Class Action Fairness Act of 2004

Madam President, I want to take some time to describe what was a very lengthy and worthwhile effort some 10 months ago to come up with a compromise proposal which is the substance of S. 2062, the legislation now before the Senate. I will do that in a moment.

Before doing so, I want to express my great disappointment at the process which the majority Leader has chosen. As my colleagues know, we worked very hard last October and November trying to come up with a compromise to give the class action reform bill an opportunity for consideration before the Senate. It is now the middle of July. In fact, this bill initially was to be brought up as the first item of business in January. For one reason or another, over the past number of months, this bill has not been brought forward until now.

I regret that deeply. Having served here for over a quarter of a century, I know that in a Presidential election year, the likelihood of getting something done becomes less and less. So those who set the agenda have to bear some responsibility, in a sense, for the situation we now find ourselves in procedurally.

Having worked on this very hard for a long time, and now finding myself in a situation where we are being told at this hour that the only amendments we can consider are ones that will be approved by the majority, is highly offensive to me and it ought be to any Member of this body.

This measure is very important. There are a lot of other important measures that the Senator from Massachusetts mentioned, all of which I support and with which I agree. But in this legislative body that the Framers founded some 220 years ago, the idea that we are not going to even agree to a process that would allow for a limited number of germane and nongermane amendments to be offered, is to in effect deny the Senate the opportunity to work its will.

Even before a single amendment has been offered, the Majority Leader has decided to fill up the amendment tree. In effect, he has precluded all Senators from offering amendments unless he deems them worthy to be offered. That includes, of course, Republican Senators as well as Democratic Senators. I also add that the Majority Leader has done this without any basis. As I have said, not a single amendment has yet been offered. This tactic is like a doctor prescribing a remedy for a perfectly healthy patient.

Last evening, I looked at the number of amendments filed. There were some 13 amendments filed. Most of them are germane amendments. There were several nongermane amendments. The Democratic leader offered a proposal of 10 germane amendments and 5 nongermane amendments on either side, with time limits. I am quite confident the authors would be willing to agree to a time agreement. I suspect that with a universe of 30 amendments, about half of them maybe would fall even before being offered. But the idea that we could not set parameters around the consideration of a bill this important I find rather breathtaking. After all, this how the Senate operates.

I floor managed with the Senator from Texas a number of years ago the securities litigation reform bill, which was another so-called tort reform bill. We spent 11 days on the floor of the Senate. Numerous amendments were offered to that piece of legislation. The then-majority leader, Senator Dole, threatened on a couple of occasions to file a cloture motion but never did. He allowed the Senate to work its will on that legislation. That is what ought to be done here as well. The fact that there has been an offer to limit the amount of time and the number of amendments ought to be embraced by the Majority Leader, not rejected by him.

I am a cosponsor of this bill and I care about it. If I am going to be confronted with voting on cloture Friday and cutting off debate, then take me off the bill right now. If you want to kill the bill, you can do it today, if that is the intention of the majority. I spent almost a year helping to write this bill, but I will not stand here today and deny Members of this body, under limited time agreements, to offer some ideas that the Senate can either accept or reject and move forward.

This is an important piece of legislation, but it is not so important to this

Member that we would deny this institution the right to be able to do its business under the rules and procedures that have been provided for more than two centuries ago.

Obviously, there are problems. Some of these nongermane amendments may be adopted. Maybe germane amendments would be adopted that would cause some of us not to be able to support the bill. That is the risk you run in a legislative body. There are 100 of us, as coequals, who have the right to offer our ideas to legislation. Unlike in the other body down the corridor, nongermane amendments can be offered in the Senate. That is how the Senate functions.

There is a risk, obviously, that this bill will get complicated. But the idea that we are going to shut off the possibility of these ideas being offered ought to be offensive to every Member, even those who support the legislation. If it can happen here, it can happen on a bill you support or oppose for one reason or another.

I am terribly disappointed that I am looking at a procedural situation that I warned about, which is that if you didn't provide adequate time for Members to be able to offer amendments--even amendments not particularly helpful in the eyes of some of my colleagues--you run the risk of undercutting the legislation. Maybe that is what the majority wants to do anyway, on the assumption that those groups outside who support the underlying bill will blame those of us who are willing to shut down the debate and, if not, give us an opportunity to let the Senate work its will. That is a false hope. I believe people are much smarter than that. They understand that if you don't let the Senate work its will, even under time constraints and amendments that are being limited in number, you do a great bit of damage to this institution.

It is late in the year, but I believe we have a good bill here. I want to describe it briefly, if I may. We have worked on an excellent compromise that a majority of colleagues here can support.

First of all, I am a very strong supporter of class action as a procedural device. Class action lawsuits have provided individuals of modest means the ability to band together to achieve systemic change when they could not have done so individually. In fact, important legal developments in such areas as civil rights, sex discrimination, and environmental protection have been the result of class action lawsuits.

But there is considerable evidence from courthouses across the country that class actions are being abused. Procedural rules that are designed to decide fair and just outcomes for individual plaintiffs and defendants are not being followed in too many cases. As a result, the class action system is not working, in my view, the way it was intended, and justice is not being served.

Madam President, I am also one who has supported and opposed various tort reform measures. I suggest that what we are talking about here is more court reform than tort reform.

For example, I opposed medical malpractice reform, not because I don't think we ought to do something about it, but it was a poorly crafted bill.

I also opposed liability protection for gunmakers. By the way, most manufacturers of firearms reside in my State, but the idea that we are going to exclude an entire industry from litigation was highly offensive to me.

I opposed liability protection for manufacturers of the so-called MTBE, which pollutes ground water. I supported a patient's right to sue their HMOs and insurance companies, which are a major industry in my State. Obviously, I helped write and helped to support the securities litigation reform, uniform standards, Y2K legislation, and the terrorism insurance bill.

So I don't fall into a category here of being for whatever is titled ``tort reform,'' supporting it or opposing it. I have a record that I believe is one of balance and support of those ideas and efforts that truly were designed to try to improve a litigation system. That is the background of my own voting record.

I will give you a history in terms of this compromise. On October 22 of last year, the Majority Leader sought to proceed to an earlier class action measure, S. 1751. The vote on that motion to proceed was 59 to 39, which is 1 vote short of the required number to invoke cloture.

At the time of that legislation, I voted no on invoking cloture, and I did so with some reluctance. I noted that, while I supported some reform of class action procedures, I could not support S. 1751. I also expressed concern about whether there would be any meaningful opportunity for Senators to negotiate changes in that bill in a bipartisan fashion.

I told colleagues in October of last year that reaching an agreement on class action reform required us to roll up our sleeves to get it done. Many long hours of painstaking negotiations were ahead of us. As an author of the securities litigation reform bill, the uniform standards legislation, terrorism insurance, and the Y2K bill, I know that principled compromise could be reached on class action reform as well.

I argued at the time, and my sentiment still holds true today, that ``the American people deserve better. We are not working together as often as we should on critical questions. If we do not do it, then we do a great disservice to the American people.''

Subsequent to the vote in October 2003, I joined with three of my colleagues in sending a letter to the Majority Leader on November 14. In that letter, we outlined the specific policies that we believed needed to be addressed in a class action bill that would garner the necessary votes to pass in this body.

In November of last year, Senators Schumer, Landrieu, and I entered into discussions with Senators Frist, Hatch, and Grassley. Those negotiations resulted in the compromise that is before us today.

I do believe this legislation is a significant improvement over the earlier bill considered by the Senate last year. When Senator Schumer, Landrieu, and I sent our letter to the Majority Leader, we asked for five changes in that legislation:

No. 1, we wanted to ensure that the jurisdictional provisions keep truly local cases in State courts.

No. 2, we wanted provisions on mass tort actions to be as precise as possible.

No. 3, we wanted to prevent the potential for repeated removal and remand between State and Federal courts, the so-called ``merry-go-round effect.''

No. 4, we wanted to provide appropriate compensation to those plaintiffs who take the risk of coming forward.

And No. 5, we wanted stronger provisions on abusive coupon settlements.

We got those changes and more. In fact, we asked for those 5 changes, and yet we got 12 improvements to the bill as originally proposed.

I am pleased to say that the compromise we reached last year is a measured, bipartisan response that fixes many aspects of our broken class action system. In addition, it strikes the appropriate balance between protecting Americans' access to the courthouse while ridding the class action system of its most egregious abuses.

I want to emphasize at the outset that this bill is a fragile, carefully-crafted compromise. There are some who will argue the bill goes too far, and others will tell you it does not go far enough. I happen to believe it achieves the right balance. It may not be perfect, but I think it is a good balance overall.

Having entered into a good-faith agreement with my colleagues on both sides of the aisle, I want to see the compromise preserved both on the Senate floor and in conference. No statement has been made by the Democratic leader that he is opposing the appointment of conferees on this bill. Part of the agreement was that the compromise we reached in the Senate would be the one approved by the House in conference. If that was not the case, then those of us who agreed vote on the motion to proceed would reserve the right to filibuster the conference report. We certainly continue to hold that view.

S. 2062 reforms the current class action system in a number of meaningful ways. Let me go through them if I can rather quickly.

First, it addresses the issue of coupon settlements which constitutes one of the greatest abuses in our courthouses today. Here the plaintiffs receive coupons, or a token payment, for a discount off their next purchase while

their attorneys pocket millions of dollars in fees.

It is not only the plaintiff attorneys who benefit from these coupon settlements, but the defendants benefit as well. For example, the average redemption rate in a settlement involving food and beverage coupons have been between 2 and 6 percent. As a result, the purpose of these coupon settlements has changed. They no longer serve class members but defendant and plaintiff attorneys instead.

The original class action bill brought to the Senate last year in October only provided for greater judicial scrutiny of such coupon settlements. Senators on the Judiciary Committee who opposed the bill rightly argued that ``reforms with real teeth were needed to end worthless coupon settlements in class action cases.''

We agreed with their view. The compromise does a much improved job of reining in these coupon settlements by pegging the lawyers' fees to the value of the coupons actually redeemed by class members or on the reasonable value of the legal work actually performed by the counsel in the litigation. As a result, there will be a strong incentive to resist easy settlements and fight for an outcome that is truly fair and equitable to the plaintiffs.

Another important consumer protection enshrined in the compromise bill concerns the payment of so-called bounties. The earlier legislation included a provision that prohibited settlements that allow one member of a plaintiff class from receiving a higher settlement award than other members of that class.

On its face, such a provision might seem innocuous. After all, it appears to confirm the notion that all plaintiffs should be treated equally and fairly. However, the bounties provision in the original bill would have unintentionally created a significant problem. While it makes sense for all plaintiffs' class members to be treated equally in many cases, in some other instances it is more appropriate for some class members, particularly class representatives, to receive larger awards than others in the same class. For example, in a class action designed to prevent the wrongful discharge of employees, it would be appropriate for those who have already been fired, for instance, to receive larger settlements than those who are merely threatened with being fired.

Furthermore, in many cases, the named plaintiffs--the people whose names appear on the papers filed with the court--are subjected to harassment, angry phone calls, hate mail, even death threats. Anybody who has seen Julia Roberts' movie ``Erin Brockovich'' or the earlier Meryl Streep movie about the life and death of Karen Silkwood will recall that being a named plaintiff in a lawsuit against a company that employs many people can be a very unpopular thing to do. It often takes courage to stand up for what one believes is right, and unfortunately those who have the courage to do the right thing are sometimes attacked, ridiculed, and ostracized.

If the bounty provision in the earlier bill were to have remained in the compromise, it would have simply stripped away any incentive for individuals to come forward and protect the rights of the class. Under current Federal law, a class representative in a successful class action can be rewarded for taking the initiative to fight unlawful discrimination. Most class members choose to sit on the sidelines and reap the benefits of the case when it is finished. Class representatives, on the other hand, take an active role in their cases, and they do so not only for themselves but to obtain justice for others in similar situations. Under the earlier bill, the courts would not have been able to recognize the special efforts or contributions made by class representatives.

We have listened to the civil rights community which was strongly opposed to the bounties provision in the original bill. The compromise deletes this provision, which will ensure that the courtroom doors remain open for those plaintiffs willing to serve as class representatives.

The compromise bill also responds to the concerns of the Federal Judicial Conference and others about the class settlement notice provisions in the earlier measure. The provision in the original legislation was intended to provide clear and simpler notices to class members regarding proposed class settlements. However, we heard from the Federal Judicial Conference that the notice requirements, while well intentioned, would have actually been too burdensome and too complicated to implement.

According to the Judicial Conference Rules Committee, these notice requirements would have ``undermined the bill's stated objectives by requiring notices so elaborate that most class members [would] not even attempt to read them.'' In addition, they would have conflicted with the December 1, 2003 amendments to Rule 23 of the Federal Rules of Civil Procedure, which are similarly intended to guide the form and content of settlement and certification notices provided to class members. The compromise, therefore, deletes the confusing notice provisions in the earlier bill and simply enacts the recommendations of the Judicial Conference. Yet another compromise in this legislation.

At the very heart of the compromise are provisions concerning when interstate class actions can be removed to Federal court. Under Article III of the U.S. Constitution, out-of-State litigants are protected against the possibility of prejudice of local courts by allowing for Federal diversity jurisdiction when the plaintiffs and the defendants are from different States.

Title 28, section 1332(a) of the United States Code specifies the current requirements that must be met for an out-of-State litigant to claim Federal diversity jurisdiction and have his or her case heard by a Federal court. First, every member of the class must be seeking damages in excess of $75,000, including interest and costs. Second, there must be complete diversity; that is, every named member of the class must be a citizen of a different State than every defendant in the same litigation.

Walter Dellinger, the former Solicitor General during the Clinton administration, noted that when Congress first drafted the diversity jurisdiction statute, the class action system as we know it today did not exist at all. In the years since its enactment, however, the law has been interpreted to exclude most nationwide class actions from Federal court.

For example, Dellinger remarks that the requirement for complete diversity can easily be avoided by the simple expedient of including at least one named plaintiff and defendant that share a common State citizenship.

With regard to the amount in controversy requirement, Mr. Dellinger contends that a class action can easily be configured to ensure that at least one class member does not satisfy the minimum amount, or by seeking $74,999 in recovery on behalf of each and every plaintiff and class member.

As a result, attorneys bringing class actions can manage to avoid Federal court all together, and have the case tried in a State court, often in the county of their choosing, even though the total amount at stake might exceed hundreds of millions of dollars and have true multi- State national implications. This practice is commonly known as ``forum-shopping.'' While it is in concept a long-standing part of our law, it has become a growing problem in the United States.

Under S. 2062, the bill now before us, the current rules for diversity jurisdiction are carefully adjusted so that certain large multiparty cases, namely, those that are truly nationwide in scope, 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. In other words, the compromise would bring the class action process closer to the Framers' intent by allowing cases that are multi-State or national in scope, where the risk of local biases are the greatest, to be heard in Federal court and not in State court.

