CLASS ACTION FAIRNESS ACT OF 2003-MOTION TO PROCEED
Mr. HATCH. Mr. President, I am sorry to keep the body a little bit later, but I do think we need to make some points that really need to be made. We should be debating the Class Action Fairness Act of 2003 rather than squandering away the Senate's time debating a motion to proceed to the bill. That has become typical around here. Anything that can delay, anything that can make it miserable, anything that can make it difficult to pass legislation or even consider legislation, we are finding the other side is doing to us.
Yesterday, my colleague from Vermont, the ranking member of the Judiciary Committee, observed accurately that the days remaining in this session are numbered and that floor time is indeed precious. But what puzzles me is if there is such a premium for time, then why in the world are we faced with a Democrat filibuster on the motion to proceed to a bill? Usually, if you are going to filibuster, you filibuster the bill. So we all know what is going on here.
From what I know, based on the remarks yesterday from the ranking member and others, I understand that there is an objection to proceeding to S. 1751 because it has been characterized by some as "special interest legislation." What "special interest" are we talking about? Are we talking about the "special interest" of millions of consumers throughout the country who are affected every day by class action abuses, or are we talking about the "special interest" of the everyday American worker who stands to lose because his or her employer can't increase wages or offer better health benefits because of the commercial uncertainties created by uncontrolled class action litigation, or are we talking about the "special interest" of the general American public that is losing faith in the American civil justice system because of the outrageous class action coupon settlements that only benefit the attorneys?
On this whole special interest point, I would like to direct your attention to a recent poll showing that the overwhelming majority of Americans believe that class action lawsuits benefit lawyers at the expense of their clients.
Look at this chart. "Opinions on class action lawsuits; who benefits most from class action lawsuits." Lawyers for the plaintiffs, the public says-47 percent believe the lawyers benefit the most. They are right, especially in these frivolous suits we have been referring to. Buyers of products, 5 percent; companies being sued, 7 percent; 9 percent of the American people think the plaintiffs benefit the most from class action lawsuits-the ones they are bringing the suits for. Only 9 percent of the American public think the injured parties, the so-called victims, are the ones who benefit; 12 percent don't know; 20 percent say the lawyers for companies. So of the total opinion of the American people in a poll conducted, with an error margin of plus or minus 3.5 percentage points, a total 67 percent of the American people believe the lawyers are the ones who benefit from these class action suits; 67 percent believe class action lawsuits are a virtual bonanza for lawyers. The public is not too dumb; they are right.
In stark contrast, the poll shows only 9 percent of Americans believe the class action lawsuits benefit the victims or the plaintiffs themselves. When the public perception of class action lawsuits in our civil justice system is so negatively skewed, I find it difficult to say with a straight face this bill somehow advances "a special interest."
Perhaps the "special interest" we are really talking about is that belonging to one Hilda Bankston. Who is Hilda Bankston? This is Hilda in the photo. A beautiful woman, a decent person. I can tell you with certainty she is not a tobacco company. She is not a gun manufacturer or somebody who pollutes the environment. Hilda Bankston and her husband Mitch owned Bankston Drugstore in Fayette, MS, a small local pharmacy where Mitch worked as a pharmacist. The Bankstons were dragged into hundreds of lawsuits filed by class action attorneys in the State of Mississippi by virtue of owning the only drugstore in Jefferson County. Their small business became a prime target for forum-shopping class action attorneys in pharmaceutical cases.
The Bankstons' nightmare began in 1999 when Bankston Drugstore was named a defendant in the fen-phen diet drug class action lawsuit simply for filling a prescription written by a doctor-something they were supposed to do. Since then, plaintiffs lawyers have filed hundreds of pharmaceutical lawsuits against Bankston Drugstore. Every time a big drug maker was sued, even if the company was located in New York, or California, the plaintiffs' lawyers added Hilda Bankston and her husband as defendants-this hard-working owner of a single drugstore-just because she sold that drug from her neighborhood drugstore, which was her obligation to do.
Even though Mrs. Bankston no longer owns the drugstore, she continues to be named a defendant in these lawsuits today and is buried under a mountain of discovery requests because of the litigation. On a more personal level, Mrs. Bankston describes to us the toll this ordeal has taken on her both personally and professionally. She testified that, "no small business should have to endure the nightmares I have experienced. . . . I have spent many sleepless nights wondering if my business would survive the tidal wave of lawsuits cresting over it."
