Providing for consideration of the bill (H.R. 720) to amend Rule 11 of the Federal Rules of Civil Procedure to improve attorney accountability, and for other purposes, and providing for consideration of the bill (H.R. 985) to amend the procedures used in Federal court class actions and multidistrict litigation proceedings to assure fairer, more efficient outcomes for claimants and defendants, and for other purposes.

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. Chairman, I have amendment at the desk.

Mr. Chairman, the manager's amendment makes several technical changes to the bill, none of which alter its basic policy, but all of which add clarity to the bill where necessary.

First, in the section of the bill governing conflicts of interest, this amendment strikes the prohibition on the use of the same class counsel if the named plaintiff is a present or former client or has a contractual relationship with the class counsel. In some instances, those restrictions may unduly limit the availability of class counsel or class representatives, so this amendment would remove them. It also clarifies that nothing in the conflicts of interest section of the bill applies to securities class actions, which have their own provisions for selection of class representatives and counsel elsewhere in the U.S. Code. The same exemption for securities class actions is made to the stay of discovery section of the bill because, again, securities class actions have their own discovery stay provisions elsewhere in the U.S. Code.

Second, the amendment makes technical changes to the misjoinder section of the bill, making clear it applies only to civil actions commenced in State court and subsequently removed to Federal court, and that a Federal court can retain jurisdiction over claims that are so related to each other that they form part of the same case and controversy under Article III of the Constitution, and the plaintiff consents to the removal of the claim.

Third, the amendment extends from 30 days to 90 days the amount of time for Federal courts to review the sufficiency of the allegations verification submissions made in the section on multidistrict litigation. The amendment also makes clear that a particular case may not be tried in a multidistrict proceeding unless all parties in that particular case consent--not all parties in the entire multidistrict proceeding. And it also makes clear in the section providing that the claimant shall not receive less than 80 percent of any monetary recovery, that such section does not alter the claimant's obligations to satisfy liens on the recovery--that is, debts owed to the Federal Government or to private insurers--for medical services received by the claimant for the treatment of the injuries alleged in the litigation. So, for example, if a person took a medicine and alleges he suffered injury as a result, a Federal program may

have paid for the treatment of the injury. If the person gets a settlement of his claim, it would include money for those medical services that should be paid back to the Federal Government. The revision makes clear that the satisfaction of such liens should come out of the 80 percent received by the claimant. The amendment also makes clear that the authorization for appeals from orders in MDL proceedings is limited to cases seeking redress for personal injury.

Mr. Chairman, I urge my colleagues to join me in supporting these clarifying and improving amendments, and I reserve the balance of my time.

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

Mr. Chairman, I claim the time in opposition to the amendment.

Mr. Chairman, this amendment should be defeated. Abraham Lincoln left behind pages of notes on a lecture he was to give to lawyers. They say: ``Never stir up litigation. A worse man can scarcely be found than one who does this. Who can be more nearly a fiend than he who habitually overhauls the register of deeds in search of defects in titles, whereon to stir up strife and put money in his pocket?''

That was Lincoln in the 1850s. Here is Forbes Magazine just a couple of years ago:

The lead plaintiff in the 5-Hour case . . . worked in

marketing for a cosmetic surgery center in California. But in

a grueling 5-hour deposition, she admitted she had been

recruited to serve as a plaintiff by her cousin, who worked

for a Texas lawyer; had purchased two bottles of 5-Hour

ENERGY specifically to sue the manufacturer; had never

complained to the company or sought a refund; and had signed

a backdated retainer agreement with the trial lawyer,

Rubinstein, the fellow seen here at his own deposition. . . .

Another one of Rubinstein's clients . . . admitted she had

served as a plaintiff for Rubinstein in at least four class

actions over products like Swanson pot pies and lipstick. . .

. Emails and other communications 5-Hour's lawyers uncovered

in their suit showed that Rubinstein belonged to a loose

affiliation of lawyers who ran an assembly-line process of

identifying companies to sue and then helping each other find

plaintiffs.

Lawsuits are supposed to be initiated by truly injured plaintiffs seeking redress, not invented by lawyers who hunt for a plaintiff to assert a supposed injury made up by the lawyer.

Few class members bother to collect the payments available in class action settlements, in large part because they don't feel injured by the supposedly wrongful conduct in the first place.

In too many cases, trial lawyers come up with an idea for a lawsuit and then search for a person who has bought the product, or they send a relative or employee to buy the product so they will have someone who can sue on behalf of a proposed class of all other buyers. No product purchaser has actually complained or feels cheated; it is just lawyers in pursuit of money. That is a major reason why so few class members bother to collect the payments available in class action settlements. They don't feel injured by the supposedly wrongful conduct in the first place.

This abuse of the class action lawyer-driven lawsuits must end. The base bill, therefore, requires lawyers to disclose how proposed class representatives became involved in the class action. Further, it prohibits class actions in which any proposed class representative, that is, a named plaintiff that will be representing everyone else in the class action, is a relative of or an employee of the class action lawyer.

Further clarifications making clear that this provision will not apply to present or former clients of, or those who have had any contractual relationship with, class counsel have already been made to the bill in the manager's amendment. The only prohibition that remains in the bill is the bar on class counsel using a relative or employee as a class representative. Clearly, that shouldn't be permitted.

The class representative is supposed to be representing the class interests, to independently ``be the client'' for the class, and tell counsel what to do. That independence will be gone if the class representative is a relative or employee of the class counsel. This amendment should be defeated.

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

Mr. Chairman, this amendment should be defeated.

Insofar as a class action seeks equitable relief, that is, the nonmonetary relief, including any injunctive relief that seeks to stop the defendant from doing something wrong, the portion of any class action lawyer's fee should be limited to a reasonable percentage of the value of that relief as determined by the court.

This provision won't affect fee awards in civil rights cases because both the monetary and equitable relief attorney's fees provision in this bill are qualified with the initial phrase, ``unless otherwise specified by Federal statute.''

