[Congressional Record (Bound Edition), Volume 151 (2005), Part 2]
[House]
[Pages 2632-2666]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   CLASS ACTION FAIRNESS ACT OF 2005

  Mr. SENSENBRENNER. Madam Speaker, pursuant to House Resolution 96, I 
call up the Senate bill (S. 5) to amend the procedures that apply to 
consideration of interstate class actions to assure fairer outcomes for 
class members and defendants, and for other purposes, and ask for its 
immediate consideration.

[[Page 2633]]

  The Clerk read the title of the Senate bill.
  The SPEAKER pro tempore (Mrs. Capito). Pursuant to House Resolution 
96, the bill is considered as read.
  The text of S. 5 is as follows:

                                  S. 5

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Class 
     Action Fairness Act of 2005''.
       (b) Reference.--Whenever in this Act reference is made to 
     an amendment to, or repeal of, a section or other provision, 
     the reference shall be considered to be made to a section or 
     other provision of title 28, United States Code.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

 Sec. 1. Short title; reference; table of contents.
 Sec. 2. Findings and purposes.
 Sec. 3. Consumer class action bill of rights and improved procedures 
              for interstate class actions.
 Sec. 4. Federal district court jurisdiction for interstate class 
              actions.
 Sec. 5. Removal of interstate class actions to Federal district court.
 Sec. 6. Report on class action settlements.
 Sec. 7. Enactment of Judicial Conference recommendations.
 Sec. 8. Rulemaking authority of Supreme Court and Judicial Conference.
 Sec. 9. Effective date.

      SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds the following:
       (1) Class action lawsuits are an important and valuable 
     part of the legal system when they permit the fair and 
     efficient resolution of legitimate claims of numerous parties 
     by allowing the claims to be aggregated into a single action 
     against a defendant that has allegedly caused harm.
       (2) Over the past decade, there have been abuses of the 
     class action device that have--
       (A) harmed class members with legitimate claims and 
     defendants that have acted responsibly;
       (B) adversely affected interstate commerce; and
       (C) undermined public respect for our judicial system.
       (3) Class members often receive little or no benefit from 
     class actions, and are sometimes harmed, such as where--
       (A) counsel are awarded large fees, while leaving class 
     members with coupons or other awards of little or no value;
       (B) unjustified awards are made to certain plaintiffs at 
     the expense of other class members; and
       (C) confusing notices are published that prevent class 
     members from being able to fully understand and effectively 
     exercise their rights.
       (4) Abuses in class actions undermine the national judicial 
     system, the free flow of interstate commerce, and the concept 
     of diversity jurisdiction as intended by the framers of the 
     United States Constitution, in that State and local courts 
     are--
       (A) keeping cases of national importance out of Federal 
     court;
       (B) sometimes acting in ways that demonstrate bias against 
     out-of-State defendants; and
       (C) making judgments that impose their view of the law on 
     other States and bind the rights of the residents of those 
     States.
       (b) Purposes.--The purposes of this Act are to--
       (1) assure fair and prompt recoveries for class members 
     with legitimate claims;
       (2) restore the intent of the framers of the United States 
     Constitution by providing for Federal court consideration of 
     interstate cases of national importance under diversity 
     jurisdiction; and
       (3) benefit society by encouraging innovation and lowering 
     consumer prices.

      SEC. 3. CONSUMER CLASS ACTION BILL OF RIGHTS AND IMPROVED 
                   PROCEDURES FOR INTERSTATE CLASS ACTIONS.

       (a) In General.--Part V is amended by inserting after 
     chapter 113 the following:

                      ``CHAPTER 114--CLASS ACTIONS

``Sec.
``1711. Definitions.
``1712. Coupon settlements.
``1713. Protection against loss by class members.
``1714. Protection against discrimination based on geographic location.
``1715. Notifications to appropriate Federal and State officials.

     ``Sec. 1711. Definitions

       ``In this chapter:
       ``(1) Class.--The term `class' means all of the class 
     members in a class action.
       ``(2) Class action.--The term `class action' means 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 statute 
     or rule of judicial procedure authorizing an action to be 
     brought by 1 or more representatives as a class action.
       ``(3) Class counsel.--The term `class counsel' means the 
     persons who serve as the attorneys for the class members in a 
     proposed or certified class action.
       ``(4) Class members.--The term `class members' means the 
     persons (named or unnamed) who fall within the definition of 
     the proposed or certified class in a class action.
       ``(5) Plaintiff class action.--The term `plaintiff class 
     action' means a class action in which class members are 
     plaintiffs.
       ``(6) Proposed settlement.--The term `proposed settlement' 
     means an agreement regarding a class action that is subject 
     to court approval and that, if approved, would be binding on 
     some or all class members.

     ``Sec. 1712. Coupon settlements

       ``(a) Contingent Fees in Coupon Settlements.--If a proposed 
     settlement in a class action provides for a recovery of 
     coupons to a class member, the portion of any attorney's fee 
     award to class counsel that is attributable to the award of 
     the coupons shall be based on the value to class members of 
     the coupons that are redeemed.
       ``(b) Other Attorney's Fee Awards in Coupon Settlements.--
       ``(1) In general.--If a proposed settlement in a class 
     action provides for a recovery of coupons to class members, 
     and a portion of the recovery of the coupons is not used to 
     determine the attorney's fee to be paid to class counsel, any 
     attorney's fee award shall be based upon the amount of time 
     class counsel reasonably expended working on the action.
       ``(2) Court approval.--Any attorney's fee under this 
     subsection shall be subject to approval by the court and 
     shall include an appropriate attorney's fee, if any, for 
     obtaining equitable relief, including an injunction, if 
     applicable. Nothing in this subsection shall be construed to 
     prohibit application of a lodestar with a multiplier method 
     of determining attorney's fees.
       ``(c) Attorney's Fee Awards Calculated on a Mixed Basis in 
     Coupon Settlements.--If a proposed settlement in a class 
     action provides for an award of coupons to class members and 
     also provides for equitable relief, including injunctive 
     relief--
       ``(1) that portion of the attorney's fee to be paid to 
     class counsel that is based upon a portion of the recovery of 
     the coupons shall be calculated in accordance with subsection 
     (a); and
       ``(2) that portion of the attorney's fee to be paid to 
     class counsel that is not based upon a portion of the 
     recovery of the coupons shall be calculated in accordance 
     with subsection (b).
       ``(d) Settlement Valuation Expertise.--In a class action 
     involving the awarding of coupons, the court may, in its 
     discretion upon the motion of a party, receive expert 
     testimony from a witness qualified to provide information on 
     the actual value to the class members of the coupons that are 
     redeemed.
       ``(e) Judicial Scrutiny of Coupon Settlements.--In a 
     proposed settlement under which class members would be 
     awarded coupons, the court may approve the proposed 
     settlement only after a hearing to determine whether, and 
     making a written finding that, the settlement is fair, 
     reasonable, and adequate for class members. The court, in its 
     discretion, may also require that a proposed settlement 
     agreement provide for the distribution of a portion of the 
     value of unclaimed coupons to 1 or more charitable or 
     governmental organizations, as agreed to by the parties. The 
     distribution and redemption of any proceeds under this 
     subsection shall not be used to calculate attorneys' fees 
     under this section.

     ``Sec. 1713. Protection against loss by class members

       ``The court may approve a proposed settlement under which 
     any class member is obligated to pay sums to class counsel 
     that would result in a net loss to the class member only if 
     the court makes a written finding that nonmonetary benefits 
     to the class member substantially outweigh the monetary loss.

     ``Sec. 1714. Protection against discrimination based on 
       geographic location

       ``The court may not approve a proposed settlement that 
     provides for the payment of greater sums to some class 
     members than to others solely on the basis that the class 
     members to whom the greater sums are to be paid are located 
     in closer geographic proximity to the court.

     ``Sec. 1715. Notifications to appropriate Federal and State 
       officials

       ``(a) Definitions.--
       ``(1) Appropriate federal official.--In this section, the 
     term `appropriate Federal official' means--
       ``(A) the Attorney General of the United States; or
       ``(B) in any case in which the defendant is a Federal 
     depository institution, a State depository institution, a 
     depository institution holding company, a foreign bank, or a 
     nondepository institution subsidiary of the foregoing (as 
     such terms are defined in section 3 of the Federal Deposit 
     Insurance Act (12 U.S.C. 1813)), the person who has the 
     primary Federal regulatory or supervisory responsibility with 
     respect to the defendant, if some or all of the matters 
     alleged in the class action are subject to regulation or 
     supervision by that person.

[[Page 2634]]

       ``(2) Appropriate state official.--In this section, the 
     term `appropriate State official' means the person in the 
     State who has the primary regulatory or supervisory 
     responsibility with respect to the defendant, or who licenses 
     or otherwise authorizes the defendant to conduct business in 
     the State, if some or all of the matters alleged in the class 
     action are subject to regulation by that person. If there is 
     no primary regulator, supervisor, or licensing authority, or 
     the matters alleged in the class action are not subject to 
     regulation or supervision by that person, then the 
     appropriate State official shall be the State attorney 
     general.
       ``(b) In General.--Not later than 10 days after a proposed 
     settlement of a class action is filed in court, each 
     defendant that is participating in the proposed settlement 
     shall serve upon the appropriate State official of each State 
     in which a class member resides and the appropriate Federal 
     official, a notice of the proposed settlement consisting of--
       ``(1) a copy of the complaint and any materials filed with 
     the complaint and any amended complaints (except such 
     materials shall not be required to be served if such 
     materials are made electronically available through the 
     Internet and such service includes notice of how to 
     electronically access such material);
       ``(2) notice of any scheduled judicial hearing in the class 
     action;
       ``(3) any proposed or final notification to class members 
     of--
       ``(A)(i) the members' rights to request exclusion from the 
     class action; or
       ``(ii) if no right to request exclusion exists, a statement 
     that no such right exists; and
       ``(B) a proposed settlement of a class action;
       ``(4) any proposed or final class action settlement;
       ``(5) any settlement or other agreement contemporaneously 
     made between class counsel and counsel for the defendants;
       ``(6) any final judgment or notice of dismissal;
       ``(7)(A) if feasible, the names of class members who reside 
     in each State and the estimated proportionate share of the 
     claims of such members to the entire settlement to that 
     State's appropriate State official; or
       ``(B) if the provision of information under subparagraph 
     (A) is not feasible, a reasonable estimate of the number of 
     class members residing in each State and the estimated 
     proportionate share of the claims of such members to the 
     entire settlement; and
       ``(8) any written judicial opinion relating to the 
     materials described under subparagraphs (3) through (6).
       ``(c) Depository Institutions Notification.--
       ``(1) Federal and other depository institutions.--In any 
     case in which the defendant is a Federal depository 
     institution, a depository institution holding company, a 
     foreign bank, or a non-depository institution subsidiary of 
     the foregoing, the notice requirements of this section are 
     satisfied by serving the notice required under subsection (b) 
     upon the person who has the primary Federal regulatory or 
     supervisory responsibility with respect to the defendant, if 
     some or all of the matters alleged in the class action are 
     subject to regulation or supervision by that person.
       ``(2) State depository institutions.--In any case in which 
     the defendant is a State depository institution (as that term 
     is defined in section 3 of the Federal Deposit Insurance Act 
     (12 U.S.C. 1813)), the notice requirements of this section 
     are satisfied by serving the notice required under subsection 
     (b) upon the State bank supervisor (as that term is defined 
     in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
     1813)) of the State in which the defendant is incorporated or 
     chartered, if some or all of the matters alleged in the class 
     action are subject to regulation or supervision by that 
     person, and upon the appropriate Federal official.
       ``(d) Final Approval.--An order giving final approval of a 
     proposed settlement may not be issued earlier than 90 days 
     after the later of the dates on which the appropriate Federal 
     official and the appropriate State official are served with 
     the notice required under subsection (b).
       ``(e) Noncompliance if Notice Not Provided.--
       ``(1) In general.--A class member may refuse to comply with 
     and may choose not to be bound by a settlement agreement or 
     consent decree in a class action if the class member 
     demonstrates that the notice required under subsection (b) 
     has not been provided.
       ``(2) Limitation.--A class member may not refuse to comply 
     with or to be bound by a settlement agreement or consent 
     decree under paragraph (1) if the notice required under 
     subsection (b) was directed to the appropriate Federal 
     official and to either the State attorney general or the 
     person that has primary regulatory, supervisory, or licensing 
     authority over the defendant.
       ``(3) Application of rights.--The rights created by this 
     subsection shall apply only to class members or any person 
     acting on a class member's behalf, and shall not be construed 
     to limit any other rights affecting a class member's 
     participation in the settlement.
       ``(f) Rule of Construction.--Nothing in this section shall 
     be construed to expand the authority of, or impose any 
     obligations, duties, or responsibilities upon, Federal or 
     State officials.''.
       (b) Technical and Conforming Amendment.--The table of 
     chapters for part V is amended by inserting after the item 
     relating to chapter 113 the following:

``114. Class Actions........................................1711''.....

      SEC. 4. FEDERAL DISTRICT COURT JURISDICTION FOR INTERSTATE 
                   CLASS ACTIONS.

       (a) Application of Federal Diversity Jurisdiction.--Section 
     1332 is amended--
       (1) by redesignating subsection (d) as subsection (e); and
       (2) by inserting after subsection (c) the following:
       ``(d)(1) In this subsection--
       ``(A) the term `class' means all of the class members in a 
     class action;
       ``(B) the term `class action' 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;
       ``(C) the term `class certification order' means an order 
     issued by a court approving the treatment of some or all 
     aspects of a civil action as a class action; and
       ``(D) the term `class members' means the persons (named or 
     unnamed) who fall within the definition of the proposed or 
     certified class in a class action.
       ``(2) The district courts shall have original jurisdiction 
     of any civil action in which the matter in controversy 
     exceeds the sum or value of $5,000,000, exclusive of interest 
     and costs, and is a class action in which--
       ``(A) any member of a class of plaintiffs is a citizen of a 
     State different from any defendant;
       ``(B) any member of a class of plaintiffs is a foreign 
     state or a citizen or subject of a foreign state and any 
     defendant is a citizen of a State; or
       ``(C) any member of a class of plaintiffs is a citizen of a 
     State and any defendant is a foreign state or a citizen or 
     subject of a foreign state.
       ``(3) A district court may, in the interests of justice and 
     looking at the totality of the circumstances, decline to 
     exercise jurisdiction under paragraph (2) over a class action 
     in which greater than one-third but less than two-thirds of 
     the members of all proposed plaintiff classes in the 
     aggregate and the primary defendants are citizens of the 
     State in which the action was originally filed based on 
     consideration of--
       ``(A) whether the claims asserted involve matters of 
     national or interstate interest;
       ``(B) whether the claims asserted will be governed by laws 
     of the State in which the action was originally filed or by 
     the laws of other States;
       ``(C) whether the class action has been pleaded in a manner 
     that seeks to avoid Federal jurisdiction;
       ``(D) whether the action was brought in a forum with a 
     distinct nexus with the class members, the alleged harm, or 
     the defendants;
       ``(E) whether the number of citizens of the State in which 
     the action was originally filed in all proposed plaintiff 
     classes in the aggregate is substantially larger than the 
     number of citizens from any other State, and the citizenship 
     of the other members of the proposed class is dispersed among 
     a substantial number of States; and
       ``(F) whether, during the 3-year period preceding the 
     filing of that class action, 1 or more other class actions 
     asserting the same or similar claims on behalf of the same or 
     other persons have been filed.
       ``(4) A district court shall decline to exercise 
     jurisdiction under paragraph (2)--
       ``(A)(i) over a class action in which--
       ``(I) greater than two-thirds of the members of all 
     proposed plaintiff classes in the aggregate are citizens of 
     the State in which the action was originally filed;
       ``(II) at least 1 defendant is a defendant--
       ``(aa) from whom significant relief is sought by members of 
     the plaintiff class;
       ``(bb) whose alleged conduct forms a significant basis for 
     the claims asserted by the proposed plaintiff class; and
       ``(cc) who is a citizen of the State in which the action 
     was originally filed; and
       ``(III) principal injuries resulting from the alleged 
     conduct or any related conduct of each defendant were 
     incurred in the State in which the action was originally 
     filed; and
       ``(ii) during the 3-year period preceding the filing of 
     that class action, no other class action has been filed 
     asserting the same or similar factual allegations against any 
     of the defendants on behalf of the same or other persons; or
       ``(B) two-thirds or more of the members of all proposed 
     plaintiff classes in the aggregate, and the primary 
     defendants, are citizens of the State in which the action was 
     originally filed.
       ``(5) Paragraphs (2) through (4) shall not apply to any 
     class action in which--
       ``(A) the primary defendants are States, State officials, 
     or other governmental entities against whom the district 
     court may be foreclosed from ordering relief; or
       ``(B) the number of members of all proposed plaintiff 
     classes in the aggregate is less than 100.
       ``(6) In any class action, the claims of the individual 
     class members shall be aggregated

[[Page 2635]]

     to determine whether the matter in controversy exceeds the 
     sum or value of $5,000,000, exclusive of interest and costs.
       ``(7) Citizenship of the members of the proposed plaintiff 
     classes shall be determined for purposes of paragraphs (2) 
     through (6) as of the date of filing of the complaint or 
     amended complaint, or, if the case stated by the initial 
     pleading is not subject to Federal jurisdiction, as of the 
     date of service by plaintiffs of an amended pleading, motion, 
     or other paper, indicating the existence of Federal 
     jurisdiction.
       ``(8) This subsection shall apply to any class action 
     before or after the entry of a class certification order by 
     the court with respect to that action.
       ``(9) Paragraph (2) shall not apply to any class action 
     that solely involves a claim--
       ``(A) concerning a covered security as defined under 
     16(f)(3) of the Securities Act of 1933 (15 U.S.C. 78p(f)(3)) 
     and section 28(f)(5)(E) of the Securities Exchange Act of 
     1934 (15 U.S.C. 78bb(f)(5)(E));
       ``(B) that relates to the internal affairs or governance of 
     a corporation or other form of business enterprise and that 
     arises under or by virtue of the laws of the State in which 
     such corporation or business enterprise is incorporated or 
     organized; or
       ``(C) that relates to the rights, duties (including 
     fiduciary duties), and obligations relating to or created by 
     or pursuant to any security (as defined under section 2(a)(1) 
     of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) and the 
     regulations issued thereunder).
       ``(10) For purposes of this subsection and section 1453, an 
     unincorporated association shall be deemed to be a citizen of 
     the State where it has its principal place of business and 
     the State under whose laws it is organized.
       ``(11)(A) For purposes of this subsection and section 1453, 
     a mass action shall be deemed to be a class action removable 
     under paragraphs (2) through (10) if it otherwise meets the 
     provisions of those paragraphs.
       ``(B)(i) As used in subparagraph (A), the term `mass 
     action' means any civil action (except a civil action within 
     the scope of section 1711(2)) in which monetary relief claims 
     of 100 or more persons are proposed to be tried jointly on 
     the ground that the plaintiffs' claims involve common 
     questions of law or fact, except that jurisdiction shall 
     exist only over those plaintiffs whose claims in a mass 
     action satisfy the jurisdictional amount requirements under 
     subsection (a).
       ``(ii) As used in subparagraph (A), the term `mass action' 
     shall not include any civil action in which--
       ``(I) all of the claims in the action arise from an event 
     or occurrence in the State in which the action was filed, and 
     that allegedly resulted in injuries in that State or in 
     States contiguous to that State;
       ``(II) the claims are joined upon motion of a defendant;
       ``(III) all of the claims in the action are asserted on 
     behalf of the general public (and not on behalf of individual 
     claimants or members of a purported class) pursuant to a 
     State statute specifically authorizing such action; or
       ``(IV) the claims have been consolidated or coordinated 
     solely for pretrial proceedings.
       ``(C)(i) Any action(s) removed to Federal court pursuant to 
     this subsection shall not thereafter be transferred to any 
     other court pursuant to section 1407, or the rules 
     promulgated thereunder, unless a majority of the plaintiffs 
     in the action request transfer pursuant to section 1407.
       ``(ii) This subparagraph will not apply--
       ``(I) to cases certified pursuant to rule 23 of the Federal 
     Rules of Civil Procedure; or
       ``(II) if plaintiffs propose that the action proceed as a 
     class action pursuant to rule 23 of the Federal Rules of 
     Civil Procedure.
       ``(D) The limitations periods on any claims asserted in a 
     mass action that is removed to Federal court pursuant to this 
     subsection shall be deemed tolled during the period that the 
     action is pending in Federal court.''.
       (b) Conforming Amendments.--
       (1) Section 1335(a)(1) is amended by inserting ``subsection 
     (a) or (d) of'' before ``section 1332''.
       (2) Section 1603(b)(3) is amended by striking ``(d)'' and 
     inserting ``(e)''.

      SEC. 5. REMOVAL OF INTERSTATE CLASS ACTIONS TO FEDERAL 
                   DISTRICT COURT.

       (a) In General.--Chapter 89 is amended by adding after 
     section 1452 the following:

     ``Sec. 1453. Removal of class actions

       ``(a) Definitions.--In this section, the terms `class', 
     `class action', `class certification order', and `class 
     member' shall have the meanings given such terms under 
     section 1332(d)(1).
       ``(b) In General.--A class action may be removed to a 
     district court of the United States in accordance with 
     section 1446 (except that the 1-year limitation under section 
     1446(b) shall not apply), without regard to whether any 
     defendant is a citizen of the State in which the action is 
     brought, except that such action may be removed by any 
     defendant without the consent of all defendants.
       ``(c) Review of Remand Orders.--
       ``(1) In general.--Section 1447 shall apply to any removal 
     of a case under this section, except that notwithstanding 
     section 1447(d), a court of appeals may accept an appeal from 
     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.
       ``(2) Time period for judgment.--If the court of appeals 
     accepts an appeal under paragraph (1), the court shall 
     complete all action on such appeal, including rendering 
     judgment, not later than 60 days after the date on which such 
     appeal was filed, unless an extension is granted under 
     paragraph (3).
       ``(3) Extension of time period.--The court of appeals may 
     grant an extension of the 60-day period described in 
     paragraph (2) if--
       ``(A) all parties to the proceeding agree to such 
     extension, for any period of time; or
       ``(B) such extension is for good cause shown and in the 
     interests of justice, for a period not to exceed 10 days.
       ``(4) Denial of appeal.--If a final judgment on the appeal 
     under paragraph (1) is not issued before the end of the 
     period described in paragraph (2), including any extension 
     under paragraph (3), the appeal shall be denied.
       ``(d) Exception.--This section shall not apply to any class 
     action that solely involves--
       ``(1) a claim concerning a covered security as defined 
     under section 16(f)(3) of the Securities Act of 1933 (15 
     U.S.C. 78p(f)(3)) and section 28(f)(5)(E) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78bb(f)(5)(E));
       ``(2) a claim that relates to the internal affairs or 
     governance of a corporation or other form of business 
     enterprise and arises under or by virtue of the laws of the 
     State in which such corporation or business enterprise is 
     incorporated or organized; or
       ``(3) a claim that relates to the rights, duties (including 
     fiduciary duties), and obligations relating to or created by 
     or pursuant to any security (as defined under section 2(a)(1) 
     of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) and the 
     regulations issued thereunder).''.
       (b) Technical and Conforming Amendments.--The table of 
     sections for chapter 89 is amended by adding after the item 
     relating to section 1452 the following:

``1453. Removal of class actions.''.

     SEC. 6. REPORT ON CLASS ACTION SETTLEMENTS.

       (a) In General.--Not later than 12 months after the date of 
     enactment of this Act, the Judicial Conference of the United 
     States, with the assistance of the Director of the Federal 
     Judicial Center and the Director of the Administrative Office 
     of the United States Courts, shall prepare and transmit to 
     the Committees on the Judiciary of the Senate and the House 
     of Representatives a report on class action settlements.
       (b) Content.--The report under subsection (a) shall 
     contain--
       (1) recommendations on the best practices that courts can 
     use to ensure that proposed class action settlements are fair 
     to the class members that the settlements are supposed to 
     benefit;
       (2) recommendations on the best practices that courts can 
     use to ensure that--
       (A) the fees and expenses awarded to counsel in connection 
     with a class action settlement appropriately reflect the 
     extent to which counsel succeeded in obtaining full redress 
     for the injuries alleged and the time, expense, and risk that 
     counsel devoted to the litigation; and
       (B) the class members on whose behalf the settlement is 
     proposed are the primary beneficiaries of the settlement; and
       (3) the actions that the Judicial Conference of the United 
     States has taken and intends to take toward having the 
     Federal judiciary implement any or all of the recommendations 
     contained in the report.
       (c) Authority of Federal Courts.--Nothing in this section 
     shall be construed to alter the authority of the Federal 
     courts to supervise attorneys' fees.

     SEC. 7. ENACTMENT OF JUDICIAL CONFERENCE RECOMMENDATIONS.

       Notwithstanding any other provision of law, the amendments 
     to rule 23 of the Federal Rules of Civil Procedure, which are 
     set forth in the order entered by the Supreme Court of the 
     United States on March 27, 2003, shall take effect on the 
     date of enactment of this Act or on December 1, 2003 (as 
     specified in that order), whichever occurs first.

     SEC. 8. RULEMAKING AUTHORITY OF SUPREME COURT AND JUDICIAL 
                   CONFERENCE.

       Nothing in this Act shall restrict in any way the authority 
     of the Judicial Conference and the Supreme Court to propose 
     and prescribe general rules of practice and procedure under 
     chapter 131 of title 28, United States Code.

     SEC. 9. EFFECTIVE DATE.

       The amendments made by this Act shall apply to any civil 
     action commenced on or after the date of enactment of this 
     Act.

  The SPEAKER pro tempore. After 90 minutes of debate on the bill, it 
shall be in order to consider the amendment in the nature of a 
substitute printed in House Report 109-7, if offered by the gentleman 
from Michigan (Mr. Conyers) or his designee, which shall be considered 
read and shall be debatable for 40 minutes equally divided and 
controlled by the proponent and opponent.

[[Page 2636]]

  The gentleman from Wisconsin (Mr. Sensenbrenner) and the gentleman 
from Michigan (Mr. Conyers) each will control 45 minutes of debate on 
the bill.
  The Chair recognizes the gentleman from Wisconsin (Mr. 
Sensenbrenner).


