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

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

Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on S. 5.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I rise in strong support of S. 5, the Class Action Fairness Act of 2005. Today marks the culmination of nearly a decade of legislative efforts to end systematic abuse of our Nation's class action system. We stand on the cusp of sending landmark legislation on civil-justice reform to the President that has been approved by increasing majorities each time it has been considered by the House in each of the last three Congresses and which passed the other body last week with an overwhelming majority of 72 votes.

Since these reforms were first proposed, the magnitude of the class action crisis, the need to address it has become more and more urgent. The crisis now threatens the integrity of our civil justice system and undermines the economic vitality upon which job creation depends.

A major element of the worsening crisis is the exponential increase in State class action cases in a handful of ``magnet'' or ``magic'' jurisdictions, many of which deal with national issues in classes. In the last 10 years, State court class actions filings nationwide have increased over 1,315 percent. The infamous handful of magnet courts known for certifying even the most speculative class action suits, the increase in filings now exceeds 5,000 percent. The only explanation for this phenomenon is aggressive forum shopping by trial lawyers to find courts and judges who will act as willing accomplices in a judicial power grab, hearing nationwide cases and setting policy for the entire country.

A second major feature of the present class action crisis is a system producing outrageous settlements that benefit only lawyers and trample the rights of class members. Class actions were originally created to efficiently address a large number of similar claims by people suffering small harms. Today they are too often used to efficiently transfer the large fees to a small number of trial lawyers, with little benefit to the plaintiffs.

The present rules encourage a race to any available State courthouse in the hopes of a rubber-stamped nationwide settlement that produces millions in attorney's fees for the winning plaintiff's attorney. The race to settle produces outcomes that favor expediency and profits for lawyers over justice and fairness for consumers. The losers in this race are the victims who often gain little or nothing through the settlement, yet are bound by it in perpetuity. And all Americans bear the cost of these settlements through increased prices for goods and services.

The bill before the House today offers commonsense procedural changes that will end the most serious abuses by allowing more interstate class actions to be heard in Federal courts while keeping truly local cases in State courts. Its core provisions are similar to those passed by this body in the last three Congresses. S. 5 also implements a consumer bill of rights that will keep class members from being used by the lawyers they never hired to engage in litigation they do not know about or to extort money they will never see.

Madam Speaker, when the House considered this important reform in the last Congress, I remarked that, ``The class action judicial system has become a joke, and no one is laughing except the trial lawyers . . . all the way to the bank.''

I imagine that laughter turned to nervous chuckles when S. 5 emerged unscathed from the gauntlet in the other body with 72 votes last week. Today, as the House prepares to pass this bill, I suspect you could hear a pin drop in the halls of infamous courthouses located in Madison County, Illinois and Jefferson County, Texas, where for so long the good times have rolled for forum-shopping plaintiffs' attorneys and the judges who enable them. And when this legislation is signed by the President one day soon, those same halls may echo with sobs and curses because this time justice and fairness and the American people will have the last laugh.

Madam Speaker, after years of toil, the moment has arrived. The opportunity to restore common sense, rationality, and dignity to our class action system is now before us, and the need for reform has never been more certain. I urge my colleagues to support the Class Action Fairness Act of 2005.

Madam Speaker, I reserve the balance of my time.

(Mr. CONYERS asked and was given permission to revise and extend his remarks.)

Madam Speaker, I yield 3 minutes to the gentleman from Virginia (Mr. Boucher) to show the breadth of the bipartisan support of this legislation.

(Mr. BOUCHER asked and was given permission to revise and extend his remarks.)

Madam Speaker, I yield myself such time as I may consume.

(Mr. SENSENBRENNER asked and was given permission to revise and extend his remarks.)

Madam Speaker, first, I have a lengthy additional statement explaining how this bill is to work. We do not have the time in general debate for me to give this statement on the floor, so I will insert the statement relative to the intent of the managers of the bill in the Record at this point.

Madam Speaker, I would like to provide a brief summary of the provisions in Sections 4 and 5 of S. 5, the Class Action Fairness Act of 2005. Section 4 gives Federal courts jurisdiction over class action lawsuits in which the aggregate amount in controversy exceeds $5 million, and at least one plaintiff and one defendant are diverse. Overall, new section 1332(d) is intended to expand substantially Federal court jurisdiction over class actions. Its provisions should be read broadly, with a strong preference that interstate class actions should be heard in a Federal court if removed by any defendant. If a purported class action is removed under these jurisdictional provisions, the named plaintiff(s) should bear the burden of demonstrating that the removal was improper. And if a Federal court is uncertain about whether the $5 million threshold is satisfied, the court should err in favor of exercising jurisdiction over the case.

The Sponsors intend that in a case seeking injunctive relief, a matter be subject to Federal jurisdiction under this provision if the value of the matter in litigation exceeds $5 million either from the viewpoint of the plaintiff or the defendant, and regardless of the type of relief sought (e.g., damages, injunctive relief, or declaratory relief). Similarly, in assessing the jurisdictional amount in declaratory relief cases, the Federal court should include in its assessment the value of all relief and benefits that would logically flow from granting the declaratory relief sought by the claimants. For example, a declaration that a defendant's conduct is unlawful or fraudulent will carry certain consequences, such as the need to cease and desist from that conduct, that will often ``cost''

the defendant in excess of $5 million. In addition, the law is clear that, once a Federal court properly has jurisdiction over a case removed to Federal court, subsequent events cannot ``oust'' the Federal court of jurisdiction. While plaintiffs can seek to avoid Federal jurisdiction by defining a proposed class in particular ways, they lose that power once the case was properly removed.

New subsections 1332( d)(3) and (d)(4)(B) address the jurisdictional principles that will apply to class actions filed against a defendant in its home State, dividing such cases into three categories. First, for cases in which two-thirds or more of the members of the plaintiff class and the primary defendants are citizens of the State in which the suit was filed, subsection 1332(d)(4)(B) states that such cases will remain in State court. Second, cases in which more than two-thirds of the members of the plaintiff class or one or more of the primary defendants are not citizens of the forum State will be subject to Federal jurisdiction since such cases are predominantly interstate in nature. Finally, there is a middle category of class actions in which more than one-third but fewer than two-thirds of the members of the plaintiff class and the primary defendants are all citizens of the State in which the action was filed. In such cases, the numbers alone may not always confirm that the litigation is more fairly characterized as predominantly interstate in character. New subsection 1332(d)(3) therefore gives Federal courts discretion, in the ``interests of justice,'' to decline to exercise jurisdiction over such cases based on the consideration of five factors.

First, the court should consider whether the claims asserted are of ``significant national or interstate interest.'' Under this factor, if a case presents issues of national or interstate significance, that argues in favor of the matter being handled in Federal court. Second, the court should consider whether the claims asserted will be governed by laws other than those of the forum State. Under this factor, if the Federal court determines that multiple State laws will apply to aspects of the class action, that determination would favor having the matter heard in the Federal court system, which has a record of being more respectful of the laws of the various States in the class action context. The third factor is whether the class action has been pleaded in a manner that seeks to avoid Federal jurisdiction. The purpose of this inquiry is to determine whether the plaintiffs have proposed a ``natural'' class that encompasses all of the people and claims that one would expect to include in a class action, as opposed to proposing a class that appears to be gerrymandered solely to avoid Federal jurisdiction by leaving out certain potential class members or claims. If the Federal court concludes evasive pleading is involved, that factor would favor the exercise of Federal jurisdiction. The fourth factor considers whether there is a ``distinct'' nexus between: (a) The forum where the action was brought, and (b) the class members, the alleged harm, or the defendants. This factor is intended to take account of a major concern that led to this legislation--the filing of lawsuits in out-of-the-way ``magnet'' State courts that have no real relationship to the controversy at hand. Thus, for example, if the majority of proposed class members and the defendant reside in the county where the suit is brought, the court might find a distinct nexus exists.

The fifth factor asks whether the number of citizens of the forum State in the proposed plaintiff class(es) is substantially larger than the number of citizens from any other State, and the citizenship of the other members of the proposed class(es) is dispersed among a substantial number of States. If all of the class members who do not reside in the State where the action was filed are widely dispersed among many other States, that point would suggest that the interests of the forum State in litigating the controversy are preeminent. However, if a court finds that the citizenship of the other class members is not widely dispersed, the opposite balance would be indicated and a Federal forum would be favored. Finally, the sixth factor is whether one or more class actions asserting the same or similar claims on behalf of the same or other persons have been filed in the last three years. The purpose of this factor is efficiency and fairness: To determine whether a matter should be subject to Federal jurisdiction so that it can be coordinated with other overlapping or parallel class actions. If other class actions on the same subject have been (or are likely to be) filed elsewhere, the Sponsors intend that this consideration would strongly favor the exercise of Federal jurisdiction. It is the Sponsors' intention that this factor be interpreted liberally and that plaintiffs not be able to plead around it with creative legal theories. If a plaintiff brings a product liability suit alleging consumer fraud or unjust enrichment, and another suit was previously brought against some of the same defendants alleging negligence with regard to the same product, this factor would favor the exercise of Federal jurisdiction over the later-filed claim.

New subsection 1332(d)(4)(A) is the ``Local Controversy Exception.'' This subsection prohibits Federal courts from exercising diversity jurisdiction over a class action under the foregoing provisions if the plaintiffs clearly demonstrate that each and every one of the following criteria are satisfied in the case at issue. First, more than two- thirds of class members are citizens of the forum State. Second, there is at least one in-State defendant from whom significant relief is sought by members of the class and whose conduct forms a significant basis of plaintiffs' claims. Third, the principal injuries resulting from the alleged conduct, or related conduct, of each defendant were incurred in the State where the action was originally filed. And fourth, no other class action asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons has been filed during the preceding three years.

This provision is intended to respond to concerns that class actions with a truly local focus should not be moved to Federal court under this legislation because State courts have a strong interest in adjudicating such disputes. At the same time, this is a narrow exception that was carefully drafted to ensure that it does not become a jurisdictional loophole. Thus, in assessing whether each of these criteria is satisfied by a particular case, a Federal court should bear in mind that the purpose of each of these criteria is to identify a truly local controversy--a controversy that uniquely affects a particular locality to the exclusion of all others. For example, under the second criterion, there must be at least one real local defendant. By that, the Sponsors intend that the local defendant must be a primary focus of the plaintiffs' claims--not just a peripheral defendant. The local defendant must be a target from whom significant relief is sought by the class (as opposed to just a subset of the class membership), as well as being a defendant whose alleged conduct forms a significant basis for the claims asserted by the class. Similarly, the third criterion is that the principal injuries resulting from the actions of all the defendants must have occurred in the State where the suit was filed. By this criterion, the Sponsors mean that all or almost all of the damage caused by defendants' alleged conduct occurred in the State where the suit was brought. The purpose of this criterion is to ensure that this exception is used only where the impact of the misconduct alleged by the purported class is localized. For example, a class action in which local residents seek compensation for property damage resulting from a chemical leak at a manufacturing plant in that community would fit this criterion, provided that the property damage was limited to residents in the vicinity of the plant. However, if the defendants engaged in conduct that could be alleged to have injured consumers throughout the country or broadly throughout several States (such as an insurance or product case), the case would not qualify for this exception, even if it were brought only as a single-State class action.

The fourth and final criterion is that no other class action involving similar allegations has been filed against any of the defendants over the last three years on behalf of the same or other persons. Once again, the Sponsors wish to stress that the inquiry under this criterion should not be whether identical (or nearly identical) class actions have been filed. Rather, the inquiry is whether similar factual allegations have been made against the defendant in multiple class actions, regardless of whether the same causes of actions were asserted or whether the purported plaintiff classes were the same (or even overlapped in significant respects).

New subsections 1332(d)(5)(A) and (B) specify that S. 5 does not extend Federal diversity jurisdiction to class actions in which (a) the primary defendants are States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief, or (b) the number of members of all proposed plaintiff classes in the aggregate is fewer than 100 class members. The purpose of the ``State action'' cases provision is to prevent States, State officials, or other governmental entities from dodging legitimate claims by removing class actions to Federal court and then arguing that the Federal courts are constitutionally prohibited from granting the requested relief. However, Federal courts should proceed cautiously before declining Federal jurisdiction under the ``State action'' case exception, and do so only when it is clear that the primary defendants are indeed States, State officials, or other governmental entities against whom the ``court may be foreclosed from ordering relief.'' The Sponsors wish to stress that this provision should not become a subterfuge for avoiding Federal jurisdiction. In particular, plaintiffs should not be permitted to name State entities as defendants as a mechanism to avoid Federal jurisdiction over class actions that largely target non-governmental defendants. The Sponsors intend that ``primary defendants'' be interpreted

to reach those defendants who are the real ``targets'' of the lawsuit-- i.e., the defendants that would be expected to incur most of the loss if liability is found. It is the Sponsors' intention with regard to each of these exceptions that the party opposing Federal jurisdiction shall have the burden of demonstrating the applicability of an exemption.

