Lawsuit Abuse Reduction Act of 2017

Mr. Chairman, I thank the ranking member of the Committee on the Judiciary for his distinguished service and my good friend from Texas for his managing of this bill on which we have a vigorous and active disagreement, but realize that the role of the Committee on the Judiciary is to enhance justice for all Americans, no matter what size business, what ethnicity, racial background, what issue they bring, whether they bring a commercial issue or whether they are for criminal justice.

That is why I rise to oppose this legislation, for it is important that we monitor, promote, coddle, and respect justice. I oppose the legislation that aims to restore a long-discredited version of Federal Rule of Civil Procedure 11, in effect from 1983 to 1993. I use as a premise of my argument a letter from the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States, in particular written by two distinguished Federal judges from Arizona, the chair of the Committee on Rules and the chair of the Advisory Committee on Rules, both Federal district court judges. But more importantly, my luck was to meet with a series of judges in the past week, Federal judges, Republican appointees and some Democratic appointees, and there was a vocal outcry of the outrage of this legislation, asking and begging that this legislation not be put in place.

Let me give you a description from the Federal courts, recognizing: ``We of course share the desire of the sponsors of LARA to improve the civil justice system''--and that is the Lawsuit Abuse Reduction Act-- ``in our Federal courts, including the desire to reduce frivolous filings. But LARA creates a cure worse than the problem it is meant to solve.''

``Moreover, as we are both Federal trial judges, our perspective is informed by our ongoing daily experience with the practical operation of the rules.''

I, too, am concerned about small businesses. That is why we need to proceed as we are proceeding. It gives thoughtful judges the ability to protect those entities. The facts do not, according to the letter, support any assumption that mandatory sanctions deter frivolous filings.

``A decade of experience with the 1983 mandatory sanctions provision,'' they go on to say, ``demonstrated that it failed to provide meaningful relief from

the litigation behavior it was meant to address, and instead generated wasteful satellite litigation that had little to do with the merits of cases.''

What good is that for the small litigant? What good will they have when they might be subject to satellite litigation? And so, Mr. Chairman, why would we want to return to the failed, discredited sanction regime rightly abandoned in 1993? H.R. 720 would require courts to impose monetary sanctions for any rule 11 violation, eliminating the safe harbor provision that currently allows attorneys to correct or withdraw a filing before rule 11 proceedings commence. That is justice: I made a mistake, I want to withdraw it. I am suing a small business, I have a different perspective. I know the facts, let me withdraw it.

The cost-shifting provision was eliminated by the courts because it encouraged satellite litigation, and many cases required parallel proceedings. Here is the worst of it: Suppose we were back in 1954. Would Brown v. Board of Education be a frivolous lawsuit subject to sanctions, a landmark decision of the United States Supreme Court that declared State laws establishing separate public schools for Black and White students unconstitutional? What about Griswold in 1965? It would also be judged as a frivolous lawsuit.

Mr. Chairman, Griswold was a landmark case in which the Supreme Court ruled that we had a right to privacy. Or what about the famous case that was made into a movie, Loving v. Virginia? I think for almost 25 years this mixed-marriage couple could not live in their own State. A lawsuit would have been considered frivolous. Loving was a landmark case which decided Virginia's antimiscegenation statute was unconstitutional.

New York Times Co. v. United States in 1971, the question was on the constitutional freedom of the press. It reinforced the First Amendment.

Mr. Chairman, it is impossible to go back to the old days. I ask my colleagues to support the Jackson Lee amendment, to come up and to oppose the underlying bill in the name of justice for all.

Mr. Chairman, I include in the Record a list of seven notable cases the Lawsuit Abuse Reduction Act may have barred from a courtroom.

seven notable cases the ``lawsuit abuse reduction act'' may have barred

from a courtroom

Contrary to proponents' claims, LARA does not deter

frivolous lawsuits. Rather it deters meritorious cases by

imposing a one-size-fits-all mandate for federal judges.

Mandatory sanctions inevitably chill meritorious claims

particularly in cases of first impression or involving new

legal theories, including cases to protect civil rights, the

right to privacy, the environment, collective bargaining and

the First Amendment. Our system of justice is a moving body

of law, and novel legal theories have the ability to shift

public policy and law.

Below are seven notable cases that LARA may have prevented

because the cases presented what--at the time they were

presented to the court--would have been considered novel

legal theories:

Brown v. Board of Education of Topeka, 347 U.S. 483 (1954):

Brown was a landmark decision of the United States Supreme

Court that declared state laws establishing separate public

schools for black and white students unconstitutional. The

decision overturned the Plessy v. Ferguson decision of 1896

which allowed state-sponsored segregation. The Court's

unanimous decision stated that ``separate educational

facilities are inherently unequal.'' As a result, de jure

racial segregation was ruled a violation of the Equal

Protection Clause of the Fourteenth Amendment of the United

States Constitution. This ruling paved the way for

integration and the civil rights movement.

Griswold v. Connecticut, 381 U.S. 479 (1965): Griswold was

a landmark case in which the Supreme Court ruled that the

Constitution protected a right to privacy. The case involved

a Connecticut law that prohibited the use of contraceptives.

By a vote of 7-2, the Supreme Court invalidated the law on

the grounds that it violated the ``right to marital

privacy.''

Lawrence v. Texas, 539 U.S. 558 (2003): In Lawrence, the

Supreme Court considered the issue of whether adult

consensual sexual activity is protected by the Fourteenth

Amendment guarantee of equal protection under the law. The

Court found that the petitioners were free as adults to

engage in the private conduct in the exercise of their

liberty under the Due Process Clause. The decision

decriminalized the Texas law that made it illegal for two

persons of the same sex to engage in certain intimate sexual

conduct.

Massachusetts v. Environmental Protection Agency, 549 U.S.

497 (2007): In this case, twelve states and several cities of

the United States brought suit against the United States

Environmental Protection Agency (EPA) to force the federal

agency to regulate carbon dioxide and other greenhouse gases

as pollutants. The Supreme Court found that Massachusetts,

due to its ``stake in protecting its quasi-sovereign

interests'' as a state, had standing to sue the EPA over

potential damage caused to its territory by global warming.

The Court rejected the EPA's argument that the Clean Air Act

was not meant to refer to carbon emissions in the section

giving the EPA authority to regulate ``air pollution

agent[s].''

Loving v. Virginia, 388 U.S. 1 (1967): Loving was a

landmark civil rights case in which the United States Supreme

Court, by a 9-0 vote, declared Virginia's anti-miscegenation

statute, the ``Racial Integrity Act of 1924,''

unconstitutional, thereby ending all race-based legal

restrictions on marriage in the United States.

New York Times Co. v. United States, 403 U.S. 713 (1971):

This case considered whether the New York Times and

Washington Post newspapers could publish the then-classified

Pentagon Papers without risk of government censure. The

question before the Court was whether the constitutional

freedom of the press, guaranteed by the First Amendment, was

subordinate to a claimed need of the executive branch of

government to maintain the secrecy of information. The

Supreme Court ruled that the First Amendment protected the

right of the New York Times to print the materials.

Tennessee Valley Authority v. Hill, 437 U.S. 153 (1978)

(The Snail Darter Case): In TVA, the Supreme Court affirmed a

court of appeals' judgment, which agreed with the Secretary

of Interior that operation of the federal Tellico Dam would

eradicate an endangered species. The Court held that a prima

facie violation of Sec. 7 of the Endangered Species Act, 16

U.S.C. Sec. 1536, occurred, and ruled that an injunction

requested by respondents should have been issued.

Mr. Chair, I rise in strong opposition to H.R. 720, the ``Lawsuit Abuse Reduction Act of 2017,'' because it is both unnecessary and counterproductive.

I oppose this legislation that aims to restore a long-discredited version of Federal Rule of Civil Procedure 11, in effect from 1983 to 1993.

The current Rule 11 allows federal courts, in their discretion, to impose sanctions for frivolous filings and it encourages litigants to resolve such issues without court intervention.

As written, H.R. 720 would change the sanctions for a violation of Federal Rules of Civil Procedure 11 to a cost-shifting sanction payable to the opposing party, an antiquated version of the Rule in effect from 1983 until 1993.

Why, Mr. Chair would we return to the failed and discredited sanction regime rightly abandoned in 1993?

H.R. 720 would require courts to impose monetary sanctions for any Rule 11 violation, eliminating the safe harbor provision that currently allows attorneys to correct or withdraw a filing before Rule 11 proceedings commence.

That cost-shifting provision was eliminated by the courts because it encouraged satellite litigation; many cases required parallel proceedings--one on the merits of the lawsuit and one on the Rule 11 motion.

The 1983 rule had a particularly negative disproportionate impact on plaintiffs, especially plaintiffs in civil rights cases, because plaintiffs in such cases often raise novel legal arguments, leaving them vulnerable to a Rule 11 motion by a defendant.

Reinstating this mandatory fee shifting rule, as H.R. 720 does, will again have a chilling effect on plaintiffs' claims, especially individual plaintiffs taking on large corporate interests.

Sanctions were more often imposed against plaintiffs than defendants and more often imposed against plaintiffs in certain kinds of cases, primarily in civil rights and certain kinds of discrimination cases.

A leading study on this issue showed that although civil rights cases made up 11.4% of federal cases filed, 22.7% of the cases in which sanctions had been imposed were civil rights cases.

The imposition of mandatory fees and costs ultimately shifts the purpose of the Rule from deterrence to compensation, encouraging parties to always file Rule 11 motions in the hopes of gaining additional compensation.

Both the Judicial Conference of the United States and the U.S. Supreme Court support preservation of the current version of Rule 11(c) and restoring the true balance between punishing unwarranted conduct and deterring unnecessary litigation.

Given the highly problematic experience under the 1983 rule, which sparked extensive and costly litigation, the rule burdened already strained federal court system, adversely affecting cases of all types, including civil litigation among businesses.

Congress should be looking for ways to decrease, not increase wasteful burdens on

courts, and should avoid rule changes that have a discriminatory impact on civil rights, employment, environmental, and consumer cases.

For these reasons and more, I oppose this bill.

Mr. Chairman, I have an amendment at the desk.

Mr. Chairman, let me again emphasize our mutual commitment to justice and why I think the underlying bill skews justice and tips the scale of justice on Lady Justice.

I again refer you to the sitting experts, and that is the Judicial Conference of the United States, comprised of Federal judges all across America. I can't help but recite this sentence that strikes me as one as strong as possible to have been cited in a letter.

Their referral to LARA, the Lawsuit Abuse Reduction Act, in this one sentence, recognizing the concern about frivolous lawsuits or filings, they say:

But LARA creates a curse worse than the problem it is meant

to solve.