Specifically, the Federal district court will have original jurisdiction over any class action with more than 100 members if the following two requirements are met. First, the aggregate claims must exceed $5 million, rather than each and every class member must exceed $75,000 in alleged damages. Second, rather than requiring every member of a class be a citizen of a different State than every defendant, S. 2062 allows for Federal jurisdiction if any class member is a citizen from a

different State from any defendant. Again, the purpose of these changes is to ensure that more substantial multi-State class actions are heard in Federal court.

Could I finish? I only have a limited amount of time, and I apologize, and I will get through this statement.

These moderate changes to the Federal diversity statute were included in the original legislation that came before the Senate last October. Under the compromise, however, we further refine these provisions to address two important concerns that were not fully taken into account in the earlier bill. I want to especially commend Senator Feinstein of California for her leadership in helping to clarify these issues, both during the Senate Judiciary Committee's consideration of the earlier measure and in the discussions that led to this compromise.

First, the compromise responds to concerns that the original bill did not adequately address the handful of small, rural State courts that have increasingly become a magnet for more and more nationwide class actions. Such ``magnet jurisdictions'' have tended to have lax class certification requirements, and have been less than rigorous in reviewing proposed settlements. In fact, one of the most flagrant abuses of the current class action system occurs when lawyers ``forum shop'' that is, invent an injured class and then file a national class action in a ``magnet jurisdiction'' where the judges are more likely to lend a sympathetic ear.

Perhaps the most famous of these so-called ``magnet jurisdictions'' is Madison County, IL. According to a 2001 study in the Harvard Journal of Law and Public Policy, the per capita rate of class action filings was almost twice that of the second-ranking jurisdiction in the United States. In recent years, the study found that class action filings in Madison County increased by 1,850 percent during the period between 1998 and 2001.

Although the population of Madison County is only 250,000, it ranks third nationwide in the number of class actions filed each year, behind only Los Angeles County, CA and Cook County, IL.

I am limited on time, I say to my colleague. When I get through this, I will be glad to respond.

I will come back to the Senator.

Even more astounding is the data reported in the January 11, 2004 St. Louis Post-Dispatch, which discovered that in anticipation of Congress reforming class action procedures, the number of class actions filed in Madison County Circuit Court rose to an all-time high.

Yet it is not only the sheer numbers of filings in Madison County that is so astonishing. What is so surprising is that many of these class actions have little connection to the county. In fact, sometimes only a few class members actually came from that particular jurisdiction. Even the Illinois Supreme Court has noted the congested dockets in this court and declared ``the congestion is aggravated by the presence of [nonresident] cases that have little or no connection to Madison County.''

For example, a recent case that found its way to Madison County involved a purported class action on behalf of 30 million customers who claimed to be injured by Sears in connection with an allegedly deceptive tire balancing service. Only one plaintiff, a Madison County resident, was named, and only one Sears automotive repair shop was actually located in Madison County. The class action, however, sought to certify a nationwide class, allegedly subject to the Illinois Consumer Fraud Act, despite the fact that the vast majority of class members and the vast majority of Sears locations have no connection to Illinois at all, much less to Madison County.

Madison County has especially been a magnet for asbestos cases. In fact, Madison County led the Nation 2 years ago in the number of mesothelioma cases filed. In most of these cases, however, the plaintiffs did not live in Madison County, were not exposed to asbestos in Madison County, and were not treated for any asbestos-related illnesses in Madison County.

For example, in a recently decided case, an Indiana resident claimed that he was exposed to asbestos at the U.S. Steel plant in Gary, IN. He sued U.S. Steel, which is based in Pennsylvania, in Madison County. Despite the total lack of connection to the local forum, the case proceeded to trial and a Madison County jury awarded him $50 million in compensatory damages and $200 million in punitive damages.

Clearly, such practices need to be curtailed in any meaningful reform of the class action system.

Again, I emphasize I am a strong supporter of class action. Class action litigation is critically important, but when these things get out of control, then we have to get them back on track again.

There are many more examples of national class actions implicating hundreds of millions if not billions of dollars being decided by Madison County judges because of its reputation as a magnet court. That means that the laws of Madison County, Illinois on everything from insurance policy to consumer fraud to environmental protection are being imposed on the residents of the other 49 states, despite the fact that many of those States have adopted different legal views.

The compromise bill specifically addresses this serious problem. It includes language not in the earlier bill to clarify when a Federal court can exercise its jurisdiction if between one-third and two-thirds of the proposed class members and all primary defendants are citizens of the same State.

Specifically, the compromise authorizes Federal courts to consider any ``distinct nexus'' or connection between the forum where the action was brought and the class members, the alleged harm, or the defendants. The purpose of this provision is to require Federal judges to consider whether the interstate class action has any relationship to the jurisdiction where it is brought. If there were no such connections, as in the case of many of the class actions filed in Madison County, the Federal judge would then have the discretion of moving the case to Federal court. Such a provision would therefore rein in the blatant forum shopping that is so prevalent in Madison County and other magnet jurisdictions today.

The other improvement to the Federal diversity statute that the compromise bill makes concerns the so-called ``local class action exception.'' The purpose of this exception is to ensure that State courts can adjudicate class actions that are truly local in nature, and they should have that right.

Under the original bill, Federal jurisdiction would not have been extended to those cases in which two-thirds or more of the members of the plaintiff class and the primary defendants were citizens of the State in which the suit was filed. Such cases would have remained in State court, since virtually all of the parties in such cases would have been local, and local interests therefore presumably would have predominated.

There were concerns raised in the earlier bill, however, that class actions with a truly local focus may be moved to Federal court because of the presence of an out-of-State defendant necessary to prosecuting the action.

The compromise responds to these concerns by further refining the criteria as to when a class action is to remain in State court. First, under our proposal, there must be a primarily local class--that is, more than two-thirds of the class members should be citizens of the forum State. Second, there must be at least one real local defendant. Third, the principal injuries resulting from the alleged conduct or related conduct of all of the defendants must have occurred in the forum State. Finally, there must be no other class actions having been filed in the previous 3 years based on the same or similar allegations against any of the defendants. Again, these provisions respect State sovereignty by ensuring that class actions of a truly local nature are kept at the State level, while complex class actions with nationwide implications are heard in Federal courts.

I want to briefly respond to some of the concerns raised about the jurisdictional provisions in the bill. Critics of

this legislation have claimed that the measure would sweep most if not all State class actions into Federal court, where overburdened and unsympathetic judges would let them wither and die.

I believe that such concerns are largely misplaced. First, as I noted earlier, we included provisions in the compromise to ensure that State prerogatives are respected. These provisions--namely, the ``local class action exception'' and the ``distinct nexus'' language--are intended to keep truly local cases in State court.

In fact, the compromise leaves in State court a wide range of class actions, such as those in which all the plaintiffs and defendants are residents of the same State; those with fewer than 100 plaintiffs; those involving less than $5 million; those in which a State government entity is the primary defendant; those brought against a company in its home State in which two-thirds or more of the class members are also residents of that State; and shareholder class actions alleging breaches of fiduciary duty.

What the compromise does target for Federal jurisdiction, however, are those nationwide or multistate class actions that are filed in magnet courts such as Madison County, IL. While I respect the views of those who assert that State courts are appropriate forums for such cases, I must respectfully disagree. In my view, such large, multistate or nationwide class actions are precisely the kinds of cases that are most appropriately tried in Federal court. I believe that the provisions we included in the compromise are quite discriminating about which class actions will be removed to Federal court and which will remain in State court.

Second, critics of the legislation have argued that Federal courts are so overburdened that they do not have the resources to handle class actions formerly assigned to State court judges. Again, these concerns are unfounded. The real workload issues are not in the Federal courts but in the State courts, where the average State court judge is assigned three times as many cases as his or her Federal counterparts. According to the Court Statistics Project, State court judges are assigned over 1,500 new cases each year. In contrast, the Administrative Office of the United States Courts finds that each Federal court judge was assigned an average of 518 new cases during the 12-month period ending September 30, 2002.

Third, I also want to be perfectly clear on one further matter. There is absolutely nothing in this legislation that would alter any individual's right to seek redress for his or her injury. It does not grant defendants any new defense. Consumers can bring the same exact claims as they are bringing now. Civil rights, environmental, and employment claims are in no way precluded. The only issue that this bill would address is whether it is more appropriate for a State or Federal court to adjudicate those same rights, and I believe that we have struck the appropriate balance in making this determination.

I want to now return to the other provisions in the compromise that represent significant improvements over the earlier legislation.

We have clarified the date when the plaintiff class could be measured. The compromise makes clear that citizenship of the proposed class members is to be determined on the date plaintiffs filed the original complaint. If there is no Federal jurisdiction over the first complaint, however, citizenship is to be determined when plaintiffs serve an amended complaint or other paper indicating the existence of Federal jurisdiction.

The original bill had been silent on when class composition could be measured, which caused some concern that a court would have to constantly reconsider jurisdiction as the contours of the class changed. I believe that the compromise has adequately addressed this matter, and has provided much needed clarity to determining class composition.

Another provision in the earlier bill that caused great difficulty would have required Federal courts to dismiss class actions if the court determined that the case did not meet Rule 23 requirements. The bill provided that the class action complaint may be amended and refiled in State court, but that the new complaint would be subject to removal again if it met Federal jurisdictional requirements. Thus, even if a State court subsequently certifies the class, it could be removed again and again, creating a judicial merry-go-round between Federal and State court.

The compromise stops the merry-go-round altogether. It eliminates the dismissal requirement, giving Federal courts discretion to handle Rule 23-ineligible cases appropriately. Potentially meritorious suits will therefore not be automatically dismissed simply because they fail to comply with the class certification requirements of Rule 23.

The original bill would have also allowed the removal of a case at any time to Federal court even if all other class members wanted the case to remain in State court. In June 2003, 106 professors of constitutional law and civil procedure wrote to Majority Leader Frist and Minority Leader Daschle expressing their concerns over this provision. They argued that:

[It] would give a defendant the power to yank a case away

from a state-court judge who has properly issued pretrial

rulings the defendant does not like, and would encourage a

level of forum-shopping never before seen in this country.

Moreover, this provision would allow an unscrupulous

defendant, anxious to put off the day of judgment so that

more assets can be hidden, to remove a case on the eve of a

state-court trial, resulting in an automatic delay of months

or even years before the case can be tried in Federal courts.

We listened to the concerns of the law professors and deleted the provision in the original bill allowing plaintiffs to remove class actions. We also retain current law permitting individual plaintiffs from opting out of class actions. The compromise would therefore make a real difference in curbing abuse of the removal process by various counsel.

Two further improvements in the compromise are also worth mentioning.

First, we responded to concerns that the ``mass actions'' provisions in the original legislation were too broad. The earlier bill would have treated all mass actions involving over 100 claimants as if they were class actions.

Under the compromise, only more substantial claims in a mass action-- namely, those that would meet the normal jurisdictional amount requirement of $75,000 for individual actions--will be subject to Federal jurisdiction.

In addition, we change the ``single sudden accident'' exception to exclude from Federal jurisdiction mass actions in which all claims arise from an ``event or occurrence'' that happened in the State where the action was filed and that allegedly resulted in injuries in that State or in a contiguous State. The purpose of this change is to allow a much broader range of truly local cases to remain in State courts.

The compromise also clarifies that there is no Federal jurisdiction under the mass action provision for claims that have been consolidated for pretrial purposes.

Second, the original bill would have allowed defendants to seek unlimited appellate review of Federal court orders remanding cases to State courts. If a defendant requested an appeal, the Federal courts would have been required to hear the appeal and the appeals would have taken months or even years to complete.

The compromise would obviate the potential for workload problems and long delays in two important ways. First, it would give the appellate courts the discretion to conduct reviews at their discretion. Presumably, Federal courts would refuse to hear an appeal unless it presented novel issues or where a district court has clearly abused its discretion. Second, it requires such appeals to be heard on an expedited basis by establishing tight deadlines for completion of any appeals so that no case can be delayed more than 77 days, unless all parties agree to a longer extension.

Finally, the compromise is in no way retroactive--that is, it will not upset or alter in any way cases filed before enactment, should in fact the bill be signed into law. Unlike other litigation reform bills considered by this Congress on guns, medical malpractice, and MTBE, the compromise does not shut the courtroom door on anyone. Instead, it will just direct them to a Federal rather than a State courthouse.

These changes I have discussed represent a fair and a balanced compromise. They constitute a significant improvement over the earlier class action reform legislation brought before the Senate last October.

I want to reemphasize my long-held view that a strong class action system can ultimately serve as a force for good. It can be used to hold companies accountable for significant violations that may result in a small monetary charge for one victim. It can also be harnessed to allow large groups to seek redress for civil rights and other harms where they could not have done so individually. In short, the class action system is the great equalizer in the American judicial system.

Yet nobody can deny that the class action system is being seriously abused. As The Washington Post editorialized last year:

No area of the United States civil justice system cries out

more urgently for reform than the high stakes extortion

racket of class actions.

In addition, an excellent Newsweek article published last December entitled ``Lawsuit Hell: How Fear of Litigation is Paralyzing our Professions'' noted that such lawsuits are:

. . . changing and complicating the lives of millions of

American professionals in ways that confound common sense and

cast a shadow over a system that can, at its best, offer

people relief and redress from legitimate grievances.

Even former Solicitor General Walter Dellinger commented that such evidence of class action abuses in State and county courthouses:

. . . gives me great concern that the rights of truly injured

individual plaintiffs, as well as the rights of corporate

defendants, have fallen victim to manipulation, and even

evasion, of settled rules--rules that, no less than financial

disclosure laws, are intended to ensure openness and

accountability, as well as fundamental fairness, in the

judicial resolution of major disputes with national

consequences.

Ultimately, the real losers of a broken class action system are not businesses or consumers. Rather, it is the American public's overall confidence in the legal system that will suffer unless a sensible class action reform package, such as that contained in the compromise, is enacted into law.

Bipartisan legislation addressing the class action system's most egregious abuses is long overdue. This carefully balanced compromise that is now before the Senate will make a real difference in reducing the abuse and manipulation of the class action system. It would restore class actions to their original noble purpose as a force for positive change in society, and I urge my colleagues not to let this golden opportunity be squandered.

I know time is getting short. My colleague from Illinois was here, and he would like to be heard on this matter.

Let me return to where I started. I spent a lot of time on this measure. I think we have written a very good bill. I would not claim that this bill is perfect. There are some colleagues who fundamentally disagree with me on this issue, and I respect their views.

What I cannot tolerate, however, is the procedure under which this bill is going to be considered. I say to my friends on the other side of the aisle with whom I worked very closely, if you constrain this institution's ability to offer either nongermane or germane amendments to this bill, then this Senator will not be able to support the motion to invoke cloture.

We failed to invoke cloture by only one vote last October. Although I care about this bill very much, I care far more about the Senate and how we do our business. It is going to disappoint me terribly to have to vote against cloture. But if you constrain the ability of Members of this body to offer specific amendments, then this Senator is going to have to wait for another day to fully consider this measure.