The Sponsors understand that in assessing the various criteria established in all of these new jurisdictional provisions, a Federal court may have to engage in some fact-finding, not unlike what is necessitated by the existing jurisdictional statutes. The Sponsors further understand that in some instances, limited discovery may be necessary to make these determinations. However, the Sponsors caution that these jurisdictional determinations should be made largely on the basis of readily available information. Allowing substantial, burdensome discovery on jurisdictional issues would be contrary to the intent of these provisions to encourage the exercise of Federal jurisdiction over class actions.

Under new subsection 1332(d)(9), the Act excludes from its jurisdictional provisions class actions that solely involve claims that relate to matters of corporate governance arising out of State law. The purpose of this provision is to avoid disturbing in any way the Federal vs. State court jurisdictional lines already drawn in the securities litigation class action context by the enactment of the Securities Litigation Uniform Standards Act of 1998. The Sponsors intend that this exemption be narrowly construed. By corporate governance litigation, the Sponsors mean only litigation based solely on (a) State statutory law regulating the organization and governance of business enterprises such as corporations, partnerships, limited partnerships, limited liability companies, limited liability partnerships, and business trusts; (b) State common law regarding the duties owed between and among owners and managers of business enterprises; and (c) the rights arising out of the terms of the securities issued by business enterprises.

New subsection 1332(d)(11) expands Federal jurisdiction over mass actions--suits that are brought on behalf of numerous named plaintiffs who claim that their suits present common questions of law or fact that should be tried together even though they do not seek class certification status. Mass action cases function very much like class actions and are subject to many of the same abuses. Under subsection 1332(d)(11), any civil action in which 100 or more named parties seek to try their claims for monetary relief together will be treated as a class action for jurisdictional purposes. The Sponsors wish to stress that a complaint in which 100 or more plaintiffs are named fits the criteria of seeking to try their claims together, because there would be no other apparent reason to include all of those claimants in a single action unless the intent was to secure a joint trial of the claims asserted in the action. The Sponsors also wish to stress that this provision is intended to mean a situation in which it is proposed or ordered that claims be tried jointly in any respect--that is, if only certain issues are to be tried jointly and the case otherwise meets the criteria set forth in this provision, the matter will be subject to Federal jurisdiction. However, it also should be noted that a mass action would not be eligible for Federal jurisdiction under this provision if any of several criteria are satisfied by the action, including (1) when all the claims asserted in the action arise out of an event or occurrence in the State where, the suit is filed and the injuries were incurred in that State and contiguous States (e.g., a toxic spill case) and (2) when the claims are asserted on behalf of the general public (and not on behalf of individual claimants or members of a purported class) pursuant to a State statute specifically authorizing such an action.

The first exception would apply only to a truly local single event with no substantial interstate effects. The purpose of this exception is to allow cases involving environmental torts such as a chemical spill to remain in State court if both the event and the injuries were truly local, even though there are some out-of-State defendants. By contrast, this exception would not apply to a product liability or insurance case. The second exception also addresses a very narrow situation, specifically a law like the California Unfair Competition Law, which allows individuals to bring a suit on behalf of the general public.

Subsection 1332(d)(11)(B)(i) includes a statement indicating that jurisdiction exists only over those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirements under section 1332(a). It is the Sponsors' intent that although remands of individual claims not meeting the section 1332 jurisdictional amount requirement may take the action below the 100-plaintiff jurisdictional threshold or the $5 million jurisdictional amount requirement, those subsequent remands should not extinguish Federal diversity jurisdiction over the action as long as the mass action met the various jurisdictional requirements at the time of removal.

Under subsection 1332(d)(11)(C), a mass action removed to a Federal court under this provision may not be transferred to another Federal court under the MDL statute (28 U.S.C. Sec. 1407) unless a majority of the plaintiffs request such a transfer. The Sponsors wish to make clear that this restriction on MDL transfers applies only to mass actions as defined in subsection 1332(d)(11); the legislation does not more broadly restrict the authority of the Judicial Panel on Multidistrict Litigation to transfer class actions removed to Federal court under this legislation. Under subsection 1332(d)(11)(D), the statute of limitations for any claims that are part of a mass action will be tolled while the mass action is pending in Federal court.

The removal provisions in Section 5 of the legislation are self- explanatory and attempt to put an end to the type of gaming engaged in by plaintiffs' lawyers to keep cases in State court. They should thus be interpreted with this intent in mind. In addition, new subsection 1453(c) provides that an order remanding a class action to State court is reviewable by appeal at the discretion of the reviewing court. The Sponsors note that the current prohibition on remand order review was added to section 1447 after the Federal diversity jurisdictional statutes and the related removal statutes had been subject to appellate review for many years and were the subject of considerable appellate level interpretive law. The Sponsors believe it is important to create a similar body of clear and consistent guidance for district courts that will be interpreting this legislation and would particularly encourage appellate courts to review cases that raise jurisdictional issues likely to arise in future cases.

Thank you, Madam Speaker, for allowing me to provide an explanation of these jurisdictional provisions.

Madam Speaker, for purposes of engaging in a colloquy with the two gentlemen from Virginia (Mr. Goodlatte) and (Mr. Boucher), I yield to the gentleman from Virginia (Mr. Goodlatte).

Madam Speaker, reclaiming my time, I appreciate the gentleman's question.

Section 4 of the bill gives Federal courts jurisdiction over class action lawsuits in which the matter in controversy exceeds the sum or value of $5 million, excluding interests and costs and at least one proposed class member and one defendant are citizens of different States or countries.

For purposes of the citizenship element of this analysis, S. 5 does not alter current law. Thus, a corporation will continue to be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business. However, the bill provides that for purposes of this new section, and section 1453 of title 28, an unincorporated association shall be deemed to be a citizen of the State where it has its principal place of business and the State under whose laws it organized. This provision is added to ensure that unincorporated associations receive the same treatment as corporations for purposes of diversity jurisdiction. New subsection 1332(d)(10) corrects this anomaly.

I yield to the gentleman from Virginia.

Madam Speaker, reclaiming my time, under new subsection 1332(d)(6), the claims of the individual class members in any class action shall be aggregated to determine whether the amount in controversy exceeds the sum or value of $5 million. The sponsors intend this subsection to be interpreted broadly, and if a purported class action is removed under this provision, the plaintiff shall bear the burden of demonstrating that the $5 million threshold is not satisfied. By the same token, if a Federal court is uncertain about whether a case puts $5 million or more in controversy, the court should favor exercising jurisdiction over the case.

This principle applies to class actions seeking injunctive relief as well. The sponsors intend that a matter be subject to Federal jurisdiction under this provision if the value of the matter in litigation exceeds the $5 million, either from the viewpoint of the plaintiff or the viewpoint of the defendant, regardless of the type of relief sought, such as damages, injunctive relief or declaratory relief.

The sponsors are aware that some courts, especially in the class action context, have declined to exercise Federal jurisdiction over cases on the grounds that the amount in controversy in those cases exceeded the jurisdictional threshold only when assessed from the viewpoint of the defendant.

For example, a class action seeking injunctive relief that would require a defendant to restructure its business in some fundamental way might cost a defendant well in excess of $75,000 under current law, but might have substantially less value to each plaintiff or even to the class of plaintiffs as a whole. Because S. 5 explicitly allows aggregation for the purposes of determining the amount of controversy in class actions, that concern is no longer relevant.

To the extent plaintiffs seek to avoid this rule by framing their cases as individual actions for injunctive relief, most Federal courts have properly held that in an individual case the cost of injunctive relief is viewed from the defendant's perspective. This legislation extends that principle to class actions as well.

The same approach would apply in a case involving declaratory relief. In determining how much money a declaratory relief case puts in controversy, the Federal court should include in its assessment the value of all relief and benefits that would logically flow from the granting of the declaratory relief sought by the plaintiffs.

For example, a declaration that a defendant's conduct is unlawful or fraudulent will carry certain consequences, such as the need to cease and desist from that conduct that will often cost the defendant in excess of $5 million; or a declaration that a standardized product sold throughout the Nation is defective might well put a case over the $5 million threshold, even if the class complaint did not affirmatively seek a determination that each class member was injured by the product.

The bottom line is that new section 1332(d) is intended to substantially expand Federal court jurisdiction over class actions, not to create loopholes. This provision should be read broadly, with a strong preference that interstate class actions should be heard in a Federal court if properly removed by a defendant.

Reclaiming my time, Madam Speaker, I am pleased to answer the gentleman.

The first factor is whether the claims asserted are of significant national or interstate interest. Under this factor, if a case presents issues of national or interstate significance that argues in favor of the matter being handled in Federal Court, for example, if a class action alleges a nationally distributed pharmaceutical product caused side effects, those cases presumably should be heard in Federal court because of the nationwide ramifications of the dispute and the potential interface with Federal drug laws.

Under this factor, the Federal court should inquire whether the case does present issues of national or interstate significance of this sort. If such issues are identified, that point favors the exercise of the Federal jurisdiction.

The second factor is whether the claims asserted will be governed by laws other than those of the forum State. The sponsors believe that one of the significant problems posed by multistate class actions in State court is the tendency of some State courts to be less than respectful of the laws of other jurisdictions, applying the law of one State to an entire nationwide controversy and thereby ignoring the distinct and varying State laws that should apply to various claims included in the class, depending upon where they arose.

Under this factor, if the Federal court determines that multiple State laws will apply to aspects of the class action, the determination would favor having the matter handled in the Federal court system, which has a record of being more respectful of the laws of various States in the class action controversy. Conversely, if the court concludes that the laws of the State to which the action was filed will apply to the entire controversy, that factor will favor keeping the case in State court.

The third factor is whether the class action has been pleaded in a manner that seeks to avoid Federal jurisdiction. The purpose of this inquiry is to determine whether the plaintiffs have proposed a natural class, a class that encompasses all the people and claims that one would expect to include in a class action, as opposed to proposing a class that appears to be gerrymandered solely to avoid Federal jurisdiction by leaving out certain potential class members or claims.

If the Federal court concludes that evasive pleading is involved, that factor would favor the exercise of Federal jurisdiction. On the other hand, if the class definition and claims appear to follow a natural pattern, that consideration would favor allowing the matter to be handled by a State court.

The fourth factor is whether there is a distinct nexus between, A, the forum where the action was brought, and, B, the class members, the alleged harm or the defendants. This factor is intended to take account of a major concern that led to this legislation, the filing of lawsuits in the out-of-the-way magnet State courts that have no real relationship to the controversy at hand.

Thus, if a majority of the proposed class action members and the defendants reside in the county where the suit is brought, the court might find a distinct nexus exists. The key to this factor is the notion of there being a distinct nexus. If the allegedly injured parties live in many other localities, the nexus is not distinct, and this factor would weigh heavily in favor of the exercise of Federal jurisdiction over the matter.

The fifth factor is whether the number of citizens in the forum State in the proposed plaintiff class is substantially larger than the number of citizens from any other State, and the citizens of the other members of the proposed class is dispersed among a substantial number of States.

This factor is intended to look at the geographic distribution of class members in an effort to determine the forum State's interest in handling the litigation. If all of the out-of-State class members are widely dispersed among many other States, that point would suggest that the interest of the forum State in litigating the controversy are preeminent.

The sponsors intend that such a conclusion would favor allowing the State court in which the action was originally filed to handle the litigation. However, if a court finds that the citizenship of the other class members is not widely dispersed, then a Federal forum would be more appropriate because several States other than the forum State would have a strong interest in the controversy.

The final factor is whether one or more class actions asserting the same or similar claims on behalf of the same or other persons have been filed in the last 3 years. The purpose of this factor is to determine whether a matter should be subject to Federal jurisdiction so that it can be coordinated with other overlapping or parallel class actions.

If the other class actions on the same subject have been or are likely to be filed elsewhere, the sponsors intend that this consideration would strongly favor the exercise of Federal jurisdiction. It is the sponsors' intention that this factor be broadly interpreted and that plaintiffs not be able to plead around it with creative legal theories.

If a plaintiff brings a product liability suit alleging consumer fraud or unjust enrichment, and another suit was previously brought against some of the same defendants alleging negligence with regard to the same product, this factor would favor the exercise of Federal jurisdiction over the later-filed claim.

Madam Speaker, I now yield to my colleague, the gentleman from Virginia (Mr. Boucher), to provide some examples that illustrate how these six factors would work in litigation.

I yield to the other gentleman from Virginia (Mr. Goodlatte).

Madam Speaker, reclaiming my time, yes, this provision is intended to respond to concerns that class actions with a truly local focus should not be moved to Federal court under this legislation because State courts have a strong interest in adjudicating such disputes. At the same time, this is a narrow exception that was carefully drafted to ensure that it does not become a jurisdictional loophole. Thus, each of the criteria is intended to identify a truly local class action.