                             General Leave

  Mr. SENSENBRENNER. Madam Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous material on S. 5.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  Mr. SENSENBRENNER. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I rise in strong support of S. 5, the Class Action 
Fairness Act of 2005. Today marks the culmination of nearly a decade of 
legislative efforts to end systematic abuse of our Nation's class 
action system. We stand on the cusp of sending landmark legislation on 
civil-justice reform to the President that has been approved by 
increasing majorities each time it has been considered by the House in 
each of the last three Congresses and which passed the other body last 
week with an overwhelming majority of 72 votes.
  Since these reforms were first proposed, the magnitude of the class 
action crisis, the need to address it has become more and more urgent. 
The crisis now threatens the integrity of our civil justice system and 
undermines the economic vitality upon which job creation depends.
  A major element of the worsening crisis is the exponential increase 
in State class action cases in a handful of ``magnet'' or ``magic'' 
jurisdictions, many of which deal with national issues in classes. In 
the last 10 years, State court class actions filings nationwide have 
increased over 1,315 percent. The infamous handful of magnet courts 
known for certifying even the most speculative class action suits, the 
increase in filings now exceeds 5,000 percent. The only explanation for 
this phenomenon is aggressive forum shopping by trial lawyers to find 
courts and judges who will act as willing accomplices in a judicial 
power grab, hearing nationwide cases and setting policy for the entire 
country.
  A second major feature of the present class action crisis is a system 
producing outrageous settlements that benefit only lawyers and trample 
the rights of class members. Class actions were originally created to 
efficiently address a large number of similar claims by people 
suffering small harms. Today they are too often used to efficiently 
transfer the large fees to a small number of trial lawyers, with little 
benefit to the plaintiffs.
  The present rules encourage a race to any available State courthouse 
in the hopes of a rubber-stamped nationwide settlement that produces 
millions in attorney's fees for the winning plaintiff's attorney. The 
race to settle produces outcomes that favor expediency and profits for 
lawyers over justice and fairness for consumers. The losers in this 
race are the victims who often gain little or nothing through the 
settlement, yet are bound by it in perpetuity. And all Americans bear 
the cost of these settlements through increased prices for goods and 
services.
  The bill before the House today offers commonsense procedural changes 
that will end the most serious abuses by allowing more interstate class 
actions to be heard in Federal courts while keeping truly local cases 
in State courts. Its core provisions are similar to those passed by 
this body in the last three Congresses. S. 5 also implements a consumer 
bill of rights that will keep class members from being used by the 
lawyers they never hired to engage in litigation they do not know about 
or to extort money they will never see.
  Madam Speaker, when the House considered this important reform in the 
last Congress, I remarked that, ``The class action judicial system has 
become a joke, and no one is laughing except the trial lawyers . . . 
all the way to the bank.''
  I imagine that laughter turned to nervous chuckles when S. 5 emerged 
unscathed from the gauntlet in the other body with 72 votes last week. 
Today, as the House prepares to pass this bill, I suspect you could 
hear a pin drop in the halls of infamous courthouses located in Madison 
County, Illinois and Jefferson County, Texas, where for so long the 
good times have rolled for forum-shopping plaintiffs' attorneys and the 
judges who enable them. And when this legislation is signed by the 
President one day soon, those same halls may echo with sobs and curses 
because this time justice and fairness and the American people will 
have the last laugh.
  Madam Speaker, after years of toil, the moment has arrived. The 
opportunity to restore common sense, rationality, and dignity to our 
class action system is now before us, and the need for reform has never 
been more certain. I urge my colleagues to support the Class Action 
Fairness Act of 2005.
  Madam Speaker, I reserve the balance of my time.
  Mr. CONYERS. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, with the consideration of this legislation, the 
majority begins their assault on our Nation's civil justice system. 
Today we will attempt to preempt State class actions. Next month we 
will take up a bankruptcy bill that massively tilts the playing field 
in favor of credit card companies and against ordinary consumers and 
workers alike. On deck and pending are equally one-sided medical 
malpractice bills and asbestos bills that both cap damages and 
eliminate liability to protect some of the most egregious wrongdoers in 
America.
  The majority's assault on victims and consumers is unprecedented in 
its scope and stunning in its breadth. Collectively, these measures 
will close the courthouse doors on millions of Americans harmed by 
intentional wrongdoing, negligence, and fraud. And so, long after the 
109th Congress has forgotten, American consumers and workers will be 
paying the price for these special interest bills through needless 
injuries and uncompensated harm.
  This legislation will remove class actions involving State law issues 
from State courts, the forum most convenient for victims of wrongdoing 
and with the judges most familiar with the substantive law, and this 
legislation will move it to the Federal courts where the case will take 
far longer to resolve and is far less likely to be certified.
  Now, you do not need to take my word for it. Let us just ask big 
business itself. The Nation's largest bank, Citicorp admits ``the 
practical effect (of the bill will) be that many cases will never be 
heard. Federal judges facing overburdened dockets and ambiguities about 
applying State laws in a Federal court, often refuse to grant standing 
to class action plaintiffs.''
  Forbes Magazine writes, ``The legislation will . . . make it more 
difficult for plaintiffs to prevail, since . . . federal courts are . . 
. less open to considering . . . class action claims.''
  Passage of this legislation would be particularly devastating for 
civil rights cases and labor law cases. As the Lawyers Committee For 
Civil Rights Under The Law explained, ``The consequences of the 
legislation for civil rights class actions . . . will be astounding 
and, in our view, disastrous. Redirecting State law class actions to 
the Federal courts will choke Federal court dockets and delay or 
foreclose the timely and effective determination of Federal (civil 
rights) cases.''
  Since the November election we have heard a lot of talk about values, 
and that is fine; but will someone during this discourse today tell me 
where the value is in denying senior citizens who suffered heart 
attacks because they took Vioxx for their arthritis? Where is the 
morality in preventing poor workers from joining together to obtain 
compensation when unscrupulous employers pay them slave-labor wages? 
Where is the righteousness in telling victims of discrimination that 
they will have to wait years for a Federal court to consider violations 
of their own State laws?
  If we have learned anything from the Enron, TYCO, Firestone, and 
other legal debacles, it is that our citizens

[[Page 2637]]

need more protection against wrongdoers in our society, not less. And 
yet the class action bill before us takes us in precisely the opposite 
direction.
  The House should reject this one-sided, anti-consumer and anti-civil 
rights legislation.
  Madam Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Madam Speaker, I yield 3 minutes to the gentleman 
from Virginia (Mr. Boucher) to show the breadth of the bipartisan 
support of this legislation.
  Mr. BOUCHER. Madam Speaker, I thank the gentleman from Wisconsin (Mr. 
Sensenbrenner) for yielding me time.
  Madam Speaker, I am pleased to rise this morning in support of the 
bill before us. In the two decades that I have been privileged to serve 
in the House, the class action measure that is before us today is the 
most modest litigation reform that has been debated, and it strikes in 
a narrow and appropriate way at an egregious abuse of justice.
  The bill before us makes procedural changes only. There are no 
restrictions on the substantive rights of plaintiffs. There are no caps 
on damages. There is no elimination on the rights of plaintiffs to 
recover.
  The bill simply permits the removal to Federal courts of class 
actions that are truly national in scope, with plaintiffs living across 
the Nation and the large corporate defendant, even if the current 
diversity of citizenship rules are not strictly met.
  This change is much needed. Cases that are truly national in scope 
are being filed as State class actions before certain favored judges 
who employ an almost ``anything goes'' approach that remedies virtually 
any controversy subject to certification as a class action. Once 
certification occurs, there is then a rush to settle the cases. The 
lawyer who filed the case makes an offer that is hard for the corporate 
defendant to refuse.

                              {time}  1030

  He asks for large fees in the millions of dollars for himself and 
coupons for the plaintiff class members that he represents. Rather than 
go through years of expensive litigation, the defendant settles. The 
judge who certified the class quickly approves the settlement. The 
lawyer who filed the case gets rich. The plaintiff class members get 
virtually nothing.
  That is the problem that this bill is designed to address. It permits 
the removal of these national cases to the Federal court in the State 
in which the State class action has been filed.
  In the Federal court, the rights of plaintiffs will be more carefully 
observed. Any settlement involving non-cash compensation will be 
carefully reviewed to assure that it is fair. Under the bill, cases 
that are local in scope will remain in the State court where they are 
initially filed.
  I want to commend the gentleman from Virginia (Mr. Goodlatte) for the 
thoughtful leadership that he has provided in steering this measure to 
the point of passage today. The gentleman from Virginia (Mr. Goodlatte) 
has exhibited both foresight and patience and as chief sponsor of the 
bill through three Congresses deserves tremendous credit for the 
success that we are now on the brink of achieving.
  I also want to commend the gentleman from Wisconsin (Mr. 
Sensenbrenner) for the wise course that he has followed as chairman of 
the House Committee on the Judiciary in permitting the Senate to act in 
advance of our action today.
  I want to commend our former House colleague, Senator Tom Carper, for 
the outstanding work he performed in negotiating changes to the measure 
which resulted in 72 Members of the Senate voting to approve this 
reform.
  I hope the House will also lend its support to this reform.
  Mr. CONYERS. Madam Speaker, I yield myself as much time as I may 
consume.
  The gentleman from Virginia (Mr. Boucher) is a dear friend of mine, 
and I merely want to take one observation that he made, that this is 
just a procedural process and that there is no substantive changes, but 
I say to him, if the legal system is rigged and the rules are stacked 
against you, you never have to get to the substance; you do not even 
get your day in court.
  That is the problem with this bill. It is a procedural process that 
prevents people from bringing actions in State courts, and we are 
sending it to the Federal courts when both the Federal judiciary has 
spoken against this measure and the State judges have spoken against 
this measure as well. I think that that should be a very instructive 
criticism against this bill.
  The proposal before us is opposed by both State and Federal 
judiciaries. It is opposed by the National Council of State 
Legislatures; consumers and public interest groups, including Public 
Citizen, the Consumers Federation of America, the Consumers Union, the 
United States PIRG; a coalition of environmental advocates; health 
advocates, including the Campaign for Tobacco Free Kids; civil rights 
groups such as the Alliance for Justice, the Leadership Conference on 
Civil Rights, the National Association for the Advancement of Colored 
People, and the Lawyers' Committee for Civil Rights and labor such as 
the American Federation of Labor-Congress of Industrial Organizations, 
AFL-CIO.
  This legislation is also opposed by many of the Nation's editorial 
boards in the newspaper business. A New York Times editorial board just 
this weekend wrote this about the measure that is before the House 
today: ``Instead of narrowly focusing on real abuses of the system, the 
measure reconfigures the civil justice system to achieve a significant 
rollback of corporate accountability and people's rights. The main 
impact of the bill, which has the sort of propagandistic title normally 
assigned to such laws, the Class Action Fairness Act, will be to funnel 
nearly all major class action lawsuits out of State courts and into 
already overburdened Federal courts. That will inevitably make it 
harder for Americans to pursue legitimate claims successfully against 
companies that violate State consumer, health, civil rights and 
environmental protection laws.''
  Madam Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, first, I have a lengthy additional statement 
explaining how this bill is to work. We do not have the time in general 
debate for me to give this statement on the floor, so I will insert the 
statement relative to the intent of the managers of the bill in the 
Record at this point.
  Madam Speaker, I would like to provide a brief summary of the 
provisions in Sections 4 and 5 of S. 5, the Class Action Fairness Act 
of 2005. Section 4 gives Federal courts jurisdiction over class action 
lawsuits in which the aggregate amount in controversy exceeds $5 
million, and at least one plaintiff and one defendant are diverse. 
Overall, new section 1332(d) is intended to expand substantially 
Federal court jurisdiction over class actions. Its provisions should be 
read broadly, with a strong preference that interstate class actions 
should be heard in a Federal court if removed by any defendant. If a 
purported class action is removed under these jurisdictional 
provisions, the named plaintiff(s) should bear the burden of 
demonstrating that the removal was improper. And if a Federal court is 
uncertain about whether the $5 million threshold is satisfied, the 
court should err in favor of exercising jurisdiction over the case.
  The Sponsors intend that in a case seeking injunctive relief, a 
matter be subject to Federal jurisdiction under this provision if the 
value of the matter in litigation exceeds $5 million either from the 
viewpoint of the plaintiff or the defendant, and regardless of the type 
of relief sought (e.g., damages, injunctive relief, or declaratory 
relief). Similarly, in assessing the jurisdictional amount in 
declaratory relief cases, the Federal court should include in its 
assessment the value of all relief and benefits that would logically 
flow from granting the declaratory relief sought by the claimants. For 
example, a declaration that a defendant's conduct is unlawful or 
fraudulent will carry certain consequences, such as the need to cease 
and desist from that conduct, that will often ``cost'' the defendant in 
excess of $5 million. In addition, the law is clear that, once a 
Federal court properly has jurisdiction over a case removed to Federal 
court, subsequent events cannot ``oust'' the Federal court of 
jurisdiction. While plaintiffs can seek to avoid Federal jurisdiction

[[Page 2638]]

by defining a proposed class in particular ways, they lose that power 
once the case was properly removed.
  New subsections 1332( d)(3) and (d)(4)(B) address the jurisdictional 
principles that will apply to class actions filed against a defendant 
in its home State, dividing such cases into three categories. First, 
for cases in which two-thirds or more of the members of the plaintiff 
class and the primary defendants are citizens of the State in which the 
suit was filed, subsection 1332(d)(4)(B) states that such cases will 
remain in State court. Second, cases in which more than two-thirds of 
the members of the plaintiff class or one or more of the primary 
defendants are not citizens of the forum State will be subject to 
Federal jurisdiction since such cases are predominantly interstate in 
nature. Finally, there is a middle category of class actions in which 
more than one-third but fewer than two-thirds of the members of the 
plaintiff class and the primary defendants are all citizens of the 
State in which the action was filed. In such cases, the numbers alone 
may not always confirm that the litigation is more fairly characterized 
as predominantly interstate in character. New subsection 1332(d)(3) 
therefore gives Federal courts discretion, in the ``interests of 
justice,'' to decline to exercise jurisdiction over such cases based on 
the consideration of five factors.
  First, the court should consider whether the claims asserted are of 
``significant national or interstate interest.'' Under this factor, if 
a case presents issues of national or interstate significance, that 
argues in favor of the matter being handled in Federal court. Second, 
the court should consider whether the claims asserted will be governed 
by laws other than those of the forum State. Under this factor, if the 
Federal court determines that multiple State laws will apply to aspects 
of the class action, that determination would favor having the matter 
heard in the Federal court system, which has a record of being more 
respectful of the laws of the various States in the class action 
context. The third factor is whether the class action has been pleaded 
in a manner that seeks to avoid Federal jurisdiction. The purpose of 
this inquiry is to determine whether the plaintiffs have proposed a 
``natural'' class that encompasses all of the people and claims that 
one would expect to include in a class action, as opposed to proposing 
a class that appears to be gerrymandered solely to avoid Federal 
jurisdiction by leaving out certain potential class members or claims. 
If the Federal court concludes evasive pleading is involved, that 
factor would favor the exercise of Federal jurisdiction. The fourth 
factor considers whether there is a ``distinct'' nexus between: (a) The 
forum where the action was brought, and (b) the class members, the 
alleged harm, or the defendants. This factor is intended to take 
account of a major concern that led to this legislation--the filing of 
lawsuits in out-of-the-way ``magnet'' State courts that have no real 
relationship to the controversy at hand. Thus, for example, if the 
majority of proposed class members and the defendant reside in the 
county where the suit is brought, the court might find a distinct nexus 
exists.
  The fifth factor asks whether the number of citizens of the forum 
State in the proposed plaintiff class(es) is substantially larger than 
the number of citizens from any other State, and the citizenship of the 
other members of the proposed class(es) is dispersed among a 
substantial number of States. If all of the class members who do not 
reside in the State where the action was filed are widely dispersed 
among many other States, that point would suggest that the interests of 
the forum State in litigating the controversy are preeminent. However, 
if a court finds that the citizenship of the other class members is not 
widely dispersed, the opposite balance would be indicated and a Federal 
forum would be favored. Finally, the sixth factor is whether one or 
more class actions asserting the same or similar claims on behalf of 
the same or other persons have been filed in the last three years. The 
purpose of this factor is efficiency and fairness: To determine whether 
a matter should be subject to Federal jurisdiction so that it can be 
coordinated with other overlapping or parallel class actions. If other 
class actions on the same subject have been (or are likely to be) filed 
elsewhere, the Sponsors intend that this consideration would strongly 
favor the exercise of Federal jurisdiction. It is the Sponsors' 
intention that this factor be interpreted liberally and that plaintiffs 
not be able to plead around it with creative legal theories. If a 
plaintiff brings a product liability suit alleging consumer fraud or 
unjust enrichment, and another suit was previously brought against some 
of the same defendants alleging negligence with regard to the same 
product, this factor would favor the exercise of Federal jurisdiction 
over the later-filed claim.
  New subsection 1332(d)(4)(A) is the ``Local Controversy Exception.'' 
This subsection prohibits Federal courts from exercising diversity 
jurisdiction over a class action under the foregoing provisions if the 
plaintiffs clearly demonstrate that each and every one of the following 
criteria are satisfied in the case at issue. First, more than two-
thirds of class members are citizens of the forum State. Second, there 
is at least one in-State defendant from whom significant relief is 
sought by members of the class and whose conduct forms a significant 
basis of plaintiffs' claims. Third, the principal injuries resulting 
from the alleged conduct, or related conduct, of each defendant were 
incurred in the State where the action was originally filed. And 
fourth, no other class action asserting the same or similar factual 
allegations against any of the defendants on behalf of the same or 
other persons has been filed during the preceding three years.
  This provision is intended to respond to concerns that class actions 
with a truly local focus should not be moved to Federal court under 
this legislation because State courts have a strong interest in 
adjudicating such disputes. At the same time, this is a narrow 
exception that was carefully drafted to ensure that it does not become 
a jurisdictional loophole. Thus, in assessing whether each of these 
criteria is satisfied by a particular case, a Federal court should bear 
in mind that the purpose of each of these criteria is to identify a 
truly local controversy--a controversy that uniquely affects a 
particular locality to the exclusion of all others. For example, under 
the second criterion, there must be at least one real local defendant. 
By that, the Sponsors intend that the local defendant must be a primary 
focus of the plaintiffs' claims--not just a peripheral defendant. The 
local defendant must be a target from whom significant relief is sought 
by the class (as opposed to just a subset of the class membership), as 
well as being a defendant whose alleged conduct forms a significant 
basis for the claims asserted by the class. Similarly, the third 
criterion is that the principal injuries resulting from the actions of 
all the defendants must have occurred in the State where the suit was 
filed. By this criterion, the Sponsors mean that all or almost all of 
the damage caused by defendants' alleged conduct occurred in the State 
where the suit was brought. The purpose of this criterion is to ensure 
that this exception is used only where the impact of the misconduct 
alleged by the purported class is localized. For example, a class 
action in which local residents seek compensation for property damage 
resulting from a chemical leak at a manufacturing plant in that 
community would fit this criterion, provided that the property damage 
was limited to residents in the vicinity of the plant. However, if the 
defendants engaged in conduct that could be alleged to have injured 
consumers throughout the country or broadly throughout several States 
(such as an insurance or product case), the case would not qualify for 
this exception, even if it were brought only as a single-State class 
action.
  The fourth and final criterion is that no other class action 
involving similar allegations has been filed against any of the 
defendants over the last three years on behalf of the same or other 
persons. Once again, the Sponsors wish to stress that the inquiry under 
this criterion should not be whether identical (or nearly identical) 
class actions have been filed. Rather, the inquiry is whether similar 
factual allegations have been made against the defendant in multiple 
class actions, regardless of whether the same causes of actions were 
asserted or whether the purported plaintiff classes were the same (or 
even overlapped in significant respects).
  New subsections 1332(d)(5)(A) and (B) specify that S. 5 does not 
extend Federal diversity jurisdiction to class actions in which (a) the 
primary defendants are States, State officials, or other governmental 
entities against whom the district court may be foreclosed from 
ordering relief, or (b) the number of members of all proposed plaintiff 
classes in the aggregate is fewer than 100 class members. The purpose 
of the ``State action'' cases provision is to prevent States, State 
officials, or other governmental entities from dodging legitimate 
claims by removing class actions to Federal court and then arguing that 
the Federal courts are constitutionally prohibited from granting the 
requested relief. However, Federal courts should proceed cautiously 
before declining Federal jurisdiction under the ``State action'' case 
exception, and do so only when it is clear that the primary defendants 
are indeed States, State officials, or other governmental entities 
against whom the ``court may be foreclosed from ordering relief.'' The 
Sponsors wish to stress that this provision should not become a 
subterfuge for avoiding Federal jurisdiction. In particular, plaintiffs 
should not be permitted to name State entities as defendants as a 
mechanism to avoid Federal jurisdiction over class actions that largely 
target non-

[[Page 2639]]

governmental defendants. The Sponsors intend that ``primary 
defendants'' be interpreted to reach those defendants who are the real 
``targets'' of the lawsuit--i.e., the defendants that would be expected 
to incur most of the loss if liability is found. It is the Sponsors' 
intention with regard to each of these exceptions that the party 
opposing Federal jurisdiction shall have the burden of demonstrating 
the applicability of an exemption.
  The Sponsors understand that in assessing the various criteria 
established in all of these new jurisdictional provisions, a Federal 
court may have to engage in some fact-finding, not unlike what is 
necessitated by the existing jurisdictional statutes. The Sponsors 
further understand that in some instances, limited discovery may be 
necessary to make these determinations. However, the Sponsors caution 
that these jurisdictional determinations should be made largely on the 
basis of readily available information. Allowing substantial, 
burdensome discovery on jurisdictional issues would be contrary to the 
intent of these provisions to encourage the exercise of Federal 
jurisdiction over class actions.
  Under new subsection 1332(d)(9), the Act excludes from its 
jurisdictional provisions class actions that solely involve claims that 
relate to matters of corporate governance arising out of State law. The 
purpose of this provision is to avoid disturbing in any way the Federal 
vs. State court jurisdictional lines already drawn in the securities 
litigation class action context by the enactment of the Securities 
Litigation Uniform Standards Act of 1998. The Sponsors intend that this 
exemption be narrowly construed. By corporate governance litigation, 
the Sponsors mean only litigation based solely on (a) State statutory 
law regulating the organization and governance of business enterprises 
such as corporations, partnerships, limited partnerships, limited 
liability companies, limited liability partnerships, and business 
trusts; (b) State common law regarding the duties owed between and 
among owners and managers of business enterprises; and (c) the rights 
arising out of the terms of the securities issued by business 
enterprises.
  New subsection 1332(d)(11) expands Federal jurisdiction over mass 
actions--suits that are brought on behalf of numerous named plaintiffs 
who claim that their suits present common questions of law or fact that 
should be tried together even though they do not seek class 
certification status. Mass action cases function very much like class 
actions and are subject to many of the same abuses. Under subsection 
1332(d)(11), any civil action in which 100 or more named parties seek 
to try their claims for monetary relief together will be treated as a 
class action for jurisdictional purposes. The Sponsors wish to stress 
that a complaint in which 100 or more plaintiffs are named fits the 
criteria of seeking to try their claims together, because there would 
be no other apparent reason to include all of those claimants in a 
single action unless the intent was to secure a joint trial of the 
claims asserted in the action. The Sponsors also wish to stress that 
this provision is intended to mean a situation in which it is proposed 
or ordered that claims be tried jointly in any respect--that is, if 
only certain issues are to be tried jointly and the case otherwise 
meets the criteria set forth in this provision, the matter will be 
subject to Federal jurisdiction. However, it also should be noted that 
a mass action would not be eligible for Federal jurisdiction under this 
provision if any of several criteria are satisfied by the action, 
including (1) when all the claims asserted in the action arise out of 
an event or occurrence in the State where, the suit is filed and the 
injuries were incurred in that State and contiguous States (e.g., a 
toxic spill case) and (2) when the claims are asserted on behalf of the 
general public (and not on behalf of individual claimants or members of 
a purported class) pursuant to a State statute specifically authorizing 
such an action.
  The first exception would apply only to a truly local single event 
with no substantial interstate effects. The purpose of this exception 
is to allow cases involving environmental torts such as a chemical 
spill to remain in State court if both the event and the injuries were 
truly local, even though there are some out-of-State defendants. By 
contrast, this exception would not apply to a product liability or 
insurance case. The second exception also addresses a very narrow 
situation, specifically a law like the California Unfair Competition 
Law, which allows individuals to bring a suit on behalf of the general 
public.
  Subsection 1332(d)(11)(B)(i) includes a statement indicating that 
jurisdiction exists only over those plaintiffs whose claims in a mass 
action satisfy the jurisdictional amount requirements under section 
1332(a). It is the Sponsors' intent that although remands of individual 
claims not meeting the section 1332 jurisdictional amount requirement 
may take the action below the 100-plaintiff jurisdictional threshold or 
the $5 million jurisdictional amount requirement, those subsequent 
remands should not extinguish Federal diversity jurisdiction over the 
action as long as the mass action met the various jurisdictional 
requirements at the time of removal.
  Under subsection 1332(d)(11)(C), a mass action removed to a Federal 
court under this provision may not be transferred to another Federal 
court under the MDL statute (28 U.S.C. Sec. 1407) unless a majority of 
the plaintiffs request such a transfer. The Sponsors wish to make clear 
that this restriction on MDL transfers applies only to mass actions as 
defined in subsection 1332(d)(11); the legislation does not more 
broadly restrict the authority of the Judicial Panel on Multidistrict 
Litigation to transfer class actions removed to Federal court under 
this legislation. Under subsection 1332(d)(11)(D), the statute of 
limitations for any claims that are part of a mass action will be 
tolled while the mass action is pending in Federal court.
  The removal provisions in Section 5 of the legislation are self-
explanatory and attempt to put an end to the type of gaming engaged in 
by plaintiffs' lawyers to keep cases in State court. They should thus 
be interpreted with this intent in mind. In addition, new subsection 
1453(c) provides that an order remanding a class action to State court 
is reviewable by appeal at the discretion of the reviewing court. The 
Sponsors note that the current prohibition on remand order review was 
added to section 1447 after the Federal diversity jurisdictional 
statutes and the related removal statutes had been subject to appellate 
review for many years and were the subject of considerable appellate 
level interpretive law. The Sponsors believe it is important to create 
a similar body of clear and consistent guidance for district courts 
that will be interpreting this legislation and would particularly 
encourage appellate courts to review cases that raise jurisdictional 
issues likely to arise in future cases.
  Thank you, Madam Speaker, for allowing me to provide an explanation 
of these jurisdictional provisions.
  Madam Speaker, for purposes of engaging in a colloquy with the two 
gentlemen from Virginia (Mr. Goodlatte) and (Mr. Boucher), I yield to 
the gentleman from Virginia (Mr. Goodlatte).
  Mr. GOODLATTE. Madam Speaker, I thank the chairman very much for 
yielding.
  Madam Speaker, the general principles behind S. 5 and many of the 
provisions in the legislation are similar to those in H.R. 1115, which 
the House passed in 2003, and S. 274, which was voted out of committee 
in the Senate in 2003 but did not ultimately pass.
  To the extent these provisions are the same, the House Committee on 
the Judiciary's report on H.R. 1115 and the Senate Committee on the 
Judiciary's report on S. 274 reflect the intent and understanding of 
the committee and the sponsors as to the import of these provisions. 
However, there are several new provisions in S. 5 regarding Federal 
jurisdiction over class actions that were not included in prior 
versions of the legislation.
  I would like to ask my colleague, the chairman of the Committee on 
the Judiciary, to provide an overview of the jurisdictional provisions 
in the legislation, and I would like to discuss the various exceptions 
included in the legislation and the intent of the sponsors with regard 
to these exceptions.
  Mr. SENSENBRENNER. Madam Speaker, reclaiming my time, I appreciate 
the gentleman's question.
  Section 4 of the bill gives Federal courts jurisdiction over class 
action lawsuits in which the matter in controversy exceeds the sum or 
value of $5 million, excluding interests and costs and at least one 
proposed class member and one defendant are citizens of different 
States or countries.
  For purposes of the citizenship element of this analysis, S. 5 does 
not alter current law. Thus, a corporation will continue to be deemed a 
citizen of any State by which it has been incorporated and of the State 
where it has its principal place of business. However, the bill 
provides that for purposes of this new section, and section 1453 of 
title 28, an unincorporated association shall be deemed to be a citizen 
of the State where it has its principal place of business and the State 
under whose laws it organized. This provision is added to ensure that 
unincorporated associations receive the same treatment as corporations 
for purposes of

[[Page 2640]]

diversity jurisdiction. New subsection 1332(d)(10) corrects this 
anomaly.
  Mr. BOUCHER. Madam Speaker, will the gentleman yield?
  Mr. SENSENBRENNER. I yield to the gentleman from Virginia.
  Mr. BOUCHER. Madam Speaker, I thank the gentleman for yielding.
  What about the amount-in-controversy component, the $5 million? Under 
current law, some Federal courts have determined the value for requests 
for injunctive relief by considering the value to each individual 
plaintiff. Since that value is usually less than $75,000, these courts 
have kept such cases in State court. This is sometimes known as the 
plaintiff's viewpoint, defendant's viewpoint problem. Would the 
Chairman explain how the bill resolves this challenge?
  Mr. SENSENBRENNER. Madam Speaker, reclaiming my time, under new 
subsection 1332(d)(6), the claims of the individual class members in 
any class action shall be aggregated to determine whether the amount in 
controversy exceeds the sum or value of $5 million. The sponsors intend 
this subsection to be interpreted broadly, and if a purported class 
action is removed under this provision, the plaintiff shall bear the 
burden of demonstrating that the $5 million threshold is not satisfied. 
By the same token, if a Federal court is uncertain about whether a case 
puts $5 million or more in controversy, the court should favor 
exercising jurisdiction over the case.
  This principle applies to class actions seeking injunctive relief as 
well. The sponsors intend that a matter be subject to Federal 
jurisdiction under this provision if the value of the matter in 
litigation exceeds the $5 million, either from the viewpoint of the 
plaintiff or the viewpoint of the defendant, regardless of the type of 
relief sought, such as damages, injunctive relief or declaratory 
relief.
  The sponsors are aware that some courts, especially in the class 
action context, have declined to exercise Federal jurisdiction over 
cases on the grounds that the amount in controversy in those cases 
exceeded the jurisdictional threshold only when assessed from the 
viewpoint of the defendant.
  For example, a class action seeking injunctive relief that would 
require a defendant to restructure its business in some fundamental way 
might cost a defendant well in excess of $75,000 under current law, but 
might have substantially less value to each plaintiff or even to the 
class of plaintiffs as a whole. Because S. 5 explicitly allows 
aggregation for the purposes of determining the amount of controversy 
in class actions, that concern is no longer relevant.
  To the extent plaintiffs seek to avoid this rule by framing their 
cases as individual actions for injunctive relief, most Federal courts 
have properly held that in an individual case the cost of injunctive 
relief is viewed from the defendant's perspective. This legislation 
extends that principle to class actions as well.
  The same approach would apply in a case involving declaratory relief. 
In determining how much money a declaratory relief case puts in 
controversy, the Federal court should include in its assessment the 
value of all relief and benefits that would logically flow from the 
granting of the declaratory relief sought by the plaintiffs.
  For example, a declaration that a defendant's conduct is unlawful or 
fraudulent will carry certain consequences, such as the need to cease 
and desist from that conduct that will often cost the defendant in 
excess of $5 million; or a declaration that a standardized product sold 
throughout the Nation is defective might well put a case over the $5 
million threshold, even if the class complaint did not affirmatively 
seek a determination that each class member was injured by the product.
  The bottom line is that new section 1332(d) is intended to 
substantially expand Federal court jurisdiction over class actions, not 
to create loopholes. This provision should be read broadly, with a 
strong preference that interstate class actions should be heard in a 
Federal court if properly removed by a defendant.
  Mr. GOODLATTE. Madam Speaker, will the gentleman yield?
  Mr. SENSENBRENNER. I yield to the gentleman from Virginia.
  Mr. GOODLATTE. Madam Speaker, I would also like to discuss the home 
State exception in the legislation.
  New subsections 1332(d)(3) and (d)(4)(B) address the jurisdictional 
principles that will apply to class actions filed against the defendant 
in its home State, dividing such cases into three categories.
  First, for cases in which two-thirds or more of the members of the 
plaintiff class and the primary defendants are citizens of the State in 
which the suit was filed, section 1332(d)(4)(B) states that Federal 
jurisdiction will not be extended by S. 5. Such cases will remain in 
State courts.
  Second, cases in which more than two-thirds of the members of the 
plaintiff class are not citizens of the State in which the action was 
filed will be subject to Federal jurisdiction. Federal courts should be 
able to hear such lawsuits because they have a predominantly interstate 
component. They affect people in many jurisdictions, and the laws of 
many States will be at issue.
  Finally, there is a middle category of class actions in which more 
than one-third, but fewer than two-thirds, of the members of the 
plaintiff class and the primary defendants are all citizens of the 
State in which the action was filed. In such cases, the numbers alone 
may not always confirm that the litigation is more fairly characterized 
as predominantly interstate in character. New subsection 1332(d)(3), 
therefore, gives Federal courts discretion in the interests of justice 
to decline to exercise jurisdiction over such cases based on the 
consideration of five factors.

