Class Action Fairness Act of 2003-Motion to Proceed

CLASS ACTION FAIRNESS ACT OF 2003—MOTION TO PROCEED

Mr. DURBIN. Mr. President, I thank the ranking Democrat in the Senate Judiciary Committee, Senator Leahy, as well as Senator Reid of Nevada, for coming to the floor today to discuss the agenda of Congress. It is worthy of reflection.

Some of us went home last week after the vote dispirited because this administration was afraid to offer the Iraq reconstruction package as an up-or-down vote. They believed—and I think they were right—they couldn't pass it. So many
Members of Congress had so many questions and reservations, the only way it could pass was to combine it with the money for our troops. Many of us, looking at this terrible Faustian bargain, had to vote for the bill to support the troops, believing that, frankly, if it were my child, someone near or dear to my family, as it is for so many people in Illinois, I wouldn't want to shortchange the troops one penny. So we ended up passing about $15 or $16 billion in reconstruction for
Iraq.

Trust me, stories are already pouring in about some of the questionable contracting that is going on over there. There is real doubt among some as to whether this money will achieve the goal we are seeking. We want peace in Iraq. We want stability.

We want our troops to come home. But we want to do it in the right way.

So far, this administration, since the declaration of the military victory, has seen a long string of embarrassments and defeats and setbacks. There have been pretty pictures painted by some on the other side who have gone there, but they can't overcome the reality of every morning's newscast which tells about another soldier being killed or another 10 soldiers being maimed.

I have visited with some of those soldiers who have returned from Iraq. Their lives will never be the same. To say they got by because they were simply wounded is to overlook the obvious. Many of them will carry scars for the rest of their lives because of a policy of this administration which, frankly, has not stood the test of time.

The reason I think it is important to reflect on that is to consider where we are today. Now that we have moved from the issue of Iraq, we are back on an issue which is near and dear to the Republican leadership in Congress as well as to the White House. Take a look at the agenda of this Congress and particularly what we are discussing today. It is an agenda which attempts to slow down the legitimate responsibilities of government directly through Executive orders and indirectly with historic deficits.

Yes, this fiscal conservative, compassionate Republican President has stood by and watched as we have reached record depths in terms of debt in America. Although he can point to a recession which he blames on the previous President, which is fair game in Washington, he can point to a war on terrorism, the fact is, most of this deficit is his own creation.

President Bush's tax policy, his economic plan has been a failure for America's economy. But it has been a dramatic success for those who were praying for a bigger deficit. I don't know who that might be, but if you were looking for a President to deliver the biggest deficit in the history of the United States, this President has done it. That deficit, of course, shortchanges us when we need to really pursue the valuable and vital functions of government.

There are some things which only government can do. I know my friends from the conservative side of the political spectrum hate to concede this point, but there are certain things only government can do. Certainly military defense is one.
Defense against terrorism is another. But there are others, and they will come to our attention as we consider the debate before us on a bill related to class action lawsuits.

The agenda of the Republicans in Congress and the President is one that is guided by the naive belief that the balance of power within our Government is outdated. It is an agenda which would close the courthouse doors to ordinary Americans in the name of penalizing trial lawyers but continue to protect the most politically powerful. This is nothing new in government. The people who have the power to line the Halls of Congress with their lobbyists in their three-piece suits and fancy shoes are well represented. They are the voices you hear when you come to vote for a bill.

The voices that are not heard are those of consumers and families and working people who are disadvantaged time and again by these special interests. The Class Action Fairness Act is a special interest piece of legislation designed exclusively to protect those who are wealthy and powerful from even being held accountable in court.

When you look at the options available to us, if you have a President who really doesn't care to work for consumers and working families, and a Government which is unresponsive because of that President or the lack of funds, and a Congress unwilling to address these same issues, there is only one place for an American to turn. That is the court system. So what this Congress tries to do time and time again is to close the doors of the courthouse so that that family, that consumer, that small business, that individual doesn't have a chance to go into the courthouse and ask for justice. They are doing that with this class action bill.

Whether the agenda is driven by the White House, the leadership of the House of Representatives, the committees on the floor of the Senate, the not so invisible hand of the right-wing agenda is busily at work. We see it in the nominees sent up for lifetime appointments to the Federal judiciary, men and women who are not even close to the center stripe of political thinking, in the hopes that if you cannot close the courthouse door, make sure there is a judge on the bench who will rule
consistently on behalf of the wealthy and powerful in America.

