Madam President, I want to take some time to describe what was a very lengthy and worthwhile effort some 10 months ago to come up with a compromise proposal which is the substance of S. 2062, the legislation now before the Senate. I will…
Madam President, I want to take some time to describe what was a very lengthy and worthwhile effort some 10 months ago to come up with a compromise proposal which is the substance of S. 2062, the legislation now before the Senate. I will do that in a moment.
Before doing so, I want to express my great disappointment at the process which the majority Leader has chosen. As my colleagues know, we worked very hard last October and November trying to come up with a compromise to give the class action reform bill an opportunity for consideration before the Senate. It is now the middle of July. In fact, this bill initially was to be brought up as the first item of business in January. For one reason or another, over the past number of months, this bill has not been brought forward until now.
I regret that deeply. Having served here for over a quarter of a century, I know that in a Presidential election year, the likelihood of getting something done becomes less and less. So those who set the agenda have to bear some responsibility, in a sense, for the situation we now find ourselves in procedurally.
Having worked on this very hard for a long time, and now finding myself in a situation where we are being told at this hour that the only amendments we can consider are ones that will be approved by the majority, is highly offensive to me and it ought be to any Member of this body.
This measure is very important. There are a lot of other important measures that the Senator from Massachusetts mentioned, all of which I support and with which I agree. But in this legislative body that the Framers founded some 220 years ago, the idea that we are not going to even agree to a process that would allow for a limited number of germane and nongermane amendments to be offered, is to in effect deny the Senate the opportunity to work its will.
Even before a single amendment has been offered, the Majority Leader has decided to fill up the amendment tree. In effect, he has precluded all Senators from offering amendments unless he deems them worthy to be offered. That includes, of course, Republican Senators as well as Democratic Senators. I also add that the Majority Leader has done this without any basis. As I have said, not a single amendment has yet been offered. This tactic is like a doctor prescribing a remedy for a perfectly healthy patient.
Last evening, I looked at the number of amendments filed. There were some 13 amendments filed. Most of them are germane amendments. There were several nongermane amendments. The Democratic leader offered a proposal of 10 germane amendments and 5 nongermane amendments on either side, with time limits. I am quite confident the authors would be willing to agree to a time agreement. I suspect that with a universe of 30 amendments, about half of them maybe would fall even before being offered. But the idea that we could not set parameters around the consideration of a bill this important I find rather breathtaking. After all, this how the Senate operates.
I floor managed with the Senator from Texas a number of years ago the securities litigation reform bill, which was another so-called tort reform bill. We spent 11 days on the floor of the Senate. Numerous amendments were offered to that piece of legislation. The then-majority leader, Senator Dole, threatened on a couple of occasions to file a cloture motion but never did. He allowed the Senate to work its will on that legislation. That is what ought to be done here as well. The fact that there has been an offer to limit the amount of time and the number of amendments ought to be embraced by the Majority Leader, not rejected by him.
I am a cosponsor of this bill and I care about it. If I am going to be confronted with voting on cloture Friday and cutting off debate, then take me off the bill right now. If you want to kill the bill, you can do it today, if that is the intention of the majority. I spent almost a year helping to write this bill, but I will not stand here today and deny Members of this body, under limited time agreements, to offer some ideas that the Senate can either accept or reject and move forward.
This is an important piece of legislation, but it is not so important to this
Member that we would deny this institution the right to be able to do its business under the rules and procedures that have been provided for more than two centuries ago.
Obviously, there are problems. Some of these nongermane amendments may be adopted. Maybe germane amendments would be adopted that would cause some of us not to be able to support the bill. That is the risk you run in a legislative body. There are 100 of us, as coequals, who have the right to offer our ideas to legislation. Unlike in the other body down the corridor, nongermane amendments can be offered in the Senate. That is how the Senate functions.
There is a risk, obviously, that this bill will get complicated. But the idea that we are going to shut off the possibility of these ideas being offered ought to be offensive to every Member, even those who support the legislation. If it can happen here, it can happen on a bill you support or oppose for one reason or another.
I am terribly disappointed that I am looking at a procedural situation that I warned about, which is that if you didn't provide adequate time for Members to be able to offer amendments--even amendments not particularly helpful in the eyes of some of my colleagues--you run the risk of undercutting the legislation. Maybe that is what the majority wants to do anyway, on the assumption that those groups outside who support the underlying bill will blame those of us who are willing to shut down the debate and, if not, give us an opportunity to let the Senate work its will. That is a false hope. I believe people are much smarter than that. They understand that if you don't let the Senate work its will, even under time constraints and amendments that are being limited in number, you do a great bit of damage to this institution.
It is late in the year, but I believe we have a good bill here. I want to describe it briefly, if I may. We have worked on an excellent compromise that a majority of colleagues here can support.
