Amendment Text: H.Amdt.169 — 108th Congress (2003-2004)

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Shown Here:
Amendment as Offered (06/12/2003)

This Amendment appears on page H5297 in the following article from the Congressional Record.


[Pages H5281-H5307]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   CLASS ACTION FAIRNESS ACT OF 2003

  The SPEAKER pro tempore. Pursuant to House Resolution 269 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the State of the Union for the consideration of the bill, H.R. 1115.

                              {time}  1205


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 1115) to amend the procedures that apply to consideration of 
interstate class actions to assure fairer outcomes for class members 
and defendants, to outlaw certain practices that provide inadequate 
settlements for class members, to assure that attorneys do not receive 
a disproportionate amount of settlements at the expense of class 
members, to provide for clearer and simpler information in class action 
settlement notices, to assure prompt consideration of interstate class 
actions, to amend title 28, United States Code, to allow the 
application of the principles of Federal diversity jurisdiction to 
interstate class actions, and for other purposes, with Mr. LaTourette 
in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.
  Under the rule, the gentleman from Wisconsin (Mr. Sensenbrenner) and 
the gentleman from Michigan (Mr. Conyers) each will control 30 minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. 
Sensenbrenner).
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I rise in strong support of H.R. 1115, the Class Action 
Fairness Act of 2003. In years past, the occasional news account of 
some outrageous class action verdict or settlement was light humor. Now 
the stories are so common there is no punch line, the class action 
judicial system itself has become a joke, and no one is laughing except 
the trial lawyers, all the way to the bank.
  Abuse of State class action lawsuits is now systemic and this 
mounting crisis is a threat to the integrity of our civil justice 
system and a persistent drain on the national economy. Since this House 
passed nearly identical class action reform legislation in the 107th 
Congress, a bill which died in the Democrat-controlled Senate, the 
problem has only gotten worse. One major element of the worsening 
crisis is the exponential increase in State class action cases, many of 
which deal with national issues and classes.
  In the past 10 years, State court class actions filing nationwide 
have increased over 1,000 percent. In certain ``magnet courts'' known 
for certifying even the most speculative class action suits, the 
increase in filings over the last 5 years is approaching 4,000 percent. 
Take, for example, the court in Madison County, Illinois, a rural 
county of 250,000 people which is on pace for a projected 3,650 percent 
increase in class action filings over 1998 levels. Eighty-one percent 
of those cases sought to certify nationwide cases, including all 
nationwide Sprint customers ever disconnected on a cell phone, all 
Roto-Rooter customers nationwide whose drains were repaired by 
unlicensed plumbers, and all nationwide customers who purchased a 
``limited edition'' Barbie doll at a higher price.
  So why are all these class action cases filed there? Madison County 
did not experience a similar growth in population during this time, nor 
did it suddenly become a hub for interstate commerce. Furthermore, 
there is no evidence to suggest that the good people of Madison County 
are somehow cursed or more plagued by injuries than the average 
citizen. Indeed, the only explanation for this phenomenon is aggressive 
forum shopping by trial lawyers to find courts and judges who will act 
as willing accomplices in a judicial power grab, hearing nationwide 
cases and setting policy for the entire country in a local court.
  A second major element of the present class action crisis is a system 
producing outrageous settlements that benefit only lawyers and trample 
the rights of class members. Class actions were originally created to 
efficiently address a large number of similar claims by people 
suffering small harms. Today they are too often used to efficiently 
transfer large fees to a small number of trial lawyers doing great 
harm. The present rules encourage a race to any available State 
courthouse in hopes of a rubber-stamped nationwide settlement that 
produces millions in attorneys' fees. Clearly, some trial lawyers are 
winners in this race, but as the Justice Department testified at the 
committee's last hearing, the losers in this race are the victims who 
often gain little or nothing through the settlement, yet are bound by 
it in perpetuity. These same victims and all consumers often bear the 
cost of these settlements through increased prices for goods and 
insurance.
  Mr. Chairman, I would like to share with Members a survey that was 
published in the USA Today newspaper on Monday, March 24, 2003: 
``Opinions on Class Action Lawsuits, Who Benefits the Most From Class 
Action Lawsuits.'' Forty-seven percent said lawyers for plaintiffs, 20 
percent said lawyers for companies, 12 percent said don't know, 9 
percent said plaintiffs, 7 percent said companies being sued, and 5 
percent said buyers of products.
  Two-thirds of the American public according to this survey indicate 
that the beneficiaries of class action lawsuits are lawyers and only 14 
percent said plaintiffs and buyers of products. This bill is designed 
to change this mix so that the consumers and the plaintiffs are the 
ones that benefit rather than lawyers for plaintiffs or lawyers for 
defendants.
  Summarizing the problem last November, The Washington Post editorial 
board in a critique of the present system wrote:
  ``Class actions permit almost infinite venue shopping; national class 
actions can be filed just about anywhere and are disproportionately 
brought in a handful of State courts whose judges get elected with 
lawyers' money. These judges effectively become regulators of products 
and services produced elsewhere and sold nationally. And when cases are 
settled, the clients get token payments while the lawyers get enormous 
fees. This is not justice. It is an extortion racket only Congress can 
fix.''
  Mr. Chairman, today Congress has an opportunity to end this extortion 
racket and fix this problem. Article 3 of the Constitution empowers 
Congress to establish Federal jurisdiction over cases between citizens 
of different States, but current rules on class actions require that 
all plaintiffs and defendants be residents of different States and that 
every plaintiff's claim be valued at $75,000 or more. These 
jurisdictional statutes enacted before the advent of modern class 
actions lead to results the framers would find perverse.
  For example, under current law, a citizen of one State may bring in 
Federal court a simple $75,001 slip-and-fall

[[Page H5282]]

claim against a party from another State. But if a class of 25 million 
product owners or users living in all 50 States bring claims 
collectively worth $15 billion against a manufacturer, that lawsuit 
usually must be heard in State court.
  H.R. 1115 would apply new diversity standards to class actions by 
changing the diversity requirements for class actions where any 
plaintiff and any defendant reside in different States and where the 
aggregate of all plaintiffs' claims is at least $2 million. These 
modest changes will keep large actions of a national character in 
Federal court where they belong.

                              {time}  1215

  H.R. 1115 also addresses the other major area in need of reform, the 
incentives for settlements in class action cases and scrutiny of those 
settlements. Under current rules, the first case settled wins. Those 
left out must either find a way to join the settlement or forego their 
claim. This leads to bad settlements favoring lawyers over consumers in 
jurisdictions with lax class action requirements. In the last year, 
more such one-sided settlements benefiting only the lawyers occurred.
  Example: A settlement with Blockbuster over late fees produced $9.25 
million in lawyers' fees, and nothing more but dollar coupons for the 
consumers represented, only 20 percent of which are likely to be 
redeemed.
  Another example: A settlement with Crayola over asbestos included in 
crayons produced $600,000 in attorneys' fees, and nothing but a 75-cent 
discount on more crayons for affected consumers.
  In order to prevent abuses like this, H.R. 1115 aims to protect 
plaintiffs by prohibiting the payment of bounties to class 
representatives, barring the approval of net loss settlements, adopting 
better notice requirement provisions which clarify class members' 
rights, and by requiring greater scrutiny of coupon settlements and 
settlements involving out-of-State class members.
  Finally, Mr. Chairman, it is important to note that the costs of 
class action abuses are not limited to the parties of the settlements. 
They are shared by the American consumer through higher prices and 
higher insurance premiums.
  Class action lawsuits also pose a threat to investors and the 
security of American retirement plans, which are largely invested in 
equity securities of American corporations. While class action 
liability can be enormous, news of these lawsuits on Wall Street can 
drive down any particular stock by as much as 10 points in one day.
  I also would note that we are likely to hear names like Enron, 
Adelphia and WorldCom tossed about today, and rhetoric that this bill 
would let such noted corporate wrongdoers off the hook. The truth of 
the matter is that nothing in H.R. 1115 would limit the rights of 
plaintiffs to seek redress in court in these types of cases.
  Under current law, most lawsuits against these companies will be 
heard in Federal bankruptcy court, for the same reasons that Federal 
courts should be able to resolve many of the class actions. Federal 
courts protect the interests of diverse parties from all parts of the 
country. In addition, section 4 of H.R. 1115 specifically excludes a 
number of Federal securities and State-based corporate fraud lawsuits.
  Mr. Chairman, the need to restore some common sense, fairness, 
certainty, and dignity in our class action system is clear. The time to 
act is now, and I urge my colleagues to vote for this bill and to put 
some sense back into our legal system.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, welcome to ``Bash Trial Lawyers Day'' in the House of 
Representatives. My friend the chairman used the term 13 times in his 
presentation.
  I just keep wondering, I would ask the gentleman from Wisconsin 
(Chairman Sensenbrenner), what kind of law did you practice? I am 
intrigued by the right of trial lawyers not to be as effective as they 
can in court.
  I notice that the Enron people have pretty good trial lawyers. I 
notice that WorldCom has pretty good trial lawyers. I notice that 
Adelphia has pretty good trial lawyers. These are all Republican 
supporters. I notice that Tyco has pretty good trial lawyers.
  Why cannot people with class action suits have trial lawyers that are 
effective and doing a good job and get compensated for it?
  I would yield to the gentleman, if he chooses to comment on that.
  Mr. SENSENBRENNER. Mr. Chairman, will the gentleman yield?
  Mr. CONYERS. I yield to the gentleman from Wisconsin.
  Mr. SENSENBRENNER. Everybody has a right to have a lawyer, but you 
ought to be for court reform.
  Mr. CONYERS. Mr. Chairman, reclaiming my time, everybody has a right 
to a lawyer. I thank the gentleman very much. I am very happy this gets 
reiterated.
  I just want to count the number of times trial lawyers get it in the 
neck. Property lawyers, they are okay. Domestic relation lawyers, have 
you got any beef about them? They are okay. But trial lawyers that try 
these kinds of class action cases, they are making out like bandits, 
so, let us put it in the Federal courts. Let us take all of the class 
action cases and send them to the Federal courts, exactly where the 
Federal judiciary is begging you not to send them; begging you not to 
send them. All the consumer groups are begging you not to send them 
there.
  Yet you tried it in 1998, 1999, 2001, and, now for the fourth time in 
6 years, you are back at it again.
  Why? What is the problem, guys? Should not people, consumers injured, 
be able to bring their cases to their State courts where they have 
traditionally?
  Well, the answer is, for me, yes; but for you, no.
  Could somebody explain to me why we would make the cases retroactive 
on top of it? I yield the floor. Tell me why Tyco, Enron, WorldCom, 
Adelphia, just tell me why those five corporations should be granted a 
delay?
  Mr. GOODLATTE. Mr. Chairman, will the gentleman yield?
  Mr. CONYERS. I yield with pleasure to the gentleman from Virginia, my 
friend on the Committee on the Judiciary.
  Mr. GOODLATTE. Mr. Chairman, it is not a delay, it is an expedition. 
Quite frankly, they have no different treatment in Federal courts than 
State courts.
  Mr. CONYERS. Mr. Chairman, I take my time back. I thank the gentleman 
very much for his contribution.
  What this bill does, and I just ask that you would read it, I will 
quote you the exact place in the bill, is grant an automatic right of 
appeal in class certification cases automatically. Is that going to 
expedite things?
  Most of the judges do not even grant an appeal if they had the 
discretion, and think I think you or your staff may be aware of this. 
That is a delay, I would say to the gentleman from Virginia (Mr. 
Goodlatte).
  Now, in addition to the automatic delay, there is a stay of all 
discovery proceedings while the right of appeal is exercised. Do you 
know how long that could take, I would ask the gentleman from Virginia 
(Mr. Goodlatte)? About 2 years. Now you are telling me that is really 
expediting the process. I wait to hear your explanation of that.
  I rise in strong opposition to H.R. 1115. Although the legislation is 
described by its proponents as a simple procedural fix, in actuality it 
represents a major rewrite of the class action rules that would bar 
most forms of State class actions and massively tilt the playing field 
in favor of corporate defendants.
  This is why the legislation is opposed by both the State and Federal 
judiciaries, consumer and public interest groups, environmental and 
health groups, and civil rights groups. There are several critical 
problems with the bill before us.
  First, H.R. 1115 will have serious adverse impact on the ability of 
consumers and other harmed individuals to obtain compensation in cases 
involving widespread harm. At a minimum, the legislation will force 
most State class action claims into Federal courts where there will be 
far more victims to litigate cases and where defendants could force 
plaintiffs to travel long distances to attend proceedings. At worst, 
because it is so much more difficult to certify class actions at the 
Federal level, the bill will operate to terminate most class action 
entirely.
  Second, the bill includes a whole series of unrelated provisions that 
have nothing to do with class action jurisdiction, but will serve to 
benefit corporate wrongdoers. For example, section 6 of the bill gives 
the defendant an absolute right to appeal preliminary court decisions, 
which will delay the case by up to 2

[[Page H5283]]

years. The section also stops the discovery process dead in its tracks 
while the appeal is pending.
  Most outrageously of all, the bill was amended so that it applies 
retroactively to pending cases. This means that the bill would apply to 
pending in corporate fraud cases. As my hometown paper, the Detroit 
Free Press wrote yesterday, ``the House version of the legislation is 
particularly offensive because it is retroactive, meaning it would 
affect class action claims now pending against Enron, Worldcom, 
Adelphia and other corporations accused of defrauding investors while 
their executives made millions of dollars.'' Is there a single Member 
in this Chamber who could defend Congress intervening in a pending case 
to help these corporate scam artists?
  Fourth, the bill federalizes far more than just class actions. 
Section 4 provides that private attorney general actions and mass tort 
actions are to be treated as class actions and removed to Federal 
court. This means that district attorneys will no longer be able to 
combat fraud and abuse in their own State courts, and groups of harmed 
tort victims will be forced out of their State courts as well.
  Do not be fooled by the Boucher amendment, which proponents claim 
will incorporate the Feinstein language from the Senate. What they do 
not tell you is that unlike the Feinstein compromise, the Majority's 
bill applies retroactively, allows for two year delays or more, and 
knocks out private attorney general actions. None of these provisions 
were in the Feinstein amendment in the Senate.
  I believe it is time for more corporate accountability, not less. I 
urge a no vote on this one-sided, anti-consumer legislation.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself 1 minute.
  Mr. Chairman, I would be happy to invite the gentleman from Michigan 
to my district, or I would be happy to go to Detroit, and have him 
explain to my constituents or me explain to his constituents why giving 
a consumer a coupon for 75 cents or $1 off a product that was 
manufactured by the company that injured that consumer and had a 
judgment entered against them, while giving a lawyer hundreds of 
thousands or millions of dollars' worth of legal fees, or having the 
lawyer send a deficiency bill to every member of the class, this bill 
takes care of this, is correct, and how it puts consumers in charge 
rather than lawyers.
  Mr. Chairman, I yield 3 minutes to the gentleman from Virginia, Mr. 
Goodlatte.
  Mr. GOODLATTE. Mr. Chairman, I thank the gentleman for yielding me 
time and for his leadership in moving this legislation to the floor.
  The reason why the interlocutory appeal allowed in the bill expedites 
the process and does not make it longer is that that issue is going to 
be heard on appeal anyway at the end of the trial, and, as you know, 
that takes years and years. Interlocutory appeals have historically 
been heard on average faster than appeals at the end of the trial, and, 
therefore, this will speed up the bringing of whatever allows the 
process to come to a conclusion.
  Now, here is what we are talking about. Cheerios. What justice is 
done when the plaintiffs' attorney gets $2 million in attorney's fees 
and his clients get a box of Cheerios, the very product they allege was 
defective in the first place? What kind of justice for the plaintiffs 
is done there? I see the justice for the attorneys.
  By the way, I say to the gentleman from Michigan, most trial lawyers 
are embarrassed by this abuse. Only a small cartel of very wealthy 
class action attorneys benefit from the current system. Most trial 
lawyers who represent most plaintiffs in America are embarrassed by 
this kind of abuse in the current system.
  Abuses like $8.5 million in the Bank of Boston case for the 
plaintiffs' attorneys. The plaintiffs wound up having to pay money to 
their attorneys. Why did the attorneys get fees in a contingent fee 
case when their plaintiffs wound up having to pay them? They did not 
get anything.
  Or the Blockbuster case that the gentleman from Wisconsin cited: 
$9.25 million to plaintiffs, $1 off on your movie ticket.
  The great airline case, the frequent flier case. A 10 percent 
discount on your plane flight, if you buy another ticket on this so-
called defective airline for $250 or more. The attorneys got $25 
million.
  The Coca-Cola case, the lawyers got $1.5 million, the plaintiffs got 
a 50-cent coupon.
  Of course, my favorite case, the case of Chase Manhattan Bank, the 
attorneys got $4 million, the plaintiffs got 33 cents. Here is one of 
the checks, 33 cents. There is a little catch though, because you had 
to use a 34-cent stamp in order to send in the acceptance to get the 33 
cents. That does not sound like a good deal for me either.
  This restores federalism. It removes to our Federal courts the cases 
that involve the complexity and the diversity that our Founding Fathers 
created diversity jurisdiction for. A simple change in the law does not 
change the substance of class action, does not take away the right of 
anybody to bring a class action, but it does protect our system and the 
integrity of justice in America.
  Mr. CONYERS. Mr. Chairman, I yield myself 15 seconds.
  Mr. Chairman, my distinguished friend, the gentleman from Virginia, 
forgot to put in Enron class action cases. I guess that was an 
oversight.
  Mr. Chairman, I am pleased to yield 1 minute to the gentlewoman from 
Ohio (Mrs. Jones), a former prosecutor, judge, and attorney.
  Mrs. JONES of Ohio. Mr. Chairman, I thank the gentleman for yielding 
me time.
  Mr. Chairman, I rise in opposition to H.R. 1115. It is another series 
in ill-advised attempts to institute broad tort reform measures by this 
body. Class actions are often the only way in which small but 
meritorious claims can find redress, and, as such, they are an 
essential tool for enforcing civil rights, public health, environmental 
and consumer rights and laws.
  It is very important, because my colleague disparages the integrity 
of elected State court judges. As a former State court judge, I speak 
for all of my colleagues to say that we are as qualified as those 
appointed by Presidents to the Federal bench.
  I would also say that it is very important that if you look at the 
campaign funds of the people who are supporting this legislation, I 
guarantee you the organizations that do not want class actions are 
funding their campaigns.
  I do not have enough time to say much more, except to say to all of 
you, vote against this legislation. It is not good for the consumer.
  Mr. Chairman, I rise today in opposition to H.R. 1115, another in a 
series of ill-advised attempts to institute broad tort reform measures 
by this body. Class action lawsuits play an important role in our 
Nation's civil justice system, serving the dual objectives of 
practicality and fairness. Class actions are often the only way in 
which the small, but meritorious claims can find redress, and, as such, 
they are an essential tool for enforcing civil rights, public health, 
environmental and consumer rights and laws. The bill before us seeks to 
remove this tool and impair consumers' access to justice. Further, it 
disregards longstanding principals of federalism and would stress an 
already overburdened Federal judiciary.
  There is no statistical evidence of a State class action ``crisis'' 
as proponents of this bill claim. In fact, there is empirical evidence 
to the contrary. For the past several years, the RAND Institute for 
Civil Justice has been studying class action settlements, only to find 
that given the small dollar amount of individuals' losses, it was 
``highly unlikely that any individual claiming such losses would find 
legal representation without incurring significant personal expense.'' 
This study also found that class actions often resulted in changes to a 
companies business practices and that ``class counsel's fees were a 
modest share of the negotiated settlements.'' Overall, it concluded 
that its survey ``contradicts the view that damage class actions 
invariably produce little for class members and that class action 
attorneys routinely garner the lion's share of settlements.''
  There is also no basis for the unfounded premise that big companies 
cannot get a fair trial in State courts--claims that are promulgated by 
sensationalist rhetoric surrounding a mere fraction of the class action 
suits that are introduced. Where the infrequent abuse has occurred, it 
is important to note that it is not an endemic feature of State 
judiciaries as proponents of this legislation would have us believe--in 
fact, many Federal class acitons have expeirenced the same outcomes 
that attract criticism at the state level.
  My colleague disparges the integrity of elected State court judges. 
As a former judge I protest--if the campaign coffers of those 
supporting this legislation were reviewed--I venture a guess then--the 
contributors are supportive of this legislation.
  But there is an overwhelming amount of evidence pointing to the fact 
that this bill would

[[Page H5284]]

make it harder--if not impossible--to bring cases against major 
corporations in an era of increasing consumer and shareholder 
vulnerability. Legitimate lawsuits could be thrown out or stalled if 
defendants are given the right to move just about any class action case 
from States to a crowded Federal court docket. Since the mid-1990s, the 
Federal civil dockets have been severely backlogged. From 1993 to 2002, 
U.S. district court civil filings climbed by nearly 37,000 cases (16 
percent). And according to the U.S. Judicial Conference, the Federal 
courts are short by 150 judges.
  This legislation would not only further overburden the schedules of 
Federal judges, but would put them in the difficult position of 
interpreting a host of State law issues that don't belong in Federal 
courts in the first place. This would result not only in extended 
delays in obtaining benefits for class members, but also increase 
delays for individual plaintiffs in other cases. And since Federal 
judges are required to provide speedy trials to criminal defendants, it 
is likely that class action suits would end up at the end of the long 
Federal docket line, giving corporate offenders more time to ``shred'' 
documents or dump stock shares.
  There is no doubt that State courts are institutionally better suited 
to handle class actions than Federal courts. State courts' civil 
dockets typically experience smaller caseloads than their Federal 
counterparts, not to mention greater experience with State civil laws. 
State courts are also more prepared to decide controversial issues of 
State law than Federal courts. Without State court interpretations, 
States' bodies of law will not develop solutions to new problems, or 
guide future conduct of businesses.
  It is also important to remember that State courts are held to the 
very same standards of due process as their Federal counterparts. If 
State judges fail to perform their duties appropriately, States have 
adequate mechanisms for reprimanding them. And let us not forget that 
State judiciaries are capable of self-regulation. Where real problems 
with the certification process have occurred, the offending States have 
responded with reforms aimed at improvement. In Alabama, the often-
cited ``swamp justice'' State according to the proponents of this 
legislation--both the legislature and the judiciary have been acting to 
tighten class action procedure in response to accusations for ``drive-
by'' certifications.
  If the foundation of our democracy relies on the strength and 
preservation of federalism and deference to State's rights, how can we 
support legislation that has as its backbone the notion that State 
judiciaries are not as competent as Federal courts? Just ask the 
substantial number of Federal judges who have served on State 
judiciaries if they are ``better judges'' now that they operate on a 
Federal court level. I doubt any of them will respond that they are 
more neutral, or less biased, as a result of their Federal appointment. 
Put simply, neither the State nor Federal judiciaries are seeking class 
action reform because they are quite confident in their own competence.
  Indeed, Chief Justice Rehnquist and the Judicial Conference of the 
United States are opposed to this legislation for reasons beyond 
``unduly burdened'' Federal courts and disturbing States' jurisdiction 
over in-State class actions--they are opposed because at its heart it 
questions the principles that our Nation's courts are the backbone of a 
fair and unbiased justice system.
  Class actions play an important role in our civil justice system. We 
need to refrain from targeting the few class-action infractions at the 
expense of many citizens' right to their day in court. We also need to 
refrain from altering the delicate balance between State and Federal 
judiciaries established by the drafters of the Constitution and 
carefully engineered by their contemporaries.
  Let us heed the advice of our most senior authority on this matter, 
Chief Justice Rehnquist, that ``Congress should commit itself to 
conserving the Federal courts as a distinctive judicial forum of 
limited jurisdiction in our system of federalism.'' This legislation is 
nothing more than a technically unsupportable effort to enact 
institutional advantages for large corporations in all class actions. 
Instead of promoting fairness and efficiency, H.R. 1115 simply gives 
tobacco companies, Enrons, Worldcoms, HMO's and polluters the power to 
choose the legal forum they believe will benefit them most.
  A vote against the bill will send the reassuring message to our State 
and Federal judiciaries that their judgment and integrity is recognized 
by Congress. As a former judge, and now as a Member of this body, I 
urge my colleagues to vote against this bill.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 3 minutes to the gentleman 
from Texas (Mr. Smith), the chairman of the Subcommittee on Courts, the 
Internet, and Intellectual Property of the Committee on the Judiciary.