Some will say what I am saying sounds a lot like class warfare. I can recall what Warren Buffet, one of the wealthiest men in America, told us a few weeks ago. He came to a luncheon on Capitol Hill and spoke to a group of Senators and talked about President Bush's tax cuts for the wealthy. This wealthy man from Omaha, NE, said, "Some people say this is class warfare." He said, "I want to tell you something. It is true, and my class is winning the war."

That is a fact. They have won the war with the President's tax cuts. They will continue to win the war when it comes to closing the courthouse doors. The agenda is being driven by President Bush and his gang of compassionate conservatives. It is not just this issue of litigation and tort reform. It stretches in so many directions. This is an administration that wants to drill for oil in the Arctic National Wildlife Refuge rather than to demand that automobile manufacturers in Detroit make more fuel-efficient cars, which they can do. The technology is available. But this administration would much rather invade a pristine wildlife refuge set aside by President Eisenhower 50 years ago than pick up the phone and say to the Big Three in Detroit that you have to do better. We need more fuel-efficient cars and we are going to support legislation to make it happen.

That shows you where they are coming from. They would much rather drill in a wildlife refuge than to ask for more fuel efficiency from the automobile manufacturers. This is an administration that cuts education funding for schoolchildren to pay for tax benefits for the wealthiest people in America. It is an administration that would restrict background checks on gun purchasers while protecting gun manufacturers from liabilities. Rather than to make certain that we keep guns out of the hands of people with criminal records or a history of mental illness, they say instead, in the name of a second amendment, we cannot ask those questions and, if we do, we cannot keep the records long enough for law enforcement to use them. It is a constitutional right as far as they are concerned under the second amendment.

Yet when it comes to gun manufacturers making defective products and dangerous products and selling them, this administration falls over backward in an effort to protect them from any liability in court, this administration which would cap the compensation of injured victims of medical negligence, medical malpractice, and never question the insurance companies that continually make mistakes and charge the most outrageous premiums. Now we are forced to debate a bill that divides instead of unifies us.

It is especially troubling at a time when so many appropriations bills have not even been considered in the Senate and we are going to work on this bill for special interest groups. The majority leader brought this bill before us instead of an appropriations bill. Here we are after October 1, at a time when we should have passed all of our appropriations bills, but instead of addressing the immediate needs of Government, we are going to address the immediate needs of the special interest groups.

I find it interesting that the bill before us is not the bill that passed the Judiciary Committee, which I served on a little earlier this year. There is a provision back in the bill called a mass tort provision. I will not go into all the details of it other than to tell you the special interests have won again. There was a bipartisan motion in the Judiciary Committee—I am not sure there was debate—to delete a section of the bill for so-called mass tort actions. It was a motion by Senator Specter, a Republican, and Senator Feinstein, a Democrat. It was removed without controversy.

Guess what happened. That bill was thrown away. The bill before us today reinstates this prohibition against mass tort actions. That is fundamentally unfair, and we knew that. The special interest groups prevailed again.

How fair is the Class Action Fairness Act before us? It is not about fairness or justice. It is about protecting the powerful against legal challenges from the little guy. Who wants this bill? Who wants this class action bill? I will tell you those who line up on the side of this bill. It is the major tobacco companies, including Philip Morris, which is sick and tired of being sued by those who have been damaged by their deadly tobacco products. They have come to the Republican Congress and prevailed on them to make it more difficult for the victims of those tobacco products to come to court. So the tobacco companies want this bill to pass. Gun manufacturers, understanding their exposure to liability by selling defective guns, selling them in quantities where they knew or should have known they would fall in the hands of criminals, don't want to be sued in court anymore. Even though the death rate in America—on the streets of Chicago, New York, and Washington—continues to climb from gun murders, this bill says the victims are going to have a tougher time suing the gun
manufacturers.

Those who pollute want this bill. Those involved in environmental pollution are less likely to be sued because of this bill.

Others include the pharmaceutical companies, every insurance company in America that I know of, the National Association of Manufacturers, and Financial Services Roundtable. The list of special interest groups is very lengthy.

