[Weekly Compilation of Presidential Documents Volume 41, Number 7 (Monday, February 21, 2005)]
[Pages 265-267]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on Signing the Class Action Fairness Act of 2005

February 18, 2005

    Thank you all. Thanks for coming. Please be seated. Thank you for 
coming. Thanks for the warm welcome. Welcome to the people's house. Glad 
you're here for the first bill signing ceremony of 2005.
    The bill I'm about to sign is a model of effective, bipartisan 
legislation. By working together over several years, we have agreed on a 
practical way to begin restoring common sense and balance to America's 
legal system. The Class Action Fairness Act of 2005 marks a critical 
step toward ending the lawsuit culture in our country. The bill will 
ease the needless burden of litigation on every American worker, 
business, and family. By beginning the important work of legal reform, 
we are meeting our duty to solve problems now and not to pass them on to 
future generations.
    I appreciate so very much the leadership that Senator Frist and 
Senator McConnell have shown on this bill in the United States Senate. I 
want to thank Senator Chris Dodd and Senator Tom Carper and Senator 
Craig Thomas as well for working in a bipartisan fashion to get this 
good bill to my desk.
    I appreciate Congressman Jim Sensenbrenner as well as Congressman 
Lamar Smith joining us today. I particularly want to pay tribute to the 
bill sponsors, Senator Grassley and Senator Kohl as well as Congressman 
Bob Goodlatte and Congressman Rick Boucher, who are with us here today.
    Congress showed what is possible when we set aside partisan 
differences and focus on what's doing right for Congress, and you all 
are to be--I mean, for the country--and you're to be credited for your 
good work. Thank you very much.
    I welcome our new Attorney General--oh, right there. [Laughter] How 
quickly they forget in Washington. [Laughter] Al Gonzales--proud you're 
up here, Al. Hector Barreto of the SBA. Thank you, all the business 
leaders, community leaders, consumer groups who care about this issue. 
Thanks for your hard work. Thanks for being patient. Thanks for not 
becoming discouraged. And thanks for witnessing the fruits of your labor 
as I sign this bill.
    Class actions can serve a valuable purpose in our legal system. They 
allow numerous victims of the same wrongdoing to merge their claims into 
a single lawsuit. When used properly, class actions make the legal 
system more

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efficient and help guarantee that injured people receive proper 
compensation. That is an important principle of justice. So the bill I 
sign today maintains every victim's right to seek justice and ensures 
that wrongdoers are held to account.
    Class actions can also be manipulated for personal gain. Lawyers who 
represent plaintiffs from multiple States can shop around for the State 
court where they expect to win the most money. A few weeks ago, I 
visited Madison County, Illinois, where juries have earned a reputation 
for awarding large verdicts. The number of class actions filed in 
Madison County has gone from 2 in 1998 to 82 in 2004--even though the 
vast majority of the defendants named in those suits are not from 
Madison County. Trial lawyers have already filed 24 class actions in 
Madison County this year--we're in February--[laughter]--including 20 in 
the past week, after Congress made it clear their chance to exploit the 
class-action system would soon be gone.
    Before today, trial lawyers were able to drag defendants from all 
over the country into sympathetic local courts, even if those businesses 
have done nothing wrong. Many businesses decided it was cheaper to 
settle the lawsuits rather than risk a massive jury award. In many 
cases, lawyers went home with huge payouts, while the plaintiffs ended 
up with coupons worth only a few dollars. By the time the settlement in 
at least one case was finished, plaintiffs actually owed their lawyers 
money.
    A newspaper editorial called the class-action system ``an extortion 
racket that only Congress can fix.'' This bill helps fix the system. 
Congress has done its duty, and I'm proud to sign it into law.
    Over the past few years, I've met people from all over the country 
who know the importance of class-action reform firsthand, and three of 
them are with us today. Marylou Rigat lives in Connecticut, yet a class 
action involving her faulty roof was resolved by a judge in Alabama. The 
award covered only a fraction of the cost of new shingles, but that 
wasn't Marylou's biggest problem. She had no idea she was part of the 
class action in the first place, and no one contacted her about her 
award. She only learned by accident when she called the company about 
her warranty. And then she found out there was nothing more she could 
do.
    Hilda Bankston is with us. And her late husband used to own a 
drugstore in Fayette, Mississippi. Their business was doing well until 
the store got swept up in massive litigation just because it dispensed 
prescription drugs for a certain drug--prescriptions for a certain drug. 
She had to sell the pharmacy 6 years ago. But she's still getting 
dragged into court again and again. Here's what she said: ``My husband 
and I lived the American Dream until we were caught up in what has 
become an American nightmare.''
    Alita Ditkowsky is with us. She was part of a class action against a 
company that made faulty televisions. When the case was settled in 
Madison County, Illinois, Alita's lawyer took home a big check while she 
got a $50 rebate on another TV built by the same company that had ruined 
the first TV. [Laughter] Here's what she said: ``I'm still left with a 
broken TV.'' [Laughter] ``He got $22 million. Where's the justice in 
this?''
    I want to thank you all for letting me use your stories, not only 
here but during different events we've had in highlighting the need for 
class-action reform, because this act will help ensure justice by making 
two essential reforms. First, it moves most large, interstate class 
actions into Federal courts. This will prevent trial lawyers from 
shopping around for friendly local venues. The bill will keep out-of-
State businesses, workers, and shareholders from being dragged before 
unfriendly local juries or forced into unfair settlements. And that's 
good for our system, and it's good for our economy.
    Second, the bill provides new safeguards to ensure that plaintiffs 
in class-action lawsuits are treated fairly. The bill requires judges to 
consider the real monetary value of coupons and discounts, so that 
victims can count on true compensation for their injuries. It demands 
settlements and rulings to be explained in plain English so that class 
members understand their full rights.
    These are needed reforms. It's an important piece of legislation. It 
shows we're making important progress toward a better legal system.

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    There's more to do. Small-business owners across America fear that 
one junk lawsuit could force them to close their doors for good. Medical 
liability lawsuits are driving up the cost for doctors and patients and 
entrepreneurs around the country. Asbestos litigation alone has led to 
the bankruptcy of dozens of companies and cost tens of thousands of 
jobs, even though many asbestos claims are filed on behalf of people who 
aren't actually sick.
    Overall, junk lawsuits have driven the total cost of America's tort 
system to more than $240 billion a year, greater than any other major 
industrialized nation. It creates a needless disadvantage for America's 
workers and businesses in a global economy, imposes unfair costs on job 
creators, and raises prices to consumers.
    We have a responsibility to confront frivolous litigation head on. I 
will continue working with Congress to pass meaningful legal reforms, 
starting with reform in our asbestos and medical liability systems.
    Once again, I want to thank you all for the hard work on this 
important legislation. Class-action reform will help keep America the 
best place in the world to do business. It will help ensure justice for 
our citizens, and I'm confident that this bill will be the first of many 
bipartisan achievements in the year 2005.
    And now it is my honor to sign the Class-Action Fairness law.

Note: The President spoke at 11:37 a.m. in the East Room at the White 
House. S. 5, approved February 18, was assigned Public Law No. 
109-2.