To clarify the application of State law in certain class actions, and for other purposes.

CLASS ACTION FAIRNESS ACT OF 2005

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

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

Pending:

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

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

Amendment No. 5

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

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

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

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

On page 5, between lines 2 and 3, insert the following:
``(1) Attorney general.--The term `attorney general' means
the chief legal officer of a State.
On page 5, line 3, strike ``(1)'' and insert ``(2)''.
On page 5, line 5, strike ``(2)'' and insert ``(3)''.
On page 5, line 12, strike the period at the end and insert
the following: ``, but does not include any civil action
brought by, or on behalf of, any attorney general.''.
On page 5, line 13, strike ``(3)'' and insert ``(4)''.
On page 5, line 17, strike ``(4)'' and insert ``(5)''.
On page 5, line 21, strike ``(5)'' and insert ``(6)''.
On page 6, line 1, strike ``(6)'' and insert ``(7)''.
On page 6, between lines 5 and 6, insert the following:
``(8) State.--The term `State' means each of the several
States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, the Commonwealth of the Northern
Mariana Islands, and any territory or possession of the
United States.
On page 14, strike lines 20 and 21, and insert the
following:
(1) by striking subsection (d) and inserting the following:
``(e) As used in this section--
``(1) the term `attorney general' means the chief legal
officer of a State; and
``(2) the term `State' means each of the several States of
the United States, the District of Columbia, the Commonwealth
of Puerto Rico, the Commonwealth of the Northern Mariana
Islands, and any territory or possession of the United
States.''; and
On page 15, line 7, insert ``, but does not include any
civil action brought by, or on behalf of, any attorney
general'' before the semicolon at the end.

Mr. PRYOR. Mr. President, I rise to offer an amendment to S. 5, the
Class

[[Page S1158]]

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

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

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

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

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

of Attorneys General,

Washington, DC, February 7, 2005.
Hon. Bill Frist,
Senate Majority Leader, U.S. Senate, Dirksen Building,
Washington DC.
Hon. Harry Reid,
Senate Minority Leader, U.S. Senate, Hart Building
Washington, DC.
Dear Senate Majority Leader Frist and Senate Minority Leader
Reid: We, the undersigned State Attorneys General, write to
express our concern regarding one limited aspect of pending
Senate Bill 5, the ``Class Action Fairness Act,'' or any
similar legislation. We take no position on the Act as a
general matter and, indeed, there are differing views among
us on the policy judgments reflected in the Act. We join
together, however, in a bipartisan request for support of
Senator Mark Pryor's potential amendment to S. 5, or any
similar legislation, clarifying that the Act does not apply
to, and would have no effect on, actions brought by any State
Attorney General on behalf of his or her respective state or
its citizens.
As Attorneys General, we frequently investigate and bring
actions against defendants who have caused harm to our
citizens. These cases are usually brought pursuant to the
Attorney General's parens patriae authority under our
respective consumer protection and antitrust statutes. In
some instances, such actions have been brought with the
Attorney General acting as the class representative for the
consumers of the state. It is our concern that certain
provisions of S. 5 might be misinterpreted to hamper the
ability of the Attorneys General to bring such actions,
thereby impeding one means of protecting our citizens from
unlawful activity and its resulting harm.
The Attorneys General have been very successful in
litigation initiated to protect the rights of our consumers.
For example, in the pharmaceutical industry, the States
have recently brought enforcement actions on behalf of
consumers against large, often foreign-owned, drug
companies for overcharges and market manipulations that
illegally raised the costs of certain prescription drugs.
Such cases have resulted in recoveries of approximately
235 million dollars, the majority of which is earmarked
for consumer restitution. In several instances, the
States' recoveries provided one hundred percent
reimbursement directly to individual consumers of the
overcharges they suffered as a result of the illegal
activities of the defendants. This often meant several
hundred dollars going back into the pockets of those
consumers who can least afford to be victimized by illegal
trade practices, senior citizens living on fixed incomes
and the working poor who cannot afford insurance.
We encourage you to support the aforementioned amendment
exempting all actions brought by State Attorneys General from
the provisions of S. 5, or any similar legislation. It is
important to all of our constituents, but especially to the
poor, elderly and disabled, that the provisions of the Act
not be misconstrued and that we maintain the enforcement
authority needed to protect them from illegal practices. We
respectfully submit that the overall purposes of the
legislation would not be impaired by such an amendment that
merely clarifies the existing authority of our respective
States.
Thank you for your consideration of this very important
matter. Please contact any of us if you have questions or
comments.
Sincerely,
Mike Beebee, Attorney General, Arkansas; Mark Shurtleff,
Attorney General, Utah; Gregg Renkes, Attorney General,
Alaska; Fiti Sunia, Attorney General, American Samoa;
Terry Goddard, Attorney General, Arizona; Bill Lockyer,
Attorney General, California; John Suthers, Attorney
General, Colorado; Richard Blumenthal, Attorney
General, Connecticut; Jane Brady, Attorney General,
Delaware; Robert Spagnoletti, Attorney General,
District of Columbia; Charlie Crist, Attorney General,
Florida; Thurbert Baker, Attorney General, Georgia;
Mark Bennett, Attorney General, Hawaii; Lawrence
Wasden, Attorney General, Idaho; Stephen Carter,
Attorney General, Indiana.
Tom Miller, Attorney General, Iowa; Greg Stumbo, Attorney
General, Kentucky; Charles Foti, Attorney General,
Louisiana; Steven Rowe, Attorney General, Maine; Joseph
Curran, Attorney General, Maryland; Tom Reilly,
Attorney General, Massachusetts; Mike Cox, Attorney
General, Michigan; Mike Hatch, Attorney General,
Minnesota; Jim Hood, Attorney General, Mississippi; Jay
Nixon, Attorney General, Missouri; Mike McGrath,
Attorney General, Montana; Jon Bruning, Attorney
General, Nebraska; Brian Sandoval, Attorney General,
Nevada; Kelly Ayotte, Attorney General, New Hampshire;
Peter Harvey, Attorney General, New Jersey.
Eliot Spitzer, Attorney General, New York; Roy Cooper,
Attorney General, North Carolina; Wayne Stenehjem,
Attorney General, North Dakota; Pamela Brown, Attorney
General, N. Mariana Islands; Jim Petro, Attorney
General, Ohio; W.A. Drew Edmondson, Attorney

[[Page S1159]]

General, Oklahoma; Hardy Myers, Attorney General,
Oregon; Tom Corbett, Attorney General, Pennsylvania;
Roberto Sanchez Ramos, Attorney General, Puerto Rico;
Patrick Lynch, Attorney General, Rhode Island.
Henry McMaster, Attorney General, South Carolina;
Lawrence Long, Attorney General, South Dakota; Paul
Summers, Attorney General, Tennessee; Rob McKenna,
Attorney General, Washington; Darrell McGraw, Attorney
General, West Virginia; Peg Lautenschlager, Attorney
General, Wisconsin; Patrick Crank, Attorney General,
Wyoming.

Mr. PRYOR. Mr. President, I have served with some of these attorneys
general, and I can say they come from different ideological points of
view and different ways of practicing law. As a whole, they are not
taking a position on the bill, but as you can see by this letter, the
vast majority of State AGs agree on one point: As the chief legal
officers for their respective States, there must be clarification in
the bill to make sure they can continue to represent the citizens of
their States and carry out their duties as elected officials.
As we all know, attorneys general frequently investigate and bring
actions against defendants who have caused harm to their citizens.
These cases are usually brought pursuant to the attorneys general
parens patriae authority under their respective consumer protection and
antitrust statutes. This is an important point. Not all States have
parens patriae authority. In fact, the State of Arkansas, when I was
attorney general, had very limited parens patriae. In fact, one could
argue none at all. We always had to pursue our actions under the
Deceptive Trade Practices Act, which is a State statute, and we had
specific authority in that statute.
I heard some people say, again, in the hallways here, that all States
have parens patriae and therefore we do not need this amendment. But
that is not the case. In some instances, such actions have been brought
with the attorney general acting as the class representative for
consumers in the State. It is my concern, as well as those of 46
attorneys general, that certain provisions in S. 5 might be interpreted
to hamper their ability to bring such actions, thereby impeding one
means of protecting their citizens from unlawful activity and resulting
harm.
It is important to all consumers, but especially to the poor,
elderly, and disabled, that the provisions of the act not be
misconstrued and that attorneys general maintain the enforcement
authority needed to protect them from illegal practices.
I know there are many people who want this body to pass class action
reform this year and do not want to ruin its chances by adding too many
amendments to the underlying bill. But, as I said a few moments ago, in
this case, with this particular amendment, we are not changing the
intent of the bill.
I would like to address a falsehood about the amendment that I have
heard, and that is that some people have said this amendment would
create a major loophole because suits could be brought on behalf of
State attorneys general, that some attorneys general may allow their
friends to use their names to avoid moving the case to Federal court.
The notion is incorrect and, quite frankly, it is offensive. Let me
be clear.
No one can add a State attorney general without his or her express
consent or permission. Moreover, attorneys general are statewide
elected officials accountable to the same citizens who vote for us.
They work hard and take their responsibility as chief legal officers
very seriously. State attorneys general would not expend the resources
or their reputations to take up a class action they did not believe was
worthy of protecting their citizens.
In addition, it should be noted that in many cases, attorneys general
are not after the check or the payment in litigation. They are not
eyeing the big settlement, although in some cases there are large
settlements at the end of the horizon. The primary objective of State
attorneys general is not chasing the money but bringing about reform.

Let me be clear on this point. I alluded to this a few moments ago.
State attorneys general are fundamentally different from private
attorneys. Private attorneys have clients, and they are out there doing
what their clients want: trying to get a recovery and trying to make
their clients whole. I understand that. That is a good thing. I do not
have any problem with that.
State attorneys general are different. Generally speaking--maybe not
in every single case but generally speaking, when the State attorney
general becomes involved, there is a matter of public policy in the
litigation. In fact, I said a few moments ago that the State attorneys
general are elected officials. That is not true in every single case. I
think there are about 35 elected attorneys general. There are a couple
selected by the supreme court or by the State legislature, and some are
appointed by the Governor.
Nonetheless, attorneys general have a level of accountability that
you do not find in private practice because they are accountable to the
people, either the people who elected them or appointed them or
selected them for the office. And attorneys general, more than private
lawyers, are sensitive to criticism.
I can assure you, the last thing an attorney general wants to read is
an opinion by a judge who is criticizing the attorney general for
bringing a frivolous lawsuit, criticizing the attorney general for
going too far. That is the last thing the attorney general wants to
read in the paper.
Also, there is the court of public opinion. The attorney general does
not like bad editorials to be written about him or her. They do not
like to be out on the street and people questioning their integrity or
their sense. So attorneys general have a level of accountability that
just does not exist in other areas of practice.
That is an important distinction. As I mentioned a few moments ago,
normally cases brought by States involve a matter of public policy, and
we can go through a long list of cases and show where the public policy
is in the cases and also show how a lot of these cases would not be
profitable for the private sector to bring.
Oftentimes there is a matter of fairness and not a matter of money
involved in these cases. There are several major examples where State
attorneys general have filed a cause of action in State court to
protect their citizens or bring reform. However, if we do not act to
clarify S. 5, I am concerned this legislation would make it much harder
for the attorneys general to do their jobs.
Back in the 1990s, the attorneys general around the country pooled
together and sued the tobacco industry for reimbursement of State
moneys as a result of disease brought about by smoking. I know in some
quarters that is still a very controversial decision. Let me very
respectfully remind the Congress that the Congress a year, two or three
before this settlement occurred had the chance to enter into a
federally mandated global settlement of all claims. That did not
happen. The States pursued their case after the Congress failed to act.
This tobacco case resulted in a historic global settlement that
drastically altered the way our Nation views and approaches smoking.
Money from these settlements was used by the States for youth smoking
prevention, to improve health care, educate citizens on the dangers of
smoking, and an increased level of treatment for smoking-related
illnesses. My State of Arkansas has spent every penny of the tobacco
money it has received on health-related issues--every single penny.
Back to the point about the difference in the private sector attorney
representing the individual or representing a class versus the attorney
general representing the State's interest and the citizens of the
State, when you look at the settlement agreement between the tobacco
companies and the State, if I recall right, it was about 147 pages
long. It was very detailed, very negotiated, a very hard-to-reach
settlement.
I believe it was 147 pages long without the attachments, and 91 of
those pages, that is two-thirds of the pages approximately, were about
the public policy and changing the tobacco industry's practices. Here
again, in private litigation it is about getting recovery for one's
client, and we understand that, but when the attorney general is
involved it is a materially different type of litigation.
I have never seen a private settlement in which two-thirds of the
settlement document requires the industry

[[Page S1160]]

or the company to change its practices, but that is the type of
litigation the attorneys general enter into.
Each State in the tobacco case filed individual suits in their
respective State's court alleging fraud. In our particular State, we
alleged the Deceptive Trade Practices Act violations and also a number
of common law claims. Due to the nature of the claims, if this
legislation as it is written would have existed at the time of this
case, it may have presented hurdles to the attorneys general that could
have prevented a resolution.
In 2001, several State attorneys general took on Ford and Firestone
for failure to disclose defects in Firestone tires used on Ford SUVs,
of which they should have been aware. These cases were brought again in
Arkansas, and other States have similar laws, under our State's
Deceptive Trade Practices Act, fraud and consumer protection laws.
Let us make this point in another case. In private causes of action,
and there were many relating to the Ford and the Firestone litigation,
the parties' and the lawyers' primary concern was trying to make the
plaintiffs whole. That is the nature of that type of litigation.
In the attorney general actions, we established a restitution fund
and a long series of injunctions against the companies in the way they
marketed their products. In fact, some people may have noticed they
have seen some new Ford Explorer ads on television in recent weeks.
These Ford Explorer ads are due to the attorney general lawsuit, and
they deal with the safety of Ford Explorers. All this goes back to the
way Ford Explorers were marketed originally. The buyers bought them
thinking they were safe under pretty much all conditions, but practice
has taught us differently. So I make that point one more time to show
how different State litigation is versus private litigation.
Ultimately, the Ford case was settled. However, had these States been
required to file separate State cases under their own consumer
protection laws, as could be required under this class action bill,
those States would have been removed to Federal court. The Federal
court would then have been required to become an expert in each State's
diverse consumer laws and remedies.
State litigation is different from private litigation, and I think to
some degree this amendment is a matter of States rights. In 2000, 26
attorneys general from 26 States brought suit against Publishers
Clearinghouse claiming that the company was intentionally preying on
the elderly by misrepresenting their sweepstakes award. My colleagues
may remember that for years people used to get mail with pictures of
celebrities, and in big bold letters it would have your name and say:
You have won X number of millions of dollars. Or it would say:
Congratulations, millionaire.
Think about it. We do not get those letters anymore. Why? Because the
States intervened. The States came in under consumer protection laws
and looked at how deceptive those ads were. In fact, in Arkansas when I
was in the attorney general's office I would talk to an adult child of
a deceased person or an adult child who had put their parents in a
nursing home and they would clean out the closets and the living room
or whatever and they would find stacks and stacks of magazines that had
been ordered through these sweepstakes companies.

Even if one reads everything in great detail, they would find in the
fine print that ordering does not increase their chances of winning.
Most people do not read all the fine print. Most people thought that
ordering did increase their chance of winning, and what happened was
people would order the same magazine. People would tell me they would
find 10 copies of the same Sports Illustrated or 10 copies of the same
Newsweek or Good Housekeeping because these senior citizens ordered to
try to win the sweepstakes.
It is sad and unfortunate, but they saw this as a chance they were
willing to take to leave a lot of money to their children and
grandchildren. So we came in as States and put a stop to that. I think
it was 26 States that banded together and put a stop to that.
It was alleged that Publishers Clearinghouse was profiting from this
fraud at the expense of the vulnerable elderly. I can recall that these
individuals had spent their life savings on these fraudulent
sweepstakes. When we got inside of the cases, we found many seniors in
Arkansas who had spent hundreds, maybe thousands of dollars trying to
win sweepstakes.
Is there someone here who thinks the actions of the attorneys general
are out of step with common sense and fairness? In this bill we should
make sure we do not take away any existing authority of the attorneys
general.
These are just a few examples of the very hard and worthy work by the
State attorneys general where they are trying to protect the citizens
of their States. I challenge my colleagues to deem the work they do as
frivolous or as junk lawsuits because attorneys general around the
country have a layer of accountability that does not exist elsewhere.
They are accountable to the people. They are accountable to the
legislature that makes their budgets. They are accountable to the
Governor. They are accountable in the court of public opinion.
I ask my colleagues to support this amendment to this bill for
several reasons. One is that the overwhelming majority of State
attorneys general, our States' chief legal officers, are concerned
about the language of this bill, and we should be concerned about it.
Remember, these attorneys general represent the citizens in all of our
States. They try to get out there and do the right thing for their
citizens.
Secondly, by making this change, we are not obstructing the intent of
the bill, but I believe very strongly we are clarifying the authority
that already exists.
Third, we should allow our attorneys general to seek State remedies
to State problems. I think this is an important piece of this. It goes
back to States rights. It goes back to local control and people trying
to do things the way they want to handle them in their own States.
So I implore all of my colleagues who are champions of States rights
or who want to protect the integrity of the bill and want to leave the
tools that currently exist with the State attorneys general, to vote
for this amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. SPECTER. Mr. President, a time agreement has been worked out. I
ask unanimous consent that the vote in relation to the Pryor amendment
occur at 12:15 today, with the time equally divided in the usual form
prior to the vote, with no amendment in order to the amendment prior to
the vote. Further, the time to be divided begins from when the
amendment was sent to the desk. So to amplify that, the time for the
Democrats would begin when Senator Pryor started to speak.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. SPECTER. I know the Senator from Delaware, Mr. Carper, has
another engagement, so I will speak very briefly as the lead opponent
of this amendment.
I do oppose the amendment. I appreciate the experience of Senator
Pryor having been attorney general of the State of Arkansas. I did not
hold such a lofty position. I was just a district attorney, but I
appreciate the reasons he has put forward for the amendment.
It is my suggestion that it is not necessary. When the Senator from
Arkansas has enumerated a number of situations where attorneys general
protect the interests of the citizens of their State, that can be
accomplished even if this bill is adopted. In the first place, the bill
provides that if two-thirds of the parties involved are citizens of the
State, it stays in the State; if one-third, it goes to the Federal
court; and between one-third and two-thirds, it is up to the discretion
of the judge.
So even within the confines of the language of the bill, the
interests that the Senator from Arkansas has articulated will be
protected.
Next, the attorneys general have authority under parens patriae
statutes enacted by the many state legislatures to represent the
citizens of their State. They are the lawyer for everybody in the
State. The Latin phrase of parens patriae has been adopted and that
gives them sufficient standing to undertake whatever is necessary.