                              {time}  1045

  Madam Speaker, I would ask the chairman to explain these factors.
  Mr. SENSENBRENNER. Reclaiming my time, Madam Speaker, I am pleased to 
answer the gentleman.
  The first factor is whether the claims asserted are of significant 
national or interstate interest. Under this factor, if a case presents 
issues of national or interstate significance that argues in favor of 
the matter being handled in Federal Court, for example, if a class 
action alleges a nationally distributed pharmaceutical product caused 
side effects, those cases presumably should be heard in Federal court 
because of the nationwide ramifications of the dispute and the 
potential interface with Federal drug laws.
  Under this factor, the Federal court should inquire whether the case 
does present issues of national or interstate significance of this 
sort. If such issues are identified, that point favors the exercise of 
the Federal jurisdiction.
  The second factor is whether the claims asserted will be governed by 
laws other than those of the forum State. The sponsors believe that one 
of the significant problems posed by multistate class actions in State 
court is the tendency of some State courts to be less than respectful 
of the laws of other jurisdictions, applying the law of one State to an 
entire nationwide controversy and thereby ignoring the distinct and 
varying State laws that should apply to various claims included in the 
class, depending upon where they arose.
  Under this factor, if the Federal court determines that multiple 
State laws will apply to aspects of the class action, the determination 
would favor having the matter handled in the Federal court system, 
which has a record of being more respectful of the laws of various 
States in the class action controversy. Conversely, if the court 
concludes that the laws of the State to which the action was filed will 
apply to the entire controversy, that factor will favor keeping the 
case in State court.
  The third factor is whether the class action has been pleaded in a 
manner that seeks to avoid Federal jurisdiction. The purpose of this 
inquiry is to determine whether the plaintiffs have proposed a natural 
class, a class that encompasses all the people and claims that one 
would expect to include in a class action, as opposed to proposing a 
class that appears to be gerrymandered solely to avoid Federal 
jurisdiction by

[[Page 2641]]

leaving out certain potential class members or claims.
  If the Federal court concludes that evasive pleading is involved, 
that factor would favor the exercise of Federal jurisdiction. On the 
other hand, if the class definition and claims appear to follow a 
natural pattern, that consideration would favor allowing the matter to 
be handled by a State court.
  The fourth factor is whether there is a distinct nexus between, A, 
the forum where the action was brought, and, B, the class members, the 
alleged harm or the defendants. This factor is intended to take account 
of a major concern that led to this legislation, the filing of lawsuits 
in the out-of-the-way magnet State courts that have no real 
relationship to the controversy at hand.
  Thus, if a majority of the proposed class action members and the 
defendants reside in the county where the suit is brought, the court 
might find a distinct nexus exists. The key to this factor is the 
notion of there being a distinct nexus. If the allegedly injured 
parties live in many other localities, the nexus is not distinct, and 
this factor would weigh heavily in favor of the exercise of Federal 
jurisdiction over the matter.
  The fifth factor is whether the number of citizens in the forum State 
in the proposed plaintiff class is substantially larger than the number 
of citizens from any other State, and the citizens of the other members 
of the proposed class is dispersed among a substantial number of 
States.
  This factor is intended to look at the geographic distribution of 
class members in an effort to determine the forum State's interest in 
handling the litigation. If all of the out-of-State class members are 
widely dispersed among many other States, that point would suggest that 
the interest of the forum State in litigating the controversy are 
preeminent.
  The sponsors intend that such a conclusion would favor allowing the 
State court in which the action was originally filed to handle the 
litigation. However, if a court finds that the citizenship of the other 
class members is not widely dispersed, then a Federal forum would be 
more appropriate because several States other than the forum State 
would have a strong interest in the controversy.
  The final factor is whether one or more class actions asserting the 
same or similar claims on behalf of the same or other persons have been 
filed in the last 3 years. The purpose of this factor is to determine 
whether a matter should be subject to Federal jurisdiction so that it 
can be coordinated with other overlapping or parallel class actions.
  If the other class actions on the same subject have been or are 
likely to be filed elsewhere, the sponsors intend that this 
consideration would strongly favor the exercise of Federal 
jurisdiction. It is the sponsors' intention that this factor be broadly 
interpreted and that plaintiffs not be able to plead around it with 
creative legal theories.
  If a plaintiff brings a product liability suit alleging consumer 
fraud or unjust enrichment, and another suit was previously brought 
against some of the same defendants alleging negligence with regard to 
the same product, this factor would favor the exercise of Federal 
jurisdiction over the later-filed claim.
  Madam Speaker, I now yield to my colleague, the gentleman from 
Virginia (Mr. Boucher), to provide some examples that illustrate how 
these six factors would work in litigation.
  Mr. BOUCHER. Madam Speaker, I thank the gentleman for yielding to me, 
and I will be pleased to provide two examples.
  Suppose that a California State court class action were filed against 
a California pharmaceutical drug company on behalf of a proposed class 
of 60 percent California residents and 40 percent Nevada residents 
alleging harmful side effects attributed to a drug sold nationwide.
  In such a case, it would make sense to leave the matter in Federal 
court. After all, the State laws that would apply in all of these cases 
would vary, depending on where the drug was prescribed and purchased. 
As a result, allowing a single Federal court to sort out such issues 
and handle the balance of the litigation would make sense both from 
added efficiency and a federalism standpoint.
  Now, suppose, in a second example, a checking account fee disclosure 
class action were filed in a Nevada State court against a Nevada bank 
located in a border city, and the class consisted of 65 percent Nevada 
residents and 35 percent California residents who crossed the border in 
order to conduct transactions in the Nevada bank.
  In this hypothetical, it might make sense to allow that matter to 
proceed in State court. It is likely that Nevada banking law would 
apply to all of these claims, even those of the California residents, 
since all of the transactions occurred in the State of Nevada. There is 
also less likelihood that multiple actions will be filed around the 
country on the same subject so as to give rise to a coordinating 
Federal multidistrict litigation proceeding.
  Mr. GOODLATTE. Madam Speaker, if the chairman would continue to 
yield.
  Mr. SENSENBRENNER. I yield to the other gentleman from Virginia (Mr. 
Goodlatte).
  Mr. GOODLATTE. I thank the chairman for yielding to me. I think those 
examples really reflect the intent of the legislation.
  Madam Speaker, the legislation also includes a local controversy 
exception which is intended to ensure that truly local class actions 
can remain in State court under the legislation. Under this provision, 
Federal courts are instructed not to exercise jurisdiction over cases 
that meet all of the following four criteria:
  First, more than two-thirds of the class members must be the citizens 
of the State where the suit is brought; second, there must be at least 
one in-State defendant from whom significant relief is sought by 
members of the class and whose conduct forms a significant basis of 
plaintiffs' claims; third, the principal injuries resulting from the 
alleged conduct or related conduct of each defendant must have occurred 
in the State where the action was originally filed; and, fourth, no 
other class action has been filed during the preceding 3 years 
asserting the same or similar factual allegations against any of the 
defendants.
  Madam Speaker, I would ask that the chairman elaborate on these 
criteria.
  Mr. SENSENBRENNER. Madam Speaker, reclaiming my time, yes, this 
provision is intended to respond to concerns that class actions with a 
truly local focus should not be moved to Federal court under this 
legislation because State courts have a strong interest in adjudicating 
such disputes. At the same time, this is a narrow exception that was 
carefully drafted to ensure that it does not become a jurisdictional 
loophole. Thus, each of the criteria is intended to identify a truly 
local class action.
  First, there must be a primarily local class. Secondly, there must be 
at least one real local defendant. And by that the drafters meant that 
the local defendant must be a primary focus of the plaintiffs' claims, 
not just a retailer or other peripheral defendant. The defendant must 
be a target from whom significant relief is sought by the class, as 
opposed to just a subset of the class membership, as well as being a 
defendant whose alleged conduct forms a significant basis for the 
claims asserted by the class.
  For example, in a consumer fraud case, alleging that an insurance 
company incorporated and based in another State misrepresented its 
policies, the local agent of the company named as a defendant 
presumably would not fit this criteria. He or she probably would have 
had contact with only some of the purported class members and, thus, 
would not be a person from whom significant relief would be sought by 
the plaintiff class viewed as a whole. And, from a relief standpoint, 
the real demand of the full class in terms of seeking significant 
relief would be on the insurance company itself.
  Third, the principal injuries resulting from the actions of all the 
defendants must have occurred in the State where the suit was filed. 
This criterion means that all or almost all of the damage caused by the 
defendants' conduct occurred in the State where the suit was

[[Page 2642]]

brought. If defendants engaged in conduct that allegedly injured 
consumers throughout the country, the case would not qualify for the 
local controversy exception, even if it was only brought as a single 
State class action.
  And, fourth, no other class action involving similar allegations has 
been filed against any of the defendants over the last 3 years. In 
other words, if we are talking about a situation that results in 
multiple class actions, those are not the types of cases that this 
exception is intended to address. I would like to stress that the 
inquiry under this criterion should not be whether identical or nearly 
identical class actions have been filed. Rather, the inquiry is whether 
similar factual allegations have been made against the defendant in 
multiple class actions, regardless of whether the same causes of action 
were asserted or whether the proposed plaintiff classes in the prior 
case was the same.
  Madam Speaker, I yield to the gentleman from Virginia (Mr. 
Goodlatte).
  Mr. GOODLATTE. I thank the chairman for yielding once again.
  Madam Speaker, in this regard I think it is important to note that 
the exceptions in this legislation are just that, exceptions, and they 
should not be interpreted in ways that turn them into loopholes. For 
example, the legislation excludes actions against States. Obviously, 
this does not mean that plaintiffs can simply name a State in every 
consumer class action and stay out of Federal court. To the contrary, 
Federal courts should proceed cautiously before declining Federal 
jurisdiction under the subsection 1332(d)(5)(a) ``state action'' case 
exception, and do so only when it is clear that the primary defendants 
are indeed States, State officials, or other governmental entities 
against whom the court may be foreclosed from ordering relief.
  The sponsors intend that primary defendants be intended to reach 
those defendants who are the real targets of the lawsuit, i.e. the 
defendants who would be expected to incur most of the loss if liability 
is found. Thus, the term ``primary defendant'' should include any 
person who has substantial exposure to significant portions of the 
proposed class in the action, particularly any defendant that is 
allegedly liable to the vast majority of the members of the proposed 
classes, as opposed to simply a few individual class members.
  It is the sponsors' intention with regard to each of these exceptions 
that the party opposing Federal jurisdiction shall have the burden of 
demonstrating the applicability of an exemption. Thus, if a plaintiff 
seeks to have a class action remanded on the ground that the primary 
defendants and two-thirds or more of the class members are citizens of 
the home State, that plaintiff has the burden of demonstrating that 
these criteria are met.
  Similarly, if a plaintiff seeks to have a purported class action 
remanded because a primary defendant is a State, that plaintiff should 
have the burden of demonstrating that the exception should apply.
  Mr. BOUCHER. Madam Speaker, if the gentleman from Wisconsin will 
yield once again.
  Mr. SENSENBRENNER. I yield to the gentleman from Virginia (Mr. 
Boucher).
  Mr. BOUCHER. Madam Speaker, I thank the gentleman for yielding.
  The principles that have just been enumerated apply to another 
provision that I would like to discuss, the mass action provision. 
Under this provision, defendants will be able to remove mass actions to 
Federal court under the same circumstances in which they will be able 
to remove class actions.

                              {time}  1100

  However, a Federal court would only exercise jurisdiction over these 
claims that meet the $75,000 minimum. In addition, a mass action cannot 
be removed to Federal court if it falls under one of the following four 
categories: number one, if all of the claims arise out of an event or 
occurrence that happened in the State where the action was filed and 
that resulted in injuries only in that State or in contiguous States;
  number two, if it is the defendants who seek to have the claims 
joined for trial;
  number three, if the claims are asserted on behalf of the general 
public pursuant to a State statute authorizing such an action;
  and, number four, if the claims have been consolidated or coordinated 
for pretrial purposes only.
  I would appreciate the gentleman from Wisconsin clarifying how the 
$75,000 amount in controversy minimum would apply to assessing whether 
Federal jurisdiction exists over a mass action, and, most importantly, 
explaining the intent of the sponsors with regard to the first and 
third exceptions.
  Mr. SENSENBRENNER. Mr. Speaker, reclaiming my time, I will be happy 
to explain.
  The mass action provision was included in the bill because mass 
actions are really class actions in disguise. They involve an element 
of people who want their claims adjudicated together, and they often 
result in the same abuses as class actions. In fact, sometimes the 
abuses are even worse because the lawyers seek to join claims that have 
little to do with each other and confuse a jury into awarding millions 
of dollars to individuals who have suffered no real injury.
  Here is how the mass action provision and the current amount-in-
controversy provision would work in tandem: suppose 200 people file a 
mass action in Mississippi against a New Jersey drug manufacturer and 
also name a local drug store. Three of them assert claims for a million 
dollars apiece, and the rest assert claims of $20,000.
  The Federal Court would have jurisdiction over the mass action 
because there are more than 100 plaintiffs, there is minimal diversity, 
and the total amount of controversy exceeds $5 million, and a product 
liability case does not qualify for the local occurrence exception in 
the provision.
  Then the question becomes, which claims would, in the mass action, 
the Federal judge keep in Federal Court, and which would be remanded? 
At this point the judge would have to look at each of the claims very 
carefully and determine whether or not they meet the $75,000 minimum.
  In this regard, I would note that the plaintiffs often seek to 
minimize what they are seeking in the complaint so that they can stay 
in State court. For example, sometimes plaintiffs leave their claim for 
punitive damages off the original complaint to make it seem like their 
claims are smaller than they really are.
  It is our expectation that a Federal judge would read a complaint 
very carefully and only remand claims that clearly do not meet the 
$75,000 threshold. If it is likely that a plaintiff is going to turn 
around in a month and add an additional claim for punitive damages, the 
Federal court should obviously assert jurisdiction over that 
individual's claims.
  Finally, I would like to stress that this provision in no way is 
intended to abrogate 8 United States Code 3867 to narrow current 
jurisdictional rules. Thus, if a Federal court believed it to be 
appropriate, the court could apply supplemental jurisdiction in the 
mass action context as well.
  With regard to the exceptions, it is our intent that they be 
interpreted strictly by a court so that they do not become loopholes 
for an important jurisdictional provision. Thus, the first exception 
would apply only in a situation where we are talking about a truly 
local single event with no substantial interstate effects.
  The purpose of this exception is to allow cases involving 
environmental torts, such as a chemical spill, to remain in State court 
if both the event and the injuries were truly local, even though there 
are some out-of-state defendants.
  By contrast, this exception would not apply to a product liability or 
insurance case. The sale of a product to different people does not 
qualify as an event, and the alleged injuries in such a case would be 
spread out over more than one State or contiguous States even if all of 
the plaintiffs in a particular case came from one single State.
  The third exception addresses a very narrow situation, specifically a 
law

[[Page 2643]]

like the California Unfair Competition Law, which allows individuals to 
bring a suit on behalf of the general public. Such a suit would not 
qualify as a mass action. However, the vast majority of cases brought 
under other States' consumer fraud laws which do not have a parallel 
provision could qualify as removable class actions.
  I yield to the gentleman from Virginia.
  Mr. GOODLATTE. I thank the gentleman for yielding.
  Finally, Mr. Speaker, some critics have complained that the 
legislation removal provisions will result in delay. Can the gentleman 
explain why that is simply not the case?
  Mr. SENSENBRENNER. Mr. Speaker, reclaiming my time, once again, 
critics of the legislation have it backwards. This legislation will 
streamline jurisdictional inquiries by putting an end to all of the 
gaming that takes place under the current system, and the so-called 
delay refers to procedural rules that already exist under the current 
system.
  Under existing law, diversity of citizenship between the parties must 
exist, both at the time a complaint is filed and at the time a 
complaint is removed to Federal court. However, if the plaintiff files 
an amended complaint in State court that creates jurisdiction, or if 
subsequent events create jurisdiction, the defendant can then remove 
the case to Federal court.
  Current law is also clear that once a complaint is properly removed 
to Federal court, the Federal court's jurisdiction cannot be ousted by 
later events. Thus, for example, changes in the amount of controversy 
after the complaint has been removed would not subject a lawsuit to be 
remanded to State court.
  Mr. GOODLATTE. Mr. Speaker, I thank the gentleman for his leadership 
in moving this legislation forward and in working with the Senate to 
accomplish that as well.
  I hope this colloquy will provide guidance on the very important 
jurisdictional provisions in S. 5 and the sponsor's intent.
  Mr. SENSENBRENNER. Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I am pleased to yield 4 minutes to my good 
friend, the gentleman from Massachusetts (Mr. Markey) from the 
Committee on Energy and Commerce. He has worked with us on many of 
these issues.
  Mr. MARKEY. Mr. Speaker, I thank the gentleman from Michigan for 
yielding, and I thank him for his leadership on this most critical of 
all consumer issues before Congress this year.
  So you have all heard now the technical arguments made by the Bush 
administration proponents here on the House floor. So you have heard 
the Bush administration argument on why this is good.
  Now, you want to hear what the bill is really about? Do you want to 
hear what the Bush administration is really interested in? Well, here 
it is, ladies and gentlemen. Citigroup's Smith Barney subdivision: 
``Tobacco. Flash--Senate Just Passed Class Action Bill--Positive For 
Tobacco.'' Let me read it to you:
  ``The Senate just passed a bill, 72-26.'' This has gone out from 
Smith Barney to all their investors. ``This bill is designated to 
funnel class action suits with plaintiffs in different States out of 
State courts and into the Federal court system, which is typically much 
less sympathetic to such litigation.
  ``The practical effect of the change could be that many cases will 
never be heard given how overburdened Federal judges are, which might 
help limit the number of cases.''
  Smith Barney advised its clients that this bill will be positive in 
general for the tobacco industry and that tobacco stocks have rallied 
on this favorable news given that this bill could have a positive 
impact on tobacco litigation.
  That is what it is all about, ladies and gentlemen. You heard the 
technical defense of it for the last half hour. The impact is they are 
trying to protect the tobacco industry from being sued. So if you are 
out there, one of your family members has just found that they have a 
spot on their lung, they have smoked for the last 20 or 30 years, what 
this bill will do is it will make it more difficult for you and the 
other people in your States who also have found that they have spots on 
their lungs to get together to sue the tobacco companies.
  If your children are beginning to smoke, they are 13, 14, 15, this 
bill is intended to make it more difficult for the people in the State 
of New Hampshire, or Kansas, or Oklahoma to bring a suit to stop it. 
That is what it is all about. Smith Barney gives the good news to the 
tobacco industry investors, not to smokers.
  And so what they have done is this. It is brilliant in the Bush 
administration and that is what this side of the aisle is all about. 
The FDA, is it going to move in to regulate tobacco? No, they made sure 
they appoint people who will not do it. The EPA, are they going to move 
in to make sure that the oil industry does not pollute your groundwater 
so that the children in your neighborhood do not contract leukemia; 
that breast cancers do not rise? No. Are they going to have a 
Department of Labor which protects you against asbestos in the 
workplace? No.
  You are not going to see those suits, ladies and gentlemen. So it 
comes to you and your families to go to court. And what this bill is 
intended to do is to not let you go to court. So it is perfect. If you 
are an asbestos company, your stocks are going up. If you are a tobacco 
company, your stocks are going up. If you are an oil company, a 
chemical company, your stocks are going up. Smith Barney gives you the 
good news, Mr. and Mrs. Investor of America.
  But if you are afraid for the health of your family, if you know that 
the groundwater in New Hampshire has been poisoned by Amerada Hess and 
22 other oil companies that are not in New Hampshire, you know what the 
Republicans say? You know what the Bush administration says? The case 
should not be held in New Hampshire. If Amerada Hess, the big oil 
company, is a defendant, the case should be outside of New Hampshire, 
not protecting the person whose family's health has been injured.
  And so that is what it is all about. It is the final payback to the 
tobacco industry, to the asbestos industry, to the oil industry, to the 
chemical industry at the expense of ordinary families who need to be 
able to go to court to protect their loved ones when their health has 
been compromised. And these people are saying, your State is not smart 
enough, your jurors are not smart enough to understand how the MTBE 
ruined the groundwater in their State and poisoned thousands of people, 
that it has to go to a State where Amerada Hess or some large oil 
company feels comfortable, because they are not headquartered in New 
Hampshire, they do not have a large plant in New Hampshire. All they 
did was sell the material which poisoned your neighborhood.
  That is what it is all about, ladies and gentlemen. You just watch 
across the board every single interest that harms the health and well-
being of America skyrocket as soon as we take the vote on final passage 
of this bill today because President Bush is going to sign this bill 
with great joy because the oil, the chemical and polluting industries 
are going to be happy.

Industry Note: Tobacco--Senate Just Passed Class Action Bill--Positive 
                              for Tobacco

                           (By Bonnie Herzog)


                                Summary

       The Senate just passed a bill 72-26 which is designed to 
     funnel class-action suits with plaintiffs in different states 
     out of state courts and into the federal court system, which 
     is typically much less sympathetic to such litigation.
       The practical effect of the change could be that many cases 
     will never be heard given how overburdened federal judges 
     are, which might help limit the number of cases.
       Although this news is positive in general for the tobacco 
     industry, we do not necessarily believe that class actions 
     pose a big threat to the industry. Furthermore, this type of 
     legislation would have been a bigger help to the industry if 
     it was passed 10 years ago.
       The bill now moves to the House floor and the chances are 
     high that it passes since the House Republican leadership 
     said last week that it would pass the Senate's version of 
     this legislation as long as there were no amendments.

[[Page 2644]]




                                OPINION

       The Senate just passed a bill that is designed to funnel 
     class-action lawsuits with plaintiffs in different states out 
     of state courts and into the federal court system, which is 
     historically much less sympathetic to such litigation.
       The practical effect of the change could be that many cases 
     will never be heard, which might also be positive for tobacco 
     companies. Federal judges, facing overburdened dockets and 
     ambiguities about applying state laws in a federal court, 
     often refuse to grant standing to class-action plaintiffs.
       Therefore, tobacco stocks have rallied on this favorable 
     news given that this bill could have a positive impact on 
     potential future tobacco litigation.
       Now the bill should move to the House floor and apparently 
     the House Republican leadership announced last week that the 
     GOP majority in that chamber will pass the Senate's version 
     of class-action litigation provided it arrives without 
     amendments and from what we hear, this is in fact what has 
     happened in the Senate. Obviously President Bush has been a 
     big proponent of this type of legislation so we would assume 
     that he would sign it as part of a broader fight that he 
     hopes will lead to limits on awards in asbestos cases and to 
     caps on pain-and-suffering awards in medical malpractice 
     cases.
       Although positive in general terms for the tobacco 
     companies, clearly this type of legislation would have been 
     much more useful if it were passed 10 years ago.


                         analyst certification

       I, Bonnie Herzog, hereby certify that all of the views 
     expressed in this research report accurately reflect my 
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[[Page 2645]]

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     holder.

  Mr. SENSENBRENNER. Mr. Speaker, I always thought that Federal judges 
protected the rights of everybody.
  Mr. Speaker, I yield 3 minutes to the gentleman from Utah (Mr. 
Cannon).
  Mr. CANNON. Mr. Speaker, to understand the need for S. 5, we need to 
understand the game the class action lawyers play here and how they go 
about abusing the court systems. I call it Class Action Monopoly. Here 
is how it works. They start at Go. The first thing they do is come up 
with an idea for a lawsuit. And then they find a named plaintiff. It 
does not have to be someone who is actually injured in the process. All 
the lawyer really needs is an idea for a lawsuit and potential 
defendants who have deep pockets.
  Next they find a person who is the named plaintiff. That named 
plaintiff is a citizen of the same State as one of the defendants and 
that puts them in the State court, which is where they want to be. 
Sometimes they have to promise to pay off that named plaintiff at this 
point, but that is all part of the game.
  Next the lawyers level their allegations, both in court and in the 
media. Remember, they do not have to have proof for their allegations. 
They just need a forum in which to make the allegations. Now the real 
fun begins after you have made the allegations. They are in State court 
with the named plaintiffs and their allegations, and it is time to get 
out of rule 23 free.
  Rule 23 is the rule that would apply in Federal courts that defines 
when a class action can be certified consistent with fundamental 
fairness and due process considerations. But in this game, there is no 
fairness. There is no due process. So they easily convince their magnet 
State to certify that they have a class and at the same time they file 
copycat lawsuits in State courts all over the country. These are the 
same class actions asserting the same claims on behalf of the same 
people. These copycat lawsuits clog the State courts.