Mrs. Bankston also suffered the loss of her husband when, within three weeks of being named as a defendant in the fen-phen case, her husband died of a heart attack. It is stories like Mrs. Bankston's-an every-day citizen just trying to fulfill the American dream-that makes this bill so compelling. I think to characterize this bill as appeasing "special interests" is not only disingenuous but it ignores the extensive mountain of evidence showing otherwise. It is pure, unmitigated bunk and they know it.
I also understand the ranking member expressed surprise and concern over the lone difference between S. 274 as reported out of the committee and the rule XIV version of the bill, S. 1751, that we are now trying to move forward. To set the record straight, we are simply invoking Senate rule XIV, which is procedurally proper, to simply accommodate the revised mass actions provision the committee had removed from the bill during markup on the condition that it would be modified and replaced in the bill before floor consideration. That is what we agreed to do. That is all we did. The rule XIV version of the bill, which is numbered S. 1751, is the identical bill we voted favorably out of committee, except for the return of the revised mass actions provision the members on the Judiciary Committee knew or should have known would be restored into the bill before floor consideration.
Just on Friday, the majority leader asked unanimous consent to bring up S. 274, substituting with the text of what is now S. 1751. There was an objection from the other side of the aisle which forced the majority leader to bring up S. 1751 under rule XIV. To now hear we are somehow not acting in good faith is, at best, a misunderstanding and at worst a deliberate attempt to mislead. You make the decision, you make the judgment on that. I know what I think.
By way of background, I want to explain what happened with this provision. When the original bill, S. 274, was marked up during committee last April, the committee members agreed to an amendment offered by Senators FEINSTEIN and SPECTER striking two provisions from the bill only with the understanding that the language would be modified and replaced before floor consideration. The first provision defined private State attorneys general actions as class actions within the meaning of the bill. These are statutory actions a private citizen can bring on behalf of the general public. My colleague from California, Senator Feinstein, expressed specific concern over this provision because she believed it would interfere with an existing California statute permitting such representative actions. This provision has remained out of the bill.
It is the second provision that necessitated the rule XIV alternative. This second provision is what we commonly refer to now as the mass actions provision. A mass action is a civil action seeking to try the claims en masse of all plaintiffs and defendants in a single trial, but pursued without the procedural due process prerequisites for litigating such a matter as a class action. Mass actions are used heavily in certain States such as West Virginia and have been used to unfairly consolidate for trial diverse claims of as many as 8,000 plaintiffs from over 35 States against over 250 defendants. These actions are especially problematic because they proceed without satisfying any of the standard class action prerequisites, such as commonality and typicality of claims.
Although the original bill contained a provision that defined mass actions to qualify as class actions, my colleague Senator Specter raised a specific concern over the scope of the provision and moved it be stricken. Because the committee didn't have a meaningful opportunity to evaluate the Senator's concerns before markup, I, as chairman, agreed to strike this provision, but only with the understanding that we would modify the provision and replace it before the bill reached the floor, which is exactly what we did.
After the extensive post-markup negotiations and other discussions among my staff and the staff of Senators SPECTER, FEINSTEIN, KOHL, and GRASSLEY, we were able to reach consensus on a revised mass actions provision in early September.
Let me stress there are no surprises here on what we were going to do with the mass actions provision. Everybody who appeared that day in the Judiciary Committee markup was aware the bill sponsors would work with the sponsors of the amendment, Senators SPECTER and FEINSTEIN, to develop compromise language. Indeed, we called specific attention to this understanding in our committee report on S. 274, which has been widely and publicly available since last July.
As for using rule XIV, which is an effective rule in the Senate, a rule that can be legitimately used, and has been used in this case, we gave advance notice to our Democratic counterparts, Senators FEINSTEIN and KOHL, over a month ago that there was a possibility we would have to use this procedural device to ensure the operative text reflected the understanding when the bill was reported out of committee.