First, there must be a primarily local class. Secondly, there must be at least one real local defendant. And by that the drafters meant that the local defendant must be a primary focus of the plaintiffs' claims, not just a retailer or other peripheral defendant. The defendant must be a target from whom significant relief is sought by the class, as opposed to just a subset of the class membership, as well as being a defendant whose alleged conduct forms a significant basis for the claims asserted by the class.

For example, in a consumer fraud case, alleging that an insurance company incorporated and based in another State misrepresented its policies, the local agent of the company named as a defendant presumably would not fit this criteria. He or she probably would have had contact with only some of the purported class members and, thus, would not be a person from whom significant relief would be sought by the plaintiff class viewed as a whole. And, from a relief standpoint, the real demand of the full class in terms of seeking significant relief would be on the insurance company itself.

Third, the principal injuries resulting from the actions of all the defendants must have occurred in the State where the suit was filed. This criterion means that all or almost all of the damage caused by the defendants' conduct occurred in the State where the suit was brought. If defendants engaged in conduct that allegedly injured consumers throughout the country, the case would not qualify for the local controversy exception, even if it was only brought as a single State class action.

And, fourth, no other class action involving similar allegations has been filed against any of the defendants over the last 3 years. In other words, if we are talking about a situation that results in multiple class actions, those are not the types of cases that this exception is intended to address. I would like to stress that the inquiry under this criterion should not be whether identical or nearly identical class actions have been filed. Rather, the inquiry is whether similar factual allegations have been made against the defendant in multiple class actions, regardless of whether the same causes of action were asserted or whether the proposed plaintiff classes in the prior case was the same.

Madam Speaker, I yield to the gentleman from Virginia (Mr. Goodlatte).

I yield to the gentleman from Virginia (Mr. Boucher).

Mr. Speaker, reclaiming my time, I will be happy to explain.

The mass action provision was included in the bill because mass actions are really class actions in disguise. They involve an element of people who want their claims adjudicated together, and they often result in the same abuses as class actions. In fact, sometimes the abuses are even worse because the lawyers seek to join claims that have little to do with each other and confuse a jury into awarding millions of dollars to individuals who have suffered no real injury.

Here is how the mass action provision and the current amount-in- controversy provision would work in tandem: suppose 200 people file a mass action in Mississippi against a New Jersey drug manufacturer and also name a local drug store. Three of them assert claims for a million dollars apiece, and the rest assert claims of $20,000.

The Federal Court would have jurisdiction over the mass action because there are more than 100 plaintiffs, there is minimal diversity, and the total amount of controversy exceeds $5 million, and a product liability case does not qualify for the local occurrence exception in the provision.

Then the question becomes, which claims would, in the mass action, the Federal judge keep in Federal Court, and which would be remanded? At this point the judge would have to look at each of the claims very carefully and determine whether or not they meet the $75,000 minimum.

In this regard, I would note that the plaintiffs often seek to minimize what they are seeking in the complaint so that they can stay in State court. For example, sometimes plaintiffs leave their claim for punitive damages off the original complaint to make it seem like their claims are smaller than they really are.

It is our expectation that a Federal judge would read a complaint very carefully and only remand claims that clearly do not meet the $75,000 threshold. If it is likely that a plaintiff is going to turn around in a month and add an additional claim for punitive damages, the Federal court should obviously assert jurisdiction over that individual's claims.

Finally, I would like to stress that this provision in no way is intended to abrogate 8 United States Code 3867 to narrow current jurisdictional rules. Thus, if a Federal court believed it to be appropriate, the court could apply supplemental jurisdiction in the mass action context as well.

With regard to the exceptions, it is our intent that they be interpreted strictly by a court so that they do not become loopholes for an important jurisdictional provision. Thus, the first exception would apply only in a situation where we are talking about a truly local single event with no substantial interstate effects.

The purpose of this exception is to allow cases involving environmental torts, such as a chemical spill, to remain in State court if both the event and the injuries were truly local, even though there are some out-of-state defendants.

By contrast, this exception would not apply to a product liability or insurance case. The sale of a product to different people does not qualify as an event, and the alleged injuries in such a case would be spread out over more than one State or contiguous States even if all of the plaintiffs in a particular case came from one single State.

The third exception addresses a very narrow situation, specifically a law like the California Unfair Competition Law, which allows individuals to bring a suit on behalf of the general public. Such a suit would not qualify as a mass action. However, the vast majority of cases brought under other States' consumer fraud laws which do not have a parallel provision could qualify as removable class actions.

I yield to the gentleman from Virginia.

Mr. Speaker, reclaiming my time, once again, critics of the legislation have it backwards. This legislation will streamline jurisdictional inquiries by putting an end to all of the gaming that takes place under the current system, and the so-called delay refers to procedural rules that already exist under the current system.

Under existing law, diversity of citizenship between the parties must exist, both at the time a complaint is filed and at the time a complaint is removed to Federal court. However, if the plaintiff files an amended complaint in State court that creates jurisdiction,

or if subsequent events create jurisdiction, the defendant can then remove the case to Federal court.

Current law is also clear that once a complaint is properly removed to Federal court, the Federal court's jurisdiction cannot be ousted by later events. Thus, for example, changes in the amount of controversy after the complaint has been removed would not subject a lawsuit to be remanded to State court.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I always thought that Federal judges protected the rights of everybody.

Mr. Speaker, I yield 3 minutes to the gentleman from Utah (Mr. Cannon).

Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. Keller).

Mr. Speaker, I yield myself the balance of the time.

Mr. Speaker, notwithstanding what we have heard from opponents of this legislation, its passage would not extinguish the legal right of any injured party, whether it be a class action, a mass action, or an individual lawsuit from proceeding in a court of competent jurisdiction in the United States. What the bill does do is it puts some sense into the class action system so that the members of the plaintiff's class will be fairly and adequately compensated rather than seeing all of their gains go to attorneys and them just getting coupon settlements from the people who have allegedly done them wrong.

I was particularly perturbed listening to the gentleman from Massachusetts (Mr. Markey), who said that the kids who start smoking at 13 and 14 years old are going to be denied their day in court, and that the tobacco companies are going to end up cashing in on a big bonanza.

Well, I had my staff, while this was going on, look at what has happened to Altria, the parent company of Philip Morris. Since the other body passed this bill, Altria stock has gone down by at least $1.50, or 2 percent. And today, the Reuters story that came out less than an hour ago says that the Dow has been dragged down by Altria.

Now, if this was the bonanza to investors in Altria, the stock would not be going down. It is not. That is a fallacious argument. Reject the substitute and pass the bill.

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

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in opposition to the Democratic substitute amendment and urge my colleagues to reject it. The new math behind the substitute amendment rests on the following arithmetic: if you add a number of amendments rejected by large bipartisan majorities in the other body last week and combine them with the amendment ideas overwhelmingly rejected on the House floor by a bipartisan vote last year, the sum will somehow equal a credible solution. Funny math.

Mr. Speaker, this formula simply does not add up. The American consumers and businesses will be left with change in their pockets if the amendment passes. The Democratic substitute is less than the sum of its parts and represents a quotient that renders Senate Bill 5's core reform elements meaningless.

The individual elements of this proposal deserve some comment and explanation. First, I note with some amusement that the substitute totally recycles the findings of S. 5. The pages of findings discuss abusive class action windfall settlements for trial attorneys, forum shopping, and the need for more of these large interstate class action cases to be in Federal court.

While the minority substitute reargues the compelling case for reform of the class action system, it is followed by text that will only perpetuate the crisis the findings identify. Their admitting you have a problem is the first step to recovery, and we appreciate that admission; but the minority sponsors clearly are not ready for step two.

One element of the substitute amendment is the State attorney general provision allowing any class action to be brought by or on behalf of the State attorney general to be in State court. This provision is unnecessary because when State attorneys general sue on behalf of their citizens, those actions are almost always ``parens patriae'' actions, and not class actions; and the former will be in no way affected by this bill.

Also, the provision could produce troubling associations between attorneys general and plaintiffs' lawyers. For these reasons, the Pryor amendment in the other body that this provision copies verbatim failed to garner even 40 votes on the Senate floor last week.

A second element of the substitute is the ``choice of law'' provision. This provision would not only eviscerate the bill, but also would overturn 70 years of established Supreme Court precedent and would export to Federal courts a primary expedient of class action abuse we seek to remedy: the reckless application by local courts of the law of one State to the entire Nation in large interstate cases.

This provision is reprinted from a Senate amendment by Senator Feinstein and Senator Bingaman. It was also soundly defeated.

The third element of the substitute is the so-called labor and civility rights carveout. This provision seeks to keep all class actions involving alleged civil rights and labor law violations in State court, despite the fact that the most generous racial discrimination and employment class action settlements in recent years have been in the Federal courts. The language was also offered in the other body and rejected.

Other major elements of the substitute include one our colleagues might remember as the Jackson-Lee House floor amendment to the bill in the last Congress. That amendment makes companies that incorporate abroad for tax purposes a citizen of a State and punishes them by keeping them out of Federal court. This is at least an admission that going into certain State courts as a defendant is indeed punishment, and that amendment was defeated in this House by the last Congress by a vote of 183 to 238. There is also a loophole creating a provision on mass actions and a completely unnecessary public disclosure provision, both based on Senate amendments in the other body that were offered and withdrawn.

What the minority has chosen as a substitute package certainly belies any grumblings about the lack of regular order this year. Since there is not a single original idea among the provisions that has not already been debated and defeated either in this House or the other body, it is hard to give credence to such complaints. This is a package of oldies but not goodies; oldies that have been rejected and should not be resurrected.

Finally, Mr. Speaker, a vote on this substitute is clearly just a vote to further deny or delay meaningful class action reform, and a vote on the substitute could not in any way be construed as reform of any kind but, rather, support for the trial-lawyer-dominated status quo.

I urge my colleagues to reject this recycled package of recycled amendments. The time for reform of a class action system which is out of control is now.

I urge my colleague to vote ``no'' on the substitute, and ``yes'' on

Mr. Speaker, I yield 4 minutes to the gentleman from Missouri (Mr. Blunt), the distinguished majority Whip.

Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Texas (Mr. Smith).

Mr. Speaker, I yield 5 minutes to the gentleman from Virginia (Mr. Goodlatte), the author of the bill.

Mr. Speaker, I yield 2 minutes to the gentleman from Virginia (Mr. Goodlatte).

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, the amendment in the nature of a substitute completely guts this bill. Every crippling amendment that was rejected either in this House or the other body in this Congress or the previous Congress is incorporated in this amendment. They do not have any new ideas over there. They just repackage and try to regurgitate the old ideas that have been found lacking.

The issue in this bill is very clear, and that is that we have to restore some sanity to the civil justice system by dealing with the abuses that a small group of lawyers have turned the class action system into.

When the framers of the Constitution wrote that inspired document, they gave Congress the power to regulate interstate Congress. What has happened as a result of the abuse of the class action system is that judges in small out-of-the-way counties, like Madison County, Illinois and Jefferson County, Texas end up being the ultimate arbiters of interstate commerce.

This bill puts some balance back into the system. The amendment perpetuates the existing system. Vote ``no'' on the amendments, vote ``no'' on the motion to recommit, and pass the bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I yield myself such time as I may consume,

and I thank the gentleman from Georgia (Mr. Gingrey) for yielding me the customary 30 minutes.

Mr. Speaker, for years the Republican majority proposed so-called ``reforms'' to class action lawsuits. Time after time, the House would pass legislation limiting class action plaintiffs only to see their attempts to dismantle the class action system die either with Senate inaction or in conference.

Mr. Speaker, it looks as though the Republican leadership has finally gamed the system to the point where it appears that they will succeed in severely limiting the rights of many of the most vulnerable citizens in this country.

Dismantling the class action lawsuit system has long been a big priority for big business groups. Last year, for instance, the Chamber spent $50 million in lobbying. Now they are getting what they paid for, because this bill obliterating the class action system is one of the first bills to be considered in this Congress.

Mr. Speaker, it is clear to me that despite the McCain-Feingold Campaign Finance Reform law, we still have a pay-to-play system. The other body considered this bill first. The plan was that the House take up the Senate bill if the other body could pass a clean bill without any amendments. The Senate succeeded in passing a bad bill and the House is now following suit.

Let me be clear. Despite the rhetoric on the other side, this is still a bad bill. Today, the other side will tell scary stories about greedy trial lawyers and how awful and unfair their practices are, but the Republican leadership will not talk about how this bill limits the rights of low-wage workers to seek justice from employers who have cheated them out of their wages or have discriminated against them. They will not talk about how they are limiting workers' rights and, with the passage of this bill, are encouraging the bad apples in the big business community to continue cheating their employees out of their hard-earned wages and rights.