                              {time}  1230

  Mr. SMITH of Texas. Mr. Chairman, I thank the gentleman from 
Wisconsin, the chairman of the Committee on the Judiciary, for yielding 
me this time.
  Mr. Chairman, I support H.R. 1115, the Class Action Fairness Act. 
This bill reforms the class action system and addresses the abuses that 
harm so many Americans.
  In recent years, State courts have been flooded with thousands of 
frivolous lawsuits. Lawyers looking for the most favorable 
jurisdictions conduct the equivalent of a legal shopping spree. They 
use loopholes so class action suits can be heard in State courts rather 
than Federal courts. Today, State courts employ criteria so loosely 
defined that virtually any controversy can qualify as a class action.
  We have all heard of the lawsuits in which the plaintiffs walk away 
with pennies, sometimes literally, while their attorneys walk away with 
millions of dollars in fees. For instance, in a suit against Chase 
Manhattan Bank that was referred to by the gentleman from Virginia (Mr. 
Goodlatte) a few minutes ago, consumers were awarded 33-cent checks 
while the attorneys pocketed $4 million in fees. Mr. Chairman, to 
describe this suit, as well as other class action lawsuits, as 
``frivolous'' is an insult to frivolousness. Even The Washington Post 
has acknowledged that under the present system ``lawyers cash in, while 
the `clients' get coupons.''
  There are many ``magnet'' State courts that have a reputation for 
doling out enormous judgments. This bill makes it easier to get cases 
into Federal court to avoid such unfair results.
  Mr. Chairman, I, along with the gentleman from Virginia (Mr. 
Boucher), amended this bill in the Committee on the Judiciary to apply 
the law to cases that have been filed, but not yet certified as class 
actions. Cases that gain class certification after the date of 
enactment will have, in fact, the new rules apply to them.
  This language eliminates any incentive to rush to the courthouse to 
avoid the reforms contained in the legislation. It also prevents 
individuals from being made part of a frivolous suit that has been 
filed before enactment of the new laws.
  The widespread abuse of class action lawsuits must be stopped. The 
Class Action Fairness Act includes bipartisan, sensible reforms that 
clarify the rights of consumers and restore confidence in America's 
civil justice system.
  Mr. Chairman, I urge my colleagues to support this legislation, and I 
also thank the chairman of the committee for his action in passing this 
today.
  Mr. CONYERS. Mr. Chairman, I am pleased to yield 2\1/2\ minutes to 
the gentleman from New York (Mr. Weiner), a distinguished member of the 
committee.
  Mr. WEINER. Mr. Chairman, something in me enjoys this exercise in 
self-flagellation by all of the lawyers in this Chamber. From time to 
time, those of us who are not lawyers in this Chamber, we convene a 
meeting, and we can do it in the phone booth in the cloakroom; but now 
we are all so angry at lawyers.
  But this is not about lawyers. Frankly, most Americans are neither 
lawyers nor, thank God, are they victims, so they do not have to go 
into courts; and that is a good thing. But the groups that do represent 
victims, that do represent average Americans, almost universally oppose 
this legislation. Those that represent cancer patients, the American 
Cancer Society, oppose this legislation. Those who fight against 
pollution, the Clean Water Action, oppose this legislation. Those who 
represent seniors, the Gray Panthers, oppose this legislation. Those 
who represent consumers oppose this legislation. Those who fight 
against violence against women, the National Women's Health Network, 
oppose this legislation, because it is bad for victims and it is bad 
for those who use the system.
  The gentleman from Virginia had these great charts. I am going to 
have to gesture because he would not let me use them. He had these 
great charts about 35 cents; that is all people are getting. Do my 
colleagues know why? Because there are millions and millions of 
victims; millions and millions of victims in that class. That is all 
that can go around is 35 cents. There

[[Page H5285]]

are hundreds and thousands of victims in this class. When you brag 
that, well, all the money that was left after they gave out these 
multimillion dollars was only 35 cents a person, that is a subject of 
how many people there were in that class.
  I say to my colleagues, the bottom line is that it is ironic to hear 
the same people who came to this floor a couple of weeks ago and said, 
oh, the amount the victims are getting is too high, let us cap it at 
$250,000, now they are saying that 35 cents is too low. Do my 
Republican colleagues want to have a minimum? Sign me up. What is the 
number going to be? I know it is lower than $250,000 and higher than 35 
cents, but we have to let my colleagues decide, because a jury cannot 
handle it. Oh, no. It is too mind-boggling for a jury to handle, 
because that is nine or 12 people from your district. They chose you, 
but they cannot figure out if Cheerios was right to short-change 
millions of consumers.
  And let me say one other thing. Let me tell my colleagues one other 
group who should oppose this legislation: anyone that has the audacity 
to call themselves conservative. If you think it is conservative to 
take power away from the people and their States and give it to 1,500 
Federal judges who sit in there in their marble chambers, who never 
talk to anyone or touch anyone, if you think that is conservative, you 
have it completely backwards. But then again, you do. You have it 
completely backwards.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself 1 minute.
  The gentleman from New York unfortunately has got it all wrong. What 
this bill does is it takes the power away from one State court judge to 
decide national legal and national economic policy and puts it in the 
Federal courts where the founders intended it to be when they 
established the right of Congress to establish diversity jurisdiction.
  The second point that I would like to make is why did all of these 
consumers only get 33-cent checks? It is because the lawyers signed off 
in the settlement that filled their pockets to overflowing with legal 
fees and giving 33-cent checks to the clients that they supposedly 
represented. Now, if those lawyers were a little bit more fighting for 
their clients and less for themselves, maybe those checks would have 
been bigger because the fees would have been smaller.
  Mr. Chairman, I yield 2 minutes to the gentlewoman from Pennsylvania 
(Ms. Hart).
  Ms. HART. Mr. Chairman, I thank the chairman of the Committee on the 
Judiciary, the gentleman from Wisconsin (Mr. Sensenbrenner), for his 
work on this issue.
  I am a lawyer. I am for class action reform. These lawsuits continue 
to victimize the victims. Even The Washington Post, as the gentleman 
from Texas referred to, said the clients get token payments: 33-cent 
checks, boxes of Cheerios. In one case, the clients even ended up 
having to pay. The lawyers get enormous fees. This is not justice; it 
is an extortion racket that only Congress can fix. That is why we are 
here today. We are here to fix it.
  The intent of the class action system is to facilitate large groups 
who have similar harm caused to them to efficiently recover damages. 
Recover damages. That is appropriate damages, not 33-cent checks. We 
are here to change that so that appropriate damages will be recovered.
  How are we going to do that? We are going to change the system. We 
are going to make sure that not one small court in one State makes a 
decision for an entire Nation of victims. We are going to put it in the 
Federal court where it should be.
  Recent studies of the class action system show there is a 1,315 
percent increase in class action suits filed in State courts. Listen 
closely: 1,315 percent increase in class action suits filed in State 
courts. Why? Because some of those State courts have been very friendly 
to that small group of trial lawyers who take on these suits and get 33 
cents for their clients and large, million-dollar settlements for 
themselves.
  Here is another number: those attorneys who search for local friendly 
courts like Madison County, Illinois. Madison County, Illinois, has 
seen a 1,850 percent increase in class action filings that certify 
their classes and they will rubber-stamp these ridiculous, useless 
settlements.
  This abuse has three larger consequences. First, as I said, the 
plaintiffs are denied real relief, and we have heard many examples, 
while the attorneys pocket huge rewards. It is time for us to take 
responsibility and make sure that clients get proper settlements. 
Support this reform.
  Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentleman from 
Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. Mr. Chairman, I thank the gentleman for yielding me 
this time.
  Mr. Chairman, let me tell my colleagues who does support this bill, 
and particularly the provision that makes the automatic appeal and the 
stay of the discovery proceedings retroactive. It is none of the groups 
that were enumerated by the gentleman from New York, no. We have two 
letters that were submitted as testimony, as exhibits before the 
Committee on the Judiciary. One is the Association to Advance 
Technology. Another is a similar trade association involving the high-
tech industry. My memory is that it was submitted by the gentleman from 
Virginia.
  I just wonder, and I am really posing a question, I guess, do any 
members of either of these trade associations have class action suits 
pending against them now? I do not know, and I do not see the gentleman 
responding. But he was very effective with his parade of horror 
stories.
  Well, let me tell my colleagues, too, I do not have any charts; but 
maybe we could present pictures here, pictures of dead people, people 
who died as a result of defective tires that were manufactured by 
Firestone. Maybe we could read the names of those who died as a result 
of not being informed by the tobacco industry about the carcinogens 
that are present in a cigarette. But thank God we had class action 
suits, because this Congress is not ready to take action until some 
lawyer, yes, a lawyer, went out and filed a class action suit and 
finally revealed what the truth was, that these industries were 
withholding information that affected the public welfare of the people 
of the United States.
  Mr. Chairman, this bill doesn't ``reform'' the class action system. 
It eviscerates it. And before we curtail the ability of our citizens to 
bring class actions, we need to be clear about why they exist in the 
first place.
  Class actions do not exist solely or even primarily to provide relief 
for private wrongs. They exist to correct, punish and deter misconduct 
that harms large numbers of ordinary people and society as a whole. 
Class actions level the playing field, uniting ordinary citizens who 
could never undertake complex and costly litigation on their own.
  You can understand why a mechanism like this is threatening to major 
corporations. Faced with a single lawsuit by an average citizen, most 
major companies can barely stifle a yawn. It is only the prospect of a 
class action suit joined by hundreds or thousands of such citizens that 
can get their attention.
  You can understand why corporate defendants would do all they can to 
stack the deck in their favor. Or in this case, to shuffle the deck in 
their favor.
  The sponsors have hit on a brilliant strategy. Since Congress cannot 
dictate the rules by which state courts handle their cases, the bill 
simply removes the cases from state court and transfers them to federal 
court. Then, once they're in federal court, the bill changes the rules 
to make sure that most of these cases will never see the light of day.
  As soon as the district court either grants or denies certification 
to the class, the bill gives the parties the right to an automatic 
interlocutory appeal of the decision. And as soon as a party files an 
appeal, the bill halts all discovery proceedings in the case until the 
appeal is completed.
  What does this mean in practical terms? Given the huge backlogs in 
federal court--backlogs which this bill will only make worse--it will 
be years before discovery can resume. And years more before plaintiffs 
who have suffered grievous injuries can get to trial on the merits.
  What's important to understand is that this doesn't just delay 
recoveries. It undermines the very purpose of the class action system 
by removing the incentive for corporate defendants to fix problems. And 
delaying the release to the public of information that might save 
lives.
  The current federal rules permit the judge to entertain an appeal of 
a class certification order, and even to stay proceedings until the 
appeal is resolved. But as Judge Scirica has

[[Page H5286]]

explained in a recent letter to the committee on behalf of the Judicial 
Conference of the United States: ``Providing an appeal as of right 
might tempt a party to . . . appeal solely for tactical reasons. 
Staying discovery and other proceedings in the district court would 
only increase the tactical advantages of filing an interlocutory 
appeal, particularly because resolution of the appeal may not occur for 
12 to 18 months.''
  Nor will this problem affect only the cases that the bill transfers 
to federal court. It will also affect the hundreds of cases that are 
already there, since the bill applies retroactively to cases that have 
not yet been certified at the time it goes into effect.
  Thoses cases include some of the most notorious corporate fraud cases 
in history, including--
  The Enron case, on behalf of thousands of investors who claim more 
than $20 billion in damages as a result of the series of fraudulent 
transactions that destroyed the company and rendered its stock 
worthless.
  The WorldCom case, in which the plaintiffs contend that corporate 
insiders and auditors disseminated materially false and misleading 
information and used illegitimate accounting schemes to hide losses and 
inflate reported earnings.
  The Adelphia case, in which plaintiffs allege violations of federal 
securities laws flowing from the failure to disclose billions of 
dollars in debt.
  The Global Crossing case, in which plaintiffs cite the accounting 
schemes that grossly misrepresented the company's financial picture and 
precipitated the ruin of the company.
  The ImClone case, in which senior corporate executives engaged in 
fraud, perjury, and obstruction of justice for which the CEO has just 
been convicted in federal court and other indictments are pending.
  These class actions seek to address the looting of company after 
company by corporate insiders, whose brazen misconduct and self-dealing 
defrauded creditors and investors of billions of dollars, and stripped 
employees and retirees of their livelihood and life savings.
  Yet if this bill becomes law, the victims of those practices will 
face new obstacles in their efforts to call those executives to task.
  Are there abuses of the class action system? Of course. We've all 
herd about abusive coupon settlements, collusive settlements, excessive 
fees, and the like. The Democratic substitute would address these 
problems. But the bill does not. That is not its purpose. Its purpose 
isn't to fine-tune the class action system but to eviscerate it. To 
shield corporate malefactors from civil liability and leave the public 
unprotected.

  At our markup of this bill, one of its supporters said, ``The goal of 
this bill is to ensure that legitimate plaintiffs receive fair and 
prompt recoveries.''
  Plainly that is not the goal of the bill. The goal is to ensure that 
legitimate plaintiffs are denied any recovery at all. And that whatever 
recovery they do receive is delayed as long as possible.
  This bill is not about protecting plaintiffs. It's not about 
protecting the public. It's about protecting large corporations whose 
conduct has been egregious. It's about protecting the powerful at the 
expense of the powerless. And to prevent people from banding together 
as a class to challenge that power in the only way we can.
  We must also see this bill in its proper context. It is only part of 
an ambitious and multi-pronged campaign by major corporations to evade 
their obligations to society.
  Under the guise of ``deregulation'' we're watching the wholesale 
dismantling of health and safety standards, environmental protections, 
and longstanding limits on concentration of ownership within the media 
and other key industries.
  This House has just passed a bill that releases gun manufacturers 
from liability for the death and destruction they cause. And a 
bankruptcy ``reform'' bill that rewards abuses by credit card companies 
and does nothing to curb the greed and irresponsibility that have 
bankrupted major corporations and left employees, retirees and 
creditors holding the bag. And a medical malpractice bill that caps 
recovery for the injuries inflicted on patients by negligent health 
care providers, while doing nothing to reduce the rate of medical 
errors or curb the exorbitant premiums charged by insurance companies.
  Today's bill completes this picture. It takes aim at the civil 
justice system that exists to correct the wrongs that the government 
cannot or will not address. Not content to put an end to regulation, 
the proponents seek to muzzle the courts as well.
  We cannot allow them to do it, Mr. Chairman. I urge my colleagues to 
vote ``no.''
  Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentlewoman 
from Tennessee (Mrs. Blackburn).
  Mrs. BLACKBURN. Mr. Chairman, I rise in support of H.R. 1115, the 
Class Action Fairness Act, and I want to thank the chairman of the 
Committee on the Judiciary and the gentleman from Virginia (Mr. 
Goodlatte) for bringing this legislation to the floor today. It is 
critical that the House act on this issue.
  Over the past 10 years, there has been a dramatic increase in the 
filing of class action lawsuits in the United States. Some of these 
lawsuits have played a valuable role in our legal system allowing for 
the efficient resolution of legitimate claims where there were numerous 
parties involved. Unfortunately, too many class actions are frivolous 
and are brought about by greedy trial lawyers who are more concerned 
with shopping for the best venue to collect fees than with producing 
justice for the injured parties.
  We have heard about some of these examples. The Blockbuster Video 
case where customers got a coupon for a dollar off the next video. The 
court in Minnesota that gave the credit card company that was engaged 
in deceptive practices, those customers got some coupons, and the 
chance to apply for a credit card at a lower rate. The attorneys got 
$5.6 million there. In the Blockbuster case, we heard they split $9.25 
million. The Coca Cola case, the customers got some 50-cent coupons and 
the lawyers split $1.5 million.
  Mr. Chairman, Americans love couponing. They love double couponing. 
They love triple couponing. But let me tell my colleagues something: 
this is a mighty expensive way to do it. The American people get ripped 
off, and the big-time lawyers and the greedy trial lawyers are getting 
the millions of dollars. They are hitting the coupon jackpot.
  It is time to reform the system. I encourage my colleagues to support 
this legislation.
  Mr. CONYERS. Mr. Chairman, I am happy to yield 3 minutes to the 
gentlewoman from California (Ms. Waters), a member of the Committee on 
the Judiciary.
  Ms. WATERS. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  The so-called Class Action Fairness Act has nothing to do with 
fairness. This corporate defendants' ``Choice of Forum Act'' is a one-
sided, unfair gift to the polluters, the Enrons, and the pharmaceutical 
companies that will hurt consumers by delaying their access to justice. 
It will indefinitely delay hearings for people who may be victims of 
defective products, fraud, discrimination, and environmental pollution.
  Mr. Chairman, this class action bill was a terrible bill when the 
House passed it in the last Congress; and fortunately, that bill died 
in the other body. Incredibly, H.R. 1115, this year's iteration of the 
bill, is even worse, as it now contains retroactivity language that 
will allow some of the worst corporate wrongdoers, companies like 
Enron, WorldCom, and Arthur Andersen, to remove cases filed against 
them in State court to the Federal courts where their attorneys can use 
the huge civil case backlogs in our Federal court system to just 
``slow-walk'' the victims of their misconduct.

                              {time}  1245

  The bill provides an automatic right of an interlocutory appeal of a 
class action certification, slow walk, and a stay on all discovery 
while the class certification appeal is pending. Slow walk.
  This unwise, ill-conceived intrusion on the jurisdiction of the State 
courts will destroy access to justice while overwhelmingly increasing 
the burdens on our Federal courts. That is why this bill is opposed by 
the Judicial Conference of the United States and the Conference of 
Chief Justices.
  It is also strenuously opposed by every Democratic member of the 
caucus who has served as a trial judge at either the State or Federal 
level. It is even opposed by Chief Justice Rehnquist.
  Finally, the bill will destroy the efficacy of private attorney 
general actions that consumers may now bring in the State of California 
to combat corporate fraud and wrongdoing. No one is better situated 
than the people of California to protect their rights as consumers 
under California law. That is why we should not support any bill that 
would allow corporate defendants to remove these cases to Federal court 
where they can avoid having to answer

[[Page H5287]]

to those State court judges with real expertise and the greatest 
knowledge of California law.
  I strongly support the amendment that the gentlewomen from California 
(Ms. Lofgren) and (Ms. Linda T. Sanchez) will offer to strike the 
language permitting California private attorney general actions to be 
removed to Federal court. Mr. Chairman, this bill will injure consumers 
and assist those corporate defendants who simply want to game the 
system.
  We can protect consumers from any perceived abuses in coupon 
settlements without adopting this assault on consumer access to full, 
fair, and timely justice. I urge my colleagues to reject this latest 
Republican miscarriage of justice. I urge my colleagues, just simply 
oppose this bad bill.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself 30 seconds.
  Mr. Chairman, once again the opponents of this bill are wrong. The 
gentlewoman from California (Ms. Waters) is talking about Enron and 
WorldCom cases being removed to Federal court. They already are there. 
Both of these corporations have filed for bankruptcy. Once there is a 
bankruptcy filing by anybody, the cases are heard in Federal court, 
simple as that.
  I really would hope that they get their facts straight before they 
attack the bill the next time.
  Mr. Chairman, I yield 1 minute to the gentleman from Florida (Mr. 
Feeney).
  Mr. FEENEY. Mr. Chairman, I want to congratulate and thank the 
gentleman from Wisconsin (Chairman Sensenbrenner) and the gentleman 
from Virginia (Mr. Goodlatte) for this fine bill. This is a commonsense 
reform of the class action process throughout the United States.
  Mr. Chairman, this bill does not deny anybody access to a court or to 
a judge. What it does say is that lawyers that have a special 
relationship with a judge cannot forum shop and select their own judge; 
they have to have equal-handed justice. This cuts down on the lottery 
mentality in the court system and gives everybody the same fair and 
equal access.
  Mr. Chairman, the Founders of our great Republic were very concerned 
about some forum shopping throughout the States where some States would 
not treat out-of-state defendants fairly, so they created diversity 
jurisdiction to allow Federal courts to make sure there was an even-
handed array of justice.
  In some States where they elect their justices, literally we have 
special interests, in some cases the trial lawyers, that are actually 
able to buy elections and have their favorite justices determine the 
entire constitutionality of issues because they run the supreme court.
  All this bill does is to say everybody gets a fair shot at a Federal 
judge if there is legitimate diversity jurisdiction. It stops the 
lottery game in our court system.
  Mr. CONYERS. Mr. Chairman, I am pleased to yield 2 minutes to the 
gentleman from Virginia (Mr. Boucher), ranking member of the Committee 
on the Judiciary.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 1 minute to the gentleman 
from Virginia (Mr. Boucher), as well.
  The CHAIRMAN. The gentleman from Virginia (Mr. Boucher) is recognized 
for 3 minutes.
  Mr. BOUCHER. Mr. Chairman, I thank both gentlemen for yielding time 
to me. It is my pleasure to rise in support of the bill that is before 
us.
  In the 20 years that it has been my privilege to serve in the House, 
the class action reform measure that is before us today is the most 
modest litigation reform that has been debated, and it strikes in a 
narrow and appropriate way at an egregious abuse and miscarriage of 
justice.
  The bill that is before us makes procedural changes only. There are 
no restrictions on the substantive rights of plaintiffs. There are no 
caps on damages. There is no limitation on the rights of plaintiffs to 
recover. The bill simply permits the removal to Federal court of class 
actions that are national in scope, with plaintiffs living across the 
Nation and a large corporate defendant doing business throughout the 
country, even if current diversity of citizenship rules are not 
strictly met.
  This change is much needed. Cases that are truly national in scope 
are being filed as State class actions before certain favored judges 
who employ an almost anything-goes approach that renders virtually any 
controversy subject to certification as a class action. Once the 
certification occurs, there is then a rush to settle the case. The 
lawyers who filed the case tend to make an offer that is very hard for 
the corporate defendant to refuse. They ask for large fees for 
themselves, typically in the millions of dollars, and then coupons are 
requested for the class members.
  Rather than go through years of expensive litigation, the defendant 
settles. The judge who certified the case quickly approves the 
settlement. The lawyer who filed the case gets rich; the plaintiff 
class members he represents get virtually nothing. That is the problem. 
That is the abuse that this reform is designed to resolve.
  This reform permits the removal of these national cases to the 
Federal court in the State in which the State class action is pending. 
In the Federal court, the rights of plaintiffs will be more carefully 
observed. Any settlement involving noncash compensation will be 
carefully reviewed to assure that it is fair. Under the bill, cases 
that are local in scope will remain in the State court where they are 
filed.
  Later today I will be joining with the gentleman from Wisconsin (Mr. 
Sensenbrenner) and other Members in offering an amendment that the 
Committee on the Judiciary and the other body adopted, originally 
drafted by Senator Feinstein of California, that gives Federal judges 
greater direction in deciding which cases are national in scope and 
should be removed to Federal court, and which cases should remain in 
the State courts in which they are filed.
  This is a needed reform. It is a modest remedy. It is procedural 
only. The rights of all plaintiffs to participate in a class action 
will be respected, either in State or Federal court. I am pleased to 
rise in support of this measure and urge its adoption in the House.
  Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentleman 
from Ohio (Mr. Chabot).
  Mr. CHABOT. Mr. Chairman, I rise in strong support of the Class 
Action Fairness Act of 2003.
  Mr. Chairman, I want to thank the gentleman from Wisconsin (Chairman 
Sensenbrenner) and the gentleman from Virginia (Mr. Goodlatte) for 
proposing this good legislation.
  As chairman of the Subcommittee on the Constitution, I welcome this 
opportunity to address some of the criticism that we have heard about 
this legislation, that it would diminish State court authority or 
otherwise offend basic federalism principles.
  Opponents of this bill have suggested that removing a lawsuit filed 
in State court to Federal court deprives the State court of its right 
to decide matters of State law, but all State law-based actions do not 
presumptively belong in State court. Federal diversity jurisdiction, 
established by the Framers of the Constitution, allows State law-based 
claims to be moved from local courts to Federal courts to ensure that 
all parties will be able to litigate on a level playing field and to 
ensure that interstate commerce interests will be protected.
  Additionally, the expansion of diversity included in the Class Action 
Fairness Act is consistent with current diversity law, since it allows 
Federal courts to hear large cases which have interstate implications. 
By nature, class actions fulfill these requirements.
  Mr. Chairman, in most State law-based class actions, the proposed 
classes encompass residents of multiple States. Therefore, the trial 
court, regardless of whether it is a State or a Federal court, must 
interpret and apply the laws of multiple jurisdictions. It is far more 
appropriate for a Federal court to interpret the laws of various States 
as opposed to having one State court dictate the substantive laws of 
others States.
  I strongly support this legislation and urge my colleagues to do the 
same.
  Mr. CONYERS. Mr. Chairman, I am happy to yield 3 minutes to the 
gentleman from North Carolina (Mr. Watt), a distinguished member of the 
Committee on the Judiciary.
  Mr. WATT. Mr. Chairman, I thank the gentleman for yielding time to 
me.
  Mr. Chairman, I have followed my colleagues' debate about this, 
particularly my colleague on the Democratic