First of all, I am a very strong supporter of class action as a procedural device. Class action lawsuits have provided individuals of modest means the ability to band together to achieve systemic change when they could not have done so individually. In fact, important legal developments in such areas as civil rights, sex discrimination, and environmental protection have been the result of class action lawsuits.
But there is considerable evidence from courthouses across the country that class actions are being abused. Procedural rules that are designed to decide fair and just outcomes for individual plaintiffs and defendants are not being followed in too many cases. As a result, the class action system is not working, in my view, the way it was intended, and justice is not being served.
Madam President, I am also one who has supported and opposed various tort reform measures. I suggest that what we are talking about here is more court reform than tort reform.
For example, I opposed medical malpractice reform, not because I don't think we ought to do something about it, but it was a poorly crafted bill.
I also opposed liability protection for gunmakers. By the way, most manufacturers of firearms reside in my State, but the idea that we are going to exclude an entire industry from litigation was highly offensive to me.
I opposed liability protection for manufacturers of the so-called MTBE, which pollutes ground water. I supported a patient's right to sue their HMOs and insurance companies, which are a major industry in my State. Obviously, I helped write and helped to support the securities litigation reform, uniform standards, Y2K legislation, and the terrorism insurance bill.
So I don't fall into a category here of being for whatever is titled ``tort reform,'' supporting it or opposing it. I have a record that I believe is one of balance and support of those ideas and efforts that truly were designed to try to improve a litigation system. That is the background of my own voting record.
I will give you a history in terms of this compromise. On October 22 of last year, the Majority Leader sought to proceed to an earlier class action measure, S. 1751. The vote on that motion to proceed was 59 to 39, which is 1 vote short of the required number to invoke cloture.
At the time of that legislation, I voted no on invoking cloture, and I did so with some reluctance. I noted that, while I supported some reform of class action procedures, I could not support S. 1751. I also expressed concern about whether there would be any meaningful opportunity for Senators to negotiate changes in that bill in a bipartisan fashion.
I told colleagues in October of last year that reaching an agreement on class action reform required us to roll up our sleeves to get it done. Many long hours of painstaking negotiations were ahead of us. As an author of the securities litigation reform bill, the uniform standards legislation, terrorism insurance, and the Y2K bill, I know that principled compromise could be reached on class action reform as well.
I argued at the time, and my sentiment still holds true today, that ``the American people deserve better. We are not working together as often as we should on critical questions. If we do not do it, then we do a great disservice to the American people.''
Subsequent to the vote in October 2003, I joined with three of my colleagues in sending a letter to the Majority Leader on November 14. In that letter, we outlined the specific policies that we believed needed to be addressed in a class action bill that would garner the necessary votes to pass in this body.
In November of last year, Senators Schumer, Landrieu, and I entered into discussions with Senators Frist, Hatch, and Grassley. Those negotiations resulted in the compromise that is before us today.
I do believe this legislation is a significant improvement over the earlier bill considered by the Senate last year. When Senator Schumer, Landrieu, and I sent our letter to the Majority Leader, we asked for five changes in that legislation:
No. 1, we wanted to ensure that the jurisdictional provisions keep truly local cases in State courts.
No. 2, we wanted provisions on mass tort actions to be as precise as possible.
No. 3, we wanted to prevent the potential for repeated removal and remand between State and Federal courts, the so-called ``merry-go-round effect.''
No. 4, we wanted to provide appropriate compensation to those plaintiffs who take the risk of coming forward.
And No. 5, we wanted stronger provisions on abusive coupon settlements.
We got those changes and more. In fact, we asked for those 5 changes, and yet we got 12 improvements to the bill as originally proposed.
I am pleased to say that the compromise we reached last year is a measured, bipartisan response that fixes many aspects of our broken class action system. In addition, it strikes the appropriate balance between protecting Americans' access to the courthouse while ridding the class action system of its most egregious abuses.
I want to emphasize at the outset that this bill is a fragile, carefully-crafted compromise. There are some who will argue the bill goes too far, and others will tell you it does not go far enough. I happen to believe it achieves the right balance. It may not be perfect, but I think it is a good balance overall.
Having entered into a good-faith agreement with my colleagues on both sides of the aisle, I want to see the compromise preserved both on the Senate floor and in conference. No statement has been made by the Democratic leader that he is opposing the appointment of conferees on this bill. Part of the agreement was that the compromise we reached in the Senate would be the one approved by the House in conference. If that was not the case, then those of us who agreed vote on the motion to proceed would reserve the right to filibuster the conference report. We certainly continue to hold that view.
S. 2062 reforms the current class action system in a number of meaningful ways. Let me go through them if I can rather quickly.
First, it addresses the issue of coupon settlements which constitutes one of the greatest abuses in our courthouses today. Here the plaintiffs receive coupons, or a token payment, for a discount off their next purchase while
their attorneys pocket millions of dollars in fees.