                              {time}  1115

  At this point in the game, the lawyers start making the money. Let us 
see where the money goes.
  In the Columbia House record case, the lawyers took home $5 million 
and the plaintiffs got a coupon for discounts on future purchases of 
records.
  In the Blockbuster case, the lawyers walked away with $9.25 million, 
and the plaintiffs again got a coupon for $1 off their next video 
rental, coupons that the defendant probably would have issued anyway.
  In the Bank of Boston case, the lawyers settled the case and took 
home $8.5 million. And the customers had money deducted from their 
mortgage accounts to pay off the lawyers. So in the end, a State court 
approved these cases, and all of the consumers in the lawsuit lost 
money.
  People may be wondering what happens to them in this game. We already 
know that if one is a consumer, in the consumer class, they will be 
lucky if they get a dollar-off coupon. If the business one works for 
gets sued in one of the class actions, their employer is going to take 
a major hit and maybe even lay them off. It is that clear in some of 
these cases, the basic result is that the lawyers will get lots of 
money, but consumers will pay because health care and car insurance 
premiums will go through the roof. And when the game comes to an end, 
they are left with no money and the lawyers are at ``go'' and they get 
to start the process all over again.
  It is fundamentally important that we resolve this problem and help 
America move forward. I urge support of S. 5.
  Mr. CONYERS. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman 
from California (Ms. Linda T. Sanchez).
  Ms. LINDA T. SANCHEZ of California. Mr. Speaker, I rise in opposition 
to S. 5.
  The sponsors of this bill call it the Class Action Fairness Act, but 
nothing about this bill is fair, especially for the victims of 
corporate wrongdoing. This bill erects a nearly insurmountable barrier 
for everyday Americans, who have been hurt or wronged, to have their 
day in court. Thanks to the so-called Class Action Fairness Act, people 
who have had their civil rights trampled on will no longer be able to 
bring their claims to State court. It does not matter if the laws of 
their home State provide better civil rights protections or that it may 
be more convenient for the victims of discrimination to seek justice in 
a court where they live. With S. 5 they must go to Federal court.
  The same burden is put on the backs of hourly wage workers who sue 
for back pay that they are owed. These folks are struggling to put food 
on their family's table, and they almost certainly cannot afford the 
high cost of multistate litigation. With S. 5 they, too, must bring 
their claims to a Federal court that may not even be in their State 
just so that they can get the back pay that they do.
  I ask all the proponents of this bill, is that their idea of 
fairness?
  Let us be real. S. 5 is not about reducing venue shopping. It is not 
about the mythical scourge of predatory plaintiffs' lawyers, and it is 
not about the fabricated economic drain of excessive jury awards. What 
this bill really is about is doing a favor for unscrupulous, negligent 
corporations by making it harder for their victims to sue them. It is 
protecting big businesses who are guilty of wrongdoing from liability.
  I am a lawyer and I acknowledge that there are some members of my 
profession who file frivolous suits. But if the lawyers are the ones 
that they claim are ruining this legal system, why are the sponsors of 
this bill making it harder for the victims?
  This bill makes about as much sense as locking the door of a hospital 
in order to lower health care costs. Kicking people out of the system 
does not solve the problem, and that is exactly what S. 5 does. It 
penalizes the victims of wrongdoing without doing anything to improve 
our legal system, and it shields bad actors from having to face the 
consequences of their action. Where is the personal responsibility? 
That is why I oppose this bill.
  I urge all of my colleagues to vote ``no'' on the final passage and 
to vote ``yes'' on the Conyers substitute.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 2 minutes to the gentleman 
from Florida (Mr. Keller).
  Mr. KELLER. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, the bottom line is that class action reform is badly 
needed. Currently, crafty lawyers are able to game the system by filing 
large, nationwide class action suits in certain preferred State courts 
such as Madison County, Illinois, where judges are quick to certify 
classes and quick to approve settlements that give the lawyers millions 
of dollars in fees and give the clients worthless coupons.
  Let us take a look at Madison County, Illinois with this chart. 
Madison County, Illinois has been called the number one judicial 
hellhole in the United States. In 2002 we can see there

[[Page 2646]]

were 77 class action filings, and in 2003 there were 106 class action 
lawsuits filed. The movie ``Bridges of Madison County'' was a love 
story. The ``Judges of Madison County'' would be a horror flick.
  Unfortunately, all too often it is the lawyer who drives these cases 
and not the individuals who are supposedly hurt. For example, in a suit 
against Blockbuster over late fees, the attorneys received for 
themselves $9.25 million, while their clients got a $1-off discount 
coupon. Similarly, in a lawsuit against the company who makes Cheerios, 
the lawyers received $2 million for themselves; predictably their 
clients received a coupon for a box of Cheerios.
  In a nutshell, these out-of-control class action lawsuits are killing 
jobs, they are hurting small business people who cannot afford to 
defend themselves, they are hurting consumers who end up paying higher 
prices for goods and services.
  This legislation provides much-needed reform in two key areas. First, 
it eliminates much of the forum shopping by requiring most of these 
nationwide class action suits to be filed in federal court. And, 
second, it cracks down on these coupon-based class action settlements 
by requiring fee awards to be based on the number of coupons actually 
redeemed or the number of hours actually billed.
  Mr. Speaker, I urge my colleagues to vote ``yes'' on this class 
action reform legislation. It is about common sense, it is about 
justice, and it is about time.
  Mr. CONYERS. Mr. Speaker, I yield 3 minutes to the distinguished 
gentleman from Virginia (Mr. Scott).
  Mr. SCOTT of Virginia. Mr. Speaker, I thank the gentleman for 
yielding me this time.
  Mr. Speaker, we hear all this hoopla about these coupon settlements, 
but we do not hear any suggestion as to what to do about them. There 
are a lot of situations where corporations are ripping people off for 
small amounts of money.
  For example, if a person at a checkout counter calibrates the machine 
to just cheat one out of a few cents, what is one's recovery in that 
case? Just a few cents. And the only way one can stop that is with a 
class action. But they would suggest there is no point in bringing the 
class action; as long as they did not rip them off for too much, they 
ought to get away with it.
  Furthermore, a lot of these coupon settlements are in Federal courts 
anyway, so there is not going to be much change. But some of these 
coupon cases are the only way that we can rein in corporate abuse.
  But this bill just increases complications in a gratuitous way. It 
took a half an hour for the proponents to explain when it is a class 
action and when it is not a class action. In normal cases they file it 
in State court. Either they certify it or not, and then one goes 
forward. There is not much complication. But this invites mischief. 
Whether it is really a class action or not, remove it anyway, and let 
the Federal courts mess around with it and mess around with it and mess 
around with it. They may never get their day in court. And if they do 
not certify it, what happens to one's case? They may not be able to get 
back to State court. So the fact that they did not certify a class 
action will deny one the right to even have their day in court.
  This complicates venue. They do not know where the case is going to 
be heard. It could be that an injury happens in one State, they have 
corporations in that State involved, they have State plaintiffs, and 
here one has to go chasing around, trying to figure out where they are 
going to be.
  The Attorneys General across the States, 47 Attorneys General in 
States and territories, have come out against the bill because it puts 
the Attorneys General in the same crack. They do not know where the 
case is going to be heard. If they bring a State action in State court, 
they may get removed. Some of the States have better wage laws, civil 
rights laws, sometimes consumer protections, and if the Attorneys 
General want to come in to protect their own citizens in their own 
States, they ought to have that right and not get jerked around to 
Federal court.
  Finally, Mr. Speaker, some Federal courts are more clogged up than 
State courts. Some in the same area, the State courts are more clogged 
up than the Federal courts. Why do we have to always go into Federal 
court on these cases rather than have some kind of choice? Every time 
we have a criminal case, it will take preference over the civil cases. 
And in some cases where we have some terrorist cases or a backlog of 
Federal cases, one may never get to hear their case in Federal court.
  If we want consumers to get timely justice, we need to defeat this 
bill, and I hope that is what we do.
  Mr. CONYERS. Mr. Speaker, I yield 4 minutes to the distinguished 
gentleman from North Carolina (Mr. Watt).
  Mr. WATT. Mr. Speaker, I rise in opposition to S. 5, the Class Action 
Fairness Act. Despite its name, this bill is anything but fair to the 
class action device that has provided redress to large numbers of 
American citizens who have been harmed by the same defendant or a group 
of defendants.
  Class action procedures have made it possible for injured Americans 
to aggregate small claims that might not otherwise warrant the expense 
of individual litigation. This bill before us will effectively 
undermine the utility, practicality, and choice the class action 
mechanism has offered to injured persons with legitimate claims against 
powerful entities.
  There appear to be improvements in this bill from the bill we 
considered last Congress; yet there could and should be more 
improvements. But the trend thus far this session is to dispense with 
regular order, deny committee consideration, and to leave Members with 
1 to 2 minutes to hurriedly voice our concerns. I can guarantee my 
colleagues, having practiced law for over 20 years, that the core 
provisions of this bill will invite prolonged satellite litigation into 
ill-defined or undefined terms in this bill, clogging the Federal 
courts and denying prompt justice to worthy claimants.
  For example, where ``significant relief'' is sought against a home 
State defendant, the court has no jurisdiction. What is significant and 
what is not significant? Also, and worse in my judgment, no longer will 
a coherent description of the class be sufficient before the trial on 
the merit proceeds. Under the bill the judge must first know with 
certainty the absolute number of the plaintiff class, because whether 
he may or must decline to hear the case depends on whether a ``magic'' 
number of plaintiffs are citizens of the State where the lawsuit was 
filed. There are other examples too complicated to address here in the 
time that we have available.
  But let me just say that juxtaposed against the smattering of cases 
paraded by the supporters of this bill as justification for this 
upheaval in our justice system are countless class action lawsuits by 
principled attorneys and courageous plaintiffs that have exposed 
deliberate wrongdoing, obtained justice for American citizens, and 
vindicated the values of fair play and equal justice that define our 
society.
  America is distinguished from other countries because of its legal 
system both criminal and civil. Is it perfect? No. But the majority 
wages countless legislative assaults on the entire system rather than 
confined, deliberative, surgical repairs. Under this bill, one bad 
judge, we condemn all of the judges in the system. One excessive jury 
award, let us overhaul the entire jury system. One irresponsible 
lawyer, let us punish all lawyers. And here let us take these actions 
without any committee hearings, markup, or debate. What could be more 
irresponsible to our constituents?
  Whatever happened to the notion that we were making our court systems 
convenient to people? In some of our States, the Federal courts are far 
removed from the places where individual litigants live. And what is it 
with the notion all of a sudden that my States rights friends believe 
that the Federal courts and the Federal Government can solve every 
problem in our society? That is just simply absurd, inconsistent with 
any kind of consistent philosophy about federalism.

[[Page 2647]]

  I think we should defeat this flawed bill, and I thank the gentleman 
for yielding me this time.

                              {time}  1130

  Mr. CONYERS. Mr. Speaker, I yield 3 minutes to the gentleman from 
Virginia (Mr. Moran).
  Mr. MORAN of Virginia. Mr. Speaker, I thank the gentleman for 
yielding me time, even though I am in opposition to his position and 
favor this bill. This is not a radical bill, nor is it regressive. In 
fact, it is a reasonable compromise designed to address what is an 
abuse of the judicial system. That is why The Washington Post endorses 
this bill. It is why the Democratic Senators from New York, California, 
and Illinois all voted for the bill. In fact, Democratic Senators 
representing 19 States voted for this bill in the other body. Why did 
they do this? Because they believe on balance that consumers are going 
to be better represented in Federal courts.
  And this notion that somehow State courts are going to be more 
inclined to represent consumer interests rather than Federal courts on 
issues like tobacco and civil rights and so on, I do not think history 
proves that to be the case.
  I am particularly sensitive to these charges that this bill is going 
to inhibit civil rights actions. Clearly if we look at history, it is 
the Federal courts that have been far more insistent upon enforcement 
of civil rights than State courts. Even recently in the Home Depot 
case, a gender-discrimination case, it was settled with a $65 million 
settlement, filed in Federal court. The Coca-Cola racial-discrimination 
settlement, which guaranteed each class member recovery of at least 
$38,000, was achieved in Federal court.
  Contrast that to the Bank of Boston case, where the depositors in 
Boston were not even aware they were members of a plaintiff class, 
where a lawyer filed suit down in Alabama supposedly representing their 
interest, and they found out when they had their bank account reduced 
by $90; $90 was taken out of the mortgage escrow account from these 
depositors to pay the lawyers when they were not even aware they were a 
member of the plaintiff's suit, and the lawyer walks off with $8.25 
million. That is judicial abuse, and that is what this bill corrects.
  This is a reasonable bill. The fact is that in so many State and 
local courts, they do not have the resources to go through the 
mountains of evidence that have to be presented in class action suits. 
In Federal courts they are far more likely to have those resources. 
They have court clerks and they can hire magistrates that can go 
through all of the evidence.
  There has been far too much abuse where judges have certified these 
settlements at the tort lawyer's request and then, the defendant has to 
settle for large sums of money. That is not the way it is supposed to 
work.
  On balance, I think the judicial system will be far more fair, 
responsible, and reasonable under this compromise bill; so I would urge 
my colleagues, particularly on the Democratic side, to support this 
bill.
  Mr. CONYERS. Mr. Speaker, I yield myself 1 minute. I would like to 
respond to my good friend, the gentleman from Virginia (Mr. Moran).
  First of all, I think the NAACP and the civil rights groups will be 
eager to find out that his wisdom is superior to their experience in 
the civil rights movement. What the gentleman was suggesting may have 
been correct a number of years ago, but I would point out to the 
gentleman that the Federal courts more recently have not been as 
desirable a forum for civil rights activities.
  The Bank of Boston case, that was 10 years ago and an anomaly. There 
are not other examples of class actions where class members lost money. 
No other court has made the same mistake. I would urge that neither the 
gentleman nor any of us rewrite class action rules because of one 
mistake.
  Mr. Speaker, I yield 3 minutes to the gentleman from Washington (Mr. 
Inslee).
  Mr. INSLEE. Mr. Speaker, I heard an earlier speaker refer to class 
actions as a game. Try telling that to the 9-year-old son of Janet 
Huggins, a 39-year-old healthy Tennessee mother who took Vioxx and died 
in September 2004. Tell her family that the effort to protect her 
family is a game. This is not a game. This is flesh and blood, the 
ability to protect your family when something happens to you that you 
did not have anything to do with.
  This bill is the Vioxx Protection Bill. It is the Wal-Mart Protection 
Bill. It is the Tyco Protection Bill. It is the Enron Protection Bill. 
Anyone in the State of Washington who saw what Enron did to us, 
stealing $1 billion, should not be voting for this bill, because this 
bill in many ways is the Just Say No Bill to People Who Are Injured By 
Rapacious Wrongdoers.
  In three ways it says ``just say no'' to consumers who were hurt by 
Enron, because in the Federal courts, if you happen to be in a 
plaintiff's group of multiple States and the laws are a little 
different in the States, do you know what the Federal courts do? They 
throw out the class action.
  Do you want to know why the Chamber of Commerce is spending $1 
billion to lobby on what seems to be a procedural issue? Because they 
throw out class actions where there is any difference in States, 
meaning you will not be able to have a class action anywhere, anywhere, 
Federal or State.
  Why is this so important? I liken this to right now you have two arms 
to protect Americans, the State judicial system and the Federal 
judicial system. This reduces by half the resources that are available 
to Americans to get redress when Enron steals from them or when Vioxx 
kills them.
  On 9/11, did we respond to September 11 by taking out city police 
officers and only having the FBI? On 9/11, did we respond by not having 
local fire departments and only having the Coast Guard or Army fire 
department? No. We recognized that in our system of federalism, 
Americans deserve the full protection, not just half the protection.
  This cuts the available judicial resources in half. Why is that 
important? The second reason it just says no to injured Americans is 
the Federal courts cannot handle these class actions. They do not have 
enough courts and judges. You go down and ask how long you will wait 
today to get into a Federal court. Then add about 4 or 5 years after 
this bill if this bill were to come into effect. You just say no 
because it takes the keys away from the courthouse.
  The third reason it just says no to good American citizens is it 
takes from the State attorneys general their ability to protect people. 
That is why the States attorneys general, Republican and Democrat 
alike, are adamantly opposed to this bill, because this bill takes cops 
off the beat; attorneys generals whose job it is to protect us from 
what Roosevelt called the ``malefactors of great wealth'' are off the 
beat.
  Mr. Speaker, we should reject this bill.
  Mr. CONYERS. Mr. Speaker, I am pleased to yield 5 minutes to the 
distinguished gentlewoman from Texas (Ms. Jackson-Lee), a member of the 
Committee on the Judiciary and a ranking subcommittee member.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the gentleman for the 
time that he has spent on this legislation. I think we have seen this 
come across our desks for a number of sessions, and we have tried to 
work in a bipartisan manner in order to find a way to respond to some 
of the larger class actions that are now proceeding before us in the 
courts.
  Mr. Speaker, let me start out by trying to address some of the large 
dilemmas that have seemingly been the underpinnings of this overhaul of 
a system that is not broken.
  I know some two or three sessions ago we were in the midst of 
conversations about the asbestos lawsuits. Frankly, I believe that with 
a reasonable dialogue and exchange, we were nearing some sort of 
resolution that would have allowed that heinous series of events over 
the years, the asbestos poisoning for many, many workers, to be brought 
to a conclusion.
  For some reason, those favoring class action reform want to paint 
with a

[[Page 2648]]

broad brush the victims, those who have been victimized by asbestos 
poisoning. Even today as we are looking to reconstruct some of the 
older buildings in my community, we are finding an asbestos problem. 
But because of the notice that was given through these class action 
lawsuits, we now have companies who are protecting workers who are 
going in trying to clean out asbestos. We would not have had that had 
we had not had this asbestos crisis.
  It is the same thing with tobacco. Although there has been some humor 
about ``don't you know when to stop smoking,'' we know that for years 
and years, years and years, there was no labeling of cigarettes to 
suggest that they in fact caused cancer. So the tobacco lawsuits are 
not in fact frivolous. They may be high in return, but they are not 
frivolous.
  This class action lawsuit legislation, I believe, is excessive and 
overreaching. What it simply wants to do is burden Federal courts 
without giving them any resources. There is nothing in this legislation 
that increases the funding of our Federal courts.
  Take the southern district, for example. We are so overburdened with 
criminal cases, immigration cases, smuggling cases, drug cases, there 
is absolutely no room to orderly now prosecute or allow to proceed 
class action lawsuits from people who have been damaged enormously.
  This legislation wants to federalize mass torts, that is thousands 
and thousands of people, when they realize that the compromise, for 
example, that was offered in the Senate, the Feinstein compromise, does 
not do anything, because what it says is you can go into State court if 
you can find one of the defendants of a large corporation in your 
State. If you happen to be a small State or maybe some State that is 
not the headquarters of corporate entities, like on the east coast, for 
example, you will find no defendant, so you will be languishing year 
after year after year trying to get into Federal court.
  What it also does is minimizes the opportunity of those who can 
secure their local lawyer to get them into a State court and burdens 
them with the responsibility of finding some high-priced counsel that 
they cannot afford to try to understand Federal procedure law to get 
into the Federal court. It closes the door to the least empowered: the 
poor, the working class and the middle class.
  What we find as well is that this legislation is much broader than is 
needed. Why close the door to those who are injured by the failings of 
products? Why close the doors to those who are injured by the mass and 
unfortunate activities of a company like Enron in my congressional 
district, penalizing thousands of workers all over America unfairly and 
giving them no relief, giving no relief to the pensioners who lost all 
of their dollars?
  Mr. Speaker, what we have here is a response to no crisis, a response 
to no problem. Frankly, I believe that if we reasonably look at this 
legislation, we will find that all it does is it zippers the courthouse 
door.
  To my good friend who mentioned that civil rights can take place 
wherever is necessary, let me just share with you that civil rights is 
not a popular cause; and, therefore, to then add it to get in line now 
with thousands of other cases, you can be assured that there will be a 
crisis.
  Mr. Speaker, let me simply say I rise to support the substitute that 
has the civil rights carve-out, the wage-and-hour carve-out. It 
excludes non-action cases involving physical injuries, an attorney 
general carve-out, the anti-secrecy language; and in particular it does 
not allow companies to go offshore to avoid class action lawsuits.
  Mr. Speaker, let me simply say this is a bill on the floor with no 
problem. But I can tell you, America, you are going to have a big 
problem once this bill is passed, and I am saddened by the fact that 
time after time we come to this floor and we close out the working 
people, we close out the middle-class, and we close out those who need 
relief.
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, we have listened carefully to the discussion here, and 
it is very clear that one thing is for sure: this is not a simple 
procedural fix to class actions in our courts.

                              {time}  1145

  Another thing, it is clear that all of the totally unsatisfactory 
provisions have not been removed.
  First, the bill, as the gentlewoman from Texas has said, harms 
working Americans and victims of discrimination who are in no position 
to bring individual actions of wage-and-hour cases or civil rights 
discrimination claims. Moving the cases to Federal court will result in 
many never being ever heard at all.
  Many State laws provide better protection than Federal statutes. For 
example, 20 States provide protection for marital status and Federal 
law does not. Twenty-one States extend Federal definitions of national 
origin discrimination by including ancestry, place of birth, and 
citizenship status; and 31 States prohibit genetic discrimination in 
the workplace, not provided under Federal law.
  Secondly, this bill closes the door on victims of large-scale 
personal injury cases resulting from accidents, environmental 
disasters, or dangerous drugs that are widely sold. Although these 
cases are filed in State courts under State law, the bill will treat 
them as class actions and throw them willy-nilly into the Federal 
court.
  While harming victims of personal injury, this provision greatly 
helps the companies, like Merck, the company that manufactured the 
deadly drug Vioxx. Since the discovery of the dangers of Vioxx, 
hundreds of cases from all over the country have been filed against 
Merck, and we can anticipate likely thousands more. However, under this 
proposal before us today, those who suffered harm from the drug will be 
denied their day in court and their ability to seek justice.
  Finally, this bill makes it difficult for consumers to pursue claims 
against defendants who violated consumer protection laws. The bill will 
force many of these cases filed in State courts into the Federal 
system. But some Federal courts will not certify class actions 
involving the laws of multiple States because they deem the case too 
complex and unmanageable. Result: harmed consumers will never have 
their cases adjudicated in the courts.
  It also makes it impossible for States to pursue actions against 
defendants who have caused harm to the State's citizens. State 
attorneys general often pursue these claims under State consumer 
protection statutes, antitrust laws, often with the attorney general 
acting as the class representative for the consumers of the State.
  Under this bill, would we want these cases to be thrown into Federal 
court and severely impede the State's ability to enforce its own laws 
for its own citizens? That is what will happen. That is what will take 
place.
  So I am very pleased to put in the Record the letter from the States 
attorneys general opposing this legislation, those attorneys general 
from California, Illinois, Iowa, Kentucky, Maine, Maryland, 
Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, 
Oregon, Vermont, and West Virginia.
  I would also like to add the letter from the environmental 
organizations which have made their case as to why this would be a very 
harmful measure. The signatories of this letter include the United 
States Public Interest Research Group, PIRG; the Wilderness Society; 
the Sierra Club; the National Environment Trust; Greenpeace; Friends of 
the Earth; and the National Audubon Society, and many others.
  Finally, Mr. Speaker, I include in this debate from the Leadership 
Conference and the AFL-CIO, and the Alliance For Justice, all writing 
on one letter, and they plead with us in the House of Representatives 
to protect working men and women and civil rights litigants by opposing 
the measure that is before us.

                                Washington, DC, February 15, 2005.
       Dear Representative: On behalf of the undersigned civil 
     rights and labor organizations, we write to urge you to vote 
     against the Class Action Fairness Act (S. 5), which passed 
     the Senate last week. While the bill was pending before the 
     Senate, we pushed for

[[Page 2649]]

     an amendment offered by Senator Kennedy that would have 
     exempted civil rights and wage and hour state law cases. 
     Because the amendment was not adopted, we ask you to reject 
     S. 5 in order to ensure that the Class Action Fairness Act 
     does not adversely impact the workplace and civil rights of 
     ordinary Americans by making it extremely difficult to 
     enforce civil rights and labor rights.
       During Congress' extensive examination into the merits of 
     class action lawsuits, nowhere has a case been made that 
     abuses exist in anti-discrimination and wage and hour class-
     action litigation. By allowing dozens of employees to bring 
     one lawsuit together, the class-action device is frequently 
     the only means for low wage workers who have been denied mere 
     dollars a day to recover their lost wages. Moreover, class 
     actions also are often the only means to effectively change a 
     policy of discrimination. These suits level the playing field 
     between individuals and those with more power and resources, 
     and permit courts to decide cases more efficiently.
       Wage and hour class actions are most often brought in state 
     courts under the law of the state in which the claims arise. 
     The reason is that state wage and hour laws typically provide 
     more complete remedies for victims of wage and hour 
     violations than the federal wage and hour statute. For 
     instance, the federal Fair Labor Standards Act (FLSA) offers 
     no protection for a worker who works 30 hours and is paid for 
     20, so long as the worker's total pay for the 30 hours worked 
     exceeds the federal minimum wage. However, many states have 
     ``payment of wage'' laws that would require that the worker 
     be fully paid for those additional 10 hours of work. Also, 
     federal law provides no remedy for part-time workers who 
     often work 10-16 hour days, yet earn no overtime because they 
     work less than 40 hours per week. At least six states and 
     territories, however, including California and Alaska, 
     require payment of overtime after a prescribed number of 
     hours are worked in a single day.
       Likewise, state laws increasingly provide greater civil 
     rights protection than federal law. For example, every state 
     has passed a law prohibiting discrimination on the basis of 
     disability. Some of these state statutes provide a broader 
     definition of disability and a greater range of protection in 
     comparison to the federal Americans with Disabilities Act 
     including California, Minnesota, New Jersey, New York, Rhode 
     Island, Washington, and West Virginia. In addition, every 
     state has enacted a law prohibiting age discrimination in 
     employment, and some of these state laws--including those of 
     California, Michigan, Ohio and the District of Columbia--
     contain provisions affording greater protection to older 
     workers than comparable provisions of the federal Age 
     Discrimination in Employment Act (ADEA).
       In addition, many state laws provide protections to 
     classifications not covered by federal law. For example, the 
     following states provide protection for marital status: 
     Alaska, California, Connecticut, Delaware, Florida, Hawaii, 
     Illinois, Maryland, Michigan, Minnesota, Montana, Nebraska, 
     New Hampshire, New Jersey, New York, North Dakota, Oregon, 
     Virginia, Washington, and Wisconsin. Moreover, several states 
     have expanded Title VII's ban on national origin 
     discrimination to prohibit discrimination on the basis of 
     ancestry, or place of birth, or citizenship status. These 
     states include Arkansas, California, Colorado, Connecticut, 
     Hawaii, Illinois, Indiana, Kansas, Maine, Massachusetts, 
     Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, South 
     Dakota, Vermont, West Virginia, Wisconsin, Wyoming, and the 
     Virgin Islands.
       Finally, 31 states have enacted legislation prohibiting 
     genetic discrimination in the workplace--an important 
     protection given the rapid increase in the ability to gather 
     this type of information. The 31 states are Arizona, 
     Arkansas, California, Connecticut, Delaware, Hawaii, Iowa, 
     Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, 
     Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New 
     Jersey, New York, North Carolina, Oklahoma, Oregon, Rhode 
     Island, South Dakota, Texas, Utah, Vermont, Virginia, 
     Washington, and Wisconsin. In addition, Florida and Illinois 
     have enacted more limited protections against genetic 
     discrimination.
       Under S. 5, citizens are denied the right to use their own 
     state courts to bring class actions against corporations that 
     violate these state wage and hour and state civil rights 
     laws, even where that corporation has hundreds of employees 
     in that state. Moving these state law cases into federal 
     court will delay and likely deny justice for working men and 
     women and victims of discrimination. The federal courts are 
     already overburdened. Additionally, federal courts are less 
     likely to certify classes or provide relief for violations of 
     state law.
       In light of the lack of any compelling need to sweep state 
     wage and hour and civil rights claims into the scope of the 
     bill, which is done in the current bill, we urge you to vote 
     against S. 5. In the event that amendments are offered, we 
     support any amendment that, like the Kennedy amendment and 
     others offered in the Senate, preserves the right of 
     individuals to bring class actions in an effective, efficient 
     manner.
       If you have any questions, or need further information, 
     please call Nancy Zirkin, Deputy Director of the Leadership 
     Conference on Civil Rights (202-263-2880); Sandy Brantley, 
     Legislative Counsel, Alliance for Justice (202-822-6070); or 
     Bill Samuel, Legislative Director, AFL-CIO (202-637-5320).
           Sincerely,
       AARP; AFL-CIO; Alliance for Justice; American-Arab Anti-
     Discrimination Committee; American Association of People with 
     Disabilities; American Association of University Women; 
     American Civil Liberties Union; American Federation for the 
     Blind; American Federation of Government Employees; American 
     Federation of School Administrators; American Federation of 
     State, County & Municipal Employees; American Federation of 
     Teachers; American Jewish Committee; Americans for Democratic 
     Action.
       The Arc of the United States; Association of Flight 
     Attendants; Bazelon Center for Mental Health Law; Center for 
     Justice and Democracy; Coalition of Black Trade Unionists; 
     Communications Workers of America; Consortium for Citizens 
     with Disabilities Civil Rights Task Force; Department for 
     Professional Employees, AFL-CIO; Disability Rights Education 
     and Defense Fund; Epilepsy Foundation; Federally Employed 
     Women; Federally Employed Women's Legal & Education Fund, 
     Inc.; Food & Allied Service Trades Department, AFL-CIO; Human 
     Rights Campaign.
       International Association of Machinists and Aerospace 
     Workers; International Brotherhood of Boilermakers, Iron Ship 
     Builders, Blacksmiths, Forgers and Helpers; International 
     Brotherhood of Electrlcal Workers; International Brotherhood 
     of Teamsters; International Federation of Professional & 
     Technical Engineers; International Union of Bricklayers and 
     Allied Craftworkers; International Union of Painters and 
     Allied Trades of the United States and Canada; International 
     Union, United Automobile, Aerospace & Agricultural Workers of 
     America; Jewish Labor Committee; Lawyers' Committee for Civil 
     Rights Under Law; Lawyers' Committee for Civil Rights of the 
     San Francisco Bay Area; Leadership Conference on Civil 
     Rights; Legal Momentum; Mexican American Legal Defense and 
     Educational Fund.
       NAACP; NAACP Legal Defense & Educational Fund, Inc.; 
     National Alliance of Postal and Federal Employees; National 
     Asian Pacific American Legal Consortium; National Association 
     for Equal Opportunity in Higher Education; National 
     Association of Protection and Advocacy Systems; National 
     Association of Social Workers; National Employment Lawyers 
     Association; National Fair Housing Alliance; National 
     Organization for Women; National Partnership for Women and 
     Families; National Women's Law Center; Paper, Allied-
     Industrial, Chemical and Energy Workers International Union; 
     Paralyzed Veterans of America.
        People For the American Way; Pride At Work, AFL-CIO; 
     Service Employees International Union; Transport Workers 
     Union of America; Transportation Communications International 
     Union; UAW; Unitarian Universalist Association of 
     Congregations; UNITE!; United Cerebral Palsy; United Food and 
     Commercial Workers International Union; United Steelworkers 
     of America; Utility Worker Union of America; and Women 
     Employed.
                                  ____