I think that that one sentence says it all. We are not here solving a problem. We are here creating a problem.

I am particularly struck by the comments regarding small businesses. My amendment improves H.R. 720 by preserving the current law and practice of courts awarding attorneys' fees when justice requires.

As written, H.R. 720 would change the sanctions for violation of Federal Rules of Civil Procedure 11 to a cost-shifting sanction, payable to the opposing party, an antiquated version of the rule in effect from 1983 until 1993. That cost-shifting provision was eliminated by the courts because it encouraged satellite litigation.

The Jackson Lee amendment would preserve the sanctions currently available under rule 11, which provide the correct balance in punishing unwarranted conduct--this is under the present status of rule 11-- without encouraging unnecessary litigation.

Specifically, my amendment will strike a provision of the legislation that mandates the award of reasonable attorney fees and costs. Instead, it restores judicial discretion to award such fees and costs when warranted.

Take small business A, who is mad at big bank XYZ. They mishandled my account, and they filed a lawsuit. Unfortunately, the bookkeeper--not accountant--bookkeeper that the small business used really made the mistake, but the judge, recognizing the small business had good intentions, would not have to mandatorily force them to be sanctioned and to pay attorneys' fees but might then have discretion. That is how you help small business A.

I ask my colleagues to support the reasonable Jackson Lee amendment.

Mr. Chair, thank you for this opportunity to explain the Jackson Lee Amendment to H.R. 720.

My amendment improves H.R. 720 by preserving the current law and practice of courts awarding attorney fees when justice so requires.

As written, H.R. 720 would change the sanctions for a violation of Federal Rules of Civil Procedure (FRCP) 11 to a cost-shifting sanction payable to the opposing party, an antiquated version of the Rule in effect from 1983 until 1993.

That cost-shifting provision was eliminated by the courts because it encouraged satellite litigation.

The Jackson Lee Amendment would preserve the sanctions currently available under Rule 11, which provide the correct balance in punishing unwarranted conduct, without encouraging unnecessary litigation.

Specifically, my amendment will strike a provision of the legislation that mandates the award of reasonable attorneys' fees and costs, and instead restores judicial discretion to award such fees and costs when warranted.

The Jackson Lee Amendment preserves the balance found in the current version of Rule 11, which gives the court discretion to determine an appropriate sanction.

H.R. 720 seeks a return to the failed and discredited sanction regime rightly abandoned in 1993.

By eliminating the mandatory fee-shifting provision, the 1993 Rule discouraged satellite litigation and encouraged parties to move forward with the merits of the case.

Under the prior Rule 11, during the 1983-1993 time, mandatory fee- shifting was used to discourage plaintiffs from bringing meritorious claims using novel legal theories in civil rights and employment rights cases.

Reinstating this mandatory fee shifting rule, as H.R. 720 does, will again have a chilling effect on plaintiffs claims, especially individual plaintiffs taking on large corporate interests.

The Jackson Lee Amendment would preserve the current version of Rule 11(c) and restore the true balance between punishing unwarranted conduct and deterring unnecessary litigation.

The old rule disproportionately affected plaintiffs, especially plaintiffs in civil rights cases.

Sanctions were more often imposed against plaintiffs than defendants and more often imposed against plaintiffs in certain kinds of cases, primarily in civil rights and certain kinds of discrimination cases.

A leading study on this issue showed that although civil rights cases made up 11.4% of federal cases filed, 22.7% of the cases in which sanctions had been imposed were civil rights cases.

The imposition of mandatory fees and costs shifts the purpose of the Rule from deterrence to compensation, encouraging parties to always file Rule 11 motions in the hopes of gaining additional compensation.

For these reasons, I urge my colleagues to join me in supporting the Jackson Lee Amendment.

Committee on Rules of Practice and Procedure of the

Judicial Conference of the United States,

Washington, DC, April 13, 2015.

Hon. Bob Goodlatte,

Chairman, Committee on the Judiciary,

House of Representatives, Washington, DC.

Dear Mr. Chairman: We write to present the views of the

Judicial Conference Rules Committees on H.R. 758, the Lawsuit

Abuse Reduction Act of 2015.

As the current chairs of the Judicial Conference's

Committee on the Rules of Practice and Procedure (the

``Standing Committee'') and the Advisory Committee on the

Federal Rules of Civil Procedure (the ``Advisory

Committee''), we oppose H.R. 758, which seeks to reduce

lawsuit abuse by amending Rule 11 of the Federal Rules of

Civil Procedure. The bill would reinstate a mandatory

sanctions provision of Rule 11 adopted in 1983 and removed as

counterproductive in 1993. The bill would also eliminate a

provision adopted in 1993 that allows a party to withdraw

challenged pleadings. Our concerns mirror the views expressed

by the Judicial Conference in 2004 and 2005, and by the

Standing Committee and Advisory Committee in 2011 and 2013,

in response to similar legislation, and reflect our ongoing

daily experience with the practical operation of the rules.

We share the desire of the sponsors of H.R. 758 to improve

the civil justice system in our federal courts, including the

desire to reduce frivolous filings. But legislation that

would restore the 1983 version of Rule 11 would create a cure

worse than the problem it is meant to solve. Such legislation

also contravenes the longstanding Judicial Conference policy

opposing direct amendment of the federal rules by legislation

rather than through the deliberative process Congress

established in the Rules Enabling Act, 28 U.S.C.

Sec. Sec. 2071-2077.

A decade of experience with the 1983 mandatory sanctions

provision demonstrated that it failed to provide meaningful

relief from the litigation behavior it was meant to address,

and instead generated wasteful satellite litigation that had

little to do with the merits of cases. The 1983 version of

Rule 11 required sanctions for every violation of the rule,

and quickly became a tool of abuse. Aggressive filings of

Rule 11 sanctions motions required expenditure of tremendous

resources on Rule 11 battles having nothing to do with the

merits of the case and everything to do with strategic

gamesmanship. Many Rule 11 motions in turn triggered counter-

motions seeking Rule 11 sanctions as a penalty for filing of

the original Rule 11 motion.

The 1993 changes to Rule 11 followed years of examination

and were made on the Judicial Conference's strong

recommendation, with the Supreme Court's approval, and

effective only following a period of congressional review.

The 1993 amendments were designed to remedy the major

problems with the rule, strike a fair balance between

competing interests, and allow parties and courts to focus on

the merits of the underlying cases. Since 1993, the rule has

included a safe harbor, providing a party 21 days within

which to withdraw a particular claim or defense before

sanctions can be imposed. If the party fails to withdraw an

allegedly frivolous claim or defense within that time, a

court may impose sanctions, including assessing reasonable

attorney fees. Under the 1993 amendments, sanctioning of

discovery-related abuse remains available under Rules 26 and

37, which provide for sanctions that include awards of

reasonable attorney fees.

Minimizing frivolous filings is vital. The current rules

give judges tools to deal with frivolous pleadings, including

the imposition of sanctions where warranted. Rule 12(b)(6)

authorizes courts to dismiss pleadings that fail to state a

claim. Section 1927 of Title 28 of the United States Code

authorizes sanctions against lawyers for ``unreasonably and

vexatiously'' multiplying the proceedings in any case. Other

tools to address frivolous filings include 28 U.S.C.

Sec. 1915(e), which requires courts to dismiss cases brought

in forma pauperis that are frivolous, malicious, or fail to

state a claim, and 28 U.S.C. Sec. 1915A, which requires

courts to dismiss prisoner complaints against governmental

entities, officers, or employees that are frivolous,

malicious, or fail to state a claim.

Some may ask, why not give courts another tool to deter

frivolous filings by reinstating the 1983 version of Rule 11?

The answer is that the very process Congress established to

consider rule proposals exposed the 1983 version of Rule 11

as superficially appealing, but replete with unintended

consequences, chiefly an explosion of satellite litigation.

Congress designed the Rules Enabling Act process in 1934, and

reformed it in 1988, to produce the best rules possible

through broad public participation and review by the bench,

the bar, and the academy. The Enabling Act charges the

judiciary with the task of neutral, independent, and thorough

analysis of the rules and their operation. The Rules

Committees undertake extensive study of the rules, including

empirical research, so that they can propose rules that will

best serve the American justice system while avoiding

unintended consequences. Experience has shown that this

process works well. Direct amendment of Rule 11 will not only

circumvent the effective Rules Enabling Act process Congress

implemented, but as the careful study of Rule 11 undertaken

by the Rules Committees over many years demonstrates, direct

amendment of Rule 11 as envisioned by H.R. 758 would work

against the laudable purpose of improving the administration

of justice.

Before proposing the 1993 amendments, the Advisory

Committee reviewed several empirical studies of the 1983

version of Rule 11, including studies conducted by the

Federal Judicial Center in 1985 and 1988, a Third Circuit

Task Force report on Rule 11 in 1989, and a New York State

Bar Committee report in 1987. In 1990, the Advisory Committee

issued a call for general comments on the rule. The response

was substantial and clearly called for a change. The Advisory

Committee concluded that Rule 11's cost-shifting provision

created an incentive for too many unnecessary Rule 11

motions. Amendments to Rule 11 were drafted by the Advisory

Committee and approved by the Standing Committee and Judicial

Conference. The Supreme Court approved the amendments and

transmitted them to Congress in May 1993 after extensive

scrutiny and debate by the bench, bar, and public in

accordance with the Rules Enabling Act process.

The amended rule has produced a marked decline in Rule 11

satellite litigation without any noticeable increase in

frivolous filings. In June 1995, the Federal Judicial Center

conducted a survey of 1,130 lawyers and 148 judges on the

effects of the 1993 amendments. The Center found general

satisfaction with the amended rule, and that a majority of

the responding judges and lawyers did not favor a return to

mandatory sanctions when the rule is violated.

In 2005, the Federal Judicial Center surveyed federal trial

judges to get a clearer picture of how the revised Rule 11

was operating. A copy of the study is enclosed. The study

showed that judges on the front lines--those who must contend

with frivolous litigation and apply Rule II--strongly believe

that the current rule works well. The study's findings

include the following highlights:

More than 80 percent of the 278 district judges surveyed

indicated that ``Rule 11 is needed and it is just right as it

now stands'';

87 percent prefer the existing Rule 11 to the 1983 version

or the version proposed by legislation (e.g., H.R. 4571 (the

Lawsuit Abuse Reduction Act of 2004) or H.R. 420 (the Lawsuit

Abuse Reduction Act of 2005));

85 percent strongly or moderately support Rule 11's safe

harbor provisions;

91 percent oppose the proposed requirement that sanctions

be imposed for every Rule 11 violation;

84 percent disagree with the proposition that an award of

attorney fees should be mandatory for every Rule 11

violation;

85 percent believe that the amount of groundless civil

litigation has not grown since the promulgation of the 1993

rule (for judges commissioned before 1992) or since their

first year as a federal district judge (for judges

commissioned after January 1, 1992); and

72 percent believe that addressing sanctions for discovery

abuse in Rules 26(g) and 37 is better than in Rule 11.