[[Page S1161]]

There is a provision in the Pryor amendment which broadens it
substantially by providing that any civil action brought by or on
behalf of the attorney general in a State would be excluded so that
there would be latitude for the attorney general to deputize private
attorneys to bring their class actions and to find an exclusion, which
is a pretty broad exclusion, not to use pejorative terms, but a pretty
broad loophole.
Those are the essential arguments. I could expand on them, but we
have limited time. The Senator from Texas has been in the Chamber since
we started the debate, but as I understand it, he has agreed to yield
to the Senator from Delaware.
Mr. CORNYN. It is my understanding Senator Carper would like to speak
for about 5 minutes. I ask unanimous consent that I be recognized
immediately after Senator Carper, and then Senator Salazar be
recognized in that sequence.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SPECTER. I thank the Senator from Texas, and I yield the floor.
The PRESIDING OFFICER. The Senator from Delaware is recognized for 5
minutes.
Mr. CARPER. Mr. President, I thank Senator Specter for yielding to
me. I say to my friend and colleague from Arkansas, he knows how fond I
am of him and how highly I regard him, both in his previous role as
attorney general and as a colleague in the Senate.
When I heard of the amendment he was preparing to offer, I stopped
and I said to my staff, let's find out if this is something I can
support. As many of my colleagues know, we have endeavored to improve
this bill over time, and the legislation before us today is a far
different bill than was first proposed 7 years ago or even was debated
2 years ago and reported out of committee.
Senator Specter has spoken of the option that is available to most
attorneys general, an approach called parens patriae, which I
understand means ``government stands in the place of the citizen.'' For
most attorneys general who wish to file a case on behalf of their
citizens against some defendant, they have the opportunity to use
parens patriae. For those who do not, in my judgment, they still have
the opportunity to use the class action lawsuit.
What we have sought to do over the last couple of years in modifying
this bill is to make sure that the class action lawsuits brought by an
individual in a State, if they are of a national scope, they would be
in a Federal court. If they are not, if they are more of a local issue
involving residents of that State, a defendant in that State, or even
where there are multiple defendants, but a defendant in that State who
has a principal role as a defendant, not just somebody who was sort of
pulled out of the air, to make sure there is a real defendant with a
real stake in it that has a real financial ability to pay damages, then
the legislation that is before us actually permits an attorney general
or, frankly, any attorney, plaintiff's attorney, to bring that kind of
class action.
The legislation that is before us says if two-thirds of the
plaintiffs in a class action lawsuit are from the same State as the
defendant, it will stay in the State court, no question. The
legislation before us says that if anywhere from one-third to two-
thirds of the plaintiffs on whose behalf the class action is brought
meet certain standards that are set out in the bill, that can stay in
State court as well.

The legislation that is before us today provides exemptions as well
for incidents involving a sudden single accident. The legislation
before us today also provides exemptions under the Dodd-Schumer-
Landrieu language that provide even further opportunities to proceed
with a class action lawsuit if the matter that is being discussed is
truly a local matter, if most of the people involved both as plaintiffs
and defendants are within that State.
The last thing I would say is there are plenty of people on both
sides of the aisle who would like to offer amendments. My fear is if
any of those amendments were adopted, we invite the House of
Representatives to come back and to offer quite a different bill than
the compromise that is before us today. To those of us who seek
reasonable, modest reforms--and this is a court reform bill, not a tort
reform bill--but to those who seek moderate reforms incorporated in
this legislation, I did not support this amendment because I think it
would simply invite the adoption of other amendments and, frankly, put
us in the situation which will end in a conference with the House of
Representatives with a bill that is frankly far different than this one
and will provide an end product not to my liking and I suspect even
less to the liking of those who are opposed to this compromise.
I reluctantly oppose this amendment with that in mind, but it is not
something I do easily or lightly.
I thank my friend Senator Cornyn for making it possible for me to
have this time.
The ACTING PRESIDENT pro tempore. The Senator from Texas is
recognized.
Mr. CORNYN. Mr. President, I first want to say how much I respect and
admire the author of this amendment, Senator Pryor. He and I served
together as State attorneys general, he in Arkansas and I in Texas, for
4 years. Our careers overlapped. I agree with him about the important
role that attorneys general play when it comes to protecting a State's
citizens and a State's consumers. But I think where I part company with
my friend Senator Pryor is, No. 1, this amendment is not necessary to
preserve the authority of the State attorney general to protect the
State's consumers, and, second, this amendment as worded--and I know
this is not his intention--would create a potential loophole big enough
to drive a truck through, that could cause substantial mischief that is
intended to be prevented by this very bill.
Finally, as Senator Carper has said, this is a negotiated bill. There
are amendments I would like to offer that I think would make it a
better bill. But I think we all realize that after many Senators have
labored long and hard to try to get us to the point today where we
literally have bipartisan support for this compromise, to offer any
amendments, and particularly one like this and others that have been
filed but not yet called up, would threaten our chance of success. I
think that would be a shame because we all agree that the class action
abuses we see are very real and are something that do not benefit the
American people or consumers in general.
We have seen that some of these egregious abuses of the class action
procedure have been used to make certain entrepreneurial lawyers very
wealthy when the consumers literally get a coupon worth pennies on the
dollar.
I am not opposed to lawyers. Let me say up front I happen to be a
lawyer. But I do think that all lawyers, all people, anybody with
common sense--some may say that excludes lawyers--but I like to think
anybody with common sense recognizes the very real abuses that have
occurred in the class action system. We have heard a lot about that. I
will not repeat all of that now. I think we all take that as a given.

First, let me allude to the letter signed by--the Senator from
Arkansas said 46 State attorneys general from the National Association
of Attorneys General, an organization of which I used to be a member
and for which I have a lot of respect, both for the people who help run
that organization as well as the attorneys general who make up its
membership.
I point my colleagues to paragraph 2 in this letter, which I believe
makes my initial point which is that this amendment is not necessary to
preserve the authority of State attorneys general. Indeed, in the last
sentence in the second paragraph these 46 attorneys general say:

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

In other words, these 46 lawyers, the chief law enforcement officers
of these States, make no claim that in fact this bill would impede
their authority but, rather, that it might be misinterpreted.
I think it is fair to say that any law that has ever been written is
capable of being misinterpreted. That is why we have the court system.
But we certainly do not need an amendment like

[[Page S1162]]

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

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

I am very sensitive to that particular phrase in the amendment
because of a, frankly, very tragic experience I had as attorney general
of my State. It is a fact that my predecessor as attorney general in
the State of Texas is currently in the Federal penitentiary. He is in
the Federal penitentiary because he was convicted, based on his own
confession, of mail fraud and other violations of law primarily related
to his attempt, almost successful, to backdate outside counsel
contracts with an old buddy of his, that would potentially entitle his
friend to $520 million out of the taxpayers' recovery in the Texas
tobacco litigation.
I take no pleasure in bringing this up but merely make mention of it
to point out the potential for mischief--not when cases are brought by
an attorney general, somebody who is elected by the people, whose
future, frankly, is dependent on their dutiful discharge of their
obligations and faithful discharge of their duties--but when you carve
out suits brought on behalf of the attorney general, which could
include any lawyer who any attorney general might choose to hire as
outside counsel and, of course, who is unelected and unaccountable to
the people. Here, we see the potential for grave abuses.
As I have pointed out, this example was part of the Texas tobacco
litigation that was part of a nationwide set of litigation, one which
ultimately involved settlements on behalf of several individual States.
I want to say, if my memory serves me, that Florida, Mississippi, and
Texas filed their individual lawsuits and had individual judgments
rendered. But the remainder of the States, including, I believe, the
States of the Senator from Arkansas and the Senator from Colorado--they
will correct me if I am wrong--they had a collective judgment rendered
against the tobacco industry of almost $250 billion, a sum we would
recognize, even here in Washington, as being significant.
The problems presented by outside counsel performing the duties of an
attorney general under an exception like this just go on and on. My own
experience is, again, where outside counsel of the State of Texas
claimed the right to $3.3 billion out of the Texas tobacco lawsuit
recovery, which by any reasonable measure was an extraordinary fee, one
that, when calculated by the hours of work actually put into the
lawsuit, has been described as scandalous and unconscionable. The
ultimate concern must be the public interest. By accepting an amendment
that would place outside the scope of this bill someone bringing a
lawsuit on behalf of the attorney general, somebody unelected by the
people, not accountable at the polls, we would be creating an
environment ripe for fraud.
Let me tell you this: I recall that many of the States' attorneys
general believed in good faith that the tobacco industry was
responsible for contributing to the death and the illness of hundreds
of thousands of Americans each year. Indeed, that is a fact. We lose
400,000 people each year in this country as a result of consuming
tobacco products. But the lawsuits brought, which were ultimately
settled by the tobacco industry, were brought under the guise of
protecting children and protecting the American consumer. We now see
that almost $300 billion was paid out but not a single tobacco company
is out of business today. Indeed, they continue to make their product,
not only in this country but worldwide. There has been no decrease in
the number of people who get sick or die as a result of consuming
tobacco products in this country each year.
I just have to ask whether it is wise--I suggest it is not--to create
an exception, to place outside the protections of the bill not the
attorneys general per se but those who seek to bring suits on the
attorney general's behalf. I suggest to you the evidence in my State--
and perhaps nationwide--indicates that the lack of accountability to
the voters, the lack of concern for ultimate welfare of the consumer,
and the potential presence of an immediate personal self-serving motive
to maximize a huge attorney fee, creates enough opportunity for
mischief under this well-intended amendment that it should be voted
down on that basis, if no other.
Finally, let me say in conclusion that I know the Senator from
Arkansas has filed this amendment in good faith and certainly does not
intend any of the results I have suggested here today. But I reiterate
what the Senator from Delaware has said, and what I have been told both
privately and publicly. If I were to offer amendments which I believe
would make this bill better, it would be a poison pill for this
litigation. Indeed, I believe that no matter how well intended the
amendment offered by the Senator from Arkansas is, it would have that
same effect. I don't believe that is in anyone's interest.
I thank the Chair. I thank my colleagues.
I yield the floor.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. SALAZAR. Mr. President, I rise in support of the amendment which
has been offered by the Senator from Arkansas. I have a great deal of
respect for the National Association of Attorneys General. I also
served in that position in the past, as well as the Senator from Texas
and the Senator from Arkansas.
Let me very quickly make three points.
First, as has already been alluded to by both the Senator from Texas
and the Senator from Delaware, the intent of this bill is to have no
effect whatsoever on the powers and duties of the attorneys general to
enforce their consumer protection responsibilities. I believe that
point should be very much a part of the legislative history of this
legislation as it moves forward.
Second, the powers and duties of the attorneys general in our States
are very important powers and duties. Those are in those cases powers
and duties that result from elections of the people of their States who
elected individuals to serve in the capacity of attorney general.
In the context where we are limiting the ability for class actions to
be brought under S. 5, that ability of the attorneys general to protect
vulnerable consumers is all the more important. It is important for us
to make sure as this legislation is being considered that we all
understand it is going to have no impact on the powers and duties of
the attorneys general.

[[Page S1163]]

The letter that came in from our 46 of our former colleagues,
interestingly, is an accumulation of almost all of the attorneys
general from around the country. It includes Democrats and Republicans
alike. It includes Republicans such as my successor, John Suthers, from
the State of Colorado, and Democrats such as Tom Miller from the State
of Iowa. I think their letter and Senator Pryor's amendment with
respect to some of those are indeed just an effort to make sure the
legislative intent that has been talked about here would impact the
legislation; that is, that this legislation, S. 5, is not going to have
any diminishing effect whatsoever on the powers and duties of the
attorneys general to proceed forward under the laws of their States,
both constitutionally and also consumer protection laws.
I yield the floor.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I have been working on this legislation
for five Congresses, and I would like to get this legislation to the
President without any amendments. We have heard from the highest levels
of the House of Representatives that if we can pass this bill without
amendments, we will be able to get it to the President without going to
conference; in other words, the House will adopt it the way we do.
I don't know how many times I would like to have heard that in the
House of Representatives. I don't know when I have ever heard that in
my entire career. I hope everybody in the Senate has a strong heart. If
I didn't have a strong heart, I wouldn't say that. And if I heard it, I
wouldn't believe it. I would pass out if the House was going to take
something the Senate did without question. We ought to grab the ball
and run with it.
Regardless of the merits of the amendment by the Senator from
Arkansas, I hope we can defeat that amendment. This amendment would
exclude this language from the bill: ``Any action brought by or on
behalf of the Attorney General of any State.''

I ask my colleagues not to be fooled. Although this amendment sounds
good, and there was a good presentation made by the authors of the
amendment, it is potentially harmful and could lead to gaming by class
action lawyers. I will explain what I mean by gaming.
First, before I do that, in my judgment, the amendment is not
necessary. I will explain. State attorneys general have authority under
the laws of every State to bring enforcement action to protect their
citizens. Sometimes these laws are parens patriae cases, similar to
class actions in the sense that the State attorney general represents
the people of that State. In other instances, their actions are brought
directly on behalf of that particular State. But they are not class
actions; rather, they are very unique attorney general lawsuits
authorized under State constitutions or under statutes.
One reason this amendment is not necessary is because our bill will
not affect those lawsuits. Our bill provides class actions under that
term ``class action'' as defined to mean any civil action filed in a
district court of the United States under rule 23 of the Federal Rules
of Civil Procedure or any civil action removed to a district court that
was originally filed under State statute or rule authorizing an action
to be brought by one or more representatives as a class action.
The key phrase there is ``class action.'' Hence, because almost all
civil suits brought by State attorneys general are parens patriae
suits, similar representative suits or direct enforcement actions, it
is clear they do not fall within this definition. That means that cases
brought by State attorneys general will not be affected by this bill.
The supporters of this amendment say it is necessary because State
attorneys general can bring class actions and those cases might become
removable to Federal court. That possibility does not make this
amendment necessary. That is because State attorneys general are not
required to use class actions to enforce their State laws. If State
attorneys general want to recover on behalf of their citizens, they can
always bring actions as parens patriae suits under statutes that
authorize representative actions or even as direct enforcement actions.
Again, such lawsuits will not be subject to this bill.
In addition, our bill has been drafted so as to distinguish between
solely truly local class action lawsuits and those that involve
national issues. That compromise, which was not part of my original
bill, was reached with Senator Feinstein on the home State exception
provision as well as further compromises made with Senators Dodd,
Schumer, and Landrieu, dealing with the local controversy exception. As
a result of these compromises, they will keep then truly local cases
where they ought to be--in State court.
Another concern with this amendment is that it is worded in such a
way to exclude class actions, not just by State attorneys general but
also, in their words, on behalf of State attorneys general. The way
this provision is drafted would allow plaintiffs' lawyers to bring
class actions and simply include in their complaint a State attorney
general's name as a purported class member, arguably to make their
class action completely immune to the provisions of this bill.
Plaintiffs' lawyers could simply ask State attorneys general to lend
their name to a class action lawsuit so as to keep them in the State
court.
That creates a very serious loophole in this bill. We should not risk
creating a situation where State attorneys general can be used as pawns
so that crafty class action lawyers can avoid the jurisdictional
provisions of this bill. Our bill would put an end to class action
abuses without diminishing the ability of State attorneys general to
protect their citizens in State court. This is another way for lawyers
to keep cases in State courts.
This is what this bill is all about, to make sure that cases that
have national significance are not determined by some county judge in
one of our 50 States that end up having national implications. Those
cases should be in Federal court and, for the most part, under our
legislation will be.
This amendment would seriously create a loophole in the reforms we
are trying to accomplish with this bill. I urge my colleagues to join
me in opposing this amendment.
Mr. HATCH. Mr. President, I rise in opposition to the amendment
offered by my colleague from Arkansas. At best, this amendment is
unnecessary. At worst, it will create a loophole that some enterprising
plaintiffs' lawyers will surely manipulate in order to keep their
lucrative class action lawsuits in State court.
Before I go into more details about the problems with the amendment,
I would like to point out that the National Association of Attorneys
General does not endorse this measure, nor has it pushed for its
inclusion in the class action bill. One would expect that if the
current bill somehow impairs the ability of State attorneys general to
bring lawsuits on behalf of their citizens, we would have a position
from them by now. But we do not, and the association's silence speaks
volumes about the merits of this amendment.
Let me first note that this amendment, which excludes from the scope
of this legislation any ``civil action brought by or on behalf of, the
Attorney General of any State,'' is unnecessary. Let me explain why.
State attorneys general have authority under the laws of every State
in this country to bring enforcement actions to protect their citizens.
These suits, known commonly as parens patriae cases, are similar to
class actions to the extent that the attorney general represents a
large group of people.
But let me be perfectly clear that they are not class actions.
There is no certification process, there are no representative class
members named in the complaint, and plaintiffs' attorneys who stand to
gain millions of dollars in fees. Rather, they are unique lawsuits
authorized under State constitutions or State statutes that are brought
on behalf of the citizenry of a particular State. These actions are
brought typically in consumer protection matters under State law and
usually involve local disputes. As such, S. 5 in no way affects these
lawsuits.
To underscore, I direct my colleagues to section 1711(2) of the bill
which explicitly defines a ``class action'' to mean any civil action
filed in a district court of the United States under rule

[[Page S1164]]

23 of the Federal Rules of Civil Procedure, or any civil action that is
removed to a district court of the United States that was originally
filed under a State or rule of judicial procedure authorizing an action
to be brought by one or more representatives as a class action.
This statutory definition makes it perfectly clear that the bill
applies only to class actions, and not parens patriae actions. Class
actions being those lawsuits filed in Federal district court under rule
23 of the Federal rules of civil procedure or lawsuits brought in State
court as a class action. Neither of these conditions are met when
compared to the nature of a parens patriae action, and consequently,
are excluded from the reach of this bill.
What I think the proponents of this amendment are really concerned
about is the impact of this bill on State attorneys general if they
choose to pursue an action other than a parens patriae action. But this
possibility does not make this amendment necessary.
First, attorneys general are not required to use class actions to
enforce their State laws and protect their citizens. To the contrary,
their main weapon has been, and continues to be, the parens patriae
action authorized under State statute.
Second, this legislation has been carefully crafted to distinguish
between truly local suits and those that involve national issues. Thus,
if an attorney general brings a class action, and that class action
involves matters of truly local concern, it will certainly fall under
one of the bill's exceptions. On the other hand, if the lawsuit is
aimed at an out-of-State corporation for conduct that affects citizens
in multiple States, or if the lawsuit is interstate in nature, then
that suit should be removed to Federal court. Removal of such a case is
particularly appropriate because there would likely be similar suits
brought in a number of courts, and one of the central purposes of this
legislation is to promote judicial efficiency and fairness by allowing
copy-cat class actions to be coordinated in one Federal proceeding.
As I noted earlier, this amendment is not only unnecessary, it
actually creates opportunities for gaming. If this legislation enables
State attorneys general to keep all class actions in State court, it
will not take long for plaintiffs' lawyers to figure out that all they
need to do to avoid the impact of S. 5 is to persuade a State attorney
general to simply lend the name of his or her office to a private class
action. In other words, plaintiffs' lawyers will try to keep interstate
class actions in State court by simply naming that State's attorney
general at the end of complaint as a cocounsel or of-counsel.
Undoubtedly, we will see arguments that if an attorney general merely
sends in a letter saying that he/she is sympathetic 10 the action, the
lawsuit will be exempt from the bill's provisions. I think this is the
very type of forum shopping that S. 5 is supposed to eliminate and we
should not be encouraging it now.
Indeed, to give the potential gaming some real life perspective, I
direct your attention, Mr. President, to an article from the Boston
Globe which reports that the Massachusetts attorney general had made
arrangements with private plaintiffs' attorneys to prosecute a
consumer-oriented class action against the drug store chain Walgreens.
Under the arrangement, the plaintiffs lawyers pocketed hefty fees while
the state AG's office received a portion of the settlement money.
But the article reports that this privatization arrangement has drawn
criticism because the settlement did very little to benefit consumers.
The article reports that too little of the settlement money actually
went to consumers, but rather to groups such as Public Citizen, the
American Lung Association, and Massachusetts Bar Association. Perhaps
more troubling about the article is the alleged campaign contribution
ties between the private attorneys who prosecuted these cases and the
State attorney general office.
Given the close ties between this State AG and private attorneys, I
find that this amendment will only encourage these types of
arrangements in the future that do not benefit consumers.
We do not want to risk creating a situation in which State attorneys
general can be used as pawns so that class action lawyers can remain in
one of their magic jurisdictions and avoid the import of this bill. S.
5 would put an end to class action reform without diminishing in any
way the ability of State attorneys general to discharge their duty to
protect their citizens--and to do so in State court. I urge my
colleagues to vote against this amendment.
The PRESIDING OFFICER. The Senator from Arkansas.
Mr. PRYOR. I thank my colleagues for their attention to this
amendment. I am encouraged in one way because I know they have spent
time with the amendment and studied it, analyzed it. What encourages me
is all four who spoke against this--in fact, every Senator who spoke
against the amendment--have said that this bill as currently drafted
will not alter or limit the existing rights of any State attorney
general. That is very good news.
I don't agree with that interpretation. In fact, there are 46
attorneys general, Democrats and Republicans from all over the country,
who have written a letter saying they do not agree, or at least they
have concern with that interpretation.
I hope when this law, if it passes, S. 5, is challenged, and it will
be at some point or be litigated at some point, and a State attorney
general tries to pursue some sort of action and there is a challenge
saying the State cannot do it, I hope the courts will recognize the
legislative history we developed today. The intention of this Senate
and the conference is not to limit any existing rights or any existing
abilities of the State attorneys general in pursuing cases they may
deem appropriate to pursue.
In addition, a number of the opponents, maybe all, have focused on
some language in the bill. We need to clarify that language so when we
vote on this we will be able to vote from an informed position. The
language is ``but does not include any civil action brought by or on
behalf of any Attorney General.''
Chairman Grassley and others have pointed to that language and
indicated they have some concern with that. I respect that concern.
Let me flesh that out, if I may. In virtually every State, and
probably every State, the work of the attorney general's office is too
large for one person to do. In other words, the AG himself or herself
cannot sign every pleading, cannot attend every hearing, cannot
participate in everything. They cannot do it. There are not enough
hours in the day and the workload is too heavy. Again, I think every
State law does this routinely. I don't know of any exception. What that
means is every attorney general in America has an assistant attorney
general or deputy attorney general or some other titled person in their
office who every single day routinely does things on behalf of the
attorney general. It has to be that way.