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

[[Page 2650]]

     MTBE in groundwater at least 20 percent of the time they 
     sample for it, and 24 states said that they find it at least 
     60 percent of the time. Some communities and individuals have 
     brought or soon will bring suits to recover damages for MTBE 
     contamination and hold the polluters accountable, but under 
     this bill, MTBE class actions or ``mass actions'' based on 
     state law could be removed to federal court by the oil and 
     gas companies in many of these cases.
       This could not only make these cases more expensive, more 
     time-consuming and more difficult for injured parties, but 
     could also result in the dismissal of legitimate cases by 
     federal judges who are unfamiliar with, or less respectful 
     of, state-law claims. For example, in at least one MTBE class 
     action, a federal court dismissed the case based on oil 
     companies' claims that the action was barred by the federal 
     Clean Air Act (even though that law contains no tort 
     liability waiver for MTBE). Yet a California state court 
     rejected a similar federal preemption argument and let the 
     case go to. a jury, which found oil refineries, fuel 
     distributors, and others liable for damages. These cases 
     highlight how a state court may be more willing to uphold 
     legitimate state law claims. Other examples of state-law 
     cases that would be weakened by this bill include lead 
     contamination cases, mercury contamination, perchlorate 
     pollution and other ``toxic tort'' cases.
       In a letter to the Senate last year, the U.S. Judicial 
     Conference expressed their continued opposition to such 
     broadly written class action removal legislation. Notably, 
     their letter states that, even if Congress determines that 
     some ``significant multi-state class actions'' should be 
     brought within the removal jurisdiction of the federal 
     courts, Congress should include certain limitations and 
     exceptions, including for class actions ``in which plaintiff 
     class members suffered personal injury or personal property 
     damage within the state, as in the case of a serious 
     environmental disaster.'' The Judicial Conference's letter 
     explains that this ``environmental harm'' exception should 
     apply ``to all individuals who suffered personal injuries or 
     losses to physical property, whether or not they were 
     citizens of the state in question.''
       We agree with the Judicial Conference that cases involving 
     environmental harm are not even close to the type of cases 
     that proponents of S. 5 cite when they call for reforms to 
     the class action system. Including such cases in the bill 
     penalizes injured parties in those cases for no reason other 
     than to benefit the polluters. No rationale has been offered 
     by the bill's supporters for including environmental cases in 
     S. 5's provisions. We are unaware of any examples offered by 
     bill supporters of environmental harm cases that represent 
     alleged abuses of the state class actions.
       More proof of the overreaching of this bill is that the so-
     called ``Class Action Fairness Act'' is not even limited to 
     class action cases. The bill contains a provision that would 
     allow defendants to remove to federal court all environmental 
     ``mass action'' cases involving more than 100 people--even 
     though these cases are not even filed as class actions. For 
     example, the bill would apply to cases similar to the 
     recently concluded state-court trial in Anniston, Alabama, 
     where a jury awarded damages to be paid by Monsanto and 
     Solutia for injuring more than 3,500 people that the jury--
     found had been exposed over many years--with the companies' 
     knowledge--to cancer-causing PCBs.
       There is little doubt in the Anniston case that, had S. 5 
     been law, the defendants would have tried to remove the case 
     from the state court that serves the community that suffered 
     this devastating harm. Even in the best-case scenario, S. 5 
     would put plaintiffs like those in Anniston in the position 
     of having to fight costly and time-consuming court battles in 
     order to preserve their chosen forum for litigating their 
     claims. In any case, it would reward the kind of reckless 
     corporate misbehavior demonstrated by Monsanto and Solutia by 
     giving defendants in such cases the right to remove state-law 
     cases to federal court over the objections of those they have 
     injured.
       The so-called ``Class Action Fairness Act'' would allow 
     corporate polluters who harm the public's health and welfare 
     to exploit the availability of a federal forum whenever they 
     perceive an advantage to doing so. It is nothing more than an 
     attempt to take legitimate state-court claims by injured 
     parties out of state court at the whim of those who have 
     committed the injury.
       Cases involving environmental harm and injury to the public 
     from toxic exposure should not be subject to the bill's 
     provisions; if these environmental harm cases are not 
     excluded, we strongly urge you to vote against S. 5.
           Sincerely,
       S. Elizabeth Birnbaum, Vice President for Government 
     Affairs, American Rivers.
       Doug Kendall, Executive Director, Community Rights Counsel.
       Mary Beth Beetham, Director of Legislative Affairs, 
     Defenders of Wildlife.
       Sara Zdeb, Legislative Director, Friends of the Earth.
       Anne Georges, Acting Director of Public Policy, National 
     Audubon Society.
       Karen Wayland, Legislative Director, Natural Resources 
     Defense Council.
       Tom Z. Collina, Executive Director, 20/20 Vision.
       Linda Lance, Vice President for Public Policy, The 
     Wilderness Society.
       Paul Schwartz, National Campaigns Director, Clean Water 
     Action.
       James Cox, Legislative Counsel, Earthjustice.
       Ken Cook, Executive Director, Environmental Working Group.
       Rick Hind, Legislative Director, Toxics Campaign, 
     Greenpeace US.
       Kevin S. Curtis, Vice President, National Environmental 
     Trust.
       Ed Hopkins, Director, Environmental Quality Programs, 
     Sierra Club.
       Julia Hathaway, Legislative Director, The Ocean 
     Conservancy.
       Anna Aurilio, Legislative Director, U.S. Public Interest 
     Research Group.
                                  ____

                                              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.
       Gregg Renkes, Attorney General, Alaska.
       Mark Shurtleff, Attorney General, Utah.
       Fiti Sunia, Attorney General, American Samoa.
       Terry Goddard, Attorney General, Arizona.
       John Suthers, Attorney General, Colorado.
       Jane Brady, Attorney General, Delaware.
       Charlie Crist, Attorney General, Florida.
       Mark Bennett, Attorney General, Hawaii.
       Stephen Carter, Attorney General, Indiana.
       Bill Lockyer, Attorney General, California.
       Richard Blumenthal, Attorney General, Connecticut.
       Robert Spagnoletti, Attorney General, District of Columbia.
       Thurbert Baker, Attorney General, Georgia.
       Lawrence Wasden, Attorney General, Idaho.
       Tom Miller, Attorney General, Iowa.

[[Page 2651]]

       Greg Stumbo, Attorney General, Kentucky.
       Steven Rowe, Attorney General, Maine.
       Tom Reilly, Attorney General, Massachusetts.
       Mike Hatch, Attorney General, Minnesota.
       Jay Nixon, Attorney General, Missouri.
       Jon Bruning, Attorney General, Nebraska.
       Kelly Ayotte, Attorney General, New Hampshire.
       Charles Foti, Attorney General, Louisiana.
       Joseph Curran, Attorney General, Maryland.
       Mike Cox, Attorney General, Michigan.
       Jim Hood, Attorney General, Mississippi.
       Mike McGrath, Attorney General, Montana.
       Brian Sandoval, Attorney General, Nevada.
       Peter Harvey, Attorney General, New Jersey.
       Eliot Spitzer, Attorney General, New York.
       Wayne Stenehjem, Attorney General, North Dakota.
       Jim Petro, Attorney General, Ohio.
       Hardy Myers, Attorney General, Oregon.
       Roberto Sanchez Ramos, Attorney General, Puerto Rico.
       Henry McMaster, Attorney General, South Carolina.
       Roy Cooper, Attorney General, North Carolina.
       Pamela Brown, Attorney General, N. Mariana Islands.
       W.A. Drew Edmondson, Attorney General, Oklahoma.
       Tom Corbett, Attorney General, Pennsylvania.
       Patrick Lynch, Attorney General, Rhode Island.
       Lawrence Long, Attorney General, South Dakota.
       Paul Summers, Attorney General, Tennesse.
       Darrell McGraw, Attorney General, West Virginia.
       Patrick Crank, Attorney General, Wyoming.
       Rob McKenna, Attorney General, Washington.
       Peg Lautenschlager, Attorney General, Wisconsin.

  Mr. Speaker, I urge my colleagues to seriously consider the excellent 
presentations made on our side of the aisle and vote against the 
measure that is before us today.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself the balance of the 
time.
  Mr. Speaker, notwithstanding what we have heard from opponents of 
this legislation, its passage would not extinguish the legal right of 
any injured party, whether it be a class action, a mass action, or an 
individual lawsuit from proceeding in a court of competent jurisdiction 
in the United States. What the bill does do is it puts some sense into 
the class action system so that the members of the plaintiff's class 
will be fairly and adequately compensated rather than seeing all of 
their gains go to attorneys and them just getting coupon settlements 
from the people who have allegedly done them wrong.
  I was particularly perturbed listening to the gentleman from 
Massachusetts (Mr. Markey), who said that the kids who start smoking at 
13 and 14 years old are going to be denied their day in court, and that 
the tobacco companies are going to end up cashing in on a big bonanza.
  Well, I had my staff, while this was going on, look at what has 
happened to Altria, the parent company of Philip Morris. Since the 
other body passed this bill, Altria stock has gone down by at least 
$1.50, or 2 percent. And today, the Reuters story that came out less 
than an hour ago says that the Dow has been dragged down by Altria.
  Now, if this was the bonanza to investors in Altria, the stock would 
not be going down. It is not. That is a fallacious argument. Reject the 
substitute and pass the bill.
  Mr. HASTERT. Mr. Speaker, I'm pleased join my colleagues here today 
who support taking a historic first step to breaking one of the main 
shackles holding back our economy and America's workforce--lawsuit 
abuse.
  For the last decade, the Republican Congress has worked to end out of 
control lawsuits. Today is the day we will pass common-sense 
legislation and put an end to Class Action Lawsuit abuse.
  I particularly want to praise the efforts of House Judiciary Chairman 
Jim Sensenbrenner for his relentless work. Without his stewardship, I 
don't think th achievement would have become a reality.
  I come from Illinois--the Land of Lincoln--where downstate Madison 
County has the dubious distinction as a personal injury lawyer's 
paradise. No, there are not palm trees or sandy beaches there. Instead, 
Madison County, Illinois, is home to very warm courtrooms where 
frivolous lawsuits are filed virtually everyday.
  Why's Madison County? The answer: ``venue shopping.''
  Cagey trial lawyers have figured out there's a pretty good likelihood 
their case--no matter what its merit--will literally get its day in 
court because of favorable judges.
  To use a sports analogy, thanks to willing judges, personal injury 
lawyers get to play on their ``home court'' each and every time they 
file a frivolous lawsuit there.
  For instance, a legendary class action case from Madison County 
illustrates what's wrong with the current legal system.
  In 2000, Cable TV customers who filed suit over their cable 
operator's late fee policy won their case, but received nothing . . . 
not a dime, not a nickel, not a Lincoln penny. Instead, their $5.6 
million settlement went directly into the pockets of their attorneys. 
How is that justice? How does that help victims?
  The American people deserve better. Our working families demand 
better.
  Today's action takes a step in the right direction to end the so-
called Tort Tax.
  The Tort Tax makes consumers pay more for the goods and services they 
use.
  The Tort Tax adds to the cost of everything we buy because businesses 
and manufacturers have to cover themselves and their employees--just in 
case they get sued by a greedy personal injury lawyer.
  At last estimate, this outrageous Tort Tax cost the nation's economy 
$246 billion a year, and by 2006, it will cost the average American 
nearly $1,000 more each year on their purchases because of defensive 
business practices.
  In closing, as a matter of principle, damage awards should go to the 
victim, not the lawyers. Lawsuits should not be ``strike it rich'' 
schemes for lawyers.
  There has to be some limit to what lawyers can take from their 
clients. Otherwise, cagey attorneys end up with the lion's share of the 
settlement and the victims end up with little more than scraps.
  Mr. UDALL of Colorado. Mr. Speaker, the House has considered similar 
legislation in 1999, 2002, and 2003. On each of those occasions, I 
voted ``no''--not because I was unalterably opposed to Congress acting 
on this subject, but because in my judgment the defects of those bills 
outweighed their potential benefits.
  When it was announced that this bill would be considered, I hoped 
that the pattern would be broken and that this time I would be able to 
support the legislation. And if the Conyers substitute had been 
adopted, that would have been the case.
  Adoption of the substitute would have greatly improved the 
legislation. It would have reaffirmed the authority and ability of each 
State's Attorney General to carry out his or her duties under State 
law. It would have made sure that the bill would not prejudice people 
with complaints about violations of their civil rights. It would have 
properly focused the legislation on class actions unrelated to personal 
injuries. It would have added important protections for the public's 
right to know about the proceedings in our courts. And it would have 
made other changes that would have improved the bill.
  Unfortunately, the substitute was not adopted--and I have come to the 
reluctant conclusion that I must vote against the bill.
  That conclusion is reluctant because in several ways this bill is 
better--or, more accurately, less bad--than its predecessors.
  Unlike earlier versions, S. 5 would not have a retroactive effect, so 
it would not affect pending cases. It also does not include a provision 
for immediate interlocutory appeals of denials of class action 
certification, or for a stay of all discovery while the appeal was 
pending. And in several other ways, it differs for the better from 
previous versions.
  However, while the bill is less bad, in my opinion it still is not 
good enough. I remain unconvinced that the problem the bill purports to 
address is so great as to require such a sweeping remedy, and I am 
still concerned that in too many cases the side-effects of this 
treatment will be more severe than the disease.
  Mr. Speaker, one of the most important rights we have as Americans is 
the ability to seek redress from the courts when we believe our rights 
have been abridged or we have been improperly treated. And, when a 
complaint arises under a State law, it is both appropriate and 
desirable that it be heard in State court because those are the most 
convenient and with the best understanding of State laws and local 
conditions.
  Of course, it is appropriate to provide for removing some State cases 
to Federal courts.

[[Page 2652]]

But I think that should be more the exception than the rule, and I 
think this bill tends to reverse that. I think it excessively tilts the 
balance between the States and the Federal government so as to throw 
too many cases into already-overburdened Federal courts--with the 
predictable result that too many will be dismissed without adequate 
consideration of their merits.
  So, while I respect those who have urged the House to pass this bill, 
I cannot vote for it.
  Mr. BLUMENAUER. Mr. Speaker, I agree with this bill's intent to 
prevent the legal system from being ``gamed'' by attorneys who lump 
thousands of speculative claims into a single class action lawsuit and 
then seek out a sympathetic State court. Any abusive or frivolous class 
action is a drain on the system and forces innocent defendants to 
settle cases rather than play judicial roulette with the risk of a huge 
unjustified settlement.
  Unfortunately, instead of narrowly focusing on such abuses, Senate 
bill 5 completely reconfigures the judicial system, resulting in 
diminished corporate accountability and fundamental legal rights of 
individuals. While this bill makes some improvements to limit frivolous 
lawsuits, it does so at a price that will make it harder for average 
Americans to successfully pursue real claims against interests that 
violate their States' consumer health, civil rights, and environmental 
protection laws. This is an unnecessary tradeoff. I voted for a 
Democratic substitute motion which would have minimized some of these 
abuses. Sadly, it was defeated and, as a result, I voted against final 
passage.
  I will continue to be open to changes that make our judicial system 
work better, but not at the expense of the people I represent. It is 
essential that we hold accountable the forces that have so much impact 
on the lives of every American.
  Mr. WEXLER. Mr. Speaker, I rise today in strong opposition to the so-
called ``Class Action Fairness Act.'' I have strong objections to not 
only to the text of the bill itself but also to the very process by 
which it was strong-armed by the Republican leadership past the 
Judiciary Committee. This process did not allow any opportunity for 
committee members to raise our objections or to work constructively to 
fix the major problems in this legislation. This circumvention of 
regular order is being sold to us with a myriad of excuses, one of them 
is that the bill is a simple procedural fix for a judicial crisis with 
nothing controversial in it.
  Nothing could be further from the truth. This bill is a federal 
mandate to undermine and all but kill the ability to raise class 
actions cases in State courts. Under this so-called ``procedural 
bill,'' almost every class action lawsuit would be removed from State 
jurisdiction and forced onto an already overburdened Federal judiciary. 
Moving these cases to Federal court will make litigation more costly, 
more time-consuming and less likely that victims can get their rightful 
day in court at all. This bill is so preposterously far-reaching it 
would prevent State courts from considering class action cases that 
only involve State laws. We have already added so many State cases to 
Federal jurisdiction that if this bill passes victims will be added to 
the substantial backlog of Federal cases and will likely find it 
difficult to ever have their cases heard.
  It should be obvious to even the most casual observer that the intent 
of this bill is to prevent class action lawsuits from ever being heard. 
Members should make no mistake about it--if we pass this misguided 
legislation, we will have effectively shut the door on civil rights, on 
workers rights and on anyone injured through corporate negligence.
  Mr. Speaker, I urge my colleagues to join me in opposing one of the 
most destructive and far reaching civil justice measures ever 
considered by this body.
  Mr. SHAYS. Mr. Speaker, I rise in support of S. 5, the Class Action 
Fairness Act.
  This legislation will work to balance class actions. Currently, 
plaintiffs' lawyers take advantage of the system by bringing large, 
national lawsuits in specific jurisdictions with relaxed certification 
criteria.
  Attorneys are increasingly filing interstate class actions in State 
courts, mostly in what are known as ``magnet'' jurisdictions. Courts in 
these jurisdictions are attractive to lawyers because they routinely 
approve settlements in which attorneys receive large fees and the class 
members receive virtually nothing, and they also decide the claims of 
other state's citizens under the court's state law.
  This results in more and more class actions being losing propositions 
for everyone involved--except for the lawyers who brought them.
  The Class Action Fairness Act works to improve our legal system by 
allowing larger interstate class action cases to be heard in Federal 
courts, closing the magnet jurisdiction loophole.
  This bill will also make it easier for local businesses to avoid 
harassment. Currently, plaintiffs' lawyers can name a local business in 
a nationwide liability suit to stay out of Federal court. This 
legislation will put an end to this unfair practice.
  Finally, S. 5 protects consumers with a consumer class action bill of 
rights. The bill of rights includes several provisions designed to 
ensure class members--not their attorneys--are the primary 
beneficiaries of the class action process, and are not simply awarded a 
coupon at the end of a trial.
  Allowing judges to limit attorney's fees when the value of the 
settlement received by the class member is small in comparison and 
banning settlements that award some class members more simply because 
they live closer to the court will make class action suits more fair 
and help compensate the people who were wronged, not the attorney's 
handling their case.
  I strongly support S. 5 and encourage my colleagues to do so as well.
  Mr. DELAHUNT. Once again, Mr. Speaker, we have before us a bill that 
would sweep aside generations of State laws that protect consumers. 
Citizens will be denied their basic right to use their own State courts 
to file class action lawsuits against companies--even if there are 
clear violations of State labor laws or State civil rights laws. This 
bill comes after a lobbying campaign costing business interests tens of 
millions of dollars. Well, that was money well spent. With this 
sweeping legislation, corporations will have free reign to avoid 
responsibility for the wrongs they commit.
  It is just shameful that the victims of corporate misconduct do not 
have the same level of influence here in the halls of Congress. Let's 
not forget the people who died as a result of defective tires 
manufactured by Firestone. What about countless individuals who died as 
a result of the tobacco industry's failure to disclose the risks of 
cigarettes?
  Well, if it is any indication of this bill's intent--tobacco is 
already celebrating this week. Stocks are up and the industry is 
glowing. Let me quote their take on this bill, ``The practical effect 
of the change could be that many cases will never be heard given how 
overburdened Federal judges are.''
  Plainly that is the goal of the bill. The goal is to ensure that 
legitimate plaintiffs are denied any recovery at all. And that whatever 
recovery they do receive is delayed as long as possible. I have spent 
decades in courtrooms and I can tell my colleagues--from my own 
experience--that justice delayed is justice denied. The doors to the 
courthouse will be locked shut. And this Republican leadership is 
handing the key to corporate America.
  With complete disregard for precedent-setting individual and class 
action litigation, the Republican leadership is determined to destroy 
America's civil justice system, eliminating protections for the poor 
and powerless. This bill is a disgrace to the historic victories in 
courts across the country--to expand consumer rights, protect our 
environment, and strengthen workers' rights.
  And there has been complete disregard for the legislative process in 
the House. While we have had hearings and markups on class action 
legislation in the past, this bill is quite complex and very different 
than previous versions. The fact that the other Chamber has already 
approved this matter in no way justifies a ``rush to judgment'' in the 
House, when so many important rights are at stake.
  Class actions have addressed the looting of company after company by 
corporate insiders, whose brazen misconduct and self-dealing defrauded 
creditors and investors of billions of dollars, and stripped employees 
and retirees of their livelihood and life savings.
  Yet if this bill becomes law, the victims of those practices will 
face new obstacles in their efforts to call those executives to task.
  This bill is not about protecting plaintiffs. It's not about 
protecting the public. It's about protecting large corporations whose 
conduct has been egregious. It's about protecting the powerful at the 
expense of the powerless. And to prevent people from banding together 
as a class to challenge that power in the only way they can.
  We must also see this bill in its proper context. It is part of an 
ambitious and multi-pronged campaign by major corporations to evade 
their obligations to society.
  Under the guise of ``deregulation'' we're watching the wholesale 
dismantling of health and safety standards, environmental protections, 
and longstanding limits on concentration of ownership within the media 
and other key industries.
  Today's bill completes this picture. It takes aim at the civil 
justice system that exists to correct the wrongs that the government 
cannot or will not address. I urge my colleagues to oppose this blatant 
effort to muzzle the courts.