The findings of the Federal Judicial Center underscore the

judiciary's united opposition to legislation amending Rule

11. Lawyers share this view. The American Bar Association has

opposed H.R. 758. Indeed, of the 200 lawyers, litigants,

judges, and academics who participated in the 2010 conference

at Duke University Law School convened by the Advisory

Committee to search for ways to address the problems of costs

and delay in civil litigation, nobody proposed a return to

the 1983 version of Rule 11.

Thank you for considering the views of the Standing

Committee and Advisory Committee. We look forward to

continuing to work with you to ensure that our civil justice

system fulfills its vital role. If you or your staff have any

questions, please contact Rebecca Womeldorf, Secretary to the

Standing Committee.

Sincerely,

Jeffrey S. Sutton,

United States Circuit Judge Sixth Circuit,Chair, Committee

on Rules of Practice and Procedure.

David G. Campbell,

United States District Judge District of Arizona, Chair,

Advisory Committee on Civil Rules.

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

Mr. Chairman, reading again from the Judicial Conference letter, it says: The facts do not support any assumption that mandatory sanctions under H.R. 720--that is what the bill is about--deter frivolous filings. All it does, after a decade of experience, is that it demonstrates that it failed to provide meaningful relief from the litigation behavior it was supposed to address.

What it will do is it will punish the small business. By eliminating the mandatory fee-shifting provision, the 1993 rule discouraged satellite litigation. Reinstating this mandatory fee-shifting rule, as H.R. 720 does, will again have a chilling effect.

The Jackson Lee amendment would give the courts discretion to protect against the mom-and-pop business from having to pay because they mistakenly thought big bank XYZ did them in, and it really was a mistake on their part.

Sanctions are more often imposed against plaintiffs than defendants, more often imposed against plaintiffs in certain kind of cases, primarily civil rights and certain kinds of discrimination cases.

The Brown v. Board of Education of Topeka might have been perceived to be outrageous--how dare you try to strike down the separate but equal--and yet it has had an amazing impact and a case of moment in history.

Or the Loving v. Virginia, when two individuals who loved each other still were kept out of Virginia because they were of different races, it was absurd to file that lawsuit at that time. Yet, if they had not, or if these kinds of penalties were in place, they might be suffering mandatory sanctions and kept out of the courthouse.

A leading study on this issue showed that, although civil rights cases make up 11.4 percent, 22.7 percent of the cases in which sanctions have been imposed are civil rights cases.

Mr. Chair, I ask my colleagues to support the Jackson Lee amendment. In order to foster justice, support the Jackson Lee amendment, which restores to the courts judicial discretion on penalties and sanctions, if you will, and listen to the Judicial Conference: this is a curse worse than the problem.

Mr. Chair, I urge support of the Jackson Lee amendment, and I yield back the balance of my time.

Mr. Chair, I demand a recorded vote.

Mr. Chairman, I support Representative Conyers' amendment.

I include in the Record in support of our amendment a Judicial Conference letter dated April 13, 2015, and letters from a number of organizations, including the Alliance for Justice and the American Association for Justice.

I also include in the Record a letter from the American Bar Association, who begins their message:

``On behalf of the American Bar Association, ABA, and its over 400,000 members, I am writing to urge you to vote against H.R. 720, the Lawsuit Abuse Reduction Act . . . which is scheduled for a floor vote this week.''

Re Groups Strongly Oppose Attacks on Civil Justice.

Hon. Bob Goodlatte,

Chairman, Committee on the Judiciary, House of

Representatives, Washington, DC.

Hon. John Conyers, Jr.,

Ranking Member, Committee on the Judiciary, House of

Representatives, Washington, DC.

Dear Chairman Goodlatte and Ranking Member Conyers: On

February 2, the House Committee on the Judiciary is scheduled

to mark up several bills that collectively would make it more

difficult for Americans to enforce their legal rights, and

would place unreasonable burdens on the federal judiciary and

federal enforcement officials. The undersigned organizations

strongly oppose these bills as harmful and unnecessary.

Mr. Speaker, I rise for the purpose of inquiring of the majority leader the schedule for the week to come, I yield to the gentleman from California (Mr. McCarthy), the majority leader and my friend.

I thank the gentleman for that information.

The gentleman mentions the Defense Appropriations bill is going to be brought forward. It is my understanding that the text was just introduced this morning. Is that accurate?

Do you know when it will be marked up?

I yield to the gentleman from California.

Is the majority leader not aware of whether there will be a markup on the bill or will it come directly to the floor through the Rules Committee?

The gentleman just indicated that this will be the bill that we passed last year.

So I am correct, then, that the bill will be the same bill that we passed last year? Is that accurate?

The majority leader may not know, and I certainly understand that. We will see what differences might exist. If there are any substantive changes in the bill, we would hope that it would be subjected to a hearing or at least a markup.

But the gentleman believes there is no substantive change. Is that accurate?

I thank the majority leader for that observation.

I agree with the majority leader that subjecting the Defense Appropriations or any other appropriation is not a tenable or appropriate policy to pursue.

The gentleman knows we were for an omnibus being passed in 2016, as an omnibus was passed in 2015, which, therefore, gives the administrators of any agency or Secretaries of any agency the opportunity to have the ability to plan over a period of time longer than months.

So I certainly agree. But very frankly, I want to tell the majority leader, on our side of the aisle we are very, very concerned that privilege will be accorded to the defense bill.

Can the majority leader tell me whether or not we intend to adopt and pass, in the regular order, individual bills--the Labor-Health bill, the Interior bill, the Agriculture bill, et cetera, et cetera--in a similar manner? That means considering them on their merits discretely, separately, individually.

I yield to the gentleman from California.

I appreciate that, Mr. Leader, if that is your goal; and I hope that, in fact, we can pursue that goal. Very frankly, we believe that the scenario is being set up to take care of the defense bill.

I voted for the defense bill. I was one of those people. I intend to vote for the defense bill next week when it comes to the floor, if, in fact, as the gentleman represents, it is substantively the same as the bill that we have already adopted.

What I am concerned about and what Members on my side of the aisle are very concerned about is that the remaining nondefense discretionary spending bills will be substantially altered from that which we would have passed in December of last year in the 2017.

Of course, we were 4 months late doing that--or 3 months late, at least: October, November, and December. But I am hopeful, Mr. Leader, that those bills will, in fact, be considered discretely so that the American public can see us vote on those bills and on the priorities that are incorporated in those bills.

Mr. Leader, it appears that the majority has stalled somewhat in their efforts in a path forward on repeal of the ACA. President Trump's address on Tuesday, it seems to me, didn't offer many details. He does say, however, that everybody is going to be covered--everybody--with better health care,

cheaper. If that bill comes to the floor, I am going to vote for it, Mr. Leader. I want you to know that. Health care for everybody-- quality, accessible, affordable, and cheaper.

Now, as the majority leader knows, the budget resolution that was passed this year set a deadline of January 27 for committees to report legislation repealing the law. It is now March 2, and there are reports, Mr. Leader, that Republicans have a draft bill that perhaps is located in H-157, that it is not being posted, and that Republicans have been told they can view it in H-157.

I don't know that I have the room number correct, and I am not sure that the information that I have is correct, but I will tell you that Michael Burgess, or Dr. Burgess, on your side of the aisle said this. He said it yesterday: People need to have access to this document-- apparently his presumption was he did not have access to the document or he believed others should; not only Members of our side of the aisle, but also the public--and if there are problems, let's talk through them. It's been a long time in the works. Most of the pieces that are in there, people have seen in the past, but it does need to be an open process.

Mr. Leader, let me repeat that. It does need to be an open process, according to Dr. Burgess.

Gus Bilirakis says: We're not having a hearing or anything. We're not having a hearing or anything. But there'll be a place for us to view it, the draft.

Paul Ryan, the Speaker, said, 3 days ago: We're going through the committee process. We're doing this step by step. We're having public hearings. We're having committee work on legislation. This is how the legislative process is supposed to be designed. We are not hatching some bill in a back room--perhaps H-157; he didn't say that, I said it--and plopping it on the American people's front door.

Mr. Leader, you and I both were here when the Affordable Care Act was passed. There was a lot of talk about the Affordable Care Act and how it was passed in the dark of night. That was baloney, of course. We had 79 bipartisan hearings and markups over the 2 years that we considered the Affordable Care Act. House Members spent nearly 100 hours in hearings, heard from 181 witnesses from both sides of the aisle, considered 239 amendments--both Democratic and Republican--and accepted 121 amendments.

The original House bill was posted online 30 days before the first committee began their markup and more than 100 days before the committee introduced their merged bill in the House. House Democrats posted the House bill--that was the final process--online 72 hours before the bill was brought to the floor, consistent with our rules.

Now, to my understanding, the Ways and Means Committee has been told this bill is going to be marked up on Wednesday. There will not have been a single hearing, there will not have been a single witness, and Members cannot, on our side of the aisle--as I understand it--see the bill today.

I don't know where all my Tea Party friends are who demanded full consideration and that everybody read the bill. I don't see them out on the lawn. I don't see them out on the plaza. I don't see them out on the sidewalk as they were when we were considering the bill and we had those 181 witnesses, the 100 hours of hearings that they thought weren't sufficient.

I don't know whether they will think that having a markup next Wednesday when the bill has not even been made available to Democratic Members of the House. Apparently, Republican Members have to go to a room to see it, and the public clearly has no idea of what that bill is.

Mr. Leader, I hope you will tell me that I am wrong, that there will be hearings consistent with what Speaker Ryan said 3 days ago. I hope you will tell me, yes, we are going to honor what Speaker Ryan said, that we are going to have those hearings, we are going to have witnesses, and we are going to consider amendments.

All of us understand that this is one of the biggest issues confronting the American people. We have had hundreds of thousands of people showing up at town meetings saying how concerned they are, yet, if my information is correct, Mr. Leader, they will have no opportunity to talk to the Committee on Ways and Means.