Under the laws of the States, the attorney general is the one who is
ultimately responsible. When a pleading is signed, that signatory--
whichever deputy or assistant or attorney general it may be--that
person is binding the State's attorney general to certain things in the
pleadings.
The attorney general is the officer of the court. The attorney
general has ethical responsibilities and ethical duties. I would argue
that these ethical duties are above and beyond what is in the private
practice of law because that lawyer, as the attorney general, is
representing the State he or she was elected or selected to represent.
Also, some are concerned that the phrase ``or on behalf of'' may mean
that a private sector law firm could be retained by the State to pursue
a matter. That is true. That is existing law today. And everybody has
said the intention of S. 5 is not to limit or alter or change any
authority of the States' attorneys general.
So all that is true. However, in every State I am aware of--I cannot
promise this is true in every State, but in every State I am familiar
with, there is a process which States' attorneys general have to go
through in order to hire outside counsel. I think if we spent 30
minutes looking at various States and the needs of various States,
probably 100 percent of the people in the Senate would understand that
there may be cases where it might be appropriate to hire outside
counsel under certain circumstances.

[[Page S1165]]

But there is a process. For example, in Arkansas, we had to go to the
State legislature. We had to go to the State legislative committee and
get approval to hire outside counsel. We also had to have the Governor
sign off on the approval. So we had both the legislative and the
executive branch signing off on that decision. Again, I cannot promise
every State has that same process, but every one I am familiar with has
some sort of process they go through and do that.
The United States is a union of States. We should not think of these
attorneys general as attorneys. I tried to make this point several
times. They are different than private practice attorneys. These
attorneys represent the State. They are the mouthpiece for the State.
They do the will of the legislature of the State in all of its various
capacities.
Mr. President, may I ask how much time I have?
The PRESIDING OFFICER (Mr. Thune). Fifteen seconds.
Mr. PRYOR. Mr. President, after the 15 seconds, what will happen? Can
I ask unanimous consent to extend it for another, say, 10 minutes?
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. PRYOR. Thank you, Mr. President.
But the only point I was going to make on that is, we are a union of
States. We should always see the States' attorneys general as being a
little different than private sector lawyers. There is nothing wrong
with private sector lawyers. Like I said many times during the course
of this debate on this amendment, they are doing their job. They are
representing their clients, and that is great and fantastic. That is
the way the system works. But the State's attorney general does more.
The State's attorney general has more responsibility. When they speak,
they speak on behalf of the State. It is kind of like us being here in
Washington. Certainly we are everyday citizens like everybody else, but
we are elected to come here and represent our States in this great
body.

So I will ask my colleagues to try to see States' attorneys general
in a different light, in a materially different light, not a slightly
different light but in a materially, substantially different light than
you see your ordinary attorneys in private practice.
Like I said, some say this amendment is unnecessary because it honors
the integrity of the bill. I like that in terms of legislative history.
But I also say the counterargument there is: If it is unnecessary and
if it does not change the impact of the bill, why not vote on it and
allow the amendment to make sure we are all protecting the ability of
our States to pursue litigation in the way they have always been able
to do that.
Mr. President, I ask for the yeas and nays on my amendment.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The yeas and nays were ordered.
Mr. PRYOR. Mr. President, I yield the floor.
Mr. GRASSLEY. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. SPECTER. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SPECTER. Mr. President, the time of 12:15 having arrived, we are
set for the vote. I move to table the Pryor amendment No. 5, and I ask
for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the motion. The clerk will call the
roll.
The assistant legislative clerk called the roll.
Mr. McCONNELL. The following Senator was necessarily absent: the
Senator from New Hampshire (Mr. Sununu).

[Rollcall Vote No. 5 Leg.]

YEAS--60

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

NAYS--39

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

NOT VOTING--1

Sununu

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

Amendment No. 2

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

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

Mr. KENNEDY. Mr. President, because of other Members' schedules, they
want to address this and other issues at this time. I intend to come
back and have a more complete statement.
This is about discrimination. It is also about a worker's rights.
Those were issues that were never intended to be included in this class
action legislation.

[[Page S1166]]

I will have more to say about it, but it is an extremely important
amendment. I will address the Senate on this issue in a very short
period of time.
I thank the floor managers for their courtesies in letting us get
this matter up. Hopefully, we will have a chance midafternoon to have a
vote on it.
Mr. BOND. Mr. President, I ask unanimous consent I may be permitted
to speak as in morning business for up to 10 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The remarks of Mr. Bond are printed in today's Record under
``Morning Business.'')
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. SPECTER. Mr. President, the senior Senator from California is on
the floor to offer an amendment, titled the Feinstein-Bingaman
amendment, which has been the subject of considerable discussion.
As I have said in the earlier portions of the discussion on this
bill, I believe class action reform is necessary to move cases into the
Federal courts, but I think it is important that there not be any
substantive law changes, as I indicated previously on the floor. I had
been in support of the Bingaman amendment. The management in opposition
will be handled by Senator Hatch.
I yield the floor.
The PRESIDING OFFICER. The Senator from California.
Mrs. FEINSTEIN. Mr. President, I thank the Senator from Pennsylvania.
I ask unanimous consent that the pending amendment be set aside.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 4

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

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

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

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

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

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

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

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

Let me quickly go over the amendment. The amendment basically
provides that:

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

Here is the amendment:

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

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

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

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

[[Page S1167]]

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

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

Now, let me speak just for a moment to this business: Well, you have
to take the bill as is or forget it, there is not going to be a bill.
There is an arrangement with the House to take the bill if it is
exactly as is.
Well, in many complicated issues, there are dilemmas or problems or
issues or corrections that need to be made which appear as the
legislative process takes place. And that is what has happened with
this bill. In certain areas of concern, where the law may be silent,
and case law may be conflicting, I think it is important to clarify the
law. That is what the Feinstein-Bingaman amendment does. There is a
hole there. The issue is governed by old case law. What we do is, in
essence, codify that so we make clear the discretion that the judge
has.
Most importantly, we make clear that a bona fide class action going
to Federal court is not going to fall into oblivion because a judge is
going to say, Oh, my goodness, there are so many State laws at issue
here I can't possibly manage the case, and, therefore, that judge does
nothing and the case goes nowhere.
So I think we have worked out a good solution. I know Senator
Bingaman was here on the Senate floor. I would say to the Senator from
Pennsylvania, I know he is desirous of saying a few words. So perhaps
if his staff is listening, they will urge him to come to the floor.
Otherwise, Mr. President, I thank the Chair, and I thank the chairman.
I yield the floor.
Mr. GRASSLEY. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. BINGAMAN. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BINGAMAN. Mr. President, I rise to express my strong support for
Senator Feinstein's amendment. The amendment will provide courts with
guidance as to how to manage large multistate class actions in Federal
court. This amendment addresses a flaw in the underlying legislation
that, if left uncorrected, could leave many properly filed multistate
consumer class actions without a forum in which those cases could be
heard.
I had prepared an amendment that would have reaffirmed the
discretionary authority of a judge to select the law of one State, as
is currently permissible under the Constitution, and reaffirm the right
of the judge to do that instead of denying certification for large
multistate consumer class actions. There were some concerns raised by
my colleagues, and I have agreed to withhold that amendment and lend my
support to the Feinstein compromise approach. I believe the Feinstein
compromise will accomplish what I intended to address in my amendment;
that is, to make sure injured consumers have their day in court.

[[Page S1168]]

By amending the diversity jurisdiction rules, the Class Action
Fairness Act of 2005 will give almost exclusive jurisdiction to the
Federal courts to hear class action cases. The proponents of the
legislation argue that such changes are necessary due to abuses that
are occurring in a handful of State courts. Although the bill makes
changes to other aspects of class action litigation, such as coupon
settlements, this procedural removal of cases from State court to
Federal court should be the focus of our scrutiny. This goes to the
core of the 10th amendment of the Constitution that preserves the right
of a State to protect its citizens. While this shift may be necessary
in certain cases, it should not be taken lightly, as we will be taking
away the ability of States to hear cases involving injuries to their
citizens that are in violation of the State law. This is clearly a
fundamental change in jurisprudence.
Class action suits have long provided a means for individuals to band
together to seek a remedy when they have collectively been damaged in a
manner that is significant but would not be economical to advance on
their own. These actions empower those citizens who would be left
without redress, absent the collective effort of others. This system
has provided a necessary balance to a system weighted toward those with
the means to defend their actions in court. The suits also take much of
the pressure off of a State attorney general. The State attorneys
general are not able to investigate and seek remedies for all the
citizens who have been damaged or hurt by business in and outside of a
State. Class actions reduce the need for overly burdensome regulations
and laws that would be necessary if it were to be forced to limit the
discretion given to businesses to operate in a responsible manner.
Finally, class action litigation protects our citizens from future
injuries by putting an end to certain acts of corporate malfeasance and
negligence. Although there have been abuses on occasion, the benefits
of class action litigation should be evident. Under current law, an
individual has the right to participate in a class when a number of
people have been injured in a similar fashion by the same defendant.
Once the class has been created, if the injury is based on a violation
of State law--and many are, as there are really no general consumer
protection laws--the class representative generally has the option of
filing either in State court or Federal court. In this respect, a class
action is similar to any action that is filed in court; that is, the
plaintiff is the master of his or her claims.

The proponents of this legislation have argued that the basic goal of
the legislation is to move these large class actions to Federal court.
For instance, Stanton D. Anderson, executive vice president and chief
legal counsel for the U.S. Chamber of Commerce, wrote in the
Philadelphia Inquirer, dated February 27, 2004, that:

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

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

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

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

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

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

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

This case involved a defective ignition switch that caused it to
fail. It has been claimed that this failure may have resulted in as
many as 11 deaths and 31 injuries, not to mention almost a billion
dollars spent by consumers to replace the defective product. The case
was ultimately settled, but it was only settled after a State court in
California agreed to certify a class.
Senator Feinstein's amendment makes sure that by moving these cases
to Federal court, we are not pushing them into a forum that will fail
to hear those cases because too many State laws apply.
The amendment requires the parties to submit plans as to how the case
could be managed by dividing it into subclasses based on the similarity
of the State laws that would need to be applied. The judge would then
have the discretion to divide the class into subclasses or use some
other manner that ensures that the plaintiffs' State laws are applied.
Under the Feinstein amendment, the Federal court is not required to
divide the class into subclasses; it is simply discretionary. It can
still follow the State's choice of law rules, or use any other means
permissible to ensure that the plaintiffs' State laws are applied to
the extent practicable.
If we are going to take away the right of State judges to hear a
class action, it is incumbent upon us to make sure the Federal judge is
not able to not certify the class because too many State laws would
apply. That would be an unfair result.
I have heard many Members argue that a deal is a deal; therefore,
Members who support the bill, including those who were able to get
changes made to the bill before it was brought to the floor, should be
precluded from supporting any amendment, including this amendment. I
remind my colleagues that although this legislation has been around for
years, there has not been a single amendment to improve this
legislation that has been voted on on the floor of the Senate prior to
this week.
The stated intention of the proponents of this bill is to avoid
conference with the House and to have that Chamber pass the bill
exactly the way it passes the Senate. While they argue this is a reason
to not support

[[Page S1169]]

amendments, I would argue the opposite. Because we know this is the
only opportunity for any Member of Congress to amend this legislation,
it is imperative that we remain openminded to the few amendments that
are going to be offered and debated on the bill.
In the 22 years I have been in the Senate, I do not recall a single
piece of legislation that could not have benefited from input from all
interested Members of the Senate. The Founding Fathers of our country
created a legislative branch that is intentionally deliberative and
subject to the repetitive processes of debate and amendment.
I remind my colleagues of the language included in last year's
nonamendable Omnibus appropriations bill that would have allowed staff
from the appropriations committees to review taxpayers' tax return
information. That one provision almost derailed the entire spending
bill for our country. Clearly, if Members had been presented with an
opportunity to review the bill on the floor, to amend that bill, we
could have avoided that problem.
As elected officials, we have a responsibility to the public to do
our best to improve legislation before it becomes law, which I believe
argues for Members to consider each amendment with an open mind. If my
colleagues disagree with this amendment, then I encourage them to vote
against it. However, if they agree with me that this catch-22, which is
in the current bill, should be corrected, then I hope they will vote
for this Feinstein amendment, regardless of whether you previously
stated support for the overall bill.
I would like to acknowledge and thank the chairman of the Judiciary
Committee, Senator Specter, for his support of my amendment and what I
understand to be his support of the Feinstein amendment. No one could
debate the chairman's dedication to getting this bill passed. Yet he
agrees that the legislation would be improved by correcting the problem
we have identified.
Substantively, one of the arguments that was raised by proponents of
the bill is that courts have been certifying classes in these large
multistate class actions, even though all of the circuits I mentioned
before in numerous district courts have denied certification on the
ground that the case is unmanageable. The cases enlisted by proponents
of the bill in defense of their claim that cases have been certified
are cases involving a Federal question or certifications of a class for
purposes of settlement. These types of certifications are entirely
different than the cases we are referring to; that is, cases involving
violations of State law for purposes of a trial. The only way these
cases are going to get to the settlement phase is if there is the
possibility that a case could be taken to trial, if necessary. It is an
important distinction.
Again, I point to this in re Simon II litigation where the Chamber of
Commerce argued against certification, stating that it is nearly a
truism that nationwide class actions in which the claims are subject to
varying State laws cannot be certified because they are simply
unmanageable.
As I mentioned before, this is not just an abstract situation. There
are over 300,000 homeowners in Mississippi, Louisiana, Florida, and
Texas who have been compensated for defective siding they had purchased
for their houses. When this case was brought before the Federal court,
it was not certified, in part because the court could not ``imagine
managing a trial under the law of 51 jurisdictions on the defectiveness
of masonite siding.'' Because an Alabama State court agreed to certify
the case for trial, the case was settled, and these homeowners
were compensated for their damages.

Proponents of the legislation also argue that a class denied
certification would be free to refile its cases in either State or
Federal court. Based on the underlying legislation, the State court
cases, almost without exception, would be removed again to the Federal
court, and once in Federal court, the case would be sent to the same
Federal court that failed to certify the class in the first place due
to the procedure for consolidation and the operation of the
multidistrict litigation panel.
This MDL, multidistrict litigation panel, streamlines large, unwieldy
multidistrict litigation involving the same parties and the same facts
when those cases are filed in Federal courts. This panel of seven
judges appointed by the Chief Justice of the Supreme Court determines
which cases pending in Federal court should be transferred to a single
district court for purposes of hearing and ruling on pretrial matters,
including the matter of class certification.
The proceedings can be initiated by the MDL panel or by any party
involved in one of the actions pending in a district court. All cases
of a similar nature in Federal court, including those filed after the
consolidation, are affected and subject to being transferred. Once a
transferee court has been selected, it rules on all pretrial motions,
including class certification, but will send the cases back to the
transferor courts for trial, assuming that the case has not settled or
been dismissed. All future cases involving similar claims and similar
parties are automatically sent back to the same transferee court for
any future actions.

Class actions by their very nature are large cases and they are
affected by the ability of the MDL panel to consolidate, as there are
generally different cases pending in district courts throughout the
country. Under current law, a class based on claims of State law
violations can avoid this consolidation by remaining in State court,
but this will no longer be the case after this bill becomes law.
Instead, plaintiffs who go through the consolidation process and are
not certified will not refile these cases since they would ultimately
be back before the same judge who failed to certify the class in the
first place.
Finally, the proponents of the bill have argued that taking away the
right of a judge to deny certification based on too many States' laws
is a violation of due process and is anticonsumer. It seems implausible
to me that an amendment that would ameliorate the impact of denying
States the right to hear certain cases could be considered either a
violation of due process or anticonsumer. I believe the amendment of
the Senator from California is fair. It is a reasonable approach to
dealing with a serious problem created in the underlying legislation.
As Chairman Specter stated earlier in the week, this legislation is
intended to change the procedure for class actions and not the
substantive law. Without Senator Feinstein's amendment this bill could
effectively limit the substantive rights of citizens to obtain a remedy
for modest damages when a defendant has injured many in a similar
fashion. I hope my colleagues will join me in supporting the Feinstein
amendment.
I have a letter I received from Professor Arthur Miller at the
Harvard Law School. He has been very helpful to me and to other
Senators in trying to help us understand the seriousness of the issue
and the importance of remedying this through proposals such as the
Feinstein amendment. I ask unanimous consent that the letter be printed
in the Record at the end of my remarks.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Harvard Law School,

Cambridge, MA, June 17, 2005.
Hon. Jeff BIngaman,
U.S. Senate,
Washington, DC.
Dear Senator Bingaman: I am happy to respond to your letter
of June 14 asking for my views of your proposed ``choice of
law'' amendment to the proposed ``Class Action Fairness Act''
(S. 2062). After decades of teaching, practicing, writing,
and serving the Judiciary in various public service
capacities in the fields of civil procedure, complex
litigation, and class actions, I very interested in any
federal legislation affecting class action lawsuits, and
particularly, in the possibility of making this particular
legislation fairer and more balanced.
In general, S. 2062 would place in federal court most class
actions that involve more than $5 million in losses and more
than 100 class members, and in which any defendant is a
citizen of a state that is different from that of any member
of the plaintiff class. In effect, the proposed legislation
would federalize all class actions of any significance. I
be1ieve that this radical departure from one of the most
basic, longstanding principles of federalism is a particular
affront to state judges when we consider the unquestioned
vitality and competence of state courts to which we have
historically and frequently entrusted the enforcement of
state-created rights and remedies. I recognize, however, that
apparently a majority of the Senate supports the idea of
moving most class action lawsuits from state to federal
court. If