The Civil Rights Attorney's Fee Award Act of 1976 allows a court, in its discretion, to award reasonable attorney's fees as part of the costs to a prevailing party in Federal civil rights lawsuits, including cases brought under 28 U.S.C. section 1983, the statute most commonly used to assert civil rights claims. Consequently, this bill won't affect attorney's fees in civil rights class actions at all.

Regarding other equitable relief cases that don't involve civil rights claims, Federal courts routinely determine the value of intangible relief such

as equitable or injunctive relief for purposes of determining whether the amount in controversy requirement--currently, $75,000 to get into court--is met.

A majority of courts consider only the value of the injunctive relief from the plaintiff's perspective or viewpoint. Some courts determine the jurisdictional amount by evaluating the claim from the perspective of the party seeking Federal court jurisdiction. Others have adopted the ``either viewpoint'' rule, which allows the court to look to either the plaintiff's or the defendant's viewpoint in establishing the amount in controversy in cases seeking some form of injunctive relief.

The bottom line is that, under this bill, Federal courts will be able to use either approach in deciding the value of the injunctive relief provided to class members; and generally speaking, counsel should be paid on the basis of what lawyers actually deliver to their clients.

This base bill, of course, does not alter in any way the relief that would be granted to equitable relief class action members. It only limits the fees attorneys would receive to a reasonable percentage of the value of what the class members actually received. So all this amendment would do would be to put more money in the hands of lawyers and less in the hands of victims.

I urge my colleagues to oppose this amendment, and I reserve the balance of my time.

Mr. Chairman, constitutional rights are priceless, but attorney's fees have to be set by the court. Who else is going to set them in those cases?

I want to correct the gentleman, again, on this point about section 1983 cases because this bill says very clearly: unless otherwise specified by Federal statute.

So this bill is not affected by the very example that he cites because that is something that is otherwise specified by Federal statute.

Mr. Chairman, I urge my colleagues to oppose this needless and harmful amendment, and I yield back the balance of my time.

Mr. Chairman, I claim time in opposition to the amendment.

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

Mr. Chairman, this amendment should be rejected. The discovery process--the pretrial process in a lawsuit in which trial lawyers demand documents and other things from the people they are suing-- imposes huge costs on defendants, particularly because of the astronomical costs associated with the discovery of electronic information, such as emails.

Law Technology News has reported that the total cost of electronic discovery rose from $2 billion in 2006 to $2.8 billion in 2009 and estimated that the total cost would rise 10 to 15 percent annually over the next few years. In a more recent case study of Fortune 500 companies, the RAND Institute found that the median total cost for electronic discovery among participants totaled $1.8 million per case.

These costs are asymmetric. While defendants typically are subject to gigantic discovery costs, because they are large organizations possessing large amounts of data, plaintiffs have little information in their possession, and, therefore, are subject to a very small financial burden during the discovery process.

Moreover, discovery conducted before a motion to dismiss is decided is unfair. Why should defendants bear the burden of paying for discovery before a complaint is held legally sufficient, especially when the threat of huge costs may coerce an unjustified settlement?

The reality for most civil litigation is that the defendants' obligation to bear these exorbitant discovery costs incentivizes plaintiffs to serve burdensome discovery requests on defendants with zero downside risk to themselves. As professor Martin Redish has explained: ``The fact that a party's opponents will have to bear the financial burden of preparing the discovery response actually gives litigants an incentive to make discovery requests, and the bigger expense to be borne by the opponent, the bigger incentive to make the request.''

Because defendants seek to avoid these exorbitant costs, discovery is all too often used as a weapon to coerce settlement of claims regardless of their

merit. Even the Supreme Court has recognized this problem, lamenting that the threat of discovery expense will push cost-conscious defendants to settle even anemic cases before reaching trial.

For example, assume that a defendant moves to dismiss a class action because it doesn't assert any valid claims. Under current law, the named plaintiff can serve massive discovery requests that force defendants to spend $10 million to collect the requested documents. A rational decision for that defendant is to settle the case for millions, even if 4 months later the court grants the motion to dismiss, finding the class claims to be totally without merit. That is because, without a stay in discovery, the defendants will, in the meantime, have been required to spend all or part of the $10 million costs complying with the discovery requests for, it turns out, no legitimate reason. Trial lawyers pursue discovery in this circumstance primarily in an effort to pressure the defendant to settle invalid claims.

The subsection of the bill entitled ``Stay of discovery'' would stop the use of discovery to coerce unjustified settlements by requiring Federal courts to stay discovery pending resolution of rule 12 motions--that is, motions to dismiss for failure to state a claim-- motions to strike class allegations, motions to transfer, and other motions that would dispose of class allegations unless the court finds that particularized discovery is necessary to preserve evidence or to prevent undue prejudice to a party.

Mr. Chairman, this amendment should be defeated, and I reserve the balance of my time.

Mr. Chairman, the gentleman will be pleased to know that tomorrow we will consider on the floor of this House legislation that, under rule XI, would impose mandatory sanctions on attorneys who engage in the type of activity he just described. That is an abuse as well. It will be covered by that legislation. But this legislation is appropriate to make sure that justice is done in class action litigation.

Mr. Chairman, I urge my colleagues to oppose this amendment, and I yield back the balance of my time.

Mr. Chairman, this amendment would subject certain class members to unfair treatment and should be rejected.

The purpose of a class action is to provide a fair means of evaluating like

claims, not to provide a means of artificially inflating the size of a class to extort a larger settlement value. Exempting a subset of cases from the bill, as this amendment would do, would serve only to incentivize the creation of artificially large classes to extort larger and unfair settlements from innocent parties for the purpose of disproportionately awarding uninjured parties.

Why should only the claimants covered by the amendment be subject to particularly unfair treatment by being allowed to be forced into a class action with other uninjured or minimally injured members, only to see their own compensation reduced? This does a disservice to those claimants. Yet, that is exactly what this amendment would do.