I am further informed, and I hope the majority leader says this is wrong, that the markup will occur before the Congressional Budget Office has the opportunity to say how much it is going to cost. All this weeping and gnashing of teeth about balanced budgets and fiscal responsibility, a bill that affects 18 percent of the gross domestic product, and the critical need for people to have access to affordable, quality health care, not one of them will have an opportunity to know how much this repeal will cost.

Again, Mr. Leader, I hope you are going to be able to tell me, no, Mr. Whip, we are going to have hearings, we understand how important this issue is, how much interest there is in this country, and we are going to give time for serious consideration, and we are going to have witnesses come before those hearings; and then after the witnesses, we are going to have a markup after substantial debate and consideration is allowed on both sides of the aisle.

I now yield to the majority leader with the hopes that he will be able to give me some degree of confidence that Paul Ryan, our Speaker, was correct, that we are going to follow regular order and make a transparent consideration of this piece of legislation.

I yield to my friend.

I have some more.

I thank the gentleman for his comment. It is, therefore, extraordinarily sad that we have spent 6 years with only one option that the majority would pursue: repeal. Not fix, not make it work better, not ensure that people can afford their care, not make sure that insurance companies had the competence to stay in the market because the market was destabilized for all of its lifetime to date by the Republicans saying all we are going to do is repeal.

The gentleman talks about the cost. The gentleman cannot tell me some 4

days before he suggests passing a piece of legislation that will affect 18 percent of our gross domestic product what it will cost. Why? Because he has no score from the CBO. He can tell me all he wants about 6 years of waiting and listening. He has no score on this bill. My judgment is he will have no score when he marks it up. By the way, he will give no access, contrary to Speaker Ryan saying that we are going to go regular order. I reject, with all due respect, Mr. Majority Leader, the fact that we had a hearing a year ago or 2 years ago or 3 years ago, that the opinion that was given at those times by various witnesses who differed on their conclusions, that we can apply that to the bill that you have introduced now.

I don't know what the bill you have introduced is. I don't know whether you have introduced it or somebody else has introduced it. I don't even know whether it exists. I told the gentleman what I am told. He has not disabused me of any of the assertions I made. He has not disabused me that it is not available publicly. He has not disabused me of the fact that we can't see it. He has not disabused me of Dr. Burgess saying it ought to be seen by everybody and considered, it should not be in a secret room someplace that people have to go to, like it is a secret document. We have to go down to the Capitol Visitor Center in the secure facilities of the Permanent Select Committee on Intelligence to see secret documents. Surely that is not the standard that we are giving to a bill that will have such, in my view, catastrophic effect on individuals, on jobs, and on businesses.

Mr. Speaker, I want to tell the majority leader that I do not accept the proposition that a hearing over 6 years about repeal only--and I am not sure how many hearings there were. Maybe the majority leader knows. But I know for a fact that proponents of the bill were very difficult to get on the list of witnesses that we wanted to testify at some of those hearings. The American people, the Tea Party, all those people for and against who came to these town meetings should really lament. And, frankly, I think that the Speaker's representation is not being followed. The assertion that it was done last year, the year before, we have a lot of new Members in this Congress who weren't here. Frankly, when we have bills introduced in Congress, we usually have hearings on them. That is the regular order.

Now, we haven't been following regular order on all these congressional review acts, Mr. Leader, so maybe the precedent nowadays is forget about hearings because most of the bills that we have considered during this Congress have not had hearings. The ramifications of the repeal of these rules no one knows. There were no hearings on those. Frankly, we didn't have hearings on those year after year after year in the past. So, Mr. Leader, it appears that the representation you are making is we know all about this, we don't need hearings, we have been talking about this stuff forever, we are just going to act. The courage, I would suggest to my friend, the courage would be to expose these to full and fair and open debate. That would be the courage.

Now, Mr. Leader, unless you want to respond to that, I will move on to a different subject.

Mr. Leader, you can be assured that history will show that. Can I see the bill today?

In other words, they will mark it up before anybody in the public, including a Member of the House of Representatives----

Before then, we cannot see it.

Is that what the gentleman is telling me?

I yield to my friend.

Mr. Leader, reclaiming my time, that is not regular order. I have been here a long time. You have been here a long time. That is not regular order. Regular order is you introduce a bill, you go up to this desk, and you put a bill in. We don't follow that very much, but that is regular order. It is then printed. It is referred to a committee. The public can see it as soon as it is printed. It goes to the committee. They establish a hearing. The witnesses then come before the committee and testify as to its positive and negative aspects. The committee then schedules a markup. It may even be the same day after the hearing, I get that. And then they mark it up. But the bill has been given to the public and to Members, invariably under regular order, substantially before that happens.

You are telling me, as I understand it, Mr. Leader, I cannot see the bill today, 5 days before it is scheduled to be marked up. Is that accurate?

I yield to my friend.

Is the leader telling me that he does not know personally whether a markup is scheduled on the Affordable Care Act repeal next week?

I yield to my friend.

I thank the gentleman, but that was not my question, whether the chairman of the committee knows. Maybe the gentleman does not know, in which case he can say no.

My question is: Does the gentleman know whether a markup is scheduled for next week in the Ways and Means Committee on the repeal of the Affordable Care Act?

I yield to my friend.

Mr. Speaker, I don't know whether that is a ``yes'' or a ``no'' or ``I don't intend to tell you,'' but it certainly does not tell me whether the majority leader knows that.

I would suggest to the chairman of the committee, though, Mr. Speaker, that the majority leader ought to be informed of what the committee is doing on such an important issue.

I am just informed that while the majority leader may not know, The Hill newspaper knows and says: ObamaCare reconciliation markup on track for next week.

They, perhaps, heard the same rumor I have heard, Mr. Leader.

I ask you: Do you expect the Budget Committee to have a hearing on it?

I yield to my friend.

I thank the gentleman.

I will close on this subject, unless the majority leader would like to make a comment. He does know I like quotes.

Mr. Leader, you said the following:

This bill is being pushed through because the majority in

the Congress refuse to listen to the people.

You said that on March 2, 2010. You were referring, of course, to us Democrats who refused to listen to the American people, because your presumption was the American people was not for the proposition we were promoting.

There were two candidates for President who got major votes in this election. One was Hillary Clinton, who said: I want to keep the Affordable Care Act. And one was Donald Trump, who said: I want to get rid of the Affordable Care Act. Although, he has said then and now that he wants to have everybody covered at a cheaper price with assured benefits. As I said, we would support a bill like that.

Of those two candidates that were running, one got 65 million votes and one got 62 million votes. Now, the one who got 62 million votes won the election. Why? Because of the electoral college. He is the legitimate elected President of the United States. I do not question that at all. But it ought to give some degree of humility that he got 3 million less votes than the person that espoused policies other than those espoused by President Trump. It ought to give some pause to let the American people into the process and testify.

I will tell the gentleman that what the Republican Party is recommending in repeal of the ACA will have very substantial consequences. You may think they are positive, I may think they are negative, but I hope neither one of us think that that won't have very substantial consequences for our country. In that context, we ought to have allowed, and we ought to allow, the people of this country to testify on those consequences.

Again, I will move on, unless the gentleman wants to make an additional comment.

I yield to my friend.

There are so many comments I could make in response to that.

No one today on this floor is questioning the legitimacy of President Trump's Presidency--period. What I said was that more people voted for the candidate who wanted to keep the ACA than voted for the candidate who wanted to repeal the ACA.

Secondly, if the gentleman refers to the polls of his quote in 2010, then I can refer to the polls today, which show that the majority of respondents believe that the ACA should be retained until and unless an acceptable replacement is provided.

The gentleman talks about 6 years. Not once in those 6 years, not once, has the majority party offered a comprehensive replacement for the Affordable Care Act. They have talked about it.

By the way, on the 26-year-olds and on the preexisting conditions, the repeal bills didn't say we were going to keep the preexisting conditions or the 26 age or the lifetime limits or the annual limits or the drug discounts for senior citizens. It didn't say any of that. It said repeal the ACA.

So the polling data today, Mr. Speaker, is that more people want to keep the ACA prior to the consideration and adoption of a replacement than want to repeal it. I agree with you, that is a change from 2010. And the reason it is a change is because they are now looking at it very carefully. They are figuring out what, in fact, it has done for them and their families and for their children who had preexisting conditions and for their access to affordable health care, and they are saying: We are taking a second look.

They do not now reflect that poll to which the gentleman referred that is now 7 years old and, very frankly, last year's poll. Now they look at it differently.

I yield to my friend.

Well, I think that is some degree of clarity in terms of the markup, and no hearing, no witnesses, and I presume no CBO score to tell us how much that legislation is going to cost.

Now, Mr. Leader, two things. One is certainly less global and impactful,

but, nevertheless, important. I am sure the gentleman met with the Governors when they were in town, as I did. They met on a bipartisan basis. I met with a lot of the Republican Governors and Democratic Governors together.

They are very concerned, as you know, not only about the ACA--which we talked about, which they have great concerns of the impact on their States, Republicans and Democrats, of the repeal of the Medicaid expansion, in particular, the impact it will have on them and their people--but they also are very concerned about the Marketplace Fairness Act.

That is simply, frankly, trying to protect small businesses so that they can compete, the local mom and pop store can compete with the online vendors so that everybody would have to pay the sales tax, whatever the State sales tax is. That bill, I believe, enjoys the majority support in this House. I think it has enjoyed the majority support since it passed the Senate pretty handedly.

Does the gentleman know whether or not that bill is going to be considered at any point in time in the near term?

I yield to my friend.

Lastly, Mr. Speaker, I want to say to my friend, the majority leader, that I look forward to working with him. I see that he recently observed that the attorney general ought to recuse himself in dealing with issues of the relationship between the administration during the course of the campaign and Russia, which the intelligence community has said interfered in America's election.

All of us ought to be concerned about that--a foreign government interfering in our democracy; particularly, a government that is hostile to our interests; particularly, a government led by Mr. Putin, who has committed international crimes, who, contrary to international law, invaded Crimea, still holds Crimea inconsistent with international law, and has been sanctioned. Hopefully, those sanctions will stay in place.

I agree with the gentleman that, at the very least, the attorney general ought to recuse himself. I have asked him to step down.

But we need to have, Mr. Speaker, an independent bipartisan commission with subpoena power, similar to the 9/11 Commission, for the security of our country and, yes, for the confidence building for our President to see what, in fact, were the relationships between his campaign and Russia and to what extent Russia involved itself in trying to impact on the elections of the United States.

I don't have anything further to say. Unless the gentleman wants to say something, I will yield back.

I yield to my friend.

I thank the majority leader for his comments.