In most cases, State laws provide greater civil rights protections than Federal law. Every State has passed a law prohibiting discrimination on the basis of disability. Some States have laws that go beyond the Federal Americans with Disabilities Act.

The same is true with age discrimination. There are also States that provide protections that are not covered by Federal law. These Federal laws are intended to be floors, not ceilings. We should commend States that extend further rights to their citizens, not punish them.

This bill federalizes class action and mass torts, moving these cases from State to Federal courts. If the bill is signed into law, hard- working Americans will be denied the right to use their own State courts to bring class actions against corporations that violate laws that are unique to their State.

Consider, for example, a class action lawsuit brought against a national corporation by employees of a store in Massachusetts because that store discriminates on the basis of ancestry, place of birth, or citizenship status. Massachusetts provides protections afforded by State law, but not by Federal law. Under this bill, except in very rare instances, that case would be sent to a Federal court instead of State court, even though the case is based on a violation of State law.

A class action lawsuit against Wal-Mart was recently filed in Massachusetts. The suit alleges that Wal-Mart failed to pay employees for the time worked and did not give them proper meal and rest breaks. These are serious charges. If the Class Action Fairness Act is signed into law, future cases like this would not be tried in Massachusetts court, but instead would be transferred to Federal court.

Mr. Speaker, we know that the Federal courts are already over burdened, but we also know that the Federal courts are less likely to certify classes or provide relief for violations of State law. In effect, this bill is rigging the system on behalf of the corporations and against the interests of workers.

We often hear a lot of lofty rhetoric on the other side about States rights. Apparently the other side only supports the rights of States if they agree with the laws of those States.

Mr. Speaker, this bill is opposed by the Leadership Conference of Civil Rights; the Alliance for Justice; the National Conference of State Legislatures; 14 State Attorneys General; AFSCME; and environmental groups like Friends of the Earth, Greenpeace, the Sierra Club, and the National Environmental Trust. These are just a few of the groups who oppose this bill, and none of them represent the trial lawyers. They oppose this bill because it will limit fairness, it will limit justice, and it will ultimately hurt everyday Americans.

Mr. Speaker, this is not about trial lawyers; it is about average citizens. The opponents of this bill are committed to fairness. We are committed to justice. And this bill robs the American people of their rights to fairness and justice in the judicial system. It closes the courthouse door in the face of people who need and deserve help.

I oppose this bill, and I urge my colleagues to support the Conyers substitute.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I include for the Record a letter signed by 14 Attorneys General, including Darrell McGraw, the Attorney General of the State of West Virginia, in opposition to this bill.

State of New York,

Office of the Attorney General,

Albany, NY, February 7, 2005.

Hon. Bill Frist,

Majority Leader, U.S. Senate, Dirksen Senate Office Building,

Washington, DC.

Hon. Harry Reid,

Minority Leader, U.S. Senate, Hart Senate Office Building,

Washington, DC.

Dear Mr. Majority Leader and Mr. Minority Leader: On behalf

of the Attorneys General of California, Illinois, Iowa,

Kentucky, Maine, Maryland, Massachusetts, Minnesota, New

Jersey, New Mexico, New York, Oklahoma, Oregon, Vermont and

West Virginia, we are writing in opposition to S. 5, the so-

called ``Class Action Fairness Act,'' which will be debated

today and is scheduled to be voted on this week. Despite

improvements over similar legislation considered in prior

years, we believe S. 5 still unduly limits the right of

individuals to seek redress for corporate wrongdoing in their

state courts. We therefore strongly recommend that this

legislation not be enacted in its present form.

As you know, under S. 5, almost all class actions brought

by private individuals in state court based on state law

claims would be removed to federal court, and, as explained

below, many of these cases may not be able to continue as

class actions. We are concerned with such a limitation on the

availability of the class action device because, particularly

in these times of tightening state budgets, class actions

provide an important ``private attorney general'' supplement

to the efforts of state Attorneys General to prosecute

violations of state consumer protection, civil rights, labor,

public health and environmental laws.

We recognize that some class action lawsuits in both state

and federal courts have resulted in only minimal benefits to

class members, despite the award of substantial attorneys'

fees. While we support targeted efforts to prevent such

abuses and preserve the integrity of the class action

mechanism, we believe S. 5 goes too far. By fundamentally

altering the basic principles of federalism, S. 5, if enacted

in its present form, would result in far greater harm than

good. It therefore is not surprising that organizations such

as AARP, AFL-CIO, Consumer Federation of America, Consumers

Union, Leadership Conference on Civil Rights, NAACP and

Public Citizen all oppose this legislation in its present

form.

1. class actions should not be ``federalized''

S. 5 would vastly expand federal diversity jurisdiction,

and thereby would result in most class actions being filed in

or removed to federal court. This transfer of jurisdiction in

cases raising questions of state law will inappropriately

usurp the primary role of state courts in developing their

own state tort and contract laws, and will impair their

ability to establish consistent interpretations of those

laws. There is no compelling need or empirical support for

such a sweeping change in our long-established system for

adjudicating state law issues. In fact, by transferring most

state court class actions to an already overburdened federal

court system, this bill will delay (if not deny) justice to

substantial numbers of injured citizens. Moreover, S. 5 is

fundamentally flawed because under this legislation, most

class actions brought against a defendant who is not a

``citizen'' of the state will be removed to federal court, no

matter how substantial a presence the defendant has in the

state or how much harm the defendant has caused in the state.

2. clarification is needed that s. 5 does not apply to state attorney

general actions

State Attorneys General frequently investigate and bring

actions against defendants who have caused harm to our

citizens, usually pursuant to the Attorney General's parens

patriae authority under our respective state consumer

protection and antitrust statutes. In some instances, such

actions have been brought with the Attorney General acting as

the class representative for the consumers of the state. We

are concerned that certain provisions of S. 5 might be

misinterpreted to impede the ability of the Attorneys General

to bring such actions, thereby interfering with one means of

protecting our citizens from unlawful activity and its

resulting harm. That Attorney General enforcement actions

should proceed unimpeded is important to all our

constituents, but most significantly to our senior citizens

living on fixed incomes and the working poor. S. 5 therefore

should be amended to clarify that it does not apply to

actions brought by any State Attorney General on behalf of

his or her respective state or its citizens. We understand

that Senator Pryor will be offering an amendment on this

issue, and we urge that it be adopted.

3. many multi-state class actions cannot be brought in federal court

Another significant problem with S. 5 is that many federal

courts have refused to certify multi-state class actions

because the court would be required to apply the laws of

different jurisdictions to different plaintiffs--even if the

laws of those jurisdictions are very similar. Thus, cases

commenced as state class actions and then removed to federal

court may not be able to be continued as class actions in

federal court.

In theory, injured plaintiffs in each state could bring a

separate class action lawsuit in federal court, but that

defeats one of the main purposes of class actions, which is

to conserve judicial resources. Moreover, while the

population of some states may be large enough to warrant a

separate class action involving only residents of those

states, it is very unlikely tbat similar lawsuits will be

brought on behalf of the residents of many smaller states.

This problem should be addressed by allowing federal courts

to certify nationwide class actions to the full extent of

their constitutional power--either by applying one state's

law with sufficient ties to the underlying claims in the

case, or by ensuring that a federal judge does not deny

certification on the sole ground that the laws of more than

one state would apply to the action. We understand that

Senator Jeff Bingaman will be proposing an amendment to

address this problem, and that amendment should be adopted.

4. civil rights and labor cases should be exempted

Proponents of S. 5 point to allegedly ``collusive''

consumer class action settlements in which plaintiffs'

attorneys received substantial fee awards, while the class

members merely received ``coupons'' towards the purchase of

other goods sold by defendants. Accordingly, this ``reform''

should apply only to consumer class actions. Class action

treatment provides a particularly important mechanism for

adjudicating the claims of low-wage workers and victims of

discrimination, and there is no apparent need to place

limitations on these types of actions. Senator Kennedy

reportedly will offer an amendment on this issue, which also

should be adopted.

5. the notification provisions are misguided

S. 5 requires that federal and state regulators, and in

many cases state Attorneys General, be notified of proposed

class action settlements, and be provided with copies of the

complaint, class notice, proposed settlement and other

materials. Apparently this provision is intended to protect

against ``collusive'' settlements between defendants and

plaintiffs' counsel, but those materials would be unlikely to

reveal evidence of collusion, and thus would provide little

or no basis for objecting to the settlement. Without clear

authority in the legislation to more closely examine

defendants on issues bearing on the fairness of the proposed

settlement (particularly out-of-state defendants over whom

subpoena authority may in some circumstances be limited), the

notification provision lacks meaning. Class members could be

misled into believing that their interests are being

protected by their government representatives, simply because

the notice was sent to the Attorney General of the United

States, State Attorneys General and other federal and state

regulators.

Equal access to the American system of justice is a

foundation of our democracy. S. 5 would effect a sweeping

reordering of our nation's system of justice that will

disenfranchise individual citizens from obtaining redress for

harm, and thereby impede efforts against egregious corporate

wrongdoing. Although we ful1y support the goal of preventing

abusive class action settlements, and would be willing to

provide assistance in your effort to implement necessary

reforms, we are likewise committed to maintaining our federal

system of justice and safeguarding the interests of the

public. For these reasons, we oppose S. 5 in its present

form.

Sincerely,

Eliot Spitzer, Attorney General of the State of New York;

W.A. Drew Edmondson, Attorney General of the State of

Oklahoma; Bill Lockyer, Attorney General of the State

of California; Lisa Madigan, Attorney General of the

State of Illinois; Tom Miller, Attorney General of the

State of Iowa; Gregory D. Stumbo, Attorney General of

the State of Kentucky; G. Steven Rowe, Attorney General

of the State of Maine; J. Joseph Curran, Attorney

General of the State of Maryland; Tom Reilly, Attorney

General of the State of Massachusetts; Mike Hatch,

Attorney General of the State of Minnesota; Patricia A.

Madrid, Attorney General of the State of New Mexico;

Hardy Myers, Attorney General of the State of Oregon;

William H. Sorrell, Attorney General of the State of

Vermont; Darrell McGraw, Attorney General of the State

of West Virginia.

Mr. Speaker, I yield 7 minutes to the gentleman from Massachusetts (Mr. Markey), the dean of our delegation.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, my colleague from Georgia had kind of quoted from a study implying that most of these class-action cases would remain in States, that the whole purpose of this bill is to try to move them to Federal courts.

Let me quote from a CBO cost estimate which says that under this bill, most class-action lawsuits would be heard in Federal District Court, rather than in the State court.

Mr. Speaker, I yield 5 minutes to the gentlewoman from Texas (Ms. Jackson-Lee).

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield 1 minute to the gentlewoman from Texas (Ms. Jackson-Lee).

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I guess it is politically popular to attack lawyers and judges, but what I am concerned about is what this bill will do to average people who are seeking remedies for being mistreated.

I want to read an excerpt from the Leadership Conference on Civil Rights, AFL/CIO, and the Alliance for Justice statement. One of things they point out is that nowhere has a case been made that abuses exist in anti-discrimination and wage and hour class action litigation.

They point out by allowing dozens of employees to bring one lawsuit together, the class action device is frequently the only means for low- wage workers who have been denied mere dollars a day to recover their lost wages. Moreover, class actions are also often the only means to effectively change a policy of discrimination.

Wage and hour class actions are most often brought in States under the law of the State in which the claim arises. The reason is that State wage and hour laws typically provide more complete remedies for victims of wage and hour violations than the Federal wage and hour statute. For instance, the Federal Fair Labor Standards Act offers no protection, no protection for a worker who works 30 hours and is paid for 20, so long as the worker's total pay for the 30 hours worked exceeds the Federal minimum wage. However, many States have payment of wage laws that would require that the workers be fully paid for those additional 10 hours of work.

Also, Federal law provides no remedy for part-time workers who often work 10- to 16-hour days, yet earn no overtime because they work less than 40 hours per week. At least six States and territories, however, including California and Alaska, require payment of overtime after a prescribed number of hours of work in a single day. Likewise, State laws increasingly provide greater civil rights protections than Federal laws. For example, every State has passed a law prohibiting discrimination on the basis of disability. Some of these State statutes provide a broader definition of disability and a greater range of protection in comparison to the Federal Americans with Disabilities Act, including California, Minnesota, New Jersey, New York, Rhode Island, Washington, and West Virginia.

In addition, every State has enacted a law prohibiting age discrimination in employment. Some of these State laws, including those in California, Michigan, Ohio and the District of Columbia, contain provisions affording greater protection to older workers than comparable provisions of the Federal Age Discrimination and Employment Act. In addition, many State laws provide protections to classifications not covered by Federal law. For example, many States provide expanded benefits based on marital status, and I could go on and on and on.

The point of the matter here is that this legislation is basically denying people the rights and the protections that many of them have fought so hard to earn in their States, and it leads to more injustice and more unfairness.