It is not only the plaintiff attorneys who benefit from these coupon settlements, but the defendants benefit as well. For example, the average redemption rate in a settlement involving food and beverage coupons have been between 2 and 6 percent. As a result, the purpose of these coupon settlements has changed. They no longer serve class members but defendant and plaintiff attorneys instead.
The original class action bill brought to the Senate last year in October only provided for greater judicial scrutiny of such coupon settlements. Senators on the Judiciary Committee who opposed the bill rightly argued that ``reforms with real teeth were needed to end worthless coupon settlements in class action cases.''
We agreed with their view. The compromise does a much improved job of reining in these coupon settlements by pegging the lawyers' fees to the value of the coupons actually redeemed by class members or on the reasonable value of the legal work actually performed by the counsel in the litigation. As a result, there will be a strong incentive to resist easy settlements and fight for an outcome that is truly fair and equitable to the plaintiffs.
Another important consumer protection enshrined in the compromise bill concerns the payment of so-called bounties. The earlier legislation included a provision that prohibited settlements that allow one member of a plaintiff class from receiving a higher settlement award than other members of that class.
On its face, such a provision might seem innocuous. After all, it appears to confirm the notion that all plaintiffs should be treated equally and fairly. However, the bounties provision in the original bill would have unintentionally created a significant problem. While it makes sense for all plaintiffs' class members to be treated equally in many cases, in some other instances it is more appropriate for some class members, particularly class representatives, to receive larger awards than others in the same class. For example, in a class action designed to prevent the wrongful discharge of employees, it would be appropriate for those who have already been fired, for instance, to receive larger settlements than those who are merely threatened with being fired.
Furthermore, in many cases, the named plaintiffs--the people whose names appear on the papers filed with the court--are subjected to harassment, angry phone calls, hate mail, even death threats. Anybody who has seen Julia Roberts' movie ``Erin Brockovich'' or the earlier Meryl Streep movie about the life and death of Karen Silkwood will recall that being a named plaintiff in a lawsuit against a company that employs many people can be a very unpopular thing to do. It often takes courage to stand up for what one believes is right, and unfortunately those who have the courage to do the right thing are sometimes attacked, ridiculed, and ostracized.
If the bounty provision in the earlier bill were to have remained in the compromise, it would have simply stripped away any incentive for individuals to come forward and protect the rights of the class. Under current Federal law, a class representative in a successful class action can be rewarded for taking the initiative to fight unlawful discrimination. Most class members choose to sit on the sidelines and reap the benefits of the case when it is finished. Class representatives, on the other hand, take an active role in their cases, and they do so not only for themselves but to obtain justice for others in similar situations. Under the earlier bill, the courts would not have been able to recognize the special efforts or contributions made by class representatives.
We have listened to the civil rights community which was strongly opposed to the bounties provision in the original bill. The compromise deletes this provision, which will ensure that the courtroom doors remain open for those plaintiffs willing to serve as class representatives.
The compromise bill also responds to the concerns of the Federal Judicial Conference and others about the class settlement notice provisions in the earlier measure. The provision in the original legislation was intended to provide clear and simpler notices to class members regarding proposed class settlements. However, we heard from the Federal Judicial Conference that the notice requirements, while well intentioned, would have actually been too burdensome and too complicated to implement.
According to the Judicial Conference Rules Committee, these notice requirements would have ``undermined the bill's stated objectives by requiring notices so elaborate that most class members [would] not even attempt to read them.'' In addition, they would have conflicted with the December 1, 2003 amendments to Rule 23 of the Federal Rules of Civil Procedure, which are similarly intended to guide the form and content of settlement and certification notices provided to class members. The compromise, therefore, deletes the confusing notice provisions in the earlier bill and simply enacts the recommendations of the Judicial Conference. Yet another compromise in this legislation.
At the very heart of the compromise are provisions concerning when interstate class actions can be removed to Federal court. Under Article III of the U.S. Constitution, out-of-State litigants are protected against the possibility of prejudice of local courts by allowing for Federal diversity jurisdiction when the plaintiffs and the defendants are from different States.
Title 28, section 1332(a) of the United States Code specifies the current requirements that must be met for an out-of-State litigant to claim Federal diversity jurisdiction and have his or her case heard by a Federal court. First, every member of the class must be seeking damages in excess of $75,000, including interest and costs. Second, there must be complete diversity; that is, every named member of the class must be a citizen of a different State than every defendant in the same litigation.
Walter Dellinger, the former Solicitor General during the Clinton administration, noted that when Congress first drafted the diversity jurisdiction statute, the class action system as we know it today did not exist at all. In the years since its enactment, however, the law has been interpreted to exclude most nationwide class actions from Federal court.