Let me say that I was very disappointed to learn that Mr. Nunes, at the request of the administration, talked to members of the press before the investigations have occurred, before they have heard a single witness, to say that he really thought this was not a matter that really needed careful consideration. That is not a quote. I characterized what I read his comment to mean to the press.

In addition, I understand the Department of Homeland Security was also requested, and the FBI, to talk to the press to tamp down interest in those. The American people need to be very concerned about these issues. Every Member of this Congress, a separate and coequal branch of the Government of the United States, ought to be very concerned about that.

The Bible says that the truth will set us free. And the truth will give us confidence. And the truth should be known by the American people.

The problem I have with the Intelligence Committee is that the Intelligence Committee--most of the information they gather is not available to the public. I don't know what they will do moving forward.

But we found in the 9/11 Commission a perfect example of a commission equally divided with two extraordinarily respected co-chairs that got to the bottom and made significant recommendations, most of which-- almost all of which--were adopted in a bipartisan fashion by this Congress.

So, Mr. Speaker, I would hope that we would pursue that not in lieu of the Intelligence Committee--not in lieu of the Intelligence Committee--but in addition to.

Benghazi, we had seven committees, and you thought on your side of the aisle that wasn't enough, so you spent some $4 million on an additional special committee to find exactly the same conclusion.

So, in this case I do not oppose the work of the Intelligence Committee, but I certainly believe the American people would expect and would want a similar bipartisan commission as they saw work on the 9/11 tragedy to give them the confidence that Russia is not in any way undermining the independence of our government or undermining the democracy that we hold so dear.

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

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 180 and ask for its immediate consideration.

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentlewoman from New York (Ms. Slaughter), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.

General Leave

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks and include extraneous materials on House Resolution 180, currently under consideration.

Mr. Speaker, I am pleased to bring forward this rule on behalf of the Rules Committee. The rule provides for consideration of H.R. 720, the Lawsuit Abuse Reduction Act, and H.R. 985, the Fairness in Class Action Litigation Act.

The rule provides for 1 hour of debate for each bill, equally divided between the chairman and ranking member of the Judiciary Committee. The rule also provides for a motion to recommit for both pieces of underlying legislation.

Yesterday, the Rules Committee had the opportunity to hear from Judiciary Committee Chairman Bob Goodlatte and Congressman Steve Cohen on behalf of the Judiciary Committee, as well as Subcommittee on Regulatory Reform, Commercial and Antitrust Law Ranking Member Hank Johnson.

The Rules Committee made in order 12 amendments total--four amendments to H.R. 720 and eight amendments to H.R. 985, representing ideas from both sides of the aisle.

I want to thank Chairman Goodlatte and the Judiciary Committee staff for their work on both pieces of legislation. I am a member of the Judiciary Committee, and we had the opportunity to consider both pieces of legislation and enjoyed lively discussion at the markup for both bills.

Mr. Speaker, as you are aware, we have worked tirelessly in this House to pass litigation reforms that would promote access to the courts for all Americans and ensure that the cost of litigation isn't used as a tool to force settlements.

We have also talked about how to restore reason and remove burdens on hardworking Americans. These bills help us achieve those goals.

Both bills have enjoyed thorough discussion at both the committee level and on the floor, both in this Congress and in previous Congresses.

H.R. 720, the Lawsuit Abuse Reduction Act, was introduced by my friend from Texas, Congressman Lamar Smith. Similar legislation to H.R. 720 has passed the House before, and I look forward to its consideration again.

This legislation provides a balanced solution to frivolous lawsuits, based on the simple principle that if an attorney files a baseless lawsuit that has no grounding in fact or law, the attorney should have to compensate the victim of their legal action.

This legislation does not change the standard for rule 11 sanctions; it simply gives this important rule some teeth by making sanctions mandatory instead of discretionary.

Opponents will argue that this bill will stifle robust examinations of existing law by discouraging otherwise meritorious lawsuits.

To be certain, LARA does not change in any way the existing standards for determining what is and what is not a frivolous lawsuit, as determined under rule 11. In fact, LARA expressly provides that ``nothing in'' the changes made to rule 11 ``shall be construed to bar or impede the assertion or development of new claims, defenses, or remedies under Federal, State, or local laws, including civil rights laws, or under the Constitution of the United States.''

H.R. 985, the Fairness in Class Action Litigation Act, was introduced by Chairman Goodlatte. This legislation now also includes the Furthering Asbestos Claims Transparency, or FACT, Act, authored by Congressman Farenthold from Texas.

H.R. 985 provides a targeted solution to a unique problem. At its core, the bill addresses whether the injury suffered by named plaintiffs in a class action suit accurately reflects injuries suffered by the class.

Let me be clear, again, this bill does not kill the class action. Opponents would have you believe that it does, but these claims have become a knee-jerk reaction to attempts to address clear abuses in the legal system.

We want to make the system work for victims of these abuses and of other injustices. We want to make it more difficult for anyone to take advantage of the courts and make legal recourse more accessible for those who genuinely deserve relief.

As a case in point, when Congress passed the Class Action Fairness Act, CAFA, in 2005, opponents claimed that its passage would mean the end of class action suits. Actually, it had two targeted goals: to reduce abusive forum-shopping by plaintiffs and, in certain circumstances, to require greater Federal scrutiny procedures throughout the review of class action settlements.

For example, you may remember an infamous Alabama class action involving Bank of Boston in which the attorneys' fees exceeded the relief to the class members. As a result, class members lost money paying attorneys for their legal victory.

Twelve years ago, opponents of CAFA made virtually identical arguments against that reform that they are making against H.R. 985 today. These objections are unsupported by history.

In fact, researchers at the Federal Judicial Center conducted a study on the impact of CAFA and concluded that--postenactment--there was an increase in the number of class actions filed in or removed to the Federal courts based on diversity jurisdiction, consistent with the congressional intent behind that law.

We see that necessary reforms have resulted in a class action option that is alive and well, representing an important part of our legal system. And it

will remain that way. Claims to the contrary, Mr. Speaker, are just simply inaccurate.

H.R. 985 is a targeted solution that says a Federal court may not certify a proposed class unless the party seeking the class action demonstrates through admissible evidentiary proof that each proposed class member suffered an injury of the same type and extent as the injury of the named class representative or representatives.

This requirement also exists in rule 23 of the Federal Rules of Civil Procedure. Unfortunately, not all courts appropriately interpret or apply these standards.

To claim that this bill, which codifies existing standards, would kill class action suits is just simply not supported by facts.

Class actions exist for a reason, a reason vindicated both by compassion and by wisdom. The class action option exists to allow a group of individuals who have been similarly harmed to join together to seek appropriate compensation for their injuries.

In today's world, we see abuse after abuse of that legitimate purpose. As a result, we have seen the rise of a class of people who may bear legitimate injuries, but we also see countless others who have suffered no injury at all yet are vying for class action spoils to which they have no right. The no-injury class actions are designed to exploit companies to achieve a quick payday through accusations that are not grounded in genuine injuries.

Class actions should be preserved as a tool for those who are harmed to plead their case and receive just compensation. H.R. 985 will allow courts to focus their resources on cases in which the people have actually suffered injuries. This helps ensure that we hold responsible parties accountable for their actions.

As I mentioned, H.R. 985 also includes the Furthering Asbestos Claims Transparency, or FACT, Act. The FACT Act is designed to reduce fraud and compensation claims for asbestos-related diseases. This is a critical step to preserving resources for true victims because, unfortunately, double-dipping has become too common in asbestos claims.

For every dollar awarded to fraudulent claims, there is $1 less available to true victims who are facing mesothelioma or other asbestos-related illnesses. These victims are often those to whom our country owes its greatest debt: our veterans. Veterans currently comprise 9 percent of the population, yet they make up approximately 30 percent of the asbestos victims. Veterans are uniquely positioned to benefit from the increased transparency that this bill offers.

Despite the positive impact that increased transparency can have for veterans, detractors claim that the legislation will negatively impact the privacy rights of claimants. Allow me to be clear, Mr. Speaker: this is not true. The bill actually requires far less personal information from claimants than State courts currently require in their disclosure documents.

This legislation will reduce fraud in the asbestos trust system to safeguard assets in order to compensate future asbestos victims, veterans or otherwise.

Mr. Speaker, H.R. 985 and H.R. 720 will establish meaningful reforms to our litigation system. I believe the United States is the greatest country in the world, and our justice system is designed to be free and fair, yet we have seen our justice system abused by people who seek ill gain at the expense of actual victims. These bills that today's rule provides for help us to right that wrong. They may not be perfect, but they recognize existing flaws in the system and strive to fix those flaws to better serve the American public.

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

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

Sometimes it is often said that we discuss the issues that come to the floor, and there are real debates taking place across the street right now dealing with our discussions around health care. But I want to go back to actually the bills that we are dealing with in the rule and discuss the part of where do sometimes these issues come from, especially when we are discussing things like H.R. 985 and class act litigation.

This came, actually, from outside the walls here and outside into the real world where this is being practiced. One of the things that is happening is that Federal judges have been looking to Congress to reform the class action system which currently allows lawyers to fill classes with hundreds of thousands of unmeritorious claims and use the artificially inflated classes to force defendants to settle the case.

As the Supreme Court has recognized, ``even a small chance of a devastating loss'' inherent in most decisions to certify a class produces an ``in terrorem'' interim effect that often forces settlement independent of merits of the case.

Mr. Speaker, I understand that fear because what we are dealing with many times in these class actions--and I know the Speaker and others are aware--is the definition of the class that really depends on the case itself, not as much of the merits of the case because of the potential of a devastating loss. So the actual class certification becomes something that is the main driver in these cases.

Notice what Ruth Bader Ginsberg said about this. She recognized this when she said: ``A court's decision to certify a class . . . places pressure on the defendant to settle even unmeritorious claims.'' That is pretty powerful from a Supreme Court Justice talking about these issues.

Judge Diane Wood of the Seventh Circuit Court of appeals, appointed by President Clinton back in the day, has explained that class certification ``is, in effect, the whole case.''

Then-Chief Judge of the Seventh Circuit Richard Posner explained that certification of a class action, even one lacking merit, forces defendants ``to stake their companies on the outcome of a single jury trial, or be forced by fear of the risk of bankruptcy to settle even if they have no legal liability.''

Mr. Speaker, listen to what these judges are saying. They are saying, number one, that the class certification is the most important thing because it depends on the outcomes and forces settlements. Notice what was said here by Supreme Court Justice Ginsberg, ``unmeritorious claims.'' Judge Diane Wood, Seventh Circuit, talked about it being ``the whole case.'' Judge Posner says that, in actuality, they are forced to settle ``even if they have no legal liability.''