[[Page H5288]]

side, the gentleman from Virginia, who says that there are no 
substantive changes in this bill, there are only procedural changes, 
and that this is a modest change.
  The thing that is amazing about that is the modest change is going to 
move a tremendous volume of cases from the State court to the Federal 
courts, which is exactly why the Federal judges are opposed to this.
  If this is only procedural in nature, I am not sure that I, for the 
life of me, can understand why we are doing it. If this is only 
process, it would seem to me that we should be able to get the same 
result in the Federal court or the State court, because if we listen to 
what the supporters of this bill are saying, they are not making any 
substantive changes.
  Now, I used to think that I understood my Republican colleagues when 
they said that they believed in States' rights, and that when we have 
the level of government or a judicial system that is close to the 
people, that is where we are likely to get the best kinds of results in 
cases.
  Why, then, if we follow that theory, would we take all of the cases 
that are now being tried in State court and pick them up and move them 
into Federal court? For some reason, there is something wrong with that 
picture. They say the rights of the parties will be carefully preserved 
in the Federal court. I think that is what I heard my friend, the 
gentleman from Virginia, say. Well, does that mean that the rights of 
the parties for all of these years have not been carefully preserved in 
the State court? I thought that is what the Republican Party stood for, 
taking things back to the local and State level. I thought they 
believed in States' rights.
  They said, well, if we move to Federal court, we are going to get 
fairness. We are going to get fairness. They have also said, for some 
reason, if we move the cases into Federal court we are going to get 
fairness. The opposite of that is if we leave them in the State court 
somehow we are not going to get fairness. If we are not changing the 
substance, then why are they doing this? Why are they doing this?
  So this must be about the results that some people are getting that 
they are not happy with. I am telling the Members, I think if we have 
the same case in Federal court or State court, we ought to get the same 
result. That is the way it has always been, and that is the way it 
would be in the absence of this new bill. I encourage my colleagues to 
oppose the bill.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself 30 seconds.
  Mr. Chairman, my friend, the gentleman from North Carolina (Mr. 
Watt), seems to have forgotten that the civil rights laws that were 
passed in the 1960s were passed with Republican support because his 
predecessors in North Carolina would not support civil rights laws, no 
way, no how. Those laws took away from the States the right to ensure 
equal treatment of all American citizens. I am proud my party, the 
party of Lincoln, led the charge on that.
  Mr. Chairman, I yield 1 minute to the gentleman from Virginia (Mr. 
Moran).
  Mr. MORAN of Virginia. Mr. Chairman, I thank the gentleman for 
yielding time to me.
  I thank others who have advanced this legislation, the gentleman from 
California (Mr. Dooley), the gentleman from Virginia (Mr. Boucher), on 
our side, and the gentleman from Virginia (Mr. Goodlatte), and many 
others.
  Mr. Chairman, we know that class actions have played a very important 
role in advancing progressive goals, like civil rights and consumer 
rights. But something has gone wrong. A lot of trial lawyers will tell 
us, privately, that this has to be fixed, and, You guys need to rein it 
in.
  There is an unintended loophole in the interpretation of diversity 
jurisdiction. That is where we are getting the abuse. We are getting a 
few trial lawyers who go forum shopping, and they go into the courts of 
judges who are elected, oftentimes with the contributions of trial 
lawyers. I am not saying this alone, but The Washington Post said this 
in their own editorial. They know what decision they are going to get. 
Oftentimes, they get the thing certified before even notifying the 
defendants, and then they wind up settling.

                              {time}  1300

  But who gets hurt? The consumer gets hurt. And it is not just in 
paying higher prices for products. They get those worthless coupons. A 
lot of them do not even know they are members of the plaintiff class. 
There is any number of consumer provisions in here. It requires 
scrutiny of these coupon settlements. It prohibits settlements where 
the class members come out as losers. It bars bounties for class 
representatives. Settlement awards cannot be based on geography. How 
unfair a system to base it on where you happen to live. It requires the 
settlement to be put in plain English so the consumers know what they 
are dealing with.
  This is commonsense legislation. Let us pass it.
  Mr. CONYERS. Mr. Chairman, I yield 30 seconds to the gentleman from 
North Carolina (Mr. Watt).
  Mr. WATT. Mr. Chairman, I appreciate the gentleman yielding me time.
  Every time a black Member of Congress gets up to talk about an issue 
like this, it always becomes a race debate; but I want to tell the 
gentleman that he is absolutely right.
  We used to file every race discrimination case in America in the 
Federal court, but the law allows those cases to be filed in the State 
courts, too. And in many cases now, because the States have started 
appointing judges who came out of this century as opposed to the 19th 
and 18th century in their racial opinions, then you can get a fair 
trial in the State courts. And I think you can get a fair trial in the 
State courts on this issue if you will let the State courts do what 
they are supposed to do.
  Mr. CONYERS. Mr. Chairman, I yield myself 15 seconds.
  Mr. Chairman, I just want to remind my friend, the chairman of the 
Committee on the Judiciary, that he was not that happy with Federal 
courts in the University of Michigan affirmative action case. Remember 
that one?
  Mr. Chairman, I yield 1 minute to the gentlewoman from California 
(Ms. Solis).
  Ms. SOLIS. Mr. Chairman, I thank the gentleman for yielding me time.
  Mr. Chairman, I would like to also voice my strong opposition to this 
bill, H.R. 1115. This bill is worse than what we saw last year, and it 
would be applied retroactively to pending cases, including those 
brought by employees at Enron for financial fraud, Dow Chemical for 
environmental charges, and Wal-Mart for employment discrimination 
against women.
  In midstream the bill would strip the rights of plaintiffs in these 
cases, causing expensive and wasteful interruption of their pursuit for 
justice and equal treatment under the law.
  In the wake of corporate scandals, workers in our country have lost 
well over $175 billion in retirement savings. Let us look at the real 
facts here. In California alone, workers have lost over $18 billion in 
retirement savings. At a time when we should be holding corporations 
more accountable, not less, their bill sends the wrong message.
  Congress should stand up and protect consumers, employees, 
pensioners, and not corporate wrongdoers. They call this the Class 
Action Fairness bill? I am sorry. In my language it is a mentiras. That 
means it is a lie.
  I urge my colleagues to please vote for the Sandlin-Conners 
substitute.
  Mr. CONYERS. Mr. Chairman, I yield 1 minute to the gentleman from 
Missouri (Mr. Clay).
  Mr. CLAY. Mr. Chairman, I thank the gentleman from Michigan (Mr. 
Conyers) for yielding me time.
  Mr. Chairman, I rise to oppose H.R. 1115 and in support of the 
Democratic substitute. There is no fairness in this so-called Class 
Action Fairness Act. This bill amounts to a sweeping Federal takeover 
of State class action lawsuits.
  Instead of improving the class action litigation process, this bill 
guarantees that those victims of discrimination of corrupt corporate 
practices will be forced to wait for years for any hope of justice.
  H.R. 1115 alters the constitutional distribution of judicial power by 
moving State class action suits into the Federal court system. This 
bill undermines State rights and jeopardizes civil rights. Adding cases 
to the already clogged Federal court system will delay hearings for all 
class action

[[Page H5289]]

cases and cause those civil rights class action cases that truly belong 
in the Federal courts to await behind cases that should be heard in the 
State court.
  This misnamed bill is opposed by both Federal and State judges. It is 
opposed by consumer groups. It is opposed by civil rights groups. It is 
opposed by environmental groups. But predictably it is supported and 
endorsed by the big corporations. I urge my colleagues to adopt the 
Democratic substitute.
  Mr. CONYERS. Mr. Chairman, I yield 1 minute to the gentleman from 
Washington (Mr. Inslee).
  (Mr. INSLEE asked and was given permission to revise and extend his 
remarks.)
  Mr. INSLEE. Mr. Chairman, Teddy Roosevelt would be spinning in his 
grave if he knew his party had decided to join ranks with what he 
referred to as the malefactors of great wealth. And that is exactly 
what this bill does.
  It is incredible to me that some of my colleagues who support this 
bill come to this well and purport, say that they are on the side of 
consumers because they have such great sorrow and empathy for 
consumers. Well, you have to decide what you are on. The Consumers 
Federation of America knows this is a bad bill for consumers and they 
are against it. The Consumers Union of America knows this is a bad bill 
and they are against it. The Consumers for Auto Liability and Safety 
know this is a bad bill and they are against it. The consumers of 
America recognize this bill reduces their rights.
  And the part that I want to focus on, and I heard one speaker refer 
to it as mere rhetoric that the consumers are going to get hurt, tell 
that to the thousands of people that are damaged by Ken Lay and Enron's 
depredations on them, whose lawsuit will be stayed for at least another 
year and a half to 2 years if this bill passes. You ought to know what 
side consumers are on, and in this bill they are against it.
  Mr. CONYERS. Mr. Chairman, I yield 3 minutes to the gentleman from 
Texas (Mr. Sandlin).
  Mr. SANDLIN. Mr. Chairman, I thank the gentleman for yielding me 
time.
  Mr. Chairman, what are the Republicans trying to hide with H.R. 1115? 
Who are they are trying to protect? Do the names WorldCom, Enron and 
Arthur Andersen strike a familiar note?
  Our colleagues on the other side of the aisle are jumping up and down 
like rodeo dogs trying to claim that they are interested in protecting 
individuals. Now, is that not a fine kettle of fish?
  They must mean individuals like Ken Lay, Jeff Skilling, Bernie Ebbers 
and the CEOs of corporate wrongdoers who enrich themselves at the 
expense of American families and pensioners.
  Oh, now, I understand. Those are the individuals who we are 
protecting.
  Mr. Chairman, these CEOs do not need further protections. They have 
the fifth amendment and they use it all the time. Individual groups, 
the real individual groups such as the American Cancer Society, the 
American Heart Association, the American Lung Association, CWA, MALDEF, 
National Education Association, National Women's Health Network, SEIU, 
United Church of Christ, NAACP, true individuals oppose this 
legislation. They are the ones that need protections.
  Mr. Chairman, who knows more about the judicial system than the Chief 
Justice of the United States Supreme Court? He is opposed. How about 
the Judicial Conference of the United States? Opposed. How about ten 
attorney generals who gave a statement just yesterday? Opposed. Federal 
courts? Opposed. State courts? Opposed. And I find it interesting that 
the Republicans have now adopted the Washington Post as their 
spokesman.
  Well, Mr. Chairman, I will see their Washington Post and raise them 
the Augusta Journal. I will raise them the Columbus Dispatch. I will 
raise them the Wilmington, North Carolina Star News. I will raise them 
the Salt Lake City Tribune. I will raise them the Milwaukee Journal 
Sentinel. The list goes on and on.
  And why, oh why, did our Republican friends make this retroactive? We 
do not do that. Who are they trying to protect? The individuals they 
are claiming to be interested in? Give me a break, Mr. Chairman. Do the 
Republicans actually believe anyone in America will believe that the 
Republicans are standing up for individuals against corporate 
wrongdoers? And the automatic appeal? That gives Enron some extra years 
to destroy evidence. That is why they want that.
  Make no mistake about it. Thus far it is Enron, for; the American 
Cancer Society, opposed. Worldcom says yes; the National Education 
Association, the teachers, they say no. Arthur Andersen, good; United 
Church of Christ and NAACP, bad.
  This act should be called exactly what it is: the Corporate Wrongdoer 
Past, Present and Future Protection Act; and, by the way, do not forget 
to send the money.
  Let us shred up this document. Let us shred up this piece of 
legislation just like the documents that the corporate wrongdoers love 
to destroy. That would be true justice. That is what ought to happen to 
this legislation.
  It is improper. It is unconstitutional. Our friends on the other side 
know it, and the judicial system of the United States has said this 
should be opposed.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself 30 seconds.
  Mr. Chairman, I wish the Democrats would get their facts straight 
before they come to the floor. First, any entity, individual or 
corporate, that is in bankruptcy is in Federal court and all claims go 
there: Enron, WorldCom, anybody else that is in bankruptcy.
  Secondly, page 16 of the bill, which I will send over to the 
gentleman from Texas (Mr. Sandlin), provides specific exemptions for 
the removal of class action cases to Federal court for all the types of 
corporate wrongdoing that he said on the floor.
  Read the bill, be accurate in your arguments, and support it.
  Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  (Ms. JACKSON-LEE of Texas asked and was given permission to revise 
and extend her remarks.)
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the distinguished 
gentleman from Detroit, Michigan (Mr. Conyers), the ranking member, for 
yielding me time, and I appreciate this debate. I just wish it was 
longer, to be able to be more edifying of what we are talking about.
  My voice is a little raspy this morning, but it seems that day after 
day and time after time, we come to this floor to try to keep the door 
of justice open.
  This seems like a one-sided victory. We know they have the votes. But 
this is personal. And I have always been taught that when we uphold the 
Constitution and speak on behalf of the American people, we should 
remove our personal considerations. There is a fight between a few 
defense lawyers who have come up against worthy plaintiffs' lawyers who 
prevailed on behalf of class action plaintiffs in a myriad of issues, 
whether it is the Ford Pinto, whether it has to do with thalidomide 
that made babies deformed in the 1950s. These are the causes that we 
are talking about.
  This class action legislation is an abuse of power because it 
undermines the tenth amendment that I have thought we respected in some 
instances; and that is, we leave certain issues to the States. There 
are 68 vacancies in the Federal court. All you need to do is kick class 
action lawsuits out of the State courts that have moved progressively 
along to allow plaintiffs to have their say, and you will have a 
backlog of Federal jurisdiction and docket, and you will never see the 
light of day.
  So individuals who have been injured with respect to medical devices 
or other kinds of manufacturing devices and have drawn together because 
their resources are small will not have their day in court.
  The Lawyers Committee for Civil Rights have brought up another issue. 
Is it because the juries are predominantly minority in many cases that 
you run away from justice? Let me say to my friends, justice comes in 
all shapes, colors, and sizes. I want to stand for justice.
  Vote against this bad bill. It closes the door of justice to the 
American people.
  Mr. Chairman, today this Chamber is considering H.R. 1115, the 
``Class Action Fairness Act of 2003.'' I oppose H.R. 1115 for several 
policy reasons including severe infringement on the discretion of the 
judiciary. I remain steadfast in my belief that this legislation is yet

[[Page H5290]]

another example of the legislature interfering in the affairs of the 
judiciary.
  It is remarkable that the proponents of this legislation have always 
espoused the wisdom of allowing state courts and legislatures to decide 
for their own citizens what is best for them. They have professed that, 
as much as possible, the Federal government should not interfere in 
state business. But H.R. 1115 directly interferes with state court 
discretion by broadening Federal jurisdiction over state class action 
lawsuits.
  H.R. 1115 makes severe changes to diversity jurisdiction 
requirements. The bill also makes substantial revisions to the rules 
governing aggregation of claims. Both of these changes would result in 
significantly more state court actions being removed to federal courts 
thereby overburdening the federal caseload.
  H.R. 1115 also provides a party to a class action lawsuit with the 
right to an interlocutory appeal of the court's class certification 
decision provided an appeal notice is filed within 10 days. The appeal 
would stay discovery and other proceedings during the pendency of the 
appeal. This is a substantial change to Rule 23(f) which presently 
provides the court with discretion to allow an appeal of the class 
certification order without staying other proceedings. The automatic 
stay under H.R. 1115 provides defendants with another delaying tactic 
and another tool to increase the expense for plaintiffs.
  These delay tactics and other provisions give a decisive advantage to 
well-financed corporate defendants. I am deeply concerned that if we 
pass H.R. 1115 we would eliminate the means by which innocent victims 
of corporate giants can find justice. First, I believe that before we 
consider this legislation, Congress should insist on receiving 
objective and comprehensive data justifying such a dramatic intrusion 
into state court prerogatives. This legislation has the potential to 
damage federal and state court systems. H.R. 1115 will expand federal 
class action jurisdiction to include most state class actions. H.R. 
1115 will dramatically increase the number of cases in the already 
overburdened federal courts.
  For example, as of February 2, 2002, there were 68 federal judicial 
vacancies. Judicial vacancies mean other courts must assume the 
workload. Assuming this additional burden contributes to federal 
district court judges having a backlogged docket with an average of 416 
pending civil cases. These workload problems caused Supreme Court Chief 
Justice Rehnquist to criticize Congress for taking actions that have 
exacerbated the courts' workload problem.
  H.R. 1115 also raises serious constitutional issues because it strips 
state courts of the discretion to decide when to utilize the class 
action format. In those cases where a federal court chooses not to 
certify the state class action, the bill prohibits the states from 
using class actions to resolve the underlying state causes of action. 
Federal courts have indicated in numerous decisions that efforts by 
Congress to dictate such state court procedures implicate important 
Tenth Amendment federalism issues and should be avoided. The Supreme 
Court has already made clear that state courts are constitutionally 
required to provide due process and other fairness protections to the 
parties in class action cases.
  H.R. 1115 also adversely impacts the ability of consumers and other 
victims to receive compensation in cases concerning extensive damages. 
The bill has the potential to force state class actions into federal 
courts which may result in increase litigation expenses. Corporate 
defendants may attempt to force less-financed plaintiffs to travel 
great distances to participate in court proceedings. There are also 
added pleading costs for plaintiffs. For example, under the bill, 
individuals are required to plead with particularity the nature of the 
injuries suffered by class members in their initial complaints. The 
plaintiff must even prove the defendant's ``state of mind,'' such as 
fraud or deception, to be included in the initial complaint. This is a 
very high standard to impose of plaintiffs who may not yet have had the 
benefit of formal discovery. If the pleading requirements are not met, 
the judge is required to dismiss the plaintiff's complaint.
  Additionally, plaintiffs under H.R. 1115 will face a far more arduous 
task of certifying their class actions in the federal court system. 
Fourteen states, representing some 29 percent of the nation's 
population, have adopted different criteria for class action rules than 
Rule 23 of the federal rules of civil procedure. Plaintiffs may also be 
disadvantaged by the vague terms used in the legislation, such as 
``substantial majority'' of plaintiffs, ``primary defendants,'' and 
claims ``primarily'' governed by a state's laws, as they are entirely 
new and undefined phrases with no precedent in the United States Code 
or the case law.
  Mr. Chairman, H.R. 1115 is riddled with provisions that are 
burdensome to potential plaintiffs and that potentially infringe on the 
discretion of state courts. I urge all of my colleagues to reject H.R. 
1115 as it is presently written. I commend my colleagues for proposing 
numerous amendments to this bill and I hope that these amendments will 
address the gross inequities in this legislation.
  Mr. CONYERS. Mr. Chairman, I yield myself the balance of my time.
  The SPEAKER pro tempore. The gentleman is recognized for 2\1/2\ 
minutes.
  (Mr. CONYERS asked and was given permission to revise and extend his 
remarks, and include extraneous material.)
  Mr. CONYERS. Mr. Chairman, this bill is class warfare with a 
vengeance.
  Here my conservative friends, Republicans, are supporting the bill 
that will help Enron, Ken Lay, that is right, Adelphia, WorldCom, Tyco, 
by making retroactive all the automatic appeal provisions. By the way, 
the Chambers of Commerce are enthusiastic that maybe the fourth time 
this will get through the Congress. The National Association of 
Manufacturers are for it, and so is the President of the United States. 
That is one side.
  Now, who are the victims? All consumers groups are against the bill. 
All civil rights groups are against the bill. All environmental groups 
are against the bill. All health care groups are against the bill. All 
judges, Federal and State, including the Chief Justice of the Supreme 
Court, are against the bill.
  Get the picture? We do. And so do the people in your districts from 
whom you are taking the right to be jurors in these trials away from.