For example, Dellinger remarks that the requirement for complete diversity can easily be avoided by the simple expedient of including at least one named plaintiff and defendant that share a common State citizenship.
With regard to the amount in controversy requirement, Mr. Dellinger contends that a class action can easily be configured to ensure that at least one class member does not satisfy the minimum amount, or by seeking $74,999 in recovery on behalf of each and every plaintiff and class member.
As a result, attorneys bringing class actions can manage to avoid Federal court all together, and have the case tried in a State court, often in the county of their choosing, even though the total amount at stake might exceed hundreds of millions of dollars and have true multi- State national implications. This practice is commonly known as ``forum-shopping.'' While it is in concept a long-standing part of our law, it has become a growing problem in the United States.
Under S. 2062, the bill now before us, the current rules for diversity jurisdiction are carefully adjusted so that certain large multiparty cases, namely, those that are truly nationwide in scope, affecting many or even all States at once, will be litigated in the Federal courts rather than in the courts of just one State or county. In other words, the compromise would bring the class action process closer to the Framers' intent by allowing cases that are multi-State or national in scope, where the risk of local biases are the greatest, to be heard in Federal court and not in State court.
Specifically, the Federal district court will have original jurisdiction over any class action with more than 100 members if the following two requirements are met. First, the aggregate claims must exceed $5 million, rather than each and every class member must exceed $75,000 in alleged damages. Second, rather than requiring every member of a class be a citizen of a different State than every defendant, S. 2062 allows for Federal jurisdiction if any class member is a citizen from a
different State from any defendant. Again, the purpose of these changes is to ensure that more substantial multi-State class actions are heard in Federal court.
Could I finish? I only have a limited amount of time, and I apologize, and I will get through this statement.
These moderate changes to the Federal diversity statute were included in the original legislation that came before the Senate last October. Under the compromise, however, we further refine these provisions to address two important concerns that were not fully taken into account in the earlier bill. I want to especially commend Senator Feinstein of California for her leadership in helping to clarify these issues, both during the Senate Judiciary Committee's consideration of the earlier measure and in the discussions that led to this compromise.
First, the compromise responds to concerns that the original bill did not adequately address the handful of small, rural State courts that have increasingly become a magnet for more and more nationwide class actions. Such ``magnet jurisdictions'' have tended to have lax class certification requirements, and have been less than rigorous in reviewing proposed settlements. In fact, one of the most flagrant abuses of the current class action system occurs when lawyers ``forum shop'' that is, invent an injured class and then file a national class action in a ``magnet jurisdiction'' where the judges are more likely to lend a sympathetic ear.
Perhaps the most famous of these so-called ``magnet jurisdictions'' is Madison County, IL. According to a 2001 study in the Harvard Journal of Law and Public Policy, the per capita rate of class action filings was almost twice that of the second-ranking jurisdiction in the United States. In recent years, the study found that class action filings in Madison County increased by 1,850 percent during the period between 1998 and 2001.
Although the population of Madison County is only 250,000, it ranks third nationwide in the number of class actions filed each year, behind only Los Angeles County, CA and Cook County, IL.
I am limited on time, I say to my colleague. When I get through this, I will be glad to respond.
I will come back to the Senator.
Even more astounding is the data reported in the January 11, 2004 St. Louis Post-Dispatch, which discovered that in anticipation of Congress reforming class action procedures, the number of class actions filed in Madison County Circuit Court rose to an all-time high.
Yet it is not only the sheer numbers of filings in Madison County that is so astonishing. What is so surprising is that many of these class actions have little connection to the county. In fact, sometimes only a few class members actually came from that particular jurisdiction. Even the Illinois Supreme Court has noted the congested dockets in this court and declared ``the congestion is aggravated by the presence of [nonresident] cases that have little or no connection to Madison County.''
For example, a recent case that found its way to Madison County involved a purported class action on behalf of 30 million customers who claimed to be injured by Sears in connection with an allegedly deceptive tire balancing service. Only one plaintiff, a Madison County resident, was named, and only one Sears automotive repair shop was actually located in Madison County. The class action, however, sought to certify a nationwide class, allegedly subject to the Illinois Consumer Fraud Act, despite the fact that the vast majority of class members and the vast majority of Sears locations have no connection to Illinois at all, much less to Madison County.
Madison County has especially been a magnet for asbestos cases. In fact, Madison County led the Nation 2 years ago in the number of mesothelioma cases filed. In most of these cases, however, the plaintiffs did not live in Madison County, were not exposed to asbestos in Madison County, and were not treated for any asbestos-related illnesses in Madison County.
For example, in a recently decided case, an Indiana resident claimed that he was exposed to asbestos at the U.S. Steel plant in Gary, IN. He sued U.S. Steel, which is based in Pennsylvania, in Madison County. Despite the total lack of connection to the local forum, the case proceeded to trial and a Madison County jury awarded him $50 million in compensatory damages and $200 million in punitive damages.