Regardless of the subject matter, class action plaintiffs are increasingly inclined to include fraud claims in their complaints. If they are suing about an allegedly defective product, they will add fraud claims, alleging that the manufacturer committed fraud by not disclosing the defect. If they are suing for a breach of contract, they will add fraud allegations, saying that the defendant didn't disclose the alleged breach, and so on and so forth.

Thus, this amendment would effectively gut the entire bill, since, to avoid its important reforms, class action lawyers would simply add fraud claims to their complaints, as they are increasingly prone to do in any event.

Regarding the Volkswagen case, some opponents have urged that, if enacted, the base bill would have prevented the filing of the class actions related to the Volkswagen diesel emission controversy. Those assertions are false.

This bill's injury provision would be readily satisfied in the VW cases, as class members presumably would argue that they have been injured by their purchase of vehicles with noncompliant emission systems.

Further, if the scope or type of injury differed among class members, separate class actions could be filed for each group, as actually occurred with respect to differing models in the Volkswagen MDL proceeding.

The bill's requirement about class representative disclosures would be easily satisfied. Many class members are interested in the litigation and presumably ready to serve as conflict-free class representatives who would not run afoul of these provisions.

The bill's ascertainability provisions would pose no obstacles because vehicle registration records would provide reliable class member lists and counsel could easily demonstrate a method to get any relief to class members.

Requiring that payment of counsel fees await distribution of class benefits and that fees reflect a reasonable percentage of benefits actually received by class members would not impede bringing such cases.

The cases would be litigated without resort to issues classes. Disclosure of any third-party litigation funding of the class actions wouldn't preclude such cases. The provision doesn't prohibit such funding. Only disclosure is required. Staying discovery while motions to dismiss are pending also poses no roadblock.

Mr. Chairman, again, I urge my colleagues to defeat this gutting amendment, and I reserve the balance of my time.

Mr. Chairman, I would just say to the gentleman that there is nothing in this bill that would restrict access to class actions based upon fraud claims. And in fact, this bill is designed to maximize the recovery for those fraud victims, rather than lining the pockets of attorneys.

Mr. Chairman, I urge my colleagues to oppose the amendment, and I yield back the balance of my time.

Mr. Chairman, I claim the time in opposition.

Mr. Chairman, with great deference and respect to my friend and colleague, the ranking member, this amendment would subject certain class members to unfair treatment and, thus, should be rejected.

First, the bill's provisions on type and scope of injury only apply to proposed classes ``seeking monetary relief for personal injury or economic loss.'' Insofar as civil rights cases do not seek money damages, they are completely unaffected by the bill and would proceed just as they do today.

However, if money damages are sought by a proposed class, then, of course, they should be subject to the procedures in the bill. The purpose of a class action is to provide a fair means of evaluating like claims, not to provide a means of artificially inflating the size of a class to extort a larger settlement value.

Exempting a subset of money damage cases from the bill, as this amendment would do, would serve only to incentivize the creation of artificially large classes to extort larger and unfair settlements from innocent parties for the purpose of disproportionately awarding uninjured parties.

Any claims seeking monetary relief for personal injury or economic loss should be grouped in classes in which those who are the most injured receive the most compensation. Why should civil rights claimants seeking money damages be subject to particularly unfair treatment by being allowed to be forced into a class action with other uninjured or minimally injured members, only to see their own compensation reduced? That does a disservice to those claimants. Yes, that is exactly what this amendment would do.

Further, the bill's provision on attorneys' fees won't affect fee awards in civil rights cases at all because both the monetary and equitable relief attorneys' fees provision in the bill are qualified with the initial phrase ``unless otherwise specified by Federal statute.''

The Civil Rights Attorney's Fee Award Act of 1976 allows a court, in its discretion, to award reasonable attorneys' fees as part of the costs to a prevailing party in Federal civil rights lawsuits, including cases brought under 28 U.S.C. section 1983, the statute most commonly used to assert civil rights claims.

Consequently, this bill will not affect attorneys' fees in civil rights class actions at all, including, of course, cases brought under the Americans with Disabilities Act, which has its own attorneys' fees provision.

The conflicts of interest provision reflects a valid concern in all class actions. The courts need to know how the named plaintiffs came to be involved in class actions in all types of cases to ensure there aren't conflicts and that the due process rights of all class members are protected.

The issues class provision won't disrupt the manner in which civil rights cases are normally litigated. Discovery stays while dispositive motions are pending won't disrupt civil rights cases. Like any other case, the plaintiffs need to show they have a facially valid complaint before discovery should commence.

Disclosure of third-party funding is no less important in civil rights cases than in other class actions. The appeals provision benefits both plaintiffs and defendants, giving either side the right to appeal if class certification is granted or denied.

I urge all my colleagues to oppose this amendment, which would set back the just causes of civil rights claimants.

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

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

Mr. Speaker, the base bill contains provisions that allow all claims to go forward as class actions and also maximize awards to deserving victims.

Why would anyone want to single out safe drinking water victims for adverse treatment and deny them the benefits of the base bill that would maximize any recovery they might receive in a class action?

This motion to recommit would do that, and it should be defeated.

In closing, let me say that we know that only the tiniest fraction of consumer class action members ever bother to claim the compensation awarded them in a settlement. That is clear proof that the vast majority--the vast large numbers of class members are satisfied with the product they purchased. They don't want compensation. They don't want to be lumped into gigantic class action lawsuits.

Federal judges are crying out for the Congress to reform the class action system, which currently allows trial lawyers to file classes with hundreds and thousands of unmeritorious claims and use those artificially inflated classes to force defendants to settle the case.

As I have recounted, some class action settlements have left lawyers with millions in fees while the alleged victims receive absolutely nothing.

This bill prevents people from being forced into class actions with other uninjured or minimally injured members, only to have the compensation of injured parties reduced. It requires that lawyer fees be limited to a reasonable percentage of the money injured victims actually receive.

I urge my colleagues to join me in opposing this motion to recommit and supporting this bill on behalf of the consumers and injured parties everywhere.