[[Page S1170]]

that is the case, your proposed amendment is essential to
ensure that, once class actions were moved into the federal
courts, these cases not be consigned to oblivion. That real
possibility goes beyond the just mentioned intrusion on
federalism principles and raises legitimate concerns about
the fairness and balance of S. 2062.
Proponents of S. 2062 argue that federal courts are the
more appropriate forum for lawsuits involving plaintiffs from
multiple states. They assert that the goal of the bill is to
ensure that nationwide cases will ``be litigated in the
federal courts rather than in the courts of just one state
(or county) or another.'' Of course, that statement ignores
the fact that state courts have been trusted to adjudicate
multi-state controversies since the foundation of the Nation.
Moreover, the truth is that these cases are not litigated in
federal court; most commonly they are denied class
certification. The proposed legislation would magnify that
reality.
Federal courts have consistently denied class certification
in multi-state lawsuits based on consumer laws as well as
other state laws. This fact is acknowledged by most class
action practitioners and experts, regardless of their
position on class action policy issues. Just last year, the
U.S. Chamber of Commerce--the leading proponent of S. 2062--
filed an amicus curiae brief in the U.S. Court of Appeals for
the Second Circuit urging the court to overrule a
distinguished district court's class certification decision
because ``. . . federal courts have consistently refused to
certify nationwide class actions in product defect cases
because the need to apply the laws of many different states
would make such a sprawling class action unmanageable.'' The
Chamber went on to conclude, ``. . . it is nearly a truism
that nationwide class actions in which the claims are subject
to varying state laws cannot be certified because they are
simply unmanageable.'' On this point, the Chamber is
correct--not a single Federal Circuit Court has granted class
certification for such a lawsuit, and six Circuit Courts have
expressly denied certification.
It is not surprising that federal courts are reluctant to
grant certification to multi-state class actions based on
state consumer protection laws. After all, these are laws
with which the federal courts generally are not familiar or
comfortable. Imagine the discomfort of a federal judge, then,
when confronted with a case involving tens of thousands of
individuals from all fifty states and state laws that at
least superficia11y appear to be different. Moreover, our
federal courts have limited resources and are responsible for
adjudicating a tremendous array of substantive matters. State
courts, on the other hand, are far more comfortable handling
cases involving state contract or tort law and are,
therefore, more inclined to try to find a way to hear and
resolve those cases.
Your proposed amendment will provide guidance to federal
judges that will enable more multi-state consumer class
actions to be certified in federal court and, hopefully,
resolved on their actual merits. If S. 2062 is enacted
without the amendment, class action lawsuits brought on
behalf of consumers who have been defrauded or injured
because of corporate misconduct that affected people in
multiple states will continue to be non-viable.
The following is a brief description of how federal courts
currently treat class actions based on different state laws.
It will elucidate the need for an amendment like yours in the
event that Congress does indeed give federal courts exclusive
jurisdiction over class actions that involve solely state law
claims.
The rationale that many federal courts use for refusing to
certify consumer class actions that involve solely state law
claims on beha1f of citizens from different states rests on
the requirement of Federal Rule of Civil Procedure 23(b)(3),
which governs most consumer class actions brought in federal
court. Rule 23(b)(3) says, in pertinent part: ``An action
may be maintained as a class action if . . . the court
finds that the questions of law or fact common to the
members of the class predominate over any questions
affecting only individual members.'' When courts feel
compelled to apply the laws of different states to
different members of a class action, they often find that
questions of law common to the members of the class do not
predominate, leading them to conclude that proceeding on a
class action basis would prove to be unmanageable, and
they deny class certification.
Federal courts often conclude they must apply the laws of
different states to different members of a class action after
they engage in a complex ``choice of law'' analysis to
determine which state's law to apply to the claims of the
class members. Under current doctrines, federal courts
hearing state law based claims must use the ``choice-of-law''
rule of the state in which the federal district court sits.
These procedural rules vary among states, but many provide
that the federal court should apply the substantive law of
the home state of the plaintiff, or the law of the state
where the harm occurred. In a nationwide consumer class
action, such a rule would lead the court to apply to each
class member's claim the law of the state in which the class
member lives, or lived at the time the harm occurred. As
noted, most federal courts will not grant class certification
in these situations because they find that the classes would
be ``unmanageable.''
Your amendment would allow a federal court to choose not to
follow the choice-of-law rule of the state in which the court
is located. The federal judge could instead make the case
more manageable by choosing the law of one state with
sufficient ties to the underlying claims to meet the choice
of law requirements that the Constitution demands be met.
That state often will be the state in which the defendant's
headquarters is located, or where the product was designed or
manufactured, or where the marketing materials were
conceived, or where the particular business practice being
challenged was developed or executed.
If the federal district judge chooses to reject the option
of applying one state's law to the case, your amendment
ensures that the judge does not deny class certification on
the sole ground that the laws of more than one state would
apply to the action. This protects consumers from being
caught in the ultimate Catch-22 situation--their lawsuit is
in federal court because the class includes people from many
states and Congress has said that is the only place the class
can go, but then, the federal court will not grant class
certification precisely because the class involves citizens
from multiple states. That simply violates the most basic
principles of citizen access to the courts. I believe that
your amendment strikes the appropriate balance among the
interests of the class members, defendants, and the courts.
Most important, it will ensure that S. 2062 does not lead to
the unintended consequence of robbing from consumers their
only avenue to seek redress from corporations that violate
the law.
If S. 2062 passes without your amendment, the only outlet
for injured consumers will be single-state class actions. But
that would fly in the face of what the proponents of the bill
are apparently trying to achieve, which is to consolidate
nationwide class actions in one forum, federal court, so that
businesses do not have to face multiple lawsuits throughout
the country. What is worse, the only plaintiffs who will he
represented and compensated through single state actions are
those from highly-populated states, where the damages
suffered by the class members will be large enough to finance
a costly and typically risky class action lawsuit. This may
be a practical and viable solution for those who live in a
state like California or Texas. But it will leave millions of
consumers who have been harmed in less-populated states, such
as your home state of New Mexico, without relief.
Your amendment effectively and efficiently allows multi-
state class actions in consumer cases to be certified in
federal court. It actually accomplishes what the bill
purports to achieve--giving harmed consumers from multiple
states one federal forum in which to seek relief. Under your
amendment, the federal judge will have the discretion to
apply one state's law, as long as that is constitutionally
permissible. Or the judge may choose to manage the case in a
different way, perhaps by grouping states together that have
similar laws into subclasses or by using exemplar or test
cases or by resorting to the increasingly sophisticated tool
chest of management procedures our courts have developed. In
any event, the judge may not dismiss a case on the ground
that the litigation is unmanageable simply because multiple
state laws apply. The judge does, of course, maintain the
discretion to refuse to certify the class on other grounds.
The amendment is quite modest, but it does restore some
balance and fairness to the bill by increasing the likelihood
that citizens will have access to the courts to present their
grievances.
Your letter to me notes that proponents of the bill are
portraying this amendment as anti-consumer. Such a
characterization could not be further from the truth and is
little more than rhetoric. Indeed, in my judgment, it is S.
2062 that is anti-consumer.
As noted above, under current practice, federal courts
rarely certify nationwide consumer class actions. In almost
every instance in which allegations of wrongdoing injuring
large numbers of consumers have been brought, the decision to
deny class certification will eviscerate any opportunity for
the victims to seek redress. The individual members of the
class simply will not suffer losses large enough to justify
bringing suit solely on one person's behalf. It is hardly
anti-consumer to provide a mechanism to enable federal courts
to certify cases and afford consumers an opportunity to have
their grievances heard.
Thus I believe your amendment provides a balanced solution.
It allows injured consumers a better chance of getting their
day in court. And it provides federal judges with a
reasonable way to manage multi-state class actions based on
consumer laws.
You also note that proponents of the legislation have
suggested that this amendment is unconstitutional. There is
no basis for such an assertion.
Your amendment expressly honors the Constitution by
stating, ``the district court may apply the rule of decision
of one state having a sufficient interest in the claim that
the application of that state's law is permissible under the
Constitution.'' Although the amendment allows a federal judge
to apply one state's law, it does so only when that is
constitutionally acceptable.
The constitutional limitation on applying a single state's
law to a multi-state action is derived from Phillips
Petroleum Co. v. Shutts et al., 472 U.S. 797 (185), a case
that I argued on behalf of Phillips Petroleum Co. before the
Supreme Court. The Court held that ``for a State's
substantive law to be selected in a constitutionally
permissible manner, that

[[Page S1171]]

State must have a significant contact or significant
aggregation of contacts, creating state interests, such that
choice of its law is neither arbitrary nor fundamentally
unfair.'' Id. at 818 (internal cite and quotations omitted).
Thus, as long as there are ``significant contacts'' and the
choice of law is not ``arbitrary'' or ``fundamentally
unfair,'' then a single state's laws may apply to a multi-
state class action. Neither party can object to that.
Because your amendment effectively codifies Shutts, it is
constitutional. If there is a multi-state class action in
which no single state's law meets the constitutional standard
set forth in Shutts or if the judge does not choose to apply
a single state law that does meet the constitutional
criteria, then the judge may follow the choice of law rules
of the state in which the district court sits. Part (b) of
the amendment does not implicate the Constitution in any way.
It merely provides that if the judge does not apply a single
state law, then he or she may not deny certification under
Rule 23 on the narrow ground that multiple states' laws apply
to the case and make it unmanageable. It encourages federal
judges to try to go forward and reach the merits of the
dispute.
Thus, your amendment gives federal judges appropriate
guidance about how to address multi-state consumer class
action lawsuits. It does not mandate a result or tie their
hands. This ability to make a case more manageable will allow
at least some multi-state consumer class actions to be heard,
rather than to be denied certification. As the California
State Supreme Court aptly recognized, defendants should not
be able to keep ill-gotten gains ``simply because their
conduct harmed large numbers of people in small amounts
instead of smal1 numbers of people in large amounts.'' State
v. Levi Strauss & Co., 41 Cal.3d 460 (1986). Yet that is
where this bill as written will lead us, and that is
extremely bad policy.
Unless the Senate wants to enact legislation that, as a
practical matter, eliminates multi-state class actions, it
should not pass S. 2062 as it is written. Under S. 2062,
multi-state class actions in consumer law cases, a vital
mechanism for promoting social justice, giving people access
to the courts and dealing fairly with our citizenry, will
become an artifact, a thing of the past. At a minimum, the
Senate would be wise to adopt your amendment, which would
allow plaintiffs to have their day in federal court; after
all, the proponents of the legislation argue that is the goal
of the bill.
Thank you again for your willingness to address this
important issue. If you have any additional questions about
S. 2062 or the benefits of your amendment, I would be happy
to assist you further.
Sincerely yours,
Arthur R. Miller,
Bruce Bromley Professor of Law.

Mr. BINGAMAN. I yield the floor, and I suggest the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Chambliss). Without objection, it is so
ordered.
The Senator from Iowa is recognized.
Mr. GRASSLEY. Mr. President, when I spoke prior to Senator Pryor's
amendment, I made a pitch that I want to repeat about the opportunity
we have now, after four Congresses--this is the fifth Congress--to get
this bill to the President. It has passed the House so many times, and
we have never been able to get it to finality in the Senate. We have
the House in position now, even after all of these compromises we have
made which have diluted the bill more than I would have liked to have
done, of passing a bill the leadership in the House of Representatives
tells us they will take the way we pass it and send it to the President
as long as there are no changes, and this assurance about no changes
comes from two standpoints.
One, in the previous Congress we made compromises to get Democratic
votes with the idea that once those changes were made and we got this
bill through the Senate, they would not be changed in the House. We
also got the assurance from the House that they would not change it,
even though the House has passed much stronger legislation a couple of
times. So there is an assurance in this body for people who would
rather not pass strong legislation but they know there needs to be some
changes in class action regime, to make some modest changes, and make
sure that what they agree to will be what gets to the President, and
then the House saying now for a new Congress they will pass this
legislation without amendment.
So every Democrat who has made a compromise with us so we can get
this bill behind us can be satisfied that they will not be nickeled and
dimed to death.
Obviously, not all Democrats are satisfied with this sort of
agreement and that is their right as individual Senators to try to
change it more. But as I said before, any changes in this bill negate
both promises that have been made. It means the promise to go through
the House will not be kept because the bill has been changed in the
Senate, and then for those Senators who got the assurance from me that
this bill would not be changed in the House so that they were not
nickeled and dimed away with their compromises are going to lose the
opportunity of getting what they want without the assurance that
somewhere else in the legislative process, probably conference, there
might be a much stronger bill than they want.
This bill was originally introduced in the 105th Congress, then the
106th Congress, then the 107th Congress. We moved it in the 108th
Congress. Now we are here in the 109th Congress. Almost everybody seems
to believe there is some reform that needs to be done in the class
action tort regime. This bill is it.
Now we have amendments. We defeated the amendment of Senator Pryor.
We had an amendment by Senator Bingaman that we were going to deal
with, that would have destroyed this compromise. There must have been a
belief on the part of the people behind the Bingaman amendment that it
would not go, so instead of the Bingaman amendment we have in front of
us a Feinstein modification of the Bingaman amendment.
I am in the same position I was with the amendment of Senator Pryor,
asking people to defeat the Feinstein-Bingaman amendment. I will be
very precise why that needs to be done. But the substance of the
amendment and my arguing against the substance of the amendment should
not carry as much weight with my colleagues as my pleading with them
that we defeat all amendments because this bill has been compromised to
satisfy a supermajority of Senators--not a bare majority, a
supermajority.
So I take this opportunity to speak out against the Feinstein-
Bingaman ``choice of law'' amendment, and I urge my colleagues to
oppose it. Pure and simple, this amendment blows a hole in the bill and
guts the modest reforms we are finally going to be able to get to the
President.
This amendment would require the Federal courts to certify a class
that does not meet basic class action requirements. In addition, what
the amendment does is a contravention of the requirements of rule 23 of
the Federal Rules of Civil Procedure, which rule says you have to have
similar law in fact in order to certify a class. The net result of this
amendment is that it would require Federal judges to hear dissimilar
claims that do not belong together as a class action, and would not be
allowed to proceed as a class action under current law. Requiring
courts to subclass does not make this amendment any better.
This amendment would require Federal judges to not follow the
requirements for certifying class under rule 23. Why do the proponents
of this amendment want to do that? They have given reasons for their
amendment and I think, whether this is their intention or not--and I
should not question the motives of people--but the end result is
perpetuating the abuses that were already seen in the magnet courts,
these infamous judicial hellholes which have been referred to. I
remember only one out of dozens throughout the country, but one was in
Madison County, IL.
The purpose of class actions is obvious: to enable courts to decide
large numbers of similar claims and to do it fairly and to do it in an
efficient manner. Different claims cannot be pulled together as a class
action because that would be unfair and it would violate the due
process rights of both plaintiffs and defendants. But the Feinstein-
Bingaman amendment would require judges to do just that. As you know,
that is exactly what the problem is all about, what our bill was trying
to correct: judges certifying classes that should never have been
certified in the first place. Rules are in place as to what should or
should not be certified,

[[Page S1172]]

and the Feinstein-Bingaman amendment blows those rules off. The
efficiency and the rationale of that rule should not be followed.

The Federal courts should undertake a review to determine whether
multistate class actions involving State law claims should be
certified. They need to determine that the legal claims are
sufficiently similar to warrant class certification. Most State courts
make the same kind of determinations as well. The magnet State courts,
on the other hand, do not make this determination and that is why they
certify huge classes that involve claims that are completely
dissimilar, to the detriment of both plaintiff and defendant. That ends
up being a due process problem.
In addition, this amendment before us ignores how diversity
jurisdiction works, and it eviscerates the reforms that are contained
in our bill.
Another argument for this amendment by Senator Feinstein and Senator
Bingaman is allegedly that Federal courts refuse to certify nationwide
class actions. That sort of presumption is plain wrong. That is not the
case. There are numerous examples of where Federal courts have
certified multistate class actions based on State law claims. There is
not a rule against nationwide class actions. Federal courts do certify
nationwide class actions where the laws that govern the claims are
similar.
Class actions are also certified when the plaintiffs' lawyers
organize the claims in a manner so that they may be litigated fairly,
even under differing State laws, where they appropriately organize the
claims into subclasses. But this amendment does not give the courts any
choice to determine whether it is appropriate to subclass.
So for a third time during this period that I am standing, I remind
my colleagues again about the extensive efforts on the part of Senator
Kohl of Wisconsin, Senator Hatch of Utah, and this Senator from Iowa,
getting to this version of the Class Action Fairness Act. No one can
question that we negotiated in good faith with our colleague Senator
Feinstein, as well as our colleagues Senators Dodd, Schumer, and
Landrieu, to make changes to address concerns they had about the
original bill introduced.
The bill we have now will keep many class actions in State court
under the Feinstein home State exception. That was accepted in
committee, way back there in early 2003, in the 108th Congress. Also
under the local controversy exception we crafted with Senators Dodd,
Schumer, and Landrieu, that will stay in State court.
So I hope I get us back in an understandable way, and what people
think is rational after all these compromises, so that there is no
further need to change this bottom-line compromise. Again, the purpose
of this amendment is to gut the modest, commonsense reforms contained
in this bill. This is an attempt to legitimize the class action abuse
we have been seeing in the magnet State courts. It is an attempt to
legalize the problem by putting it into the rule.
All I can say is, that is not all right. It is not OK. If we are
serious about putting a stop to class action abuse, I urge my
colleagues to oppose this amendment.
Mr. President, I ask unanimous consent to have printed in the Record
the letter by Walter Dellinger.
There being no objection, the material was ordered to be printed in
the Record, as follows:

O'Melveny & Myers LLP,

Washington, DC, February 4, 2005.
Re Proposed Choice-of-Law Amendment to Class Action Fairness
Act (S. 5).
Hon. Arlen Specter,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: I write concerning the ``choice-of-law''
amendment that Public Citizen has been suggesting should be
offered to the Class Action Fairness Act. As I understand it,
this amendment would encourage or require federal court
judges, faced with multi-state or nationwide class actions,
to either: (1) apply the laws of one state to all the claims
in the case; or (2) certify the class action despite the
manageability problems created by conflicting state laws.
I strongly recommend rejection of this seriously flawed
proposal for several reasons.
The Public Citizen amendment violates basic principles of
federalism and would extend ``magnet'' state court abuses to
federal court. Many consumer protection cases now proceed on
a nationwide basis in federal court in those instances in
which Congress has determined that a single national law
ought to govern. This has been the case with laws such as the
Truth in Lending Act (TILA) and the Real Estate Settlement
Practices Act (RESPA). Frequently, nationwide class actions
are brought and tried to successful conclusions under laws
such as these.
Where Congress has chosen not to enact uniform national
legislation under which citizens can bring suit, however, it
has left the legal issues to be resolved by each state
adopting its own law. Allowing each state to decide for
itself and for its citizens is the essence of federalism.
Instructing a federal judge to pick out one state's law and
impose it on other states is a profound violation of
federalism principles. Congress is elected by all the people
of the United States. When it is acting within its
constitutional power under Article I, Congress can decide to
impose a uniform rule on the states. It is a far more serious
intrusion into the autonomy of the States when a single
judge, not Congress, acts to set aside the laws of all of the
states (but one) by choosing whichever particular state law
the judge likes best and imposing that law on all of the
other states.
For example, in Avery v. State Farm Mut. Auto Ins. Co., 746
N.E.2d 1242 (Ill. App. 2001), the sate court decided that
Illinois law could be applied to a nationwide class of
policyholders, and held that State Farm's use of ``non-
original equipment manufactured'' automobile service parts
violated Illinois law. Yet many other states' insurance laws
either expressly or implicitly permitted or even required
insurance companies to use non-OEM parts as a way to reduce
insurance costs. Avery has been uniformly recognized as an
example of judicial excess--the Illinois court exceeded its
authority by purporting to dictate the insurance laws of 49
other states. Nonetheless, the proposed amendment would tell
federal courts to do precisely the same thing. It would, in
effect, recreate in federal court the very state-court
problem that precipitated the introduction of this
legislation.
The amendment would reverse the decisions of numerous state
supreme courts that have rejected application of their laws
extraterritorially. Opponents of S. 5 have argued that this
amendment is necessary because ``state courts . . . are far
more comfortable handling cases involving state contract or
tort law.'' Aside from certain magnet courts, however, many
state courts have strongly rejected what Public Citizen
proposes: i.e., nationwide application of individual states'
laws. In fact, the proposed amendment would eviscerate a
number of decisions by state supreme courts, refusing to
apply one state's consumer protection laws in nationwide
class actions. Among the state court decisions that could be
reversed by the proposed amendment are the following:
Goshen v. Mutual Life Insurance Company of New York, 774
N.E.2d 1190 (N.Y. 2002), (explaining that to ``apply the [New
York consumer] statute to out-of-state transactions in the
case before us would . . . tread on the ability of other
states to regulate their own markets and enforce their own
consumer protection laws.'').
Compaq Computer Corp. v. Lapray, 2004 Tex. LEXIS 435 (Tex.
May 7, 2004) (``The putative class members are domiciled in
fifty states and the District of Columbia. All these fifty-
one relevant jurisdictions are likely to be interested in
ensuring that their consumers are adequately compensated for
a breach of warranty. Texas law may not provide sufficient
consumer protections in the view of the other states . . .
The differences in state law outlined above cannot be
concealed in a throng.'').
Zarella v. Minnesota Mutual Life Ins. Co., 1999 R.I. Super.
LEXIS 161 (R.I. Super. Ct. 1999) (the court found that there
were substantial variations on issues such as statutes of
limitations and burdens of proof, which ``plaintiffs have not
adequately addressed'').
Ex parte Green Tree Financial Corp., 723 So. 2d 6, 11 (Ala.
1998) (the Alabama Supreme Court expressed ``grave concerns
as to whether any national class of plaintiffs in an action
involving the application of the differing laws of
numerous states can satisfy the requirements'' for
certifying a class action).
Dragon v. Vanguard Indus., 277 Kan. 776, 789 (Kan. 2004)
(reversing certification of a nationwide class of property
owners alleging defective plumbing due to, inter alia, ``wide
variance in the laws of various states'' on relevant issues).
State ex rel. Am. Family Mut. Ins. Co. v. Clark, 106 S.W.3d
483, 487 (Mo. 2003) (``The trial court abused its discretion
in certification of the class with respect to insureds whose
contracts are subject to the laws of states other than
Missouri'').
Henry Schein v. Stromboe, 102 S.W.3d 675 (Tex. 2002)
(decertifying a class of some 20,000 purchasers of software
products on theories of fraud, breach of express warranty,
negligent misrepresentation, promissory estoppel, and
deceptive trade practices because class could not demonstrate
that Texas law should apply to individual issues of reliance
and trial court was required to look to the laws of all fifty
states to adjudicate the claims).
Philip Morris, Inc. v. Angeletti, 358 Md. 689, 747 (Md.
2000) (denying certification of a proposed tobacco class
because, inter alia, Maryland ``conflict of law principles
necessitate that the [lower court] engage in individualized
assessments for each class member'').
Washington Mutual Bank v. Superior Court, 24 Cal. 4th 906,
926 (Cal. 2001) (reversing the

[[Page S1173]]

certification of a nationwide class and holding that ``a
class action proponent must credibly demonstrate, through a
thorough analysis of the applicable state laws, that state
law variations will not swamp common issues and defeat
predominance'').
Stetser v. TAP Pharm. Prods. Inc., 598 S.E.2d 570, 586
(N.C. Ct. App. 2004) (reversing trial court's certification
of a nationwide class of persons alleging the defendant
companies had inflated prices and defrauded patients and
insurance companies) (``Because this case is composed of
plaintiffs nationwide, the remaining forty-nine states' laws,
as well as the law of the District of Columbia, must be
analyzed to determine whether it conflicts with the law of
North Carolina.'').
Linn v. Roto-Rooter, Inc., 2004 Ohio 2559, P57 (Ohio Ct.
App. 2004) (reversing trial court's decision to certify a
nationwide class ``because of the widespread reluctance to
certify nationwide class actions involving consumer
protection, fraud, and unjust enrichment claims, and due to
the variances in these laws which would render a nationwide
class unmanageable . . . the trial court abused its
discretion in certifying the class which entails litigants
from 35 states'').
Liggett Group Inc. v. Engle, 853 So. 2d 434, 448, 449 (Fla.
Dist. Ct. App. 2003) (decertifying a statewide class of
smokers because, inter alia, the ``highly transient
population'' of Florida would ``require examination of
numerous significantly different state laws governing the
different plaintiffs' claims'') (matters under review by the
Florida Supreme Court, see 873 So. 2d 1222 (Fla. 2004)).
Although proponents of the amendment say that its purpose
is to protect state law, its real effect would be to overrule
an established body of state law.
I would also note that these state supreme court decisions
are no less binding on federal courts than on lower state
courts. The reason is because, in ``diversity'' cases,
federal courts look to the choice-of-law rules of the state
in which they sit to decide what substantive state law should
apply. Thus, a federal court confronting a nationwide class
action would currently defer to the decision of the highest
appellate court of that state declining to allow that state's
law (or any other single state's law) to govern the claims of
consumers residing throughout the nation. But the ``choice-
of-law''' amendment would change that. As its proponents
concede, the ``amendment would allow a federal court to
choose not to follow the choice-of-law rule of the state in
which the court is located.'' That is another serious
distortion of federalism principles.
The amendment could hurt consumers from states with strong
consumer protection laws. Another problem with the proposal
is that, in their effort to make sure that a single state's
law may be applied even in a nationwide class action, critics
of S. 5 have not thought through the consequences of what
would happen if federal courts actually did apply a single
state's law. To pose the question bluntly: which single
state's law? If the choice-of-law amendment were adopted,
that question--the ``which state'' question--likely would be
the source of considerable mischief, often to the detriment
of consumers.
For example, assume that someone brings a nationwide class
action alleging that the defendant company participated in
fraudulent sales behavior. State consumer protection statutes
vary widely, but the court may decide to apply Alabama law to
all claims. That would be bad news for the class members
living in California and other states with strong consumer
protection statutes, because the Alabama statute prohibits
the assertions of consumer protection claims on a class
basis. Thus, the claims of all class members presumably would
be subject to dismissal. In short, consumers with valid
claims under their home state laws, adopted by their own
state legislatures and courts to protect their interests, may
have their claims obliterated (or, at least, rendered much
less beneficial).
Even its proponents appear to acknowledge this problem.
Professor Arthur Miller, for example, has suggested that one
state whose law would ``often'' be applied in a nationwide
class action would be ``the state in which the defendant's
headquarters is located.'' See Letter of Prof. Arthur Miller
to Sen. Bingaman, June 17, 2004, at 3.
The amendment, in short, is a radical attempt to avoid the
fact that in some areas Congress has chosen to leave the
decision of what substantive law should govern conduct to the
legislative process of each state. By having judges dismiss
the laws of all states but one, the Public Citizen amendment
violates fundamental principles of federalism.
The amendment is based on the false premise that federal
courts never certify multi-state classes based on state law.
It is worth noting that neither federal nor state courts have
any hard-and-fast rule against the certification of
nationwide or multi-state classes asserting state law claims.
To the contrary, federal ``[c]ourts have expressed a
willingness to certify nationwide classes on the ground that
relatively minor differences in state law could be overcome
at trial by grouping similar state laws together and applying
them as a unit.'' In re Prudential Ins. Co. of America Sales
Practices Litig., 148 F.3d 283, 315 (3d Cir. 1998). Indeed,
the two leading proponents of the Public Citizen amendment--
Prof. Arthur Miller and Prof. Samuel Isaacharoff--have
themselves succeeded in persuading federal courts to certify
such nationwide class actions.
The main reason why courts, state and federal, often refuse
to certify nationwide classes is because attorneys too often
propose classes that overreach--classes that encompass too
many people with too many disparate facts asserted under too
many different laws. See, e.g., Chin v. Chrysler Corp., 182
F.R.D. 448 (D.N.J. 1998) (``Plaintiffs could have reduced or
simplified the case . . . by the creation of a smaller and
more clearly defined proposed class. Instead, Plaintiffs have
asked this Court to certify the largest class possible . . .
on the basis of mere promises that a manageable litigation
plan can be designed . . . for five causes of action under
the laws of 52 jurisdictions''). That, I submit, is a
necessary consequence of respect for federalism. There is no
reason to exalt the need for nationwide class actions in
every case above the basic principles of federalism.
The amendment, which would ignore the manageability
problems engendered by varying state laws, would violate due
process rights. If a federal court decided that a single
state's law cannot be applied over all claims in a nationwide
class action without violating the Constitution, the choice-
of-law amendment would allow a federal court to apply several
states' laws to the claims at issue. But in that
circumstance, the proposed amendment would then forbid the
court from denying class certification (even ``in part'') on
the grounds that applying those several states' laws would
render the case one devoid of common legal issues that could
not be tried fairly on a class basis.
The amendment would distort traditional and prevailing
class action practice in a way that raises serious due
process concerns. The basic reason is that it would instruct
federal judges that, even if they truly believe that the fact
that several (or even all 50) states' laws must be applied in
a particular case means that the case cannot possibly be
fairly adjudicated as a class action, they must simply ignore
that true belief and grant class certification anyway.
In deciding whether to certify a class, for example, a
federal court must inquire into (a) whether ``common
questions of law'' will ``predominate'' and (b) whether the
class action is ``superior'' to other methods, both of which
require consideration of any ``difficulties likely to be
encountered in the management of the class action.'' Fed. R.
Civ. P. 23(b)(3). What that means is that a party objecting
to the proposed class action can argue that various state's
laws must be applied in the case; that those state laws
differ in important ways (indeed, they may even conflict);
and that those variations (or conflicts) will make it
impossible to adjudicate the class action fairly on a class
basis--and will make it impossible for one jury to decide
those different or conflicting laws in one trial. In the
parlance of Rule 23, the party objecting to the proposed
class may argue that the differing state laws are reasons why
common questions of law do not ``predominate'' and that the
multi-state or nationwide class action is not ``superior'' to
other methods of resolving the case (including a statewide
class action).
Again, the Avery case makes for a good example. If the
court had (correctly, in my view) concluded that many states'
laws would need to be applied to resolve that nationwide
class action, that determination would in all likelihood have
also led the court to conclude that it would not have been
fair to try before one jury the legality of the use of non-
OEM parts nationwide. After all, how could a single jury
hearing that the practice is illegal in Illinois, legally
required in other states, permitted in other states, and not
addressed at all by still other states, render a fair and
coherent verdict? Especially when one keeps in mind that some
class actions involve dozens of claims, nationwide class
actions would in some cases require literally hundreds of
different decisions for a single jury to make.
These Rule 23 requirements have due process underpinnings.
Class actions serve an important public function: they allow
numerous, similarly situated individuals whose relatively
small claims might otherwise be shut out of the legal system
to aggregate their claims and obtain collective relief. At
the same time, the purpose of the class action device is to
allow the aggregation of only some--not all--lawsuits.
Indeed, as the U.S. Supreme Court has noted, there is a
strong presumption in our legal system that claims will be
litigated individually; class actions are an exception to
that general rule. Thus, lawsuits seeking damages in which
common questions of questions do not ``predominate,'' and in
which the class action is not ``superior'' method of
resolving the dispute, are denied class treatment for the
very reason that the court concludes that it would not be
fair to resolve the whole case in one trial. In other words,
a class cannot be certified at the expense of ``procedural
fairness.'' Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613
(1997); see also Malcolm v. Nat'l Gypsum Co., 995 F.2d 346,
350 (2d Cir. 1993) (holding that the benefits of aggregated
litigation ``can never be purchased at the cost of
fairness''). This principle is as important for protecting
the plaintiffs (that is, the unnamed class members) as it is
for protecting defendants. See id.; see also Hansberry v.
Lee, 311 U.S. 32, 40-42 (1940).
The proposed amendment violates this principle by elevating
the class certification decision over ``procedural
fairness.'' Whereas the fact that different state laws would
need to be applied to a multi-state or nationwide class
action is unquestionably a valid factor to consider in
deciding whether a class should be certified, the proposed
amendment would dictate to federal judges that they cannot
consider that factor at all. For example, under the facts of
the Avery case, the

[[Page S1174]]

choice-of-law amendments would require the federal court to
ignore the central fact that the 50 states have made
fundamentally conflicting policy choices over the legality of
the conduct at issue. The court would be required not to
consider the obvious fact that it might be procedurally
unfair for the same jury to decide whether the use of non-OEM
parts is legal in all of the different states.
I am not suggesting that, in every multi-state class
action, the laws of every state must be applied as a matter
of due process. That depends upon the particular case, and
upon the connection that any one state might have to a
proposed class action. Rather, what I am suggesting is that
in cases in which federal courts themselves decide that due
process requires the application of numerous states' laws, it
is a serious due process problem to tell those same federal
courts that they may not deny class certification on same
basis--to tell those federal courts that they must certify a
class despite their firmly held relief that the differing
state laws will make use of the class action device
fundamentally unfair.
For all of the foregoing reasons, I find the proposed
choice-of-law amendment to be constitutionally suspect (both
from a federalism and due process standpoint) and wrongheaded
as a public policy matter. It should be rejected.
Sincerely,
Walter E. Dellinger.

The PRESIDING OFFICER. The majority leader is recognized.
Mr. FRIST. Mr. President, for the information of our colleagues, we
are making good progress on the class action bill. I appreciate
everyone's participation in coming to the floor and offering and
talking about their amendments. I want to keep the pace going.
The Democratic leader and I have been in discussions over the day. We
want to complete this bill at the earliest possible time this week.
I will shortly be asking unanimous consent that the vote on the
Kennedy amendment be this afternoon at a time which I will state. After
that we will be proceeding to the Feinstein amendment. We will at that
time divide the time accordingly.
At this point, I ask unanimous consent that the vote occur in
relation to the Kennedy amendment No. 2 at 4 p.m. today; provided
further that following that vote the Senate proceed immediately to a
vote in relation to the Feinstein amendment No. 4; provided further
that the debate until 4 be equally divided in the usual way, and that
no amendments be in order to either amendment prior to the votes.
Finally, I ask unanimous consent that there be 2 minutes for debate
equally divided following the first vote. I further ask unanimous
consent that 15 minutes of minority time be reserved for Senator
Kennedy.
Mr. REID. Mr. President, I have no objection to the unanimous consent
request.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. FRIST. Mr. President, while the Democratic leader is here, I
mentioned as he was returning to the floor that we are all working very
hard to complete the bill on class action. I understand there are
several other amendments to be considered. But I reflected our
commitment to stay on the bill and complete it at the soonest time
possible.
Mr. REID. It is my understanding that the distinguished Republican
leader has indicated we will finish this bill this week. Is that right?
Mr. FRIST. Mr. President, that is right.
Mr. President, again I encourage our colleagues to focus on the bill
before us today and tonight and tomorrow, and we will be staying on the
bill until we complete the bill. I appreciate everybody's
consideration.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. SESSIONS. Mr. President, I ask unanimous consent that the order
for the quorum call be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The PRESIDING OFFICER. The Senator from Alabama is recognized.
Mr. SESSIONS. Mr. President, Senator Feinstein has offered an
amendment to S. 5, the Class Action Fairness Act of 2005, to address
the opponents' claim that Federal courts routinely deny certification
of multistate or nationwide classes that involve different State laws.
Under this amendment, that would change the underlying bill we are
considering here. Federal courts would be required to certify class
actions, even if the claims were brought under State law.
The amendment further provides that courts faced with nationwide
classes involving different State laws should either create subclasses
to account for variations in State law or, if such subclasses are
impractical, to attempt to apply the proper State law to the class
members claims only to the extent doing so is practical.
The proposal would toss State laws and procedural fairness out of the
window for the sake of allowing a nationwide class action. It would
reverse nearly 70 years of established Supreme Court case law that
requires Federal courts to apply the proper State law when they hear
claims between citizens of different States.
It would reverse numerous decisions about State supreme courts
rejecting the application of one State's law to class action claims
that arise in 50 States, and it would seriously undermine the ability
of plaintiffs and defendants alike to have a fair trial.
Most importantly, it would have the perverse effect of perpetuating
the very magnet court abuses that the legislation seeks to end.
Here is why the latest choice-of-law amendment should be rejected.
First, the premise of the amendment is false. Federal courts do not
have a hard and fast rule against certifying multistate class actions.
Rather, both Federal and State courts--except for certain magnet
jurisdictions--conduct a careful inquiry before certifying a class to
ensure that common legal issues predominate, as required by the Federal
rules governing class actions.
The reason for this requirement is self-evident. The whole point of a
class action is to resolve a large number of similar claims at the same
time. If the differences among the class members' legal claims are too
great, a class trial will not be fair or practical.
In some circumstances, Federal courts have found that the law of
different States was sufficiently similar that a class action could go
forward. In other cases, they have found the differences were too great
to have a fair class action trial.
If the laws under which the liability is founded are significantly
different, you can't try them in the same trial. If they are not that
much different, you can make it work.
The proposed amendment would take away the discretion of Federal
judges to make these important decisions as they always have.
Proponents of the amendment conveniently ignore the fact that Federal
law on this issue is quite consistent with the approach taken by
numerous State supreme courts, which have refused to certify cases
where the differences in State law would make it impossible to have a
fair or manageable trial. In fact, the proposed amendment would reverse
decisions by the Supreme Court of California, Texas, New York, and
numerous other States that have rejected nationwide classes in such
circumstances as these.

Second, Federal courts already use subclassing where appropriate.
Subclassing basically means dividing a class into a couple of smaller
classes where claims may be more similar to one another. In rule 23 of
the Federal Rules of Civil Procedure, the nearly 40-year rule governing
class actions explicitly gives courts the option of using subclasses to
account for variations in the class as long as the trial would still be
manageable and fair.
For example, if a case involved State laws that can be easily divided
into three or four groups, subclassing would be appropriate if the
trial would otherwise be manageable. At the same time, if subclassing
were used in every situation that involved different State laws, in
some cases there would be so many subclasses it would be impossible to
have a manageable or fair trial.
Under the current law, Federal judges have the discretion to decide
when subclassing makes sense. That approach is working. Why change it?
If it ``ain't'' broke, don't fix it. We have not had serious problems,
and it is better to allow the discretion with the judge than for us to
try to anticipate and put in hard law requirements involving
complexities in the future we cannot anticipate fully today.
Third, the amendment would hurt consumers by subverting State laws.