Clearly, such practices need to be curtailed in any meaningful reform of the class action system.
Again, I emphasize I am a strong supporter of class action. Class action litigation is critically important, but when these things get out of control, then we have to get them back on track again.
There are many more examples of national class actions implicating hundreds of millions if not billions of dollars being decided by Madison County judges because of its reputation as a magnet court. That means that the laws of Madison County, Illinois on everything from insurance policy to consumer fraud to environmental protection are being imposed on the residents of the other 49 states, despite the fact that many of those States have adopted different legal views.
The compromise bill specifically addresses this serious problem. It includes language not in the earlier bill to clarify when a Federal court can exercise its jurisdiction if between one-third and two-thirds of the proposed class members and all primary defendants are citizens of the same State.
Specifically, the compromise authorizes Federal courts to consider any ``distinct nexus'' or connection between the forum where the action was brought and the class members, the alleged harm, or the defendants. The purpose of this provision is to require Federal judges to consider whether the interstate class action has any relationship to the jurisdiction where it is brought. If there were no such connections, as in the case of many of the class actions filed in Madison County, the Federal judge would then have the discretion of moving the case to Federal court. Such a provision would therefore rein in the blatant forum shopping that is so prevalent in Madison County and other magnet jurisdictions today.
The other improvement to the Federal diversity statute that the compromise bill makes concerns the so-called ``local class action exception.'' The purpose of this exception is to ensure that State courts can adjudicate class actions that are truly local in nature, and they should have that right.
Under the original bill, Federal jurisdiction would not have been extended to those cases in which two-thirds or more of the members of the plaintiff class and the primary defendants were citizens of the State in which the suit was filed. Such cases would have remained in State court, since virtually all of the parties in such cases would have been local, and local interests therefore presumably would have predominated.
There were concerns raised in the earlier bill, however, that class actions with a truly local focus may be moved to Federal court because of the presence of an out-of-State defendant necessary to prosecuting the action.
The compromise responds to these concerns by further refining the criteria as to when a class action is to remain in State court. First, under our proposal, there must be a primarily local class--that is, more than two-thirds of the class members should be citizens of the forum State. Second, there must be at least one real local defendant. Third, the principal injuries resulting from the alleged conduct or related conduct of all of the defendants must have occurred in the forum State. Finally, there must be no other class actions having been filed in the previous 3 years based on the same or similar allegations against any of the defendants. Again, these provisions respect State sovereignty by ensuring that class actions of a truly local nature are kept at the State level, while complex class actions with nationwide implications are heard in Federal courts.
I want to briefly respond to some of the concerns raised about the jurisdictional provisions in the bill. Critics of
this legislation have claimed that the measure would sweep most if not all State class actions into Federal court, where overburdened and unsympathetic judges would let them wither and die.
I believe that such concerns are largely misplaced. First, as I noted earlier, we included provisions in the compromise to ensure that State prerogatives are respected. These provisions--namely, the ``local class action exception'' and the ``distinct nexus'' language--are intended to keep truly local cases in State court.
In fact, the compromise leaves in State court a wide range of class actions, such as those in which all the plaintiffs and defendants are residents of the same State; those with fewer than 100 plaintiffs; those involving less than $5 million; those in which a State government entity is the primary defendant; those brought against a company in its home State in which two-thirds or more of the class members are also residents of that State; and shareholder class actions alleging breaches of fiduciary duty.
What the compromise does target for Federal jurisdiction, however, are those nationwide or multistate class actions that are filed in magnet courts such as Madison County, IL. While I respect the views of those who assert that State courts are appropriate forums for such cases, I must respectfully disagree. In my view, such large, multistate or nationwide class actions are precisely the kinds of cases that are most appropriately tried in Federal court. I believe that the provisions we included in the compromise are quite discriminating about which class actions will be removed to Federal court and which will remain in State court.
Second, critics of the legislation have argued that Federal courts are so overburdened that they do not have the resources to handle class actions formerly assigned to State court judges. Again, these concerns are unfounded. The real workload issues are not in the Federal courts but in the State courts, where the average State court judge is assigned three times as many cases as his or her Federal counterparts. According to the Court Statistics Project, State court judges are assigned over 1,500 new cases each year. In contrast, the Administrative Office of the United States Courts finds that each Federal court judge was assigned an average of 518 new cases during the 12-month period ending September 30, 2002.
Third, I also want to be perfectly clear on one further matter. There is absolutely nothing in this legislation that would alter any individual's right to seek redress for his or her injury. It does not grant defendants any new defense. Consumers can bring the same exact claims as they are bringing now. Civil rights, environmental, and employment claims are in no way precluded. The only issue that this bill would address is whether it is more appropriate for a State or Federal court to adjudicate those same rights, and I believe that we have struck the appropriate balance in making this determination.