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

Mr. Chair, I rise in strong opposition to Rules Committee Print 115-5 of H.R. 985, the Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017, which is a radical measure that would overturn centuries of American law.

This committee print buries the ``Furthering Asbestos Claim Transparency Act of 2017,'' crammed through committee on a party-line vote, within the overarching legislation intended to effectively obliterate class actions in America, H.R. 985, the Fairness in Class Action Litigation Act of 2017.

I oppose this two-for-one bill combination because it will, in sum, undermine the enforcement of this Nation's civil rights laws and upend decades of settled class action law.

The fact that the House would even consider such sweeping, reckless legislation without holding a single hearing is an outrage.

This poorly drafted legislation will create needless chaos in the courts without actually solving any demonstrated problem.

Class action lawsuits are among the most important tools to enable injured, cheated, and or victimized individuals and small businesses to hold large corporations and institutions accountable and deter future misconduct.

H.R. 985 would eviscerate that tool.

Let me remind my colleagues that class actions are critical for the enforcement of laws prohibiting discrimination in employment, housing, education, and access to public areas and services.

As the Supreme Court has recognized in Amchem Products, Inc. v. Windsor, class actions provide ``vindication of the rights of groups of people who individually would be without effective strength to bring their opponents into court at all.''

Amchem Products, Inc. v. Windsor, 521 U.S. 591, 617 (1997). Courts have interpreted Rule 23 of the Federal Rules of Civil Procedure, the federal class action rule, over decades and the Advisory Committee on Civil Rules has, through its deliberative process, reviewed and amended the rule to ensure its fair and efficient operation.

No further revisions are needed at this time.

Civil rights injuries are never identical and are already subject to rigorous judicial review.

H.R. 985 imposes a new and impossible hurdle for class certification.

This alone would sound the death knell for most class actions.

It requires that the proponents of the class demonstrate that each class member has suffered the same type and scope of injury.

At this early stage of a civil rights class action, it is frequently impossible to identify all of the victims or the precise nature of each of their injuries.

Classes inherently include a range of affected individuals, and in no case does every member of the class suffer the same scope of injury from the same wrongful act.

But even if this information were knowable, class members' injuries would not be the same.

As a simple example, those overcharged for rent will have different injuries.

In an employment discrimination class action, the extent of a class member's injuries will depend on a range of factors, including their job position, tenure, employment status, salary, and length of exposure to the discriminatory conditions.

For this reason, nearly forty years ago, the Supreme Court developed a two-stage process for such cases in International Brotherhood of Teamsters v. U.S., 431 U.S. 324, 371-72 (1977).

In the first stage, the court determines whether the employer engaged in a pattern or practice of discrimination.

If the employer is found liable, the court holds individual hearings to determine the relief (if any) for each victim.

The Supreme Court recently reaffirmed the use of the Teamsters model for discrimination class actions in part because of the individualized nature of injuries.

In the case of Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 366 (2011).

Thus, this bill would overturn the approach established four decades ago to permit a class of victims of discrimination to seek effective relief.

Certainly, many civil rights, discrimination and employment class actions, including cases involving refusals by companies to properly pay workers, would not satisfy these criteria.

Some provisions would make it even more difficult to bring race and gender discrimination class actions.

Other provisions would have a dramatic impact on cases against toxic polluters.

For example, arbitrary and unworkable standards for attorneys' fees undermine civil rights enforcement.

If a case is successful, the judge awards a reasonable fee based upon the time that the advocates have spent working on the case.

This method of determining attorneys' fees provides for consistent and predictable outcomes, which is a benefit to all parties in a lawsuit.

H.R. 985 would entirely displace this well-settled law with a standard long ago rejected as arbitrary and unworkable.

Under the bill, attorneys' fees would be calculated as a percentage of the value of the equitable relief. Sec. 1718(b)(3).

But how is a judge to determine the cash value of an integrated school, a well-operating foster care system, the deinstitutionalization of individuals with disabilities, or myriad other forms of equitable relief secured by civil rights class actions?

Asking judges to assign a price tag in such cases is an impossible task and would lead to uncertainty and inconsistency.

Non-profit organizations cannot bear the risk of these long and expensive cases if, at the end, their fees are calculated under this incoherent and capricious standard.

Indeed, the bill creates an incentive for defendants to prolong the litigation so as to make it economically impossible for plaintiffs' attorneys to continue to prosecute the litigation.

In addition, by considering this bill now, Congress is circumventing the process that Congress itself established for promulgation of federal court rules under the Rules Enabling Act, bypassing both the Judicial Conference of the United States and the U.S. Supreme Court.

Civil rights class actions are often about systemic reforms that benefit the most vulnerable.

Interference with the proper federal court rules process is reckless and irresponsible, particularly when this proposal is so damaging to victims.

Mr. Chair, the only beneficiaries of the so-called FACT Act, are the very entities that knowingly produced a toxic substance that killed or seriously injured thousands of unsuspecting American consumers and workers.

The FACT Act would force asbestos patients seeking any compensation from a private asbestos trust fund to reveal on a public web site private information including the last four digits of their Social Security numbers, and personal information about their families and children.

In fact, not a single asbestos victim has come forward in support of this legislation.

Worse, this bill would allow victims of asbestos exposure to be further victimized by requiring this information about their illness to be made publicly available to virtually anyone who has access to the Internet.

For example, the bill requires all payment demands, as well as, the names and exposure histories of each claimant--together with the basis for any payment the trust made to such claimants--to be publicly disclosed.

This sensitive information must be posted on the court's public docket, which is easily accessible through the Internet with the payment of a nominal fee.

Once irretrievably released into the public domain, this information would be a virtual treasure trove for data collectors and other entities for purposes that have absolutely nothing to do with compensation for asbestos exposure.

Insurance companies, prospective employers, lenders, and predatory scam artists as well as the victim's neighbors would have access to this information.

Many of the people who would be hurt by the FACT Act are veterans, who are disproportionately affected by asbestos disease.

To address this serious failing of the bill, I offered an amendment which would ensure that the quarterly reports required under the FACT Act, contain only aggregate payment information.