I also understand from my staff that these offices then informed, among others, the ranking member on our committee about the potential use of the rule when we introduced S. 1751 last week. Simply put, we were open and above board. We didn't have to be, but we were. We didn't have to be because the rule is the rule. We are entitled to use it. The Democrats have used it time after time, as have Republicans. There are no surprises here. I was the most shocked to find claims that something somehow or another was askew and not properly handled. Again, that is pure bunk, and everybody knows it. But I suppose when we have television in the Senate, we are going to see that type of argument made from time to time, even though it doesn't hold water and can't stand the light of day.
We provided advance notice and opportunity to review the text to our Democratic sponsors and the sponsors of the amendment so they could all verify that no other changes were made. That is good faith, in my view. We gave advance notice of our intended use of this device for a provision we made clear to everyone we intended to modify. So I am particularly baffled as to why the ranking member of our committee is calling this a mystery. This is no mystery. We did exactly what we said we would do when we marked up this bill in committee, and the bill was voted out with a partisan vote of 12 to 7, but, of course, the distinguished Senator from Vermont didn't vote for the bill in committee. That may be what is behind these types of comments. He never has been for this bill.
I suspect all is fair in love and war. This being war, they can say whatever they want on the floor of the Senate, even though it is totally wrong.
I believe rule XIV is the most appropriate way of handling the unique set of circumstances leading to the revision of the class action provisions, especially in light of the limited number of days remaining in this session. Given the number of pressing appropriations issues facing the Senate in the coming months, I think it makes little sense to waste valuable floor time debating as a separate amendment a provision that the key Republican and Democratic members have already worked out in good faith. It is even more absurd to be forced to debate a motion to proceed to this bill.
There is only one reason for that. That is to delay, delay, delay, and hopefully bollix up everything at the end of this session so nothing good gets done. I ask my colleagues to support the motion to proceed to S. 1751, the rule XIV version, the Class Action Fairness Act of 2003.
A Senator got on the floor and made a number of what I thought were outrageous comments as well pertaining to this being a special interest piece of legislation. This is a people's bill. The biggest losers under the current system are the people. Lawyers sue companies and negotiate settlements in which they get all the money. So consumers get ripped off twice: Their lawyers rip them off by taking the settlement money that is supposed to go to them, and then they have to pay for the payoff to the lawyers at higher prices.
How about tax cuts for the wealthy? That was an argument made yesterday. The class action bill would not protect the wealthy. It is the opponents of the bill who are trying to protect the wealthy-the wealthy trial lawyers in this case. Although not all class action lawyers are to be criticized, some actually are good lawyers who actually do what is right within the law in fair class actions that really are brought to help people. We are talking about the ones who need to be reformed. Some of these wealthy lawyers who need reform amass their riches by ripping off consumers in bad settlements. We have shown that throughout this debate.
Senators raised the issue of defective products, protecting gun manufacturers. The only successful class action against gun manufacturers, the only case in which any relief was awarded was in Federal court. That is what we are trying to do here, and they act as if the Federal courts are not capable of handling these cases? This doesn't stop legitimate class actions. It just says there is no longer going to be these phony forum-shopped cases in corrupt jurisdictions where there are corrupt judges and where jurors don't realize they are saddling all of America with these outrageous verdicts that pay off the attorneys but do very little for consumers or for the plaintiffs who are supposedly the real victims.
We heard the argument yesterday that Justice Rehnquist is opposed to this bill. Opponents keep saying Chief Justice Rehnquist opposes the bill, but whenever we ask for a citation to that opposition, we get absolutely nothing. They talk about the Judicial Conference letters, but those letters do not express opposition to the bill that was reported out of committee.
How about forum shopping? Defendants cannot forum shop. The plaintiff always gets to choose where to file the lawsuit. If they file in State court, they can often choose precisely the judge who will hear the case. All the defendant can do is remove to Federal court where the case will be heard by a randomly selected judge, not a stacked, forum-shopped deal with a corrupt judge or maybe not even a corrupt judge, but one who just believes the plaintiffs should win no matter what the facts are. Again, I think that is corruption. It is nonsense to say defendants can forum shop or that forum shopping is the purpose of this bill. That is nonsense. Yet that is what one of our distinguished Senators was saying yesterday.
How about the scalpel argument? Any suggestion that this class action problem is concentrated in a handful of State courts is wrong. It is a problem in many places, and if you fix it in one place, the party moves to some other court in some other town.