There are many people across this country who believe we put together a good compromise, but I am not going to vote for a compromise that doesn't allow the Senate to work its will on this important matter.

I realize my time has expired.

I am.

Madam President, before he leaves the Senate floor, I commend my colleague from Ohio for his excellent statement.

I agree with him that this is an important piece of legislation. I have spent a good part of a year, along with

my good friend and colleague from Delaware, and others--the Senator from California, Mrs. Feinstein, the Senator from Wisconsin, Mr. Kohl, and the Senator from New York, Mr. Schumer--working to try to put together a responsible bill on class action reform. We have done that with this proposal.

I regret the fact that nearly eight months after we forged a compromise on class action reform, we have just begun to deal with this issue. I had hoped the legislation would have come up earlier in the year when there would have been more time available to consider it.

I was pointing out to my colleagues earlier, as someone who managed and wrote the securities litigation reform bill, that we spent almost 3 weeks on the floor of the Senate debating that bill. At the time, Bob Dole was the majority leader of the Senate. We had countless amendments that were offered, both relevant and nonrelevant amendments. Never once was cloture invoked. Never once did someone fill up the amendment tree so as to limit who could offer what amendments. You didn't have to get permission, in effect, to offer your amendment. It was a contentious debate from time to time, but ultimately the will of the Senate prevailed. The legislation was adopted.

But I also point out, interestingly, the securities litigation reform was the only bill that President Clinton vetoed that was ultimately overridden by both the House and the Senate. It became the law of land.

It was a lengthy process, but it was a good process. I think the debate was healthy. It was complicated, but nonetheless I believe the legislation ultimately proved to be worthwhile.

I cite that example because here we are now in a situation where before any amendments were offered--and we went on this bill almost 24 hours ago--we were told last night by the majority there would be no votes last evening. We have been in session since about 9 o'clock this morning. There have been no amendments offered one way or the other because we have an amendment tree that is filled up, and you must get permission to bring up an amendment.

Madam President, this is the U.S. Senate. I have served here for a quarter of a century and I have rarely seen this kind of procedural tactic being used on a bill that enjoys a strong majority of support. I believe we have at least some 62 supporters of this bill. The idea that we are not going to allow amendments to be brought up unless approved by the majority runs counter to everything this institution stands for.

Now I know that some of these nongermane amendments are uncomfortable. There are people who are against them, although in several instances they have strong bipartisan support. For example, the legislation dealing with immigration reform has been offered by Senator Craig of Idaho and Senator Kennedy of Massachusetts. Also the reimportation issue on drugs. I will be the first to admit it, but I think an overwhelming majority of our colleagues are either cosponsoring or supporting that legislation. Even in the other areas, we have had a limited amount of time to bring up some of these issues.

But I believe we can get time agreements on some of these amendments if we stay in today, if we stay in tomorrow, if we stay in Friday, if we work longer hours, and if we come back on Monday or Tuesday. I believe we could adopt this important legislation, and we would either accept or reject a number of these other nongermane amendments. But to go through now the second day with nothing being done on a bill that many would argue is one of the most important pieces of legislation from the business community perspective is inexcusable. I want the business community to know what is happening here because I am sure the allegations are going to be made that somehow the minority is trying to stop this legislation. That is anything but the case.

We probably could have dealt with five, six, or seven amendments on the floor of the Senate today. I am told there are only 13 filed amendments on this bill. In effect, we probably could have almost concluded action on this legislation instead of stonewalling to make sure some amendments are not going to be debated and heard. We stop everything from happening so a good piece of legislation that a lot of people have worked long and hard on to get right may be denied an opportunity to be heard. That is wrong, Madam President.

Now, again, I know voting on nongermane amendments is not something we are terribly excited about here. It is the U.S. Senate though. In the U.S. Senate, we allow nongermane amendments--absent a unanimous consent agreement or filing cloture--to be considered by this body. So even before a single amendment is debated here, the majority is now invoking rules and procedures that limit the ability of this institution to be heard. I regret that deeply.

I was fearful this would happen. I am sort of mystified as to why it is happening. The majority, at least among their members, are more supportive of the class action reform bill.

There are a number of Members on this side who are supporting this legislation, but the bulk of the support comes from the majority side. I am mystified as to why the majority would not be pushing us to bring up our amendments, agree to time limits, and then vote on the amendments one way or the other and move the bill forward. But that is not the case.

So we find ourselves now at the close of business on this day. We voted on one judge yesterday, and that is it. Now we are about to go into Thursday. We will be leaving, I presume, sometime around noon on Friday and probably won't come back until next Tuesday. We have about 30 legislative days left around here to consider all matters before the elections of the fall. If my colleagues sense some frustration in this Senator's voice, it is because I am frustrated.

I regret having spent as much time on the bill only to find out in the end we can't even get amendments to be brought up to debate. Instead, we have to agree ahead of time what amendments are going to be brought up. Those rules exist in the House of Representatives. The rules of the Senate are very different. This body is the antithesis of the House of Representatives, and for good reason. That has been the way this institution has functioned for two centuries.

On important legislation such as this, to invoke House rules to apply in the Senate is unfortunate. As important as this bill is, how this institution functions, in my view, is far more important. Senators have the right to be heard. Because one day, not too distant in the future, the very Senator who today is trying to stop a debate may be the one seeking one. And so be careful what you wish for when you set precedents or establish procedures that may be repeated at times when you may find yourself on the other side of the political equation.

For all of those reasons, I am frustrated that this important bill many of us have spent a lot of time on may be close to death. We may not be able to enact it. That is unfortunate that we are getting to that point with this bill, despite all the efforts that have been made, where we may not get a chance to even debate it, much less act on it.

I hope the leadership will listen to those who want to bring up some amendments, and see if we can't work out some time agreements and move forward. If that is not the case, the idea that somehow the Senate as an institution would have to take a back seat to some procedural hurdles the majority would want to impose on the minority is not worth giving up. As important as this bill is, how the Senate operates is more important to this Senator. I will be most reluctant, but nonetheless I want my colleagues to know if it comes down to making a decision about supporting a bill I have helped write or abandoning procedures in the Senate, I will protect this institution over this bill, as much as I would like to see this bill enacted.

I am not going to sit here and support a set of procedures which deny my colleagues an opportunity to be heard. I wouldn't support an unlimited right that goes on for days with endless amendments. I know when I am being gamed. I know when I am being taken advantage of. That is not the case at this point at all, not even close to being the case.

My hope is wiser heads will prevail, that voices who care about this legislation would be heard, and that we could move to consideration of this legislation in the normal course of business,

on how we normally function when matters such as this emerge, where there is a division of thought and there are differences of opinion.

There are those who feel strongly about not adopting this legislation. I understand that. But there are also those in the majority who would like to see it adopted. To suggest somehow we are going to prohibit those who would disagree with the bill an opportunity to be heard on other matters on this legislation is a wrong set of procedures to be followed.

Despite the fact my name is on this bill and I am proud of the fact it is--I think it is a good bill and we did a good job writing this compromise--and as much as I would like to see S. 2062 become the law of the land, I am not about to turn my back on an institution that allows Members to be heard and their ideas to be debated. As important as this bill is, it is not as important as maintaining the integrity of the Senate.

I yield the floor.

Mr. President, I have been listening to this debate, and I would first like to respond to the concerns raised by some of my colleagues on the other side of the aisle about the majority leader's decision to fill the amendment tree. First, I commend the leader for taking this unfortunately necessary step because it significantly minimizes the mischief that will in all certainty occur if this bill is left open to amendments that have absolutely nothing to do with the subject of class action.

These are amendments that are offered to score political points in an election year and that, at the end of the day, will obliterate any chances that class action reform will become law. That is exactly what is involved, and we all know it. We know that if some of these amendments are added to this bill, it will kill the bill.

We thought we had an agreement last November, of 62 people. As I have always interpreted it, when you get an agreement to support a bill, that means support it against all amendments unless those who made the agreement agree otherwise. My colleagues on the other side say that was

not the agreement. That has been the agreement every time around here, where you know that mischief is going to occur and we just continue on and on.

By filling the tree, the leader has effectively protected key bipartisan legislation from the same procedural pitfalls that faced the DOD authorization bill, FSC/ETI, and the Internet tax bill, just to name a few.

To be sure, the current move to protect the bill from nonrelevant or nongermane amendments is nothing new, as former majority leaders have invoked this prerogative with other important pieces of legislation in the past. The ranking member from Vermont even admitted on the floor last night that S. 2062 was probably the last amendable vehicle to be considered by the Senate this year. While this bill has legs to move out of the Senate--that is why it is the last amendable bill in his eyes--I can assure you it will go nowhere if it is bogged down with extraneous amendments that peel votes in the Senate.

That is the game here and everybody knows it. Everybody on the outside should know it, too. We made a deal; we had 62 people agree to the language in this amendment. Now we have people peeling off from the language in this amendment by wanting to be able to vote for nongermane and nonrelevant amendments which will kill the bill.

Assuming the bill goes out of the Senate with controversial amendments, what is going to happen in the House after they alter the bill? I seriously doubt we will have enough time this year to resolve differences in conference. Indeed, I think the chances are pretty slim, especially since the minority leader has threatened to oppose the appointment of conferees for the rest of the year.

How do we get it done if we put nonrelevant amendments on this very important bill that we have worked on for 6 years to get to this point? A lot of decent people on both sides have worked very hard, but we know we are going to have to have 60 votes to vote on this bill.

The minority leader himself has threatened to oppose the appointment of conferees for the rest of the year. How do you get this bill if these nongermane, nonrelevant amendments are added? It is apparent some of them might be. Even if you could, how do you get it by the House? Even if you get it by the House, how do you get it by the conference?

Then, when those amendments are taken off, also if they were taken off in conference--assuming we would be given the privilege of being able to hold a conference, something that has not been denied to my recollection before this year--we may not have time to get this bill done anyway.

S. 2062 embodies the bipartisan deal we reached in good faith last November, Democrats and Republicans, 62 of us reached in good faith. We reached a compromise because I thought the end goal was to get a class action bill passed into law. I can say, in all certainty, that my agreement to further moderate this bill was certainly not premised on letting it become a Christmas tree for unrelated measures so people can score political points on the floor of the Senate--people who never would vote for this bill to begin with.

If the supporters of the underlying bill really want class action reform, I see no reason why they should not support the leader's action. No one is denying Members from offering amendments that are germane to the bill, although I would recommend we even vote those down unless the people who agreed in a bipartisan way agree to allow those amendments to pass. That is what we usually do on legislation around here. But now we have all new rules here that suddenly spring up.

No one is denying Members from offering amendments that are germane to the bill, amendments that Members, in their view, believe will improve the bill. If they will, we can agree on those. I see no reason why we cannot give these amendments an up-or-down vote. In fact, the leader explicitly made this offer to the other side when he tendered a time agreement to consider several key amendments, including a vote, a vote on a nongermane, nonrelevant amendment, Senator Kennedy's amendment on the minimum wage measure which he has been trying to get up for quite a while. That is how far the majority leader went. But, no, they want a lot of other buzz amendments that are political in nature, that they think they can pass, that will kill this bill. Anybody with brains knows the game.

This was a good-faith offer by the leader. We have heard for some time how important a minimum wage amendment is to my colleagues and to the country. I don't know of anybody on our side objecting to consideration of the minimum wage amendments and any amendment also to it. What we do object to is a never-ending moving of the goalposts where more and more amendments are added, especially nongermane and nonrelevant amendments.

Because the Democrats objected to this very generous unanimous consent request, the leader had no choice other than to protect the class action bill from this open season of political amendments that will kill it anyway.

That is what it comes down to. Either we are going to vote for this class action bill, the 62 of us who have agreed it should pass--and I think more would vote for it in the end--or it is going to be killed. Because that is the choice. We made a deal last November to pass class action reform and that is the direction our leader is taking us today.

When it comes to nongermane amendments that appear to be offered to score political points in an election year, I want no part of that on this bill, and neither does the leader, and for good reason. We know the games around here.

There are a significant number of Democrats who do not want this bill under any circumstances because the No. 1 hard money funder to Democrats happens to be the personal injury lawyers in this country. The No. 1 funder of the Presidential campaign happens to be personal injury lawyers in this country, for the Democrats. The No. 1 opponents against this bill happen to be some of the personal injury lawyers. Not all, because the really good lawyers can go to Federal court and get big verdicts. They don't have to have false mechanisms to be able to get good verdicts on behalf of their clients. They don't have to play games with magnet courts that are, if not corrupt, so close to being corrupt in some of these special jurisdictions in this country where they have had a field day.

Regarding the jurisdictional test in S. 2060, the minority leader made the point they cannot get their cases tried in South Dakota if this bill passes. That is total poppycock. You know, the jurisdictional test in S. 2062 moves only larger interstate class actions to Federal court, including large cases where there are more than 100 class members and more than $5 million in amount in controversy.

If they fit that jurisdictional category, then they will have to go to Federal court. But as somebody has tried a lot of cases in both Federal and State courts, I have to say we used to love to get to Federal court because people know it is a more important case. The reason some of these attorneys want to go to some of these State courts, such as Madison County, is that is where it is a field day for plaintiffs' lawyers whether they have a good case or not--and they know it, and they have been milking this system and hurting people all over this country in ways that are unseemly and, frankly, wrong. S. 2062 also has exceptions to keep local controversies in State courts. We have these exceptions.

To make a long story short, I have heard my colleagues on the other side--some of the people who have agreed to be cosponsors of this bill, who have agreed to be in the 62 who have supported this bill which would make up enough to be able to invoke cloture on this bill--now moaning and groaning they want a right to bring up nonrelevant, nongermane, political amendments to score points. That is not the way I have operated around here, and that is not the way most Senators have operated around here, but that is what we are faced with here.

Either we are going to invoke--probably we will have to file cloture in order to end another filibuster. I hope the 62 people who said they would be for this bill will vote for cloture. If they are not, then this bill is going to be dead and 6 years of honest work, 6 years of bipartisan effort, is going to go right down the drain.

We all know what the game is around here. It is by those who have never wanted this bill to pass anyway, some who want to play both sides on this thing, who basically want to have the right to foul up the bill with amendments they know the House won't take and they know if we have to go to conference we are probably not going to be able to get conferees.

That is what is involved, and it is a game. It is a bad game at that. I have been known to stand up for the trial lawyers when they are right. I have taken a lot of grief for it from some people on our side who are wrong, too. I am going to stand up for them when they are right because trial lawyers do a lot of good in our society when they stand up and fight for those who are downtrodden and not treated properly in our society.

What has been going on for years in this area is the abysmally dishonest forum shopping to local areas where they can get huge verdicts that shouldn't be gotten because they don't get them in their own jurisdiction. That is wrong. I think a lot of trial lawyers are starting to get upset about it because it is giving all trial lawyers a bad name because of the few who milk the system like this to the detriment of consumers, to the detriment of the little people, to the detriment of those who can't make it. That is what is involved, and everybody knows it.