                              {time}  1315

  Let us talk about the coupon business, because in the Democratic 
substitute, on page 12, section 1711, is the only corrective action to 
coupons, which have been cried about on this floor this morning. If 
there is any provision in the bill that is on the floor now about 
coupons that will eliminate it or make it harder to bring, I would sure 
like to hear about it in the closing comments; and I have a Detroit 
Free Press editorial that came out yesterday saying class action, the 
plan seems less about justice than helping business. And I will insert 
it and a letter from the NAACP for the Record at this point.

              [From the Detroit Free Press, June 11, 2003]

   Class Action: Plan Seems Less About Justice Than Helping Business

       Now don't go making a federal case of it . . .
       That old expression is a good one to direct at Congress, 
     since the House and Senate appear to be racing each other to 
     pass bills that would discourage class-action lawsuits by 
     shifting them from state courts to the federal system. This 
     is an interesting tack for a lot of conservative lawmakers 
     who profess to want less federal involvement in American 
     lives. Federal judges, already buckling under case overload, 
     are opposed to it. So are state judges. Consumer groups see 
     the bills as an overkill remedy for a system that's already 
     being repaired by judicial initiatives.
       Class-action suits allow one or a few people to seek 
     damages for hundreds or even thousand of individuals who may 
     have been affected by a bad product or policy. They are, 
     understandably, the bane of big business and have been 
     outrageously lucrative to some lawyers. But they also have 
     produced changes in dangerous products or practices and held 
     companies accountable.
       Shifting such suits to federal courts sets up new 
     procedural hurdles, appeal possibilities, and delays even 
     before the merits of a claim are addressed. Even suits in 
     which the entire ``class'' of potentially harmed people 
     resides in the same state as the company being sued would be 
     moved to the federal system, where cases languish years 
     longer than in state courts.
       The House version of the legislation is particularly 
     offensive because it is retroactive, meaning it would affect 
     class-action claims now pending against Enron, WorldCom, 
     Adelphia and other corporations accused of defrauding 
     investors while their executives made millions of dollars.
       Supporters will say these bills are about reforming a bad 
     process. What they really are about is discouraging a 
     legitimate right to seek redress for wrongdoing--without 
     making a federal case of it.
                                  ____

                                      National Association for the


                                Advancement of Colored People,

                                    Washington, DC, June 11, 2003.
     Members,
     House of Representatives,
     Washington, DC.


         re: oppose h.r. 1115 class action lawsuit legislation

       Dear Representative: on behalf of the NAACP, our nation's 
     oldest, largest and most widely-recognized grassroots civil 
     rights organization, I urge you, in the strongest terms 
     possible, to oppose H.R. 1115, the so-called ``Class Action 
     Fairness Act of 2003'', legislation that would substantially

[[Page H5291]]

     alter the constitutional distribution of judicial power and 
     have a severely negative impact on the struggle for civil 
     rights in this country.
       Class action lawsuits are essential to the enforcement of 
     our nation's civil rights and voting rights laws. They are 
     often the only means by which individuals can challenge and 
     obtain relief from systemic discrimination. Indeed, federal 
     class actions were designed to accommodate, and have served 
     as a primary vehicle for, civil rights litigation seeking 
     broad equitable relief.
       The proposed legislation, if enacted, would remove most 
     state law class actions into federal court; clog the federal 
     courts with state law cases and make it more difficult to 
     have federal civil rights cases heard; deter people from 
     bringing class actions; and impose barriers and burdens on 
     settlement of class actions. The pending legislation would 
     also discourage people from bringing class actions by 
     prohibiting settlements that provide named plaintiffs full 
     relief for their claims and would impose new, burdensome 
     delay tactics for all class actions by automatically allowing 
     a defendant to appeal any class certification in federal 
     court and staying all the proceedings while the appeal is 
     pending.
       I urge you again, in the strongest terms possible, to 
     oppose H.R. 1115, the so-called ``Class Action Fairness Act 
     of 2003'' if and when it comes before you. If enacted, its 
     impact would be profound, and it would result in new and 
     substantial limitations on access to the courts for victims 
     of discrimination. Should you have any questions about the 
     NAACP position, please feel free to contact me at (202) 638-
     2269. Thank you for your attention.
           Sincerely,
                                                Hilary O. Shelton,
                                                         Director.

  My colleagues may get a Tyco and Enron out of jail with this delay, 
but they are not going to get this bill through the Federal legislative 
body.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself the balance of the 
time.
  Mr. Chairman, this country has a crisis in manufacturing. 
Particularly, small- and medium-sized manufacturing jobs are going 
overseas by the droves, particularly to China, and there are a whole 
lot of reasons for that; but one of the reasons is a judicial system 
that is out of control.
  My colleagues can talk about business, but it is business that 
creates the jobs that hire our constituents who pay the taxes to make 
the government run; and by having court reform, which is what this bill 
does, it is not tort reform because nobody's rights to a jury trial or 
to get into a court are constricted by one iota. It is where this is 
done and how class actions get certified and protections for consumers 
such as the coupon settlements and the deficiency judgments that are 
entered against class members.
  This is going to help keep America's economy vibrant. Pass the bill.
  Mr. STARK. I rise today to oppose this misguided legislation. Don't 
be fooled by the title of this bill. It would lead some to believe that 
Congress is standing up for the average American--modifying certain 
inequities in our judicial system. Instead, it is a Republican 
sponsored hoax unfairly threatening the very people we are all elected 
to protect.
  I don't think that the American public would be satisfied knowing 
that if H.R. 1115 passes, the accountability of such companies as 
Enron, WorldCom, and Arthur Anderson and pharmaceutical giants like Eli 
Lilly, Aventis Pasteur and Abbott laboratories would be held less 
responsible in pending class action cases againt them. This bill will 
adversely affect low-income groups and consumers to effectively assert 
their rights against large corporations.
  Why should corporations reap the benefits of our judicial system by 
avoiding civil penalties? They are the ones committing crimes. The 
intent of pursuing a class action suit in court allows redress for 
average Americans financially unable to launch a judicial battle on 
their own. Class action suits empower consumers to challenge 
wrongdoings by wealthy corporations who would otherwise ignore their 
appeal.
  We know that truthful law-abiding citizens are the ones who will lose 
if this bill becomes law. Apparently, in America today, you must 
contribute a significant amount to the Republican Party's campaign 
pocketbook to be considered protected under the law. This bill 
certainly protects major Republican campaign contributors--too bad for 
all the average working people who are left behind.
  I ask my colleagues to stand up for real people and vote against H.R. 
1115.
  Mr. BLUMENAUER. Mr. Chairman, the pages of our newspapers have been 
filled with accounts of corporate abuse of investors and consumers. 
Part of the reason Oregon has the highest unemployment rate in America 
for over a year is the result of the Enron scandal and the California 
energy crisis. To make it harder for Oregonians who have been abused to 
seek legal redress is nothing short of outrageous.
  This legislation would severely undermine the ability of Americans to 
seek relief from activities that harm consumers, the environment and 
public health. We should be working in Congress to help mend the 
relationship between corporations and the American public, rather than 
promote measures like this which will make it more difficult for 
injured consumers to bring class-action lawsuits.
  By allowing corporations to move most class-action lawsuits from 
state courts, where they properly belong, into already overburdened 
federal courts and by imposing new procedural hurdles, the measure 
would delay, if not deny, justice to plaintiffs in legitimate class-
action lawsuits. The federal courts have fewer than 1,500 judges 
compared to more than 30,000 judges currently serving on state courts. 
Thousands of class actions lawsuits spending in state courts around the 
country would be added to the federal docket under H.R. 1115 because of 
its retroactivity provision.
  This legislation would also dilute the right of consumers to bring 
class action lawsuits against the firearms industry. Firearms are one 
of the only consumer products not subject to federal consumer safety 
regulation. Citizen lawsuits--including class actions--are one of the 
only incentives for the firearms industry to act responsibly.
  We should not take away this important tool for the American public 
to protect their rights and secure compensation for their injuries and 
losses.
  Ms. SCHAKOWSKY. Mr. Chairman, I rise today in opposition to H.R. 
1115, the so-called Class Action Fairness Act. This bill is actually 
unfair to consumers because it would make it more difficult, more 
expensive, and more time-consuming for Americans with legitimate claims 
to access justice in class-action lawsuits. Instead, this bill rewards 
corporate wrongdoers and companies that fail to avoid dangerous 
practices and refuse to remove faulty products from store shelves.
  Class action suits are an invaluable asset to consumers and all who 
engage in business of any kind. No one is immune from potentially being 
treated unfairly, being discriminated against, being taken advantage 
of, or being cheated. However, those who are victims are often those 
with no voice and no resources to fight back. But class action suits 
allow them to join with hundreds of others who have suffered the same 
harm and, together, become a strong voice for justice. In many cases, 
class action lawsuits are the only way that those who have been harmed 
can be heard and have their day in court.
  Unfortunately, this bill would make most class action suits and the 
empowerment they provide to consumers a thing of the past. We've seen 
this bill repeatedly in the past, and we're seeing it again today 
because the Republicans will stop at nothing to protect their big money 
corporate supporters--those who get them elected--from being held 
accountable for their actions. This is especially evident in the bill 
before us today which goes further than the Republican class action 
bills of the past by making the legislation retroactive! If passed, 
this bill would apply to pending class actions, including the cases 
against Enron and WorldCom for financial fraud, Dow Chemical for 
environmental damage, Wal-Mart for employment discrimination, and Eli 
Lilly, GlaxoSmithKline, Abbott Laboratories and others for autism and 
other neurological damage.
  This bill would change the rules midstream. While a class action has 
been filed against Enron by retirees, this class has yet to be 
certified. Under this bill, Enron for the first time would be given the 
opportunity to make an immediate appeal of any court decision granting 
class certification. The result could be a hold on all proceedings, 
including investigations to make discoveries of evidence, while the 
appeal was pending. This is an unwarranted, expensive, and wasteful use 
of time, and all while Enron retirees sit and wait for a decision 
regarding their retirement funds. This is not compassionate and not 
fair.
  This bill looks the other way as workers are taken advantage of by 
big corporations, as patients are abused by HMOs, and as the 
environment continues to suffer damage from big polluters. In such a 
claim, it is critical that people have access to justice. This bill 
takes away that access and protects those who will continue to do harm. 
Republicans are committing fraud against the American people by 
proposing this bill, and I urge my colleagues to oppose H.R. 1115.
  Mr. POMEROY. Mr. Chairman, I rise in reluctant opposition to H.R. 
1115, the Class Action Fairness Act.
  Our system of class action litigation is in dire need of reform. Most 
class action cases are national in scope and should be heard in federal 
court, where like claims may be combined and uniform decisions 
rendered. Under the current system, however, these interstate suits are 
often filed in state or country court, where the decision of a local 
judge and jury may affect the laws of all 50 states. As a former state 
insurance commissioner, I am

[[Page H5292]]

deeply troubled that a jury panel in a class action case in Mississippi 
or New Mexico could effectively overturn state regulations in my home 
state of North Dakota.
  In addition, by allowing interstate class action claims to be filed 
in any of the thousands of local courts across the country, the 
likelihood is increased that a plaintiffs lawyer will find at least one 
judge who is willing to entertain a claim that most people would 
consider to be without merit. Once a sympathetic judge is found, the 
plaintiffs' attorney can leverage nationwide settlements that all too 
often provide little benefit to the actual plaintiffs but enormous 
benefit to the attorney.
  I support the amendment brought forward by Representatives 
Sensenbrenner, Boucher, Dooley, Stenholm, and Terry, that incorporates 
the so-called ``Feinstein Amendment.'' Through this amendment, class 
action suits would be apportioned to federal or state courts depending 
on the domicile of the plaintiffs. I believe that the Feinstein 
Amendment addressed an important criticism to the bill in that it would 
leave lawsuits that are clearly of local concern, with state courts.
  However, I was disheartened to learn that an amendment that would 
effectively strike the retroactivity provision in the bill was ruled 
out-of-order and will not be brought forward for a vote here today. 
This provision would unfairly apply the new law to cases already filed 
in state courts, but not granted class certification. It sets bad 
public policy because it changes the rules for injured Plaintiffs in 
the middle of the game. I understand that this provision was added 
during Committee debate of the bill and was added at the urging of a 
special interest. Such political favoring produces bad policy that I 
cannot support. Therefore, I cannot support class action reform that 
retroactively applies to active cases.
  We have not heard the last of this issue. I look forward to 
continuing to work on this issue so that we can finally reform the 
class action system.
  Mr. BACA. Mr. Chairman, I rise in opposition to H.R. 1115, the Class 
Action Fairness Act of 2003.
  H.R. 1115 is just another attempt by Republicans to deny people their 
fair day in court. Once again, they are siding with Goliath at the 
expense of David. They are siding with the big corporate interests at 
the expense of the public interest. They are siding with their campaign 
contributors at the expense of the American people.
  This legislation is unfair to consumers. It wrongly limits the 
authority of State courts, bogs down Federal courts, and makes it more 
difficult for consumer claims to be heard. This is a deliberate attempt 
b7 conservatives to protect big businesses like WorldCom, Arthur 
Andersen and Enron.
  When a company violates the rights of consumers, consumers are 
entitled to have their claim go before a judge and jury in a timely 
manner. Republicans would love to be the judge and jury in these cases, 
siding with and protecting their corporate friends. But that's not the 
way it works.
  In my home state, the University of California pension plan lost $353 
million as a result of the WorldCom accounting scandal. Like many other 
Americans, they were victims of the fraudulent activities of Arthur 
Andersen.
  Under H.R. 1115, the University of California would have been 
prevented from having their day in a State court. Instead, the suit 
would have been moved to Federal court, causing terrible delays and 
hurting those Californians who depended on their pensions.
  The people of California and all across this nation deserve to have 
fair and easy access to a speedy judicial system.
  This legislation places huge barriers in the path of consumers. It 
limits the rights of consumers, undermines the authority of state 
courts, and increases the burden on federal courts.
  That sound you hear is the sound of big business applauding this 
legislation. They appreciate the additional time this bill would give 
them to shred documents, destroy evidence and cause harm to hard-
working Californians and to all Americans.
  It simply isn't fair and we must do more to protect our consumers.
  Mr. SENSENBRENNER. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the committee amendment in the nature of a 
substitute printed in the bill shall be considered as an original bill 
for the purpose of amendment under the 5-minute rule and shall be 
considered read.
  The text of the committee amendment in the nature of a substitute is 
as follows:

                               H.R. 1115

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Class 
     Action Fairness Act of 2003''.
       (b) Reference.--Whenever in this Act reference is made to 
     an amendment to, or repeal of, a section or other provision, 
     the reference shall be considered to be made to a section or 
     other provision of title 28, United States Code.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; reference; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Consumer class action bill of rights and improved procedures 
              for interstate class actions.
Sec. 4. Federal district court jurisdiction of interstate class 
              actions.
Sec. 5. Removal of interstate class actions to Federal district court.
Sec. 6. Appeals of class action certification orders.
Sec. 7. Enactment of Judicial Conference recommendations.
Sec. 8. Effective date.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds as follows:
       (1) Class action lawsuits are an important and valuable 
     part of our legal system when they permit the fair and 
     efficient resolution of legitimate claims of numerous parties 
     by allowing the claims to be aggregated into a single action 
     against a defendant that has allegedly caused harm.
       (2) Over the past decade, there have been abuses of the 
     class action device that have--
       (A) harmed class members with legitimate claims and 
     defendants that have acted responsibly;
       (B) adversely affected interstate commerce; and
       (C) undermined public respect for the judicial system in 
     the United States.
       (3) Class members have been harmed by a number of actions 
     taken by plaintiffs' lawyers, which provide little or no 
     benefit to class members as a whole, including--
       (A) plaintiffs' lawyers receiving large fees, while class 
     members are left with coupons or other awards of little or no 
     value;
       (B) unjustified rewards being made to certain plaintiffs at 
     the expense of other class members; and
       (C) the publication of confusing notices that prevent class 
     members from being able to fully understand and effectively 
     exercise their rights.
       (4) Through the use of artful pleading, plaintiffs are able 
     to avoid litigating class actions in Federal court, forcing 
     businesses and other organizations to defend interstate class 
     action lawsuits in county and State courts where--
       (A) the lawyers, rather than the claimants, are likely to 
     receive the maximum benefit;
       (B) less scrutiny may be given to the merits of the case; 
     and
       (C) defendants are effectively forced into settlements, in 
     order to avoid the possibility of huge judgments that could 
     destabilize their companies.
       (5) These abuses undermine the Federal judicial system, the 
     free flow of interstate commerce, and the intent of the 
     framers of the Constitution in creating diversity 
     jurisdiction, in that county and State courts are--
       (A) handling interstate class actions that affect parties 
     from many States;
       (B) sometimes acting in ways that demonstrate bias against 
     out-of-State defendants; and
       (C) making judgments that impose their view of the law on 
     other States and bind the rights of the residents of those 
     States.
       (6) Abusive interstate class actions have harmed society as 
     a whole by forcing innocent parties to settle cases rather 
     than risk a huge judgment by a local jury, thereby costing 
     consumers billions of dollars in increased costs to pay for 
     forced settlements and excessive judgments.
       (b) Purposes.--The purposes of this Act are--
       (1) to assure fair and prompt recoveries for class members 
     with legitimate claims;
       (2) to protect responsible companies and other institutions 
     against interstate class actions in State courts;
       (3) to restore the intent of the framers of the 
     Constitution by providing for Federal court consideration of 
     interstate class actions; and
       (4) to benefit society by encouraging innovation and 
     lowering consumer prices.

     SEC. 3. CONSUMER CLASS ACTION BILL OF RIGHTS AND IMPROVED 
                   PROCEDURES FOR INTERSTATE CLASS ACTIONS.

       (a) In General.--Part V is amended by inserting after 
     chapter 113 the following:

                      ``CHAPTER 114--CLASS ACTIONS

``Sec.
``1711. Judicial scrutiny of coupon and other noncash settlements.
``1712. Protection against loss by class members.
``1713. Protection against discrimination based on geographic location.
``1714. Prohibition on the payment of bounties.
``1715. Definitions.

     ``Sec. 1711. Judicial scrutiny of coupon and other noncash 
       settlements

       ``The court may approve a proposed settlement under which 
     the class members would receive noncash benefits or would 
     otherwise be required to expend funds in order to obtain part 
     or all of the proposed benefits only after a hearing to 
     determine whether, and making a written finding that, the 
     settlement is fair, reasonable, and adequate for class 
     members.

     ``Sec. 1712. Protection against loss by class members

       ``The court may approve a proposed settlement under which 
     any class member is obligated to pay sums to class counsel 
     that would result in a net loss to the class member only if 
     the court

[[Page H5293]]

     makes a written finding that nonmonetary benefits to the 
     class member outweigh the monetary loss.

     ``Sec. 1713. Protection against discrimination based on 
       geographic location

       ``The court may not approve a proposed settlement that 
     provides for the payment of greater sums to some class 
     members than to others solely on the basis that the class 
     members to whom the greater sums are to be paid are located 
     in closer geographic proximity to the court.

     ``Sec. 1714. Prohibition on the payment of bounties

       ``(a) In General.--The court may not approve a proposed 
     settlement that provides for the payment of a greater share 
     of the award to a class representative serving on behalf of a 
     class, on the basis of the formula for distribution to all 
     other class members, than that awarded to the other class 
     members.
       ``(b) Rule of Construction.--The limitation in subsection 
     (a) shall not be construed to prohibit any payment approved 
     by the court for reasonable time or costs that a person was 
     required to expend in fulfilling his or her obligations as a 
     class representative.

     ``Sec. 1715. Definitions

       ``In this chapter--
       ``(1) Class action.--The term `class action' means any 
     civil action filed in a district court of the United States 
     pursuant to rule 23 of the Federal Rules of Civil Procedure 
     or any civil action that is removed to a district court of 
     the United States that was originally filed pursuant to a 
     State statute or rule of judicial procedure authorizing an 
     action to be brought by one or more representatives on behalf 
     of a class.
       ``(2) Class counsel.--The term `class counsel' means the 
     persons who serve as the attorneys for the class members in a 
     proposed or certified class action.
       ``(3) Class members.--The term `class members' means the 
     persons who fall within the definition of the proposed or 
     certified class in a class action.
       ``(4) Plaintiff class action.--The term `plaintiff class 
     action' means a class action in which class members are 
     plaintiffs.
       ``(5) Proposed settlement.--The term `proposed settlement' 
     means an agreement that resolves claims in a class action, 
     that is subject to court approval, and that, if approved, 
     would be binding on the class members.''.
       (b) Technical and Conforming Amendment.--The table of 
     chapters for part V is amended by inserting after the item 
     relating to chapter 113 the following:

``114. Class Actions............................................1711''.

     SEC. 4. FEDERAL DISTRICT COURT JURISDICTION OF INTERSTATE 
                   CLASS ACTIONS.