[[Page S1175]]

The proposed amendment suggests that if subclassing will not work, the
court should simply respect State laws ``to the extent practicable.''
What does that mean? How does the court partially carry out State law?
Judges are responsible for carrying out the law, not for carrying out
the law to the extent practicable. It would be a dangerous empowerment
and an erosion of our classical commitment to following law.
By suggesting that Federal courts should ignore variations in State
laws when respecting State law is impractical, this provision would
perpetuate the very problem the class action bill is trying to fix. For
example, in the notorious Avery v. State Farm case, a county judge in
Illinois applied Illinois law to claims that arose throughout the
country, ruling that insurers could not use aftermarket parts in making
auto accident repairs even though several States had passed laws
encouraging, even requiring the use of these more economic parts to
keep down the cost of insurance premiums. The approach taken by the
Avery judge and condoned by the proposed amendment actually hurts
consumers by denying them the protection of their State's laws.
Some State legislatures have adopted particularly strong laws in
certain areas because their citizens have expressed strong feelings
about these issues; for example, privacy or consumer fraud. Under this
amendment, the citizens of such States would not be entitled to the
protection of their State's laws in nationwide class actions. Instead,
their claims would be subject to some compromise law created by the
judge in order to carry out a class action.
These are some thoughts I share about this legislation. We do have a
need for class action reform. The legislation before the Senate is
sound. We know if we stay firm, if we do not willy-nilly amend this
bill, if we keep it clean and send it forward to the House, they will
approve it, we will make this law, and for once pass a serious tort
reform legislation that will improve justice in America and reduce
costs.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. CARPER. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CARPER. Mr. President, I would like to take a couple of minutes
today to speak to the amendment being offered by Senators Feinstein and
Bingaman. I don't think we will find on either side of the aisle a
Democrat or Republican more thoughtful than either of them, or more
fair-minded. Senator Feinstein, in particular, has been heroic in her
efforts to try to bring about consensus on class action so we end up
with legislation to make sure little people who are harmed by big
companies are able to bind together and be made whole; to ensure that
the companies that are accused know if they step out of line there is a
price to pay for that; legislation that will also make sure that the
defendant companies, large or small, have the opportunity to have a
fair trial for whatever they are accused of in the litigation; and our
last goal is to make sure the Federal judiciary is not overwhelmed with
litigation that could be in State courts, ought to be in State courts,
and is needlessly moved to Federal courts.
Those are the objectives we all share, Democrats and Republicans,
whether we like or do not like the bill. I am in support of the
legislation.
Most consumer laws that end up in courts are laws that are adopted by
our States. There are some areas where the Federal Government has laws
in place to protect the consumers, but the lion's share of the consumer
protection laws are written by the various States.
The effort by Senators Feinstein and Bingaman is laudable; that is,
to make sure that when State laws have been violated, particularly when
State laws have been violated in a number of States, that whoever has
violated those laws is going to be held accountable. The question is,
If you have a class action case that is brought forward based on the
laws of 10, 20, or 30 States or more, under whose State law do we argue
in court the class action litigation? Is it in a State that has fairly
weak consumer protection laws or a State that has very strong consumer
protection laws?
I am not a lawyer by training, and I come at this as a lay person
simply trying to figure out what is the right and fair thing to do. As
I understand class action litigation, I will use the example of where
we have maybe 21 States that have been bound together in a class action
filed in a particular State court, one of those 21 States, and in
particular, a State where the litigation is brought, the effort might
be to apply that State's laws to all the other States that are part of
this. Senator Sessions talked about a situation in a case involving
class action with State Farm, where the suit alleged that consumers
were being harmed because in the car repair business, when replacement
parts were used, some of the States allowed the use of non-original
equipment replacement crash parts, sometimes referred to as generic
parts. In this case, Avery v. State Farm, an Illinois judge applied the
Illinois Consumer Fraud Act to a 48-State class, even though there were
significant differences in the States' consumer protection laws and
vast differences in the laws of the different states on the use of
these types of parts. Most States explicitly authorize their use and a
few States even require their use to reduce costs for consumers.

As I have looked into this matter, I have learned when there is an
effort to move a class action litigation on consumer issues from a
State court to a Federal court, the Federal judge has a number of
decisions to make as to whether they want to receive it and hear it at
the Federal level.
One, they can say, yes, on the basis of the law that is in question
here, and the facts, this is one that makes sense to be heard at the
Federal level and to go forward.
The Federal judge can say--again, using the example of 21 States
because the math works easily--let's divide those 21 States into three
subgroups, and each of those 7 States have laws that are fairly similar
but distinct and apart from the other two subgroups. So a Federal judge
could say, we are going to go forward with this class action
litigation. We will do it as one case, but we will have three
subcategories of subgroups.
A third alternative that is available to a Federal judge would be to
say, we are not going to have one case; we will have maybe three cases.
In those instances where the laws of the States are pretty similar, we
will group those seven, and the same would be true for this seven and
that seven. And we will hear three separate cases, not one.
If none of that works, the Federal judge is always free to say this
is a State matter. The laws and the facts are in such disarray that it
is difficult to try them as one case.
Some States have very strong consumer laws, some not. There is a
whole big range in between where the laws and the facts are just too
disparate and different, and the judge can simply remand it back to the
States.
If the Federal judge declines to hear that consumer class action,
then it can be tried in State court. Whoever the plaintiffs are, in
those instances, will have their day in court. If you happen to be from
California, the latter course is not a big deal because you have so
many people, 30 million people, and it is not as difficult to put
together a meaningful class and to be able to attract an attorney to
represent your case. If you happen to be from a smaller State, with
fewer people, then it can be more of a challenge to put together a
large enough plaintiff class in that State to pay for an attorney to
represent the interests of consumers in that State. I acknowledge that.
Having said that, my overriding concern with this legislation is
this. I mentioned the four principles earlier, but my overriding
concern with this legislation is that we not begin to pick apart this
carefully balanced compromise on which we have worked. I have been here
4 years. We have worked on it for almost those 4 years I have been in
this Senate. I know people worked on this 3 years before that. We have
come so far from where this legislation began in 1997.
This is not tort reform, as a lot of people like to think of it. This
is, as

[[Page S1176]]

others have said today, court reform. Our goal is to, again, make sure
if people get harmed, they have an opportunity to be made whole, to
band together into similar groups to make sure the accused and the
defendants in the case have a chance to be fairly defended in a
courtroom. It is a fair shot.
My fear is, to the extent this amendment would be adopted, it invites
amendments of others who may not like this bipartisan compromise
because it does not go far enough.
Earlier this month, in the House of Representatives, their bill,
which passed by a fairly wide margin in the last Congress, was
reintroduced. There are some people in the other Chamber, as well as
some in this body, who would like nothing better than to be able to
change this bipartisan compromise and move it, frankly, a lot closer to
where the House bill is.
Eventually, my friends, we are going to pass a class action bill this
year. My own view is it is not going to get any better or more balanced
or fairer to plaintiffs and defendants than the compromise we have
worked out here this year. As a result, I will oppose, albeit with some
reluctance, the amendment offered by Senators Feinstein and Bingaman. I
know they have put a lot of time and energy into this amendment.
Frankly, my staff and I have as well, trying to find a way to
accommodate the concerns they have raised. In the end, I do not believe
we can, and I must reluctantly oppose the amendment.
I yield back my time.
The PRESIDING OFFICER (Mr. Martinez). The Senator from Vermont.

Attacking The Democratic Leader

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

Those who came up with the bright idea of attacking Harry Reid, a man
who will get reelected his next term, I suspect by even a greater
margin than the last landslide he had, ought to step back. They might
raise money this way. They might stir up some of the true believers
this way. They do nothing for the country. They do nothing for the
Nation. All they do is deepen the divides instead of healing them. It
would be nice if we could have leaders

[[Page S1177]]

who would try to be uniters, not dividers. We haven't had that for a
few years. I wish we could.
I digress somewhat. I see the distinguished Chair, a man I knew
before he came here, admired in his work as a member of the Cabinet. We
are benefited by having him here. I hope that he might be one of those
who will come in not with preconceptions but his enormous talent of
bringing people together and work with us. I say this somewhat unfairly
because under the rules he cannot respond, of course. I hope I have not
damaged him irreparably with the Republican Party in Florida, but he
has known me long enough to know I mean what I am saying.
This Bingaman-Feinstein amendment is a commonsense amendment. It
seeks to rectify one of most significant problems of the class action
legislation under consideration by the Senate. As we all know, this
class action bill is going to sweep most class actions into Federal
court. But then many of the Federal courts refuse to certify multistate
class actions because the court would be required to apply the laws of
different jurisdictions to different plaintiffs, even if the laws of
those jurisdictions are quite similar.
Without this balanced amendment, members of important class actions
that involve multiple-State laws may have no place to receive justice.
In other words, they get removed from the State court to Federal court,
but then the Federal court says: Well, because the State laws may be
different, we can't do anything. But you can't go back to State court
because you are removed here. It is probably as classical a legal
Catch-22 as one could see.
According to 14 of our State attorneys general:

[I]n theory, injured plaintiffs in each state could bring a
separate class action lawsuit in federal court, but that
defeats one of the main purposes of class actions, which is
to conserve judicial sources. Moreover, while the population
of some states may be large enough to warrant a separate
class action involving only residents of those states, it is
very unlikely that similar lawsuits would be brought on
behalf of residents of many smaller states.

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

Sad News for Vermont

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

[[Page S1178]]

originate from the State courts. As we have noted in the Judiciary
Committee report in the 108th Congress, the Class Action Fairness Act
is a ``modest, balanced bill to address some of the most egregious
problems in class action practice.'' It is not, however ``intended to
be a panacea that will correct all class action abuses.''
This bill is the result of intense bipartisan negotiations and is our
best effort to address a problem that is pervading our State court
system. Abuse of the class action system has reached a critical point,
and it is time that we as a legislative body address the problem. The
public is increasingly aware of the system's unfairness. News programs,
such as ABC's ``20/20,'' have covered the rise in class action
jurisdictions in certain magnet jurisdictions, magnet meaning
jurisdictions where these extortionate suits are brought because they
can get a tremendous advantage regardless of whether they are right or
wrong.
Scores of editorials have called for actions in newspapers all across
this country. Abuse of the class action system has even become the
inspiration for popular literature. In 2003, the author, John Grisham,
released a book entitled ``The King of Torts.'' Grisham's novel takes
its reader into the world of the mass tort/class action lawyer where
clients are treated like chattel and bargaining chips. The value of a
potential action is not measured by the merit of the claim but on the
number of class members that can be rounded up. The end game is not the
pursuit of justice for the class members and clients, but in the
pursuit of a hefty attorney's fee.
Although Grisham's book is intended as fiction, it is hard to
distinguish it from the facts of our broken class action system.
Let me read a few passages:

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

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

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

Worthwhile, indeed. Worthwhile for the lawyers.
A small handful of wealthy lawyers is profiting from the class action
system. According to an article appearing in the 2001-2002 edition of
the Harvard Journal of Law and Public Policy five firms accounted for
nearly half of the class action lawsuits filed in Madison County, IL,
and Jefferson County, TX.
Of the lawsuits filed in these districts, many allege the same causes
of action, represent the same class of plaintiffs that are brought
against many of the same parties within an industry.
While these lawyers might have something to gain, the same cannot
clearly be said with respect to plaintiffs, consumers, and those
employed by defendant companies, who lose their jobs as a result of
these types of lawsuits.
It is evident that a few key courts have been singled out by a small
group of legal players in the class action world. This point is
reinforced by a 2003 study conducted by the Institute for Civil
Justice/RAND and funded jointly by the plaintiffs and defense bar to
determine who gets the money in class action settlements. The study
found that in State court consumer class settlements, it is the class
counsel and not their clients who often walk away with a
disproportionate share of the settlement.
What do their clients get? Well, quite simply, not enough. I believe
that the many hard-working and honest class action lawyers should be
compensated for their hard work and efforts. The overwhelming number of
lawyers are honorable people. They are honest. They are hard working.
Only a few are causing the lion's share of trouble. The majority of the
honest ones are not searching for jackpot jurisdictions where the
judges and the lawyers are in cahoots and somehow always find against
the defendants.

I also believe such compensation should be reconcilable with a fair
recovery for the client. I have supported large recovery for trial
lawyers when I thought it was justified. Quite honestly, it is simply
not right when our judicial system allows lawyers to walk away with
millions of dollars while in some cases their clients walk away with
nothing more than a coupon good toward a future purchase of the very
product that was the subject matter of the class action to begin with.
I do not know about my colleagues, but when I have a problem with a
product, sometimes the last thing I want to do is buy that product or
have anything to do with the company or firm that makes that particular
product. Frankly, keep your coupon and show me the money. If the
coupons were so good, one would expect the lawyers would request that
they be paid in coupons, not money.
In real life, we are too often reminded of the legendary fictional
case Jarndyce v. Jarndyce of Charles Dickens' ``Bleak House'' in which
legal fees ate up the whole estate so that the intended beneficiaries
could not benefit.
Consider the case of Degradi v. KB Holdings, Inc., in Cook County,
IL. The suit alleged that KB Toys, one of the Nation's largest toy
retailers, engaged in deceptive pricing practices in some of their
products. Specifically, the suit alleged that the prices of certain
products were marked to appear reduced when in fact the apparently
reduced price was the market price.
In the settlement with KB Toys over these allegedly deceptive pricing
practices, the toy store paid attorney's fees and costs of $1 million
and not one dime of cash to class members. As part of the settlement,
the store held an unadvertised 30-percent-off sale on selected
products. That is laughable. Under the terms of the settlement
agreement, the toy retailer agreed to offer a 30-percent discount on
selected products between October 8 and October 14, 2003. In other
words, they held a week-long sale that was not even publicly
advertised. By the time most of the class members learned about the
sale, their opportunity to recover under the terms of the settlement
had passed.
In fact, an independent analyst stated that KB Toys would likely
benefit from the settlement because they were driving traffic. What did
the class counsel get? They got $1 million. Good work if one can get
it, but not necessarily a good outcome for their clients.
Then there was the 1998 class action filed in Fulton County, GA,
alleging

[[Page S1179]]

that Coca-Cola improperly added sweeteners to apple juice. In this
Coca-Cola case, in the settlement of a class action lawsuit alleging
that Coca-Cola improperly added sweeteners to apple juice, it was the
lawyers who got a sweet deal--$1.5 million in fees and costs.
Unfortunately, class members came up empty again, receiving 50-cent
coupons but no cash. So each of them got 50-cent coupons while the
lawyers walked away with $1.5 million in attorney's fees.
As my colleagues know, I am a lawyer. In my practice, I represented
both plaintiffs and defendants. I have watched some of the greatest
lawyers appear in court when I started to practice law in Pittsburgh,
PA, such as James McArdle. When Jimmy McArdle tried a case, the
courtroom was always filled with young and old lawyers who wanted to
watch a master at work. He brought one of the first cases against the
tobacco industry.
He lost that one, but it was the case that paved the way to clean up
the tobacco industry in this country.
I supported many of the tobacco class action lawyers because I
thought what they did was in the best interests of their clients and
the American public. But this current class action system is out of
whack and needs to be fixed. I understand many of these classes are
comprised of hundreds if not thousands of members, and I do not
begrudge class action attorneys a reasonable fee award. But when the
class member gets a 50-cent coupon and the lawyers get $1.5 million
because the company has to settle rather than take a chance of going on
and getting killed in a forum-shopped court, then you can see why I am
upset about this.
There is also the case of Scott v. Blockbuster, Inc. Blockbuster
Video was named as a defendant in 23 class action lawsuits brought by
consumers, alleging that they were charged excessive late movie return
fees. In 2001, Blockbuster agreed to enter into a settlement agreement.
Under the terms of the settlement, which was approved by a Jefferson
County, TX, State court, the class attorneys received approximately
$9.25 million in attorney's fees while the class members received--you
guessed it--coupons. Each class member got a $1-off, or buy one get one
free coupon. Experts have predicted only 20 percent of the class
members will even redeem these coupons.
I am pleased the bill before us at least ties legal fees to the
actual amount of redeemed coupons. If only 1,000 people redeem those $1
coupons, the attorneys would be entitled to a percentage of that $1,000
but not $9.25 million.
I have described a few of the many class action settlements streaming
out of our State court system. Many State courts appear at times to be
nothing more than rubberstamps for the lawyers' proposed settlement
agreements. This is not civil justice.
In that Jefferson County case, the company, Blockbuster, had to
settle. They could not risk going to trial in that particular
jurisdiction because of the outrageous verdicts that are granted by
jurors who appear to be compromised.
This is akin to legalized extortion. Too often it appears that the
chief interests served by these settlements are those of the class
counsel and not the class members. This bill does not prevent class
action suits, but it does stop some of these excesses.
The Class Action Fairness Act would alleviate many of the problems
present in the current class action system by allowing truly national
class actions to be filed in or removed to Federal court. Some of our
colleagues have indicated the consumer will be lost here because they
will not be able to bring these cases. Give me a break. Of course they
will be able to bring these cases. But they have to be brought in a
legitimate way, in Federal court where it is much less likely that they
will be hammered by political judges who are in cahoots with the
plaintiffs' lawyers in that jurisdiction. Federal courts as a general
rule will adequately dispense justice in these matters. So the suits
can be brought. This will level the playing field that has become
tilted in many jurisdictions in the last few years.
It also reforms the way Federal courts would approve proposed
settlements with basic requirements such as a hearing and a finding by
the court that the settlement is fair, reasonable, and adequate.
This is the second time the Class Action Fairness Act has come to the
Senate floor, but we have been working on it for 6 years. When we
failed to achieve cloture by one vote in the preceding Congress--by one
vote we failed to achieve cloture--we sat down with several Democratic
Senators to reach bipartisan agreement on a bill. We know it is
difficult for them to work on this bill because the largest hard money
contributor to Democrats in the Senate happens to be the American Trial
Lawyers Association. Some people believe Democrats are owned by them. I
do not believe that. I know there are many wonderful lawyers in the
American Trial Lawyers Association. Most are decent, honorable people,
and I know many of them. But there are some who are unscrupulous, and
they are the ones who have been fighting this reform. And they have the
means to do so since they have become billionaires as a result of these
coupon cases won in jackpot jurisdictions.

The bill we are considering today is the result of all of these
negotiations. S. 5, the Class Action Fairness Act of 2005, presents
this Congress with an opportunity to correct some of the dubious
practices currently found in the class action system, and to protect
the average consumer.
The first response I have is that this amendment is based on a faulty
premise. Federal courts do not have a hard and fast rule against
certifying multistate class actions. Rather, both Federal and State
courts conduct a fair, full inquiry before certifying a class, to
ensure that common legal issues predominate, as required by the Federal
rule governing class actions. Put simply, this Bingaman-Feinstein
amendment, as amended by Senator Feinstein, would toss State laws and
procedural fairness out the window for the sake of allowing nationwide
class actions. It would reverse nearly 70 years of established Supreme
Court case law that requires Federal courts to apply the proper State
laws when they hear claims between citizens of different States.
It would reverse numerous decisions by State supreme courts rejecting
the application of one State's laws to class action claims that arise
in 50 States, and it would seriously undermine the ability of
plaintiffs and defendants alike to have a fair trial.
Most importantly, it would have the perverse effect of perpetuating
the very magnet court abuses that this legislation seeks to end. The
reason for this requirement is self-evident. The whole point of a class
action is to resolve a large number of similar claims at the same time.
If the differences among class members' legal claims are too great, a
class trial will not be fair or practical. In some circumstances,
Federal courts have found that the law of different States was
sufficiently similar that a class could go forward. In other cases,
they have found that the differences were too great to have a fair
class trial.
The proposed amendment would take away the discretion of Federal
judges to make these important decisions. It is as though we do not
trust our Federal judges. In this case, we can trust them.
Proponents of the amendment conveniently ignore the fact that Federal
law in this issue is quite consistent with the approach taken by
numerous State supreme courts which have refused to certify cases where
the differences in State law would make it impossible to have a fair
and manageable trial.
In fact, the proposed amendment would reverse decisions by the
Supreme Courts of California, Texas, New York, and numerous other
States that have rejected nationwide class actions under such
circumstances.
Second of all, Federal courts already use subclassing where
appropriate. Subclassing basically means dividing a class into a couple
of smaller classes whose claims are similar. Rule 23 of the Federal
Rules of Civil Procedure, the nearly 40-year-old rule governing class
actions, explicitly gives courts the option to use subclasses to
account for variations in a class as long as the class would still be
manageable and fair--for example, if a case involves State law that can
easily be divided into three or four groups, subclassing would be
appropriate if the trial would otherwise be manageable. At the same
time, if subclassing were used in every

[[Page S1180]]

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

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

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

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

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

amendment no. 2

Mr. KENNEDY. Mr. President, I urge all of my colleagues to support
this amendment to exclude civil rights and wage and hour cases from the
bill's provisions on removal of cases to Federal court. Working
Americans and victims of discrimination seeking justice under State
laws don't deserve to have the doors of justice slammed on such claims,
but that is exactly what this bill will do.
All of us know that families across the country are struggling to
make ends meet. We cannot ignore that they are too often hurt by the
denial of a fair wage, or by unfair discrimination. We cannot tell the
victims of these practices that Congress does not care about this
enormous problem.
This amendment is needed, because the harm suffered by plaintiffs in
State civil rights and labor cases is real, devastating, and personal--
not the sort of harm that results in a few dollars of damages or a
coupon settlement.
We have been told that this bill was designed to correct the problem
of class actions in which plaintiffs get only a few dollars for minor
claims, while elite attorneys earn million-dollar fees. We have yet to
hear one example of that happening in a civil rights case or a labor
case. We certainly haven't heard anything to suggest there is a major
problem in those areas.
Some have said it is too late to raise these concerns about civil
rights and workers' rights. We have been told that