[[Page 2653]]

This bill is but the latest in a series of assaults by those on the 
other side attacking the ability of individuals to seek relief from the 
courts. And it is also but the latest in a series of assaults on 
States' rights to provide legal remedies for harm suffered by their 
citizens.
  We cannot allow them to do it, Mr. Speaker. I urge my colleagues to 
vote ``no.''
  Mr. BACA. Mr. Speaker, I ask unanimous consent to revise and extend 
my remarks.
  Mr. Speaker, I rise in strong opposition of S. 5, the so-called 
``Class Action Fairness Act.''
  This bill will send the majority of class action suits from State to 
Federal courts, making it more difficult for people who have been 
unfairly hurt to collect compensation for their injuries.
  Federal courts are already overwhelmed by a large number of drug and 
immigration cases, and they don't have the time or the resources to 
deal with complex issues of State law.
  This bill has it all wrong. Instead of punishing individuals who 
pursue frivolous lawsuits, this bill will punish innocent people who 
have been wrongfully hurt.
  This bill is a payoff to large companies and special interests. It 
takes rights away from consumers in order to protect drug 
manufacturers, insurance companies, HMOs and negligent doctors. There 
is no accountability on their part.
  It is not ``frivolous'' for an innocent person who has been harmed 
through no fault of their own to seek compensation for their injuries.
  When a child is disabled or maimed by a preventable error, it is not 
frivolous to seek damages from the company responsible for the injury.
  This is a bill that's going to significantly harm small consumers who 
want to hold large companies accountable for defrauding them.
  I urge my colleagues to vote ``no'' on S. 5.
  Mr. MEEHAN. Mr. Speaker, I rise in opposition to S. 5, the so-called 
Class Action Fairness Act.
  Few of us would stand here and argue that there is too much 
accountability in corporate America today. In recent years, millions of 
our constituents have been swindled out of their retirement savings by 
corporate crooks at Enron, WorldCom, and other companies. For years, 
many unscrupulous mutual fund managers were skimming off the top of 
their clients' investment funds. Drug companies put new products on the 
market like Vioxx that they knew to be unsafe.
  This bill is a windfall for companies that have profited while 
causing harm to others. And no industry is in a better position to 
benefit than the tobacco industry. It's little wonder that tobacco 
stocks rallied at the news that the Senate had passed this bill.
  I'd like to read from a Wall Street analyst's view of how this bill 
would impact the tobacco industry. ``Flash--Senate Just Passed Class 
Action Bill--Positive for Tobacco,'' the analyst writes.
  ``The Senate just passed a bill 72-26 which is designed to funnel 
class-action suits with plaintiffs in different States out of State 
courts and into the Federal court system, which is typically much less 
sympathetic to such litigation. The practical effect of the change 
could be that many cases will never be heard given how overburdened 
Federal judges are, which might help limit the number of cases.''
  I only wish that the proponents of this bill would use such candid 
language to describe its true intent--to make sure that legitimate 
cases are never heard, and to shield corporations from accountability 
for their actions.
  The class action system is a major reason why we have safer consumer 
products, more honest advertising, cleaner air and drinking water, and 
better workplace protections than many other countries.
  All of us are empowered by the right to band together and seek 
justice. Class actions are one of the most effective and powerful ways 
we have to hold people accountable for their actions.
  I oppose this attempt to shut the courthouse door to people who have 
been wronged.
  Mr. STARK. Mr. Speaker, I rise today to oppose this misguided 
legislation to limit the ability of average Americans to seek redress 
for injury and harm caused by corporate malfeasance.
  Don't be fooled by the title of this bill. Congress is not standing 
up for the average American under this bill. It's not fixing inequities 
in our judicial system. It's making those inequities worse by giving 
the upper hand to big corporations.
  I won't vote for this Republican-sponsored hoax. It unfairly 
threatens the very people we are all elected to protect. When the so-
called party of local control makes it a top priority to move class 
action cases from State to Federal court, there's an ulterior motive.
  Don't believe the myth my Republican colleagues want to sell you. 
Class action suits aren't frivolous. They allow average Americans 
financially unable to launch a judicial battle on their own the means 
to seek redress for injury or death of a loved one. They empower 
consumers to challenge wrongdoings by wealthy corporations who would 
otherwise ignore their appeal.
  I don't think that the American public would be satisfied knowing 
that if this bill passes, the accountability of companies like Eron 
would be held less accountable. And the makers of Vioxx and other 
dangerous drugs would be held less accountable.
  It is truthful, law-abiding citizens who will lose if this bill 
becomes law, Apparently, in America today, we have government for, by, 
and of corporate interests and not the people.
  I ask my colleagues to stand up for real people and vote against this 
shameful bill.
  Ms. McCOLLUM of Minnesota. Mr. Speaker, I rise in opposition to the 
so-called class action fairness bill. This legislation will close the 
courthouse doors to thousands seeking justice.
  The bill we are considering today pushes almost all class actions 
into the federal courts and away from state jurisdiction. It is no 
secret that federal courts are generally less willing to consider 
complex civil litigation than state courts. They face incredible 
backlogs with hundreds of criminal drug cases and immigration cases. 
Federalizing class actions causes delays in getting relief for injured 
consumers.
  Instead of fixing the current system, this legislation is only making 
it more difficult and time-consuming for Americans with legitimate 
complaints to have their day in court. Class actions are a critical way 
for people, particularly those without the resources to battle large 
corporations, to seek redress from companies for fraudulent behavior, 
defective products and employment discrimination. A strong class-action 
system is particularly important given the emergence of evidence 
proving corporate wrongdoing in recent years. This bill will give 
banks, credit card companies, insurers, HMOs, drug manufacturers and 
other big businesses a green light to defraud and deceive consumers 
without fear of being held accountable. Most troubling, this bill 
deprives Americans of an important forum--in many cases their only 
forum--for remedying genuine wrongs.
  I support strengthening our class action system and reducing fraud, 
which is why I voted for a substitute bill. This legislation would 
ensure that people injured or discriminated against could still get the 
justice they deserve while making adjustments needed to reduce abuse in 
the class action system. The substitute puts an end to ``coupon 
settlements'' and court shopping. It keeps our class action system 
accessible and effective by carving out civil rights and worker rights 
cases. It protects cases brought by state attorney's general. Lastly, 
it asks the Administrative Office of the U.S. Courts to report back to 
Congress on how the new law is working. The substitute is a real 
improvement in our legal system that will ensure the protection and 
justice promised to individuals, families and businesses by our 
Constitution.
  The SPEAKER pro tempore (Mr. Boozman). All time for general debate 
has expired.


     Amendment in the Nature of a Substitute Offered by Mr. Conyers

  Mr. CONYERS. Mr. Speaker, I offer an amendment in the nature of a 
substitute.
  The SPEAKER pro tempore. The Clerk will designate the amendment in 
the nature of a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Amendment in the nature of a substitute offered by Mr. 
     Conyers:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Class 
     Action Fairness Act of 2005''.
       (b) Reference.--Whenever in this Act reference is made to 
     an amendment to, or repeal of, a section or other provision, 
     the reference shall be considered to be made to a section or 
     other provision of title 28, United States Code.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

 Sec. 1. Short title; reference; table of contents.
 Sec. 2. Findings and purposes.
 Sec. 3. Consumer class action bill of rights and improved procedures 
              for interstate class actions.
 Sec. 4. Federal district court jurisdiction for interstate class 
              actions.
 Sec. 5. Removal of interstate class actions to Federal district court.
 Sec. 6. Report on class action settlements.
 Sec. 7. Enactment of Judicial Conference recommendations.
 Sec. 8. Rulemaking authority of Supreme Court and Judicial Conference.

[[Page 2654]]

 Sec. 9. Effective date.

      SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds the following:
       (1) Class action lawsuits are an important and valuable 
     part of the legal system when they permit the fair and 
     efficient resolution of legitimate claims of numerous parties 
     by allowing the claims to be aggregated into a single action 
     against a defendant that has allegedly caused harm.
       (2) Over the past decade, there have been abuses of the 
     class action device that have--
       (A) harmed class members with legitimate claims and 
     defendants that have acted responsibly;
       (B) adversely affected interstate commerce; and
       (C) undermined public respect for our judicial system.
       (3) Class members often receive little or no benefit from 
     class actions, and are sometimes harmed, such as where--
       (A) counsel are awarded large fees, while leaving class 
     members with coupons or other awards of little or no value;
       (B) unjustified awards are made to certain plaintiffs at 
     the expense of other class members; and
       (C) confusing notices are published that prevent class 
     members from being able to fully understand and effectively 
     exercise their rights.
       (4) Abuses in class actions undermine the national judicial 
     system, the free flow of interstate commerce, and the concept 
     of diversity jurisdiction as intended by the framers of the 
     United States Constitution, in that State and local courts 
     are--
       (A) keeping cases of national importance out of Federal 
     court;
       (B) sometimes acting in ways that demonstrate bias against 
     out-of-State defendants; and
       (C) making judgments that impose their view of the law on 
     other States and bind the rights of the residents of those 
     States.
       (b) Purposes.--The purposes of this Act are to--
       (1) assure fair and prompt recoveries for class members 
     with legitimate claims;
       (2) restore the intent of the framers of the United States 
     Constitution by providing for Federal court consideration of 
     interstate cases of national importance under diversity 
     jurisdiction; and
       (3) benefit society by encouraging innovation and lowering 
     consumer prices.

      SEC. 3. CONSUMER CLASS ACTION BILL OF RIGHTS AND IMPROVED 
                   PROCEDURES FOR INTERSTATE CLASS ACTIONS.

       (a) In General.--Part V is amended by inserting after 
     chapter 113 the following:

                      ``CHAPTER 114--CLASS ACTIONS

``Sec.
``1711. Definitions.
``1712. Coupon settlements.
``1713. Protection against loss by class members.
``1714. Protection against discrimination based on geographic location.
``1715. Notifications to appropriate Federal and State officials.
``1716. Sunshine in court records.

     ``Sec. 1711. Definitions

       ``In this chapter:
       ``(1) Class.--The term `class' means all of the class 
     members in a class action.
       ``(2) Class action.--The term `class action' means 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 statute 
     or rule of judicial procedure authorizing an action to be 
     brought by 1 or more representatives as a class action. The 
     term `class action' does not include any civil action brought 
     by, or on behalf of, any State attorney general or the chief 
     prosecuting or civil attorney of any county or city within a 
     State.
       ``(3) Class counsel.--The term `class counsel' means the 
     persons who serve as the attorneys for the class members in a 
     proposed or certified class action.
       ``(4) Class members.--The term `class members' means the 
     persons (named or unnamed) who fall within the definition of 
     the proposed or certified class in a class action.
       ``(5) Plaintiff class action.--The term `plaintiff class 
     action' means a class action in which class members are 
     plaintiffs.
       ``(6) Proposed settlement.--The term `proposed settlement' 
     means an agreement regarding a class action that is subject 
     to court approval and that, if approved, would be binding on 
     some or all class members.
       ``(7) 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 possessions of the 
     United States.
       ``(8) State attorney general.--The term `State attorney 
     general' means the chief legal officer of a State.

     ``Sec. 1712. Coupon settlements

       ``(a) Contingent Fees in Coupon Settlements.--If a proposed 
     settlement in a class action provides for a recovery of 
     coupons to a class member, the portion of any attorney's fee 
     award to class counsel that is attributable to the award of 
     the coupons shall be based on the value to class members of 
     the coupons that are redeemed.
       ``(b) Other Attorney's Fee Awards in Coupon Settlements.--
       ``(1) In general.--If a proposed settlement in a class 
     action provides for a recovery of coupons to class members, 
     and a portion of the recovery of the coupons is not used to 
     determine the attorney's fee to be paid to class counsel, any 
     attorney's fee award shall be based upon the amount of time 
     class counsel reasonably expended working on the action.
       ``(2) Court approval.--Any attorney's fee under this 
     subsection shall be subject to approval by the court and 
     shall include an appropriate attorney's fee, if any, for 
     obtaining equitable relief, including an injunction, if 
     applicable. Nothing in this subsection shall be construed to 
     prohibit application of a lodestar with a multiplier method 
     of determining attorney's fees.
       ``(c) Attorney's Fee Awards Calculated on a Mixed Basis in 
     Coupon Settlements.--If a proposed settlement in a class 
     action provides for an award of coupons to class members and 
     also provides for equitable relief, including injunctive 
     relief--
       ``(1) that portion of the attorney's fee to be paid to 
     class counsel that is based upon a portion of the recovery of 
     the coupons shall be calculated in accordance with subsection 
     (a); and
       ``(2) that portion of the attorney's fee to be paid to 
     class counsel that is not based upon a portion of the 
     recovery of the coupons shall be calculated in accordance 
     with subsection (b).
       ``(d) Settlement Valuation Expertise.--In a class action 
     involving the awarding of coupons, the court may, in its 
     discretion upon the motion of a party, receive expert 
     testimony from a witness qualified to provide information on 
     the actual value to the class members of the coupons that are 
     redeemed.
       ``(e) Judicial Scrutiny of Coupon Settlements.--In a 
     proposed settlement under which class members would be 
     awarded coupons, the court may approve the proposed 
     settlement only after a hearing to determine whether, and 
     making a written finding that, the settlement is fair, 
     reasonable, and adequate for class members. The court, in its 
     discretion, may also require that a proposed settlement 
     agreement provide for the distribution of a portion of the 
     value of unclaimed coupons to 1 or more charitable or 
     governmental organizations, as agreed to by the parties. The 
     distribution and redemption of any proceeds under this 
     subsection shall not be used to calculate attorneys' fees 
     under this section.

     ``Sec. 1713. Protection against loss by class members

       ``The court may approve a proposed settlement under which 
     any class member is obligated to pay sums to class counsel 
     that would result in a net loss to the class member only if 
     the court makes a written finding that nonmonetary benefits 
     to the class member substantially outweigh the monetary loss.

     ``Sec. 1714. Protection against discrimination based on 
       geographic location

       ``The court may not approve a proposed settlement that 
     provides for the payment of greater sums to some class 
     members than to others solely on the basis that the class 
     members to whom the greater sums are to be paid are located 
     in closer geographic proximity to the court.

     ``Sec. 1715. Notifications to appropriate Federal and State 
       officials

       ``(a) Definitions.--
       ``(1) Appropriate federal official.--In this section, the 
     term `appropriate Federal official' means--
       ``(A) the Attorney General of the United States; or
       ``(B) in any case in which the defendant is a Federal 
     depository institution, a State depository institution, a 
     depository institution holding company, a foreign bank, or a 
     nondepository institution subsidiary of the foregoing (as 
     such terms are defined in section 3 of the Federal Deposit 
     Insurance Act (12 U.S.C. 1813)), the person who has the 
     primary Federal regulatory or supervisory responsibility with 
     respect to the defendant, if some or all of the matters 
     alleged in the class action are subject to regulation or 
     supervision by that person.
       ``(2) Appropriate state official.--In this section, the 
     term `appropriate State official' means the person in the 
     State who has the primary regulatory or supervisory 
     responsibility with respect to the defendant, or who licenses 
     or otherwise authorizes the defendant to conduct business in 
     the State, if some or all of the matters alleged in the class 
     action are subject to regulation by that person. If there is 
     no primary regulator, supervisor, or licensing authority, or 
     the matters alleged in the class action are not subject to 
     regulation or supervision by that person, then the 
     appropriate State official shall be the State attorney 
     general.
       ``(b) In General.--Not later than 10 days after a proposed 
     settlement of a class action is filed in court, each 
     defendant that is participating in the proposed settlement 
     shall serve upon the appropriate State official of each State 
     in which a class member resides and the appropriate Federal 
     official, a notice of the proposed settlement consisting of--

[[Page 2655]]

       ``(1) a copy of the complaint and any materials filed with 
     the complaint and any amended complaints (except such 
     materials shall not be required to be served if such 
     materials are made electronically available through the 
     Internet and such service includes notice of how to 
     electronically access such material);
       ``(2) notice of any scheduled judicial hearing in the class 
     action;
       ``(3) any proposed or final notification to class members 
     of--
       ``(A)(i) the members' rights to request exclusion from the 
     class action; or
       ``(ii) if no right to request exclusion exists, a statement 
     that no such right exists; and
       ``(B) a proposed settlement of a class action;
       ``(4) any proposed or final class action settlement;
       ``(5) any settlement or other agreement contemporaneously 
     made between class counsel and counsel for the defendants;
       ``(6) any final judgment or notice of dismissal;
       ``(7)(A) if feasible, the names of class members who reside 
     in each State and the estimated proportionate share of the 
     claims of such members to the entire settlement to that 
     State's appropriate State official; or
       ``(B) if the provision of information under subparagraph 
     (A) is not feasible, a reasonable estimate of the number of 
     class members residing in each State and the estimated 
     proportionate share of the claims of such members to the 
     entire settlement; and
       ``(8) any written judicial opinion relating to the 
     materials described under subparagraphs (3) through (6).
       ``(c) Depository Institutions Notification.--
       ``(1) Federal and other depository institutions.--In any 
     case in which the defendant is a Federal depository 
     institution, a depository institution holding company, a 
     foreign bank, or a non-depository institution subsidiary of 
     the foregoing, the notice requirements of this section are 
     satisfied by serving the notice required under subsection (b) 
     upon the person who has the primary Federal regulatory or 
     supervisory responsibility with respect to the defendant, if 
     some or all of the matters alleged in the class action are 
     subject to regulation or supervision by that person.
       ``(2) State depository institutions.--In any case in which 
     the defendant is a State depository institution (as that term 
     is defined in section 3 of the Federal Deposit Insurance Act 
     (12 U.S.C. 1813)), the notice requirements of this section 
     are satisfied by serving the notice required under subsection 
     (b) upon the State bank supervisor (as that term is defined 
     in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
     1813)) of the State in which the defendant is incorporated or 
     chartered, if some or all of the matters alleged in the class 
     action are subject to regulation or supervision by that 
     person, and upon the appropriate Federal official.
       ``(d) Final Approval.--An order giving final approval of a 
     proposed settlement may not be issued earlier than 90 days 
     after the later of the dates on which the appropriate Federal 
     official and the appropriate State official are served with 
     the notice required under subsection (b).
       ``(e) Noncompliance if Notice Not Provided.--
       ``(1) In general.--A class member may refuse to comply with 
     and may choose not to be bound by a settlement agreement or 
     consent decree in a class action if the class member 
     demonstrates that the notice required under subsection (b) 
     has not been provided.
       ``(2) Limitation.--A class member may not refuse to comply 
     with or to be bound by a settlement agreement or consent 
     decree under paragraph (1) if the notice required under 
     subsection (b) was directed to the appropriate Federal 
     official and to either the State attorney general or the 
     person that has primary regulatory, supervisory, or licensing 
     authority over the defendant.
       ``(3) Application of rights.--The rights created by this 
     subsection shall apply only to class members or any person 
     acting on a class member's behalf, and shall not be construed 
     to limit any other rights affecting a class member's 
     participation in the settlement.
       ``(f) Rule of Construction.--Nothing in this section shall 
     be construed to expand the authority of, or impose any 
     obligations, duties, or responsibilities upon, Federal or 
     State officials.

     ``Sec. 1716. Sunshine in court records

       ``No order, opinion, or record of the court in the 
     adjudication of a class action, including a record obtained 
     through discovery, whether or not formally filed with the 
     court, may be sealed or subjected to a protective order 
     unless the court makes a finding of fact--
       ``(1) that the sealing or protective order is narrowly 
     tailored, consistent with the protection of public health and 
     safety, and is in the public interest; and
       ``(2) if the action by the court would prevent the 
     disclosure of information, that disclosing the information is 
     clearly outweighed by a specific and substantial interest in 
     maintaining the confidentiality of such information.''.
       (b) Technical and Conforming Amendment.--The table of 
     chapters for part V is amended by inserting after the item 
     relating to chapter 113 the following:

``114. Class Actions........................................1711''.....

      SEC. 4. FEDERAL DISTRICT COURT JURISDICTION FOR INTERSTATE 
                   CLASS ACTIONS.

       (a) Application of Federal Diversity Jurisdiction.--Section 
     1332 is amended--
       (1) by redesignating subsection (d) as subsection (e), and 
     amending the subsection to read as follows:
       ``(e) As used in this section--
       ``(1) 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 possessions of the United 
     States; and
       ``(2) the term `State attorney general' means the chief 
     legal officer of a State.''; and
       (2) by inserting after subsection (c) the following:
       ``(d)(1) In this subsection--
       ``(A) the term `class' means all of the class members in a 
     class action;
       ``(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 civil action brought by, or on behalf of, any 
     State attorney general or the chief prosecuting or civil 
     attorney of any county or city within a State;
       ``(II) any class action brought under a State or local law 
     prohibiting discrimination on the basis of race, color 
     religion, sex, national origin, age, disability, or other 
     classification specified in that law; or
       ``(III) any class action or collective action brought to 
     obtain relief under a 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;
       ``(C) the term `class certification order' means an order 
     issued by a court approving the treatment of some or all 
     aspects of a civil action as a class action; and
       ``(D) the term `class members' means the persons (named or 
     unnamed) who fall within the definition of the proposed or 
     certified class in a class action.
       ``(2) The district courts shall have original jurisdiction 
     of any civil action in which the matter in controversy 
     exceeds the sum or value of $5,000,000, exclusive of interest 
     and costs, and is a class action in which--
       ``(A) any member of a class of plaintiffs is a citizen of a 
     State different from any defendant;
       ``(B) any member of a class of plaintiffs is a foreign 
     state or a citizen or subject of a foreign state and any 
     defendant is a citizen of a State; or
       ``(C) any member of a class of plaintiffs is a citizen of a 
     State and any defendant is a foreign state or a citizen or 
     subject of a foreign state.
       ``(3) A district court may, in the interests of justice and 
     looking at the totality of the circumstances, decline to 
     exercise jurisdiction under paragraph (2) over a class action 
     in which greater than one-third but less than two-thirds of 
     the members of all proposed plaintiff classes in the 
     aggregate and the primary defendants are citizens of the 
     State in which the action was originally filed based on 
     consideration of--
       ``(A) whether the claims asserted involve matters of 
     national or interstate interest;
       ``(B) whether the claims asserted will be governed by laws 
     of the State in which the action was originally filed or by 
     the laws of other States;
       ``(C) whether the class action has been pleaded in a manner 
     that seeks to avoid Federal jurisdiction;
       ``(D) whether the action was brought in a forum with a 
     distinct nexus with the class members, the alleged harm, or 
     the defendants;
       ``(E) whether the number of citizens of the State in which 
     the action was originally filed in all proposed plaintiff 
     classes in the aggregate is substantially larger than the 
     number of citizens from any other State, and the citizenship 
     of the other members of the proposed class is dispersed among 
     a substantial number of States; and
       ``(F) whether, during the 3-year period preceding the 
     filing of that class action, 1 or more other class actions 
     asserting the same or similar claims on behalf of the same or 
     other persons have been filed.
       ``(4) A district court shall decline to exercise 
     jurisdiction under paragraph (2)--
       ``(A)(i) over a class action in which--
       ``(I) greater than two-thirds of the members of all 
     proposed plaintiff classes in the aggregate are citizens of 
     the State in which the action was originally filed;
       ``(II) at least 1 defendant is a defendant--
       ``(aa) from whom significant relief is sought by members of 
     the plaintiff class;
       ``(bb) whose alleged conduct forms a significant basis for 
     the claims asserted by the proposed plaintiff class; and
       ``(cc) who is a citizen of the State in which the action 
     was originally filed; and
       ``(III) principal injuries resulting from the alleged 
     conduct or any related conduct of

[[Page 2656]]

     each defendant were incurred in the State in which the action 
     was originally filed; and
       ``(ii) during the 3-year period preceding the filing of 
     that class action, no other class action has been filed 
     asserting the same or similar factual allegations against any 
     of the defendants on behalf of the same or other persons; or
       ``(B) two-thirds or more of the members of all proposed 
     plaintiff classes in the aggregate, and the primary 
     defendants, are citizens of the State in which the action was 
     originally filed.
       ``(5) Paragraphs (2) through (4) shall not apply to any 
     class action in which--
       ``(A) the primary defendants are States, State officials, 
     or other governmental entities against whom the district 
     court may be foreclosed from ordering relief; or
       ``(B) the number of members of all proposed plaintiff 
     classes in the aggregate is less than 100.
       ``(6) In any class action, the claims of the individual 
     class members shall be aggregated to determine whether the 
     matter in controversy exceeds the sum or value of $5,000,000, 
     exclusive of interest and costs.
       ``(7) Citizenship of the members of the proposed plaintiff 
     classes shall be determined for purposes of paragraphs (2) 
     through (6) as of the date of filing of the complaint or 
     amended complaint, or, if the case stated by the initial 
     pleading is not subject to Federal jurisdiction, as of the 
     date of service by plaintiffs of an amended pleading, motion, 
     or other paper, indicating the existence of Federal 
     jurisdiction.
       ``(8) This subsection shall apply to any class action 
     before or after the entry of a class certification order by 
     the court with respect to that action.
       ``(9) Paragraph (2) shall not apply to any class action 
     that solely involves a claim--
       ``(A) concerning a covered security as defined under 
     16(f)(3) of the Securities Act of 1933 (15 U.S.C. 78p(f)(3)) 
     and section 28(f)(5)(E) of the Securities Exchange Act of 
     1934 (15 U.S.C. 78bb(f)(5)(E));
       ``(B) that relates to the internal affairs or governance of 
     a corporation or other form of business enterprise and that 
     arises under or by virtue of the laws of the State in which 
     such corporation or business enterprise is incorporated or 
     organized; or
       ``(C) that relates to the rights, duties (including 
     fiduciary duties), and obligations relating to or created by 
     or pursuant to any security (as defined under section 2(a)(1) 
     of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) and the 
     regulations issued thereunder).
       ``(10) For purposes of this subsection and section 1453, an 
     unincorporated association shall be deemed to be a citizen of 
     the State where it has its principal place of business and 
     the State under whose laws it is organized.
       ``(11)(A) For purposes of this subsection and section 1453 
     of this title, a foreign corporation which acquires a 
     domestic corporation in a corporate repatriation transaction 
     shall be treated as being incorporated in the State under 
     whose laws the acquired domestic corporation was organized.
       ``(B) In this paragraph, the term `corporate repatriation 
     transaction' means any transaction in which--
       ``(i) a foreign corporation acquires substantially all of 
     the properties held by a domestic corporation;
       ``(ii) shareholders of the domestic corporation, upon such 
     acquisition, are the beneficial owners of securities in the 
     foreign corporation that are entitled to 50 percent or more 
     of the votes on any issue requiring shareholder approval; and
       ``(iii) the foreign corporation does not have substantial 
     business activities (when compared to the total business 
     activities of the corporate affiliated group) in the foreign 
     country in which the foreign corporation is organized.''.
       (b) Conforming Amendments.--
       (1) Section 1335(a)(1) is amended by inserting ``subsection 
     (a) or (d) of'' before ``section 1332''.
       (2) Section 1603(b)(3) is amended by striking ``(d)'' and 
     inserting ``(e)''.

      SEC. 5. REMOVAL OF INTERSTATE CLASS ACTIONS TO FEDERAL 
                   DISTRICT COURT.

       (a) In General.--Chapter 89 is amended by adding after 
     section 1452 the following:

     ``Sec. 1453. Removal of class actions

       ``(a) Definitions.--In this section, the terms `class', 
     `class action', `class certification order', and `class 
     member' shall have the meanings given such terms under 
     section 1332(d)(1).
       ``(b) In General.--A class action may be removed to a 
     district court of the United States in accordance with 
     section 1446 (except that the 1-year limitation under section 
     1446(b) shall not apply), without regard to whether any 
     defendant is a citizen of the State in which the action is 
     brought, except that such action may be removed by any 
     defendant without the consent of all defendants.
       ``(c) Review of Remand Orders.--
       ``(1) In general.--Section 1447 shall apply to any removal 
     of a case under this section, except that notwithstanding 
     section 1447(d), a court of appeals may accept an appeal from 
     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.
       ``(2) Time period for judgment.--If the court of appeals 
     accepts an appeal under paragraph (1), the court shall 
     complete all action on such appeal, including rendering 
     judgment, not later than 60 days after the date on which such 
     appeal was filed, unless an extension is granted under 
     paragraph (3).
       ``(3) Extension of time period.--The court of appeals may 
     grant an extension of the 60-day period described in 
     paragraph (2) if--
       ``(A) all parties to the proceeding agree to such 
     extension, for any period of time; or
       ``(B) such extension is for good cause shown and in the 
     interests of justice, for a period not to exceed 10 days.
       ``(4) Denial of appeal.--If a final judgment on the appeal 
     under paragraph (1) is not issued before the end of the 
     period described in paragraph (2), including any extension 
     under paragraph (3), the appeal shall be denied.
       ``(d) Exception.--This section shall not apply to any class 
     action that solely involves--
       ``(1) a claim concerning a covered security as defined 
     under section 16(f)(3) of the Securities Act of 1933 (15 
     U.S.C. 78p(f)(3)) and section 28(f)(5)(E) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78bb(f)(5)(E));
       ``(2) a claim that relates to the internal affairs or 
     governance of a corporation or other form of business 
     enterprise and arises under or by virtue of the laws of the 
     State in which such corporation or business enterprise is 
     incorporated or organized; or
       ``(3) a claim that relates to the rights, duties (including 
     fiduciary duties), and obligations relating to or created by 
     or pursuant to any security (as defined under section 2(a)(1) 
     of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) and the 
     regulations issued thereunder).''.
       (b) Technical and Conforming Amendments.--The table of 
     sections for chapter 89 is amended by adding after the item 
     relating to section 1452 the following:

``1453. Removal of class actions.''.

       (c) Choice of State Law in Interstate Class.--
     Notwithstanding any other choice of law rule, in any class 
     action over which the United States district courts have 
     jurisdiction and that asserts 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, 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.

     SEC. 6. REPORT ON CLASS ACTION SETTLEMENTS.

       (a) In General.--Not later than 12 months after the date of 
     enactment of this Act, the Judicial Conference of the United 
     States, with the assistance of the Director of the Federal 
     Judicial Center and the Director of the Administrative Office 
     of the United States Courts, shall prepare and transmit to 
     the Committees on the Judiciary of the Senate and the House 
     of Representatives a report on class action settlements.
       (b) Content.--The report under subsection (a) shall 
     contain--
       (1) recommendations on the best practices that courts can 
     use to ensure that proposed class action settlements are fair 
     to the class members that the settlements are supposed to 
     benefit;
       (2) recommendations on the best practices that courts can 
     use to ensure that--
       (A) the fees and expenses awarded to counsel in connection 
     with a class action settlement appropriately reflect the 
     extent to which counsel succeeded in obtaining full redress 
     for the injuries alleged and the time, expense, and risk that 
     counsel devoted to the litigation; and
       (B) the class members on whose behalf the settlement is 
     proposed are the primary beneficiaries of the settlement; and
       (3) the actions that the Judicial Conference of the United 
     States has taken and intends to take toward having the 
     Federal judiciary implement any or all of the recommendations 
     contained in the report.
       (c) Authority of Federal Courts.--Nothing in this section 
     shall be construed to alter the authority of the Federal 
     courts to supervise attorneys' fees.