       (a) Application of Federal Diversity Jurisdiction.--Section 
     1332 is amended--
       (1) by redesignating subsection (d) as subsection (e); and
       (2) by inserting after subsection (c) the following:
       ``(d)(1) In this subsection--
       ``(A) the term `class' means all of the class members in a 
     class action;
       ``(B) the term `class action' means any civil action filed 
     pursuant to rule 23 of the Federal Rules of Civil Procedure 
     or similar State statute or rule of judicial procedure 
     authorizing an action to be brought by one or more 
     representative persons on behalf of a class;
       ``(C) the term `class certification order' means an order 
     issued by a court approving the treatment of a civil action 
     as a class action; and
       ``(D) the term `class members' means the persons who fall 
     within the definition of the proposed or certified class in a 
     class action.
       ``(2) The district courts shall have original jurisdiction 
     of any civil action in which the matter in controversy 
     exceeds the sum or value of $2,000,000, exclusive of interest 
     and costs, and is a class action in which--
       ``(A) any member of a class of plaintiffs is a citizen of a 
     State different from any defendant;
       ``(B) any member of a class of plaintiffs is a foreign 
     state or a citizen or subject of a foreign state and any 
     defendant is a citizen of a State; or
       ``(C) any member of a class of plaintiffs is a citizen of a 
     State and any defendant is a foreign state or a citizen or 
     subject of a foreign state.
       ``(3) Paragraph (2) shall not apply to any civil action in 
     which--
       ``(A)(i) the substantial majority of the members of the 
     proposed plaintiff class and the primary defendants are 
     citizens of the State in which the action was originally 
     filed; and
       ``(ii) the claims asserted therein will be governed 
     primarily by the laws of the State in which the action was 
     originally filed;
       ``(B) the primary defendants are States, State officials, 
     or other governmental entities against whom the district 
     court may be foreclosed from ordering relief; or
       ``(C) the number of proposed plaintiff class members is 
     less than 100.
       ``(4) In any class action, the claims of the individual 
     class members shall be aggregated to determine whether the 
     matter in controversy exceeds the sum or value of $2,000,000, 
     exclusive of interest and costs.
       ``(5) This subsection shall apply to any class action 
     before or after the entry of a class certification order by 
     the court with respect to that action.
       ``(6)(A) A district court shall dismiss any civil action 
     that is subject to the jurisdiction of the court solely under 
     this subsection if the court determines the action may not 
     proceed as a class action based on a failure to satisfy the 
     requirements of rule 23 of the Federal Rules of Civil 
     Procedure.
       ``(B) Nothing in subparagraph (A) shall prohibit plaintiffs 
     from filing an amended class action in Federal court or 
     filing an action in State court, except that any such action 
     filed in State court may be removed to the appropriate 
     district court if it is an action of which the district 
     courts of the United States have original jurisdiction.
       ``(C) In any action that is dismissed under this paragraph 
     and is filed by any of the original named plaintiffs therein 
     in the same State court venue in which the dismissed action 
     was originally filed, the limitations periods on all 
     reasserted claims shall be deemed tolled for the period 
     during which the dismissed class action was pending. The 
     limitations periods on any claims that were asserted in a 
     class action dismissed under this paragraph that are 
     subsequently asserted in an individual action shall be deemed 
     tolled for the period during which the dismissed action was 
     pending.
       ``(7) Paragraph (2) shall not apply to any class action 
     brought by shareholders that solely involves a claim that 
     relates to--
       ``(A) a claim concerning a covered security as defined 
     under section 16(f)(3) of the Securities Act of 1933 and 
     section 28(f)(5)(E) of the Securities Exchange Act of 1934;
       ``(B) the internal affairs or governance of a corporation 
     or other form of business enterprise and arises under or by 
     virtue of the laws of the State in which such corporation or 
     business enterprise is incorporated or organized; or
       ``(C) the rights, duties (including fiduciary duties), and 
     obligations relating to or created by or pursuant to any 
     security (as defined under section 2(a)(1) of the Securities 
     Act of 1933 and the regulations issued thereunder).
       ``(8) For purposes of this subsection and section 1453 of 
     this title, an unincorporated association shall be deemed to 
     be a citizen of the State where it has its principal place of 
     business and the State under whose laws it is organized.
       ``(9) For purposes of this section and section 1453 of this 
     title, a civil action that is not otherwise a class action as 
     defined in paragraph (1)(B) of this subsection shall 
     nevertheless be deemed a class action if--
       ``(A) the named plaintiff purports to act for the interests 
     of its members (who are not named parties to the action) or 
     for the interests of the general public, seeks a remedy of 
     damages, restitution, disgorgement, or any other form of 
     monetary relief, and is not a State attorney general; or
       ``(B) monetary relief claims in the action are proposed to 
     be tried jointly in any respect with the claims of 100 or 
     more other persons on the ground that the claims involve 
     common questions of law or fact.
     In any such case, the persons who allegedly were injured 
     shall be treated as members of a proposed plaintiff class and 
     the monetary relief that is sought shall be treated as the 
     claims of individual class members. The provisions of 
     paragraphs (3) and (6) of this subsection and subsections 
     (b)(2) and (d) of section 1453 shall not apply to civil 
     actions described under subparagraph (A). The provisions of 
     paragraph (6) of this subsection, and subsections (b)(2) and 
     (d) of section 1453 shall not apply to civil actions 
     described under subparagraph (B).''.
       (b) Conforming Amendments.--
       (1) Section 1335(a)(1) is amended by inserting ``(a) or 
     (d)'' after ``1332''.
       (2) Section 1603(b)(3) is amended by striking ``(d)'' and 
     inserting ``(e)''.

     SEC. 5. REMOVAL OF INTERSTATE CLASS ACTIONS TO FEDERAL 
                   DISTRICT COURT.

       (a) In General.--Chapter 89 is amended by adding after 
     section 1452 the following:

     ``Sec. 1453. Removal of class actions

       ``(a) Definitions.--In this section, the terms `class', 
     `class action', `class certification order', and `class 
     member' have the meanings given these terms in section 
     1332(d)(1).
       ``(b) In General.--A class action may be removed to a 
     district court of the United States in accordance with this 
     chapter, without regard to whether any defendant is a citizen 
     of the State in which the action is brought, except that such 
     action may be removed--
       ``(1) by any defendant without the consent of all 
     defendants; or
       ``(2) by any plaintiff class member who is not a named or 
     representative class member without the consent of all 
     members of such class.
       ``(c) When Removable.--This section shall apply to any 
     class action before or after the entry of a class 
     certification order in the action, except that a plaintiff 
     class member who is not a named or representative class 
     member of the action may not seek removal of the action 
     before an order certifying a class of which the plaintiff is 
     a class member has been entered.
       ``(d) Procedure for Removal.--The provisions of section 
     1446 relating to a defendant removing a case shall apply to a 
     plaintiff removing a case under this section, except that in 
     the application of subsection (b) of such section the 
     requirement relating to the 30-day filing period shall be met 
     if a plaintiff class member files notice of removal within 30 
     days after receipt by such class member, through service or 
     otherwise, of the initial written notice of the class action.
       ``(e) Review of Orders Remanding Class Actions to State 
     Courts.--The provisions of section 1447 shall apply to any 
     removal of a case under this section, except that, 
     notwithstanding the provisions of section 1447(d), an order 
     remanding a class action to the State court from which it was 
     removed shall be reviewable by appeal or otherwise.
       ``(f) Exception.--This section shall not apply to any class 
     action brought by shareholders that solely involves--
       ``(1) a claim concerning a covered security as defined 
     under section 16(f)(3) of the Securities Act of 1933 and 
     section 28(f)(5)(E) of the Securities Exchange Act of 1934;
       ``(2) a claim that relates to the internal affairs or 
     governance of a corporation or other form of business 
     enterprise and arises under or by virtue of the laws of the 
     State in which such corporation or business enterprise is 
     incorporated or organized; or

[[Page H5294]]

       ``(3) a claim that relates to the rights, duties (including 
     fiduciary duties), and obligations relating to or created by 
     or pursuant to any security (as defined under section 2(a)(1) 
     of the Securities Act of 1933 and the regulations issued 
     thereunder).''.
       (b) Removal Limitation.--Section 1446(b) is amended in the 
     second sentence by inserting ``(a)'' after ``section 1332''.
       (c) Technical and Conforming Amendments.--The table of 
     sections for chapter 89 is amended by adding after the item 
     relating to section 1452 the following:

``1453. Removal of class actions.''.

     SEC. 6. APPEALS OF CLASS ACTION CERTIFICATION ORDERS.

       (a) In General.--Section 1292(a) is amended by inserting 
     after paragraph (3) the following:
       ``(4) Orders of the district courts of the United States 
     granting or denying class certification under rule 23 of the 
     Federal Rules of Civil Procedure, if notice of appeal is 
     filed within 10 days after entry of the order.''.
       (b) Discovery Stay.--All discovery and other proceedings 
     shall be stayed during the pendency of any appeal taken 
     pursuant to the amendment made by subsection (a), unless the 
     court finds upon the motion of any party that specific 
     discovery is necessary to preserve evidence or to prevent 
     undue prejudice to that party.

     SEC. 7. ENACTMENT OF JUDICIAL CONFERENCE RECOMMENDATIONS.

       Notwithstanding any other provision of law, the amendments 
     to Rule 23 of the Federal Rules of Civil Procedure which are 
     embraced by the order entered by the Supreme Court of the 
     United States on March 27, 2003, shall take effect on the 
     date of the enactment of this Act or on December 1, 2003 (as 
     specified in that order), whichever occurs first.

     SEC. 8. EFFECTIVE DATE.

       (a) In General.--The amendments made by this Act shall 
     apply to--
       (1) any civil action commenced on or after the date of the 
     enactment of this Act; and
       (2) any civil action commenced before such date of 
     enactment in which a class certification order (as defined in 
     section 1332(d)(1)(C) of title 28, United States Code, as 
     amended by section 4 of this Act) is entered on or after such 
     date of enactment.
       (b) Filing of Notice of Removal.--In the case of any civil 
     action to which subsection (a)(2) applies, the requirement 
     relating to the 30-day period for the filing of a notice of 
     removal under section 1446(b) and section 1453(d) of title 
     28, United States Code, shall be met if the notice of removal 
     is filed within 30 days after the date on which the class 
     certification order referred to in subsection (a)(2) is 
     entered.

  The CHAIRMAN. No amendment to the committee amendment is in order 
except those printed in House Report 108-148. Each amendment may be 
offered only in the order printed in the report, by a Member designated 
in the report, shall be considered read, shall be debatable for the 
time specified in the report, equally divided and controlled by the 
proponent and an opponent, shall not be subject to amendment, and shall 
not be subject to a demand for division of the question.
  It is now in order to consider amendment No. 1 printed in House 
Report 108-148.


              Amendment No. 1 Offered by Mr. Sensenbrenner

  Mr. SENSENBRENNER. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Sensenbrenner:
       In section 1332(d) of title 28, United States Code, as 
     proposed to be inserted by section 4(a)(2) of the bill--
       (1) in paragraph (2), strike ``$2,000,000'' and insert 
     ``$5,000,000'';
       (2) redesignate paragraphs (4) through (9) as paragraphs 
     (5) through (10), respectively;
       (3) strike paragraph (3) and insert the following:

       ``(3) A district court may, in the interests of justice, 
     decline to exercise jurisdiction under paragraph (2) over a 
     class action in which greater than one-third but less than 
     two-thirds of the members of all proposed plaintiff classes 
     in the aggregate and the primary defendants are citizens of 
     the State in which the action was originally filed based on 
     consideration of the following factors:
       ``(A) Whether the claims asserted involve matters of 
     national or interstate interest.
       ``(B) Whether the claims asserted will be governed by laws 
     other than those of the State in which the action was 
     originally filed.
       ``(C) In the case of a class action originally filed in a 
     State court, whether the class action has been pleaded in a 
     manner that seeks to avoid Federal jurisdiction.
       ``(D) Whether the number of citizens of the State in which 
     the action was originally filed in all proposed plaintiff 
     classes in the aggregate is substantially larger than the 
     number of citizens from any other State, and the citizenship 
     of the other members of the proposed class is dispersed among 
     a substantial number of States.
       ``(E) Whether 1 or more class actions asserting the same or 
     similar claims on behalf of the same or other persons have 
     been or may be filed.
       ``(4) Paragraph (2) shall not apply to any class action in 
     which--
       ``(A) two-thirds or more of the members of all proposed 
     plaintiff classes in the aggregate and the primary defendants 
     are citizens of the State in which the action was originally 
     filed;
       ``(B) the primary defendants are States, State officials, 
     or other governmental entities against whom the district 
     court may be foreclosed from ordering relief; or
       ``(C) the number of members of all proposed plaintiff 
     classes in the aggregate is less than 100.'';
       (4) in paragraph (5), as so redesignated, strike 
     ``$2,000,000'' and insert ``$5,000,000''; and
       (5) in paragraph (10), as so redesignated--
       (A) in the third sentence, strike ``paragraphs (3) and 
     (6)'' and insert ``paragraph (7)''; and
       (B) in the last sentence, strike ``(6)'' and insert 
     ``(7)''.

  The CHAIRMAN. Pursuant to House Resolution 269, the gentleman from 
Wisconsin (Mr. Sensenbrenner) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. 
Sensenbrenner).
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, this bipartisan amendment is intended to mirror the 
amendment offered by Senator Feinstein over in the other body. It is in 
keeping with the spirit and intent of the bill and would slightly 
broaden the category of class action cases that would remain in State 
court in two ways.
  First, the amendment raises the aggregate amount and controversy 
required for Federal jurisdiction from $2 million to $5 million. 
Second, it allows Federal courts discretion to return intrastate class 
actions in which local law governs the State courts after weighing five 
factors to determine the case is appropriately of a local character.
  This discretion would come into play when between one-third and two-
thirds of the plaintiffs are citizens of the same State as the primary 
defendants. If less than one-third are citizens of the same State, the 
case would automatically be eligible for Federal court jurisdiction 
under the new diversity rules in the bill. Likewise, if more than two-
thirds are citizens of the same State, the case would not be subject to 
the new rules in this bill and would remain in State court.
  I urge my colleagues to adopt this amendment to help speed passage of 
this important legislation.
  Mr. Chairman, I reserve the balance of my time.
  The CHAIRMAN. Who seeks time in opposition to the amendment?
  Mr. CONYERS. Mr. Chairman, I do.
  The CHAIRMAN. The gentleman from Michigan (Mr. Conyers) is recognized 
for 5 minutes.
  Mr. CONYERS. Mr. Chairman, I yield myself 2 minutes.
  (Mr. CONYERS asked and was given permission to revise and extend his 
remarks.)
  Mr. CONYERS. Mr. Chairman, this is to celebrate the gentlewoman, the 
Senior Senator from California Day in addition to Attorney Bashing Day. 
We have a letter from the senior Senator of California, which says she 
is opposed to the bill and why she is. So what we have here is a 
Feinstein-lite or a fake Feinstein here.
  I do not know what we are trying to do here, but this attempt to fix 
the class action bill creates, as I expected, more confusion and does 
not deal with the real defects in the bill.
  Her letter says: ``As I said in committee before this amendment was 
adopted, I will not support any class action legislation that moves 
those suits to Federal court.''
  So we have the senior Senator from California saying that this is a 
class action bill, and there has been general agreement that we need 
reform on class actions; but these provisions in the bill do not relate 
to class actions.
  This is far from a done deal. I do not think we correct the basic 
defects in the bill; and since this is Feinstein-lite, I am going to 
reject the amendment that I am sure is made in good faith by the 
chairman of the Committee on the Judiciary.
  I include the letter from Senator Feinstein in the Record at this 
point.

                                                    June 11, 2003.
     Hon. Rick Boucher,
     House of Representatives,
     Washington, DC.
       Dear Congressman Boucher: I wanted to clarify several 
     issues with regard to S.274, the Class Action Fairness Act, 
     and two

[[Page H5295]]

     Amendments I offered to it in the Senate Judiciary Committee. 
     During House consideration of H.R. 1115, there has been some 
     misunderstanding about my position. I thought a clarification 
     might be helpful to you in your deliberations.
       During Committee consideration of S.274, I offered an 
     amendment to raise the amount in controversy to $5 million 
     and to set specific criteria based on a percentage formula to 
     determine whether certain intrastate cases should be heard in 
     state or federal court. This is what has popularly become 
     known as the ``Feinstein Amendment.'' It is my understanding 
     that Chairman Sensenbrenner and a number of Democrats plan to 
     offer this as an amendment to H.R. 1115 on the House floor, 
     and of course, I support its inclusion.
       I also co-authored an amendment with Senator Specter to 
     strike a provision from the bill that would have made certain 
     citizen suits and ``private attorney general'' actions 
     removable to Federal Court as well. I felt strongly then, and 
     I feel strongly now, that such suits--particularly those 
     brought under Section 17200 of the California Business and 
     Professional Code--properly belong in state court and should 
     not be classified as class actions under the bill. As I said 
     in Committee before this amendment was adopted, I will not 
     support any class action legislation that moves those suits 
     to federal court.
       Senators Specter's amendment also, however, struck a 
     provision from the bill that would make so-called ``Mass 
     Actions'' subject to the same removal provisions in the bill 
     that apply to class actions. That was not my concern, and in 
     fact I believe that truly national ``Mass Actions'' should be 
     removable to Federal Court under the same procedures as class 
     actions.
       I hope this clarifies some of my views on this matter. I 
     appreciate your concerns about this important legislation and 
     welcome you to contact me or to have your staff contact my 
     Chief Counsel, David Hantman, at 224-4933 if you have further 
     questions.
           Sincerely,
                                                 Dianne Feinstein.

  Mr. Chairman, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself 15 seconds.
  What the gentleman from Michigan is saying is this is a good 
amendment but not good enough. I think if it is a good amendment, it 
ought to be supported; and I know my cosponsor, the gentleman from 
Virginia (Mr. Boucher), will tell us it is a very good amendment.
  Mr. Chairman, I yield 2 minutes to the gentleman from Virginia (Mr. 
Boucher).
  Mr. BOUCHER. Mr. Chairman, I thank the gentleman from Wisconsin for 
yielding me the time and for his willingness to accept the amendment 
that was drafted by Senator Feinstein of California, which was approved 
by the Committee on the Judiciary of the other body when that committee 
reported class action fairness legislation.
  We are joined in offering this amendment by the gentleman from 
Virginia (Mr. Goodlatte), the gentleman from Virginia (Mr. Moran), the 
gentleman from California (Mr. Dooley), the gentleman from Texas (Mr. 
Stenholm), and the gentleman from Nebraska (Mr. Terry); and I thank 
them for their cosponsorship as well.
  Under the approach of the bill, only cases that are filed as State 
class actions which are national in scope will be removable to Federal 
court, notwithstanding the absence of complete diversity of 
citizenship. Cases that are local in nature will remain in the State 
courts where they are filed.
  Senator Feinstein's amendment, which is the same as the amendment we 
are now offering, gives Federal judges clear directions in determining 
which cases are national in character and which are local. Under this 
test, if two-thirds of the members of the plaintiff class reside 
outside of the State and at least one of the primary defendants resides 
outside of the State, the case is deemed to be national in scope and 
can be removed to Federal court. By contrast, if two-thirds of the 
plaintiffs and the primary defendants are residents of the foreign 
State, the case is local and will remain in State court.
  There is a middle category of cases in which more than one-third and 
less than two-thirds of plaintiffs are residents of the foreign State, 
and in these instances the amendment directs the Federal judge to weigh 
five specific criteria that will be set forth in the statute in order 
to determine whether the case is national or local in character. This 
approach will promote a higher degree of uniformity among the Federal 
districts in the application of the new law and assure that local class 
actions remain in State courts.
  The amendment also raises from $2 million to $5 million the aggregate 
jurisdictional amount for removals under the bill, assuring that cases 
which are of lesser value remain in the State courts.
  The amendment is a useful addition to the bill, and I urge its 
adoption.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself the balance of the 
time.
  Mr. Chairman, the name of the senior Senator from California, Ms. 
Feinstein, has been bandied about on both sides of the aisle; and she 
has sent a letter to the gentleman from Virginia (Mr. Boucher), which 
says in part: ``It is my understanding that Chairman Sensenbrenner and 
a number of Democrats plan to offer this as an amendment to H.R. 1115 
on the House floor, and of course, I support its inclusion.''
  Mr. Chairman, I yield back the balance of my time.
  Mr. CONYERS. Mr. Chairman, I yield such time as he may consume to the 
gentleman from California (Mr. Dooley).
  (Mr. DOOLEY of California asked and was given permission to revise 
and extend his remarks.)
  Mr. DOOLEY of California. Mr. Chairman, I rise in support of the 
amendment and the bill.
  Mr. Chairman, over the last decade, elements of the class action 
litigation system have gone terribly wrong. H.R. 1115 is a moderate, 
sensible measure. This bill is not tort reform. This legislation makes 
a common sense correction in Federal law so that large, multistate 
class action lawsuits can be heard in Federal court. Cases that are 
national in scope should be decided by courts that represent the nation 
at large, not individual county courts, where oftentimes, judges are 
elected by the very trial lawyers who are bringing suits to their 
courtroom.
  This bill does not take away anyone's right to file a class action. 
This bill does not cap damages. This bill is a process improvement.
  Chairman Sensenbrenner has worked with Democrats to improve the bill 
and make key changes to include a provision crafted by Senator Dianne 
Feinstein that keeps a single state case in that state's courts, not 
Federal court.
  On February 10th 2003, the American Bar Association's House of 
Delegates overwhelmingly endorsed a resolution of the ABA's Class 
Action Task Force, voicing qualified support for the principle of 
expanded Federal jurisdiction over class actions.
  That is precisely what this bill accomplishes.
  H.R. 1115 is the only proposal on the table that will curb abuse.
  Vote ``yes'' on Final Passage. Vote ``yes'' on the Sensenbrenner, 
Boucher, Moran, Dooley, Stenholm, Terry amendment.
  Mr. CONYERS. Mr. Chairman, I yield such time as he may consume to my 
good friend, the gentleman from Texas (Mr. Stenholm).
  (Mr. STENHOLM asked and was given permission to revise and extend his 
remarks.)
  Mr. STENHOLM. Mr. Chairman, I rise in support of this amendment, and 
I commend the gentleman from Wisconsin (Chairman Sensenbrenner) and the 
gentleman from Virginia (Chairman Goodlatte) and the gentleman from 
Virginia (Mr. Boucher) for their work on this bill and the amendment.
  Mr. Chairman, I rise in support of this amendment and the underlying 
bill. As one who often comes to this well to express frustration at the 
unwillingness of the other side of the aisle to work with members on 
this side, I am extremely pleased to come to the floor in support of 
this bipartisan amendment which reflects the input of several members 
on this side of the aisle.
  I want to thank Chairman Sensenbrenner and Mr. Goodlatte for working 
with me and other members on this side of the aisle to develop a 
balanced approach on this issue that deserves strong bipartisan 
support. I also want to comment Mr. Boucher for his hard work on this 
legislation.
  This legislation is based on a simple, common sense principle that 
class action lawsuits that affect several states should be considered 
in federal courts. It does not make sense to allow state judges in a 
few local jurisdiction to make decisions that will affect businesses 
and consumers nationwide. Cases that are brought on behalf of folks 
from across the country and will have consequences in many states 
should be heard in the federal court.
  The amendment before us, which was the product of bipartisan 
negotiations in the other body, clarifies the line between class 
actions that may be handled by federal courts and class actions that 
should be resolved by state courts. It ensures that class actions of 
predominantly local concern remain in state court, while allowing 
federal courts to handle larger cases that are national or interstate 
in character. In other words, if a class action lawsuit

[[Page H5296]]

is primarily a multi-state lawsuit, it goes to federal court and if it 
is a primarily a single state lawsuit it stays in state court.
  The legislation before us is much stronger because of the commitment 
of Chairman Sensenbrenner to deal with this issue in a truly bipartisan 
manner. The legislative process and the American people are served best 
when we work together across party liens to find a reasonable middle 
ground on legislation. I hope that the process by which Chairman 
Sensenbrenner has handled this legislation is a model for other 
legislation in this body.
  Mr. CONYERS. Mr. Chairman, I yield the balance of the time to the 
gentleman from Texas (Mr. Sandlin).
  Mr. SANDLIN. Mr. Chairman, I thank my friend for yielding me the 
time.
  Mr. Chairman, we have heard some very charming stories about this 
amendment, but how about a little truth in advertising. The 
Sensenbrenner amendment that we are considering today is not Feinstein. 
While it is true that a rose by any other name is still a rose, calling 
a dandelion a rose do not make it so. Yet that is precisely the hoax 
that is being perpetrated by the Sensenbrenner amendment.
  In a desperate attempt to make H.R. 1115 appear moderate, trying to 
hide that it is really a radical expansion of Federal authority and 
away from the States, the proponents of the Sensenbrenner amendment 
want the House to believe that adopting this amendment makes H.R. 1115 
the same proposal advanced by Senator Feinstein last month in the 
Senate Committee on the Judiciary.
  Mr. Chairman, that is just not so. The Feinstein amendment was only 
about class actions, period. That is it. It was not meant to apply, nor 
does it apply, to mass tort cases, consolidated cases, joinder cases or 
State Attorney General actions; and as my friends on the other side of 
the aisle are so prone to say, why do they not read their own darn 
amendment.
  Let us get real on this. Here is what the proponents of the 
Sensenbrenner amendment will not tell my colleagues and do not want us 
to know:
  In the Senate, committee passage of the bill, including adoption of 
the Feinstein amendment, was tied to the passage of another amendment, 
the Feinstein-Specter amendment that narrowed the scope of the bill so 
that it applied only to class action. Now Sensenbrenner is more extreme 
in other ways, of course. That is what we are about here, extremist 
policy.
  There are three very important ways that it is more extreme. 
Feinstein does not apply to joinder or consolidated cases or attorney 
general actions. Sensenbrenner does. Feinstein does not apply 
retroactively to pending cases such as ongoing actions against Enron 
and WorldCom. Sensenbrenner does. We know who they are protecting. We 
know what they are doing.
  Feinstein does not allow defendants to remove cases into a Federal 
settlement and give those same defendants the right to delay 
proceedings, appeal intelocutory orders, and stay discovery. 
Sensenbrenner does.
  It is time to tell the truth about the Sensenbrenner amendment. We 
know what it does. We know what it says. We know who it protects. We 
have read the thing.
  In closing, I have brought a chart to explain this amendment. If my 
colleagues can understand it, they are wasting their time in the House. 
They should be confirmed as the Chief Justice of the United States 
Supreme Court if they can go over the Sensenbrenner amendment and the 
Feinstein wording and make any sense whatsoever of it. It is poorly 
drafted, it does not have definitions, it does not allow one to remain 
in Federal court or State court. It bumps a person back and forth on a 
jurisdictional merry-go-round that never ends, that protects corporate 
wrongdoers. It is bad for America.
  The CHAIRMAN. All time having expired, the question is on the 
amendment offered by the gentleman from Wisconsin (Mr. Sensenbrenner).
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider amendment No. 2 printed 
in House Report 108-148.