To play this political game and bring up nongermane and nonrelevant amendments that we know will kill this bill is a terrible thing.

All I can say is there comes a time when you have to vote. There comes a time when you have to stand up and do what you said you would do. If you do not do it, then shame on you. All I can say is, that is what is involved, and anybody who says otherwise, it seems to me, is wrong.

I yield the floor.

Madam President, I know some of my colleagues on the other side want to speak. I have much more to say about this issue, and especially after the distinguished minority whip has chatted.

That would be fine. Do we know how long they would speak?

Can we get some idea?

I have no problem with that.

Did the Senator have enough time? Is the Senator finished? I would certainly grant him more time.

Madam President, I appreciate much of what the distinguished Senator from Connecticut has said with regard to this bill. He is right on. I do not agree with him that he should not vote for cloture on this matter because he knows, we all know, if we do not get cloture, this bill is not going to make it.

The Senate is used to having nongermane, irrelevant--nonrelevant amendments foreclosed in order to get legislation passed. We all know unless we foreclose that, this legislation is never going to see the light of day. That is what we have been putting up with now for 6 years.

To come on the floor today, as some have, and indicate that the Senate is going to be broken if we proceed on this bill in a way that permits only germane amendments and with one nongermane amendment which those on the other side have wanted for months, and which I think the majority leader was willing to give them, is not shooting straight, as far as I am concerned. As everybody knows, we have worked 6 years on this bill; 62 people signed off on this bill as prime cosponsors. We lost on cloture by one vote last time, one solitary vote. If we get only one of the three who agreed to go ahead with this bill, knowing it would cut off the extended debate or the filibuster, which is what we agreed to, then this bill is going to go forward and we will only have to deal with germane amendments and not a whole proliferation of nongermane, political, politicized amendments, which is what the majority leader would like to foreclose.

All of the holier than thou ``we must preserve the Senate'' comments are meaningless in this context. If this were the first time this bill had ever been considered, if it had not had extensive debate through at least four hearings through the years, if it hadn't had an extensive internal debate as we agreed to accept a whole raft of amendments by the three who came on this bill back in November of last year with the understanding that we are going to invoke cloture--if we had not gone through all that, then I might see some reason for the comments made here today, but those comments should not see the light of day if you look at the facts and you look at what has gone on here.

Let me mention my support of S. 2062, the Class Action Fairness Act of 2004. I appreciate Senator Reid's impassioned defense of trial lawyers. It is a profession I proudly belong to and share with him. But this bill is not about attacking trial lawyers. It is about correcting certain grotesque abuses of our judicial system by a handful of class action lawyers who are giving all the other trial lawyers a bad name. On this point the evidence is clear and undeniable.

Furthermore, I would like to note that the Erin Brockovich case, which my Democratic colleague from Nevada mentioned, would have remained in State court. There is no question about that. The suit of Anderson v. PG&E, known as the Erin Brockovich case, was brought in California by California residents against a California company.

There is no question that if they wanted to stay in State court they could. Under this bill, the case would not have been eligible for removal under diversity jurisdiction principles. Our concern is to remove truly national actions to Federal court and not local controversies like this one.

The evidence is clear and undeniable. The well-documented abuse of the class action litigation device victimizes plaintiffs--the very people that class actions are supposed to benefit. These abuses cheat millions of consumers who unwittingly have their legal rights adjudicated in local courts thousands of miles away. They deny the due process rights of defendants who are relentlessly hauled into a handful of small county courts where the playing field is unfairly tilted in favor of the plaintiffs' bar. And if that were not enough, class action abuses are eroding public confidence in our civil justice system.

To give the class action problem some perspective, I want to consider the effect of this litigation in just one locale--Madison County, IL, which the Senator from Connecticut mentioned. There we find a case study in the rampant misconduct within the class action system, its corrupting effect on the courts, and the desperate need for reform. This small town in the Southwestern part of that state provides all

the evidence necessary to convince anyone that the legal system is currently being exploited by shameless and self-seeking plaintiffs lawyers.

Madison County, IL is a rural county. I imagine that it is the type of place where Abraham Lincoln first got his start as a young lawyer and advocate for justice. In some notes taken in preparation for a Law Lecture around 1850, Lincoln set the ideal for his profession, a profession practiced by many in this Chamber.

No. 1: Discourage litigation. Point out how the nominal winner is often the real loser in fees, expenses, and waste of time.

No. 2: Never stir up litigation. The worst man can scarcely be found than the one who does this. Who can be more nearly a fiend than he who habitually overhauls the register of deeds in search of defective titles and stirs up strife to put money in his pocket. The moral tone ought to be infused into such a profession which should drive such man out of it.

No. 3: An exorbitant fee should never be claimed.

That was Abraham Lincoln. These words were uttered during a time when being a lawyer carried a title of honor, integrity and trust. Unfortunately, these words no longer carry such meaning for the lawyers who descend on Madison County. In the ``Land of Lincoln,'' the rule of law has been corrupted almost beyond recognition by self-interested personal injury lawyers, plaintiffs, and public officials without any sense of shame.

Unscrupulous personal injury lawyers go forum shopping to find friendly jurisdictions such as Madison County. Then the judges in those jurisdictions are frequently compromised by campaign contributions from the very same law firms arguing in their courtrooms and certify these cases with the proverbial rubberstamp, even though they don't deserve certification.

Finally, sympathetic local juries trying out-of-state corporations bestow unjustified and sometimes outrageous awards.

This pattern of behavior is not only an affront to the due process right of the defendants, but it breeds disrespect for the rule of law itself.

Let me refer to this chart. ``Honest Abe'' would be ashamed, and I would say anyone else would be ashamed who studied his life. The ``Land of Lincoln'' has become the land of lawsuits. Madison County has become the principal place where they bring these frivolous lawsuits and where they bring them because they are forum shopping. They know they can take unfair advantage. It is easy to see. They hire the attorneys right there in Madison County who have helped to support the judges who sit on the bench. The juries in that county don't care what the rule of law is or what reasonable approaches to the law really may be.

The courthouse in Madison County, IL is now described as ``magnet court,'' always on the lookout to find suitable venues for enriching itself. Entrepreneurial plaintiffs' lawyers or personal injury lawyers, many who practice in the field of personal injury, are sucked into its orbit.

The numbers alone tell the story. Over the last 5 years, the number of class actions in the county has increased by 1,000 percent.

Let me repeat that so this astronomical figure can sink in: a 1,000- percent increase. It almost defies logic. In 1998, there were only two class actions filed in the county. In 2000, that number rose to 39. In 2001, there were 43 new class actions.

One year later, the bridges leading to the riches of Madison County were clogged with carpet-bagging lawyers as word hit the street that the local court there was giving away money like it was Christmas Morning. Enterprising plaintiff's lawyers looking to make a quick buck knew that Madison County was the place for business. This includes millions of people. In 2002, 77 class action suits were field. In 2003, there were another 106. Between 1998 and 2003, the number of class actions in the county rose from 1 to 106.

In the classic American musical The Music Man, a con man came to take advantage of a small Midwestern town. In today's revival, a marching band of lawyers has descended on Madison County, with tall tales of jackpot justice and the dream of getting something for nothing. Only this time the judges of that Midwestern town have joined hands with the con-men to take all of America for a ride. Even when the purveyors have law degrees on their walls, snake oil is still snake oil.

Just in the last 3 years, the lawyers who flocked to Madison County succeeded in having the following classes certified:

All Sprint customers in the entire Nation who have ever been disconnected on a cell phone call in a suit in Madison County; every RotoRooter customer in the country whose drains might have been repaired by a non-licensed plumber; and all consumers who purchased limited edition Barbie dolls that were later allegedly offered for a lower price elsewhere.

Those are just three examples of how ridiculous this was getting. If it were not so tragic, it would almost be easy to laugh at these cases. We laugh at the thought of small county courthouse in Illinois adjudicating cases against national companies, involving various State and Federal regulations, and involving millions if not billions of dollars in settlements--but where neither the plaintiffs nor the defendants are typically residents of the county. These locally elected judges, with the close assistance of interested plaintiffs' attorneys, merrily continue to set policy for the entire nation, defying the principles of self-government on which our Federal system is based.

This situation is a mess and a few plaintiffs' lawyers are exploiting it to the hilt. The same five firms appeared as counsel in 45 percent of all cases filed between 1999 and 2000. Of the 66 firms appearing in these cases, 56 of them--85 percent--had office addresses outside of Madison County.

In this small county, with a population of 259,000, there are somehow more mesothelioma claims from asbestos exposure than in all of New York City, with its population of 8 million. On 9-member firm with an office in Madison County claims to handle more mesothelioma cases than any firm in the country.

And who benefits form all this litigation? One Madison County judge approved a $350 million settlement against AT&T and Lucent for allegedly billing customers who leased telephones at an unfair rate. What did the lawyers get? Forty-four lawyers from our firms will split $80 million for legal fees and $4 million for expenses. And the customers? They actually lost money. After their legal fees, the average class member got hit for $6.49. That is outrageous.

Lincoln's example is a distant memory in Madison County and clearly something is rotten in middle America. The Washington Post has succinctly described the situation. ``Having invented a client, the lawyers, also get to choose a court. Under the current absurd rules, national class actions can be filed in just about any court in the country.'' And those lawyers are picking Madison County. They're picking it because it is what some call a magic jurisdiction.

Dickie Scruggs happens to be a friend of mine. He made this comment. Dickie is one of the most wealthy and successful trial lawyers in the country. But he said this regarding Madison County and the ``magic jurisdictions.''

What 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 populists.

They're what 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 are 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 the 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.

This was Dickie Scruggs talking to Asbestos for Lunch, in May 2002. I think Dickie Scruggs has been very honest and accurate. I don't think anybody can deny what he is saying.

What makes it so magical? In a magic jurisdiction, the supposedly objective judge and jury both stand to gain from the settlement. Madison County is, the Chicago Tribune noted, a jackpot jurisdiction where local newspapers ``sport advertisements looking for the local plaintiff who can provide a convenient excuse to file.''

This choice of venue might have something to do with the fact that the elected judges of the circuit court of Madison County receive at least three-quarters of their campaign funding from the lawyers who appear before them in these class action suits. Unbelievably, since it so obviously smacks of corruption, this is an increasingly common occurrence all over the country. It is all enough to make an honest person cringe.

As a fellow attorney, who has taken an oath to support justice and the law, this story of juries and judges in the back pockets of those arguing before them, turns my stomach. Magic jurisdiction? Judicial black hole is more fitting.

In a simpler time, a State court would only certify a class if there was a substantial local connection. The judges of Madison County have created an environment, however, where a lifetime resident of Washington State, who worked in Washington, was allegedly exposed to asbestos in Washington, never received medical treatment in Illinois, and had no witnesses in Illinois to testify on his behalf, actually thought it was worth a shot to bring suit in a strange town halfway across the country. What was his connection to Madison County? He vacationed in Illinois for 10 days with his family nearly 50 years ago.

In this case, the court did the right thing and refused to certify this man's claim. But that a lawyer would even consider bringing it shows how far gone Madison County is. So far that the Illinois Supreme Court took the extraordinary step of rebuking it. As legal ethics Professor Susan Koniak of Boston University School of Law explains, ``Madison County judges are infamous for approving anything put before them, however unfair to the class or suggestive of collusion that is.''

This isn't justice. This is a travesty. The St. Louis Post-Dispatch, one of this Nation's great newspapers, has followed this epidemic of litigation closely, and they describe the run on the Madison County courthouse as resembling ``gleeful shoppers mobbing a going-out-of- business sale.'' Due process itself is corrupted by this circus. What is going on in Madison County too closely resembles blackmail for my taste. The deck is stacked against these companies hauled to Illinois to answer these charges. The cases are heard on an expedited basis that barely gives the defendants a chance to respond. Under these pressures, they are typically given an offer they can't refuse, and they settle regardless of the merits of the case. These ultimatums offered by lawyers in cahoots with judges are better suited to an episode of The Sopranos than to a supposedly impartial justice system.

Let's be clear. These are not local disputes. S. 2062 does nothing to remove local suits from local courts. These are suits brought on behalf of a nationwide class of clients against corporations that do business in every state. Madison County is not chosen as the venue because of its quaint scenery. It is chosen because it is a sure thing, a sure bet. The fix is in. If it was a sport, we would say the game was thrown. Defendants in these class actions do not get a fair shake in Madison County.

This is not a triumph of federalism and local decisionmaking. It is the evisceration of federalism. One of the bedrock principles of a Federal government is that states are largely free to regulate their own particular affairs. To allow one State to legislate for another is to violate an important principle of self-government that this country is built upon. In the case of Madison County, a trial bar that knows few limits, coupled with a ready and able courthouse, is in fact imposing the will of a small few on the entire Nation. Madison County has been flooded with class action claims and now the Nation is drowning in them. This is a classic case for Federal intervention. In fact, this is a case study for the type of intervention in Federal affairs the Constitution was meant to allow.

Let me refer to what happens in Madison County and how it affects the whole country. As this chart shows, the white dot in the middle is Madison County. The overwhelming majority of class actions filed in Madison County are nationwide lawsuits in which 99 percent of the class members live outside of Madison County. As a result, decisions reached in Madison County courts affect consumers all over the country. The county's elected judges effectively set national policies on important commercial issues. They do it in a way that is basically dishonest.

There is a place for personal injury law in the American justice system. Americans have a sacred right to take their case to court when they are harmed by a person or a product. I will stand up for those rights against anybody and everybody, if necessary. Yet this right is endangered by a seriously compromised class action regime, not just in Madison County but in other jurisdictions throughout this country. To help resecure it we must enact this reform.

Today's lawyers do not take cases that come to them, they invent cases. They behave like entrepreneurs who find an issue before they find a plaintiff. They act like businessmen, the CEOs of Trial Lawyers Incorporated.

The problem is their business plan makes hash of our system of impartial justice and mocks our Federal arrangements. Much of this has occurred once the Supreme Court allowed attorneys to advertise. The great lawyers never advertise. It is only those who are in business to rake off the top of the crop. To be honest, I personally would be ashamed to advertise. If I was not good enough to get clients without advertising, I would be ashamed. Now, it is legal under our system, but since that happened, this is what is happening throughout the country.

It simply defies belief that the small county courts are the proper venue, much less a capable one, for complex multijurisdictional litigation. The plaintiffs bar has put its business model into motion in Madison County. First, find sympathetic judges, then bankroll their campaigns, and to seal the deal rush defendants into court without giving them an opportunity to investigate the claims against them. Justice demands fairness, but our system of decentralized class action litigation is fundamentally unfair to defendants, to plaintiffs, and the average American who ends up footing the bill for the unjustified billion-dollar settlements.