     SEC. 7. ENACTMENT OF JUDICIAL CONFERENCE RECOMMENDATIONS.

       Notwithstanding any other provision of law, the amendments 
     to rule 23 of the Federal Rules of Civil Procedure, which are 
     set forth in the order entered by the Supreme Court of the 
     United States on March 27, 2003, shall take effect on the 
     date of enactment of this Act or on December 1, 2003 (as 
     specified in that order), whichever occurs first.

     SEC. 8. RULEMAKING AUTHORITY OF SUPREME COURT AND JUDICIAL 
                   CONFERENCE.

       Nothing in this Act shall restrict in any way the authority 
     of the Judicial Conference and the Supreme Court to propose 
     and prescribe general rules of practice and procedure under 
     chapter 131 of title 28, United States Code.

     SEC. 9. EFFECTIVE DATE.

       The amendments made by this Act shall apply to any civil 
     action commenced on or after the date of enactment of this 
     Act.

  Mr. SENSENBRENNER. Mr. Speaker, pursuant to the rule, I claim the 
time in opposition.

[[Page 2657]]

  The SPEAKER pro tempore. Pursuant to House Resolution 96, the 
gentleman from Michigan (Mr. Conyers) and the gentleman from Wisconsin 
(Mr. Sensenbrenner) each will control 20 minutes.
  The Chair recognizes the gentleman from Michigan (Mr. Conyers).
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would like to briefly describe why this substitute is 
the superior piece of legislation before us today. The substitute is 
much better for the following reasons: civil rights carve-out. The 
substitute would carve out State civil rights claims in order to make 
sure that civil rights plaintiffs, especially those seeking immediate 
injunctive relief, can have their grievances addressed in a timely 
manner.
  Believe me, this is an issue of great moment to those of us who are 
still prosecuting for a fair day in our Nation and have civil rights 
laws to back us up, but we now are pleading to keep the proper forums. 
For example, every State in the Union has passed a law prohibiting 
discrimination on the basis of disability. The language does not affect 
the Federal jurisdiction over Federal claims.
  The second consideration for this is the wage-and-hour carve-out. 
Wage-and-hour class actions are often brought in State courts because 
State wage-and-hour remedies are often, I am sorry to say, more 
complete than the Federal wage-and-hour statute; and we have examples 
of that.
  The third reason: we exclude non-class action cases involving 
physical injuries. The measure before us applies not only to class 
actions, but also to mass torts. The Democratic substitute removes the 
mass tort language. And then, of course, the attorney general carve-out 
which clarifies cases brought by State attorneys general are excluded 
from the provisions of the class action bill and would not be forced 
into Federal court.
  These are the major reasons why we encourage a supportive vote for 
the substitute to the measure that is being debated today.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in opposition to the Democratic substitute 
amendment and urge my colleagues to reject it. The new math behind the 
substitute amendment rests on the following arithmetic: if you add a 
number of amendments rejected by large bipartisan majorities in the 
other body last week and combine them with the amendment ideas 
overwhelmingly rejected on the House floor by a bipartisan vote last 
year, the sum will somehow equal a credible solution. Funny math.
  Mr. Speaker, this formula simply does not add up. The American 
consumers and businesses will be left with change in their pockets if 
the amendment passes. The Democratic substitute is less than the sum of 
its parts and represents a quotient that renders Senate Bill 5's core 
reform elements meaningless.
  The individual elements of this proposal deserve some comment and 
explanation. First, I note with some amusement that the substitute 
totally recycles the findings of S. 5. The pages of findings discuss 
abusive class action windfall settlements for trial attorneys, forum 
shopping, and the need for more of these large interstate class action 
cases to be in Federal court.
  While the minority substitute reargues the compelling case for reform 
of the class action system, it is followed by text that will only 
perpetuate the crisis the findings identify. Their admitting you have a 
problem is the first step to recovery, and we appreciate that 
admission; but the minority sponsors clearly are not ready for step 
two.
  One element of the substitute amendment is the State attorney general 
provision allowing any class action to be brought by or on behalf of 
the State attorney general to be in State court. This provision is 
unnecessary because when State attorneys general sue on behalf of their 
citizens, those actions are almost always ``parens patriae'' actions, 
and not class actions; and the former will be in no way affected by 
this bill.
  Also, the provision could produce troubling associations between 
attorneys general and plaintiffs' lawyers. For these reasons, the Pryor 
amendment in the other body that this provision copies verbatim failed 
to garner even 40 votes on the Senate floor last week.
  A second element of the substitute is the ``choice of law'' 
provision. This provision would not only eviscerate the bill, but also 
would overturn 70 years of established Supreme Court precedent and 
would export to Federal courts a primary expedient of class action 
abuse we seek to remedy: the reckless application by local courts of 
the law of one State to the entire Nation in large interstate cases.

                              {time}  1200

  This provision is reprinted from a Senate amendment by Senator 
Feinstein and Senator Bingaman. It was also soundly defeated.
  The third element of the substitute is the so-called labor and 
civility rights carveout. This provision seeks to keep all class 
actions involving alleged civil rights and labor law violations in 
State court, despite the fact that the most generous racial 
discrimination and employment class action settlements in recent years 
have been in the Federal courts. The language was also offered in the 
other body and rejected.
  Other major elements of the substitute include one our colleagues 
might remember as the Jackson-Lee House floor amendment to the bill in 
the last Congress. That amendment makes companies that incorporate 
abroad for tax purposes a citizen of a State and punishes them by 
keeping them out of Federal court. This is at least an admission that 
going into certain State courts as a defendant is indeed punishment, 
and that amendment was defeated in this House by the last Congress by a 
vote of 183 to 238. There is also a loophole creating a provision on 
mass actions and a completely unnecessary public disclosure provision, 
both based on Senate amendments in the other body that were offered and 
withdrawn.
  What the minority has chosen as a substitute package certainly belies 
any grumblings about the lack of regular order this year. Since there 
is not a single original idea among the provisions that has not already 
been debated and defeated either in this House or the other body, it is 
hard to give credence to such complaints. This is a package of oldies 
but not goodies; oldies that have been rejected and should not be 
resurrected.
  Finally, Mr. Speaker, a vote on this substitute is clearly just a 
vote to further deny or delay meaningful class action reform, and a 
vote on the substitute could not in any way be construed as reform of 
any kind but, rather, support for the trial-lawyer-dominated status 
quo.
  I urge my colleagues to reject this recycled package of recycled 
amendments. The time for reform of a class action system which is out 
of control is now.
  I urge my colleague to vote ``no'' on the substitute, and ``yes'' on 
S. 5.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I yield 3 minutes to the gentleman from 
Virginia (Mr. Scott).
  Mr. SCOTT of Virginia. Mr. Speaker, I rise in support of the 
substitute. One of the problems with the substitute is you have to 
debate all of the different issues all at once. If we had the 
opportunity to introduce individual amendments, we could have discussed 
them one at a time and had a much more coherent discussion.
  As it has been said, the underlying bill does not extinguish the 
right to get to court but it does gratuitously complicate the 
litigation. It does not fix coupons, it just moves them from State 
court to Federal courts. It adds procedural hurdles, and this 
substitute removes many of those hurdles.
  The main thing it does is it carves out many of the different cases 
that belong in State court or at least ought to have the opportunity in 
the State

[[Page 2658]]

court. It also fixes the yo-yo effect where you start off in State 
court, get removed to Federal court, Federal court does not certify the 
class, and then what happens? I guess you come back to State court or, 
I do not know, you might not be able to get back to State court. You 
may end up in a procedural trap where you have lost your case just in 
the time it takes to get over there and try to get back.
  This amendment fixes that quagmire. It also carves out, as has been 
said, the State civil rights cases where some States have civil rights 
laws that are stronger and cover different people, different classes 
than the Federal laws. Wage and hour laws, some States have better laws 
than the Federal court. Mass torts where you have not class actions per 
se, but a lot of different litigants all in the same State. It fixes 
the problem with Attorneys General in bringing a case in State court on 
behalf of not only members of their State, but if the injury has 
occurred to a lot of other people, the Attorney General might want to 
bring that case.
  I have a letter, Mr. Speaker, signed on this specific issue by 47 
Attorneys General.
  It also denies benefits under the bill for tax traitors, those who 
move their corporate headquarters off shore to avoid corporate taxes; 
and it also provides a limitation on sealed settlements that the 
gentleman from New York (Mr. Nadler) has been very active in making 
sure that cases that are settled cannot be sealed beyond public view, 
unless if such a sealing would violate public health or other important 
considerations.
  This is a well-reasoned substitute. It eliminates many but not all of 
the problems in the underlying bill, and I would hope that the House 
would adopt the substitute.

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

  Mr. SENSENBRENNER. Mr. Speaker, I yield 4 minutes to the gentleman 
from Missouri (Mr. Blunt), the distinguished majority Whip.
  Mr. BLUNT. Mr. Speaker, the vote in this House we will take within 
the hour will leave only one more step, the President's signature, in 
this first major attack on lawsuit abuse.
  I oppose the substitute and support the bill. I want to express my 
appreciation to the gentleman from Wisconsin (Mr. Sensenbrenner) and 
his committee and all the Members, in fact, who have been willing to 
take on this tough fight, but particularly to the chairman for working 
hard to find a way to get this bill on the floor and to the President 
this early in this Congress.
  Frivolous lawsuits are clogging America's judicial system, 
endangering America's small businesses, jeopardizing jobs, and driving 
up prices for consumers. The bill we are debating today will reduce 
these junk lawsuits through tougher sanctions and increased commonsense 
protections.
  The past few years have witnessed an explosion of interstate class 
actions being filed in State courts, particularly in certain magnet 
jurisdictions. These magnet courts are filled with class action abuses. 
They routinely approve settlements in which the lawyers receive large 
fees and the class members receive virtually nothing.

[[Page 2659]]

  The Class Action Fairness Act is a commonsense bipartisan plan that 
addresses this serious problem by allowing larger interstate class 
action cases, cases that truly do involve multiple States, to be filed 
in Federal court. In addition to unclogging certain overused courts, 
this bill ends the harassment of local businesses through forum 
shopping. Lawyers who now manipulate this system often do anything to 
stay out of Federal court. They sometimes name a local pharmacy or a 
local convenience store in a nationwide product liability suit simply 
because they believe that court, and that court often has created a 
reputation as the place to go to get unjust settlements.
  Sometimes they wait and amend their complaint and add millions of 
dollars of claims after the deadline for removal to Federal court. This 
bill stops this unfair practice as well.
  This bill also establishes a much-needed class action rights bill. 
Several provisions are specifically designed to ensure that class 
members, not their attorneys, are the primary beneficiaries of the 
class action process.
  Six years ago on this floor we really began the process of attacking 
this system. The stories go on and on and on, to the point that by the 
time we passed legislation like this in the last Congress for the third 
Congress straight, Members were eager to just simply get a couple of 
minutes to talk about one of the classes where the people in the class 
get a dollar-off coupon, the people in the class get the smallest 
possible box of Cheerios, the people in the class get a 31-cent check, 
or the people in the class even wind up having to pay the lawyers of 
the class additional money because there really was no money for the 
people in the class that was being determined.
  This bill requires that judges carefully review settlements and 
limits attorneys fees when the value of the settlement received by the 
class members is minor in comparison or when there is a net loss 
settlement where the class members actually end up losing money.
  This bill bans settlements that award some class members a large 
recovery simply because they live closer to the court that the lawyers 
shopped for to get that case in that judge's court.
  It allows Federal courts to maximize the benefit of class action 
settlements by requiring that unclaimed settlement funds be donated to 
charitable organizations.
  The Class Action Fairness Act is good for small business and good for 
consumers. I urge a ``no'' vote on the substitute. I urge my colleagues 
to support this important legislation.
  Mr. Speaker, I thank the chairman and his committee for their hard 
work on this effort.
  Mr. CONYERS. Mr. Speaker, I yield 1 minute to the gentlewoman from 
California (Ms. Pelosi), the minority leader of our caucus.
  Ms. PELOSI. Mr. Speaker, I rise in strong opposition to this 
legislation.
  Today Republicans are bringing to the floor as their first major 
legislative action a payback to big business at the expense of 
consumers. The Republican agenda is to ensure that some Americans do 
not get their day in court.
  Make no mistake that this class action bill before us today is an 
extreme bill. It is not a compromise bill as some have claimed. It is 
an extreme bill that is an injustice to consumers and a windfall for 
irresponsible corporations. Consumers will be hit hard by this bill, 
Mr. Speaker. It lumps together individual personal injury cases such as 
those involving Vioxx, which are not class action under current 
procedures, and forces them into the Federal courts. Doing so will 
greatly increase the likelihood that such cases will never be heard.
  When Americans are injured or even killed by Vioxx or Celebrex or 
discriminated against by WalMart, they may never get their day in 
court. Those cases that do go forward will take significantly longer 
because the Federal courts are overburdened and unequipped for this 
caseload. That is why the bill is opposed by Federal judges, including 
The Judicial Conference of the United States. Special interests have 
even admitted that the real intent of this bill is to clog the Federal 
courts and, therefore, stop the cases.
  To irresponsible corporations, however, the class action bill is a 
belated Valentine. It is exactly what they have asked for. Powerful 
corporations will largely be immune from the accountability that 
currently comes from meritorious State class action cases. For example, 
this bill would help shield large corporations from any accountability 
for Enron-style shareholder fraud, for activities that violate employee 
rights under State law, and for telemarketing fraud targeted at the 
elderly.
  It should come as no surprise, however, that Republicans are seeking 
yet another way to protect irresponsible corporations.
  The Washington Post reported that last year's Republican medical 
malpractice bill contained special liability protections that would 
have precluded consumers from suing to recover punitive damages arising 
for the types of injuries caused by Vioxx and Celebrex. Protecting big 
drug companies is always at the top of the Republican agenda. We saw 
that in the prescription drug bill under Medicare. This is yet again 
another example of Republicans being the handmaidens of the 
pharmaceutical industry.
  This bill also runs counter to the principles of federalism that my 
colleagues on the other side of the aisle claim to support. It throws 
thousands of State cases into Federal courts that are not equipped to 
adjudicate State laws. For instance, lawsuits involving the enforcement 
of the State hourly wage laws, which often have greater protections 
than Federal wage laws, would be forced into Federal courts. In fact, 
46 State Attorneys General on a bipartisan basis have requested an 
exemption so that they can continue to protect their citizens under the 
State consumer protection laws in State courts. The Republicans have 
rejected that request while Democrats have incorporated it into our 
substitute.
  Democrats in our substitute support sensible approaches that weed out 
frivolous lawsuits but not meritorious claims. Our Democratic 
substitute says that certain kinds of cases must always have their day 
in court. Physical injury cases, civil rights cases, wage and hour 
cases, State Attorneys General cases, and others must be heard if we 
are to remain a Nation that strives for justice for all.
  President Harry Truman said it so well. ``The Democratic party stands 
for the people. The Republican party stands, and has always stood, for 
special interest.''
  I urge my colleagues to stand up to the special interests, to support 
the Democratic substitute, to listen, to listen to the recommendation 
of the Federal judges and the Judicial Conference of the United States 
and oppose this extreme legislation.

                              {time}  1215

  Mr. SENSENBRENNER. Mr. Speaker, I yield 2\1/2\ minutes to the 
gentleman from Texas (Mr. Smith).
  Mr. SMITH of Texas. Mr. Speaker, I thank the chairman of the 
Committee on the Judiciary for yielding me time.
  Mr. Speaker, all Americans should thank the gentleman from Virginia 
(Mr. Goodlatte) and the gentleman from Wisconsin (Chairman 
Sensenbrenner) for their leadership on this most important issue.
  The Class Action Fairness Act is a bipartisan, sensible bill that 
clarifies the rights of consumers and restores confidence in America's 
judicial system. It reforms the class action system and addresses the 
abuses that harm so many Americans.
  We have all heard of the lawsuits in which plaintiffs walk away with 
pennies, sometimes literally, while the attorneys walk away with 
millions of dollars in fees. This problem will be addressed by 
providing greater scrutiny over settlements that involve coupons or 
very small cash amounts.
  This legislation also ensures that deserving plaintiffs are able to 
make full use of the class action system. It allows easier removal of 
class action cases to Federal courts. This is important because class 
actions tend to affect numerous Americans and often involve millions of 
dollars. Federal court is the right place for such large lawsuits.

[[Page 2660]]

  Moving more class actions to Federal courts also prevents one of the 
worst problems in class actions today, forum shopping.
  Mr. Speaker, while many concessions were made on both sides, this is 
still a very worthwhile bill that contains many good reforms, and I 
fully support it and look forward to its enactment into law and also 
encourage my colleagues to support it as well.
  Mr. CONYERS. Mr. Speaker, I am pleased to yield 3 minutes to the 
gentleman from New York (Mr. Nadler), a distinguished member of the 
Committee on the Judiciary.
  Mr. NADLER. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  I rise in strong opposition to this egregious legislation and in 
support of the Conyers/Nadler/Jackson-Lee substitute amendment.
  This substitute amendment amends this bill in several ways to ensure 
that consumers, workers and victims in personal injury cases are not 
precluded from having a fair opportunity to present their cases in 
court. I know the distinguished minority leader and others have 
mentioned some of these instances.
  My good friend Eliot Spitzer, the distinguished attorney general of 
New York State, has joined 46 State attorneys general in expressing 
their concern that this legislation could limit their power to 
investigate and bring actions in their State courts against defendants 
who have caused harm to their citizen. Our amendment clarifies that 
cases brought by States attorneys general will not be subject to the 
provision of this bill and would not be forced into Federal court.
  The substitute also includes a provision which I have advocated for 
many years, which actually was supported by the distinguished chairman 
and passed the Committee on the Judiciary a couple of times, to limit 
the ability of corporations settling lawsuits to demand that records 
that may indicate threats to public health and safety be sealed, unless 
it is necessary to protect trade confidentiality.
  The substitute provides that when such a gag order is requested, and 
it is normally requested by both the plaintiff and the defendant 
because in the settlement the defendant insists on this as a condition 
of the settlement, the court then rubber stamps it. This substitute 
provides that if such a gag order is requested, the court must make a 
finding as to whether the defendant's interest in confidentiality 
outweighs the public interest in knowing of the threat to its health or 
safety.
  If the court finds that the privacy interest outweighs the public 
interest, the court will issue the gag order. If the court finds the 
public interest in health and safety outweighs the privacy interest 
claimed in the specific case, the court must prohibit the sealing of 
the information.
  Too often, critical information is sealed from the public and people 
are harmed as a result. How many people were killed or injured because 
the court sealed records relating to exploding Firestone tires, for one 
example. This provision will allow the public to learn of threats to 
this health and safety so as to take proper action to protect the 
public, while protecting legitimate confidential information.
  The Conyers/Nadler/Jackson-Lee substitute amendment also deals with a 
major catch-22 created by the bill for victims of large and complex 
multistate court torts. On the one hand, the bill provides State courts 
cannot hear such cases; but when these cases are removed to Federal 
court, plaintiffs will find that the Federal courts routinely refuse to 
hear them. Federal courts are very reluctant to certify a multistate 
consumer class action suit, and six circuit courts and 26 district 
courts have expressly refused to consider certifying cases where 
several State laws apply.
  Our substitute protects victims from facing this catch-22 and having 
the courtroom door completely closed to them by providing that if these 
cases are removed to Federal court by this bill, the Federal courts 
cannot refuse to certify a class action simply because more than one 
State law applies.
  I urge my colleagues not to allow this bill to completely deny 
victims their day in court, either in State court or in Federal court. 
That would render this bill completely hypocritical. I urge my 
colleagues to vote ``yes'' on the Conyers/Nadler/Jackson-Lee substitute 
and ``no'' on the main bill.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 5 minutes to the gentleman 
from Virginia (Mr. Goodlatte), the author of the bill.
  Mr. GOODLATTE. Mr. Speaker, I thank the chairman for yielding me time 
and for his leadership in bringing this legislation to the floor and 
for working with the Senate to achieve the compromise that we need.
  The gentlewoman from California (Ms. Pelosi), the minority leader, 
called this an extreme Republican measure. Apparently, she has not 
spoken to her own fellow San Franciscan and senior Senator from her 
State, Dianne Feinstein, who negotiated the compromise that has brought 
this legislation to the floor of the House, or to Senator Chuck 
Schumer, also a member of the Committee on the Judiciary on the 
Democratic side in the Senate, or 16 other Democratic Senators who 
voted for this legislation.
  She also apparently has not spoken to members of her own Democratic 
Caucus, many of whom have voted for this legislation in each of the 
last three Congresses that have passed the House of Representatives and 
many more of whom will vote for the legislation today.
  A number of the folks who have spoken on the other side of the aisle 
criticizing the legislation have cited total inaccuracies about what 
the legislation will do.
  The gentleman from Massachusetts (Mr. Markey) would not yield to me, 
but he said that the Amerada Hess case in New Hampshire, with gasoline 
leaking into groundwater, would not be heard in the State court; but if 
you live in New Hampshire and you have gasoline leaking in your 
groundwater and virtually all of the plaintiffs are New Hampshire 
residents, the case, under this bill, would be heard in the State 
courts.
  Some have mentioned the Vioxx case against Merck would be affected by 
this, and they have argued that Senate 5 should be rejected because it 
will hurt consumers bringing Vioxx cases against Merck. The truth, 
however, is that this legislation will have absolutely no effect on 
Vioxx suits. Here is why: the majority of personal injury cases brought 
against Merck are individual cases that would not be affected by the 
bill in any manner whatsoever. These include more than 400 personal 
injury cases that are part of a coordinated proceeding in New Jersey 
State court. None of these cases will be affected by the bill because 
they are neither class actions nor mass actions.
  Now, what kind of cases would be affected by this legislation? Well, 
let me show my colleagues how a select number of class action trial 
lawyers play the class action wheel of fortune.
  How about the Kay Bee Toys case where the lawyers got $1 million in 
attorneys fees and the consumers got 30 percent off selected products 
of an advertised sale at Kay Bee Toys for one week.
  Or the Poland Spring Water case where the lawyers got $1.35 million 
in the wheel of fortune and the consumers got coupons to buy more of 
the water that the lawyers were alleging was defective.
  How about the Ameritech case. The price goes up, $16 million for 
those lawyers; the consumers, $5 phone cards.
  How about the Premier Cruise line case. The lawyers got nearly 
$900,000. The consumers got $30 to $40 off of their next thousand 
dollar cruise, with a coupon to buy more of the product the lawyers 
were alleging was defective.
  Or the computer monitor litigation, $6 million in attorneys fees in a 
case alleging that the size of the computer screen was slightly off, 
and therefore, they were entitled to something. What did the consumers 
get? A $13 rebate to purchase their next purchase.
  How about the register.com case, $642,500 to the lawyers. The 
consumers, $5-off coupons.

[[Page 2661]]

  My favorite case, the case against Chase Manhattan Bank, the lawyers 
got $4 million in attorneys fees, but the plaintiffs that allegedly the 
opponents of this bill are protecting, they got 33 cents. Here is one 
of the actual checks. The catch was that at the time, to accept this 
33-cent magnanimous check, they had to use a 34-cent postage stamp to 
send in the acceptance to get their 33-cent fee.
  How about the case that President Bush cited last week when he 
highlighted problems with this of the woman who had a defective 
television set against Thompson Electronics, found she had been made a 
member of a class action seeking redress of her grievances and many 
others against Thompson Electronics. What did the lawyers get? $22 
million in attorneys fees. What did she get? A coupon for $25 to $50 
off her next purchase of exactly what she did not want, another 
Thompson Electronics television set.
  Now, the gentlewoman from California, the minority leader, also cited 
the Washington Post. Let me tell my colleagues, the Washington Post has 
repeatedly endorsed this legislation, along with over a hundred other 
major newspapers, the Washington Post, the Wall Street Journal, the 
Financial Times, Christian Science Monitor, on and on the list goes. 
And here is what the Washington Post said, and that is why we need to 
pass this legislation today. The clients get token payments while the 
lawyers get enormous fees. This is not justice. It is an extortion 
racket that only Congress can fix.
  I urge my colleagues to pass the bill.
  Mr. CONYERS. Mr. Speaker, I am pleased to yield 4 minutes to the 
gentleman from New York (Mr. Weiner), a distinguished member of the 
Committee on the Judiciary.
  Mr. WEINER. Mr. Speaker, I thank the gentleman from Michigan for the 
time.
  Sometimes during these debates I like to step in to take a 
perspective of someone on the committee who is not a lawyer; but I have 
to tell my colleagues, the previous speaker, the gentleman from 
Virginia, went to great lengths to talk about the lawyers fees. There 
is nothing in this bill that limits lawyers fees, and there is not 
anything in the bill actually that argues for his point, which is 
apparently that there should be a minimum amount that wrongdoers pay to 
each individual aggrieved person, which is a novel argument, I have not 
heard it made by my colleague before, saying that the plaintiffs are 
receiving too little now.
  Let me explain very briefly why it is that we have situations like 
that. Those of us who are individuals of modest means, if we have been 
aggrieved by a major company, if they have done something that has 
harmed our health or our community or our family, we as individuals 
frankly do not have the ability to take on a major company to stop them 
from doing the wrongful things, to make sure they understand that there 
is a cost of doing it. So we join together as a community and we bring 
these actions as a group. We cannot, frankly, pay the lawyer up front 
so they are paid on contingencies, and that is the way these actions 
get taken.
  One thing the gentleman from Virginia did not say even once through 
that whole wheel of rhetoric was that any of those that were held 
accountable by juries of their peers were not guilty of those things. 
In those cases, those parties, each and every one of them, on the wheel 
of rhetoric actually was found by a judge or a jury to have done 
substantial bad things to the community. The system actually worked in 
those cases.
  We can quibble about the person, the individual that wound up getting 
a payment. There were so many of them, millions of people who had been 
harmed by those companies, that when they were done divvying up what 
seemed like a very large judgment, tens of millions of dollars, there 
was only left a 35, 40-cent coupon and the like.
  I stand perfectly ready to vote in favor of an amendment by the 
gentleman from Virginia to have minimum payments to people who have 
been harmed. If the gentleman thinks it is not enough that they get 35 
cents, I am with him. Some of those companies did outrageous things to 
our community, and they should be held accountable. If my colleague 
thinks a 35-cent check is not enough, I am with him. Let us make 
minimum amounts that they pay for the injuries, that they have to get, 
because the harm is so great.
  I want to remind my colleagues and the citizens watching this why the 
system is structured this way. Imagine for a moment if someone who is 
making a shoddy automobile, who was not paying attention to whether 
sharp objects got into a cereal box, did not have to be concerned about 
lawsuits anymore. Do my colleagues think they would really say let us 
hire that extra safety precaution, that extra employee to keep an eye 
out for consumers? No. They would be less inclined to do that.
  The system works as it is intended. Are there abuses? I am sorry to 
say that there are some, and I wish we would address some of them in 
this legislation which, of course, we do not; but frankly to stand 
before the wheel of rhetoric, which really is a wheel of bad doers who 
got caught by the justice system, which we are trying to dismantle here 
today, and say this is evidence that the system does not work is 
entirely the opposite of the truth, unless my colleagues believe that a 
jury of people's peers cannot make these informed decisions, that we 
are the only people brilliant enough to make these decisions. I love 
these small government types who believe we have better judgment on 
these things than 12 men and women in a community, then we have to 
believe that the system in those cases worked.
  I would say to my colleagues on both sides of the aisle that the 
Conyers/Nadler/Jackson-Lee substitute only puts lipstick on a fraud. It 
still leaves a very, very flawed bill; but at least we go from being 
completely destructive to only being moderately destructive, and we 
protect ourselves from some of the worst abuses.