How about Madison County, IL, by the way? We had the two Senators from Illinois speak: One just found Madison County to be the most circumspect county in the world. The other basically called the judges and the lawyers, many of whom never practiced law in Madison County, people who were abusing the system. He even implied some of them were corrupt.
The figures in Madison County do indicate a problem. Look at the dramatic increase in the number of class actions, virtually all of which were nationwide class actions over a short period, an increase from 2 in 1998 up to over 75 last year. Why are all these people, all these attorneys from other States flocking to the middle of nowhere to file lawsuits in which none of the claimants and none of the defendants are from the area? Do we really need to ask why? We know why. Because of corruption-corrupt judges, or should we say misconceived judges, to be nice about it, or judges who always find for the plaintiffs or steer everything in favor of the plaintiffs or always find class actions to exist when they really shouldn't. That is corruption.
We hear statistics indicating half of the class actions have been certified, but what the distinguished Senator from Illinois should have said was "certified so far."
What I find curious is that the distinguished Senator from Illinois didn't give the number of class actions that were denied.
What happens in Madison County is that the case is filed, and when the lawyer decides he wants to put the squeeze on the defendant to settle, he starts moving toward getting a class certified, but sometimes it takes a while.
By the way, just moving to get a class certified in Madison County where it is almost granted at will is enough to scare any corporation because once that happens, that corporation is in real trouble, and so are that corporation's employees who are likely to lose their jobs, their income, their health care, and their pensions if the company gets thrown into bankruptcy.
We have heard allegations that under the class action bill, a defendant can remove a case at any time, even on the eve of trial. The current removal statute, 28 USC section 1446(b), provides that a case must be removed to Federal court "within 30 days after the defendant's receipt . . . of a copy of the [complaint] in the action."
This class action bill would not change that rule. The allegation that a class action bill would allow a case to be removed to Federal court at any time is ridiculous. But that is what we are getting used to from those who argue against this issue.
Now why do they do that? Why can they not see these simple, easy to see facts of life? Well, I hate to say it but I think it comes down to the fact these trial lawyers are the biggest hard money funders of many of these people who will vote against this bill. They get whatever they pay for. They can rely on their friends in the Congress to ignore what really should be ethical and good changes in the law and to stand in the way of those changes. That is what is happening here.
That is taking the sugar coat off, but that is what is happening. The fact is that we have people in this body who will vote for the trial lawyers no matter how wrong they may be.
Now, when I say trial lawyers, I am speaking about this select group of trial lawyers who really are giving the legal profession a bad name, who are in it for the money so they can support their own political candidates, live in high style, be influential in their respective communities, most all of which are outside of Madison County, by the way, and who can just about afford to do anything they want to do and are used to doing anything they want to do.
I happen to know a lot of good trial lawyers who are honest and decent, who really fight hard for their plaintiffs, for people who were wronged, for victims, and who are disgusted with these trial lawyers who are taking procedural advantage, monetary advantage, of forum shopping in this country. It is coming to the point where even the American Trial Lawyers Association is starting to get split on these types of issues because they realize that some of these people are giving trial lawyers who are good, honest, decent, hard-working trial lawyers a bad name, because they are getting lumped into the term "trial lawyers" all the time with these people who are bad actors, who are in it for the money.
Now, they paint a very big picture about how they are in it for the little consumers, but look at the coupon settlements. Look at the amount of money they are getting in fees. Look at the way the consumers have been ripped off. Look at the cost to society. Look at the companies that are in shambles and can no longer employ people. Look at the unfairness of forum shopping. Look at the unfairness of corruption.
I commend trial lawyers who are honest and decent and who bring decent class actions. They know they can win in Federal court just as much as they can win in State court, but they also know they cannot forum shop as well in Federal courts.
Now, one can still forum shop but not nearly like they can in a number of jurisdictions in this country in certain counties where, as I say, judges are owned lock, stock, and barrel by various political interests.
Well, I have kept us long enough, but this is an important bill and to filibuster even the motion to proceed to the bill, at this late date, leads only to one conclusion and that is unfairness, delay, win at any cost, fear to debate this bill straight up and down, fear to have votes straight up and down. The reason they are afraid is because they know if Senators were permitted to vote their consciences this bill would pass overwhelmingly, if it were not for the untold influence of big class action money.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. If the Senator will yield, based on his experience, it is indeed an unusual thing that we have a filibuster of a motion to proceed to a bill that has this kind of bipartisan support. Is it not?