                              {time}  1330


          Amendment No. 2 Offered by Ms. Jackson-Lee of Texas

  Ms. JACKSON-LEE of Texas. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Ms. Jackson-Lee of Texas:
       In section 1332(d) of title 28, United States Code, as 
     proposed to be inserted by section 4(a)(2) of the bill--
       (1) in paragraph (9), strike the quotation marks and second 
     period at the end; and
       (2) add after paragraph (9) the following:
       ``(10)(A) For purposes of this subsection and section 1453 
     of this title, a foreign corporation which acquires a 
     domestic corporation in a corporate repatriation transaction 
     shall be treated as being incorporated in the State under 
     whose laws the acquired domestic corporation was organized.
       ``(B) In this paragraph, the term `corporate repatriation 
     transaction' means any transaction in which--
       ``(i) a foreign corporation acquires substantially all of 
     the properties held by a domestic corporation;
       ``(ii) shareholders of the domestic corporation, upon such 
     acquisition, are the beneficial owners of securities in the 
     foreign corporation that are entitled to 50 percent or more 
     of the votes on any issue requiring shareholder approval; and
       ``(iii) the foreign corporation does not have substantial 
     business activities (when compared to the total business 
     activities of the corporate affiliated group) in the foreign 
     country in which the foreign corporation is organized.''.

  The CHAIRMAN. Pursuant to House Resolution 269, the gentlewoman from 
Texas (Ms. Jackson-Lee) and the gentleman from Wisconsin (Mr. 
Sensenbrenner) each will control 5 minutes.
  The Chair recognizes the gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, I rose earlier today and said this is a personal 
conflict. This is a personal issue. This is the issue of some powerful 
lawyers who have lost cases in the courts of America against those who 
have stood for those individuals who could find no way to enter into 
the court of justice except to join together as many plaintiffs on 
behalf of their issue.
  The issue today is whether or not we can ensure that whatever happens 
in this legislation, if a corporation that has a class action against 
them decides to abscond by being purchased by a foreign corporation, 
that that class action lawsuit will not be null and void.
  Specifically, Mr. Chairman, the language says ``a foreign corporation 
which acquires a domestic corporation in a corporate repatriation 
transaction shall be treated as being incorporated in the State under 
whose laws the acquired domestic corporation was organized.''
  Let me give an example, Mr. Chairman. The example is as follows. Just 
remember the case that dealt with the parent company of Jack-in-the-Box 
restaurants that agreed to pay $14 million in a class action 
settlement. The class involved 500 people, mostly children. They had to 
come in a class represented by an attorney. They became sick in 1993 
after eating undercooked hamburgers tainted with E. coli bacteria. The 
children did not go to Jack-in-the-Box to fake injury or to fake 
sickness. They did not go to the place they enjoyed to eat a hamburger 
that was tainted. Just imagine that Jack-in-the-Box subsequently had 
been bought by a foreign corporation. That would have quashed or could 
have quashed both the settlement and the judgment that was obtained on 
behalf of sick children.
  So this is an amendment that protects consumers, it protects the 
innocent, it is not a personal amendment; it is an amendment that rids 
itself of a personal conflict between allegedly defense lawyers who 
have lost and those plaintiff attorneys who may have won a class action 
case once in awhile. If we pass this class action litigation, it will 
inhibit those individuals from being heard.
  Mr Chairman, I propose this amendment to H.R. 1115, to prevent 
domestic corporations from escaping liability from class action 
lawsuits by incorporating abroad. I ask the Rules Committee to make my 
amendment in order.
  Under this amendment, ``a foreign corporation which acquires a 
domestic corporation in a corporate repatriation transaction shall be 
treated as being incorporated in the State under whose laws the 
acquired domestic corporation was organized.''
  Simply put, this amendment ensures that U.S. corporations cannot 
escape class action

[[Page H5297]]

liability or the jurisdiction of U.S. courts by repatriating or merging 
with a foreign-based corporation. Under this amendment if an American 
corporation is guilty of corporate crimes or malfeasance, and 
thereafter the corporation merges with a foreign corporation, the 
corporation will be deemed incorporated in the State where the 
corporation was domiciled before the merger.
  This amendment prevents American companies from fleeing abroad to 
avoid liability in a class action lawsuit.
  To see the benefit of this amendment one need only consider the 
hypothetical impact on Enron employees without this amendment. In the 
Enron collapse, corporate executives criminally failed to disclose 
corporate decision-making in pension plans, and in other financial 
decisions. In the Enron case, executives and senior management staff 
were fraudulently encouraging employees to buy company stock. At the 
same time, those same executives and senior managers were cashing out 
millions of dollars shortly before the company declared bankruptcy in 
December of 2001. As a result of the corporate executives crimes, 4,500 
Enron employees lost their jobs in my home district alone.

  Without my amendment, it would be possible for the bankrupt Enron 
corporation to agree to be acquired by a foreign company, relinquish 
their status as a company incorporated in the United States, avoid the 
jurisdiction of Federal courts, and avoid liability for their corporate 
crimes.
  A result of this egregious would be a slap in the face to the 4,500 
Enron employees who lost their jobs because of corporate wrongdoing and 
are undoubtedly entitled to damages. It would also be a slap in the 
face to the victims of tobacco companies, negligent automobile 
manufacturers, asbestos litigation clients, and any number of other 
class action plaintiffs who are opposed by well-finance, business and 
legal savvy defendants. This amendment would ensure that potential 
corporate defendants are unable to avoid liability.
  Mr. Chairman, I urge my colleagues to support my amendment to protect 
victimized class action plaintiffs form runaway corporations.
  Mr. Chairman, I yield 1 minute to the gentleman from Michigan (Mr. 
Conyers).
  Mr. CONYERS. Mr. Chairman, the problem that is presented in the bill 
that the Jackson-Lee amendment attempt to correct is the incredible 
ability of corporations doing business in this country to move 
offshore, Bermuda as an example, to do business and then escape coming 
into State court on class action by claiming they are a foreign 
corporation.
  These are the same companies that are eager to put ``Made in the 
U.S.A.'' on their products, while they at the same time avoid United 
States taxes and attempt to minimize their legal liability by merely 
shuffling corporate documents. Support the Jackson-Lee amendment.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield myself the balance of 
my time.
  Mr. Chairman, I ask my colleagues to support this amendment. Think of 
the children playing on playgrounds and broken equipment with a class 
action lawsuit and ultimately the company is bought by a foreign 
corporation. This amendment makes this litigation better on behalf of 
the consumers and the people who need justice in America.
  Mr. Chairman, I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield such time as he may consume 
to the gentleman from Virginia (Mr. Goodlatte).
  Mr. GOODLATTE. Mr. Chairman, I rise in opposition to this amendment. 
This is the ``if you cannot win the argument, try to change the 
subject'' amendment. This amendment would preclude companies opened by 
foreign or offshore companies from using the jurisdictional provisions 
in H.R. 1115. The amendment would make for bad policy, and I urge my 
colleagues to reject it.
  Apparently the gentlewoman from Texas (Ms. Jackson-Lee) believes that 
the State class action abuse problem is so bad that companies forced to 
litigate in State court will move back onshore. Well, I think that 
belief tells us a lot about how unfair some of these select magnet 
State courts are around the country where these abuses occur to 
defendants and to consumers in this country.
  Nonetheless, this bill is not the proper vehicle for debating tax 
policy. Our goal today is to curb class action abuse, to stop coupon 
settlements that rip off consumers, and to make sure that county courts 
do not dictate our Nation's economic policies. If this body wants to 
debate the problems regarding foreign ownership of companies, let us do 
that in the appropriate context.
  Let me add that one of the important things that we need to 
understand and that the other side of the aisle keeps trying to target 
here is that somehow there are certain companies that are bad actors, 
and that we should write Federal policy based on that rather than 
having one fair, across-the-board treatment of one type of lawsuit. 
That is exactly what this legislation is attacking and why they are 
objecting to it.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, this amendment I think can probably be referred to as 
the ``back-door erosion of the 14th amendment to the Constitution 
amendment'' to this bill because it erodes the concept of equal 
protection under the law, meaning everybody gets treated equally in 
court.
  What the gentlewoman from Texas (Ms. Jackson-Lee) is trying to do is 
to say for certain types of corporations, they would be treated under a 
different law than other types of corporations. That poses some really 
profound problems as far as I am concerned.
  The crux of this whole matter is that this is an attempt to establish 
tax policy in a civil litigation procedure bill. It mixes up apples and 
oranges. It is not going to have the effect that the gentlewoman from 
Texas (Ms. Jackson-Lee) is stating, and that is preventing corporations 
that wish to go offshore from going offshore. The amendment is not 
wrong, it just does not make any sense. It should be rejected.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Texas (Ms. Jackson-Lee).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings 
on the amendment offered by the gentlewoman from Texas (Ms. Jackson-
Lee) will be postponed.
  The CHAIRMAN. It is now in order to consider amendment No. 3 printed 
in House Report 108-148.


                 Amendment No. 3 Offered by Ms. Lofgren

  Ms. LOFGREN. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Ms. Lofgren:
       In section 1332(d)(9) of title 28, United States Code, as 
     proposed to be inserted by section 4(a)(2) of the bill--
       (1) in the first sentence, strike ``if--'' and all that 
     follows through ``(B) monetary relief'' and insert ``if 
     monetary relief--'';
       (2) strike ``The provisions of paragraphs (3) and (6)'' and 
     all that follows through ``subparagraph (A).''; and
       (3) in the last sentence, strike ``subparagraph (B)'' and 
     insert ``this paragraph''.

  The CHAIRMAN. Pursuant to House Resolution 269, the gentlewoman from 
California (Ms. Lofgren) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentlewoman from California (Ms. Lofgren).
  Ms. LOFGREN. Mr. Chairman, I yield myself 2\1/2\ minutes.
  (Ms. LOFGREN asked and was given permission to revise and extend her 
remarks.)
  Ms. LOFGREN. Mr. Chairman, the question is not whether there have 
been problems with coupon-award cases; there have been. The question is 
whether this bill is the remedy for those problems. I have two concerns 
about the bill. One, it goes too far; and secondly, I do not see how 
the bill really addresses and solves the coupon settlement problem.
  But what is really offensive to me is the scorched-earth approach of 
the bill does not just stop at class actions, it also targets 
California's prosecutors.
  California has strong consumer protection, section 17200 of the 
Business and Professions Code, and it provides that not just AGs, but 
district attorneys, can sue in the public interest. District attorneys 
are not bringing abusive class actions to collect attorneys' fees; they 
are trying to protect their constituents.

[[Page H5298]]

  For example, in People v. National Travel, two California DAs shut 
down an unscrupulous Florida travel agency. In People v. Providian 
Bank, the San Francisco district attorney stopped predatory credit card 
practices and recovered $300 million for California consumers. In 
People v. Rite-Aid, DAs stopped the sale of expired baby formula. In 
People v. Cook Brothers, DAs stopped an Illinois company from selling 
illegal weapons through a mail-order catalog. These are a few examples 
of how local DAs use consumer protection actions to safeguard 
Californians. Their ability to bring these cases in State court would 
be eliminated under this bill.
  Put simply, if my amendment is not passed, this will have a chilling 
effect on local DAs, and that is why it is opposed by the California 
District Attorneys Association. I want to read from a letter I received 
from the California District Attorneys Association. They say, As 
currently written, H.R. 1115 would severely limit our ability to 
protect the public. Under the definition of class action, our consumer 
protection cases would be eligible for removal.
  They wrote, That if these offenders remove our cases to Federal 
court, the cost of prosecution and inconvenience to the victims will 
make pursuit of many such cases a practical impossibility.
  So the question is not whether there are problems with class actions, 
but whether this bill is the remedy. I say it is not.
                                               California District


                                        Attorneys Association,

                                    Sacramento, CA, June 11, 2003.
     Re HR 1115, oppose unless amended.

     Hon. Zoe Lofgren,
     House of Representatives, Cannon House Office Building, 
         Washington, DC.
       Dear Representative Lofgren: The California District 
     Attorneys Association (CDAA) has taken an Oppose Unless 
     Amended position on HR 1115 (Goodlatte), the Class Action 
     Fairness Act of 2003.
       As you may know, District Attorneys in California and many 
     other states are charged with protecting the public from 
     unfair, unlawful, and predatory practices used by 
     unscrupulous businesses. In California, our Business and 
     Professions Code Sec. 17200 allows District Attorneys to 
     bring civil actions against such businesses in the name of 
     the People of the State of California, and thereby seek civil 
     penalties, restitution, and injunctions on the People's 
     behalf. This law has been successfully used by California's 
     District Attorneys to protect the public from false 
     advertising, predatory lending, fake cures for cancer, and 
     other shameful scams perpetrated by out-of-state businesses.
       As currently written, HR 1115 would severely limit our 
     ability to protect the public from these wrongs. Under the 
     definition of class action currently used by HR 1115, our 
     consumer protection cases would be eligible for removal to 
     Federal court. If these offenders remove our cases to Federal 
     court, the cost of prosecution and the inconvenience to the 
     victims will make pursuit of many such cases a practical 
     impossibility.
       We appreciate that HR 1115 currently exempts actions 
     brought by Attorneys General from its provisions. For this 
     reason, we are hopeful that the supporters of HR 1115 did not 
     intend to extend its provisions to actions brought by 
     District Attorneys and other public prosecutors. Therefore, 
     we ask that the author considers amending page 15, line 20 to 
     read ``. . . attorney general, state or local district 
     attorney, other governmental prosecutor, or group thereof . . 
     .'' We would also ask that the following text be inserted at 
     page 13, between lines 6 and 7; ``(D) the action is brought 
     by a State attorney general, state or local district 
     attorney, other governmental prosecutor, or group thereof.'' 
     With these amendments, HR 1115 would preserve the ability of 
     California's District Attorneys, and those of many other 
     states, to protect the public from unlawful, unfair, and 
     predatory practices disguised as legitimate businesses.
       We also appreciate the recent efforts of Senators Feinstein 
     and Specter to address our identical concerns with S 274 
     (Grassley). We look forward to continuing to work with the 
     Senators, and any other interested party, to resolve this 
     issue. Please feel free to contact us if we can be of any 
     further assistance.
           Very truly your,

                                             Gilbert G. Otero,

                                                        President.
                               District Attorney, Imperial County.

  Mr. SENSENBRENNER. Mr. Chairman, I claim the time in opposition to 
the amendment.
  The CHAIRMAN. The gentleman from Wisconsin (Mr. Sensenbrenner) is 
recognized for 5 minutes.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, the gentlewoman from California (Ms. Lofgren) has spent 
a lot of time referring to suits by local district attorneys being 
removed to Federal court under this bill because she believes they 
would not be covered by the exemption contained in the bill for State 
attorney generals.
  I would say to the gentlewoman that we believe that suits by local 
elected district attorneys do fall within that exempted category, and 
are not covered by the bill. It is clearly the intent of the bill to 
exclude elected law enforcement officials like district attorneys.
  If we need to work further with the gentlewoman from California (Ms. 
Lofgren) as this bill moves forward to clarify that intent with regard 
to suits by local officials, I would offer her to do that. However, I 
do want to make it quite clear that private attorney general actions 
are another matter. If the gentlewoman will withdraw her amendment, we 
can work on clarification of this. Otherwise, I would urge the 
membership to vote against the amendment since the gentlewoman has 
rejected my offer.
  Mr. Chairman, I reserve the balance of my time.
  Ms. LOFGREN. Mr. Chairman, I yield 2 minutes to the gentlewoman from 
California (Ms. Linda T. Sanchez), my colleague on the Committee on the 
Judiciary and a cosponsor of this amendment.
  Ms. LINDA T. SANCHEZ of California. Mr. Chairman, I rise to speak in 
support of this amendment. I agree that there are some problems with 
our class action system, but the so-called Class Action Fairness Act is 
not the solution.
  I am particularly concerned because the bill intrudes on a specific 
provision of California law, one which allows State laws to be enforced 
by district and city attorneys as well as private attorneys general. 
This California law has been used successfully to protect the public 
from false advertising, predatory lending, fake cures for cancer and 
other shameful scams perpetrated by out-of-State business.
  For example, in People v. Life Alert, California's district attorney 
stopped Life Alert, the purveyors of the ``I have fallen and cannot get 
up'' advertisements from aggressive door-to-door sales tactics. Those 
tactics included refusing to leave elderly people's homes until they 
bought the product, and refusing to issue refunds to consumers who 
complained about such tactics.

                              {time}  1345

  Unfortunately, the Class Action Fairness Act takes away California's 
ability to protect consumers in this way. It does so by defining 
private attorney general actions as class actions and removing them to 
Federal court. Why does this matter? Because private attorney general 
lawsuits are less likely to proceed if they are deemed class action 
lawsuits. That would force the private attorney general to certify a 
class when in fact he or she is bringing the suit to protect consumers 
from harm. In addition, Federal court is more expensive and time 
consuming for plaintiffs, especially when it involves greater travel.
  This bill is also an insult to States' rights. It usurps decisions 
made by States regarding their court system and their class action 
system. Some members of Congress talk about the importance of States' 
rights, but in the end it appears that that is only true when it is 
convenient for their purposes. Apparently federalism is not as 
important when consumer protections are at stake.
  I urge my colleagues to support this amendment and to oppose the 
underlying bill. Voting for H.R. 1115 is like trying to address 
automobile fatalities by dumping gasoline into the ocean. It fails to 
do anything about the first problem while creating a second one. If we 
are going to fix the class action system, then let us do it right. This 
bill is not the way to do it.
  Ms. LOFGREN. Mr. Chairman, I yield myself the balance of my time.
  I wanted to quote from a letter I received from Senator Feinstein. 
This amendment is identical to what Senator Feinstein wrought in the 
Senate, and she has pointed out that she will not support this bill 
unless this amendment is adopted and that is to protect section 17200 
of California's Business and Professions Code in its entirety. There is 
no rationale, no reason, there have been no problems with section 
17200; and I would urge all members of

[[Page H5299]]

the House, and especially the Californians, to stand up for federalism 
and protect California State law.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself the balance of my 
time.
  Mr. Chairman, I really regret that the gentlewoman from California 
was not interested in the compromise and clarification that I proposed, 
where we would allow elected district attorneys to continue to utilize 
the State court, but not private citizens with private attorney general 
actions which are authorized only in California and no place else. One 
of these private attorney general actions should not set national legal 
and economic policy. When you have an elected official like a district 
attorney or a State attorney general, that is one thing, because these 
people represent the public and it is their job to do this. When you 
have a private citizen in a procedure that has not been adopted by 49 
out of the 50 States, they should not get a carve-out under this bill. 
Because there was no compromise that was agreed to, I would urge the 
rejection of this amendment.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from California (Ms. Lofgren).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Ms. LOFGREN. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings 
on the amendment offered by gentlewoman from California (Ms. Lofgren) 
will be postponed.
  It is now in order to consider amendment in the nature of a 
substitute No. 4 printed in House Report 108-148.


  Amendment in the Nature of a Substitute No. 4 Offered by Mr. Sandlin

  Mr. SANDLIN. Mr. Chairman, I offer an amendment in the nature of a 
substitute.
  The CHAIRMAN. The Clerk will designate the amendment in the nature of 
a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Amendment in the nature of a substitute No. 4 offered by 
     Mr. Sandlin:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Class 
     Action Improvement Act of 2003''.
       (b) Reference.--Whenever in this Act reference is made to 
     an amendment to a section or other provision, the reference 
     shall be considered to be made to a section or other 
     provision of title 28, United States Code.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; reference; table of contents.
Sec. 2. Improved procedures for certain interstate class actions.
Sec. 3. Establishment of State Court Multidistrict Litigation Panel.
Sec. 4.Establishment of procedure for transferring certain actions to 
              Federal court.
Sec. 5. Best practices study.

     SEC. 2. IMPROVED PROCEDURES FOR CERTAIN CLASS ACTIONS.

       (a) In General.--Part V is amended by inserting after 
     chapter 113 the following:

                      ``CHAPTER 114--CLASS ACTIONS

``Sec.
``1711. Coupons and other noncash settlements.
``1712. Protection against loss by class member.
``1713. Protection against discrimination based on geographic location.
``1714. Additional requirements.
``1715. Protecting the integrity of the courts.
``1716. Interlocutory appeals.
``1717. Definitions.''.

     ``Sec. 1711. Coupons and other noncash settlements

       ``(a) Contingent Fees.--If a proposed settlement in a class 
     action provides for an award of a noncash benefit to a class 
     member, and the attorney's fee to be paid to class counsel is 
     based upon a portion of the recovery, then the attorney's fee 
     shall be based on the value of the noncash benefit that is 
     redeemed.
       ``(b) Other Attorney's Fee Awards.--If a proposed 
     settlement in a class action includes a noncash benefit to a 
     class member, and a portion of the recovery is not used to 
     determine the attorney's fee to be paid to class counsel, 
     then the attorney's fee shall be based upon the actual amount 
     of time class counsel expended working on the action. Any 
     attorney's fee under this subsection shall be subject to 
     approval by the court. Nothing in this subsection shall be 
     construed to prohibit application of a lodestar with a 
     multiplier method of determining attorney's fees whenever 
     appropriate under applicable law.
       ``(c) Settlement Valuation Expertise.--In a class action 
     involving the awarding of noncash benefits, the court may in 
     its discretion, upon the motion of a party, receive expert 
     testimony from a witness qualified to provide information on 
     the actual value of the settlement.