I want to now return to the other provisions in the compromise that represent significant improvements over the earlier legislation.
We have clarified the date when the plaintiff class could be measured. The compromise makes clear that citizenship of the proposed class members is to be determined on the date plaintiffs filed the original complaint. If there is no Federal jurisdiction over the first complaint, however, citizenship is to be determined when plaintiffs serve an amended complaint or other paper indicating the existence of Federal jurisdiction.
The original bill had been silent on when class composition could be measured, which caused some concern that a court would have to constantly reconsider jurisdiction as the contours of the class changed. I believe that the compromise has adequately addressed this matter, and has provided much needed clarity to determining class composition.
Another provision in the earlier bill that caused great difficulty would have required Federal courts to dismiss class actions if the court determined that the case did not meet Rule 23 requirements. The bill provided that the class action complaint may be amended and refiled in State court, but that the new complaint would be subject to removal again if it met Federal jurisdictional requirements. Thus, even if a State court subsequently certifies the class, it could be removed again and again, creating a judicial merry-go-round between Federal and State court.
The compromise stops the merry-go-round altogether. It eliminates the dismissal requirement, giving Federal courts discretion to handle Rule 23-ineligible cases appropriately. Potentially meritorious suits will therefore not be automatically dismissed simply because they fail to comply with the class certification requirements of Rule 23.
The original bill would have also allowed the removal of a case at any time to Federal court even if all other class members wanted the case to remain in State court. In June 2003, 106 professors of constitutional law and civil procedure wrote to Majority Leader Frist and Minority Leader Daschle expressing their concerns over this provision. They argued that:
[It] would give a defendant the power to yank a case away
from a state-court judge who has properly issued pretrial
rulings the defendant does not like, and would encourage a
level of forum-shopping never before seen in this country.
Moreover, this provision would allow an unscrupulous
defendant, anxious to put off the day of judgment so that
more assets can be hidden, to remove a case on the eve of a
state-court trial, resulting in an automatic delay of months
or even years before the case can be tried in Federal courts.
We listened to the concerns of the law professors and deleted the provision in the original bill allowing plaintiffs to remove class actions. We also retain current law permitting individual plaintiffs from opting out of class actions. The compromise would therefore make a real difference in curbing abuse of the removal process by various counsel.
Two further improvements in the compromise are also worth mentioning.
First, we responded to concerns that the ``mass actions'' provisions in the original legislation were too broad. The earlier bill would have treated all mass actions involving over 100 claimants as if they were class actions.
Under the compromise, only more substantial claims in a mass action-- namely, those that would meet the normal jurisdictional amount requirement of $75,000 for individual actions--will be subject to Federal jurisdiction.
In addition, we change the ``single sudden accident'' exception to exclude from Federal jurisdiction mass actions in which all claims arise from an ``event or occurrence'' that happened in the State where the action was filed and that allegedly resulted in injuries in that State or in a contiguous State. The purpose of this change is to allow a much broader range of truly local cases to remain in State courts.
The compromise also clarifies that there is no Federal jurisdiction under the mass action provision for claims that have been consolidated for pretrial purposes.
Second, the original bill would have allowed defendants to seek unlimited appellate review of Federal court orders remanding cases to State courts. If a defendant requested an appeal, the Federal courts would have been required to hear the appeal and the appeals would have taken months or even years to complete.
The compromise would obviate the potential for workload problems and long delays in two important ways. First, it would give the appellate courts the discretion to conduct reviews at their discretion. Presumably, Federal courts would refuse to hear an appeal unless it presented novel issues or where a district court has clearly abused its discretion. Second, it requires such appeals to be heard on an expedited basis by establishing tight deadlines for completion of any appeals so that no case can be delayed more than 77 days, unless all parties agree to a longer extension.
Finally, the compromise is in no way retroactive--that is, it will not upset or alter in any way cases filed before enactment, should in fact the bill be signed into law. Unlike other litigation reform bills considered by this Congress on guns, medical malpractice, and MTBE, the compromise does not shut the courtroom door on anyone. Instead, it will just direct them to a Federal rather than a State courthouse.
These changes I have discussed represent a fair and a balanced compromise. They constitute a significant improvement over the earlier class action reform legislation brought before the Senate last October.
I want to reemphasize my long-held view that a strong class action system can ultimately serve as a force for good. It can be used to hold companies accountable for significant violations that may result in a small monetary charge for one victim. It can also be harnessed to allow large groups to seek redress for civil rights and other harms where they could not have done so individually. In short, the class action system is the great equalizer in the American judicial system.