I thought we would compare this to Monopoly. Let's play Class Action Monopoly. Go. Come up with an idea for a lawsuit. Find a named plaintiff to pay off. Make allegations, no proof is needed. Get out of rule 23--which is an appropriate rule--get out of rule 23 free. Convince your ``magnet'' State court judge to certify the ``class,'' even though it is not certifiable. File copycat lawsuits in State courts all over the country. Sue as many companies in as many States as possible, even if they have no connection to the State.

Who gets the money? Columbia House case: $5 million for lawyers, discount coupons for plaintiffs. Blockbuster case, $9.25 million for lawyers, free movie coupons for plaintiffs. And they were not very many of those, at that. Bank of Boston case, $8.5 million for lawyers. Some plaintiffs even had to pay out of their own pockets to pay for this, even though they were the ones for whom the suits were allegedly brought.

You ought to ask yourself, What happens to me? Your employer takes a hit, maybe lays you off. Your health and car insurance premiums go up dramatically, which we have been seeing. The lawyers win; you lose.

Almost everything in society goes out of sight and goes up in cost because of what is happening in these jurisdictions and in these cases that really should never have been brought to begin with. The Class Action Fairness Act is a modest reform. It is not a great big change. It does not deprive substantive legal rights to any American in this country. All it does is make it easier to put these national cases where they belong; that is, in our national courts. According to one study, 98 of the 113 class actions filed in Madison County from 1998 to early 2002 could have been moved to Federal court under this legislation.

Justice demands that we act. Those who are injured will get their day in court. By voting for S. 2062 we will help make sure they get it in a court where justice can be dispensed.

I yield the floor.

Mr. President, will the Senator from Wisconsin yield for a unanimous consent request?

My understanding is the Senator from Wisconsin is going to speak for about 5 minutes. I ask consent to be recognized following his presentation.

Mr. President, I was inspired by my colleague from South Carolina. Senator Hollings comes to the floor to speak, among other things, about international trade issues and does it in a way that is not only right on point but also very colorful. I would like to follow on that a bit and talk about a couple of other subjects.

I know we have the class action reform bill on the floor of the Senate, but that bill apparently is going nowhere at this moment. My understanding is the majority leader has ``filled the tree,'' which is a fancy way of saying he is blocking everything. He puts a bill down, blocks everything, and creates a little gate in the majority leader's office saying: Show me your amendment. If I like it, you can offer it; if I don't, you can't. That is where we are. Because of that action, I assume very little is going to happen at the moment.

While I think that class action reform is an important issue and we should get to the amendments to the bill, there are other things we also need to be doing. There is a lot of unfinished business in this Chamber. We are doing very little on any of it, regrettably.

On appropriations, we had some subcommittee markups scheduled this week that have been canceled. We need to get the appropriations done.

Writing a new highway bill, we were supposed to have written the highway bill last year, and it is not done this year. Now they are talking about extending it until next year. There is no better job generator for those who are concerned about new jobs in this country than having a highway bill because that puts people to work right now with contractors and workers all across this country. Yet the highway bill was supposed to have been rewritten last year. It wasn't. It was supposed to have been rewritten this year. It isn't. So there is a lot to do in this Congress that is regrettably not getting done. There is a lot of unfinished business.

My colleague from South Carolina talked about trade, the trade deficit, the shrinking employment base in manufacturing and the shrinking manufacturing base itself in this country. He also spoke of the Chamber of Commerce that was critical of our colleague, Senator Edwards.

That was one of the things I was going to talk about today. The head of the Chamber of Commerce, in a speech just within recent days, said people who are affected by off-shoring should ``stop whining.'' Again, the head of the Chamber of Commerce says those people who are affected by outsourcing, by the movement of jobs overseas, by offshoring, ought to ``stop whining.''

I don't know of the head of a corporation who has had his or her job moved overseas. I don't know of a Member of the House or Senate, I don't know of a politician who has had his or her job moved overseas. I don't know of one journalist who has had his or her job moved overseas. But there are plenty of folks who work in manufacturing in this country who have been the victims of offshoring, outsourcing, moving jobs overseas.

I have pointed this out on numerous occasions, but it is worthwhile to do it again, just because it is, I think, such a good illustration of what is happening in our economy.

This is a bicycle I have spoken of often in the Senate, a Huffy bicycle. Most Americans know of a Huffy bicycle. It has 20 percent of the American market. Many Americans have ridden a Huffy bicycle.

This used to be made in Ohio, by the way, by one plant with over 900 proud employees who made Huffy bicycles and did a good job by all accounts. They came to work one day and discovered they were all fired. Why were they fired? Because they made $11 an hour plus benefits and that was too costly.

The manufacturing plant in which these bicycles were produced was moved to China. It was moved to China because they could hire somebody for 33 cents an hour in China and work them 12 or 14 hours a day, 7 days a week. So that is why Huffy bicycles are not made in this country any longer.

Those who say to those 900-plus workers who lost their jobs, ``stop whining,'' apparently don't understand the anguish of being told, in this country, that making $11 an hour is too much money. You can't compete with a Chinese worker who makes 33 cents an hour.

The American people don't need to be told that. We can't compete with 33 cents an hour. We can't compete with someone in Indonesia who is making shoes for 16 cents an hour. We understand we can't compete with that. Nor should we be required to.

This country, for one century, has fought over the issues that are important to a good life in this country, issues of abolishing child labor, in which we were sending kids into factories and down into mines. So we have child labor laws. There are issues about plants that dump effluents and poisons into the air and water, and so we have environmental laws. We have issues about safe workplaces, so that workers can expect to go into a factory that is safe, and so we have laws dealing with safe workplaces. There are issues about fair wages, so we have minimum wages in this country.

There are issues about the right to organize. People died on the streets in this country for the right to organize as workers, and so we have labor unions with the right for people to organize.

In one fell swoop, a company wishing to pole-vault over all of those issues can simply decide it wants to be an American company for purposes of incorporation, but it would like to be a foreign company for purposes of production. Whether it is a Huffy bicycle or a little red wagon, the Radio Flier wagon which for 100 years was made in this country and now is gone, they can decide to move the production of those products somewhere in the world where they don't have to worry about child labor laws, environmental laws, about a labor union, because they can move it to a place where labor unions are not permitted, workers are not permitted to organize, where there are no requirements with respect to fair wages.

What is happening, as we know, is more and more companies are engaged in outsourcing. It is not just bicycles and little red wagons, the Radio Fliers; it is not just that. It is now white collar jobs as well, where there is outsourcing into Indonesia and China and elsewhere. And they are told stop whining. By whom? By people who have never lost their jobs and are not about to. They are not going to lose their jobs to outsourcing. To them, this is all theory.

By describing all of this, I am not suggesting we build a wall around this country because I don't believe we should or could. I believe in expanded trade and I believe in expanding opportunities for Americans through trade. But I do not believe in the kind of trade agreements that have been brought to this Senate for approval.

I don't intend to support the Australian-United States Free Trade Agreement, which will come to the floor of the Senate soon, because it, again, in my judgment, undercuts the interests of this country.

I am perfectly willing to support trade agreements that are fair to this country, fair to America's workers and require us to engage in competitive and fair trade. If we can't win in fair trade, then that is our tough luck. That is our fault. But let me give some examples of what our trade negotiators have done, time after time after time. If there are people who want to defend this, I wish they would come to the floor of the Senate. None have and none will. I will give just one example and then go on to several others.

About 2 years ago, we did a bilateral trade agreement with the country of China. In that agreement our trade negotiators said this to China: You produce automobiles and ship them to

the United States. We will charge a tariff of 2.5 percent on any automobiles that you ship into the United States. But we agree that any U.S. automobiles, any automobiles produced in the U.S. that we would ship to China, you can charge a 25-percent tariff. In other words, our negotiators said: I will tell you what we will do. You have a very large trade surplus with us, China. We have a $130 billion trade deficit with you. But I will tell you what we will do. We will set up an agreement with respect to automobile trade, and you can charge a tariff on U.S. automobiles going to China that is 10 times higher than any tariff we would impose on Chinese automobiles going to the U.S.

I would like to find the softheaded negotiator who decided that this is something that is fair to America, fair to America's workers or fair to America's producers.

I don't come from an automobile State. I will give you one more example of automobile trade--that is, automobile trade with Korea.

We have a circumstance with Korea where we ship about 2,800 automobiles every year to be sold in Korea. That is how many automobiles we get into Korea. What does Korea ship to the United States? Somewhere over six hundred thousand vehicles come into our marketplace, and 2,800 we get into Korea. You know why? Because our marketplace is wide open and the Korean Government doesn't want U.S. cars in Korea, so they set up dozens of impediments to our shipment of U.S. cars to the Korean marketplace.

The list goes on and on and on. If you are an American rancher and believe you ought to get beef into Japan--after all, we have a deficit with Japan of $50 billion to $60 billion every year, year after year, so the Japanese market ought to be open to U.S. beef--you find that years after the United States-Japan beef agreement, there still remains a 50-percent tariff on every single pound of beef that is sent from this country into Japan. Unfair? You bet your life it is. Anybody care about it? No. Our trade negotiators are off busy negotiating new agreements with Singapore, Australia, Morocco, Honduras, Costa Rica-- all of these new agreements that create new unfairness in trade law-- before they will even talk to you about the old trade laws that aren't working.

We have the largest trade deficit in history--not just our history but in the history of the world. Someday it will have to be repaid. It will regrettably be paid with a lower standard of living in this country, and nobody seems to care about it.

Let me talk about that trade deficit for a moment. On May 13, we see headlines that the U.S. trade deficit grows unchecked--a $46 billion trade gap in March--1 month, a $46 billion trade deficit. How about the next month, June 15, when we learn that the U.S. trade deficit sets another record in April--$48.3 billion in a single month. Up and up and up goes this trade deficit, with American jobs leaving, outsourcing, offshoring. That is not a way, in my judgment, to strengthen our country and strengthen our economy. No country will long remain a world economic power without a strong, vibrant, growing manufacturing base, and our manufacturing base is being decimated month after month. These are not circumstances of fair trade. We ought to be debating them on the floor of the Senate with respect to legislation. But we will not. Instead, we will debate the United States-Australia Free Trade Agreement, and will be unable to offer a single amendment because of fast track rules.

While I talk about some of the circumstances of trade, one of the problems, of course, is that U.S. companies are setting up foreign subsidiaries--not for the purpose of producing in a foreign country for sale in another foreign country, but for the purpose of producing in a foreign country for the sale into the U.S. marketplace. And in fact, another reason they are setting up foreign subsidiaries is to avoid paying taxes to the U.S. Government.

Here is an interesting statistic. In a recent year, of the 100 largest publicly traded companies that do business with the Federal Government--I am talking about Federal contractors, the biggest companies that build things, airplanes, tanks and all of the things they sell to the Federal Government--59 of them had created subsidiaries in tax-haven countries. Why? Because they want to move production plants to tax-saving countries? No. Because they don't want to pay taxes.

Halliburton Corporation, the subject of a couple of hearings I have had, had 17 subsidiaries, 13 in the Cayman Islands. This is all about running a corporation through a mailbox, not for the purpose of producing anything but for the purpose of trying to avoid paying taxes.

What you have is companies that decide they want to be American citizens, they want to do business in this country, they want to sell into our marketplace and contract with the Federal Government, but they do not want to pay taxes. Second, to the extent they can, the production which they want to contract to the Federal government they want to move offshore. Why? Because it is cheaper to produce offshore.

Once again, anytime someone gives a speech, as my colleague from South Carolina did or as I do from time to time, about trade and requiring and demanding fair trade rules, the institutional press and others will say this is just uninformed nonsense from a bunch of xenophobic, isolationist stooges who can't see over the horizon.

You can't have a thoughtful debate about trade. We have now a $48 billion monthly trade deficit. Nobody wants to talk about it. Nobody will talk about it. Will there be anything brought to the floor of the Senate to deal with this? No. We talk a lot about the fiscal policies and budget deficits, and we have a reckless fiscal policy that is out of control. No question about that. But this trade policy is something nobody talks about, and these trade policy deficits are way out of control. They are affecting our economic base, our manufacturing base, and our productive capacity in this country. We will pay a heavy price for that unless we decide at some point that our trading partners are required to engage with us in fair, competitive, and open trade.

My colleague talked a little bit about the effort through the WTO and the allegation by some that we must remove our antidumping provisions that exist in law. Antidumping provisions are provisions that protect a country against another country that would try to dump into that marketplace at a price well below the price of production and injure or demolish an industry in your country. The trade ambassador said those are on the table for negotiation. We are willing to negotiate and we will negotiate in the WTO negotiations our antidumping provisions and get rid of them potentially. So we will get rid of the only protection that exists for producers and workers in this country against unfair competition. I don't understand that. Is there some notion that we shouldn't stand up for this country's interests?

I come from a State that must find a foreign home for a substantial amount of its agricultural production, and I am the last person in the world to want a trade war or to shut down opportunities for fair trade. But I will give you some examples of things that bother us.

We produce a great deal of wheat in my State. So we do a bilateral trade agreement with China. The Chinese say: Well, under this agreement we will set a tariff rate quota of 8.5 million metric tons. I didn't believe that, but I especially didn't believe it when I saw the South Asia Post one day and the Agriculture Minister from China was traveling down there speaking in an interview in the South Asia Post. He said to the Chinese: This 8.5 million metric tons of wheat, that is just theory. That is just theory. That doesn't mean we are going to buy it. And sure enough, they didn't buy it. Now, finally, they have made some modest purchases. But we didn't have any substantial quantity of wheat going into China for years after the agreement because they didn't have any intention of making those purchases. Our farmers deserve the opportunity to compete in these markets and yet were denied that opportunity.

Probably the most obvious hood ornament on foolishness here in Congress in terms of public policy and in the White House is our attempt to sell goods into Cuba. Talk about a political odd couple. John Ashcroft and I, when he was a Senator, actually got legislation passed which is now law, and it opens just a bit the embargo with Cuba

so that we could sell agricultural commodities into Cuba. After 40 years of an embargo, we finally, because of the bipartisan work here in the Congress, passed a law that opened that market just a bit so we can sell some agricultural products into Cuba. Cuba has to pay cash. They have to run the transaction through a European bank, a bank that is not in this country. But, nonetheless, we have been selling agricultural products to Cuba. But the State Department and the administration are doing everything they can, every conceivable thing they can to shut down even that small amount of export of agricultural commodities to Cuba.

I don't understand this effort to injure ourselves. Public policy that hurts our country, that is believed to be sound and good policy, whether it is at the White House or by some in Congress, is something that makes no sense to me at all.

On a related subject but somewhat off of trade, in addition, with respect to Cuba, we have a travel ban. That travel ban, incidentally, is an attempt to slap around Fidel Castro, someone for whom I have no use at all, a Communist dictator that Cuba does not deserve. In an attempt to punish Fidel Castro, our Government has decided we shall prohibit Americans from traveling to Cuba, so we have a travel ban. We do not ban people from traveling to Communist China. We do not ban people from traveling to Communist Vietnam. But they cannot go to Cuba.