     ``Sec. 1712. Protection against loss by class members

       ``The court may approve a proposed settlement under which 
     any class member is obligated to pay sums to class counsel 
     that would result in a net loss to the class member only if 
     the court first makes a written finding that nonmonetary 
     benefits to the class member outweigh the monetary loss.

     ``Sec. 1713. Protection against discrimination based on 
       geographic location

       ``The court may not approve a proposed settlement that 
     provides for the payment of greater sums to some class 
     members than to others solely on the basis that the class 
     members to whom the greater sums are to be paid are located 
     in closer geographic proximity to the court.

     ``Sec. 1714. Additional requirements

       ``(a) Settlements.--The court may not approve a proposed 
     settlement of a class action unless the court determines 
     that--
       ``(1) the settlement is fair, reasonable, and adequate to 
     the plaintiff class; and
       ``(2) the settlement applies only to claims with respect to 
     which the plaintiff class was authorized to represent class 
     members.
       ``(b) Notice to Defendants.--The court in a class action 
     shall require that, before the class is certified, defendants 
     receive notice of the action and be given an opportunity to 
     respond to the complaint.
       ``(c) Blocking Removal.--A defendant in a class action may 
     not elect to block removal of the action to Federal court 
     that is sought by other defendants if the court finds that 
     plaintiffs named the defendant solely for purposes of 
     blocking such removal.

     ``Sec. 1715. Protecting the integrity of the courts

       ``(a) Open Records.--No order, opinion, or record of the 
     court in a class action, including a record obtained through 
     discovery, whether or not formally filed with the court, may 
     be sealed or made subject to a protective order unless the 
     court finds--
       ``(1) that the sealing or protective order is narrowly 
     tailored and necessary to protect the confidentiality of a 
     particular trade or business secret of one or more of the 
     settling parties and is in the public interest; or
       ``(2) that--
       ``(A) the sealing or protective order is narrowly tailored, 
     consistent with the protection of public health and safety, 
     and is in the public interest; and
       ``(B) if the action by the court would prevent the 
     disclosure of information, disclosing the information is 
     clearly outweighed by a specific and substantial interest in 
     maintaining the confidentiality of such information.
       ``(b) Destruction of Documents Prohibited.--All parties 
     filing or receiving service of a class action shall maintain 
     all documents, including those in electronic format, related 
     to the subject matter of the class action. Any person who 
     knowingly alters, destroys, mutilates, conceals, or falsifies 
     any record, document, or tangible object with the intent to 
     impede, obstruct, or influence the outcome of a class action 
     shall be fined not more than $5,000 for each record, 
     document, or object destroyed, imprisoned not more than 5 
     years, or both.

     ``Sec. 1716. Interlocutory appeals

       ``A court of appeals may in its discretion permit an appeal 
     from an order of a district court granting or denying class 
     action certification under Rule 23 of the Federal Rules of 
     Civil Procedure if application is made to the court within 10 
     days after entry of the order. An appeal does not stay 
     proceedings in the district court unless the district court 
     or the court of appeals so orders.

     ``Sec. 1717. Definitions

       ``In this chapter--
       ``(1) Class action.--The term `class action' means--
       ``(A) any civil action filed in a district court of the 
     United States pursuant to Rule 23 of the Federal Rules of 
     Civil Procedure; and
       ``(B) any civil action that is removed to a district court 
     of the United States that was originally filed pursuant to a 
     State statute or rule of judicial procedure authorizing an 
     action to be brought by one or more representatives on behalf 
     of a class;
       ``(2) Class counsel.--The term `class counsel' means the 
     persons who serve as the attorneys for the class members in a 
     proposed or certified class action.
       ``(3) Class members.--The term `class members' means the 
     persons who fall within the definition of the proposed or 
     certified class in a class action.
       ``(4) Proposed settlement.--The term `proposed settlement' 
     means an agreement that resolves any or all claims in a class 
     action, that is subject to court approval, and that, if 
     approved, would be binding on each class member, except to 
     the extent that a class member has requested to be excluded 
     from the class action.
       (b) Technical and Conforming Amendment.--The table of 
     chapters for part V is amended by inserting after the item 
     relating to chapter 113 the following:

``114. Class Actions............................................1711''.

[[Page H5300]]

     SEC. 3. ENACTMENT OF JUDICIAL CONFERENCE RECOMMENDATIONS.

       Notwithstanding any other provision of law, the amendments 
     to Rule 23 of the Federal Rules of Civil Procedure, relating 
     to notice to members of a class, which are embraced by the 
     order entered by the Supreme Court of the United States on 
     March 27, 2003, shall take effect on the date of the 
     enactment of this Act or on December 1, 2003 (as specified in 
     that order), whichever occurs first.

     SEC. 4. ESTABLISHMENT OF STATE COURT MULTIDISTRICT LITIGATION 
                   PANEL.

       (a) Creation of Multidistrict Litigation Panel.--The 
     National Center for State Courts is authorized to develop and 
     implement, in coordination with the Conference of Chief 
     Judges, a State court multidistrict litigation panel for 
     class actions, to be called the ``State Court Panel on 
     Multidistrict Litigation'', in accordance with the following:
       (1) Consolidation of class actions.--The SCPML shall allow 
     State court judges, or parties with class actions pending in 
     State courts, to seek to consolidate within one State court 
     for pretrial proceedings related class actions pending in 
     different States. No pending class action may be consolidated 
     without the approval of the State court judge handling the 
     pending action.
       (2) For pretrial proceedings.--When class actions involving 
     one or more common questions of fact are pending in the 
     courts of different States, such actions may be transferred, 
     with permission of the court, to any of these State courts 
     for coordinated or consolidated pretrial proceedings. Such 
     transfers shall be made by the SCPML upon its determination 
     that transfers for such proceedings will be for the 
     convenience of the parties and witnesses and will promote the 
     just and efficient conduct of such actions. Each action so 
     transferred shall be remanded by the SCPML at or before the 
     conclusion of such pretrial proceedings to the State court 
     from which it was transferred unless it has been previously 
     terminated, except that the SCPML may separate any claim, 
     cross-claim, counter-claim, or third-party claim and remand 
     any such claim before the remainder of the action is 
     remanded.
       (3) Judicial assignments.--Coordinated or consolidated 
     pretrial proceedings under paragraph (2) shall be conducted 
     by a judge or judges to whom such actions are assigned by the 
     SCPML. With the consent of the transferee court or courts, 
     such actions may be assigned by the SCPML to a judge or 
     judges from any relevant State court. The judge or judges to 
     whom such actions are assigned and the members of the SCPML 
     may exercise the powers of a trial court judge of any of the 
     relevant State courts for the purpose of conducting pretrial 
     depositions in such coordinated or consolidated pretrial 
     proceedings.
       (4) Composition of scpml.--The SCPML shall consist of nine 
     judges designated from time to time by the CCJ, no two of 
     whom shall be from the same State. The concurrence of five 
     members shall be necessary to any action by the SCPML. The 
     members of the SCPML shall each serve for a term of three 
     years. The CCJ is urged to develop a system to ensure that 
     States from varying regions and States of different sizes are 
     equitably represented on the SCPML.
       (5) Establishment of rules.--The SCPML may prescribe 
     procedural rules for the conduct of its business not 
     inconsistent with Federal law and the Federal Rules of Civil 
     Procedure, including rules establishing procedures for 
     initiating the transfer of a class action under this section, 
     providing notice to all affected parties, determining whether 
     such transfer shall be made, issuing orders either directing 
     or denying such transfer, and providing notice of and 
     appealing any order of the SCPML under this section.
       (b) Authorization.--There are authorized to be appropriated 
     to the National Center for State Courts for the establishment 
     and administration of the State Court Panel on Multidistrict 
     Litigation $1,000,000 for fiscal year 2004 and such sums as 
     may be necessary for fiscal year 2005 and thereafter.
       (c) Definitions.--In this section:
       (1) Class action.--The term ``class action'' means any 
     civil action that--
       (A) is brought in a State court pursuant to a State statute 
     or rule of judicial procedure authorizing an action be 
     brought by one or more representatives on behalf of a class; 
     and
       (B) is not removed to a court of the United States.
       (2) CCJ.--The term ``CCJ'' means the Conference of Chief 
     Justices.
       (3) NCSC.--The term ``NCSC'' means the National Centers for 
     State Courts.
       (4) SCPML.--The term ``SCPML'' means the State Court Panel 
     on Multidistrict Litigation established pursuant to 
     subsection (b).

     SEC. 5. ESTABLISHMENT OF PROCEDURE FOR TRANSFERRING CERTAIN 
                   ACTIONS TO FEDERAL COURT.

       (a) Establishment of Procedure.--The National Center for 
     State Courts is authorized to develop and implement, in 
     coordination with the Conference of Chief Judges, a procedure 
     by which the applicable State court or the SCMPL shall have 
     the authority to transfer a class action to the appropriate 
     Federal court if the matter in controversy of the civil 
     action exceeds the sum or value of $5,000,000, exclusive of 
     interest and costs, and is a class action in which--
       (1) any member of a class of plaintiffs is a citizen of a 
     State different from any defendant;
       (2) any member of a class of plaintiffs is a foreign state 
     or a citizen or subject of a foreign state and any defendant 
     is a citizen of a State; or
       (3) any member of a class of plaintiffs is a citizen of a 
     State and any defendant is a foreign state or a citizen or 
     subject of a foreign state.
       (b) Discretion to Decline to Transfer Jurisdiction.--The 
     applicable State court or the SCMPL may, in the interests of 
     justice, decline to transfer jurisdiction under subsection 
     (a) over a class action in which greater than one-third but 
     less than two-thirds of the members of all proposed plaintiff 
     classes in the aggregate and the primary defendants are 
     citizens of the State in which the action was originally 
     filed, based on consideration of the following factors:
       (A) Whether the claims asserted involve matters of national 
     or interstate interest.
       (B) Whether the claims asserted will be governed by laws 
     other than those of the State in which the action was 
     originally filed.
       (C) Whether the class action has been pleaded in a manner 
     that seeks to avoid Federal jurisdiction.
       (D) Whether the number of citizens of the State in which 
     the action was originally filed in all proposed plaintiff 
     classes in the aggregate is substantially larger than the 
     number of citizens from any other State, and the citizenship 
     of the other members of the proposed class is dispersed among 
     a substantial number of States.
       (E) Whether one or more class actions asserting the same or 
     similar claims on behalf of the same or other persons have 
     been or may be filed.
       (c) Cases in Which Jurisdiction May Not be Transferred.--
     The applicable State court or the SCMPL shall not transfer 
     jurisdiction under subsection (a) over a class action in 
     which--
       (A) two-thirds or more of the members of all proposed 
     plaintiff classes in the aggregate and the primary defendants 
     are citizens of the State in which the action was originally 
     filed;
       (B) the primary defendants are States, State officials, or 
     other governmental entities against whom the district court 
     may be foreclosed from ordering relief; or
       (C) the number of members of all proposed plaintiff classes 
     in the aggregate is less than 100.
       (d) Jurisdiction of Federal Courts.--Any Federal court to 
     which a class action is transferred under subsection (a) 
     shall have, and exercise, jurisdiction of the case.
       (e) Definitions.--In this section, the terms ``class 
     action'' and ``SCMPL'' have the meanings given those terms in 
     section 4.

     SEC. 6. BEST PRACTICES STUDY.

       The National Center for State Courts is authorized and 
     requested to--
       (1) conduct a study for the purpose of identifying problems 
     that arise in the litigation of State class actions;
       (2) develop recommendations on ways to address the problems 
     so identified; and
       (3) report to the Congress, within 1 year after the date of 
     the enactment of this Act, on the results of such study and 
     recommendations.

  The CHAIRMAN. Pursuant to House Resolution 269, the gentleman from 
Texas (Mr. Sandlin) and the gentleman from Wisconsin (Mr. 
Sensenbrenner) each will control 10 minutes.
  The Chair recognizes the gentleman from Texas (Mr. Sandlin).
  Mr. SANDLIN. Mr. Chairman, I yield myself such time as I may consume. 
Mr. Chairman, my good friend, the gentleman from Virginia (Mr. 
Goodlatte), mentioned earlier that we need fair, across-the-board 
reform in the area of class action. I agree with that; it needs to be 
fair, reasonable and workable. That is what we should pursue.
  In typical fashion, our friends have cited isolated cases over a 
number of years that they say cry out for reform. However, they forgot 
to mention the case in Georgia at the Tri-State Crematory where they 
had been foregoing cremations for bodies received from funeral homes. 
Instead, they passed off wood chips and other substances as ashes. They 
forgot to mention the Ohio case wherein an Ohio neighborhood was filled 
with noxious gases when an 8,500-gallon resin kettle exploded at a 
Georgia Pacific plant. An employee was killed, 13 were injured, and 15 
houses near the plant were evacuated. They forgot to mention the 
Foodmaker case which we heard earlier where the parent company of Jack-
in-the-Box agreed to pay $14 million in a class action settlement in 
the State of Washington. That class included 500 people, mostly 
children, who became sick in early 1993 after eating undercooked 
hamburgers tainted with E coli. They forgot to mention the Indiana 
case, TRG Marketing LLC, who sold fraudulent health insurance policies 
to more than 5,000 Floridians who were left with several million 
dollars in unpaid medical bills.
  As you might imagine, we could go on day after day, case by case, a 
tit for tat, going forward and comparing our

[[Page H5301]]

cases. But let us look at reasonable reform that protects business and 
consumers, that respects State law, that can be supported by both sides 
of the aisle. The Democratic alternative, importantly, is reasonable 
and, more importantly, it is not retroactive. If we change the law, let 
us do it properly. Let us do it from this point forward. There is no 
reason to pass a law that is retroactive. The Democratic alternative is 
not retroactive. The Democratic alternative does not contain compulsory 
appeal requirements to ultimately delay justice by years. Certainly the 
appeal is permissible. The appeal is available, just like it is in the 
law now. The Democratic alternative does not cede jurisdiction to the 
Federal courts. It says that we respect the State courts. The State 
courts are the ones where these cases were originally filed.
  Class actions were originally founded in State court. Even when you 
go to Federal court, there is a requirement of the use and 
interpretation of State law. The Democratic substitute respects the 
sovereignty of State courts. The Democratic alternative provides 
substantial protection to consumers and other class action plaintiffs 
that could result in settlements; and we want to make sure that the 
settlements are fair, reasonable, and adequate to address the injuries 
of the parties and their claims. The Democratic alternative provides 
specific, reasonable reforms to address concerns about so-called magnet 
State adjudication of multistate class actions. This act does not 
preempt State attorney general mass tort cases as we mentioned earlier.
  We also have protection on fees to make sure that they are reviewed 
by the courts to make sure that they are fair and reasonable. Any 
coupon settlements that we have heard all about today, which I notice 
that the Republicans did not ban, but any coupon settlements can be 
examined by a court and expert testimony can be received on the actual 
value of the settlement. Attorneys' fees under our bill would be 
determined and measured by the amount of the actual noncash benefit 
redeemed, not what was awarded, to make sure that that is fair and 
equitable.
  Additional requirements on settlements. The courts can only approve 
the settlement of a class action if it determines the settlement is 
fair, reasonable and adequate, and it applies to only the claims that 
are currently before the court. We protect the integrity of the courts, 
we say that the primary authority should be in the State courts, we 
prohibit the destruction of documents. As I mentioned on interlocutory 
appeals, they are permissible, not mandatory. We create, much as the 
Federal courts have, a State multicourt litigation panel to operate as 
a panel in the States just as we do in the Federal. If we have a 
concern about Federal versus State and not having a panel, our 
legislation takes care of that. We have an establishment of procedure 
for transferring actions to Federal court, but it puts the discretion 
within the State courts. It says the State courts know best how to 
interpret State law for their State citizens.
  Also, importantly, we have a best practices study. Let us let the 
National Center for State Courts conduct a study to identify problems 
that arise in the litigation of State class actions. Let us get them to 
recommend things to us that will cause us to pause and to make 
corrections. Let us let them report to Congress about problems that 
they see and potential corrections.
  It just boils down to this: Do you want the States to decide or the 
Federal Government to decide? State courts, Federal courts. We feel 
like that our substitute and the summary that I have just gone on is a 
reasonable, fair way to address the problems.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, this substitute amendment, I think, can probably be 
called the Madison County, Illinois, Judicial Protection Act of 2003, 
because what it does is it goes on for a long, long text, preserving 
essentially the status quo, and then throws a million dollars a year in 
for the next 2 fiscal years to have some kind of a study.
  The most important sentence in the Sandlin amendment that 
demonstrates the author's true intent is tucked away in the middle of 
the legislation toward the top of page 8. For those Members who missed 
it, let me read this sentence to them: ``No pending class action may be 
consolidated without the approval of the State court judge handling the 
pending action.''
  Let me tell my colleagues what this means. If you are a magnet State 
court judge and you want to keep running your class action factory, 
this bill will not affect you, because you do not approve any 
consolidation. You can continue to certify class action cases without 
considering the rules. You can continue to approve settlements, even if 
they do nothing for class members, even coupons. And you can continue 
to support the trial lawyers who got you elected to the bench.
  It claims to offer better consumer provisions; but those provisions 
only apply to Federal court cases, of which there will be very few, if 
any, if this substitute is adopted. It is just a piece of paper for 
consumer protections. It claims to offer a proposal for consolidating 
State court class actions, but even if that proposal were 
constitutional, which it is not, it is completely discretionary. It 
claims to offer a proposal for transferring cases to Federal court, but 
it lets the State court judge where the suit was brought decide whether 
to take advantage of this procedure. This amendment is not worth the 
paper it is printed on.
  The gentleman from Texas has given a few examples, and I think they 
came from a document that was originally circulated by the American 
Trial Lawyers Association. Let me respond to three of the examples he 
gave to show Members how much his bill misses the mark and ours 
addresses the problem. The Dow Chemical case he cited filed by Michigan 
residents alleging contamination at a Michigan plant likewise would not 
be affected by this bill. Because Dow and the proposed class members 
were all Michigan citizens, under our bill that suit would remain in 
State court.
  The Tri-State Crematory cases actually present a perfect example of 
the benefits of our bill. Many Federal and State class actions have 
been filed in that matter. The Federal cases were consolidated in a 
multidistrict litigation proceeding where a Federal judge certified a 
class action in advance of any State court doing so. Finally, the TRG 
Marketing case, which is scattered amongst a number of State courts 
that are duplicating each other's work. Under our bill, all such cases 
would be removed to Federal court and handled by a single Federal 
judge. There is no reason to believe that consumers would fare worse 
under that scenario. Actually, under the substitute, duplicative 
litigation would end up being allowed, and the lawyers' meters are 
ticking. Studies show that State courts are much more likely to produce 
bad settlements, money for lawyers and no relief for consumers. And the 
Federal court would not be slower. Florida State court judges are each 
assigned four times the number of new cases annually than each Florida 
Federal court judge.
  This amendment in the nature of a substitute is having the fox watch 
the hen house. The foxes are the plaintiffs' lawyers. They are the ones 
that the USA Today poll believes benefit disproportionately under this 
bill. It is time to send the fox packing. Defeat the substitute, pass 
the bill and the fox can go back to the woods.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SANDLIN. Mr. Chairman, I yield myself 15 seconds. I think it is 
important that the other side read the Federal rules and be familiar 
with Federal procedure. If they would look on page 8, first paragraph, 
where it says: ``No pending class action may be consolidated without 
the approval of the State court judge handling the pending action.'' 
That is consistent and completely accurate with Federal practice as it 
currently exists.
  Mr. Chairman, I yield such time as he may consume to the gentleman 
from Maryland (Mr. Hoyer), the distinguished minority whip.
  Mr. HOYER. I thank the gentleman for yielding me this time.
  Mr. Chairman, I rise in support of this substitute and reiterate what 
the distinguished gentleman from Texas said.