My amendment also deletes the bill's burdensome discovery requirement.

As noted by the widow of our former colleague Congressman Bruce Vento who passed away from asbestos-induced mesothelioma, the bill's public disclosure of victims' private information: ``could be used to deny employment, credit, and health, life, and disability insurance.''

Mrs. Vento also warned that asbestos victims ``would be more vulnerable to identity thieves, con men, and other types of predators.''

Supporters of this legislation say that Bankruptcy Code section 107 will prevent such results.

But, they are wrong; this provision only permits--it does not require--the bankruptcy court to issue a protective order.

In fact, such relief may only be granted for cause if the court finds that ``disclosure of such information would create undue risk of identity theft or other unlawful injury to the individual.''

What this means is that an asbestos victim would have to retain counsel and go to court in order to prove cause to obtain relief.

And, even though Bankruptcy Rule 9037 does require certain types of personal information to be redacted from a document filed in a bankruptcy case, said Rule would be overridden by this legislation, as written.

Accordingly, for these reasons and more, I oppose this harmful legislation.

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

Mr. Chairman, I think the question is: Is there any collegiality and respect for the Federal judicial system?

Let me read a letter in reference to the underlying bill:

We strongly urge Congress not to amend the class action

procedures found in rule 23 outside of the Rules Enabling Act

process.

It goes on to talk about an advisory committee, but I don't know any sentence more clear than that. I know that as a parent raising a child, ``do not'' and ``no'' are very clear, yet we maintain this debate on the floor of the House.

Let me also mention a debate that is tomorrow, but I think it is relevant to my amendment, LARA. This is a rule that was in in 1983. In 1993, it was thrown out because it had a deleterious effect on meritorious civil rights cases, employment cases, and others. The Lawsuit Abuse Reduction Act, that is tomorrow. The courts also don't want you to do that, and most of the courts say it is a waste of resources.

My amendment is going to help us solve the problem for this bill, H.R. 985. It would improve the rules of the committee print by replacing the substantive text of the bill with a requirement that the bankruptcy asbestos trust report quarterly an aggregate list of demands received and payments made. Specifically, the Jackson Lee amendment protects the privacy of asbestos victims from overly broad and invasive disclosure requirements by striking from the bill's text personal information disclosure mandates.

Mr. Chairman, the only beneficiaries of the so-called FACT Act are the very entities that knowingly produced a toxic substance that killed or seriously injured thousands of unsuspecting American consumers and workers--it is the defendants. And, no, it does not provide for a safety for the trust.

Worse, this bill would allow victims of asbestos exposure to be further victimized by requiring information about their illness to be made publicly available to virtually anyone who has access to the internet. Once irretrievably released into the public domain, this information would be a virtual treasure trove for data collectors and other entities for purposes that have absolutely nothing to do with the compensation for asbestos exposure.

Why do these people have to be doubly, triply penalized? They are already dying, many of them.

Insurance companies, prospective employers, lenders, predatory scam artists all have access to these unsuspecting and devastated families or victims. I ask my colleagues to support this commonsense Jackson Lee amendment.

Mr. Chair, I wish to thank the Chair and Ranking Member of the Rules Committee for making the Jackson Lee Amendment in order.

Mr. Chair, thank you for this opportunity to explain the Jackson Lee Amendment to Rules Committee Print 115-5 of H.R. 985, the ``Fairness in Class Action Litigation And Furthering Asbestos Claim Transparency Act of 2017.''

My amendment would improve the Rules Committee Print 115-5 to H.R. 985 by replacing the substantive text of the bill with a requirement that the bankruptcy asbestos trust report quarterly an aggregate list of demands received and payments made.

Specifically, the Jackson Lee Amendment protects the privacy of asbestos victim plaintiffs from overly broad and invasive disclosure requirements, by striking from the bill's text personal information disclosure mandates.

Mr. Chair, the only beneficiaries of the so-called ``FACT Act,'' are the very entities that knowingly produced a toxic substance that killed or seriously injured thousands of unsuspecting American consumers and workers.

In fact, I am unaware of any asbestos victim who supports this legislation.

Worse yet, this bill would allow victims of asbestos exposure to be further victimized by requiring information about their illness to be made publicly available to virtually anyone who has access to the Internet.

For example, the bill requires all payment demands, as well as, the names and exposure histories of each claimant together with the basis for any payment the trust made to such claimants to be publicly disclosed.

This sensitive information must be posted on the court's public docket, which is easily accessible through the Internet with the payment of a nominal file.

Once irretrievably released into the public domain, this information would be a virtual treasure trove for data collectors and other entities for purposes that have absolutely nothing to do with compensation for asbestos exposure.

Insurance companies, prospective employers, lenders, and predatory scam artists as well as the victim's neighbors would have access to this information.

To address this serious failing of the bill, my amendment would ensure that the quarterly reports required under the ``FACT Act,'' contain only aggregate payment information.

My amendment also deletes the bill's burdensome discovery requirement.

As noted by the widow of our former colleague Representative Bruce Vento who passed away from asbestos-induced mesothelioma, the bill's public disclosure of victims' private information: ``could be used to deny employment, credit, and health, life, and disability insurance.''

Mrs. Vento also warned that asbestos victims ``would be more vulnerable to identity thieves, con men, and other types of predators.''

I am sure that the supporters of this legislation will say that Bankruptcy Code section 107 will prevent such results.

But this provision only permits--it does not require--the bankruptcy court to issue a protective order.

In fact, such relief may only be granted ``for cause'' if the court finds that ``disclosure of such information would create undue risk of identity theft or other unlawful injury to the individual.''

What this means is that an asbestos victim would have to retain counsel and go to court in order to prove ``cause'' to obtain relief.

And, even though Bankruptcy Rule 9037 does require certain types of personal information to be redacted from a document filed in a bankruptcy case, said Rule would be overridden by this legislation, as written.

Accordingly, I urge my colleagues to support the Jackson Lee amendment to ensure that the privacy of asbestos victims is protected.