At a time when we are beset by terrorist threats in this country, we have a little organization down in the U.S. Department of Treasury that ought to hang its head these days. They have, I understand, 20 people in an organization called OFAC, Office of Foreign Assets Control. Their job is to track financial movements of money to the terrorist organizations.

Twenty of them are tracking Americans traveling to Cuba. They are accusing them of trying to take a vacation. A woman named Joan Scott went to Cuba. Joan Scott went to Cuba to distribute free Bibles on the streets in Cuba with a missionary zeal and a religious sense of making a difference. She went to Cuba to distribute free Bibles. Guess what. Boy, the Treasury Department got hold of her recently and is going to fine her $10,000.

There is a fellow from near Seattle, WA. His dad died and was cremated. His dad's last wish was to be buried on the church grounds where he ministered in Cuba. This young fellow took his dad's ashes to Cuba. They tracked him down, the people who are tracking down terrorists. They tracked down a young man taking his dad's ashes to Cuba.

Or Joan Slote. They are supposed to track terrorists; they tracked Joan Slote down. Joan Slote is a 76-year-old grandmother who rides a bicycle all over the world. She joined a Canadian bicycle club and bicycled to Cuba. She did not know it wasn't legal. She had a good time, a 76-year-old grandmother bicycling to Cuba. They tracked her down right quick and slapped a big fine on her. It was all a mistake because she was not even home when they sent her the first letter. She was gone because her son was dying of a brain tumor. She was not there, did not get the letter, so they slapped her with a bigger fine. After she paid part of that fine, they tried to attach part of her Social Security check.

These are people who are supposed to be tracking terrorists, but they are going after people distributing free Bibles in Cuba, retired grandmothers who are taking bicycle trips, and a young fellow trying to bury his dead father's ashes.

It is embarrassing what is happening in this administration dealing with this issue of the travel ban. We have, on repeated occasions, on a bipartisan basis, with Republican support and Democrat support in the Senate, voted to lift that ban. Yet, somehow, in the end, the White House always wins. That ban is in place and we are using precious resources that are supposed to be tracking terrorists who are now tracking American citizens accused of taking vacations in Cuba and slapping them with $10,000 fines.

I digress. That was not the point of raising the Cuba issue. The Cuba issue is about trade and the foolishness of what we are doing to inhibit our family farmers from fully exploring the opportunities of trade in Cuba. We have a natural advantage over Canadian and European farmers with respect to that marketplace.

Incidentally, they are required to pay cash for the food they buy in these trades and yet the administration is making it more and more difficult for our farmers to access those marketplaces.

I started by saying the Senator from South Carolina was talking about the Chamber of Commerce and, as I said, the President of the Chamber of Commerce said people should stop whining if they are affected by offshoring or offsourcing or moving jobs overseas.

I don't think people who have been hurt by this should stop speaking up at all. I don't think they are whining. But you could certainly see the anguish on the faces of people who are proud to go to work in the morning and make a good product, only to discover their employer felt $11 an hour was excessive and they would sooner get that product made by Chinese workers at 33 cents an hour. You can certainly see the anguish in the faces of those people who had to go home some night and tell their loved ones: Honey, I lost my job. It was not my fault. I worked here for 15 years. I lost my job today because I make $11 an hour and my employer wants to go offshore and find somebody who will do it for 33 cents an hour, and who will be prevented from joining a labor union, and who will work at a plant that may not necessarily be safe, and who will work in a plant that will put poisons into the air and the water, and who will work in a plant where there are no child labor laws.

That is a hard thing for people to do, to go home and tell their families. It is not whining. These Americans deserve better than that. This country was built by people who take showers after work. This country was built by people who work hard, do their best, expect a fair deal, expect there is some connection between effort and reward in this country. And regrettably, these days, when we see this avalanche of outsourcing and offshoring and decisions that this is not about workers being part of the country, workers are like a pair of pliers or tools; when you are done with them, get rid of them. That attitude on the part of business is wrong.

I visited with a CEO of a corporation recently. He said, I am one of the few companies in my industry that has not offshored or outsourced a portion of the servicing of my customers. He said, Everyone else has done it and I have not. It costs me more and it makes me a little less competitive because I have not done it, but I have resisted it because I have not wanted to lay off workers in the United States and to outsource that to China or India.

I applaud him. But there are precious few companies which have that attitude.

In short, we need trade laws that stand up for this country's interests. Why is it embarrassing for someone to say, I support this country's interests? Why has that become something no one will talk about? I am not talking about advantage; I am talking about fair trade. Why is it not fair for us to say we stand for requirements of compensation that are fair? Yes, with China, with Japan, with Korea, with Europe.

Why do we allow Korea to have a 300-percent tariff on potato flakes from our country? Why do we allow the Koreans to decide they will keep out our American automobiles to the extent they can, or keep out American pickup trucks to the extent they can, while boats pull up at our docks with Korean cars?

I say to Korea, that is fine, bring your cars to our marketplace. Our consumers want the opportunity to shop for them. But there is a condition for that. Then your market must be open to American vehicles. It must. We ought to have the strength and the assertiveness to say that to all of our trading partners.

This country needs to get a backbone. This country needs to have a spine that says, look, we believe in trade and it should be mutually beneficial. We also are not going to apologize for standing up for this country's interests. This country has interest in a growing economy and expanding economy and jobs. There is no essential program we will vote on in this Congress that is as important as a good job

that pays well with good benefits. There is no social program that is any more important than that.

It is time, it seems to me, to turn to important things in the Senate. First and foremost, perhaps the majority leader should come to the Senate and stop blocking amendments so we can finish the class action bill. If we do not finish the class action bill, it will be because of one reason, and that is because the majority leader decided to block amendments.

If he wanted to offer amendments, I assume our side could have offered a number of the amendments we were prepared to offer today, work through tonight, tomorrow, tomorrow night, and finish the class action bill. In my judgment, in all the discussions I have been in, and I am part of the leadership on our side, there was no desire to block class action. There was an acknowledgment and an understanding that this bill was going to get done--until this morning when the majority leader came to the Senate and used an unprecedented maneuver to block all amendments except those with which he would agree.

The first thing we ought to do is unhinge that problem, move forward on class action, and then deal with a range of other issues we know are important for this Congress. It is surprising to me how little this Congress has accomplished and how much it should be required to accomplish.

The highway bill, which is so important, as I indicated earlier, is last year's business. It was not done last year and now apparently will not be done this year.

What are we doing? Standing around here in the Senate. We will not vote today, apparently, and probably will not vote tomorrow, I don't know why. Why? Because we have these unusual procedures of blocking amendments because someone is concerned, apparently, that someone else is going to offer an amendment that somebody else does not like.

I do not understand. We probably should be required to retreat someplace in a room and read Senator Byrd's history of the U.S. Senate. Maybe that would be helpful, and we can read about some of the great debates in this Congress--tough debates, sharp debates. But they went on and they had votes and they resolved them and got through them.

Mr. President, with that, I yield the floor and suggest the absence of a quorum.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I rise today to talk about the critical need for class action reform. The class action fairness bill that is before us, S. 2062, seeks to guarantee that plaintiffs in a class action, the people who have actually been harmed and who have a right to be compensated, are the actual beneficiaries of class action and not only attorneys.

The Class Action Fairness Act provides, one, the ability to remove actions to Federal court in cases where the aggregate amount in question exceeds $5 million and the home State plaintiffs are no more than two-thirds of the class. In other words, class actions that are essentially State court matters will remain in State court, but matters that involve major amounts of money and large numbers of plaintiffs in multi-State regions, which frequently occurs, ought to be in Federal court. Why should a single county in a single State, a State judge, decide a matter that affects all 50 States and perhaps hundreds of thousands of individuals?

It will provide special scrutiny for the abused coupon settlements. That is something we have heard a lot about and is not right; that the victims get coupons for the product and the lawyers get paid millions of dollars. It provides protections against unwarranted higher awards for certain class members based on geographic location.

The bill is responsible, it is restrained, it will curb class action abuses, and produce a more productive class action system.

As I understand the situation today, the majority leader wants to proceed to this bill, and I hope we can do that in short order. The bill passed out of the Judiciary Committee, of which I am a member, in June of 2003 by a 12 to 7 strong bipartisan support. Since passing out of committee, the bill has been through two major substantive periods of negotiation, each one bringing on more Senators in support of the legislation. Currently, 62 Senators have either voted for cloture on the previous version of the bill or have publicly expressed their support for this version.

It is time to proceed to the bill, to debate the substance of the bill, and have an up-or-down vote on class action reform. But I am concerned, I must say, that many of the people who say they are for it, my Democratic colleagues who in the past have been reluctant to sign on, but they studied it more and said they are for it, that they may not really want to move to this bill. One way we can do that--and all Members of this body understand how it works: Add amendment after amendment to legislation, and they draw out the debate on issues nonrelated, nongermane to the legislation and, in effect, they can kill legislation through a filibuster by amendment.

The majority leader has a lot of things we need to do. We need to pass this bill. We have strong bipartisan support for it, but he has a lot of other legislation that needs to be done. The majority leader has propounded a series of proposals that would provide an opportunity for Members on the other side to offer minimum wage amendments and other amendments, unlimited germane amendments, amendments related to this bill, unlimited, and they have been rejected.

So what that suggests is there is not a serious commitment, that this bill is being obstructed and being blocked from even having an up-or- down vote by a device that does not give any limits on the amount of debate. That is very unfortunate. It is not the right thing to do. As I indicated, it is a device that allows a group of Senators to block the passage of the bill even if they say they are for it. But if we try to cut off and limit debate and have a definite time for a vote, they say, no, they will not support that; I am for the bill, I just will not give this time limit; I will not agree to how many amendments we can put on.

The majority leader goes to it, we spend a week to 10 days on it and we still have not passed it. Then what can he do? So he cannot move to a bill under those circumstances. We need to have an agreement.

I hope Senators will reevaluate those circumstances so we can reach an agreement and move forward with this legislation that is very important. If not, everybody needs to know it was blocked again, obstructed from being able to be brought up, debated, and amendments offered to it.

I know the Presiding Officer served on the Texas Supreme Court and also as attorney general of Texas. He understands the legal issues perhaps better than any other Member of this body. I think we would agree, and most lawyers would agree, class actions are not evil in themselves. In fact, they are good tools to deal with litigation in which there is a single type of cause that injured a whole host of people, where perhaps hundreds of thousands of people were injured or wronged by the same act or series of acts. So as the matter of proof gets to be unjustifiable, if the amount of loss is $100 or $200, 100,000 people in America have to hire a lawyer to file 100,000 lawsuits, so a person can file a class action and a lawyer can represent the whole class to determine how much that group of people were damaged and get them checks, pay them and get them recompensed. I think that is a good procedure, and I am all for that. It is a real good procedure. It is something we ought not to believe is bad in and of itself.

State courts are being overwhelmed by these actions. I saw the numbers from 1988 to 1998. The number of class actions pending in State courts increased by 1,042 percent while the number in Federal courts increased only 338 percent during that period.

State courts have often been unable to give class actions the attention they need, and abuses have occurred too often under those circumstances. It has hurt class members sometimes to the benefit of attorneys. Make no mistake about it, an attorney in a class action is in a delicate position. That attorney's interest, when the settlement negotiations come around, can be in conflict with the interest of the people he represents.

So what happens sometimes in these negotiations is that lawyers demand from the big companies, or whoever they are suing, big fees to be paid to the lawyers, millions of dollars, and then acquire only token benefits for the members of the class. That is not good, and I will talk later about some of the cases where this has happened. Lawyers in such cases have lost their perspective and have not handled the interest of their clients with integrity.

This bill would crack down on that. It would give more power to the judge to make sure those kinds of abuses do not happen.

Sometimes these class action cases are being used as judicial blackmail, forcing defendants to settle cases that are basically unjustified, even frivolous, rather than spend millions of dollars in litigation and the risk of loss of a whole customer base maybe because of bad publicity. So the defendants are compelled to pay even if they are really at fault, and sometimes they will pay the lawyers more than they will pay the people who have been victimized.

Other examples of class action problems include what has been referred to as ``drive-by'' class actions where the class is certified even before the defendant has notice. There are ``copycat'' class actions where the actions are filed in multiple jurisdictions to see which court will certify the class first, or they are filed by another lawyer to try and steal what appears to be a lucrative claim from the person who filed the first class action; get in a race to the courthouse.

This is a matter of significance. Lawyers are supposed to have fidelity to their clients. In some cases, the fidelity to their clients leads them to do things that are lawful and proper under the law but are really abusive. This is one of those examples. Class action lawyers are known to forum shop by naming irrelevant parties in class actions in order to destroy diversity and to agree to settlements that pay bounties for someone discovering a class action, awarding the original plaintiff more than any other member of the class.

It is hard to criticize a lawyer for forum shopping. If he looks all over the United States of America, he has a complaint that involves everybody, maybe it is a MasterCard that in every county in America somebody has one, and there is a complaint about that, he can pick the best jurisdiction in America, the best county. Maybe he knows the judge who is very favorable to his theories. He can file it in any county in the United States that he chooses. There are some counties in Alabama that are known for this. He gets total choice of where to file the case. I cannot say that is morally bad for the lawyer to do that, but those of us who set the laws, who set the policy for class actions, we ought to review that. We ought to create laws that make it more difficult for a lawyer to be able to pick the single most favorable jurisdiction in the whole United States in which to file an action.

Let me talk about this situation in the Toshiba case. A class action suit was filed in Texas, complaining of an entirely theoretical defect in the floppy disk controllers of Toshiba laptops. There were no allegations that the asserted defect had resulted in injury to any user, and not one customer had ever reported a problem attributable to the defendant. However, Toshiba faced potential liability of $10 billion, and they decided to try to settle the claim. The class members received between $200 and $400 in a coupon off the purchase price of Toshiba products. The two named plaintiffs received $25,000, and the attorneys received $147 million. The class members in this case only benefitted from the lawsuit if they purchased additional products from Toshiba and used the coupons. This is not the way the legal system is supposed to work.

Class action reform is also needed so that people who are not injured do not receive compensation. If members of a class are unable to demonstrate damage, they ought not to be paid.

Lawyers are supposed to represent real clients with real problems. They are ethically bound to represent the interests of their client foremost beyond their own interest.

Class action lawsuits are designed to be available when lawyers realize that an entire class of people has been harmed in the same way his client had been harmed. Class action should not become a way for creative lawyers to gain excessive fees. It should not be a situation where good advocates figure out a way, by adding unrelated defendants or otherwise, to file actions in friendly circuits or to use other methods that maximize the benefit to their clients while ignoring the rest of the class members.

Another case touched on my home State of Alabama, the famous, or infamous, Bank of Boston case. In this case, a class action was filed by a Chicago attorney in the circuit court of Mobile, AL. The case alleged that the bank did not properly post interest to its clients' real estate escrow accounts. The class settlements limited the maximum recovery to individual class members at $9 each. That $9 was the maximum amount anybody could recover.