Yet nobody can deny that the class action system is being seriously abused. As The Washington Post editorialized last year:
No area of the United States civil justice system cries out
more urgently for reform than the high stakes extortion
racket of class actions.
In addition, an excellent Newsweek article published last December entitled ``Lawsuit Hell: How Fear of Litigation is Paralyzing our Professions'' noted that such lawsuits are:
. . . changing and complicating the lives of millions of
American professionals in ways that confound common sense and
cast a shadow over a system that can, at its best, offer
people relief and redress from legitimate grievances.
Even former Solicitor General Walter Dellinger commented that such evidence of class action abuses in State and county courthouses:
. . . gives me great concern that the rights of truly injured
individual plaintiffs, as well as the rights of corporate
defendants, have fallen victim to manipulation, and even
evasion, of settled rules--rules that, no less than financial
disclosure laws, are intended to ensure openness and
accountability, as well as fundamental fairness, in the
judicial resolution of major disputes with national
consequences.
Ultimately, the real losers of a broken class action system are not businesses or consumers. Rather, it is the American public's overall confidence in the legal system that will suffer unless a sensible class action reform package, such as that contained in the compromise, is enacted into law.
Bipartisan legislation addressing the class action system's most egregious abuses is long overdue. This carefully balanced compromise that is now before the Senate will make a real difference in reducing the abuse and manipulation of the class action system. It would restore class actions to their original noble purpose as a force for positive change in society, and I urge my colleagues not to let this golden opportunity be squandered.
I know time is getting short. My colleague from Illinois was here, and he would like to be heard on this matter.
Let me return to where I started. I spent a lot of time on this measure. I think we have written a very good bill. I would not claim that this bill is perfect. There are some colleagues who fundamentally disagree with me on this issue, and I respect their views.
What I cannot tolerate, however, is the procedure under which this bill is going to be considered. I say to my friends on the other side of the aisle with whom I worked very closely, if you constrain this institution's ability to offer either nongermane or germane amendments to this bill, then this Senator will not be able to support the motion to invoke cloture.
We failed to invoke cloture by only one vote last October. Although I care about this bill very much, I care far more about the Senate and how we do our business. It is going to disappoint me terribly to have to vote against cloture. But if you constrain the ability of Members of this body to offer specific amendments, then this Senator is going to have to wait for another day to fully consider this measure.
There are many people across this country who believe we put together a good compromise, but I am not going to vote for a compromise that doesn't allow the Senate to work its will on this important matter.
I realize my time has expired.
I am.
Madam President, before he leaves the Senate floor, I commend my colleague from Ohio for his excellent statement.
I agree with him that this is an important piece of legislation. I have spent a good part of a year, along with
my good friend and colleague from Delaware, and others--the Senator from California, Mrs. Feinstein, the Senator from Wisconsin, Mr. Kohl, and the Senator from New York, Mr. Schumer--working to try to put together a responsible bill on class action reform. We have done that with this proposal.
I regret the fact that nearly eight months after we forged a compromise on class action reform, we have just begun to deal with this issue. I had hoped the legislation would have come up earlier in the year when there would have been more time available to consider it.
I was pointing out to my colleagues earlier, as someone who managed and wrote the securities litigation reform bill, that we spent almost 3 weeks on the floor of the Senate debating that bill. At the time, Bob Dole was the majority leader of the Senate. We had countless amendments that were offered, both relevant and nonrelevant amendments. Never once was cloture invoked. Never once did someone fill up the amendment tree so as to limit who could offer what amendments. You didn't have to get permission, in effect, to offer your amendment. It was a contentious debate from time to time, but ultimately the will of the Senate prevailed. The legislation was adopted.
But I also point out, interestingly, the securities litigation reform was the only bill that President Clinton vetoed that was ultimately overridden by both the House and the Senate. It became the law of land.
It was a lengthy process, but it was a good process. I think the debate was healthy. It was complicated, but nonetheless I believe the legislation ultimately proved to be worthwhile.
I cite that example because here we are now in a situation where before any amendments were offered--and we went on this bill almost 24 hours ago--we were told last night by the majority there would be no votes last evening. We have been in session since about 9 o'clock this morning. There have been no amendments offered one way or the other because we have an amendment tree that is filled up, and you must get permission to bring up an amendment.
Madam President, this is the U.S. Senate. I have served here for a quarter of a century and I have rarely seen this kind of procedural tactic being used on a bill that enjoys a strong majority of support. I believe we have at least some 62 supporters of this bill. The idea that we are not going to allow amendments to be brought up unless approved by the majority runs counter to everything this institution stands for.
Now I know that some of these nongermane amendments are uncomfortable. There are people who are against them, although in several instances they have strong bipartisan support. For example, the legislation dealing with immigration reform has been offered by Senator Craig of Idaho and Senator Kennedy of Massachusetts. Also the reimportation issue on drugs. I will be the first to admit it, but I think an overwhelming majority of our colleagues are either cosponsoring or supporting that legislation. Even in the other areas, we have had a limited amount of time to bring up some of these issues.