In another Seventh Circuit Court decision, the court wrote: ``One possible solution to this problem is requiring judges to do some threshold level of review of the merits of a class action before allowing certification, that is, approval of a class . . . It is cases like the one before us that demonstrate precisely why the courts, and Congress, ought to be on the lookout for ways to correct class action abuses. Given the complexity of our legal system, it is impossible to develop perfect standards for identifying and quickly disposing of frivolous claims. Inevitably this court and other courts will be faced with the cases that waste the time and money of everybody. Beyond addressing the legal claims before us as we would in any ordinary case, we must frankly identify situations where we suspect the lawyers, rather than the claimants, are the only potential beneficiaries.''

Again, not coming in a vacuum, it is coming from the courts who see this on a regular basis, from Judge Ginsberg on down, saying: This is the whole deal. This is why we do these things.

Mr. Speaker, this is something that does need to be taken up. It is something that we are proud to bring to the floor. In doing so, I reserve the balance of my time.

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

Mr. Speaker, I think what we are hearing today--and I think what we are going through in the process--is issues of real change, issues of discussions that have been going on in our country for really now almost 8 years. It has been 7 years since the Affordable Care Act, ObamaCare, was passed.

We are seeing the changes that have taken place, Mr. Speaker, from your time here and my time here on really dealing with the American people and dealing with the substances of what their concerns and fears are. The things that I have come before this body and debated many times were what does the view look like from outside of this Chamber.

Inside this Chamber, we have raucous debates. We have discussions on things. And at the end of the day, I believe sometimes, Mr. Speaker, those sitting at home say: Does anybody listen to me? Does anybody hear my call?

Over the past few years, we have seen through election results and we have seen through times of change here in this body that the Affordable Care Act is nothing like affordable. In fact, as many have described it, it has been in a death spiral. We are beginning to work on that.

Now, I understand how that can make the other side, the ones who gave us the Affordable Care Act, ObamaCare, not want to see that changed. I can appreciate that.

Reality must set in at some point, and reality says that to defend something that is failing is asking for a status quo that hurts people. Now, I believe my friends across the aisle don't want to do that, but that is what they are doing, holding onto a legacy that is only a legacy for many of heartbreak and problems.

Did it help in some ways? Are we finding some? Did we address issues over the past few years and begin the discussion of preexisting conditions, keeping our children on until 26, and removing caps? Those were all discussed and could have been handled in many different ways besides the government takeover of health care.

Instead, we chose to use an ideological position to begin the process of moving forward, and moving forward in which government will put its fingers on the scale and government will begin to say what is right and what is wrong. What we found in the whole process was our individual mark is destroyed.

I have had some of my colleagues actually say: Let's just start over and go back to the way it was. That would be nice, except that land doesn't exist anymore.

Even if you wanted to--and I don't think we need to--we need to move forward with free-market solutions that put access to affordable health care for all Americans on the table, so that we can actually bend the cost curve so that we can actually work to help people. That is what we are working on. We are going to continue to work on making a smooth transition from the disaster that many of us have seen over the past few years. When we do that, change will come, and change is hard.

My folks back home are looking for change that helps, by Brittany Ivey, who joined me here for the joint session just a few weeks ago, who had employer-based health coverage with her family taken. She had to make choices about healthcare coverage and staying home. These choices make families' decisions harder because they would rather make the decision to stay with family, but are having to work because health care became unaffordable. It is these kind of choices that we are laying out for the American people to listen and to say: What do we need to do and how do we need to go forward?

So when we look ahead, we take issues of health care seriously. The gentlewoman from New York (Ms. Slaughter) is a friend. She states her position eloquently. It is always good to be on the floor with her. We disagree, and this is the place for this disagreement. This is a time in which we share; this is a time in which we come together. And what the Republican majority will do, Mr. Speaker, is keep its promises.

Now, I have had a moment of sharing what we are doing in health care, but also let's get back to why we are here, for the rule. The rule deals with abuses in the system; it deals with fairness.

Mr. Speaker, today we are discussing reforms to our litigation system that increase fairness, balance, and transparency. These principles are part of our larger goals as House Republicans to create a system that works better for the American people and restores accountability to the system.

We agree that there are legitimate lawsuits and legitimate class action suits. No one is arguing against that. In fact, I firmly believe that Americans should have access to a robust legal system that protects them.

We encounter a problem, however, when frivolous lawsuits are lobbed against small businesses and employers in attempts to profit without warrant and at the expense of jobs.

The bills provided for by the underlying rule help us address this challenge and to ensure that the litigation system functions as intended, rather than being manipulated to improperly target individuals or entities for profit.

The rule itself provides for robust debate on the legislation and amendments from both sides of the aisle.

I would encourage my colleagues to look favorably on these bills as a step toward reining in unnecessary and burdensome litigation and making the legal system work better to address true grievances and harms.

Mr. Speaker, that last statement probably sums up what we need to be about here. Let's look at the truth. Let's help people. Let's remember why we are here and, that is, those who sent us.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

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

At this time, I would like to include in the Record a number of exhibits:

Exhibit A, in which under oath we had testimony that said the Department of Justice did not want to be in the business of picking or choosing organizations that may or may not receive any funding under an agreement.

Yet, exhibit B, in which the number three at Department of Justice under President Obama said, ``Can you explain to Tony the best way to allocate money toward organizations of our choosing,'' in a $9 billion settlement.

And in exhibit C, in which they specifically said they had concerns, including not allowing Citibank to pick a statewide intermediary like Pacific Legal Foundation that does conservative causes.

exhibit a

Chairman GOODLATTE. Well, let me just add that this

committee will not stand silent, nor will, I am sure, the

Financial Service Committee, and you can expect that this

will escalate if you do not provide the documentation that we

requested over 2 months ago.

Secondly, did anyone at the Department of Justice ever

consider the serious appearance of impropriety in requiring

banks to make available to activist organizations the lion's

share of funding that Congress has previously cut off to

them? That is one of the reasons why we want to see the

communications. We want to know what considerations went into

making this decision to take this action.

Mr. GRABER. Thank you, Mr. Chairman. Again, understand the

concern. And I can tell you that one of the reasons that the

Department wanted to use a preexisting list, the one that I

believe you are referring to, the HUD approved counseling

agency list, is because that list is preexisting. The

Department did not want to be in the business of picking and

choosing which organization may or may not receive any

funding under the agreement.

Chairman GOODLATTE. No, but it is the Congress'

responsibility to appropriate funds, and the Congress'

responsibility to be picking and choosing who gets

appropriations for expenditures. And we want to know what

connection there is between the fact that cuts were made and

. . .

exhibit b

From: Taylor, Elizabeth G. (OAAG)

Sent: Wednesday, November 06, 2013 10:58 AM

To (OLC); Seitz, Virginia A (OLC)

Cc: Martinez, Brian (OAAG); Graber, Geoffrey (OAAG) (OLC)

Subject: back again with questions

I'm sorry to be a pest. We keep tinkering with the

settlement agreement and I want to make sure that we are

doing it right. I also am not sure that I am a good messenger

between you and Tony because he asks me follow up questions

that I'm not sure I can answer. Do you have a few minutes

today to meet with Tony and let him ask you questions

directly?

Here are our current issues:

Can you explain to Tony the best way to allocate some money

toward an organization of our choosing? We have been

discussing having the agreement provide that JPM agreed to

pay $9 billion but that, if, by the time we sign the

settlement agreement, JPM has given $60 million to x

organization, they will only have to pay $8.04 billion. I

think that's ok. We understand that we would have no control

over what x organization does with the money.

Thanks

exhibit c part i

From: Frimpong, Maame Ewusi-Mensah (OAAG)

Sent: Wednesday, July 09, 2014 1:07 PM

To: (A2J)

Subject: RE: new language

Thanks! We made the proposal. They had one question

whenever you have a moment.

From: (A2J)

Sent: Wednesday, July 09, 2014 9:47 AM

To: Frimpong, Maame Ewusi Mensah (OAAG)

Subject: RE: new language

You go girl. The prospective settlement was on NPR this

morning, in case you didn't have your radio on . . .

Acting Senior Counselor for Access to Justice

U.S. Department of Justice

From: Frimpong, Maame Ewusi Mensah (OAAG)

Sent: Wednesday, July 09, 2014 9:42 AM

To: (A2J)

Subject: RE: new language

Cool. I will keep you posted.

From (A2J)

Sent: Wednesday, July 09, 2014 9:34 AM

To: Frimpong, Maame Ewusi Mensah (OAAG)

Cc (A2J)

Subject: RE: new language

Importance: High

Got it. Ok, this will hopefully address the concerns we'd

like to avert:

Donations to state-based Interest on Lawyers' Trust Account

(IOLTA) organizations (or other statewide bar-association

affiliated intermediaries) that provide funds to legal aid

organizations, to be used for foreclosure prevention legal

assistance and community redevelopment legal assistance.

Concerns include: a) not allowing Citi to pick a statewide

intermediary like the Pacific Legal Foundation (does

conservative property-rights free legal services) or a

statewide pro bono entity (will conflict out of most

meaningful foreclosure legal aid) we are more likely to get

the right result from a state bar association affiliated

entity; b) making

exhibit c part II

sure that it's legal assistance provided, not a scenario

where the bank can direct IOLTA or other intermediary to give

to even a legal aid organization but to do only housing

counseling, for example, under the umbrella ``foreclosure

prevention assistance.''

This get you closer?

Acting Senior Counselor for Access to Justice

U.S. Department of Justice

From: Frimpong, Maame Ewusi Mensah (OAAG)

Sent: Tuesday, July 08, 2014 6:10 PM

To (A2J)

Subject: new language

Mr. Chairman, I yield 5 minutes to the gentleman from Texas (Mr. Poe).

Mr. Chair, I yield an additional 1 minute to the gentleman.

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

If the minority has not gone through the discovery that we have, that we placed in the Record, I will be glad to give Mr. Cicilline or anyone else a copy.

I am just going to repeat, though, after receiving testimony that they didn't pick winners and losers, what we are marking as exhibit B and exhibit C make it clear they were, and specifically choosing, to exclude a ``conservative group.''

I think the important things here, though, Mr. Chairman, are if they want to have money in a settlement, such as the Deepwater Horizon tragedy, they certainly could, as long as it directly provides aid to the victims; which, of course, cleanup did. But when we look at these others, one of the great things is if they want to put it into a victim's fund as part of it, a government-controlled fund, they can if they want.