[[Page H5302]]

                              {time}  1400

  Obviously, adversely affecting pending cases, in my opinion, is 
extraordinarily bad policy and precedent that we should not follow. 
Have we done it from time to time? We have. Have I opposed it? I have. 
I think that is not the way we ought to go.
  Now, I think that legislation in this area is appropriate. The 
gentleman from Texas (Mr. Sandlin) I think has offered an appropriate 
substitute. Are there abuses in our system of civil justice 
specifically regarding class action lawsuits? I want to tell the 
gentleman that I believe there are, and we need to write legislation 
that addresses and remedies those problems.
  However, the bill offered on the floor today, if not amended, in my 
opinion, does not do that. Instead, its provisions would apply to 
pending class actions, making it more difficult for shareholders, 
retirees, and former employees frankly to hold companies such as Enron, 
WorldCom and Arthur Andersen accountable for their alleged wrongdoing. 
We ought not to, because of our desire to protect those cases, 
therefore not address other corporate citizens who are responsible and 
who are doing a good job and who want to be ought to be subject, 
obviously, to suits, but ought to be subject to suits that are 
legitimate.
  The addition of this retroactivity provision is a major change. Let 
me stress that, Mr. Chairman. This is a major change from the class 
action bill considered in the last Congress. I do not know who it is in 
there to protect. I do not know who came forward and said we need 
protection; it is not a question of reform in the future, but we need 
protection.
  We have seen a few reports of that, from people who want protection. 
Maybe that is what that retroactivity is for. As matter of fact, 
invariably in my plus-30 years of service in legislative bodies, when 
retroactive provisions are included in the bill, invariably it is there 
to protect somebody. And it is very bad policy. Congress should not be 
changing the rules that govern this resolution of civil disputes in 
midstream.
  Furthermore, this legislation would give defendants in class actions 
vast new opportunities to delay cases for 2 years or more and stay 
discovery during the same period. Again, these rule changes would apply 
retroactively to pending cases.
  H.R. 1115 also would force our Federal courts to handle State class 
actions, in addition to their large caseload and judicial vacancy rate. 
Thus, it is not surprising, I tell my colleagues, that both Federal and 
State judges oppose this measure. In fact, the Federal Judicial 
Conference, which is headed by Chief Justice Rehnquist, recently wrote 
a letter in which it ``strongly cautions Congress to uphold principles 
of federalism and to not increase the workload of the already 
overburdened Federal courts.''
  In sharp contrast to this overreaching GOP bill, Democrats have 
offered legislation that, among other things, would base attorneys' 
fees on the amount redeemed by class members rather than the amount of 
the settlement. I think that is appropriate.
  I understand the concerns of corporate leaders when they say the 
attorneys get all the money, and the aggrieved parties get a piece of 
paper saying that they may get something prospectively if they buy 
another product. That is a legitimate concern. This substitute speaks 
to it.
  Our bill would require courts to determine that a class action 
settlement is fair, reasonable and adequate to the class. That is a 
protection against specious suits and those who would misuse the 
system.
  This substitute would bar litigants from sealing court records and 
documents under protective orders unless a court finds that it is 
necessary to protect a trade or business secret and it is in the public 
interest.
  Mr. Chairman, I urge my colleagues to support this substitute and 
then support its passage. We need reform. This is the appropriate step 
for us to take.
  The CHAIRMAN pro tempore (Mr. Gillmor). The time of the gentleman 
from Texas (Mr. Sandlin) has expired.
  Mr. SENSENBRENNER. Mr. Chairman, I yield myself 1 minute.
  Mr. Chairman, I would like to commend my friend from Maryland and my 
friend from Texas for being very consistent on the issue of 
retroactivity. Retroactivity is in here to prevent a race to the 
courthouse to avoid the new rules that are contained in this bill, 
should it be enacted into law. But, then again, they were against the 
retroactive tax cut. The tax cut that was enacted into law just a 
little while ago is retroactive to the first of January and, as a 
result of that retroactivity, there is going to be a reduction in 
withholding rates beginning the first of July that would be twice the 
amount if it were not retroactive.
  So I guess they are against providing benefits of good legislation 
retroactively to anybody, because they are against good legislation.
  Mr. Chairman, I yield the balance of my time to the gentleman from 
Virginia (Mr. Goodlatte).
  The CHAIRMAN pro tempore. The gentleman from Virginia is recognized 
for 4 minutes.
  Mr. GOODLATTE. Mr. Chairman, I rise in strong opposition to the 
substitute bill. This substitute bill commissions studies, creates new 
advisory panels, and even allows State court judges to voluntarily 
consolidate class actions. However, the substitute bill fails to 
accomplish one thing: to prevent the current abuses in the class action 
system.
  Welcome to Madison County, Illinois. It is hard to imagine why the 
bizarre system of delegations, panels and transfers in the substitute 
system is preferable to a system allowing parties to utilize the 
existing Federal removal procedure to have their cases heard in Federal 
Court through a process that has existed and served this country well 
for over 200 years.
  The substitute bill authorizes a group of State court judges to think 
about the class action problem and to propose a solution, if they wish. 
The bill, however, H.R. 1115, offers real change. It moves large 
interstate class actions to Federal courts, which have a better track 
record of dealing with these cases and more resources to handle them 
efficiently, and it offers real consumer benefits that will apply to 
real cases and makes sure that lawyers do not sell their clients short 
and take home all the money.
  Like the Blockbuster case, where the plaintiffs got $1 coupons and 
the plaintiffs' attorneys got $9.2 million in attorneys' fees.
  Like the Bank of Boston case, where the lawyers got $8.5 million and 
the plaintiffs paid money. They did not get anything.
  Like the frequent flier case, where the lawyers got $25 million, and 
the plaintiffs got coupons for discount air fares on the same airlines 
that the plaintiffs' attorneys alleged had performed some sort of 
wrongdoing.
  Like the Coca-Cola sweetener case, the lawyers got $1.5 million. That 
was a real sweetener for them. The plaintiffs only got 50-cent coupons 
for their sweetener.
  That is what is wrong. That is what the substitute does not cover.
  The transfer provision in the substitute bill is meaningless. The 
substitute would also authorize State courts to develop a procedure for 
transferring certain cases to Federal courts. But, once again, State 
courts that do not want to participate do not have to. It is a safe bet 
that the courts, like the ones in Madison County, are not going to 
exercise that option. They are giving class actions a bad name, and 
they are not going to voluntarily send their class actions to Federal 
Court.
  Thus, this provision is a sham, and I urge my colleagues to defeat 
the substitute and support the underlying bill.
  The CHAIRMAN pro tempore. All time having expired, the question is on 
the amendment in the nature of a substitute offered by the gentleman 
from Texas (Mr. Sandlin).
  The question was taken; and the Chairman pro tempore announced that 
the noes appeared to have it.
  Mr. SANDLIN. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings 
on the amendment offered by the gentleman from Texas (Mr. Sandlin) will 
be postponed.


          Sequential Votes Postponed in Committee of the Whole

  The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII, 
proceedings will now resume on those amendments on which further 
proceedings were postponed in the following order: Amendment No. 2 
offered

[[Page H5303]]

by Ms. Jackson-Lee of Texas, Amendment No. 3 offered by Ms. Lofgren of 
California, and Amendment No. 4 by offered by Mr. Sandlin of Texas.
  The first electronic vote will be conducted as a 15-minute vote, and 
the remaining votes will be conducted as 5-minute votes.


               Amendment No. 2 Offered by Ms. Jackson-Lee

  The CHAIRMAN pro tempore. The pending business is the demand for a 
recorded vote on the amendment offered by the gentlewoman from Texas 
(Ms. Jackson-Lee) on which further proceedings were postponed and on 
which the noes prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN pro tempore. A recorded vote has been demanded.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 185, 
noes 238, not voting 11, as follows:

                             [Roll No. 268]

                               AYES--185

     Abercrombie
     Alexander
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Ballance
     Becerra
     Bell
     Bereuter
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Boswell
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Case
     Clay
     Clyburn
     Conyers
     Costello
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Doyle
     Duncan
     Edwards
     Emanuel
     Engel
     Etheridge
     Evans
     Farr
     Fattah
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Gordon
     Green (TX)
     Grijalva
     Gutierrez
     Hall
     Hastings (FL)
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     Kleczka
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lynch
     Majette
     Maloney
     Markey
     Marshall
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore
     Moran (VA)
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ross
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Sandlin
     Schakowsky
     Schiff
     Scott (VA)
     Serrano
     Sherman
     Slaughter
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Wamp
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--238

     Aderholt
     Akin
     Bachus
     Baker
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boucher
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cooper
     Cox
     Cramer
     Crane
     Crenshaw
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dooley (CA)
     Doolittle
     Dreier
     Dunn
     Ehlers
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Fletcher
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Harman
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hill
     Hobson
     Hoekstra
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Janklow
     Jenkins
     John
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     Matheson
     McCotter
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Murtha
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schrock
     Scott (GA)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Snyder
     Souder
     Stearns
     Stenholm
     Sullivan
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--11

     Ackerman
     Cubin
     Eshoo
     Filner
     Flake
     Gephardt
     Johnson (CT)
     Jones (OH)
     Rothman
     Smith (WA)
     Solis


                Announcement by the Speaker Pro Tempore

  The CHAIRMAN pro tempore (Mr. Gillmor)(during the vote). There are 2 
minutes remaining in this vote.

                              {time}  1430

  Ms. HARRIS and Messrs. NUNES, WELLER, DEAL of Georgia, BOOZMAN, 
KINGSTON, WICKER, HYDE, ENGLISH, TURNER of Ohio, EHLERS, and PICKERING 
changed their vote from ``aye'' to ``no''.
  Ms. LOFGREN and Messrs. HOLDEN, WAMP and DOGGETT changed their vote 
from ``no'' to ``aye''.
  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Mr. FILNER. Mr. Chairman, on rollcall No. 268, I was caught in 
traffic and missed the vote. Had I been present, I would have voted 
``aye.''
  Ms. SOLIS. Mr. Chairman, during rollcall vote No. 268 on the Jackson-
Lee amendment to H.R. 1115, I was unavoidably detained. Had I been 
present, I would have voted ``aye.''


                Announcement by the Chairman pro tempore

  The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII, the 
remainder of this series will be conducted as 5-minute votes.


                 Amendment No. 3 Offered by Ms. Lofgren

  The CHAIRMAN pro tempore. The pending business is the demand for a 
recorded vote on the amendment offered by the gentlewoman from 
California (Ms. Lofgren) on which further proceedings were postponed 
and on which the noes prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN pro tempore. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 186, 
noes 234, not voting 14, as follows:

                             [Roll No. 269]

                               AYES--186

     Abercrombie
     Alexander
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Ballance
     Becerra
     Bell
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Case
     Clay
     Clyburn
     Conyers
     Costello
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley (CA)
     Doyle
     Edwards
     Emanuel
     Engel
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Frank (MA)
     Frost
     Gonzalez
     Gordon
     Green (TX)
     Grijalva
     Gutierrez
     Hall
     Harman
     Hastings (FL)
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     Kleczka
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     LaTourette
     Lee

[[Page H5304]]


     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lynch
     Majette
     Maloney
     Markey
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ross
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Sandlin
     Schakowsky
     Schiff
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Snyder
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--234

     Aderholt
     Akin
     Bachus
     Baker
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Bass
     Beauprez
     Bereuter
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Bonilla
     Bonner
     Bono
     Boozman
     Boucher
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cooper
     Cox
     Cramer
     Crane
     Crenshaw
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Holden
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Janklow
     Jenkins
     John
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCotter
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Mollohan
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schrock
     Scott (GA)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stenholm
     Sullivan
     Sweeney
     Tancredo
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--14

     Ackerman
     Barton (TX)
     Boehner
     Cubin
     Delahunt
     Eshoo
     Ford
     Gephardt
     Johnson (CT)
     Jones (OH)
     Marshall
     Rothman
     Smith (WA)
     Solis

                              {time}  1438

  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Ms. SOLIS. Mr. Chairman, during rollcall vote No. 269 on the Lofgren/
Sanchez amendment to H.R. 1115 I was unavoidably detained. Had I been 
present, I would have voted ``aye.''


  Amendment in the Nature of a Substitute No. 4 Offered by Mr. Sandlin

  The CHAIRMAN pro tempore. The pending business is the demand for a 
recorded vote on the amendment in the nature of a substitute offered by 
the gentleman from Texas (Mr. Sandlin) on which further proceedings 
were postponed and on which the noes prevailed by voice vote.
  The Clerk will redesignate the amendment in the nature of a 
substitute.
  The Clerk redesignated the amendment in the nature of a substitute.


                             Recorded Vote

  The CHAIRMAN pro tempore. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 170, 
noes 255, not voting 9, as follows:

                             [Roll No. 270]

                               AYES--170

     Abercrombie
     Alexander
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Ballance
     Becerra
     Bell
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Clay
     Clyburn
     Conyers
     Crowley
     Cummings
     Davis (AL)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doyle
     Edwards
     Engel
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Green (TX)
     Grijalva
     Gutierrez
     Hall
     Hastings (FL)
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     Kleczka
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lowey
     Lynch
     Maloney
     Markey
     Marshall
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Moore
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ross
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Sandlin
     Schakowsky
     Schiff
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Spratt
     Stark
     Strickland
     Stupak
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--255

     Aderholt
     Akin
     Bachus
     Baker
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Bereuter
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boucher
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Case
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cooper
     Costello
     Cox
     Cramer
     Crane
     Crenshaw
     Culberson
     Cunningham
     Davis (CA)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doggett
     Dooley (CA)
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Emanuel
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Gordon
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Harman
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hill
     Hobson
     Hoekstra
     Holden
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Janklow
     Jenkins
     John
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lofgren
     Lucas (KY)
     Lucas (OK)
     Majette
     Manzullo
     Matheson
     McCotter
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Mollohan
     Moran (KS)
     Moran (VA)
     Murphy
     Murtha
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schrock
     Scott (GA)

[[Page H5305]]


     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Snyder
     Souder
     Stearns
     Stenholm
     Sullivan
     Sweeney
     Tancredo
     Tanner
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--9

     Ackerman
     Berkley
     Cubin
     Eshoo
     Gephardt
     Johnson (CT)
     Rothman
     Smith (WA)
     Solis


                Announcement by the Chairman pro tempore

  The CHAIRMAN pro tempore (during the vote). There are 2 minutes 
remaining in this vote.

                              {time}  1447

  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Ms. SOLIS. Mr. Chairman, during rollcall vote No. 270 on the Sandlin 
amendment to H.R. 1115 I was unavoidably detained. Had I been present, 
I would have voted ``yea.''
  Ms. BERKLEY. Mr. Chairman, I was under the impression that I had 
voted on rollcall vote No. 270. In reviewing the record, my vote did 
not register. If the vote had registered, I would have voted ``aye'' on 
rollcall vote No. 270.
  The CHAIRMAN. There being no other amendments, the question is on the 
committee amendment in the nature of a substitute, as amended.
  The amendment in the nature of a substitute, as amended, was agreed 
to.
  The CHAIRMAN. Accordingly, under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Ose) having assumed the chair, Mr. Gillmor, Chairman pro tempore of the 
Committee of the Whole House on the State of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 1115) to 
amend the procedures that apply to consideration of interstate class 
actions to assure fairer outcomes for class members and defendants, to 
outlaw certain practices that provide inadequate settlements for class 
members, to assure that attorneys do not receive a disproportionate 
amount of settlements at the expense of class members, to provide for 
clearer and simpler information in class action settlement notices, to 
assure prompt consideration of interstate class actions, to amend title 
28, United States Code, to allow the application of the principles of 
Federal diversity jurisdiction to interstate class actions, and for 
other purposes, pursuant to House Resolution 269, he reported the bill 
back to the House with an amendment adopted by the Committee of the 
Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  Is a separate vote demanded on the amendment to the committee 
amendment in the nature of a substitute adopted by the Committee of the 
Whole? If not, the question is on the committee amendment in the nature 
of a substitute.
  The committee amendment in the nature of a substitute was agreed to.
  The SPEAKER pro tempore. The question is on engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


                Motion to Recommit Offered by Mr. Weiner

  Mr. WEINER. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. WEINER. I am, Mr. Speaker, in its present form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. Weiner moves to recommit the bill H.R. 1115 to the 
     Committee on the Judiciary with instructions that the 
     Committee report the same back to the House forthwith with 
     the following amendments:
       Strike section 8 (EFFECTIVE DATE) and insert the following:

     SEC. 8. EFFECTIVE DATE.

       The amendments made by this Act shall apply to any civil 
     action commenced on or after the date of the enactment of 
     this Act.
       Strike section 6 (APPEALS OF CLASS ACTION CERTIFICATION 
     ORDERS) and redesignate the succeeding sections accordingly.
       Conform the table of contents accordingly.

  Mr. WEINER (during the reading). Mr. Speaker, I ask unanimous consent 
that the motion be considered as read and printed in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York (Mr. Weiner) is recognized for 5 minutes in support of his motion.
  Mr. WEINER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, let me begin by offering a word of apology and concern 
for the many lawyers in this Chamber. This has been a very bad 
afternoon for all of the lawyers who have seen their reputations 
dragged through the mud. And those of us who are not lawyers, the seven 
or eight of us here, will be meeting later in a phone booth off the 
cloakroom to discuss how badly we feel for all of these horrible 
lawyers who have been flogging themselves on the floor all afternoon.
  I should also express my sorrows to those victims who use the courts 
to try to find redress. Now, most Americans are thankfully not lawyers 
and they are not victims. And we are grateful and thank God for that. 
But for the organizations who do represent victims, this has been a 
very bad day, whether it is the American Cancer Society that opposes 
this legislation because they represent victims of cancer. A bad day 
for them. It has been a bad day for those who advocate against water 
pollution like Clean Water Action. It has been a very bad day because 
they oppose this bill.
  This bill is also a setback for those who advocate for seniors who 
have been victims, for those who advocate on behalf of women who have 
been victims. All of these groups are against this bill.
  This has also been a very bad day for anyone in this Chamber who 
calls themselves a conservative. This has been a very bad day for you, 
because for all of the efforts that you put in to returning power to 
the States, returning power to individuals, this bill does the exact 
opposite. It says that the people in our local States, the people in 
our State courts are simply not smart enough to handle these cases. 
They are simply not sophisticated enough. We trust them to put them in 
charge of choosing their Congressman, but we do not trust them on a 
jury. No, that is too big a mistake. So we take out of the hands of 
about the 50,000 State courts and give them to about 1,500 Federal 
judges.
  This is a huge setback for all of you who support stronger State 
government.
  This has also been a very bad day for anyone who wants to be 
intellectually consistent. Was it not about 2 weeks ago you voted on 
putting a cap on the amount that victims can get, and now you come up 
here with your charts saying, oh, it is terrible how little victims are 
getting.
  There is a reason victims are getting 35 cents, 40 cents, $1, $2.50. 
It is because there are millions and hundreds of thousands of victims 
in these cases all chopping up the 5-, 6-, 7-, $8 million claims. So it 
is a very bad day if you want to be consistent.
  Although, any of those who claim about how low the amount that 
victims are getting, I look forward to a bill on this floor sometime in 
the near future putting a minimum amount that victims have to get in 
these cases. By the way, I will vote for that. You can sign me up as a 
cosponsor.
  While I cannot improve the day for those groups, if there are some of 
you in this body who see that this is a terrible power grab, for those 
of you who do not mind the power grab against the States, who do not 
mind sticking it to victims, who do not mind flogging yourself as a 
lawyer, who do not mind being inconsistent conservatives, there are a 
couple of ways to improve the bill in case you do not want to be a pig.
  If you do not want to be a pig about it, there are two things in this 
bill that no one asked for, were not in the original version of the 
bill, and really are an affront to our basic elements of fairness. One 
is the element that says you can have retroactive effects of this bill, 
meaning taking things that are presently going through the process, 
even if they are due to be judged tomorrow, and sending them back; and 
the second

[[Page H5306]]

is the provision that gives mandatory appeal on the certification of a 
class.
  What that will have the effect of doing is that at any point in the 
process, if someone wanted to challenge the certification of a class, 
whether it be Enron or WorldCom, if they are in the case right now, 
even if it is in the Federal court, this will allow them to stop 
everything in its tracks and go back on appeal.
  By the way, for those of you who think that the lower courts get 
overturned a lot on appeal, it has never happened. It has never 
happened.
  So these are two minor ways for those of you who spend so much time 
flogging yourself because you are such evil lawyers to be able to vote 
for this bill and improve it in a minor way. This does not make this a 
good bill. That is too much to hope for in this Congress in this day 
and age. But what it will do is make it a little less offensive to 
those victims who are now waiting for some redress to that grievance.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I rise in opposition to the motion to 
recommit.
  The SPEAKER pro tempore. The gentleman is recognized for 5 minutes.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I think it is unfortunate that the gentleman from New 
York (Mr. Weiner) did not spend more time talking about his motion to 
recommit. And I can understand why he did not do it. Because it opens 
up two big loopholes in this bill to allow the minority of the bar that 
abused the class action laws to continue to be on the gravy train.
  I will tell you how he proposes to do it. First of all, he changes 
the effective date of the bill. What the bill says is that any class 
action where the class has not been certified will go under the new 
rules.
  The motion to recommit changes that. It says that the new rules 
become effective as of the date of enactment of the bill. And this will 
result in a rush to the courthouse in Madison County, Illinois and the 
other class action mills to get cases filed so that they will be exempt 
from the modest civil action court reforms that are contained in H.R. 
1115.
  Now, the other red herring that is in this motion to recommit is that 
it takes away the so-called interlocutory appeal. This has nothing to 
do with Enron or WorldCom or any other firm or individual that is in 
bankruptcy. They are already in the Federal bankruptcy court, and all 
civil litigation against them in State or Federal courts is stayed and 
the bankruptcy court decides those claims. But interlocutory appeals 
are not the bad things that we hear from the gentleman from New York 
(Mr. Weiner).
  The average time to decide an appeal for all types of cases 
nationwide is 10.7 months. The average time for a merits ruling and 
class certification appeals in the Seventh Circuit, which includes 
Illinois, is only 3.2 months. So you are not talking about having 
justice be unduly delayed. These appeals are decided promptly, even in 
a very busy circuit. This motion is a red herring. It should be 
defeated.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mr. WEINER. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair 
will reduce to 5 minutes the minimum time for any electronic vote on 
the question of final passage.
  The vote was taken by electronic device, and there were--ayes 185, 
noes 240, not voting 9, as follows:

                             [Roll No. 271]

                               AYES--185

     Abercrombie
     Alexander
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Ballance
     Becerra
     Bell
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Case
     Clay
     Clyburn
     Conyers
     Cooper
     Costello
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Doyle
     Duncan
     Edwards
     Emanuel
     Engel
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Gordon
     Green (TX)
     Grijalva
     Gutierrez
     Hastings (FL)
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     Kleczka
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lynch
     Majette
     Maloney
     Marshall
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Sandlin
     Schakowsky
     Schiff
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--240

     Aderholt
     Akin
     Bachus
     Baker
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Bereuter
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boucher
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cox
     Cramer
     Crane
     Crenshaw
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dooley (CA)
     Doolittle
     Dreier
     Dunn
     Ehlers
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Hall
     Harman
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Holden
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Janklow
     Jenkins
     John
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     Matheson
     McCotter
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Moran (VA)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schrock
     Scott (GA)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stenholm
     Sullivan
     Sweeney
     Tancredo
     Tanner
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--9

     Ackerman
     Cubin
     Eshoo
     Gephardt
     Johnson (CT)
     Markey
     Payne
     Royce
     Smith (WA)

[[Page H5307]]




                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Ose) (during the vote). Members are 
advised that 2 minutes remain in this vote.

                              {time}  1516

  Mr. HOEKSTRA changed his vote from ``aye'' to ``no.''
  Mr. BLUMENAUER changed his vote from ``no'' to ``aye.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. Ose). The question is on the passage of 
the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 253, 
nays 170, not voting 11, as follows:

                             [Roll No. 272]

                               YEAS--253

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Bereuter
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boucher
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Case
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cooper
     Cox
     Cramer
     Crane
     Crenshaw
     Culberson
     Cunningham
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dooley (CA)
     Doyle
     Dreier
     Duncan
     Dunn
     Ehlers
     Emanuel
     Emerson
     Everett
     Feeney
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Ford
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Gordon
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Hall
     Harman
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hill
     Hobson
     Hoekstra
     Holden
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Janklow
     Jenkins
     John
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Majette
     Manzullo
     Matheson
     McCarthy (NY)
     McCotter
     McCrery
     McInnis
     McKeon
     Mica
     Michaud
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moore
     Moran (KS)
     Moran (VA)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schrock
     Scott (GA)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stenholm
     Sullivan
     Sweeney
     Tancredo
     Tanner
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiberi
     Toomey
     Turner (OH)
     Turner (TX)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--170

     Abercrombie
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Ballance
     Becerra
     Bell
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Clay
     Clyburn
     Conyers
     Costello
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Doolittle
     Engel
     English
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Frank (MA)
     Frost
     Gonzalez
     Green (TX)
     Grijalva
     Gutierrez
     Hastings (FL)
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     King (NY)
     Kleczka
     Kucinich
     Lampson
     Langevin
     Lantos
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lynch
     Maloney
     Markey
     Marshall
     Matsui
     McCarthy (MO)
     McCollum
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Sandlin
     Schakowsky
     Schiff
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Waters
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                             NOT VOTING--11

     Ackerman
     Cubin
     Edwards
     Eshoo
     Gephardt
     Johnson (CT)
     McDermott
     McHugh
     Smith (WA)
     Tiahrt
     Watson


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised that 2 
minutes remain in this vote.

                              {time}  1523

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. TIAHRT. Mr. Speaker, in rollcall No. 272 I was unavoidably 
detained. Had I been present, I would have voted, ``yea.''
  Stated against:
  Mr. EDWARDS. Mr. Speaker, I missed rollcall No. 272. Had I been 
present, I would have voted, ``nay.''

                          ____________________