Leadership Conference on Civil Rights, Alliance for

Justice, AFL-CIO,

Washington, DC, February 2, 2005.

Exempt Civil Rights and Wage and Hour Cases From S. 5

Dear Senators, On behalf of the undersigned civil rights

and labor organizations, we write to urge you to support an

amendment being offered by Senators Kennedy and Cantwell to

the Class Action Fairness Act (S. 5), which would exempt

civil rights and wage and hour state law cases. The amendment

is necessary in order to ensure that S. 5 does not adversely

impact the workplace and civil rights of ordinary Americans

by making it extremely difficult to enforce civil rights and

labor rights.

During Congress' extensive examination of the merits of

class action lawsuits, nowhere has a case been made that

abuses exist in anti-discrimination and wage and hour class-

action litigation. By allowing dozens of employees to bring

one lawsuit together, the class-action device is frequently

the only means for low wage workers who have been denied mere

dollars a day to recover their lost wages. Moreover, class

actions also are often the only means to effectively change a

policy of discrimination. These suits level the playing field

between individuals and those with more power and resources,

and permit courts to decide cases more efficiently.

Wage and hour class actions are most often brought in state

courts under the law of the state in which the claims arise.

The reason is that state wage and hour laws typically provide

more complete remedies for victims of wage and hour

violations than the federal wage and hour statute. For

instance, the federal Fair Labor Standards Act (FLSA) offers

no protection for a worker who works 30 hours and is paid for

20, so long as the worker's total pay for the 30 hours worked

exceeds the federal minimum wage. However, many states have

``payment of wage'' laws that would require that the worker

be fully paid for those additional 10 hours of work. Also,

federal law provides no remedy for part-time workers who

often work 10-16 hour days, yet earn no overtime because they

work less than 40 hours per week. At least six states and

territories, however, including California and Alaska,

require payment of overtime after a prescribed number of

hours are worked in a single day.

Likewise, state laws increasingly provide greater civil

rights protection than federal law. For example, every state

has passed a law prohibiting discrimination on the basis of

disability. Some of these states statutes provide a broader

definition of disability and a greater range of protection in

comparison to the federal Americans with Disabilities Act,

including California, Minnesota, New Jersey, New York, Rhode

Island, Washington, and West Virginia. In addition, every

state has enacted a law prohibiting age discrimination in

employment, and some of these state laws--including those of

California, Michigan, Ohio and the District of Columbia--

contain provisions affording greater protection to older

workers than comparable provisions of the federal Age

Discrimination in Employment Act (ADEA).

In addition, many state laws provide protections to

classifications not covered by federal law. For example, the

following states provide protection for marital status:

Alaska, California, Connecticut, Delaware, Florida, Hawaii,

Illinois, Maryland, Michigan, Minnesota, Montana, Nebraska,

New Hampshire, New Jersey, New York, North Dakota, Oregon,

Virginia, Washington, and Wisconsin. Moreover, several states

have expanded Title VII's ban on national origin

discrimination to prohibit discrimination on the basis of

ancestry, or place of birth, or citizenship status. These

states include Arkansas, California, Colorado, Connecticut,

Hawaii, Illinois, Indiana, Kansas, Maine, Massachusetts,

Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, South

Dakota, Vermont, West Virginia, Wisconsin, Wyoming, and the

Virgin Islands.

Finally, 31 states have enacted legislation prohibiting

genetic discrimination in the workplace--an important

protection given the rapid increase in the ability to gather

this type of information. The 31 states are Arizona,

Arkansas, California, Connecticut, Delaware, Hawaii, Iowa,

Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan,

Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New

Jersey, New York, North Carolina, Oklahoma, Oregon, Rhode

Island, South Dakota, Texas, Utah, Vermont, Virginia,

Washington, and Wisconsin. In addition, Florida and Illinois

have enacted more limited protections against genetic

discrimination.

Under S. 5, citizens are denied the right to use their own

state courts to bring class actions against corporations that

violate these state wage and hour and state civil rights

laws, even where that corporation has hundreds of employees

in that state. Moving these state law cases into federal

court will delay and likely deny justice for working men and

women and victims of discrimination. The federal courts are

already overburdened. Additionally, federal courts are less

likely to certify classes or provide relief for violations of

state law.

In light of the lack of any compelling need to sweep state

wage and hour and civil rights claims into the scope of the

bill, we urge you to support an amendment to exempt

these claims from the provisions of S. 5. If you have any

questions, or need further information, please call Nancy

Zirkin, Deputy Director of the Leadership Conference on

Civil Rights (202-263-2880); Sandy Brantley, Legislative

Counsel, Alliance for Justice (202-822-6070); or Bill

Samuel, Legislative Director, AFL-CIO (202-637-5320).

Sincerely,

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I would like to read a couple of cases here.

Mrs. Higgins of Tennessee was a 39-year-old woman who died of a sudden heart attack after taking Vioxx. She was the mother of a 9-year- old son. When she was diagnosed with the early onset of rheumatoid arthritis, Vioxx was prescribed. She had no former cardiac problems or family history. According to her medical records, Mrs. Higgins was in otherwise excellent health; but on September 25, 2004, she died of a sudden heart attack, less than a month after she started taking Vioxx. She was buried on the very day in September that Merck took Vioxx off the market.

On October 28, 2004, her husband, Monty, filed a claim against Merck in the Superior Court of New Jersey, Atlantic City Division.

Why New Jersey? This couple is from Tennessee. Because that is the State where Merck is headquartered. In an interview on ``60 Minutes,'' Mr. Higgins said, ``I believe my wife would be here if Merck had decided to take Vioxx off the market just 1 month earlier.''

Then there is Richard ``Dickie'' Irvin of Florida who was a 53-year- old former football coach and president of the Athletic Booster Association. He had received his college football scholarship and was inducted into the school's football hall of fame. He went on to play in Canadian league football until suffering a career-ending injury. In addition to coaching, he worked at a family-owned seafood shop where he was constantly moving crates of seafood. He rarely went to see a doctor and had no major medical problems.

In April of 2001, Mr. Irvin was prescribed Vioxx for his football knee injury from years ago. Approximately 23 days after he began taking Vioxx, Mr. Irvin died from a sudden, unexpected heart attack. An autopsy revealed that his heart attack was caused by a sudden blood clot. This is the exact type of injury that has been associated with Vioxx use. Mr. Irvin and his wife of 31 years had four children and three grandchildren.

I could read more cases involving Vioxx, but most people in this House, Mr. Speaker, probably agree with me that Merck should be held accountable if they knew about the harmful effects of Vioxx.

The class action section of this bill, however, would allow Merck and other corporate defendants to delay their day of reckoning for years and years and years; and justice for these individuals' families would be delayed; and justice delayed is justice denied. Again, this bill should be defeated.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Let me close by saying, this bill is not about lawyers. It is about people, and it is about State governments and attorney generals being able to pass laws in their own States to better protect their people. And it is ironic and it is almost kind of laughable that the majority, which has made it a point to argue on behalf of States right, is basically turning its back on what States have done to protect their people.

The previous speaker talked about making sure that the plaintiffs got what they deserved. Well, we are concerned about making sure that the plaintiffs get their day in court. And under this bill it makes it more difficult, especially for low-wage workers, for people who are battling discrimination to be able to have their day in court.

The system clearly can be improved. Nobody is arguing that. What I am saying here is that the bill before us does not provide the justice and the fairness that I think is appropriate. So I would urge my colleagues to oppose this bill.

National Conference

of State Legislatures,

February 2, 2005.

U.S. Senate,

Washington, DC.

Dear Senator: On behalf of the National Conference of State

Legislatures (NCSL), I am urging you to oppose passage of S.

5, the ``Class Action Fairness Act of 2005.'' This

legislation will federalize class actions involving only

state law claims. S. 5 undermines our system of federalism,

disrespects our state court system, and clearly preempts

carefully crafted state judicial processes which have been in

place for decades regarding the treatment of class action

lawsuits. The overall tenor of S. 5 sends a disturbing

message to the American people that state court systems are

somehow inferior or untrustworthy.

S. 5 amends the Federal Rules of Civil Procedure to grant

federal district courts original diversity jurisdiction over

any class action lawsuit where the amount in controversy

exceeds $5,000,000 or where any plaintiff is a citizen of a

different state than any defendant, or in other words, any

class action lawsuit. The effect of S. 5 on state

legislatures is that state laws in the areas of consumer

protection and antitrust which were passed to protect the

citizens of a particular state against fraudulent or illegal

activities will almost never be heard in state courts.

Ironically, state courts, whose sole purpose is to interpret

state laws, will be bypassed and the federal judiciary will

be asked to render judgment in these cases. The impact of S.

5 is that state processes will be preempted by federal ones

which aren't necessarily better.

NCSL opposes the passage of federal legislation, such as S.

5 which preempts established state authority. State courts

have traditionally and correcdy been the repository for most

class action lawsuits because state laws, not federal ones,

are at issue. Congress should proceed cautiously before

permitting the federal government to interfere with the

authority of states to set their own laws and procedures in

their own courts.

NCSL urges Congress to remember that state policy choices

should not be overridden without a showing of compelling

national need. We should await evidence demonstrating that

states have broadly overreached or are unable to address the

problems themselves. There must be evidence of harm to

interests of national scope that require a federal response,

and even with such evidence, federal preemption should be

limited to remedying specific problems with tailored

solutions, something that S. 5 does not do.

I urge you to oppose this legislation. Please contact Susan

Parnas Frederick

at the National Conference of State

Legislatures at 202-624-3566 or

susan.frederick@ncsl.org for further information.

Sincerely,

Michael Blaboni,

New York State Senator; and Chair,

NCSL Law and Criminal Justice Committee.

Mr. Speaker, I yield back the balance of my time.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, with the consideration of this legislation, the majority begins their assault on our Nation's civil justice system. Today we will attempt to preempt State class actions. Next month we will take up a bankruptcy bill that massively tilts the playing field in favor of credit card companies and against ordinary consumers and workers alike. On deck and pending are equally one-sided medical malpractice bills and asbestos bills that both cap damages and eliminate liability to protect some of the most egregious wrongdoers in America.

The majority's assault on victims and consumers is unprecedented in its scope and stunning in its breadth. Collectively, these measures will close the courthouse doors on millions of Americans harmed by intentional wrongdoing, negligence, and fraud. And so, long after the 109th Congress has forgotten, American consumers and workers will be paying the price for these special interest bills through needless injuries and uncompensated harm.

This legislation will remove class actions involving State law issues from State courts, the forum most convenient for victims of wrongdoing and with the judges most familiar with the substantive law, and this legislation will move it to the Federal courts where the case will take far longer to resolve and is far less likely to be certified.

Now, you do not need to take my word for it. Let us just ask big business itself. The Nation's largest bank, Citicorp admits ``the practical effect (of the bill will) be that many cases will never be heard. Federal judges facing overburdened dockets and ambiguities about applying State laws in a Federal court, often refuse to grant standing to class action plaintiffs.''

Forbes Magazine writes, ``The legislation will . . . make it more difficult for plaintiffs to prevail, since . . . federal courts are . . . less open to considering . . . class action claims.''

Passage of this legislation would be particularly devastating for civil rights cases and labor law cases. As the Lawyers Committee For Civil Rights Under The Law explained, ``The consequences of the legislation for civil rights class actions . . . will be astounding and, in our view, disastrous. Redirecting State law class actions to the Federal courts will choke Federal court dockets and delay or foreclose the timely and effective determination of Federal (civil rights) cases.''

Since the November election we have heard a lot of talk about values, and that is fine; but will someone during this discourse today tell me where the value is in denying senior citizens who suffered heart attacks because they took Vioxx for their arthritis? Where is the morality in preventing poor workers from joining together to obtain compensation when unscrupulous employers pay them slave-labor wages?

Where is the righteousness in telling victims of discrimination that they will have to wait years for a Federal court to consider violations of their own State laws?

If we have learned anything from the Enron, TYCO, Firestone, and other legal debacles, it is that our citizens need more protection against wrongdoers in our society, not less. And yet the class action bill before us takes us in precisely the opposite direction.

The House should reject this one-sided, anti-consumer and anti-civil rights legislation.

Madam Speaker, I reserve the balance of my time.

Madam Speaker, I yield myself as much time as I may consume.

The gentleman from Virginia (Mr. Boucher) is a dear friend of mine, and I merely want to take one observation that he made, that this is just a procedural process and that there is no substantive changes, but I say to him, if the legal system is rigged and the rules are stacked against you, you never have to get to the substance; you do not even get your day in court.

That is the problem with this bill. It is a procedural process that prevents people from bringing actions in State courts, and we are sending it to the Federal courts when both the Federal judiciary has spoken against this measure and the State judges have spoken against this measure as well. I think that that should be a very instructive criticism against this bill.