If the Department of Justice wants specific authority the way they do, for example, in water settlements, particularly related to Native American Tribes, they offer a deal, they put one together, and, Mr. Chairman, they come to Congress. This Congress, in the last Congress, settled multiple longstanding disputes with Tribes. What is interesting is they made sure the money went to those who had been harmed when they came to Congress and said: Please codify this agreement.

But in the many agreements that seems to go on in the Obama administration--and we now have the smoking gun of that--they made political decisions. Making political decisions is why you have to put this back in the light of day and with real congressional oversight.

What is amazing is, during the markup of this bill, there were a number of Members of the other party who specifically talked about not trusting the current occupant of the White House and the current Attorney General. It baffles me that they would not want to take back this authority knowing that the Department of Justice could bring to us a request for a bill that would authorize a specific settlement that could have outside groups or grant authority on a case-by-case basis.

The reality is the slush fund system has to stop. That is why Chairman Goodlatte's bringing this bill today was so critical.

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

It is majority. Yes, you have copies of it.

Mr. Chairman, the gentleman asks for a colloquy.

Although I don't have them, I am sure they prove the same point: that the light of day, the cleanliness of sunlight, and congressional oversight and appropriation would have protected against the abuses the gentleman is probably describing.

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

Mr. Chairman, the gentleman's points are good. I am afraid his conclusion may be the part I have to differ slightly with, Mr. Chairman.

The gentleman from Tennessee is right to note past and other indiscretions. That is why we have this bill before you today. In fact, it is why passage is so important.

We don't want to have anybody of either party--the current occupant of the White House is from my party, a Republican. The current Attorney General is from my party, a Republican and former Republican Senator. The fact is that now is the time not to necessarily disparage any past activity but to stop it.

We are not a body that is supposed to trust as much as we are a body to have some trust and to verify. When we find wrongdoing, it is our job to make sure it doesn't happen again. This bill, including the comments of the gentleman from Tennessee, seeks to do that. I am convinced that it is good for that reason, and it is even good for the example that Mr. Cohen suggests.

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

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

Mr. Chairman, I would like to make sure I provide a little clarity. We are not talking about leftwing, rightwing, or other groups who get it. What we are talking about is a basic question of fungibility of money.

If something has been done wrong and a judge or the Department of Justice has X amount of determination of wrongdoing, the first question is: How much of that money can get to the victims? In a perfect world, the victims are made 100 percent whole. In a perfect world, 100 percent of the money passes from the perpetrator to the victim.

The Department of Justice making a decision not to a left- or rightwing group, but a political decision to give $1 million to the Coast Guard, to their charitable foundation, was a decision that clearly was not part of the mitigation but, rather, a general charitable decision. That was $1 million that did not go to the victim, did not go to the general Treasury, but it went to the whims of a bureaucrat.

We seek to make sure that, if that is an appropriate action, they come to Congress with that and not decide that charity begins with some unelected individual in the Department of Justice.

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

Mr. Chairman, I yield myself 1 minute in short response.

Mr. Chairman, sometimes the obvious is missed in the debate. The gentleman from Georgia talks about locking down power. Quite frankly, Republicans do have a majority in the House and a slim majority in the Senate, and the current occupant of the White House is from my party. So when we are trying to reduce potential misconduct by the executive branch, we are not doing it to take any money away.

As a matter of fact, this law would clearly cause more money to flow from the same amount of initial payment, more money to flow to the victims. So we are trying to flow more money to the victims. We are in no way reducing any aspect of settlements other than, if the current occupant of the White House, the President, and the Attorney General want to give to the charity of their choice, they can either do it with their own money or they can come to Congress for authority.

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

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

Mr. Chairman, I want to take a moment to agree with the gentleman from New Jersey. The idea that you can pay a fine to get out from underneath criminal prosecution is one that I would like to see either eclipsed to where it is almost invisible and rarely used or done away with altogether. I would certainly agree to join with the gentleman in finding further prohibitions to that practice.

It has been too often that a corporation able to pay large amounts of money not only escapes its actions, but, of course, it escapes the prosecution of key individuals who may, in some cases, be responsible for the loss of life and/or health.

So I want to join with the gentleman from New Jersey. That is not what this bill is about. It doesn't deal with it, nor does it fail to deal with it. It is not the subject of the bill.

I urge the gentleman, who does agree with a portion of what we have to say, to work with me. I will be happy to be his cosponsor on a piece of legislation to try to curtail that practice.

Today, we are trying to curtail a practice in which we have examples of both Republicans and Democrats in the Office of the Attorney General, their justice departments, from making settlements that seem to have political bias. And that is what we are here to stop.

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

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

The gentlewoman spoke quickly, and I know she had a lot of important information there. Some of it simply was wrong.

One of them is that she touched on environmental cleanup. Very clearly, nothing in this legislation would limit the cleanup related to the wrongdoing or the damage. Not so. A third party could be hired to do the cleanup.

Additionally, nothing stops a settlement from requiring a company to have counseling or other mitigation. It simply stops the Department of Justice from picking a charity of its choosing to go do it.

Now what I would really like the gentlewoman--who may not be on the floor any longer--to understand is that the Department of Justice has grant authority and does multiple grants every single month of the year to some of the very same groups under its authority that these settlements are going toward. Congress has allowed it a certain amount of money to provide grants for general harm.

Additionally, every year, Congress allocates hundreds of millions of dollars to some of the very same groups and efforts the gentlewoman knows that we are talking about.

So, although her speech was quick, the thing that she said that may have misled some people here in the Chamber I think needs to be corrected. Direct harm will be mitigated. It can be done by anyone. A company can agree and be forced under supervision to mitigate and to hire people to help in that effort.

Very clearly, many of the groups being talked about here today already receive money through the grant process or through direct appropriation by Congress. That is the right way to do it. It is the reason this is a bipartisan bill and this is an effort by our Congress to make sure that we hold the reins of authority where they should be under the Constitution.

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

Mr. Chairman, I yield myself 2 minutes.

Mr. Chairman, I am putting this sign up not for the people in the Chamber, because people in the Chamber on the other side have continued to read the same talking points from their leadership that says there is no evidence.

This is in the record. This is a bigger part of it. So for the people in their offices who will come down to vote, if there is not a motion to recommit, they are not going to get an opportunity to see this.

So I hope that they will look just now and realize this is one of those things you don't normally get. As Chairman Goodlatte said, this is a smoking gun. This is a clear statement that an ideological bent against a nonprofit was very specifically there, while other emails in the same chain of emails shows that they were picking who they wanted.

That is the politics that was going on. It is the politics we are trying to prevent. As I said in my previous statement, the Department of Justice is given a number of dollars for grant programs, and we may not always agree with how those grant programs are run, but we give them that.

Additionally, the Congress appropriates a tremendous amount of money, much of it going to the same groups. A little over 1\1/2\ years ago, 2 years ago, this body came together on the reauthorization on Violence Against Women, which has and will continue to do very good work in exactly the area that people are talking about.

This is the reason we have legislation before us today. We have had political activity that has been going on, according to the Democrats, by Republican Attorneys General; according to this document, by the last Attorneys General. The fact is, we need the legislation. We have to have it.

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

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

Mr. Chairman, in closing, I don't believe there is any question at all but that the minority has missed the point. In no way, shape, or form are we changing. We intend to make sure the Department of Justice prosecutes wrongdoing, both criminal and civil.

The gentleman from New Jersey (Mr. Pascrell) rightfully said we shouldn't have money paid in lieu of criminal prosecution; it should be both. I agree with him.

What we are dealing with here is a recognition that, under Republican and Democratic administrations, we have had mandatory donations that, in fact, went to charities, if you will, or organizations of the choice of those political entities. The fact is what we are doing is reining in--reining in--wrongdoing that is actual and has been observed, nothing more.

One of the challenges we face every day and one of the reasons I am imploring both sides to come together on this vote, one of the challenges we face is how much of our obligation we have ceded to the executive branch, often then only to be horrified when, behind closed doors, unelected, unaccountable people make decisions that would never be made on the House floor or the Senate floor, and this is one of them.

We are scrutinized when we pick nonprofits to provide funding to on the left, on the right, or, if there is such a thing left in America, in the middle. We are scrutinized. But when we scrutinize the Department of Justice's action, according to my colleagues, under Republicans, there has been clear wrongdoing. According to the documents that we put in the Record today and showed on the floor, in the last administration, there was clear partisan politics.

We are simply saying, if they want to make that kind of a settlement, bring it to Congress; otherwise, it is very clear that they must--and I repeat, must--stop the action of taking money that would otherwise go to the victims and moving it to nondescript third parties of their choosing, no matter how benevolent they might be, including the Coast Guard Foundation. It can't continue to happen. We have to have the money that is in settlements flow to the victims or flow to the Treasury.

Mr. Chairman, I urge passage of the bill, and I yield back the balance of my time.

Mr. Chair, I would only offer to say that there is not one Judiciary Committee Democrat on this so-called bipartisan bill. That is where you first start the bipartisanship: you work with members who may, in fact, believe that some of the issues that have been raised by my

good friend from California may have merit.

Maybe this bill could have been drafted in a way that would have responded to some of the failures, if there are some, such as evidenced by our good friend from New Jersey, who recalled a lot of failures not by Democrats but by Republicans. But when you start off with a bill talking about slush funds, then you negate the good work of so many organizations that have benefited to do the very good that the consent decree was intended to do.

Today, I stood with the Latinas Against Domestic Violence. They came here to stand against the violence against women that goes on and on and on. Some of them may be in the gallery.

But what I would say, Mr. Chairman, is: Why would we not want to give that organization funds if they were in line to get dollars to help prevent or intervene in the vileness of domestic violence?

So the idea that our friends on the other side are missing is the value some of these entities have been given.

The only word that I have heard over and over again, as I have heard from the administration, I have heard from the Attorney General, the former Secretary of Health and Human Services, is one word. In fact, I think the English language has been limited to one word on the floor of the House: Obama. I like to call him President Barack Obama. That is the respect I give him.

Every legislative initiative has come forward on the shoulders of a man who finishes 8 years, might I say, with a great deal of respect.

So here is what the bill the people are opposed to will do:

This bill would not give dollars to those victims who are harmed and could engage in workplace monitoring, as well as other payments to remedy generalized harm, including remedies designed to prevent the recurrence of sexual violence or discrimination in the workplace.

They wouldn't give it to an environmental remedy project, such as needed cleanup efforts following the hazardous toxic pollutant spills that spoil protected areas, preventing families and children from enjoying recreation on State lands designed for public use.

They wouldn't give it to federally certified housing counseling intermediaries by preventing housing counseling, relief to communities that have been preyed upon by financial institutions that have broken the law.