Mr. HATCH. No question that we usually do not have a filibuster on a motion to proceed, because if any of my colleagues are going to filibuster, they should filibuster the bill. By filibustering the motion to proceed, they can delay a vote on that for 3 days. Then they can filibuster the bill and delay that for another 3 days, which eats up 6 days at a crucial time of the year when we are trying to do all of the appropriations bills, a prescription drug benefit and Medicare reform, asbestos reform, judges, a whole raft of other very important issues, including the Energy bill. So by eating up all this time it makes it difficult to pass any of these matters, and it makes one wonder what in the world is behind all of this.
Mr. SESSIONS. I think it is particularly telling, I say to the Senator, because this is not like the circumstances we had when the Democrats were in the majority and Senator Daschle called up the entire Agriculture bill, or the entire Energy bill, which were huge bills, under rule XIV, that had not been addressed in the committee. This bill had hearings in committee and we voted for it 12 to 7. There was only one basic change to the bill.
Mr. HATCH. It was a bipartisan supported bill. Democrats and Republicans support this bill. It will pass if Senators are permitted to vote their consciences and are permitted to vote up or down without the phony delays of a filibuster, especially a filibuster on the motion to proceed.
By the way, rule XIV is an effective rule of the Senate. Both sides have used that in order to expedite consideration of matters and everybody understands that, and everybody can then debate.
Mr. SESSIONS. I just recall when Senator Daschle was the majority leader, he brought up huge legislation outside of the committee that could not have been passed in the committee. We were forced to debate that legislation on the floor under rule XIV. To say there is some procedural problem here, when Senator Hatch has managed the bill through the committee process, when we have debated the bill, and when we have voted on the bill in committee, it came out 12 to 7, is baffling. As far as rule XIV is concerned, everybody was given notice of what would happen, this is just pure obstructionism. This is just an excuse to delay, delay, obstruct, obstruct.
We are coming to the end of this legislative session. We have a lot of things to do. One of the things we absolutely ought to do is to move this bipartisan bill to fix class action litigation in America. It is the right thing to do. It has the overwhelming majority support of the Members of this body. Yes, it has the opposition of a small but powerful little group of trial lawyers who put a lot of money in the political campaigns, but it is the right thing to do, and we ought to move forward with it.
I think there is every reason for those who believe in improving the legal system to be upset at the obstructionism that we are facing by a majority leader who has approved this. I think if we had some leadership on the other side by Senator Daschle, we could move this bill. To lay back is to allow the trial lawyers to control this matter.
There are a lot of reasons why we ought not have a single state judge in Madison County, as the Senator said, trying cases that have impact all over America. That is not good. A Federal court, with a Federal judge, with a quality group of law clerks, a fine staff, and by far a smaller caseload than most State judges have-I would say on the average, in my experience, that the State judges would carry maybe 10 times as many cases on their docket as a Federal judge has on the Federal court docket. The Federal judges give more attention to the cases and they have more ability to focus on a case. There is the ability to issue subpoenas nationwide and make things happen in ways that are more difficult in State court. So a major class action involving millions of dollars and thousands of plaintiffs from different states ought to be tried in Federal court when there is a majority of the people involved who are out of State.
This reform fixes some of the problems associated with class actions. It sets up legislation that gives special scrutiny for those abused coupon-related settlements, where the victims get coupons and lawyers get big fees.
It guarantees that notifications to class Members to be in plain English. It scrutinizes against a negative awards, where plaintiffs who may not have even known they were plaintiffs end up having to pay attorney's fees in a case they never authorized to go forward. It provides protection against unwarranted higher awards for certain class members, just because they are in a certain area of the country. And there are prohibitions on the payment of bounties.
It makes it more difficult, when you are facing a fair judge who you believe will rule on the law and give you a fair shake, not in a county that has a reputation of just hammering defendants in favor of the attorneys who file the cases. That allows defendants to litigate with integrity, and not feel they must just pay up, almost in the form of blackmail, to get the matter away so they can go on about their business. This is not a fair way to do business.
This bill has a lot of good things in it that will make this area of the law, class actions, better, more fair, and more objective.
I thank the chair and I yield the floor.
Mr. President, I suggest the absence of a quorum.