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

Mr. Chairman, how much time is remaining on my side?

Mr. Chairman, let me say whose side I want to stand on, and that is the side of Mrs. Vento, the widow of our former colleague, Representative Bruce Vento, who passed away from asbestos- induced cancer.

The bill's public disclosure of victims' private information could be used to deny employment, credit, and health, life, and disability insurance. Mrs. Vento also warned that asbestos victims would be more vulnerable to identity thieves, con men, and other types of predators.

There is no reason for this bill. Not only is the Judicial Conference of Federal Judges against it, but victims are crying out: Stop it, and stop it now.

Mr. Chairman, how much time do I have remaining?

Mr. Chairman, I include in the Record a StarTribune article.

[From the StarTribune]

Stand With Families Affected by Asbestos, and Help Kill FACT Act

My husband was the late U.S. Rep. Bruce F. Vento, who

served for almost 24 years in the House of Representatives

representing Minnesota's Fourth Congressional District. He

died from mesothelioma in 2000 within eight and a half months

of being diagnosed.

Mesothelioma is an aggressive cancer caused by asbestos

exposure. Bruce was exposed while working his way through

college as a laborer, years before he became involved in

public life.

With his death, our country lost a hardworking and humble

public servant years before his time. Bruce's parents,

siblings, children, grandchildren and I lost so much more.

Since his death, I have worked with asbestos patients and

family members from across the country to fight for a ban on

asbestos and to protect the rights of people whose lives have

been forever affected by this terrible poison.

I have recently been involved in the effort to stop the so-

called ``Furthering Asbestos Claims Transparency Act,'' or

FACT Act, which would obstruct justice for victims dying from

asbestos-related diseases while giving a handout to the very

corporations that knowingly poisoned and killed them.

The FACT Act would require that the personal information of

sick and dying asbestos patients and their families be posted

on a public website, including names, addresses, medical

diagnoses, financial compensation received and the last four

digits of our Social Security numbers.

This is precisely the kind of information that law

enforcement officials tell the public we should not share on

the Internet because it leaves us vulnerable to identity

thieves and con artists.

The House could be considering a vote on this bad

legislation in the coming weeks, making it all the more

urgent that we act now to protect the privacy of asbestos

victims and their families.

Supporters of the FACT Act are the corporations that

exposed innocent workers, consumers and their family members

to asbestos, while concealing what they knew about this

dangerous poison. They claim that this gross violation of our

privacy is necessary in order to protect asbestos patients

from fraud against the asbestos trust funds that were set up

to compensate asbestos victims and their families. Yet, not a

single instance of fraud against the trust funds has been

identified.

What is worse, while the bill's supporters claim that they

are doing it for asbestos victims, not one victim of asbestos

exposure or an affected family member has been allowed to be

heard on this legislation. The only people who would be

directly affected by the bill have been completely shut out

of the process.

The FACT Act would also bog down the asbestos trust funds

in endless paperwork to respond to information requests from

asbestos companies. This would drain the funds of money that

is desperately needed to compensate sick and dying victims.

As the victims get more and more desperate, they will be

willing to settle cases for pennies on the dollar, taking

needed compensation away from families and leaving it in the

pockets of the responsible companies.

I recently traveled to Washington, D.C., and met with Sens.

Al Franken and Amy Klobuchar and Rep. Betty McCollum, all of

whom committed to work with asbestos patients and family

members to stop the FACT Act from becoming law. I hope that

we can count on the rest of Minnesota's congressional

delegation to stand with asbestos patients and families and

against the FACT Act.

Mr. Chairman, without having the ability to hear my colleague's opposition, I know that the supporters of this legislation will say that Bankruptcy Code section 107 will prevent these devastating results, but it is not true. This provision only permits it. It does not require the bankruptcy court to issue a protective order.

My amendment protects these vulnerable victims against the release of their data, making them, in addition to the devastating disease that they got from asbestos--and our good friend Bruce Vento, many of us knew Congressman Vento, we knew his wife, and we knew that his death was both untimely and devastating, and now you are saying to victims like him: Release all the data. Open yourself up to more. Open your families up to more.

The Jackson Lee amendment is a commonsense amendment that will provide for an asbestos trust report quarterly, an aggregate list of demands received and payments made. As well, it would protect the privacy of asbestos victim plaintiffs from overly broad and invasive disclosure requirements by striking down the bill's text about personal information disclosure mandates. No matter what my good friend from Texas says, he does not have an answer to protecting the privacy of these victims.

I ask our colleagues to support a commonsense response. Stop it now. The courts don't want it, and it is horrible for the victims. It is doubling down on people who have lost loved ones and victims who are suffering from asbestos-induced cancer. I ask my colleagues to support the Jackson Lee amendment.

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

Mr. Chairman, I demand a recorded vote.

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. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous materials to H.R. 985.

I yield myself such time as I may consume.

Mr. Chairman, recently an independent research firm surveyed companies in 26 countries and found that 80 percent of those companies that were subject to class action lawsuits were U.S. companies, putting those U.S. companies at a distinct economic disadvantage when competing with companies worldwide.

But the problem of overbroad class action doesn't just affect U.S. companies. It affects consumers in the United States who are forced into lawsuits they don't want to be in. How do we know that? We know that because the median rate at which consumer class action members take the compensation offered in a settlement is incredibly low. That would be 0.023 percent. That is two-hundredths of a percent. That is right, only the tiniest fraction of consumer class action members bother to claim the compensation awarded them in a settlement. That is clear proof that vastly large numbers of class members are satisfied with the products they purchase, don't want compensation, and don't want to be lumped into a ginormous class action lawsuit.

Federal judges are crying out for Congress to reform the class action lawsuit system, which currently allows trial lawyers to fill classes with hundreds and thousands of unmeritorious claims and use those artificially inflated claims to force defendants to settle the case. Liberal Justice Ruth Bader Ginsburg has recognized that ``A court's decision to certify a class . . . places pressure on the defendant to settle even unmeritorious claims.''