After the State approved the settlement, the bank disbursed more than $8 million to the class action attorneys in legal fees and credited most of the accounts of the victims with sums of less than $9. The legal fees which were automatically debited from the class members' bank accounts total 5.3 percent of the balance of each account. It was bad enough that a lot of these people did not even know they had been in a class action or that they owed an attorneys' fee for the $9 recovery that had been won for them, the worst part is that many accounts were debited for amounts that exceeded the credit they obtained from the settlement, meaning that the attorney fee that came out of their account far exceeded the $9 benefit they received from the class action.

For example, Dexter J. Kamowitz, of Maine, a case which a Chicago attorney filed in Mobile, AL, and the plaintiff, who is supposed to be winning a verdict, who lives in Maine, who did not initiate the class action against the Bank of Boston--he just happened to be declared a member of the class--but he received a credit of $2.19 on the settlement. At the same time, the class action attorney debited his account for $91 in legal fees, producing a net loss of $87.81. Such results, as might be expected, produced outrage from class members in other States affected by the action.

Judge Frank Easterbrook, circuit judge of the seventh circuit, asked:

What right does Alabama have to instruct financial

institutions in Florida to debit the account of citizens in

Maine and other States?

So we need to be careful about these matters. We need to be careful that these cases are handled fairly. This bill takes steps forward in that regard. That is why it received strong support throughout the Nation, and that is why so many Senators have committed to supporting it, Republicans and Democrats.

S. 2062, offered by Senator Grassley and passed out of the Judiciary Committee last summer, will help eliminate many of these abuses. I think I have noted those. I will just note it will eliminate forum shopping, keeping State judges of a case of less than one-third of the member class who are members of that State from dictating the fate of plaintiff members in 49 States.

I hope we will have a healthy debate on this process and that we can move forward and get this bill before us and confront a problem that is jeopardizing America. We have a lot of members here who say: We believe in jobs, we want to see the economy grow, they are not creating enough jobs in America. But when you have huge, multimillion dollar, sometimes virtually extortionate lawsuits filed against businesses on a regular basis--they go up more than 1,000 percent in State court in 10 years, 300-something percent in Federal court in 10 years; these lawsuits are gaining momentum all over the country--it does impact our productivity as a Nation.

No nation carries the kind of litigation cost that the United States does. When we export a product outside our country, the total value and cost of producing that product, which has to be competitive in prices in the world market, that cost is created and added to by litigation costs. Much of that is just insurance premiums. The more these cases are filed, the higher insurance premiums go.

So it is a real problem for us. It has hurt our job creation, it has hurt our economic growth. It is time for this Nation to get in sync with the rest of the world and bring some containment to the abuses in litigation.

I believe in litigation. I believe in the court system of America. I believe many of these lawyers are not improper or immoral; they are just using the existing legal system in every way they can to maximize the benefit they can obtain for their client. So what happens then? It is up to us to deal with it.

A lot of people have talked about this question of federalism, States' rights, how we ought to handle this and why should the Federal Government involve itself in class actions or why are we dealing with it. Over the last 30 years, we have had a host of pieces of legislation that poured through this body, many of them driven by our friends on the other side of the aisle, that impact States' rights. Now all of a sudden they are claiming States' rights will be violated by class action reform. Let me just say a few things about that question because it is very important. It is one we should think about and analyze honestly.

First, there is no doubt whatsoever that the kind of cases we are talking about ought to be or can be handled in Federal court. That is perfectly constitutional. The Constitution provides for the litigation between citizens of different States to be in Federal court to begin with. It is only through the device of undermining diversity by suing a local defendant that Federal jurisdiction has been avoided in many of these cases. The intention of the Framers of the Constitution was, in these interstate lawsuits, jurisdiction should be in Federal court. So it is not unconstitutional for these cases to be tried in Federal court. I don't think there is a single Senator in this body who would argue that making these a Federal case somehow violates the State's rights because they are interstate cases. They involve plaintiffs from more than one State. That really was always thought to be appropriately handled in Federal court. I know that.

The next question is: Should we do it? Is it proper that we put more of these cases in Federal court? I think so. I believe it is proper because we are seeing abuses of state court jurisdiction and because Federal courts have a better ability to handle multi-state litigation issues. Let's take this practical example. Let's say there is a lawsuit--I think there was one filed a number of years ago involving the construction of seatbelts for automobiles. It was filed on behalf of the class of everybody in America who had automobiles, and virtually every county in America had one of those automobiles and so they go to a certain county in the Midwest where thousands of these class action lawsuits are being filed and they filed it there, the result of which could be an order and financial judgment that would impact the way seatbelts are handled throughout America.

If you appealed any verdict from that county, where would it go? It would go

to the supreme court of the State that handled it. But it is going to affect everybody in America. So if you file this lawsuit in Alabama or Texas or Illinois, and you get a verdict that impacts the whole United States and you appeal it, a single State gets to decide whether it was properly tried and whether the order was appropriate. But if it is tried in Federal court, the appeal would be to the U.S. Supreme Court, which handles the jurisdiction of the whole United States of America, where it ought to be if the verdict is going to impact a multitude of States. So I think that is perfectly logical and a good policy reason for us to do it in that way.

We are seeing a problem in which litigation is impacting adversely our ability to create economic growth and impacting adversely our ability to create jobs. It adds to the cost of products that we want to export around the world. It adds to the cost of products produced here and sold in America making them less competitive against imports that come into this country. If we can reduce the cost of litigation on businesses in America, they will be more effective about their business.

We do not want to deny people who are wronged fundamental rights. In no way does this legislation do that. It says the litigation ought to be tried in Federal court if it involves these kinds of situations and it contains some provisions to limit abuses.

Frankly, let me say this: I was a Federal prosecutor in Mobile, AL, for 15 years, and 12 years as U.S. attorney. I have tried cases in State court and in Federal court. I know the Presiding Officer knows that by and large Federal judges have a lot fewer cases than State judges. The fact is, in our State, Federal judges probably carry on their dockets one-fourth or less the number of cases in State court, or maybe one-tenth the number of cases. State court judges have thousands of cases. Frequently, State court judges have fewer law clerks-- sometimes no law clerk--when the Federal judges usually have one or two law clerks to help them do their work.

Where would a big, complex multi-state, multimillion-dollar lawsuit be better filed? Which court is best able to handle these cases? Which ones were designed by the original founders to handle interstate cases to begin with? It is clear to me that it is in Federal court. That is where these cases ought to go.

Frankly, I could see taking more class action cases than this legislation provides for in Federal courts. I think it would be justified.

But because of the objections of some of my colleagues, we negotiated and worked out concerns that some lawyers had, these negotiations will keep more cases in state court than the bill originally intended, but I am willing to live with that.

Article III of the Constitution vests the Federal courts with jurisdiction over ``controversies between citizens of different states.'' When you have a bank in Miami, a lawyer in Chicago, victims in Maine and Alabama and other places, that is a controversy between citizens of different States. It is only through the reinterpretation of the diversity rule that these cases have many times been able to be kept in the State court system rather than to be allowed to go through the Federal courts. I think this is right way for us to go. I think this is a logical, fair, restrained, professional response to a problem of the abuse of class actions in America.

It is important for our economy. It is important for our business in America. I believe we need to pass it. I hope our colleagues who are holding up this bill today will reevaluate and reach an agreement with majority leader Bill Frist to have some amendments or all the amendments that are relevant to the bill they want but not an unlimited number of amendments on any subject they want to offer amendments on. That won't work. That is not right. Let us move this bill forward. Let us pass it. Let us do what at least 60 Senators in this Senate believe is proper.

I thank the Chair. I suggest the absence of a quorum.

Madam President, I ask unanimous consent that the order for the quorum call be dispensed with.

Madam President, I would like to talk today briefly about an important matter.

As many of you may know, today is Cost of Government Day. Not that we need to celebrate it, but it is an important day.

What is Cost of Government Day, you ask? It is the day on which the average American worker has earned enough money to cover his or her share of the Federal, State, and local government. That means that our government is so large and spends so much money that we must work our poor citizens 189 days a year before they can break even with spending.

Think about it like this. Say you go out and buy a house and the monthly mortgage you have to pay for your house is one-half of your monthly salary. That is a huge amount. One-half of the money you earn-- one-half of your salary--has to go to pay your house mortgage. Say every month you get your paycheck and about half of it is written off to the bank to cover your mortgage.

That is the same way our government works. The cost of government consumes 51.6 percent of our national income. It is taking more than the hypothetical mortgage payment of half your salary. I cannot help what someone's mortgage payment is but we in this body can have some impact on the cost of the government.

I say to those here today, that spending is getting out of hand. Since 1977, the earliest Americans have paid off their cost of government was June 28. Now it is July 7. The United States prides itself in being a frontrunner in human and civil rights protections. We come together under the values of life, liberty, and the pursuit of happiness, those values that the Founders declared to be the basis of this great Nation.

But there is a dragon in the midst, a burglar in the basement, sucking Americans dry of their hard-earned money. The perpetrators are right here among us. Our government is being burdened with cumbersome and unnecessary legislation and regulation for which the American citizens also pay the bill. In this season of budget and appropriations bills, we need to think about who we are representing and the sacrifices they are making for each bill we pass.

We are not celebrating Cost of Government Day, a day 189 days into the year. I am here to celebrate America. The strength and vitality of this Nation is its belief and its investment in individual American citizens, entrepreneurs, people working hard, giving their very best every day. They do not mind paying a reasonable amount in taxes. But we need to fight every day. We need to analyze the situation with every bill and ask ourselves: How much more can we expect the American people to pay? How much burden can we expect them to carry? How can they carry a dynamic and growing economy that creates jobs and allows higher pay, where people work and save and invest and do well economically with these burdens?

We do better, slightly better, somewhat better than the Europeans. Their taxes are going through the roof. I notice that the leadership in Germany cited the U.S. tax cuts that have spurred our economic growth in recent months, something we are definitely celebrating. They are discussing whether they need to do that. The Europeans, though, are further down the road in social welfare, in burdens economically, than even we are.

We need to watch what we are spending. We need to indelibly imprint in our mind that the cost of Federal, State, and local government is the work of American citizens for 189 days this year, 51.6 percent of the income earned. That is more than we need to allow. We do not need to see those numbers increase. They need to start going down. It is something we ought to work on.

We must remember every day there is a limit to the burden that the American citizens can carry if we expect them to be competitive in the world market.

I yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I have come to the floor momentarily on account of a headline in the Financial Times, on page 3, U.S. business hits a choice of running mate. It quotes Tom Donohue, the president of the U.S. Chamber of Commerce, in stating that he attacked Mr. Edwards in an interview in the Wall Street Journal. He warned if Mr. Edwards were chosen, the group might abandon its traditional neutrality in Presidential elections and dedicate the best people and the greatest assets to defeating the Democratic ticket.

This is unfortunate. Since I know a little bit about the Chamber of Commerce, and I know even more about my friend Tom Donohue, I want to admonish that they not take that course and begin to try to work for ``Main Street'' America rather than ``Main Street'' Shanghai.

I speak advisedly of the Chamber of Commerce. As a young Governor, I was the first Governor to take a trip to Latin America to develop economically our little State of South Carolina. I reasoned the Port of Charleston was 300 nautical miles closer to the Port of Caracas, Venezuela, than New Orleans, and New Orleans was always getting the Midwest business. But there was no reason why we could not bring it to Charleston.

So I went down to Caracas, and to the Ports of Santos and Montevideo, Buenos Aires, Santiago, and we started building up industry there.

Incidentally, in June of 1960, I made a trip to Europe, following my friend Luther Hodges of North Carolina. We called on the various Dusseldorf, Frankfurt, Hamburg, and other towns in Germany, and the little State of South Carolina now has 126 German industries.

We had gone to France in June of 1960. I called on Michelin. Michelin Tire of Paris, France, now has four large production facilities and their North American headquarters and more than 10,000 employees in my State.

We are proud. We are business Democrats. That is my friend John Edwards. He is a business Democrat. If there was one leader in this industrial development, it would have been the State of North Carolina with its then-Governor Luther Hodges.

Hodges had been the president of the New York Rotary Club. He had been the vice president of the Marshall Field chain before he was Governor. So he knew all of those businesspeople. I had to compete with him, follow on board, so to speak, and try to get the jobs and develop businesses.

One thing we know upfront; that is, you have to have a sound fiscal policy. We raised taxes in South Carolina. And I got the first triple A credit rating.

So it is nonsense for the Chamber of Commerce to call John Edwards a ``wide-eyed liberal'' and John Kerry a ``wide-eyed liberal.''

Incidentally, I can tell you when I had Gramm-Rudman-Hollings on the floor of the Senate, I was opposed by the Democratic leader, who voted against it; I was opposed by the Democratic whip, who voted against it; I was opposed by the chairman of the Budget Committee, my late friend Lawton Chiles of Florida. And in spite of that opposition, on 14 different votes, up and down, we got the majority of Democrats to support cutting spending and working for a balanced budget. It was hailed at that time. Everybody talks about President Reagan, and I can talk about him advisedly because he was outstanding in international trade. But let me stick right to this particular point.

In order for Gramm-Rudman-Hollings, I had to go to many so-called liberal friends in the Northeast, and I got Senator Chris Dodd and Senator John Kerry, who had just been elected to the Senate, to vote for fiscal responsibility. Yes, my friend Senator Kerry laid his life on the line in Vietnam. He immediately, when he came to the Senate, laid his political life on the line.

I know Tom Donohue well. I used to work very closely with the American

Trucking Association, and I was their loyal supporter, still am their loyal supporter. I, under Tom Donohue, was their man.

I am telling you, I got every financial support and every assistance and what have you. I know Tom Donohue, and he knows trucking all right, but I never have seen him go out and develop an industry. Yes, he got on the boards. He went big time, just like joining the country club. He immediately started getting on the boards of all these multinationals and changing the national Chamber of Commerce into the international, multinational Chamber of Commerce. That is my resentment. That is why I take the floor.

I have worked with the Chamber of Commerce. Go back home to the State of South Carolina and you name a county or a city that I hadn't gotten the Chamber of Commerce award. That is how I met my friend, Robert Kennedy. I was 1 of the 10 men of the year back in 1954, 50 years ago. We met on the TOYM program. And, yes, bring it right on up to 1992. In 1992, they had a fellow named Bob Thompson. He was the national president of the U.S. Chamber of Commerce, and I was his boy. I was the toast of the town and got all kind of help because I had held up labor law reform on eight up-and-down cloture votes. We defeated that initiative. We believed in the right to work and we didn't need labor law reform.

I only have to harken to the 8 years of President Clinton when we had the strongest economy in the history of the United States, with all the taxes that they are trying to cut. Even with all those taxes, we had the 8-year record of economic outburst and production.

So what have you. Now comes the Chamber of Commerce being admonished by Tom Donohue that we can't have this wild, crazy Senator from North Carolina, which is a bellwether of industrial development. That is where he was grown and that is where the people who sent him know him best. And now we are going to have him depicted by Johnny-come-lately to business over at the Chamber of Commerce after heading up the trucking association for years and totally skew trial lawyers.