But I believe we can get time agreements on some of these amendments if we stay in today, if we stay in tomorrow, if we stay in Friday, if we work longer hours, and if we come back on Monday or Tuesday. I believe we could adopt this important legislation, and we would either accept or reject a number of these other nongermane amendments. But to go through now the second day with nothing being done on a bill that many would argue is one of the most important pieces of legislation from the business community perspective is inexcusable. I want the business community to know what is happening here because I am sure the allegations are going to be made that somehow the minority is trying to stop this legislation. That is anything but the case.
We probably could have dealt with five, six, or seven amendments on the floor of the Senate today. I am told there are only 13 filed amendments on this bill. In effect, we probably could have almost concluded action on this legislation instead of stonewalling to make sure some amendments are not going to be debated and heard. We stop everything from happening so a good piece of legislation that a lot of people have worked long and hard on to get right may be denied an opportunity to be heard. That is wrong, Madam President.
Now, again, I know voting on nongermane amendments is not something we are terribly excited about here. It is the U.S. Senate though. In the U.S. Senate, we allow nongermane amendments--absent a unanimous consent agreement or filing cloture--to be considered by this body. So even before a single amendment is debated here, the majority is now invoking rules and procedures that limit the ability of this institution to be heard. I regret that deeply.
I was fearful this would happen. I am sort of mystified as to why it is happening. The majority, at least among their members, are more supportive of the class action reform bill.
There are a number of Members on this side who are supporting this legislation, but the bulk of the support comes from the majority side. I am mystified as to why the majority would not be pushing us to bring up our amendments, agree to time limits, and then vote on the amendments one way or the other and move the bill forward. But that is not the case.
So we find ourselves now at the close of business on this day. We voted on one judge yesterday, and that is it. Now we are about to go into Thursday. We will be leaving, I presume, sometime around noon on Friday and probably won't come back until next Tuesday. We have about 30 legislative days left around here to consider all matters before the elections of the fall. If my colleagues sense some frustration in this Senator's voice, it is because I am frustrated.
I regret having spent as much time on the bill only to find out in the end we can't even get amendments to be brought up to debate. Instead, we have to agree ahead of time what amendments are going to be brought up. Those rules exist in the House of Representatives. The rules of the Senate are very different. This body is the antithesis of the House of Representatives, and for good reason. That has been the way this institution has functioned for two centuries.
On important legislation such as this, to invoke House rules to apply in the Senate is unfortunate. As important as this bill is, how this institution functions, in my view, is far more important. Senators have the right to be heard. Because one day, not too distant in the future, the very Senator who today is trying to stop a debate may be the one seeking one. And so be careful what you wish for when you set precedents or establish procedures that may be repeated at times when you may find yourself on the other side of the political equation.
For all of those reasons, I am frustrated that this important bill many of us have spent a lot of time on may be close to death. We may not be able to enact it. That is unfortunate that we are getting to that point with this bill, despite all the efforts that have been made, where we may not get a chance to even debate it, much less act on it.
I hope the leadership will listen to those who want to bring up some amendments, and see if we can't work out some time agreements and move forward. If that is not the case, the idea that somehow the Senate as an institution would have to take a back seat to some procedural hurdles the majority would want to impose on the minority is not worth giving up. As important as this bill is, how the Senate operates is more important to this Senator. I will be most reluctant, but nonetheless I want my colleagues to know if it comes down to making a decision about supporting a bill I have helped write or abandoning procedures in the Senate, I will protect this institution over this bill, as much as I would like to see this bill enacted.
I am not going to sit here and support a set of procedures which deny my colleagues an opportunity to be heard. I wouldn't support an unlimited right that goes on for days with endless amendments. I know when I am being gamed. I know when I am being taken advantage of. That is not the case at this point at all, not even close to being the case.
My hope is wiser heads will prevail, that voices who care about this legislation would be heard, and that we could move to consideration of this legislation in the normal course of business,
on how we normally function when matters such as this emerge, where there is a division of thought and there are differences of opinion.
There are those who feel strongly about not adopting this legislation. I understand that. But there are also those in the majority who would like to see it adopted. To suggest somehow we are going to prohibit those who would disagree with the bill an opportunity to be heard on other matters on this legislation is a wrong set of procedures to be followed.
Despite the fact my name is on this bill and I am proud of the fact it is--I think it is a good bill and we did a good job writing this compromise--and as much as I would like to see S. 2062 become the law of the land, I am not about to turn my back on an institution that allows Members to be heard and their ideas to be debated. As important as this bill is, it is not as important as maintaining the integrity of the Senate.
I yield the floor.