The proposal before us is opposed by both State and Federal judiciaries. It is opposed by the National Council of State Legislatures; consumers and public interest groups, including Public Citizen, the Consumers Federation of America, the Consumers Union, the United States PIRG; a coalition of environmental advocates; health advocates, including the Campaign for Tobacco Free Kids; civil rights groups such as the Alliance for Justice, the Leadership Conference on Civil Rights, the National Association for the Advancement of Colored People, and the Lawyers' Committee for Civil Rights and labor such as the American Federation of Labor-Congress of Industrial Organizations,

Mr. Speaker, I am pleased to yield 4 minutes to my good friend, the gentleman from Massachusetts (Mr. Markey) from the Committee on Energy and Commerce. He has worked with us on many of these issues.

Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman from California (Ms. Linda T. Sanchez).

(Ms. LINDA T. SANCHEZ and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield 3 minutes to the distinguished gentleman from Virginia (Mr. Scott).

Mr. Speaker, I yield 4 minutes to the distinguished gentleman from North Carolina (Mr. Watt).

Mr. Speaker, I yield 3 minutes to the gentleman from Virginia (Mr. Moran).

Mr. Speaker, I yield myself 1 minute. I would like to respond to my good friend, the gentleman from Virginia (Mr. Moran).

First of all, I think the NAACP and the civil rights groups will be eager to find out that his wisdom is superior to their experience in the civil rights movement. What the gentleman was suggesting may have been correct a number of years ago, but I would point out to the gentleman that the Federal courts more recently have not been as desirable a forum for civil rights activities.

The Bank of Boston case, that was 10 years ago and an anomaly. There are not other examples of class actions where class members lost money. No other court has made the same mistake. I would urge that neither the gentleman nor any of us rewrite class action rules because of one mistake.

Mr. Speaker, I yield 3 minutes to the gentleman from Washington (Mr. Inslee).

(Mr. INSLEE asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I am pleased to yield 5 minutes to the distinguished gentlewoman from Texas (Ms. Jackson-Lee), a member of the Committee on the Judiciary and a ranking subcommittee member.

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks, and include extraneous material.)

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, we have listened carefully to the discussion here, and it is very clear that one thing is for sure: this is not a simple procedural fix to class actions in our courts.

Another thing, it is clear that all of the totally unsatisfactory provisions have not been removed.

First, the bill, as the gentlewoman from Texas has said, harms working Americans and victims of discrimination who are in no position to bring individual actions of wage-and-hour cases or civil rights discrimination claims. Moving the cases to Federal court will result in many never being ever heard at all.

Many State laws provide better protection than Federal statutes. For example, 20 States provide protection for marital status and Federal law does not. Twenty-one States extend Federal definitions of national origin discrimination by including ancestry, place of birth, and citizenship status; and 31 States prohibit genetic discrimination in the workplace, not provided under Federal law.

Secondly, this bill closes the door on victims of large-scale personal injury cases resulting from accidents, environmental disasters, or dangerous drugs that are widely sold. Although these cases are filed in State courts under State law, the bill will treat them as class actions and throw them willy-nilly into the Federal court.

While harming victims of personal injury, this provision greatly helps the companies, like Merck, the company that manufactured the deadly drug Vioxx. Since the discovery of the dangers of Vioxx, hundreds of cases from all over the country have been filed against Merck, and we can anticipate likely thousands more. However, under this proposal before us today, those who suffered harm from the drug will be denied their day in court and their ability to seek justice.

Finally, this bill makes it difficult for consumers to pursue claims against defendants who violated consumer protection laws. The bill will force many of these cases filed in State courts into the Federal system. But some Federal courts will not certify class actions involving the laws of multiple States because they deem the case too complex and unmanageable. Result: harmed consumers will never have their cases adjudicated in the courts.

It also makes it impossible for States to pursue actions against defendants who have caused harm to the State's citizens. State attorneys general often pursue these claims under State consumer protection statutes, antitrust laws, often with the attorney general acting as the class representative for the consumers of the State.

Under this bill, would we want these cases to be thrown into Federal court and severely impede the State's ability to enforce its own laws for its own citizens? That is what will happen. That is what will take place.

So I am very pleased to put in the Record the letter from the States attorneys general opposing this legislation, those attorneys general from California, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Vermont, and West Virginia.

I would also like to add the letter from the environmental organizations which have made their case as to why this would be a very harmful measure. The signatories of this letter include the United States Public Interest Research Group, PIRG; the Wilderness Society; the Sierra Club; the National Environment Trust; Greenpeace; Friends of the Earth; and the National Audubon Society, and many others.

Finally, Mr. Speaker, I include in this debate from the Leadership Conference and the AFL-CIO, and the Alliance For Justice, all writing on one letter, and they plead with us in the House of Representatives to protect working men and women and civil rights litigants by opposing the measure that is before us.

Washington, DC, February 15, 2005.

Dear Representative: On behalf of the undersigned civil

rights and labor organizations, we write to urge you to vote

against the Class Action Fairness Act (S. 5), which passed

the Senate last week. While the bill was pending before the

Senate, we pushed for an amendment offered by Senator Kennedy

that would have exempted civil rights and wage and hour state

law cases. Because the amendment was not adopted, we ask you

to reject S. 5 in order to ensure that the Class Action

Fairness Act does not adversely impact the workplace and

civil rights of ordinary Americans by making it extremely

difficult to enforce civil rights and labor rights.

During Congress' extensive examination into the merits of

class action lawsuits, nowhere has a case been made that

abuses exist in anti-discrimination and wage and hour class-

action litigation. By allowing dozens of employees to bring

one lawsuit together, the class-action device is frequently

the only means for low wage workers who have been denied mere

dollars a day to recover their lost wages. Moreover, class

actions also are often the only means to effectively change a

policy of discrimination. These suits level the playing field

between individuals and those with more power and resources,

and permit courts to decide cases more efficiently.

Wage and hour class actions are most often brought in state

courts under the law of the state in which the claims arise.

The reason is that state wage and hour laws typically provide

more complete remedies for victims of wage and hour

violations than the federal wage and hour statute. For

instance, the federal Fair Labor Standards Act (FLSA) offers

no protection for a worker who works 30 hours and is paid for

20, so long as the worker's total pay for the 30 hours worked

exceeds the federal minimum wage. However, many states have

``payment of wage'' laws that would require that the worker

be fully paid for those additional 10 hours of work. Also,

federal law provides no remedy for part-time workers who

often work 10-16 hour days, yet earn no overtime because they

work less than 40 hours per week. At least six states and

territories, however, including California and Alaska,

require payment of overtime after a prescribed number of

hours are worked in a single day.

Likewise, state laws increasingly provide greater civil

rights protection than federal law. For example, every state

has passed a law prohibiting discrimination on the basis of

disability. Some of these state statutes provide a broader

definition of disability and a greater range of protection in

comparison to the federal Americans with Disabilities Act

including California, Minnesota, New Jersey, New York, Rhode

Island, Washington, and West Virginia. In addition, every

state has enacted a law prohibiting age discrimination in

employment, and some of these state laws--including those of

California, Michigan, Ohio and the District of Columbia--

contain provisions affording greater protection to older

workers than comparable provisions of the federal Age

Discrimination in Employment Act (ADEA).

In addition, many state laws provide protections to

classifications not covered by federal law. For example, the

following states provide protection for marital status:

Alaska, California, Connecticut, Delaware, Florida, Hawaii,

Illinois, Maryland, Michigan, Minnesota, Montana, Nebraska,

New Hampshire, New Jersey, New York, North Dakota, Oregon,

Virginia, Washington, and Wisconsin. Moreover, several states

have expanded Title VII's ban on national origin

discrimination to prohibit discrimination on the basis of

ancestry, or place of birth, or citizenship status. These

states include Arkansas, California, Colorado, Connecticut,

Hawaii, Illinois, Indiana, Kansas, Maine, Massachusetts,

Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, South

Dakota, Vermont, West Virginia, Wisconsin, Wyoming, and the

Virgin Islands.

Finally, 31 states have enacted legislation prohibiting

genetic discrimination in the workplace--an important

protection given the rapid increase in the ability to gather

this type of information. The 31 states are Arizona,

Arkansas, California, Connecticut, Delaware, Hawaii, Iowa,

Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan,

Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New

Jersey, New York, North

Carolina, Oklahoma, Oregon, Rhode Island, South Dakota,

Texas, Utah, Vermont, Virginia, Washington, and Wisconsin. In

addition, Florida and Illinois have enacted more limited

protections against genetic discrimination.

Under S. 5, citizens are denied the right to use their own

state courts to bring class actions against corporations that

violate these state wage and hour and state civil rights

laws, even where that corporation has hundreds of employees

in that state. Moving these state law cases into federal

court will delay and likely deny justice for working men and

women and victims of discrimination. The federal courts are

already overburdened. Additionally, federal courts are less

likely to certify classes or provide relief for violations of

state law.

In light of the lack of any compelling need to sweep state

wage and hour and civil rights claims into the scope of the

bill, which is done in the current bill, we urge you to vote

against S. 5. In the event that amendments are offered, we

support any amendment that, like the Kennedy amendment and

others offered in the Senate, preserves the right of

individuals to bring class actions in an effective, efficient

manner.

If you have any questions, or need further information,

please call Nancy Zirkin, Deputy Director of the Leadership

Conference on Civil Rights (202-263-2880); Sandy Brantley,

Legislative Counsel, Alliance for Justice (202-822-6070); or

Bill Samuel, Legislative Director, AFL-CIO (202-637-5320).

Sincerely,

AARP; AFL-CIO; Alliance for Justice; American-Arab Anti-

Discrimination Committee; American Association of People with

Disabilities; American Association of University Women;

American Civil Liberties Union; American Federation for the

Blind; American Federation of Government Employees; American

Federation of School Administrators; American Federation of

State, County & Municipal Employees; American Federation of

Teachers; American Jewish Committee; Americans for Democratic

Action.

The Arc of the United States; Association of Flight

Attendants; Bazelon Center for Mental Health Law; Center for

Justice and Democracy; Coalition of Black Trade Unionists;

Communications Workers of America; Consortium for Citizens

with Disabilities Civil Rights Task Force; Department for

Professional Employees, AFL-CIO; Disability Rights Education

and Defense Fund; Epilepsy Foundation; Federally Employed

Women; Federally Employed Women's Legal & Education Fund,

Inc.; Food & Allied Service Trades Department, AFL-CIO; Human

Rights Campaign.

International Association of Machinists and Aerospace

Workers; International Brotherhood of Boilermakers, Iron Ship

Builders, Blacksmiths, Forgers and Helpers; International

Brotherhood of Electrlcal Workers; International Brotherhood

of Teamsters; International Federation of Professional &

Technical Engineers; International Union of Bricklayers and

Allied Craftworkers; International Union of Painters and

Allied Trades of the United States and Canada; International

Union, United Automobile, Aerospace & Agricultural Workers of

America; Jewish Labor Committee; Lawyers' Committee for Civil

Rights Under Law; Lawyers' Committee for Civil Rights of the

San Francisco Bay Area; Leadership Conference on Civil

Rights; Legal Momentum; Mexican American Legal Defense and

Educational Fund.

NAACP; NAACP Legal Defense & Educational Fund, Inc.;

National Alliance of Postal and Federal Employees; National

Asian Pacific American Legal Consortium; National Association

for Equal Opportunity in Higher Education; National

Association of Protection and Advocacy Systems; National

Association of Social Workers; National Employment Lawyers

Association; National Fair Housing Alliance; National

Organization for Women; National Partnership for Women and

Families; National Women's Law Center; Paper, Allied-

Industrial, Chemical and Energy Workers International Union;

Paralyzed Veterans of America.

People For the American Way; Pride At Work, AFL-CIO;

Service Employees International Union; Transport Workers

Union of America; Transportation Communications International

Union; UAW; Unitarian Universalist Association of

Congregations; UNITE!; United Cerebral Palsy; United Food and

Commercial Workers International Union; United Steelworkers

of America; Utility Worker Union of America; and Women

Employed.

Mr. Speaker, I offer an amendment in the nature of a substitute.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I would like to briefly describe why this substitute is the superior piece of legislation before us today. The substitute is much better for the following reasons: civil rights carve-out. The substitute would carve out State civil rights claims in order to make sure that civil rights plaintiffs, especially those seeking immediate injunctive relief, can have their grievances addressed in a timely manner.

Believe me, this is an issue of great moment to those of us who are still prosecuting for a fair day in our Nation and have civil rights laws to back us up, but we now are pleading to keep the proper forums. For example, every State in the Union has passed a law prohibiting discrimination on the basis of disability. The language does not affect the Federal jurisdiction over Federal claims.

The second consideration for this is the wage-and-hour carve-out. Wage-and-hour class actions are often brought in State courts because State wage-and-hour remedies are often, I am sorry to say, more complete than the Federal wage-and-hour statute; and we have examples of that.