Judge Diane Wood of the Seventh Circuit Court of Appeals, appointed by President Clinton, has explained that class certification ``is, in effect, the whole case.'' And as one appeals court judge, nominated by President Obama, wrote in his dissent in a recent class action case, ``The chief difficulty we confront in this case arises from the fact that some of the members of the class have not suffered the . . . injury upon which this entire case is predicated and that could constitute as many as 24,000 consumers who would have no valid claim against the defendants under the state laws even if the named plaintiffs win on the merits.''

He went on to chastise the other judges who allowed the class action to proceed, writing ``if the district court does not identify a culling method to ensure that the class, by judgment, includes only members who were actually injured, this court has no business simply hoping that one will work.''

The purpose of a class action is to provide a fair means of evaluating similar, meritorious claims, not to provide a way for lawyers to artificially inflate the size of a class to extort a larger settlement fee for themselves, siphoning money away from those actually injured, and increasing prices for everyone.

Just look at an accounting of recent class action settlements. The SUBWAY food chain was sued in a class action because trial lawyers complained their foot-long subs weren't a full foot long. As part of the settlement, small amounts were paid to the 10 class representatives, but the millions of other class members received nothing; not a dime, not a sandwich. Meanwhile, the lawyers were awarded $520,000 in fees. The settlement was appealed, and during oral arguments Judge Diane Sykes remarked that ``A class action that seeks only worthless benefits for the class should be dismissed out of hand. That's what should have happened here. . . . This is a racket.''

The Coca-Cola Company was sued in a class action lawsuit involving Vitaminwater. Class members received zero dollars in the settlement. The lawyers were awarded $1.2 million in fees.

In a case involving Facebook, the company agreed to settle the case by paying class counsel $3 million. Zero dollars were paid to class members. The Ninth Circuit affirmed the deal, but in a withering dissent, Judge Kleinfeld observed that ``Facebook users who had suffered damages . . . got no money, not a nickel, from the defendants. Class counsel, on the other hand, got millions.''

This bill includes several reforms. It prevents people from being forced into a class with other uninjured or minimally injured class members, only to have the compensation of injured parties reduced. It prevents trial lawyers from using incestuous, litigation-factory arrangements to gin up lawsuits. It requires courts to use objective criteria in determining who is injured in a class action and how compensation will actually reach the victims. It requires that injured victims get paid first, before the lawyers, and that lawyer fees be limited to a reasonable percentage of the money received by victims.

It requires judges to itemize exactly who gets what in a class action settlement and who is paying and controlling the lawyers. It requires all the rules governing class action be followed, that expensive pretrial proceedings be put on hold while the court determines if the case can't meet class certification requirements, and allows appeals of those class certification orders so justice can be done faster.

It ensures lawyers don't add plaintiffs just for forum shopping purposes, and it requires the verification of allegations in multidistrict pretrial proceedings, ensuring defendants receive due process while plaintiffs, not lawyers, get the benefits of any cost savings achieved by the multidistrict pretrial process.

H.R. 985 also contains provisions to include much-needed transparency into the asbestos bankruptcy trust system. On too frequent an occasion, by the time asbestos victims assert their claims for compensation, the bankruptcy trust formed for their benefit has been diluted by fraudulent claims, leaving these victims without their entitled recovery.

The reason that fraud is allowed to exist within the asbestos trust system is the excessive lack of transparency created by plaintiffs' firms. The predictable result of this reduced transparency has been a growing wave of claims and reports of fraud.

This bill strikes the proper balance of transparency and preserving the dignity and medical privacy of asbestos victims while also minimizing the administrative impact on the asbestos trusts. This bill saves the money in these trusts, which is a limited amount of money, to make sure future claimants, many of whom are veterans, have the opportunity to seek and receive compensation for their injuries and prevent double-dipping and fraud.

Please join me in supporting this bill on behalf of consumers and injured parties everywhere.

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 point out to my colleague across the aisle that over the past several Congresses, we have had multiple hearings on class action reform and asbestos trust litigation, all of which are easily and publicly available.

I further would like to go on to say this bill doesn't prevent any claim from being brought as a class action--zero, zip, none. All it does is maximize the recovery of the victims.

Under this bill, a class action lawyer's fees are pegged to a reasonable percentage of the money actually received by the client under the settlement. What that will do is incentivize lawyers to make the maximum amount available to their clients, to seek the maximum recovery for their client.

Under this bill, class action lawyers will no longer be able to agree to settlements that give them millions of dollars and get their clients absolutely nothing, or maybe a coupon, if they are lucky.

Under this bill, a class action lawyer will get more in fees as long as they agree to a settlement that actually means that their clients, the actual plaintiffs, are getting a reasonable amount of money. Imagine that: incentivizing lawyers to do the best work for their clients. That is what this bill does.

I would also like to talk for a second about the asbestos portion of this. I have to say that this is a little troubling for me. The disclosure requirements in the FACT Act portion of this bill requires less than would be required in a State court pleading for damages. It is the minimum amount of information necessary to make sure somebody isn't double-dipping. It specifically protects medical records and social security numbers. It is designed as a fraud prevention tool.

The argument that this is designed to protect companies that manufactured asbestos is flawed. This is designed for the asbestos trust--companies that have gone bankrupt and set aside large amounts of money to be paid to the victims of asbestos. This protects the assets in those trusts, not the tortfeasor companies. We are making sure there is enough money in these trusts to pay future victims by stopping fraudulent claims today.

Mr. Chairman, I urge my colleagues to support this bill, and I reserve the balance of my time.

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

Clearly there are two groups of individuals who we are not fearful will commit fraud. It is our Nation's veterans and servicemembers. At the same time, there is no reason to distinguish between the disclosure obligation of veteran servicemembers and the disclosure obligations of ordinary citizens.

This FACT Act provision is designed to protect veterans from fraud and make sure our future veterans who are exposed and other people who are exposed in their jobs to asbestos have the resources available because the company that actually made the asbestos is most likely bankrupt and out of business now.