[[Page S1181]]

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

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

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

[[Page S1182]]

particular issue involved. That is true for genetic discrimination. It
is true for discrimination based on marital status, parental status,
and citizenship status. Those types of discrimination are prohibited
under many State laws, but not yet under Federal law.
If we don't let State courts develop these emerging protections under
State laws, we are stacking the deck against workers and victims of
discrimination. That is because Federal courts have said, time and time
and time again, that they will interpret State laws narrowly.
The Court of Appeals for the Seventh Circuit, faced with opposing
interpretations of State law, has ruled that it will ``choose the
narrower interpretation that restricts liability.'' The First and Third
Circuits have made similar rulings. There is no question that Federal
courts are more likely than State courts to rule against plaintiffs in
interpreting State law. Federal judges have said so themselves. Moving
these cases into Federal courts will put a Federal thumb on the scale
in favor of companies that violate the law.
We can't let that happen. I urge all of my colleagues on both sides
of the aisle, and on both sides of the class action debate, to support
this amendment. This legislation is supposed to reduce class action
abuses, not add new abuses.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. SESSIONS. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SESSIONS. Mr. President, I rise in opposition to the Kennedy
amendment that would exclude labor class actions from the scope of S.
5. At the outset, I have serious problems with any of the carve-out
amendments to S. 5. These amendments are part of an effort by opponents
of the bill to mischaracterize S. 5 as anticonsumer and to make it
appear that some of these carve-outs and exceptions are necessary to
prevent injustice. But, Mr. President, S. 5 is a good deal across the
board. It is going to improve class actions for consumers, for workers,
for our economy, and for businesses. Why should American workers be
denied its benefits? Why would people who have a labor dispute not want
to have that dispute settled in a Federal court under these superior
procedures?
S. 5 will keep most labor cases in State court, anyway. The act
includes two exceptions--the home State exception, and the local
controversy exception--that are intended to keep most local class
actions in State court. That means if local residents sue a local
employer, the case will probably stay in State court, anyway.
Second, any labor class actions that will be removable to Federal
court under the bill would still be governed by State law. This is not
unusual. It is done all the time in Federal court. Nothing in the act
changes substantive law in any way. It does not strip any worker of any
right to seek redress for a labor violation. It creates no new defense
for corporate defendants in time-shaving cases or otherwise. In short,
workers who bring State labor claims after the Act passes--and I expect
that it will--will have the exact same rights they have now.
Third, Federal courts have frequently certified overtime class
actions. Some critics have said they are worried about Federal courts
refusing to certify employee claims, but that is not true.
A recent study by the Federal Judicial Center found that class
actions generally ``are almost equally likely to be certified'' in
State and Federal court.

Certification, of course, is when a Federal court agrees that a class
action should be tried as a class action. A lawyer can't go in and
declare, I am representing a whole class of people, without some
finding that there is a class that has been similarly wronged, or there
is a similar litigation issue at stake.
A review of these decisions in Federal court found numerous examples
of Federal judges certifying wage-labor class actions. For example, a
Federal court in New York recently certified a State labor law class
action on behalf of employees of a chain of natural food stores, many
of whom were immigrants, who claimed they were not properly compensated
for their overtime claims. The Federal judge accepted that case.
A Federal court in New York also certified a class of delivery
persons and dispatchers at a drugstore chain who alleged they were not
paid the minimum wage or overtime in violation of New York law. That
was already accepted under current law, and it certainly would not
change under this.
We made some efforts to improve the overtime laws in the Federal
rules with regard to it. I have personally, as a private practitioner,
represented two clients in wage cases involving overtime. The reason
those cases were litigated is because the laws are not clear about what
overtime is and what it is not. Nor is the law clear as to who is
entitled to overtime and who is not. That needs to be clarified, and I
salute the President for his attempt to do so. That is a parenthetical
comment.
In a multidistrict litigation proceeding in the Federal court in
Oregon, a Federal court certified seven State law classes brought by
claims representatives against an insurance company, alleging they were
improperly classified as exempt. In a case in Federal court in
Illinois, the judge certified a class of employees who said their
employer violated State law by failing to pay them for time spent
loading trucks and driving to sites.
So the judge certified a class of employees who were making a claim
in Federal court for violation of State labor laws. Judges will try
that case based on whether it violated State law.
In a case in Washington State, the district court certified a class
of meat processing plant employees who accused their employer of
failing to pay them for work at the beginning and end of each day when
they were on meal breaks. This is a constant source of litigation in
these types of cases.
I would suggest that the argument that Federal courts will not
certify class actions in wage and hour cases is not correct.
Finally, Mr. President, contrary to what has been suggested today,
Federal courts have a long record of protecting workers in employment
class actions. Congress has passed strong laws, such as title VII, that
were specifically crafted to give workers access to Federal courts so
they could bring employment discrimination cases in a fair forum.
We have always believed Federal court is a fair, objective forum for
people who have been discriminated against, whether they claim
employment rights or civil rights.
As a result, Federal courts already have jurisdiction over most
employment discrimination and pension claims, and their record is in
sharp contrast to courts such as in Madison County, IL, and Jefferson
County, TX.
Which courts system oversaw the Home Depot gender discrimination case
settlement that paid class members about $65 million? Which courts
oversaw the $192 million Coca-Cola race discrimination settlement in
which each class member was guaranteed a recovery of at least $38,000?
The answer to both is these were Federal court cases, not magnet
State courts that to often look out for lawyers instead of consumers.
In sum, the only class of workers that will be negatively affected by
S. 5 is the trial lawyers who will no longer be able to bring major
nationwide class actions in their favorite county court. For everyone
else, S. 5 is a win-win proposition that will put an end to class
action abuse while protecting consumers who seek to bring legitimate
class actions.
I urge my colleagues to reject this amendment and those other carve-
out amendments that are being introduced.
Senator Kennedy has also added to his amendment, the employer-worker
rights cases, the civil rights carve-out. I would like to make a few
points about the civil rights cases.
The amendment, as I understand it, would exclude from the reach of
this bill all class actions involving civil rights--all of them. It
should be defeated for several reasons.
First, an amendment that would affirmatively exclude civil rights
cases from Federal jurisdiction would be contrary to a long tradition
of encouraging the availability of our Federal courts to address civil
rights claims.

[[Page S1183]]

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

[Rollcall Vote No. 6 Leg.]

YEAS--40

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

NAYS--59

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

NOT VOTING--1

Sununu

The amendment (No. 2) was rejected.

Amendment No. 4

The PRESIDING OFFICER. Under the previous order, there are now 2
minutes of debate equally divided prior to a vote in relation to the
Feinstein amendment No. 4.
The Senator from California.
Mrs. FEINSTEIN. Mr. President, I understand I have 1 minute to
discuss

[[Page S1184]]

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

[Rollcall Vote No. 7 Leg.]

YEAS--38

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

NAYS--61

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

NOT VOTING--1

Sununu

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

Amendment No. 12

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

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

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

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

On page 22, strike line 22 and all that follows through
page 23, line 4, and insert the following:
``(1) In general.--Section 1447 shall apply to any removal
of a case under this section, except that--
``(A) not later than 60 days after the date on which a
motion to remand is made, the district court shall--
``(i) complete all action on the motion; or
``(ii) issue an order explaining the court's reasons for
not ruling on the motion within the 60 day period;
``(B) not later than 180 days after the date on which a
motion to remand is made, the district court shall complete
all action on the motion unless all parties to the proceeding
agree to an extension; and
``(C) notwithstanding section 1447(d), a court of appeals
may accept an appeal from an order of a district court
granting or denying a motion to remand a class action to the
State court from which it was removed if application is made
to the court of appeals not less than 7 days after entry of
the order.''

Mr. FEINGOLD. Mr. President, if we are going to pass this bill, I
think we should do all we can to ensure citizens get their day in court
promptly, whether it is in a Federal court or a State court. We are all
familiar with the adage that justice delayed is justice denied. So we
cannot let this bill become a vehicle for delay.
The bill includes complicated requirements for determining which
cases can be removed to Federal court. We need to make sure the cases
that belong in State court under this bill do not get caught up in some
kind of procedural wrangling that would effectively deny justice to the
plaintiffs through delay.
Current Federal court practice allows a case filed in a State court
to be automatically removed to Federal court by the filing of a notice
of removal. If a party believes the case does not belong in Federal
court, it can then remove in Federal court to remand or return the case
to the State court.
Under current law, when a Federal district court decides to grant a
motion to remand the case back to State court, right now that order is
not appealable. S. 5, the bill before us, makes such orders appealable
for the first time in over a century. Due to the efforts of Senator
Schumer, Senator Dodd, and Senator Landrieu, the bill requires the
court of appeals to decide appeals of remand orders within 60 days
unless the parties agree otherwise. This 60-day time limit recognizes
that there is a potential for delay that these newly permitted appeals
could cause and that there is a need for courts to resolve quickly at
the appellate level the issue of where a case will be heard.
I strongly support this idea of a time limit for decisions on
appeals. But it

[[Page S1185]]

also highlights another great potential for delay that is caused by
this bill. Before that 60-day clock begins to run on an appeal, the
district court must first rule on the motion to remand the case to
State court. Unfortunately, some courts take a great deal of time to
decide motions to remand. The result is simply putting a case in limbo.
Take, for example, the case of Lizana v. DuPont. In this case, cancer
victims in Mississippi allege they became sick because they lived next
door to a DuPont manufacturing plant. DuPont then removed the case to
Federal court on January 21, 2003, and the victims then moved to remand
the case to State court. The Federal district court finally granted the
victims' motion, a year after the motion to remand was filed.
In an Oklahoma case called Gibbons v. Sprint, a group of consumers
filed a case against Sprint for installing cable lines across their
land without giving proper notice or paying compensation to the
landowners. Sprint then removed the case to Federal court. A remand
motion was filed on October 4, 1999, and was granted, but only after a
delay of nearly a year.
These are real-life examples of how an improper removal can end up
delaying a case for a significant period of time. By rewriting
diversity jurisdiction rules in this bill, we are handing defendants a
tool for delay, even if they do not actually qualify to have their
cases removed. So we need to make sure that in cases that are removed
from State courts as a result of this bill, remand motions are decided
promptly. At the very least, we should require that the courts review
these motions and decide them quickly, if they can.
The amendment that I offered in the Judiciary Committee would have
placed a 60-day time limit on district court consideration of motions
to remand. This is the same limit that the new bill places on courts of
appeals when decisions on motions to remand are appealed.
My committee also adopted the other components of the bill's
provision on appeals. It allowed all parties to agree to an extension
of any length and allows the court to take an additional 10 days for
good cause shown. If courts of appeals are going to be required to rule
on appeals of decisions on motions to remand in short order, I thought
we should require district courts to make those decisions just as
quickly. That way, we could be sure that removals will not be used as a
tool for delay.

On Monday, the Judicial Conference sent a letter to the chairman of
the Judiciary Committee concerning my amendment. Not surprisingly, it
opposes the amendment. The Judicial Conference historically has
opposed, as it says in its letter, ``statutory imposition of litigation
priority, expediting requirements, or time limitation rules in
specified types of civil cases.''
In other words, judges do not like being told by Congress how to
prioritize their cases or how quickly they should do their work. And I
do not blame them. But we do it when we think it is important. And here
we are sending a potentially large new number of cases to Federal
court. We are increasing the workload of the Federal courts, making it
more likely cases will be delayed because of crowded dockets.
What the committee amendment did was to require the courts to quickly
assess whether a case belongs in Federal court, whether this bill
applies to it. I do not think that amendment of mine was unreasonable
at all.
On the other hand, I am sympathetic to the concern expressed by the
Judicial Conference that in some cases 60 days may not be enough time
to decide the motion. Its letter points out that, in some cases, an
evidentiary hearing might be required and the time to fully brief the
motion may exhaust a portion of this 60-day period. My committee
amendment allowed for an automatic 10-day extension and an extension of
any amount if both sides agree.
I have read the letter from the Judicial Conference and I am trying
to come to a reasonable solution. I accept the possibility that the
changes I have made to date perhaps are not enough. So I am not wedded
to the 60-day period itself. What I am wedded to is the idea that these
motions should not be permitted to languish unexamined for months and
months. I have made further modifications to the amendment that I
offered in committee in the hope that the sponsors of the bill would be
willing to work with me to reach an accommodation on this issue.
The amendment I have proposed on the floor requires the district
court to do one of two things within 60 days of a motion to remand
being filed. First, the court can decide the motion. I hope many, if
not most, motions to remand could be decided that quickly. But under my
amendment before the body, the court has another option under this
amendment. It can issue an order within a 60-day time period indicating
why a decision within that time cannot be made. Perhaps the reason is
that the factual record cannot be completed within that time, or that
other pressing matters must receive priority in light of the court's
full docket. The amendment does not presume to specify what reasons are
good or adequate reasons. The justification is entirely within the
court's discretion, but it must give some explanation, some reason in
an order that would be issued within this 60-day period.
If such an order is issued, the court is then allowed, under the
amendment before the body, to issue a decision up to 180 days after the
filing of the motion. That gives the court a full 6 months to make a
decision. I argue that should be enough time for even the most complex
of remand motions. Once again, an extension of any length is permitted
if all the parties to the case agree.
I believe these changes more than address the concerns raised by the
Judicial Conference, but they also make sure that a remand motion will
not languish for more than 6 months because the court simply has not
gotten around to it.
My hope is that the requirement that an order be issued within the 60
days will make it more likely that the court will devote enough time to
the motion to realize that it is possible for a final decision to be
reached within that time. If more time is needed, 180 days should be
more than sufficient.
A 6-month time limit will not cause undue hardship to our Federal
courts. For those who doubt that removal will become a tool for delay,
let me call their attention to testimony before the House Judiciary
Committee by legal scholar Theodore Eisenberg of Cornell Law School.
Professor Eisenberg testified that his research has found that even
though the number of class action lawsuits is declining, efforts to
remove cases are not. More importantly, he found that remand rates are
increasing over time.
In recent years, more than 20 percent of diversity tort cases removed
to Federal court have been remanded to State court. Now, that means
that one out of five removals are improper. We have no way of knowing
what will happen under this bill. Perhaps some of the 20 percent will
now be properly removed to Federal court. But given the complexity of
the bill's new requirements, I think it is safe to assume that a
significant number of removals will still turn out to be improper.
Once a district court decides to remand a case, that remand order
will almost certainly be appealed. Plaintiffs with legitimate class
actions in State court therefore need the additional protection
provided by my amendment in order to avoid being unfairly harmed by
this bill. Some time limit on district court consideration of remand
motions in class action cases is critical to minimize the denial of
justice to citizens who legitimately turn to the State courts, even
under this bill, to have their grievances heard.
I know there is tremendous opposition to any attempt to perfect this
bill on the floor because of concerns about the other body, but I
implore my colleagues who support the bill to not let their no-
amendment strategy prevent them from taking a hard look at this
problem. Do we want to leave unaddressed the possibility that a case
could sit in Federal court with a motion to remand pending for a year
or more, only to have the case properly returned to State court once
the court finally takes a look at the motion? Is that a just result?
I am convinced that we can work at something if my colleagues will
simply take a quick look at this issue with an open mind. This
amendment does not even come close to blowing this bill up. It is
certainly not a poison pill. It is just an effort to make the bill work
better, and surely the supporters of this bill should have the
flexibility to do that.

[[Page S1186]]

This bill is called the Class Action Fairness Act. To be fair to
people seeking justice from courts, we should ask the courts to act
quickly on remand motions at both the court of appeals and district
court levels. So I urge my colleagues to support this amendment.
I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. DODD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DODD. Mr. President, I begin by thanking the leadership. I thank
Senator Reid of Nevada particularly because, as my colleagues know, the
minority in this institution, even a minority of 1, can make life
difficult for a majority even of 99.
The Framers of the Constitution created an institution that would
make sure that the rights of minorities would be protected in this
body. Contrary to his own substantive feelings about the matter before
us, the distinguished Democratic leader has made it possible, because
of the unanimous consent agreement entered into with the distinguished
majority leader, for this matter to proceed. I also thank Senator
Frist, the majority leader, for working out that arrangement so that we
can deal with the matter before us.
As someone who a year and a half ago negotiated an agreement that was
satisfactory to many, not to all, I am pleased that we are within a day
or so of adopting this very important legislation. We would not be able
to do that were it not for the leadership shown by the minority and the
majority in allowing this amendment process to go forward. So I begin
there.
I commend my colleagues who have offered amendments. They have
offered germane and relevant amendments to this bill that have at the
very least some kernels of sound judgment and good ideas to them. I
regretfully disagree with my colleagues substantively and have
expressed that in the Record. I know my colleague from Delaware,
Senator Carper, who has spent a lot of time on this legislation, has
been more deeply involved in this question than almost anyone in this
body and has listened very carefully to all of those who have argued
their amendments and considered them thoroughly. So I thank them for
offering these ideas. I do not suggest that I would necessarily be
opposed to all of these amendments under different circumstances,
although I think there are substantive arguments against them.
I say to one of my dearest friends in this body--and I know we call
each other good friends, but Russ Feingold is one of my best friends in
the Senate, and it is a rarity when he and I are on different sides of
an issue. I am not comfortable disagreeing with my friend from
Wisconsin because I admire him so much, but there is a substantive
disagreement over having mandatory time requirements.
The Judicial Conference of the United States, in a letter dated
February 7, addresses specifically this amendment and urges our
colleagues not to impose a time certain. The Senator from Wisconsin
makes a strong argument on having some predictability, and I agree with
him about predictability for all involved, for defendants and
plaintiffs, but there is a danger in making the predictability so
certain that it makes it difficult for the judicial process to
necessarily work in a fair and balanced way. Because there are so many
extenuating circumstances which can complicate a given mandatory time
requirement, it can actually work adversely to plaintiffs or defendants
in the case, and I know my colleagues are aware of that.
A sound case can be made for Senator Feingold's amendment. There was
a sound argument on the other side as well as to why this can be
dangerous. The Judicial Conference has come down rather strongly in a
letter in opposition to a mandatory time requirement. Rather than go
through and read this whole letter, I ask unanimous consent that the
letter from the Judicial Conference dated February 7 be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Judicial Conference of

the United States,

Washington, DC, February 7, 2005.
Hon. Arlen Specter,
Committee on the Judiciary, U.S. Senate, 224 Dirksen Senate
Office Building, Washington, DC.
Dear Mr. Chairman: I write on behalf of the Judicial
Conference of the United States, the policy-making body for
the federal courts, to express the judiciary's opposition to
the amendment offered, and later withdrawn, by Senator Russ
Feingold to the Class Action Fairness Act of 2005 (S. 5)
during the Senate Judiciary Committee's business meeting on
February 3, 2005. That amendment would require the district
court to complete all action on a motion to remand a class
action case not later than 60 days after the date on which
such motion was made, unless ail parties agree to an
extension or the court grants an extension up to 10 days for
good cause shown and in the interests of justice. As further
explained below, the Judicial Conference opposes the
imposition of mandatory time frames for judicial actions.
Because the amendment may be considered further as S. 5 moves
to the floor of the United States Senate, I wanted to provide
you with these views as soon as possible.
The Judicial Conference strongly opposes the statutory
imposition of litigation priority, expediting requirements,
or time limitation rules in specified types of civil cases
brought in federal court beyond those civil actions already
identified in 28 U.S.C. 1657 as warranting expedited review.
The Conference also strongly opposes any attempt to impose
statutory time limits for the disposition of specified cases
in the district courts, the courts of appeals, or the Supreme
Court. (Report of the Proceedings of the Judicial Conference
of the United States, September 1990, p. 80.) Section 1657
currently provides that United States courts shall determine
the order in which civil actions are heard, except for the
following types of actions that must be given expedited
consideration: cases brought under chapter 153 (habeas
corpus petitions) of title 28 or under 28 U.S.C. Sec. 1826
(recalcitrant witnesses); actions for temporary or
injunctive relief; and actions for which ``good cause'' is
shown.
The expansion of statutorily mandated expedited review is
unwise for several reasons. Individual actions within a
category of cases inevitably have different priority
requirements, which are best determined on a case-by-case
basis. Also, mandatory priorities and expediting requirements
run counter to principles of effective civil case management.
In addition, as the number of categories of cases receiving
priority treatment increases, the ability of a court to
expedite review of any of these cases is necessarily
restricted. At the same time, district courts must meet
stringent deadlines for the consideration of criminal cases,
as required by the Speedy Trial Act.
From a practical standpoint, it may be difficult in many
situations to meet the 60-day deadline under Senator
Feingold's amendment. The filing of a remand motion following
a notice of removal pursuant to 28 U.S.C. Sec. 1447 would
trigger the 60-day period. Under current local rules of
practice in the district courts, a motion to remand may not
be fully briefed and ready for court consideration until a
substantial portion of the 60-day deadline has expired. In
addition, the district court must consider the criteria
listed as a threshold for federal court jurisdiction under S.
5 before deciding the motion to remand, which may require the
court to hold an evidentiary hearing with witnesses.
The judiciary shares Senator Feingold's desire to
facilitate the consideration of cases. However, for the
reasons stated above, the judiciary believes the amendment is
unwise. Nevertheless, if Congress determines that a specific
reference beyond 28 U.S.C. Sec. 1657 is appropriate, then the
following alternative language is suggested for the
Committee's consideration as a replacement for subsection (A)
on pages 1 and 2 of Senator Feingold's amendment:
``(A) the district court shall complete all action on a
motion to remand as soon as practicable after the date on
which such motion was made; and''
OR
``(A) the district court shall expedite all action on a
motion to remand to the greatest extent practicable; and''.
Similar language has been used by Congress in other
legislation and is now found within the draft asbestos bill
being discussed in your Committee. It has reminded federal
judges of the importance Congress has given to the resolution
of the particular matter without precluding a fair hearing of
the issues underlying the motion or action.
Thank you for your consideration of the above comments. If
you have any questions, please contact Mike Blommer,
Assistant Director, Office of Legislative Affairs, at 202-
502-1700.
Sincerely,
Leonidas Ralph Mecham,
Secretary.