The third reason: we exclude non-class action cases involving physical injuries. The measure before us applies not only to class actions, but also to mass torts. The Democratic substitute removes the mass tort language. And then, of course, the attorney general carve-out which clarifies cases brought by State attorneys general are excluded from the provisions of the class action bill and would not be forced into Federal court.

These are the major reasons why we encourage a supportive vote for the substitute to the measure that is being debated today.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from Virginia (Mr. Scott).

Mr. Speaker, I yield 1 minute to the gentlewoman from California (Ms. Pelosi), the minority leader of our caucus.

Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from New York (Mr. Nadler), a distinguished member of the Committee on the Judiciary.

Mr. Speaker, I am pleased to yield 4 minutes to the gentleman from New York (Mr. Weiner), a distinguished member of the Committee on the Judiciary.

Mr. Speaker, I yield 30 seconds to the gentleman from New York (Mr. Weiner).

Mr. Speaker, I am pleased to yield the balance of my time to the gentlewoman from Texas (Ms. Jackson-Lee), a cosponsor of the substitute amendment.

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Madam Speaker, I thank the chairman very much for yielding.

Madam Speaker, the general principles behind S. 5 and many of the provisions in the legislation are similar to those in H.R. 1115, which the House passed in 2003, and S. 274, which was voted out of committee in the Senate in 2003 but did not ultimately pass.

To the extent these provisions are the same, the House Committee on the Judiciary's report on H.R. 1115 and the Senate Committee on the Judiciary's report on S. 274 reflect the intent and understanding of the committee and the sponsors as to the import of these provisions. However, there are several new provisions in S. 5 regarding Federal jurisdiction over class actions that were not included in prior versions of the legislation.

I would like to ask my colleague, the chairman of the Committee on the Judiciary, to provide an overview of the jurisdictional provisions in the legislation, and I would like to discuss the various exceptions included in the legislation and the intent of the sponsors with regard to these exceptions.

Madam Speaker, will the gentleman yield?

Madam Speaker, I would also like to discuss the home State exception in the legislation.

New subsections 1332(d)(3) and (d)(4)(B) address the jurisdictional principles that will apply to class actions filed against the defendant in its home State, dividing such cases into three categories.

First, for cases in which two-thirds or more of the members of the plaintiff class and the primary defendants are citizens of the State in which the suit was filed, section 1332(d)(4)(B) states that Federal jurisdiction will not be extended by S. 5. Such cases will remain in State courts.

Second, cases in which more than two-thirds of the members of the plaintiff class are not citizens of the State in which the action was filed will be subject to Federal jurisdiction. Federal courts should be able to hear such lawsuits because they have a predominantly interstate component. They affect people in many jurisdictions, and the laws of many States will be at issue.

Finally, there is a middle category of class actions in which more than one-third, but fewer than two-thirds, of the members of the plaintiff class and the primary defendants are all citizens of the State in which the action was filed. In such cases, the numbers alone may not always confirm that the litigation is more fairly characterized as predominantly interstate in character. New subsection 1332(d)(3), therefore, gives Federal courts discretion in the interests of justice to decline to exercise jurisdiction over such cases based on the consideration of five factors.

Madam Speaker, I would ask the chairman to explain these factors.

Madam Speaker, if the chairman would continue to yield.

I thank the chairman for yielding to me. I think those examples really reflect the intent of the legislation.

Madam Speaker, the legislation also includes a local controversy exception which is intended to ensure that truly local class actions can remain in State court under the legislation. Under this provision, Federal courts are instructed not to exercise jurisdiction over cases that meet all of the following four criteria:

First, more than two-thirds of the class members must be the citizens of the State where the suit is brought; second, there must be at least one in-State defendant from whom significant relief is sought by members of the class and whose conduct forms a significant basis of plaintiffs' claims; third, the principal injuries resulting from the alleged conduct or related conduct of each defendant must have occurred in the State where the action was originally filed; and, fourth, no other class action has been filed during the preceding 3 years asserting the same or similar factual allegations against any of the defendants.

Madam Speaker, I would ask that the chairman elaborate on these criteria.

I thank the chairman for yielding once again.

Madam Speaker, in this regard I think it is important to note that the exceptions in this legislation are just that, exceptions, and they should not be interpreted in ways that turn them into loopholes. For example, the legislation excludes actions against States. Obviously, this does not mean that plaintiffs can simply name a State in every consumer class action and stay out of Federal court. To the contrary, Federal courts should proceed cautiously before declining Federal jurisdiction under the subsection 1332(d)(5)(a) ``state action'' case exception, and do so only when it is clear that the primary defendants are indeed States, State officials, or other governmental entities against whom the court may be foreclosed from ordering relief.

The sponsors intend that primary defendants be intended to reach those defendants who are the real targets of the lawsuit, i.e. the defendants who would be expected to incur most of the loss if liability is found. Thus, the term ``primary defendant'' should include any person who has substantial exposure to significant portions of the proposed class in the action, particularly any defendant that is allegedly liable to the vast majority of the members of the proposed classes, as opposed to simply a few individual class members.

It is the sponsors' intention with regard to each of these exceptions that the party opposing Federal jurisdiction shall have the burden of demonstrating the applicability of an exemption. Thus, if a plaintiff seeks to have a class action remanded on the ground that the primary defendants and two-thirds or more of the class members are citizens of the home State, that plaintiff has the burden of demonstrating that these criteria are met.

Similarly, if a plaintiff seeks to have a purported class action remanded because a primary defendant is a State, that plaintiff should have the burden of demonstrating that the exception should apply.

I thank the gentleman for yielding.

Finally, Mr. Speaker, some critics have complained that the legislation removal provisions will result in delay. Can the gentleman explain why that is simply not the case?

Mr. Speaker, I thank the gentleman for his leadership in moving this legislation forward and in working with the Senate to accomplish that as well.

I hope this colloquy will provide guidance on the very important jurisdictional provisions in S. 5 and the sponsor's intent.

Mr. Speaker, I thank the chairman for yielding me time and for his leadership in bringing this legislation to the floor and for working with the Senate to achieve the compromise that we need.

The gentlewoman from California (Ms. Pelosi), the minority leader, called this an extreme Republican measure. Apparently, she has not spoken to her own fellow San Franciscan and senior Senator from her State, Dianne Feinstein, who negotiated the compromise that has brought this legislation to the floor of the House, or to Senator Chuck Schumer, also a member of the Committee on the Judiciary on the Democratic side in the Senate, or 16 other Democratic Senators who voted for this legislation.

She also apparently has not spoken to members of her own Democratic Caucus, many of whom have voted for this legislation in each of the last three Congresses that have passed the House of Representatives and many more of whom will vote for the legislation today.

A number of the folks who have spoken on the other side of the aisle criticizing the legislation have cited total inaccuracies about what the legislation will do.

The gentleman from Massachusetts (Mr. Markey) would not yield to me, but he said that the Amerada Hess case in New Hampshire, with gasoline leaking into groundwater, would not be heard in the State court; but if you live in New Hampshire and you have gasoline leaking in your groundwater and virtually all of the plaintiffs are New Hampshire residents, the case, under this bill, would be heard in the State courts.

Some have mentioned the Vioxx case against Merck would be affected by this, and they have argued that Senate 5 should be rejected because it will hurt consumers bringing Vioxx cases against Merck. The truth, however, is that this legislation will have absolutely no effect on Vioxx suits. Here is why: the majority of personal injury cases brought against Merck are individual cases that would not be affected by the bill in any manner whatsoever. These include more than 400 personal injury cases that are part of a coordinated proceeding in New Jersey State court. None of these cases will be affected by the bill because they are neither class actions nor mass actions.

Now, what kind of cases would be affected by this legislation? Well, let me show my colleagues how a select number of class action trial lawyers play the class action wheel of fortune.

How about the Kay Bee Toys case where the lawyers got $1 million in attorneys fees and the consumers got 30 percent off selected products of an advertised sale at Kay Bee Toys for one week.

Or the Poland Spring Water case where the lawyers got $1.35 million in the wheel of fortune and the consumers got coupons to buy more of the water that the lawyers were alleging was defective.

How about the Ameritech case. The price goes up, $16 million for those lawyers; the consumers, $5 phone cards.

How about the Premier Cruise line case. The lawyers got nearly $900,000. The consumers got $30 to $40 off of their next thousand dollar cruise, with a coupon to buy more of the product the lawyers were alleging was defective.

Or the computer monitor litigation, $6 million in attorneys fees in a case alleging that the size of the computer screen was slightly off, and therefore, they were entitled to something. What did the consumers get? A $13 rebate to purchase their next purchase.

How about the register.com case, $642,500 to the lawyers. The consumers, $5-off coupons.

My favorite case, the case against Chase Manhattan Bank, the lawyers got $4 million in attorneys fees, but the plaintiffs that allegedly the opponents of this bill are protecting, they got 33 cents. Here is one of the actual checks. The catch was that at the time, to accept this 33-cent magnanimous check, they had to use a 34-cent postage stamp to send in the acceptance to get their 33-cent fee.

How about the case that President Bush cited last week when he highlighted problems with this of the woman who had a defective television set against Thompson Electronics, found she had been made a member of a class action seeking redress of her grievances and many others against Thompson Electronics. What did the lawyers get? $22 million in attorneys fees. What did she get? A coupon for $25 to $50 off her next purchase of exactly what she did not want, another Thompson Electronics television set.

Now, the gentlewoman from California, the minority leader, also cited the Washington Post. Let me tell my colleagues, the Washington Post has repeatedly endorsed this legislation, along with over a hundred other major newspapers, the Washington Post, the Wall Street Journal, the Financial Times, Christian Science Monitor, on and on the list goes. And here is what the Washington Post said, and that is why we need to pass this legislation today. The clients get token payments while the lawyers get enormous fees. This is not justice. It is an extortion racket that only Congress can fix.

I urge my colleagues to pass the bill.

Mr. Speaker, I thank the gentleman from Wisconsin for yielding me this time, and I thank the gentleman from New York (Mr. Weiner) for raising the points on those cases on the class action wheel of fortune because he makes a good point. In not one of those cases was there any wrongdoing found on the part of any of those defendants because all of those were settlements. They were extortionate settlements because they are in the jurisdiction of a court where they know they are facing a hanging judge and a hanging jury.

The gentleman also raised another good point, and we should not leave plaintiffs in the situation where they get a 33-cent check or a coupon for a box of Cheerios, like in another case, and that is what this bill does. It requires extra-special scrutiny for coupon settlement cases so the courts will no longer let the manufacturers' attorneys and the defendants' attorneys come in with a settlement that simply gets out of the case, that gives the plaintiffs' attorney a huge sum of money and everyone else walks away and the plaintiffs get left holding the bag.

Mr. Speaker, the gentleman ought to talk to his colleague, the senior Senator from New York, the predecessor of his seat, who supported this legislation.

In addition, when the gentleman talks about abuse of plaintiffs in these cases, take into consideration the nationwide class action lawsuit filed in Alabama against the Bank of Boston, headquartered in Massachusetts, over mortgage escrow accounts. The class members won the case but actually lost money. Amazing.

Under the settlement agreement, the 700,000 class members received small payments of just a couple of dollars or no money at all. About a year later, they found out that anywhere from $90 to $140 had been deducted from their escrow accounts. For what? To pay their lawyers' legal fees, of what? $8.5 million. And when some of those class members, some of those beleaguered plaintiffs, that I am glad the gentleman from New York is standing up for, sued their class action lawyers for malpractice, the lawyers countersued them for $25 million saying that their former clients were trying to harass them.

This is an extortionate practice. A small cartel of class action lawyers around the country are abusing the system and we need to change it.

Mr. Speaker, I rise in opposition to the motion to commit.

Mr. Speaker, first let me thank Chairman Sensenbrenner for his leadership in bringing us to this historic point. He and I have been working on this for over 6 years. It has passed the House of Representatives three times before.

Due to his good work, it has now passed the Senate and we have the opportunity to send it to the President. He is waiting to sign it and we shouldn't waste any more time.

Now the truth about class action fairness and Vioxx. Critics have been arguing in the press that S. 5 should be rejected because it will hurt consumers bringing Vioxx cases against Merck. The truth is, however, that this legislation will have absolutely no effect on Vioxx suits, and here is why. The majority of personal injury cases brought against Merck are individual cases that would not be affected by the bill in any manner whatsoever. These include more than 400 personal injury cases that are part of a coordinated proceeding in New Jersey State Court. None of these cases will be affected by the bill because they are neither class actions nor mass actions.

Merck has been named in more than 75 statewide and nationwide class actions involving Vioxx, but only a small percentage are personal injury class actions. To the extent these cases do involve personal injury, most were already brought in or removed to Federal Court because each potential class member's claims exceeds $75,000. Thus, these cases are removable to Federal Court under the old rules.