You know, I have tried to go quietly, and I have stayed off the floor a good bit this year. I have had my time. But I still struggle. I can't keep quiet when I hear all of this lawyer talk. I practiced law on both sides of the aisle. I represented the electric and gas company and the bus system. If you want to represent a defendant, represent the local power company buses. I can tell you, come November, everybody slips on a green pea in the aisle; everybody gets their arm caught in the door; everybody gets their head bumped or whatever else it is. And do you know what. They bring these little claims. When I say little, in those days they were relatively little--$5,000 claim, $10,000 claim.

And the corporate lawyer was lazy. They didn't try the cases. So they settled them out of court and they just paid. You see, corporate lawyers are the most lazy group in the United States. So I backed up all those claims and took them to court all during the month of December and the Christmas holidays and into January. And I won my bet with Arthur Williams who was president of the electric and gas company. I saved them over $1 million at that particular time.

The only reason I mention this, you don't brag but you have to talk to the record. And what happens is that I have been on the side of the corporate practice as well as the plaintiffs practice in punitive damages. I know all about them. I have had a hard experience with them. I have had a hard experience with every Chamber of Commerce in my State and with the national group. When Tom Donohue starts this talk about lawyers, if he wants to really save corporate money, I wish he would go to the corporate lawyers. They talk about frivolous claims. Who in the Lord's world as a trial lawyer can afford to be frivolous?

They have rules of court that get you out. Tomorrow you can file, if you assume all the facts alleged in the complaint as being true. You still don't have a cause of action or, if it is a frivolous charge, you can take it up under rule XI and have it done up. The courts take care of these things, but the pollsters are like used car salesmen and kill all the lawyers and go after trial lawyers who have to work for a living.

What does the trial lawyer do? The trial lawyer says: Poor client, haven't you been offered anything for this particular injury? They said no. Or sometimes they said yes, but they only said $200 or $2,000 or $20,000, and that is not going to take care of my medical expenses for more than a year.

We don't get cases as trial lawyers. Talking about ambulance chasers, I don't know how you chase an ambulance, to tell you the truth. I have been in practice now for--well, I got in in 1947--over 50-some years. I practiced law up here. It is just like making a jury argument. The only thing about it is, you can serve on the jury and you can vote. I like it better.

But the point is that we usually get the client, once his incident, his accident, his claim has been totally investigated by corporate America. I know them. I represented them. They have investigators. All you have to do is tell them, go see this, go see that. When you have investigators to go out and check the jurors: Go around, by gosh, in a particular neighborhood and ask questions. What kind of fellow is John Adams? Is he liberal or conservative? Has he ever had a law case before? They have all the resources in the world. But the trial lawyer gets it after the cake is done and you can't hardly rise it. And it is done falling flat, and the poor client is disconcerted and disillusioned and finally gets to you.

The last case I tried I said, Did you go to so-and-so? He knows this kind of case better. And I went to another one and another one and everything else of that kind. And it was an antitrust case. I had to brief myself, antitrust work. Finally I tried that thing.

But what I am trying to say is, get off of this ambulance chasing issue. No trial lawyer, all the ones that you read about--Fred Baron, in one of the articles, an eminent attorney, head of the American Trial Lawyers Association from Texas. They work. They know what they are doing. And they take on all the expenses, the investigations, the making up of all the models that have to be made, pay the photographers who have to take the pictures. In some instances, they pay the medical bills going along. They take a risk and take that case on as their own. Why? Because they don't get one red cent until they win. They have to win all the way through, taking the expenses of all the interrogatories, all the depositions, all the motions, all the delays, all the frivolity of corporate America because that corporate American is sitting up there on the 12th or the 25th floor, and the clock is running.

The biggest cancer we have in the law practice is billable hours. This crowd down here on K Street is nothing but billable hour boys. They don't try cases. They fix you and me. And they are the ones who have the unmitigated gall to come and talk about frivolous claims. They never go to work. They take you to a dinner, take you to a movie, take you to a weekend down to the golf course, take you out to Alaska fishing, take you anywhere you want to go.

They never try cases, but the trial lawyer does. He has to get prepared, and he has to work, and he has to not only try that case that might take a day, might take a week--some cases take several weeks and months--but as they try that case, they are carrying those expenses all that time. But the corporate lawyer is trying to delay it. It pays them because their clock is running. It pays the trial lawyer to get on with the business of trying the case and bringing it to a conclusion. I know, I have been there on both sides.

What do you have to do? He has to get all 12 jurors--all this about runaway juries. There are some exorbitant verdicts. I have seen in the headlines. When we get to debating this thing, maybe on legal fees, or class actions, or medical malpractice, or whatever it is--if the doctors policed themselves as the lawyers, they would not have any medical malpractice.

There was a headline down in my own backyard how nationally they had about 100,000 injuries and deaths last year as a result of medical malpractice. It would be 200,000, or 300,000, or 500,000 if we didn't have medical malpractice.

What do you think the purpose is of being able to recover for somebody else's wrongful act? Heavens above, we

have to get all 12 jurors. I can tell you now, that defendant, all he has to do is get one. Just like they had one on a recent criminal case of some kind. They held that thing up and held it up, and that one juror said he just wasn't convinced.

The jury system is the fundamental of not only the British but the American system of jurisprudence. We have many sayings of not only Winston Churchill and Alexander Hamilton, the forefathers about the importance of trial by jury, because when you get a group of your peers together, they will listen to the facts and make an honest judgment about it. Sometimes if they do go extreme, the trial judge can set it aside, or give them an entire new trial, or just no verdict at all.

One of the last cases I had, I had over $40,000 in costs and expenses--not time, no. I didn't have any clock. I never heard of billable hours. Senator, I have never practiced law for a billable hour. It means if you send the case or dispose of the case and everything else like that, you lose.

The corporate lawyer wants to keep all the cases going. He has all the hours. He just goes to the club, and on the weekend he is off with the chairman of the board, and that is all he has to do. They keep delaying things.

You talk about my friend, John Edwards, is a liberal, some kind of nut and some kind of frivolous nonsense here. He has worked hard, and the Chamber of Commerce ought to know that.

Let's talk a minute about trade itself. It is the fundamental duty of Congress to protect--we take an oath to preserve, protect, and defend, and we have Social Security to protect us from the ravages of old age. We have a minimum wage to protect us from slave labor. We have Medicare and Medicaid to protect us from ill health. We have clean air and clean water to protect us from those environmental poisons. You can go right on down the list. We have the Army to protect us from within.

The fundamental of us is to protect jobs and the fundamental of us is to create jobs. You know what the multinationals have to do? They have to move the jobs out because it is cheaper. Why? Because of you and me. We say that before you can open up in manufacturing, you have to have clean air, clean water, Social Security, Medicare, Medicaid, minimum wage, plant closing notice, parental leave, safe working place, safe machinery--I can go down the list. But you can go to Shanghai, China, for 58 cents an hour with none of that.

I called up Walter Allison Dreeny. He was an executive of Pirelli. We brought him to South Carolina in the Lexington County area. I helped him get connected with water and sewer lines. He made a heck of a success in the fiber glass section of Pirelli. He went out on his own and organized what is called Avanex on the big board, and he was doing good. This was about 5 years ago. I learned a lesson. I called Walter and I said: Walter, I see where you are doing good and we don't have a plant of yours in South Carolina. If you continue to do well and you expand, I would like to get your expansion somewhere in Columbia, where you still have a home, or somewhere in our State.

He said, Fritz, I don't produce anything in this country.

I said: You don't?

He said: No, I have my research and sales here.

He sells the innards of computerization and communications, fiberoptic stuff.

He says: I produce in China. When you go to China, they will build a billion. You have a year-to-year contract. They have a good and capable workforce. You got a guarantee. You put a quality man there; you get a young Byron Dorgan and say you go to Shanghai and oversee this thing-- somebody you can trust who knows the business. He watches it for you. You sit on the Internet and you watch it every day as to what they have done. You visit three or four times a year to see how it is going. If the national trend goes big, you get an additional contract in China. If it goes bad, you don't have to renew the contract. You have no obligation to the labor at all.

That is what we are competing with. That is the reality. Yes, the Chamber of Commerce has to understand why their task is to make a profit for the stockholders. Our task is to build jobs. We are not interested in profit. We are interested in building the economy, in education, in health care, safety, law enforcement, yes, and we are interested in the economic strength of this country.

The security of the United States is like a three-legged stool. You have the one leg of our values, our stand for individual freedom, unquestioned the world around; you have the second leg of the military, unquestioned, the superpower; the third leg, the economic leg, has been fractured intentionally.

I say intentionally fracture because after World War II, we had to rebuild freedom and capitalism the world around us, and we had to more or less give up the store. We not only had the Marshall plan, the expertise, the money, and the equipment, but we gave a good part of our own production.

I had a hearing with President Kennedy in 1961 when he put out his famous seven-point program showing that it was injurious to the national security of the United States for us to import more than 10 percent of our consumption in textiles clothing. I am looking around and everywhere I look, I can tell my colleagues that 70 percent of the clothing is from offshore, imported into the United States. Yes, 84 percent of the shoes on the floor of this Chamber are imported. We are out of the shoe business. We are out of my textile business.

Yes, we are going to go out of the computer business, and we are going out of the semiconductor business. Ronald Reagan was the best of the best. He saw that during his 8 years. And do my colleagues know what President Reagan did? He got what they called VRAs, voluntary restraint agreements, on semiconductors, automobiles, steel, and machine tools, hand tools. Ask Andy Grove of Intel. If President Reagan had not put protectionism, a voluntary restraint agreement, on semiconductors, we would not have had an Intel. We put that program in SEMATECH. It was assistance to equalize high technology development that was about to go out.

As I see it, we are about to go out not only of textiles but semiconductors, automobiles, and other products. We have to have basic production. That basic production has developed the middle class, the strength of America. If you want to do away with it, Mr. Chamber of Commerce, and move everything to China all for a profit and no country at all--it is scandalous what corporate America has been doing, running over to Bermuda, evading and avoiding taxes.

I saw one report the other day that in corporate America, something like only 20 percent pay taxes. About 80 percent of them do not pay taxes at all. And they talk about high corporate taxes. They have more experts on how to evade and avoid and change and cancel out. So it happens.

Yes, Senator Edwards has worked not only on the Intelligence Committee, knowing foreign policy for 6 years now. In one of the stories, they said if something happened to John Kerry, we would have a President with no experience again. The only thing is, this President, Edwards, would be interested in being President. President Bush is only interested in being Candidate Bush. He goes out every day to some military or some police or other particular situation, gets that 7 o'clock news photo, makes his little statements, and he does not keep up with any of the legislation. He is not proud of any legislation. We do not have any leadership from the White House on getting anything done. We are getting little nagging spitballs of class actions and-- what is that other thing--a constitutional amendment on marriages.

One can get a common-law marriage in South Carolina. Are we going to put that in the Constitution? Come on, a big national problem. He has more funny bunny things to think of and bring up and waste our time. It is the worst administration I have ever seen.

My point is the Chamber of Commerce.

Yes.

That is right. They know their scheme. I tell you, our Republican colleagues know what they are doing when it comes to running campaigns. We know how to run the office once we get in, but they know how to run for the office. We saw President Bush was already in Raleigh, NC, and they called for, of all things, class actions so they can lambaste our Vice Presidential choice. That is what is going on. The campaign is going on on the floor, and I am joining in on the campaign. I have tried to stay out of it, but I am happy to join it because when we get about protectionism--and this is what this article says, we are going to lose out on everything and regressive--what are all those funny words they use?

Here is yesterday's Financial Times: ``China vows to use anti-dumping and trade measures to protect its markets.''

I ask unanimous consent to print the Tom Donohue article and this article about China in the Record.

Mr. President, the reason I had the China article printed in the Record is because China is following Japan. We have yet, in 50 years, to get into the downtown market, Main Street, Tokyo. We cannot sell in Tokyo what we sell in the United States. No. They have total protection. They not only have MITI with the financing and the refinancing and keeping even bankrupt entities going, but they control that market so they go for market share. They are not worried about profits the way the government runs things. We have antitrust, they have pro-trust.

That Lexus I have sells for, let's say, $35,000. It will sell for $45,000 in downtown Tokyo. They pay at the local market way more for that camera, way more for that television set, way more for that automobile because we are talking about profit, and they keep on getting more and more market share.

So we have to understand not only the thrust of their competition, but that they are competing. They are as protectionist as can be on antidumping. We get into WTO and say: Oh, no, it is WTO violative; you cannot enforce any antidumping statutes in the United States. That is why we have that funny tax bill over there that they loaded with all these extra tax cuts for corporate America. It is a disgrace. Everybody has written about that.

Warren Buffett, two days ago, said that tax bill is a disgrace. But the reason we got the tax bill started was to try to equalize the situation where we have been taking care of our particular businesses and industries, and if we are going to have the U.S. Chamber of Commerce join the other side, this is like joining Saddam in Iraq.

If my colleagues want to see a business-oriented State, come to North Carolina where John Edwards is a Senator. I can say right now, they talk now about the two most liberals. That is the biggest bunch of nonsense I have ever heard. I resent it, particularly respected entities like the National Chamber of Commerce taking business away from America. Tom Donohue is just adamant on doing that. He has been taken over by the multinationals. His main membership is the Business Roundtable. They are not for your stores, they are not for the Main Street merchants anymore.

That is why the Chamber of Commerce--by the way, I was a member of the oldest Chamber of Commerce in the United States, so I speak with some authority. I have seniority in something. I have been around here for so long, I have been looking for it wherever I could find it.

In any event, what we have to do is sober up. The business leadership has to quit this race to China, quit this tax race avoidance to Bermuda, quit this Chamber of Commerce nonsense about who is liberal and who is conservative, and understand that our jobs are here to build up this market so they can sell what they sell here, not dump. If we do not have any jobs, they cannot buy, they cannot sell.

We have the richest market in the world, but we are vastly developing into the poorest market. That is why I have my job. I see some other Members. But they talk about a wonderful economy, we have 5 percent growth. Baloney. I have 56,800 manufacturing jobs lost since President Bush took office, and they have not come back as of last night. This is from the Bureau of Labor Statistics. That is manufacturing. Do not tell me about growth, growth, growth. I am not getting all of this growth.

We have a lot of Government jobs. The Government is growing, the law practice is growing, health care is growing, but business is not growing. Production is not growing in America. The middle class is diminishing.

It is shrinking. We have to worry about that. We cannot go along with these labels about, we have the Chamber of Commerce now which has already said he is the most liberal. He could not be a Senator--he could not have won any election in the State of North Carolina if he had that character.

I say to my colleagues, he believes in hard work, he believes in justice, he believes in trying his case, and 12 jurors and the presiding judge and the appellate court all agreed with John Edwards. Tell Tom Donohue to bug off.

I yield the floor.