                              {time}  1230

  Mr. Speaker, I urge a ``yes'' vote on the substitute, a ``no'' vote 
on the base bill, and I urge us to stop this drumbeat on the other side 
of blaming average Americans for being victimized by big corporations.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 2 minutes to the gentleman 
from Virginia (Mr. Goodlatte).
  Mr. GOODLATTE. Mr. Speaker, I thank the gentleman from Wisconsin for 
yielding me this time, and I thank the gentleman from New York (Mr. 
Weiner) for raising the points on those cases on the class action wheel 
of fortune because he makes a good point. In not one of those cases was 
there any wrongdoing found on the part of any of those defendants 
because all of those were settlements. They were extortionate 
settlements because they are in the jurisdiction of a court where they 
know they are facing a hanging judge and a hanging jury.
  The gentleman also raised another good point, and we should not leave 
plaintiffs in the situation where they get a 33-cent check or a coupon 
for a box of Cheerios, like in another case, and that is what this bill 
does. It requires extra-special scrutiny for coupon settlement cases so 
the courts will no longer let the manufacturers' attorneys and the 
defendants' attorneys come in with a settlement that simply gets out of 
the case, that gives the plaintiffs' attorney a huge sum of money and 
everyone else walks away and the plaintiffs get left holding the bag.
  Mr. Speaker, the gentleman ought to talk to his colleague, the senior 
Senator from New York, the predecessor of his seat, who supported this 
legislation.
  In addition, when the gentleman talks about abuse of plaintiffs in 
these cases, take into consideration the nationwide class action 
lawsuit filed in Alabama against the Bank of Boston, headquartered in 
Massachusetts, over mortgage escrow accounts. The class members won the 
case but actually lost money. Amazing.
  Under the settlement agreement, the 700,000 class members received 
small payments of just a couple of dollars or

[[Page 2662]]

no money at all. About a year later, they found out that anywhere from 
$90 to $140 had been deducted from their escrow accounts. For what? To 
pay their lawyers' legal fees, of what? $8.5 million. And when some of 
those class members, some of those beleaguered plaintiffs, that I am 
glad the gentleman from New York is standing up for, sued their class 
action lawyers for malpractice, the lawyers countersued them for $25 
million saying that their former clients were trying to harass them.
  This is an extortionate practice. A small cartel of class action 
lawyers around the country are abusing the system and we need to change 
it.
  Mr. CONYERS. Mr. Speaker, I yield 30 seconds to the gentleman from 
New York (Mr. Weiner).
  Mr. WEINER. Mr. Speaker, I thank the gentleman very much for yielding 
me this additional time, and I am surprised that such an able lawyer 
would be unwilling to engage in a debate on his time, but I will take 
30 seconds simply to rebut what the gentleman said.
  In every one of those cases on the wheel of rhetoric that the 
gentleman put up, those that were found guilty, those who were found to 
be responsible, those who were found to be culpable of doing harmful 
things to our community admitted it, paid a fine, paid a penalty, that 
was approved by a judge, and that is the fact; that the gentleman took 
cases of people who admitted with their actions there was wrongdoing 
involved.
  And if they had not been caught by this system, I ask the gentleman, 
what system would they be caught by?
  Mr. CONYERS. Mr. Speaker, I am pleased to yield the balance of my 
time to the gentlewoman from Texas (Ms. Jackson-Lee), a cosponsor of 
the substitute amendment.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, that pig may have lipstick, 
but I can tell my colleagues that it is still pretty unattractive.
  It is interesting that my good friend from Virginia keeps talking 
about coupons and this 30 cents. What he is not telling those of us who 
understand what class action settlements really mean is that in the 
settlement comes the punishment for not doing or the incentive to not 
violate the law again. In the settlement comes an injunction that 
argues or stops the culprit, the violator, from doing harm again. There 
is an action. Class actions do not always generate into dollars to 
petitioners. If you have been done harm, you want that harm to stop 
immediately so someone else cannot be harmed.
  And the class action lawsuit and the so-called millions of dollars to 
attorneys for attorneys fees does not take into account the preparation 
for that case, the depositions, the travel. So it looks as if there is 
a great bounty or a gift being given to lawyers who are working to 
ensure that the punitive entity, the entity that has caused thousands 
of employees to lose pensions from corporations, the entity such as MCI 
and others who have thrown away their corporate responsibility to their 
employees and caused them to lose all their money, who violated 
corporate laws and had the violation of trust and made sure that they 
did the self-dealing, these class actions were to say ``and do that no 
more,'' and ``we will not allow you to do that anymore.''
  For example, the particular amendment that is included in the 
Conyers-Nadler-Jackson-Lee substitute, which I rise enthusiastically to 
support, the tax traitor corporation which leaves America and 
incorporates somewhere else and depletes all of its savings accounts, 
or all of its accounts, so therefore if there is an action, if you are 
harmed, if you are hurt and you sue here in the United States, you look 
up in the court and you find out there is empty pockets. Why? Because 
they have overcome the laws of this land. They have absconded and you 
have no way of seeking relief. The substitute includes the relief that 
is necessary to ensure that citizens and consumers are protected.
  There is a civil rights carveout, so that you have a right to address 
your grievances without the expenses of a Federal Court. There is a 
wage and hour carveout, so that you can file against a company in your 
local jurisdiction as a class action when you have been violated on the 
minimum wage. Physical injuries, so that when your child is injured in 
a park because of a defective product you have the right to go into 
your State courts and seek relief.
  Now, I want to share with those who feel that we are now opening the 
doors of opportunity with the Federal courts. Let me share this with 
you. This is why this is a bogus litigation or legislation that will 
not work. Arizona has 159 State judges, only 13 Federal courts. Tell me 
the difference in being able to go into a court that has 159 judges 
versus those who have 13.
  What about the State of South Carolina, with 48 State judges and 
merely 10 federal judges; or Rhode Island with 22 State judges and 
three Federal judges; New York with 593 State judges and a mere 52 
Federal courts; Louisiana, 211 State judges and 22 Federal courts?
  Frankly, there is a farce going on here. At the end of the 108th 
Congress there were 35 judicial vacancies in the Federal courts. There 
is no opportunity to go into the Federal courts. They are overburdened 
and overworked. Justice Rehnquist said something very important. He 
said, ``I have criticized Congress and the President for their 
propensity to enact more and more legislation which brings more and 
more cases into the Federal Court system. This criticism received 
virtually no public attention. If Congress enacts and the President 
signs new laws, allowing more cases to be brought into the Federal 
courts, just filling the vacancies will not be enough. We need 
additional judgeships.''
  This is a farce, I am saddened to say, even with the compromise. We 
all want to see the judicial system work. I know my good friend from 
Virginia has good intentions, but this responds to a noncrisis with no 
resources, no added courts to the Federal bench, and the backlog of 
cases all over America simply slams the door to injured parties across 
this land.
  The substitute is fair. It allows you to go into the State courts 
that have a bounty of judges, allows you to be heard, and it allows 
those corporate offenders or those products that have offended and 
harmed and maybe killed, those defective automobiles, to be in the 
courthouse and to have their concerns heard.
  Mr. Speaker, I rise in opposition to this bill, S. 5, the Class 
Action Fairness Act. Unfortunately for the millions of aggrieved 
plaintiffs in America with legitimate claims, this body has brought yet 
another piece of legislation to the floor that threatens to close the 
doors of the court.
  This bill, despite its name, is not fair to all complainants who come 
to the courts for relief. In addition, it fails to render 
accountability to parties who are in the best financial position. One 
issue that I planned to address by way of amendment was that of 
punishing fraudulent parties to class action proceedings by preventing 
them from removing the matter to federal court.
  I am a co-sponsor of the amendment in nature of a substitute that 
will be offered by my colleagues. With the provisions that it contains, 
requirements for Federal diversity jurisdiction will not be watered 
down resulting in the removal of nearly all class actions to Federal 
court. A wholesale stripping of jurisdiction from the State courts 
should not be supported by this body. Therefore, it needs to be made 
more stringent as to all parties and it needs to contain provisions to 
protect all claimants and their right to bring suit.
  Contained within the amendment in nature of a substitute is a section 
that I proposed in the context of the Terrorist Penalties Enhancement 
Act that was included in the bill passed into law. This section relates 
to holding ``tax traitor corporations'' accountable for their terrorist 
acts. With respect to S. 5, the right to seek removal to Federal courts 
will be precluded for tax traitor corporations.
  The ``tax traitor corporation'' refers to a company that, in bad 
faith, takes advantage of loopholes in our tax code to establish bank 
accounts or to ship jobs abroad for the main purpose of tax avoidance. 
A tax-exempt group that monitors corporate influence called ``Citizen 
Works'' has compiled a list of 25 Fortune 500 Corporations that have 
the most offshore tax-haven subsidiaries. The percentage of increase in 
the number of tax havens held by these corporations since 1997 ranges 
between 85.7 percent and 9,650 percent.
  This significant increase in the number of corporate tax havens is no 
coincidence when

[[Page 2663]]

we look at the benefits that can be found in doing sham business 
transactions. Some of these corporations are tax traitor corporations 
because they have given up their American citizenship; however, they 
still conduct a substantial amount of their business in the United 
States and enjoy tax deductions of domestic corporations.
  The provision in the substitute amendment will preclude these 
corporations from enjoying the benefit of removing State class actions 
to Federal court. Forcing these corporate entities to defend themselves 
in State courts will ensure that these class action claims will be 
fairly and fully litigated.
  Mr. Speaker, S. 5 applies not only to class actions but to all tort 
cases. It is highly inefficient to overwhelm the Federal courts with 
the massive number of State claims that will come their way. Not only 
are the Federal courts less sympathetic to this kind of litigation, the 
practical effect will be that many cases will never be heard.
  The barriers to gaining Federal jurisdiction to have a case heard is 
much higher than in State courts by virtue of their creation. As a 
result, the Federal courts will be quick to refuse class certification 
in complex litigation matters. State courts are better suited to 
adjudicate complex class actions.
  I oppose this legislation and urge my colleagues to join me.
  Mr. Speaker, I ask my colleagues to vote for the substitute and 
defeat the underlying bill.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself the balance of my 
time.
  Mr. Speaker, the amendment in the nature of a substitute completely 
guts this bill. Every crippling amendment that was rejected either in 
this House or the other body in this Congress or the previous Congress 
is incorporated in this amendment. They do not have any new ideas over 
there. They just repackage and try to regurgitate the old ideas that 
have been found lacking.
  The issue in this bill is very clear, and that is that we have to 
restore some sanity to the civil justice system by dealing with the 
abuses that a small group of lawyers have turned the class action 
system into.
  When the framers of the Constitution wrote that inspired document, 
they gave Congress the power to regulate interstate Congress. What has 
happened as a result of the abuse of the class action system is that 
judges in small out-of-the-way counties, like Madison County, Illinois 
and Jefferson County, Texas end up being the ultimate arbiters of 
interstate commerce.
  This bill puts some balance back into the system. The amendment 
perpetuates the existing system. Vote ``no'' on the amendments, vote 
``no'' on the motion to recommit, and pass the bill.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Cole of Oklahoma). Pursuant to House 
Resolution 96, the previous question is ordered on the bill and on the 
amendment in the nature of a substitute offered by the gentleman from 
Michigan (Mr. Conyers).
  The question is on the amendment in the nature of a substitute 
offered by the gentleman from Michigan (Mr. Conyers).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. CONYERS. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 178, 
nays 247, not voting 9, as follows:

                             [Roll No. 36]

                               YEAS--178

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Chandler
     Clay
     Cleaver
     Clyburn
     Conyers
     Costa
     Costello
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Emanuel
     Engel
     Etheridge
     Evans
     Fattah
     Filner
     Frank (MA)
     Gonzalez
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Reyes
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NAYS--247

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boucher
     Boustany
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Case
     Castle
     Chabot
     Chocola
     Coble
     Cole (OK)
     Conaway
     Cooper
     Cox
     Cramer
     Crenshaw
     Cubin
     Cuellar
     Culberson
     Cunningham
     Davis (KY)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Everett
     Feeney
     Ferguson
     Fitzpatrick (PA)
     Flake
     Foley
     Forbes
     Ford
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harris
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Holden
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Marshall
     Matheson
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Moran (VA)
     Murphy
     Murtha
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Porter
     Portman
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schwarz (MI)
     Scott (GA)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (NJ)
     Smith (TX)
     Sodrel
     Souder
     Stearns
     Sweeney
     Tancredo
     Tanner
     Taylor (MS)
     Taylor (NC)
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)

                             NOT VOTING--9

     Davis (IL)
     Eshoo
     Farr
     Rangel
     Reichert
     Stupak
     Sullivan
     Thomas
     Young (FL)

                              {time}  1308

  Messrs. CULBERSON, SIMMONS, BASS, GOODE, GARY G. MILLER of 
California, HOBSON, FORD,

[[Page 2664]]

CUELLAR, and Mrs. CUBIN changed their vote from ``yea'' to ``nay.''
  Messrs. GEORGE MILLER of California, SMITH of Washington, and 
MOLLOHAN changed their vote from ``nay'' to ``yea.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. Cole of Oklahoma). The question is on 
the third reading of the Senate bill.
  The Senate bill was ordered to be read a third time, and was read the 
third time.


             Motion to Commit Offered by Mr. Brown of ohio

  Mr. BROWN of Ohio. Mr. Speaker, I offer a motion to commit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. BROWN of Ohio. I am, Mr. Speaker.
  The SPEAKER pro tempore. The Clerk will report the motion to commit.
  The Clerk read as follows:

       Mr. Brown of Ohio moves to commit the bill S. 5 to the 
     Committee on the Judiciary with instructions that the 
     Committee report the same back to the House forthwith with 
     the following amendments:
       In section 1711(2) of title 28, United States Code, as 
     added by section 3(a) of the bill, add after the period the 
     following: ``The term `class action' does not include any 
     action arising by reason of the use of the drug Vioxx.''.
       In section 1332(d)(1)(B) of title 28, United States Code, 
     as amended by section 4(a)(2) of the bill, insert before the 
     semicolon the following ``, except that the term `class 
     action' does not include any action arising by reason of the 
     use of the drug Vioxx''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Ohio (Mr. Brown) is recognized for 5 minutes in support of his motion.
  Mr. BROWN of Ohio. Mr. Speaker, Janet Huggins died last September. 
She was 39 years old. She had a 9-year-old son.
  She had no personal or family history of heart problems, but she 
suffered a fatal heart attack just a month after she began taking a new 
medicine for her early-onset arthritis.
  That medicine she took was Merck's anti-inflammatory drug, Vioxx. 
Cardiologist, Dr. Eric Topol, and other researchers at the Cleveland 
Clinic sounded the alarm in August of 2001.
  Their article in the Journal of the American Medical Association 
pointed to increased occurrence of heart problems in patients taking 
Vioxx and similar Cox-II anti-inflammatory drugs. Dr. Topol even called 
Merck's CEO and research director to talk about his concerns. His calls 
went unanswered. His warnings went unheeded.
  Instead, Merck continued to sell Vioxx, continued to spend $100 
million a year on direct-to-consumer advertising, encouraging more and 
more Americans to buy Vioxx. That is what Ms. Huggins did. She was 
buried the same day that Merck finally took Vioxx off the market.
  Her husband Monty has filed suit against Merck. His suit will be 
captured, along with thousands of other Vioxx suits, under the mass 
actions provisions of S. 5. This bill is designed to make it more 
difficult for Monty Huggins and others to pursue their claims that 
companies like Merck will never be held accountable.
  S. 5 will make it more expensive for him and much harder for him to 
travel for court proceedings. It may even dead-end Monty Huggins' claim 
entirely.
  Federal Courts have repeatedly refused to certify multistate class 
actions because they found them too complex to choose one State law 
over the other. So Monty Huggins may arrive in Federal Court only to 
find that is the end of the line.
  The bitter irony here is that Vioxx claims are not really class 
actions at all.
  Here is a good example of the sort of things settled by class action 
lawsuits. This iPod portable music player is all the rage. There are 
some people out there who thought the batteries on these things run out 
too quickly. They have filed a class action lawsuit against the 
manufacturer. If they win, everybody in the class probably gets a few 
bucks and the whole thing is done.
  That is what class action lawsuits are about. They do not generally 
involve personal injuries. They do not generally involve huge losses. 
There is a world of difference, Mr. Speaker, between a faulty battery 
in this, and the death of a 39-year-old wife and mother.
  Perhaps the worst aspect of this bill is that it treats these suits 
the same. We should strip out the whole class action, the mass action 
provision, but that is not realistic in this political environment.
  My motion to commit prevents harm so obvious it cannot be ignored by 
specifically exempting Vioxx lawsuits.
  Dr. Topol at the Cleveland Clinic, who I mentioned earlier wrote, 
``Neither of the two major forces in this 5-and-a-half year affair, 
neither Merck nor the FDA, fulfilled its responsibilities to the 
public.''
  This motion to commit offers an opportunity for someone at last to 
act responsibly.
  If we adopt this motion to commit, Monty Huggins will have a fighting 
chance for justice. If we do not, the U.S. House of Representatives 
will join the list of those who betrayed the public's trust.
  Mr. Speaker, I yield the reminder of my time to my friend, the 
gentleman from Arkansas (Mr. Ross).
  Mr. ROSS. Mr. Speaker, the Class Action Fairness Act could not be 
more inappropriately named, and this motion to commit shows why.
  Since 1999, Merck has spent over $100 million a year to advertise 
Vioxx. More than 80 million people took Vioxx, and the drug generated 
sales of $2.5 billion for Merck.
  Merck should take responsibility for the harm their products may 
cause. Thousands, literally thousands of American families believe they 
lost a loved one or suffered personal harm because Vioxx was unsafe.
  These families believe Merck knew of the danger Vioxx was causing, 
but allowed the drug to remain on the market anyway. Maybe they are 
right. Maybe they are not. But the point is that the so-called Class 
Action Fairness Act does not give them a fair chance to make their case 
before a jury of their peers.
  The Class Action Fairness Act makes it very difficult for those who 
feel they were harmed by drugs like Vioxx from getting the justice they 
deserve. We should adopt this motion to commit and pass a Class Action 
Fairness Act worthy of the name.
  Mr. GOODLATTE. Mr. Speaker, I rise in opposition to the motion to 
commit.
  The SPEAKER pro tempore. The gentleman from Virginia (Mr. Goodlatte) 
is recognized for 5 minutes.
  Mr. GOODLATTE. Mr. Speaker, first let me thank Chairman Sensenbrenner 
for his leadership in bringing us to this historic point. He and I have 
been working on this for over 6 years. It has passed the House of 
Representatives three times before.
  Due to his good work, it has now passed the Senate and we have the 
opportunity to send it to the President. He is waiting to sign it and 
we shouldn't waste any more time.

                              {time}  1315

  Now the truth about class action fairness and Vioxx. Critics have 
been arguing in the press that S. 5 should be rejected because it will 
hurt consumers bringing Vioxx cases against Merck. The truth is, 
however, that this legislation will have absolutely no effect on Vioxx 
suits, and here is why. The majority of personal injury cases brought 
against Merck are individual cases that would not be affected by the 
bill in any manner whatsoever. These include more than 400 personal 
injury cases that are part of a coordinated proceeding in New Jersey 
State Court. None of these cases will be affected by the bill because 
they are neither class actions nor mass actions.
  Merck has been named in more than 75 statewide and nationwide class 
actions involving Vioxx, but only a small percentage are personal 
injury class actions. To the extent these cases do involve personal 
injury, most were already brought in or removed to Federal Court 
because each potential class member's claims exceeds $75,000. Thus, 
these cases are removable to Federal Court under the old rules.

[[Page 2665]]

  There are a few cases which plaintiffs have joined together in mass 
action-type cases against Merck. However, not a single Vioxx case has 
been brought against Merck in State court by more than 100 plaintiffs, 
one of the requirements for removal to Federal Court under the class 
action legislation. Thus, there is no reason to believe that the mass 
action provision would affect any Vioxx-related cases whatsoever.
  Most of the class actions have been brought against Merck. Since the 
legislation is not retroactive, it would absolutely have no effect on 
the 75 class actions already filed against Merck in the wake of the 
Vioxx withdrawal.
  Mr. BROWN of Ohio. Mr. Speaker, I have a parliamentary inquiry.
  The SPEAKER pro tempore (Mr. Cole of Oklahoma). Does the gentleman 
from Virginia yield to the gentleman from Ohio for a parliamentary 
inquiry?
  Mr. GOODLATTE. Mr. Speaker, I do not yield.
  The SPEAKER pro tempore. The gentleman from Virginia (Mr. Goodlatte) 
may continue.
  Mr. GOODLATTE. Mr. Speaker, given the large number of suits already 
filed and the fact that every former Vioxx taker in America is already 
a proposed class member in numerous class actions, it is unlikely there 
will be many more class actions after the legislation is enacted.
  It is bad legislation to have something pass that covers all class 
actions in the country for all time and name one specific product or 
one specific company in the legislation. It is irrelevant anyway.
  Now, let me tell you the kinds of cases that are affected by this 
legislation. Take a look at the ``Class Action Wheel of Fortune'' on 
this chart. It will tell you what we are doing here today.
  You have got the case against Ameritech. Ameritech, the attorneys for 
the plaintiffs got $16 million in attorneys fees. What did the 
plaintiffs they represent get? Five-dollar phone cards.
  The Premier Cruise Line case, the lawyers got almost $1 million; the 
consumers got a $30- to $40-off coupon for their next cruise.
  The computer monitor litigation case, the lawyers, $6 million in 
fees; the consumers, a $13 rebate against your next future purchase of 
the alleged defective product.
  Register.com, $650,000 for the lawyers; $5 for the consumers.
  KB Toys, $1 million for the lawyers; 30 percent off your selected 
product in a unadvertised 1-week sale at KB Toys.
  Poland Spring Water, $1.35 million for the lawyers; a coupon for more 
of the allegedly defective water for the consumers.
  My favorite case, however, is this one, the Chase Manhattan Bank 
case, where the lawyers got $4 million in attorneys fees; the 
plaintiffs, a check, we have got one right here, for 33 cents. But 
there was a catch, because if you wanted to accept the 33 cents, you 
had to use a 34-cent postage stamp to send in your acceptance notice. 
How is that for a bargain for you?
  And how about the $22 million case that President Bush cited last 
week against Thompson Electronics? The lawyers got $22 million in 
attorneys fees; the plaintiffs, one of whom was there, got a $25- to 
$50-off coupon to buy more of what? The very television set that she 
was complaining was defective in the first place.
  It is a racket, it is extortionate. The people of the country know 
it. When they are asked the question, who benefits from our class 
action industry today, 47 percent say it is the plaintiffs' lawyers; 20 
percent say it is the lawyers for the companies; 67 percent of our 
public recognizes it is the lawyers who benefit from this system.
  It is time we change it. This bill does just that. It protects 
American consumers and makes sure that they get justice by examining 
these ridiculous coupon settlements.
  Mr. Speaker, I urge my colleagues to support this legislation, defeat 
the motion to commit, and send the bill to the President, and starting 
very soon, we will have justice for American consumers.
  Mr. Speaker, I yield back the balance of my time.


                         Parliamentary Inquiry

  Mr. BROWN of Ohio. Mr. Speaker, I have a parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state it.
  Mr. BROWN of Ohio. Mr. Speaker, under provisions of this bill, is it 
not the case that all future Vioxx cases are prohibited?
  The SPEAKER pro tempore. The gentleman has not stated a proper 
parliamentary inquiry.
  Without objection, the previous question is ordered on the motion to 
commit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to commit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mr. BROWN of Ohio. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clauses 8 and 9 of rule XX, this 
15-minute vote on the motion to commit will be followed by 5-minute 
votes on the passage of S. 5, if ordered, and the motion to suspend the 
rules on H. Res. 91.
  The vote was taken by electronic device, and there were--ayes 175, 
noes 249, not voting 10, as follows:

                             [Roll No. 37]

                               AYES--175

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Chandler
     Clay
     Cleaver
     Clyburn
     Conyers
     Costa
     Costello
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Emanuel
     Etheridge
     Evans
     Fattah
     Filner
     Frank (MA)
     Gonzalez
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Price (NC)
     Rahall
     Reyes
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Stark
     Strickland
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--249

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boucher
     Boustany
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Case
     Castle
     Chabot
     Chocola
     Coble
     Cole (OK)
     Conaway
     Cooper
     Cramer
     Crenshaw
     Cubin
     Cuellar
     Culberson
     Cunningham
     Davis (AL)
     Davis (KY)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     Engel
     English (PA)
     Everett
     Feeney
     Ferguson
     Fitzpatrick (PA)
     Flake
     Foley
     Forbes
     Ford
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey

[[Page 2666]]


     Gohmert
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harris
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Holden
     Hostettler
     Hulshof
     Hunter
     Hyde
     Issa
     Istook
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Marshall
     Matheson
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Moran (VA)
     Murphy
     Murtha
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Pomeroy
     Porter
     Portman
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schwarz (MI)
     Scott (GA)
     Sensenbrenner
     Sessions
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (NJ)
     Smith (TX)
     Sodrel
     Souder
     Spratt
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Tanner
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--10

     Buyer
     Cox
     Eshoo
     Farr
     Inglis (SC)
     Jones (OH)
     Rangel
     Reichert
     Shadegg
     Stupak


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Cole of Oklahoma) (during the vote). 
Members are advised there are 2 minutes remaining in this vote.

                              {time}  1341

  So the motion to commit was rejected.
  The result of the vote was announced as above recorded.
  Mr. MARKEY changed his vote from ``aye'' to ``no.''
  The SPEAKER pro tempore (Mr. McHugh). The question is on the passage 
of the Senate bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 279, 
nays 149, not voting 6, as follows:

                             [Roll No. 38]

                               YEAS--279

     Aderholt
     Akin
     Alexander
     Bachus
     Baird
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Bean
     Beauprez
     Berry
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boucher
     Boustany
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Case
     Castle
     Chabot
     Chandler
     Chocola
     Coble
     Cole (OK)
     Conaway
     Cooper
     Costa
     Costello
     Cox
     Cramer
     Crenshaw
     Cubin
     Cuellar
     Culberson
     Cunningham
     Davis (AL)
     Davis (IL)
     Davis (KY)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Drake
     Dreier
     Duncan
     Edwards
     Ehlers
     Emanuel
     Emerson
     English (PA)
     Everett
     Feeney
     Ferguson
     Fitzpatrick (PA)
     Flake
     Foley
     Forbes
     Ford
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harman
     Harris
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Higgins
     Hinojosa
     Hobson
     Hoekstra
     Holden
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Kanjorski
     Keller
     Kelly
     Kennedy (MN)
     Kind
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Marshall
     Matheson
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris
     Meeks (NY)
     Melancon
     Mica
     Michaud
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moore (KS)
     Moran (KS)
     Moran (VA)
     Murphy
     Murtha
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Pomeroy
     Porter
     Portman
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Rahall
     Ramstad
     Regula
     Rehberg
     Renzi
     Reyes
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ruppersberger
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schwarz (MI)
     Scott (GA)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Tanner
     Tauscher
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Wu
     Young (AK)
     Young (FL)

                               NAYS--149

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baldwin
     Barrow
     Becerra
     Berkley
     Berman
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Clay
     Cleaver
     Clyburn
     Conyers
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doolittle
     Doyle
     Engel
     Etheridge
     Evans
     Fattah
     Filner
     Frank (MA)
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hastings (FL)
     Herseth
     Hinchey
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kucinich
     Langevin
     Lantos
     Lee
     Levin
     Lewis (GA)
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Menendez
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (WI)
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Price (NC)
     Ross
     Rothman
     Roybal-Allard
     Rush
     Ryan (OH)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Solis
     Spratt
     Stark
     Strickland
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wynn

                             NOT VOTING--6

     Baker
     Eshoo
     Farr
     Rangel
     Reichert
     Stupak


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised there 
are 2 minutes remaining in this vote.

                              {time}  1349

  So the Senate bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________