There are a few cases which plaintiffs have joined together in mass action-type cases against Merck. However, not a single Vioxx case has been brought against Merck in State court by more than 100 plaintiffs, one of the requirements for removal to Federal Court under the class action legislation. Thus, there is no reason to believe that the mass action provision would affect any Vioxx-related cases whatsoever.

Most of the class actions have been brought against Merck. Since the legislation is not retroactive, it would absolutely have no effect on the 75 class actions already filed against Merck in the wake of the Vioxx withdrawal.

Mr. Speaker, I do not yield.

Mr. Speaker, given the large number of suits already filed and the fact that every former Vioxx taker in America is already a proposed class member in numerous class actions, it is unlikely there will be many more class actions after the legislation is enacted.

It is bad legislation to have something pass that covers all class actions in the country for all time and name one specific product or one specific company in the legislation. It is irrelevant anyway.

Now, let me tell you the kinds of cases that are affected by this legislation. Take a look at the ``Class Action Wheel of Fortune'' on this chart. It will tell you what we are doing here today.

You have got the case against Ameritech. Ameritech, the attorneys for the plaintiffs got $16 million in attorneys fees. What did the plaintiffs they represent get? Five-dollar phone cards.

The Premier Cruise Line case, the lawyers got almost $1 million; the consumers got a $30- to $40-off coupon for their next cruise.

The computer monitor litigation case, the lawyers, $6 million in fees; the consumers, a $13 rebate against your next future purchase of the alleged defective product.

Register.com, $650,000 for the lawyers; $5 for the consumers.

KB Toys, $1 million for the lawyers; 30 percent off your selected product in a unadvertised 1-week sale at KB Toys.

Poland Spring Water, $1.35 million for the lawyers; a coupon for more of the allegedly defective water for the consumers.

My favorite case, however, is this one, the Chase Manhattan Bank case, where the lawyers got $4 million in attorneys fees; the plaintiffs, a check, we have got one right here, for 33 cents. But there was a catch, because if you wanted to accept the 33 cents, you had to use a 34-cent postage stamp to send in your acceptance notice. How is that for a bargain for you?

And how about the $22 million case that President Bush cited last week against Thompson Electronics? The lawyers got $22 million in attorneys fees; the plaintiffs, one of whom was there, got a $25- to $50-off coupon to buy more of what? The very television set that she was complaining was defective in the first place.

It is a racket, it is extortionate. The people of the country know it. When they are asked the question, who benefits from our class action industry today, 47 percent say it is the plaintiffs' lawyers; 20 percent say it is the lawyers for the companies; 67 percent of our public recognizes it is the lawyers who benefit from this system.

It is time we change it. This bill does just that. It protects American consumers and makes sure that they get justice by examining these ridiculous coupon settlements.

Mr. Speaker, I urge my colleagues to support this legislation, defeat the motion to commit, and send the bill to the President, and starting very soon, we will have justice for American consumers.

Mr. Speaker, I yield back the balance of my time.

Parliamentary Inquiry

Mr. Speaker, I thank the gentleman for the time that he has spent on this legislation. I think we have seen this come across our desks for a number of sessions, and we have tried to work in a bipartisan manner in order to find a way to respond to some of the larger class actions that are now proceeding before us in the courts.

Mr. Speaker, let me start out by trying to address some of the large dilemmas that have seemingly been the underpinnings of this overhaul of a system that is not broken.

I know some two or three sessions ago we were in the midst of conversations about the asbestos lawsuits. Frankly, I believe that with a reasonable dialogue and exchange, we were nearing some sort of resolution that would have allowed that heinous series of events over the years, the asbestos poisoning for many, many workers, to be brought to a conclusion.

For some reason, those favoring class action reform want to paint with a broad brush the victims, those who have been victimized by asbestos poisoning. Even today as we are looking to reconstruct some of the older buildings in my community, we are finding an asbestos problem. But because of the notice that was given through these class action lawsuits, we now have companies who are protecting workers who are going in trying to clean out asbestos. We would not have had that had we had not had this asbestos crisis.

It is the same thing with tobacco. Although there has been some humor about ``don't you know when to stop smoking,'' we know that for years and years, years and years, there was no labeling of cigarettes to suggest that they in fact caused cancer. So the tobacco lawsuits are not in fact frivolous. They may be high in return, but they are not frivolous.

This class action lawsuit legislation, I believe, is excessive and overreaching. What it simply wants to do is burden Federal courts without giving them any resources. There is nothing in this legislation that increases the funding of our Federal courts.

Take the southern district, for example. We are so overburdened with criminal cases, immigration cases, smuggling cases, drug cases, there is absolutely no room to orderly now prosecute or allow to proceed class action lawsuits from people who have been damaged enormously.

This legislation wants to federalize mass torts, that is thousands and thousands of people, when they realize that the compromise, for example, that was offered in the Senate, the Feinstein compromise, does not do anything, because what it says is you can go into State court if you can find one of the defendants of a large corporation in your State. If you happen to be a small State or maybe some State that is not the headquarters of corporate entities, like on the east coast, for example, you will find no defendant, so you will be languishing year after year after year trying to get into Federal court.

What it also does is minimizes the opportunity of those who can secure their local lawyer to get them into a State court and burdens them with the responsibility of finding some high-priced counsel that they cannot afford to try to understand Federal procedure law to get into the Federal court. It closes the door to the least empowered: the poor, the working class and the middle class.

What we find as well is that this legislation is much broader than is needed. Why close the door to those who are injured by the failings of products? Why close the doors to those who are injured by the mass and unfortunate activities of a company like Enron in my congressional district, penalizing thousands of workers all over America unfairly and giving them no relief, giving no relief to the pensioners who lost all of their dollars?

Mr. Speaker, what we have here is a response to no crisis, a response to no problem. Frankly, I believe that if we reasonably look at this legislation, we will find that all it does is it zippers the courthouse door.

To my good friend who mentioned that civil rights can take place wherever is necessary, let me just share with you that civil rights is not a popular cause; and, therefore, to then add it to get in line now with thousands of other cases, you can be assured that there will be a crisis.

Mr. Speaker, let me simply say I rise to support the substitute that has the civil rights carve-out, the wage-and-hour carve-out. It excludes non-action cases involving physical injuries, an attorney general carve-out, the anti-secrecy language; and in particular it does not allow companies to go offshore to avoid class action lawsuits.

Mr. Speaker, let me simply say this is a bill on the floor with no problem. But I can tell you, America, you are going to have a big problem once this bill is passed, and I am saddened by the fact that time after time we come to this floor and we close out the working people, we close out the middle-class, and we close out those who need relief.

Mr. Speaker, that pig may have lipstick, but I can tell my colleagues that it is still pretty unattractive.

It is interesting that my good friend from Virginia keeps talking about coupons and this 30 cents. What he is not telling those of us who understand what class action settlements really mean is that in the settlement comes the punishment for not doing or the incentive to not violate the law again. In the settlement comes an injunction that argues or stops the culprit, the violator, from doing harm again. There is an action. Class actions do not always generate into dollars to petitioners. If you have been done harm, you want that harm to stop immediately so someone else cannot be harmed.

And the class action lawsuit and the so-called millions of dollars to attorneys for attorneys fees does not take into account the preparation for that case, the depositions, the travel. So it looks as if there is a great bounty or a gift being given to lawyers who are working to ensure that the punitive entity, the entity that has caused thousands of employees to lose pensions from corporations, the entity such as MCI and others who have thrown away their corporate responsibility to their employees and caused them to lose all their money, who violated corporate laws and had the violation of trust and made sure that they did the self-dealing, these class actions were to say ``and do that no more,'' and ``we will not allow you to do that anymore.''

For example, the particular amendment that is included in the Conyers-Nadler-Jackson-Lee substitute, which I rise enthusiastically to support, the tax traitor corporation which leaves America and incorporates somewhere else and depletes all of its savings accounts, or all of its accounts, so therefore if there is an action, if you are harmed, if you are hurt and you sue here in the United States, you look up in the court and you find out there is empty pockets. Why? Because they have overcome the laws of this land. They have absconded and you have no way of seeking relief. The substitute includes the relief that is necessary to ensure that citizens and consumers are protected.

There is a civil rights carveout, so that you have a right to address your grievances without the expenses of a Federal Court. There is a wage and hour carveout, so that you can file against a company in your local jurisdiction as a class action when you have been violated on the minimum wage. Physical injuries, so that when your child is injured in a park because of a defective product you have the right to go into your State courts and seek relief.

Now, I want to share with those who feel that we are now opening the doors of opportunity with the Federal courts. Let me share this with you. This is why this is a bogus litigation or legislation that will not work. Arizona has 159 State judges, only 13 Federal courts. Tell me the difference in being able to go into a court that has 159 judges versus those who have 13.

What about the State of South Carolina, with 48 State judges and merely 10 federal judges; or Rhode Island with 22 State judges and three Federal judges; New York with 593 State judges and a mere 52 Federal courts; Louisiana, 211 State judges and 22 Federal courts?

Frankly, there is a farce going on here. At the end of the 108th Congress there were 35 judicial vacancies in the Federal courts. There is no opportunity to go into the Federal courts. They are overburdened and overworked. Justice Rehnquist said something very important. He said, ``I have criticized Congress and the President for their propensity to enact more and more legislation which brings more and more cases into the Federal Court system. This criticism received virtually no public attention. If Congress enacts and the President signs new laws, allowing more cases to be brought into the Federal courts, just filling the vacancies will not be enough. We need additional judgeships.''

This is a farce, I am saddened to say, even with the compromise. We all want to see the judicial system work. I know my good friend from Virginia has good intentions, but this responds to a noncrisis with no resources, no added courts to the Federal bench, and the backlog of cases all over America simply slams the door to injured parties across this land.

The substitute is fair. It allows you to go into the State courts that have a bounty of judges, allows you to be heard, and it allows those corporate offenders or those products that have offended and harmed and maybe killed, those defective automobiles, to be in the courthouse and to have their concerns heard.

Mr. Speaker, I rise in opposition to this bill, S. 5, the Class Action Fairness Act. Unfortunately for the millions of aggrieved plaintiffs in America with legitimate claims, this body has brought yet another piece of legislation to the floor that threatens to close the doors of the court.

This bill, despite its name, is not fair to all complainants who come to the courts for relief. In addition, it fails to render accountability to parties who are in the best financial position. One issue that I planned to address by way of amendment was that of punishing fraudulent parties to class action proceedings by preventing them from removing the matter to federal court.

I am a co-sponsor of the amendment in nature of a substitute that will be offered by my colleagues. With the provisions that it contains, requirements for Federal diversity jurisdiction will not be watered down resulting in the removal of nearly all class actions to Federal court. A wholesale stripping of jurisdiction from the State courts should not be supported by this body. Therefore, it needs to be made more stringent as to all parties and it needs to contain provisions to protect all claimants and their right to bring suit.

Contained within the amendment in nature of a substitute is a section that I proposed in the context of the Terrorist Penalties Enhancement Act that was included in the bill passed into law. This section relates to holding ``tax traitor corporations'' accountable for their terrorist acts. With respect to S. 5, the right to seek removal to Federal courts will be precluded for tax traitor corporations.

The ``tax traitor corporation'' refers to a company that, in bad faith, takes advantage of loopholes in our tax code to establish bank accounts or to ship jobs abroad for the main purpose of tax avoidance. A tax-exempt group that monitors corporate influence called ``Citizen Works'' has compiled a list of 25 Fortune 500 Corporations that have the most offshore tax-haven subsidiaries. The percentage of increase in the number of tax havens held by these corporations since 1997 ranges between 85.7 percent and 9,650 percent.

This significant increase in the number of corporate tax havens is no coincidence when we look at the benefits that can be found in doing sham business transactions. Some of these corporations are tax traitor corporations because they have given up their American citizenship; however, they still conduct a substantial amount of their business in the United States and enjoy tax deductions of domestic corporations.

The provision in the substitute amendment will preclude these corporations from enjoying the benefit of removing State class actions to Federal court. Forcing these corporate entities to defend themselves in State courts will ensure that these class action claims will be fairly and fully litigated.

Mr. Speaker, S. 5 applies not only to class actions but to all tort cases. It is highly inefficient to overwhelm the Federal courts with the massive number of State claims that will come their way. Not only are the Federal courts less sympathetic to this kind of litigation, the practical effect will be that many cases will never be heard.

The barriers to gaining Federal jurisdiction to have a case heard is much higher than in State courts by virtue of their creation. As a result, the Federal courts will be quick to

refuse class certification in complex litigation matters. State courts are better suited to adjudicate complex class actions.

I oppose this legislation and urge my colleagues to join me.

Mr. Speaker, I ask my colleagues to vote for the substitute and defeat the underlying bill.