Mr. DODD. I am not going to go through each and every amendment, but
the amendments offered by my friends, Senators Kennedy, Bingaman, and
Feinstein, also make good points, but as the Senator from Delaware and
others have pointed out there are substantial and substantive reasons
why those amendments are even incorporated already under the
legislation

[[Page S1187]]

and thereby covered or that would undo what we have attempted to
achieve in this legislation.
I pointed out the other day that back in the fall of 2003--I believe
in October--a group of us who objected to the cloture motion and
provided the margin of difference that day from invoking cloture
provided the necessary votes to secure passage of the then as written
class action reform bill. I think we were right in doing so. That bill,
I believe, was excessive. There was a real danger it would have undone
a lot of good law in this country which made courts accessible to
legitimate class action plaintiffs.

We were asked, a small group of us who were willing to work on this
issue, to try to come up with some compromises, and we did. We
submitted a letter to the majority leader saying there were four items
that we thought needed to be addressed in that bill. We then sat down
and negotiated not only the 4 items but 8 items additional to the 4, so
we came back with 12 improvements to that bill, far more than we were
asked to do by those concerned with legislation. I am not suggesting
that covered the universe. Obviously, other ideas occurred in the last
year and several months since that was struck. I was disappointed we
didn't bring up the reform bill in January of last year, as the leader
announced we would do. We lost an entire year on this matter, where we
could have had the same arrangement we agreed to over a year ago.
Nonetheless, we are back here with that same agreement.
Across the country, those who have had a chance to look at this
legislation have spoken very extensively in favor of it. In fact, some
109 editorials across the Nation, from publications, daily publications
literally across the Nation in virtually every jurisdiction of the
country, have come out and strongly endorsed this compromise package. I
have a list of the 109 editorial comments made in support of this
legislation, from publications that have reputations of being center,
right, and left. It transcends the traditional ideological differences
one might find in our daily newspapers. It is instructive to those of
us anxious to know what those editorials have to say about this bill.
I ask unanimous consent that list be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

109 Editorials Supporting Class Action Reform

The Washington Post
Get Tort Reform Right--January 10, 2005
Reforming Class Actions--June 14, 2003
Making Justice Work--November 25, 2002
Restoring Class to Class Actions--March 9, 2002
Actions Without Class--August 27, 2001
The Wall Street Journal
Tort Reform Roadmap--January 27, 2005
Class-Action Showdown--July 8, 2004
Class-Action Showdown--June 12, 2003
Mayhem in Madison County--December 6, 2002
Miracle in Mississippi--December 3, 2002
Class War--March 25, 2002
Chicago Tribune
Mr. Bush goes to Collinsville--January 5, 2005
American as apple pie--July 7, 2004
Madison (just another) County--June 18, 2004
The Judicial Hellhole--March 11, 2004
The class-action money chase--June 18, 2003
The judges of Madison County--September 6, 2002
Financial Times
Class Action Repair--September 18, 2003
Out of Action--March 18, 2002
USA Today
Class-action plaintiffs deserve more than coupons--October 9,
2002
Akron Beacon Journal
Classier act--May 2, 2003
Baltimore Sun
No-Class Action--October 26, 2003
Bangor Daily News
Class-action reform--June 3, 2004
Action on Lawsuits--September 17, 2003
Bloomington Pantagraph (Bloomington, IL)
Congress should approve class-action suit reforms--June 30,
2004
The Buffalo News
Class Action Compromise--December 6, 2003
Class-Action Lawsuits--October 14, 2003
Protection for plaintiffs--July 31, 2002
Business Insurance
Tort Reform Takes Time--July 19, 2004
Tort Reform Deserved More--January 26, 2004
Redouble Effort in Tort Reform Battle--October 27, 2003
Stick With Original Class Action Bill--September 29, 2003
Maintain Class-Action Reform Push--September 8, 2003
The Christian Science Monitor
Reforming class-action suits--April 17, 2003
Contra Costa Times (Walnut Creek, CA)
Class-Action Reform--July 9, 2004
Crain's New York Business
A Class Action for Schumer--September 1, 2003
Daily Jefferson County Union
Take Bite Out of Frivolous Suits--October 20, 2003
The Des Moines Register
Pass the class-action reform--July 14, 2004
Reform class actions--February 14, 2003
The Florida Times-Union (Jacksonville, FL)
Congress: Minority Rules--July 11, 2004
Progress Is Seen--December 16, 2003
Class Warfare--September 8, 2003
Always Alert--June 17, 2003
The Gazette (Cedar Rapids, Iowa)
Clamp down on class-action suits--May 19, 2004
More class-action suits should be federal cases--July 10,
2002
The Gazette (Colorado Springs, CO)
Our View: A lawyer's paradise--July 5, 2003
Greensboro News & Record
Class-Action Lawsuit Abuse Less Under Senate Rewrite--January
12, 2004
The Hartford Courant
Abuse of the Courts--June 16, 2004
Compromise on Class Action--December 31, 2003
Sen. Dodd's Crucial Vote--October 26, 2003
Stop Class-Action Abuses--August 22, 2003
The class-action racket--July 15, 2002
The Herald (Everett, WA)
Class-action reform needed to curb abuse--June 25, 2003
The Indianapolis Star
Lawyers Get Rich, Plaintiffs Get Coupons--September 2, 2003
Class-action suits shop the system--May 15, 2002
Investor's Business Daily
A Shorter Leash for Trial Lawyers--January 6, 2005
Any Tort In A Storm--December 18, 2003
King County Journal (Bellevue/Kent, WA)
Our View: Class-action reform needs Senate action--July 8,
2003
Knoxville News Sentinel
Class action act was reasonable legislation--October 27, 2003
Las Vegas Review-Journal
Tort Reform--June 2, 2004
Coupon Clippers--January 12, 2004
A real class act--June 13, 2003
Lincoln Journal Star (Lincoln, Neb.)
Take small step toward legal reform--June 30, 2003
Mobile Register
Senate Has a Chance To Limit Lawsuit Abuse--August 16, 2003
Montgomery Advertiser
Negotiate Fair Bill on Lawsuits--October 27, 2003
Newsday (Long Island, NY)
Lawsuit reform is within reach; Stop stalling class-action
remedy--July 9, 2004
A Little Compromising Helps Bill on Mass Lawsuits--December
4, 2003
Senate Should Change the Rules for Mass Lawsuits--November 5,
2003
Congress should stem abuses of class-action lawsuits--March
3, 2003
New York Daily News
End Lawyers' Shopping Spree--September 28, 2003
New York Sun
Breaking With the Bar--November 20, 2003
Senators With Class?--October 22, 2003
Northwest Arkansas Business Journal
Class-action reform a must--May 27, 2002
The Oklahoman
So Long to Reform--October 29, 2003
Odessa American (Odessa, Texas)
Lawsuit reform seems necessary--July 8, 2003
Omaha World-Herald
A Final Judgement--May 20, 2004
Ready for (Class) Action--February 12, 2004
Class-action bill sinks--October 27, 2003
Reshaping Class Action Suits--October 13, 2003
Balance the Scales--July 25, 2003
Shopping days may be over--June 16, 2003
Fix class-action abuse--July 29, 2002
The Oregonian
Approve class-action reform--July 29, 2002
Orlando Sentinel
A Needed Crackdown: It's Important for Congress to Revive the
Effort to Control Class-Action Abuse--January 28, 2005
Congress Should Approve a Plan To Reform the Class-Action-
Lawsuit System--June 1, 2004
Cut Down On Judge-Shopping--February 1, 2004
Stop abuse of class actions--June 23, 2003
Pittsburgh Tribune-Review
No-class action--July 12, 2004
The Providence Journal
Crimes against consumers--May 19, 2003

[[Page S1188]]

Stop these corrupt suits--April 6, 2002
Rocky Mountain News (Denver, Colorado)
Pay the Lawyers in Coupons, Too: Class-Action Excesses--July
25, 2004
Sun Journal (Lewiston, Maine)
Reform Class Actions--September 7, 2003
St. Louis Post-Dispatch
Madison County: Bush in the ``hellhole''--January 5, 2005
Feathering the Legal Nest--April 6, 2004
Tilted Scales--January 23, 2004
The Lawyers Win Again--October 24, 2003
Derail Madco's gravy train--October 2, 2003
Lawsuit heaven--January 13, 2003
The Santa Fe New Mexican
Time for a tad of tort reform--July 16, 2003
Spokane Spokesman-Review
Class Action Bill Needs Action Now--July 20, 2004
Unclassy Action in Need of Reform--September 3, 2003
Times Union (Albany, NY)
Class Action Victory--December 3, 2003
Class Action Showdown--November 10, 2003
Fix class-action law--July 28, 2002
Tyler Morning Telegraph
Small firms new target in lawsuit abuse crisis--June 23, 2003
Vero Beach Press-Journal
Class-action reform delayed by Democrats' stalling tactics--
July 14, 2004
No Class--October 24, 2003
Washington Times
Ushering thru tort reform--July 7, 2004
Wisconsin State Journal
Put Fair Limits on Group Lawsuits: Class-Action Abuses Enrich
Lawyers While Yielding Pennies for Plaintiffs--June 7,
2004

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

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

Reining In Class-Action Abuses

Congress finally appears ready to curtail the worst abuses
in class-action lawsuits.
The House and Senate have debated the issue for a decade.
Now the Senate is prepared to vote, possibly this week, on a
bipartisan compromise engineered by Democratic Sen.
Christopher Dodd of Connecticut and others. President Bush
has indicated he will sign the measure.
Lawyers long have had a field day with class-action
lawsuits. They sometimes solicit clients and then shop for
friendly state courts with reputations for handing down huge
monetary awards. Too often, though, plaintiffs end up with
pennies, while the lawyers take home millions of dollars.
Under a bill that cleared the Senate Judiciary Committee
last week, most interstate class-action lawsuits in which
claims total more than $5 million would appropriately be
moved to federal courts.
Truly local lawsuits involving plaintiffs and defendants
within a state would properly remain in local courts.
The bill, known as the Class Action Fairness Act, has other
useful provisions, such as tighter controls on so-called
coupon settlements, in which consumers receive discount
coupons instead of cash. Also, there would be better scrutiny
of settlements in which class members actually lose money.
Critics say the bill would unfairly penalize consumers
because federal consumer-protection laws are weak. There
still is time to address this shortcoming. But lawmakers must
resist the temptation to add extraneous amendments--such as
one to increase the salaries of federal judges--that would
doom the bill.
The measure enjoys broad support in the House, which gave
it overwhelming approval last year but which must vote again.
Once Congress acts on class-action lawsuits, it can turn
its attention to two other urgent lawsuit abuses--medical
malpractice and asbestos.
Mr. DODD. Let me say again to my colleagues here, many of whom I know
have offered amendments that have not succeeded in the past, I know it
can be disappointing to work on the amendment and not get the necessary
votes. But let me remind my colleagues, those who believe--and that is
most of us here--that clearly the class action situation in this
country cries out for reform, that this bill is a court reform bill
rather than a tort reform bill. No courts are closing their doors to
class action plaintiffs at all. But the situation had gotten out of
hand. I think most of us here agree with that.
We have written an improved bill--from both a plaintiff's perspective
as well as a defendant's perspective. We can have access to courts, get
good judgments, and see to it that victimized plaintiffs will receive
the compensation they deserve as a result of a class action decision in
their favor.
I suggest to those who would have liked to have us add additional
amendments here that there was a very real danger indeed that had we
not stuck with the agreement reached almost a year and a half ago, the
original bill would have come back or a bill adopted in the other body
would have been the vehicle chosen as the vehicle for class action
reform. I believe that would have been a mistake.
I know there are colleagues who are disappointed that some of us did
not support them in their efforts. I state there are substantive
reasons that we did not, but also there is the reason that had we done
so, this matter would have been opened and the results would have been
a bill that would have been dangerous. I would have opposed it, but I
think the votes are here to carry it. It is always a tough call, and I
am not going to suggest otherwise. Those are the kinds of decisions you
have to make in a legislative body with 99 other colleagues, 435 in the
other body, and a President. We are dealing with a legislative form of
government. Unfortunately, as much as we would like to write our own
bills and have everybody go along and agree with our ideas, that is not
the way the process works.
We think we have a substantially improved piece of legislation, one
that I heartily endorse. We will discover in time if there are any
shortcomings, but by and large I believe we have written a good bill.
I mentioned in his absence my friendship with the Senator from
Wisconsin, talking about his amendment. As I said earlier, there is
more than just a kernel of truth in what he suggests. There is an
argument on the other side that I know my colleague, as a very
distinguished member of the bar, will appreciate. I will not be able to
support his amendment, but nonetheless I appreciate the point he is
making about certainty and predictability, which is not an irrelevant
issue when it comes to our courts.
For those reasons, I appreciate the fact that a majority of us here
in a bipartisan way--not overwhelmingly bipartisan but a bipartisan
fashion--have rejected the amendments offered by our colleagues today.
My hope is that a similar result will occur with remaining amendments,
that we can have final passage of this bill, that the leadership of the
House will do what they said they were going to do, and that is to
embrace this compromise package, and that we will be able to send this
bill to the President for his signature and make a major step forward
in reforming our courts so that class actions can proceed in the way
the Framers intended in the Constitution, which is fair to plaintiffs
and defendants alike.
I yield the floor.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. FEINGOLD. Mr. President, let me say I appreciate the comments of
my friend from Connecticut, as I always do. I just want to point out
that the amendment I have offered, as opposed to the one I offered in
committee, has increased the time for deciding these motions from 60
days to 180 days. Surely 6 months is plenty of time, even in a
complicated motion. So I believe the concerns of the Judicial
Conference have been addressed, unless we in the Congress are going to
go along with the idea there should be no time limit at all.
At this point I simply leave it at that, hoping that prior to the
time of actually voting on the amendment tomorrow I would have a few
minutes to repeat and reiterate my position on this amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Delaware.
Mr. CARPER. Mr. President, while Senator Dodd is still on the floor,
and Senator Feingold as well, let me first of all say to Senator Dodd
that we would not be here today with this compromise, which is good
public policy but also something Democrats and Republicans, not all,
can support--and I know we will get the support of the House and the
President. I want to say a special thank you for your leadership. I
have learned a lot in the last 4 years watching you and listening to
you. Certainly in this instance it is no exception, but thank you.
I want to say to Senator Feingold, we had a number of amendments that
have been presented to us today, all thoughtful amendments by some of
our

[[Page S1189]]

very finest Members. I was not able to support any of them.
The one amendment that I have literally worked, as he knows, behind
the scenes to try to get included in a managers' amendment is this
amendment or some variation of this amendment. I think the underlying
point you make--if a class action is filed in a State court and that is
turned down and there is an effort to move it to Federal court, that is
turned down, and then there is another effort to move that class action
from State court to Federal court, we limit the second time through.
There has to be a response in 60 days to the appeal by the Federal
judge on the appeal. That would sort of beg the question, Should not
there maybe be some kind of time limit as well on the first time there
is an attempt to remove the case to the Federal court? That strikes me
as something that makes common sense and seems fair and reasonable. As
he knows, I have reached out as recently as last night with some of the
people involved in the Judicial Conference and the Rules Committee to
see if there is a way to strike the balance, and I believe you have
moved toward that balance.
My hope is that we could take this amendment or something similar to
this amendment and include it in a managers' package. You have heard
Senator Dodd and me and others say there is a very delicate compromise
here, and there is a concern if we change one piece of the bill we
invite friends on the other side, who have a different view about the
balance and would like to take the bill in a different direction--we
unleash them to feel free to come forth with their amendments and set
the bill back.
Having said that, I still think this amendment as you have redrawn it
would actually be a good addition to a managers' amendment. I learned
today there is not going to be a managers' amendment. As a result, I am
not going to be able to support this amendment.
I discussed this this morning with Senator Specter; he finds favor
with your amendment. I think he mentioned that at the Senate Judiciary
Committee hearing. He said to me--and he has no reason to say this, but
I think it is just in his heart--he thinks you are onto something here
and would like to take the Senator's approach on this provision and
include it in another bill that he is working on and presumably will
have hearings on.
I think this idea, if it does not pass tomorrow and does not get
included in the underlying bill, is going to live for another day and
we will be back to where we can hopefully all support it.
I thank the Senator for a real thoughtful approach and for his
willingness to compromise and try to find some middle ground. I think
he has found it. I think his efforts will ultimately be rewarded.
Mr. FEINGOLD. Mr. President, I thank the Senator from Delaware for
his kind remarks and for his genuine efforts to try to reach an accord.
It is a shame when we have the chairman of the committee admitting that
this ought to be dealt with, and one of the great advocates of this
legislation admitting that this is just a question of fixing something,
we can't get it done. There is something wrong with the way we are
proceeding when we can't fix something that basically nobody is really
against if we do it right.
I recognize what is likely to happen in the vote. But I take the
Senator at his word that he is hoping we can resolve it. Perhaps this
is something that can still happen on this bill. If not, we have to
resolve it another way. But I thank him for his sincere efforts to
solve this problem.
I yield the floor. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. FRIST. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

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