There are finite resources in these trusts, and we owe it to our servicemembers and to future victims of asbestosis or mesothelioma to make sure there is money there to take care of their medical bills and compensate them for the injuries. That is the purpose of the FACT Act portion of this bill.

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

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

I am going to have to beg to differ with my colleague from across the aisle.

Fraud has been documented in news reports, State court cases, and in testimony before the Judiciary Committee.

The Wall Street Journal conducted an investigation that found thousands of dispiritedly filed claims. Court documents in many States, including Delaware, Louisiana, Maryland, New York, Ohio, Oklahoma, and Virginia, attest to widespread fraud. Most recently, a bankruptcy case in North Carolina uncovered a startling number of dispiritedly filed claims.

Additionally, the Judiciary Committee heard testimony over the course of four hearings about the FACT Act, during which witnesses repeatedly testified that fraud existed within the asbestos trust bankruptcy situation. Keep in mind that the fraud reported today has been in spite of the lack of disclosure that exists.

Consistent with other multimillion-dollar compensation programs, there is fraud occurring in the asbestos trust system, and the FACT Act will go a long way to uncovering that fraud. The FACT Act is designed to provide the minimum amount of transparency necessary to prevent this fraud while protecting the personal information of those victims of asbestos.

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

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

I want to address the fact that there have been numerous hearings on the FACT Act and the problems associated with it. There was one hearing before the Judiciary Committee on the Constitution on September 9, 2011. There were three legislative hearings before the Subcommittee on Regulatory Reform, Commercial, and Antitrust Law, one during the 112th Congress, one during the 113th Congress, and one during the 114th Congress. I am sure the gentleman's staff could have gotten him copies of those.

I also point out that the minority used these opportunities to call witnesses that were representatives of the plaintiffs' asbestos trial bar. They called the attorneys to voice their concern about the bill, not the victims. In fact, the minority called the same witness for three out of the four hearings. Now they claim that asbestos victims were never provided an opportunity to testify.

The Judiciary Committee has provided ample opportunity to include asbestos victims' views on the legislation in the record, and there are many letters and statements from victims in the record.

In closing, I do want to say--going back to the class action part of this bill for a second only--that only the tiniest fraction of consumers in class actions bother to claim the compensation awarded them in the settlement. That is clear proof that the vastly large number of class members are satisfied with the products they have purchased, don't want compensation, and don't want to be lumped into a gigantic class action lawsuit.

Federal judges are crying out for Congress to reform the class action system, which currently allows trial lawyers to fill classes with hundreds and thousands of meritorious claims and use those artificially inflated classes to force defendants to settle the case.

As I recounted, class action settlements have left lawyers with millions of dollars while victims receive absolutely nothing or a coupon, at best. The bill prevents people from being forced into class actions with other uninjured or minimally injured members only to have the compensation of injured parties reduced. It requires that lawyer fees be limited to a reasonable percentage of the money injured victims actually receive. I urge my colleagues to support the bill.

I also want to talk a second about the FACT Act. We hear these stories about these corporations that did all of this wrong. Many of them are bankrupt, and the only money available to the victims are the money that has been set aside in these asbestos trust funds. When an unscrupulous attorney makes a claim against multiple trusts or files claims in Federal court and State court, it is difficult, if not impossible, to find out if that claim has already been made. The FACT Act makes that easily available while providing privacy necessary to protect the victims.

The FACT Act is designed to protect the future victims and make sure there is money there for the children, for the veterans, for the hardworking Americans who are injured by asbestos but whose symptoms have not yet manifested. Sometimes these asbestos-related diseases take decades to show up, and there needs to be money there to take care of those folks. That is what this legislation is intending to do, not to protect corporations.

I urge my colleagues to support this bill that provides much-needed reform to the class action system and to the asbestos trust system.

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

Mr. Chairman, I claim the time in opposition to the amendment.

Mr. Chairman, the FACT Act is designed to require increased transparency to combat fraud committed against asbestos trusts. This amendment strikes the requirement that asbestos trusts publish the very data that is necessary to detect fraud between the trusts and State tort proceedings. In its place, this amendment calls for only a quarterly report with an aggregate list of demands received by the trusts.

The simple aggregation of information is worthless in allowing parties to make a meaningful inquiry into whether or not they are being defrauded. This amendment guts the bill, and I urge opposition.

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

Mr. Chairman, the FACT Act requires that a very basic amount of information be released to protect against fraud against the asbestos trust system. I am standing with future victims of asbestos.

The diseases associated with asbestos typically don't manifest themselves for decades, in some cases, beyond or after exposure. These trusts are being drained by fraudulent and duplicative claims. These requirements of disclosure prevent that fraud by requiring the minimal amount of information being required. In fact, a judge with 29 years of bench experience testified before the Committee on the Judiciary that the FACT Act provides more protection in terms of confidentiality of records than the legal system is able to do.

This is commonsense legislation, does not invade people's privacy, and preserves these trust funds to make sure all victims are compensated. Mr. Chairman, I urge my colleagues to oppose the Jackson Lee amendment.

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

Mr. Chairman, this amendment would prevent asbestos trusts from disclosing claims information submitted by individuals living in public housing in its quarterly reports and in response to information requests.

There is no reason to distinguish between the disclosure obligations of individuals living in public housing and the disclosure obligations of ordinary citizens. To the extent that claimants do not affirmatively identify themselves as living in public housing, this amendment would require asbestos trusts to determine whether claimants qualify in these categories, further draining them of funds needed to compensate future victims.

The FACT Act balances the need for transparency and protecting claimants' privacy. The FACT Act excludes any confidential medical records and the claimants' Social Security numbers. We should ensure that bankruptcy asbestos claims are processed in an open, fair, and transparent method in order to protect the limited amount of money reserved for compensating future asbestos victims.

The FACT Act should apply uniformly to all claimants, and it should not impose disparate burdens relating to individuals living in public housing.

Mr. Chairman, for that reason, I urge my colleagues to oppose the amendment, and I yield back the balance of my time.