I even hate to use the term ``slush.'' They are dollars out of a consent decree that are managed and monitored by career professionals to those in need.

So I am opposed to the underlying bill, and I will offer an amendment.

I will also be on this floor offering letters opposing, again, not only this dastardly named legislation--who would want to see this in the Congressional Record: slush fund--undermining, as I said, the professionalism of our career employees in the DOJ and undermining American citizens and nonprofits who are working every day to make the life of America and America's children better.

This is a bad bill. Vote it down. It is not bipartisan. No Judiciary Committee Democrat saw fit for it to be legitimate.

Mr. Chair, I rise in strong opposition to H.R. 732, the ``Stop Settlement Slush Funds Act of 2017.''

The proposed legislation, as currently drafted, is intended to preclude all third-party payments in settlement agreements, other than restitution to identifiable victims.

Specifically, this legislation seeks to block federal law from including payments that provide relief in negotiated settlements to victims, such as in cases of predatory lending, employment discrimination and pollution through environmental hazardous.

For the average American, this harmful bill translates as thwarting settlement donations to legitimately harmed victims for:

1. Workplace monitoring, as well as, other payments to remedy generalized harm, including remedies designed to prevent the recurrence of sexual violence or discrimination in the workplace;

2. Environmental remedy projects, such as needed clean-up efforts following the hazardous, toxic pollutant spills that spoil protected areas, preventing families and children from enjoying recreation time on state lands designed for public use; or

3. Federally-certified housing counseling intermediaries by preventing housing counseling relief to communities that have been preyed upon by financial institutions that have broken the law.

This legislation fails to recognize the critical role and positive benefits that housing counseling organizations now play in addressing and ensuring that the discriminatory practices and abuses, like those that led to the housing and financial crisis, never happen again.

The Republican narrative suggests that this bill attempts to make technical changes to the way that courts operate; but in reality, for the everyday hard working American, this legislation along with its companion bills (H.R. 720, the ``Lawsuit Abuse Reduction Act,'' and H.R. 725, the ``Innocent Party Protection Act,'') is merely a concerted effort to chip away at Americans' ability to seek justice and, therefore, must be opposed.

This legislation is intended to cut off proceeds from government settlements to ``third-party'' entities, which would stop a critical source of funding for the nonprofit sector--including public interest community organizations, foundations or trusts and other similar groups.

Oftentimes, allowing these monies to be available to third-parties is the best way to assure harmed persons will be made whole.

By barring government settlements from directing payments to non- profit organizations, this legislation would thereby hamstring the parties' ability to fully remedy the wrongdoing underlying the lawsuit.

Congress lacks the time, expertise, and resources to properly review and make enforcement decisions on behalf of Federal agencies.

The cost of delays associated with this scheme would have devastating consequences for the public health, environment, and local communities.

H.R. 732 would greatly strain Congress' already limited legislative resources and scarce time, while opening the doors to industry influence and obstruction in routine enforcement matters.

This legislation pushes the everyday hard working American to the margins of the justice system by requiring restitution only in cases with a showing of actual harm directly and proximately caused by the party making the payment.

The bill's definition excludes any payment by a party to provide restitution for, or otherwise, remedy the actual harm, directly and proximately caused by the alleged conduct of the party that is the basis for the settlement agreement, including payments requiring monitoring and other payments for generalized harm.

This exception is too narrowly drawn to allow for numerous beneficial uses of settlement monies, especially for vulnerable plaintiffs trying to access the courts in search of restitution from legitimate harm.

As you know, following the subprime meltdown, the U.S. Department of Justice pursued lawsuits against mortgage lenders and banks that engaged in discriminatory lending practices, such as those targeted by this legislation.

Research shows that African Americans and Latinos were discriminated against and steered into subprime loans even when they qualified for conventional loans.

Moreover, African Americans and Latinos were two to three times more likely than white homebuyers to receive subprime loans which resulted in foreclosure rates 10 times that of conventional loans.

Pursuant to the settlement agreements, available under current law, the Justice Department ordered that financial institutions dedicate a portion of their settlement payments to U.S. Department of Housing and Urban Development (HUD) certified housing counseling intermediaries to provide consumer relief in the communities that were hit hardest.

HUD has approved thirty-seven housing counseling intermediaries that financial institutions have the discretion to choose as third-party providers of consumer relief under the terms of the Justice Department settlement agreements.

Additionally, these HUD-certified housing counseling providers deliver financial education and coaching to individuals to inform them of their home-buying options and rights, and to ensure they become and remain homeowners.

In fact, since 2008, 40 affiliates have provided housing counseling services--to date serving more than 200,000 clients in mostly underserved areas.

The success of housing counseling programs is undisputed.

Borrowers who have used housing counseling are one-third less likely to be seriously delinquent on their loan payments, and those who are in default are 60 percent more likely to save their homes.

The benefits of these programs are tangible and must continue to be made available to the public.

This example is particularly pertinent as Houston recovers from hurricane Harvey, a tragedy that displaced tens of thousands of my constituents.

There are still over 61 thousand people living in hotels throughout Texas.

The public has found itself in need of protection form environmental harms caused by absconding deep pocket defendants.

To ensure these protections, the Environmental Protection Agency (EPA) may request Supplemental Environmental Projects (SEPs) in settlement agreements to offset the harms of unlawful conduct by requiring parties to undertake an environmentally beneficial project or activity that ``is not required by law,'' but that a defendant agrees to undertake as part of the settlement of an enforcement action.

In workplace discrimination cases, victims are guarded by the Civil Rights Act passed by Congress in 1964 to remove discriminatory barriers and to promote equality in employment opportunities.

Cases, nonetheless, involving workplace discrimination claims often occur without identifiable victims and tend to affect the interests of persons who are not likely to receive compensation for unlawful conduct (e.g., unidentifiable victims such as former and future employees).

In these cases, a settling party that violated antidiscrimination laws may seek to resolve its civil liability through workplace monitoring or training programs that seek to remedy systemic unlawful conduct.

Furthermore, the claim that the funding received by organizations to provide home counseling services to harmed individuals amount to a ``slush fund,'' is an egregious and shameless attempt to smear and impugn the integrity of longstanding and trusted nonprofits and civil rights organizations.

As the Justice Department has observed, remedies can correct both noncompliance and recidivism through settlement terms that require a party to undertake activity to prevent future misconduct.

Not only is this legislation an unnecessary intrusion into the province of the federal courts, it is a part of a larger push to limit Americans' ability to seek justice in a court of law.

An innocent-sounding name aside, this bill poses a grave threat to our court system--the nation's stronghold for protecting our democracy.

In the current political climate, where the justice system is the last line of defense for our nation's values, I urge my colleagues not to cede that ground.

Congress should applaud and elevate the benefits of housing counseling, and the good work of frontline organizations, in righting the injustices of the past and present.

The working men and women of America, as well as their families deserve fair and impartial access to real justice when major corporations, inadvertently as it may be, inflict harm.

It is our duty as guardians of the judicial system to ensure real restitution is available to all, including the most vulnerable.

For these reasons, I urge all Members to vote against H.R. 732.

Mr. Chairman, I include in the Record a letter from National Urban League and a letter from Public Citizen.

National Urban League,

New York, NY, February 1, 2017.

Re Opposition to H.R. 732--The Stop Settlement Slush Funds

Act of 2017.

Hon. Bob Goodlatte,

Chairman, Judiciary Committee,

Washington, DC.

Hon. John Conyers,

Ranking Member, Judiciary Committee,

Washington, DC.

Dear Chairman Goodlatte and Ranking Member Conyers: As

President and CEO of the National Urban League, the nation's

largest historic civil rights organization dedicated to

economic empowerment of African Americans and other

underserved urban communities, I write to urge you to oppose

H.R. 732, the Stop Settlement Slush Funds Act of 2017. This

legislation seeks to block federal law enforcement from

including in negotiated settlements payments that provide

relief to victims of predatory lending. Specifically, the

bill targets federally certified housing counseling

intermediaries such as the National Urban League by

preventing these organizations from providing housing

counseling relief to communities that have been preyed upon

by financial institutions that have broken the law. H.R. 732

fails to recognize the critical role and positive benefits

that housing counseling organizations now play in addressing

and ensuring that the discriminatory practices and abuses,

like those that led to the housing and financial crisis,

never happen again.

As you know, following the subprime meltdown, the U.S.

Department of Justice pursued law suits against mortgage

lenders and banks that engaged in discriminatory lending

practices. Research shows that African Americans and Latinos

were discriminated against and steered into subprime loans

even when they qualified for conventional loans. Moreover,

African Americans and Latinos were two to three times more

likely than white homebuyers to receive subprime loans which

resulted in foreclosure rates 10 times that of conventional

loans. Pursuant to the settlement agreements, the Justice

Department ordered that financial institutions dedicate a

portion of their settlement payments to U.S. Department of

Housing and Urban Development (HUD) certified housing

counseling intermediaries to provide consumer relief in the

communities that were hit hardest.

The National Urban League is one of thirty-seven HUD-

approved housing counseling intermediaries that financial

institutions have the discretion to choose as third-party

providers of consumer relief under the terms of the Justice

Department settlement agreements. The National Urban League

is accredited by the Better Business Bureau and has a 4-star

rating from Charity Navigator, placing it in the top 10

percent of all U.S. charities for adhering to good

governance, fiscal responsibility and other best practices.

As a HUD-certified housing counseling provider, the

National Urban League successfully delivers financial

education and coaching to individuals to inform them of their

home-buying options and rights, and to ensure they become and

remain homeowners. In fact, since 2008, 40 of our affiliates

have provided housing counseling services--to date serving

more than 200,000 clients in mostly underserved areas.

The success of housing counseling programs provided by

National Urban League and others is undisputed. Borrowers who

have used housing counseling are one-third less likely to be

seriously delinquent on their loan payments, and those who

are in default are 60 percent more likely to save their

homes. The benefits of these programs are tangible and must

continue to be made available to the public.

On a separate note, it has come to my attention the

National Urban League and National Council of La Raza have

been singled out during recent hearings on this legislation.

The claims made during congressional testimony that the

funding received by our organizations to provide home

counseling services amounts to a ``slush fund,'' is an

egregious and shameless attempt to smear and impugn the

integrity of longstanding and trusted nonprofits and civil

rights organizations. Congress should applaud and elevate the

benefits of housing counseling, and the good work of

frontline organizations, like the National Urban League, in

righting the injustices of the past and present.

Therefore, I respectfully urge you to oppose H.R. 732 and

any efforts to include similar provisions in legislation

moving through Congress.

Sincerely,

Marc H. Morial,

President and CEO.