There is another group on the other side who oppose this bill—an interesting coalition. Listen to those who have come out in opposition to the bill. The first name on the list may be the most curious. It is Chief Justice of the U.S. Supreme Court, William Rehnquist. Why? Because this bill shifts a lot of class action lawsuits from State courts to Federal courts. Chief
Justice Rehnquist understands that the Federal courts are not in a position to deal with these lawsuits. He said this is a bad bill; it is bad for the administration of justice in America. He is not a bleeding heart when it comes to consumer cases. His precedents and rulings will speak for themselves. But he says this bill is bad, and he is right.

Then the list of organizations—which I will not read—is two pages long. These groups are a clear indication of why it should not be passed. I will say generically that many of the leading medical groups, including the American Cancer Society, the Heart and Lung Society, many leading environmental groups in America, and almost every one of the major consumer groups in America, say this is a bad bill. It will keep ordinary Americans from having their day in court.

I ask unanimous consent that the list be printed in the RECORD.

NATIONAL ORGANIZATIONS OPPOSED TO FEDERAL CLASS ACTION LEGISLATION
AARP.

AFL-CIO.

Alliance for Justice.

Alliance for Retired Americans.

American Association of People with Disabilities.

American Cancer Society.

American Heart Association.

American Lung Association.

Brady Campaign to Prevent Gun Violence United with the Million Mom March.

Campaign for Tobacco Free Kids.

Center for Disability and Health.

Center for Responsible Lending.

Clean Water Action.

Coalition to Stop Gun Violence.

Consumer Federation of America.

Consumers for Auto Reliability and Safety.

Consumers Union.

Earthjustice.

Environmental Working Group.

Families USA.

Friends of the Earth.

Gray Panthers.

Greenpeace.

Homeowners Against Deficient Dwellings.

Lawyers' Committee for Civil Rights Under Law.

Leadership Conference on Civil Rights.

Mexican American Legal Defense and Educational Fund.

Mineral Policy Center.

National Asian Pacific Legal Consortium.

National Association for the Advancement of Colored People.

National Association of Consumer Advocates.

National Association of Protection and Advocacy Systems.

National Campaign for Hearing Health.

National Partnership for Women & Families.

Natural Resources Defense Council.

National Workrights Institute.

National Women's Health Network.

National Women's Law Center.

People for the American Way.

Public Citizen.

Service Employees Union International.

Sierra Club.

Tobacco Control Resource Center.

Tobacco Products Liability Project.

USAction.

U.S. Public Interest Research Group.

Violence Policy Center.

Women Employed.

GOVERNMENT ORGANIZATIONS OPPOSED TO FEDERAL CLASS ACTION LEGISLATION

Judicial Conference of the United States.

Conference of Chief Justices.

Attorney General of California, Bill Lockyer.

Attorney General of Illinois, Lisa Madigan.

Attorney General of Maryland, J. Joseph Curran, Jr.

Attorney General of Minnesota, Mike Hatch.

Attorney General of Missouri, Jeremiah W. Nixon.

Attorney General of Montana, Mike McGrath.

Attorney General of New Mexico, Patricia A. Madrid.

Attorney General of New York, Eliot Spitzer.

Attorney General of Oklahoma, W.A. Drew Edmondson.

Attorney General of Vermont, William H. Sorrell.

Attorney General of West Virginia, Darrell Vivian McGraw, Jr.

Mr. DURBIN. This is a classic battle between the biggest companies in America, that don't want to face legal responsibilities, and the most vulnerable people in America, who have no other recourse but the courts. Consumers, environmentalists, gun control advocates, and civil rights champions often turn to the class action process of our civil justice system because the Government—beholden to the special interest groups and the corporate agenda—simply is unwilling to take on these same big corporations.

Unfortunately, when you pit these two sides together on Capitol Hill, consumers don't have a chance. This bill is a clear indication of that.

The bill is fundamentally unfair and unnecessary. How can you be sure it is only the plaintiffs who are guilty of abusing forum shopping but never the defendant? That is the argument being made. They say we have to restrict the people who can bring lawsuits in court.

The argument on the other side is that there are so many frivolous lawsuits. The honest answer is that there are some frivolous lawsuits, and there always will be in a system open for any individual to file a lawsuit. On the other hand, we know many of these lawsuits—and I will recount several later on—give clear indications and evidence of the fact that many people who are sued in class action lawsuits have a real responsibility to the consumers and the American people that they don't meet.

I am concerned when they tell me the bill will restrict their ability to fight for rights of consumers and victims of corporate malfeasance, and I hope the sponsors can carry their burden in explaining to the American people why they believe this bill will not tilt the advantage to the corporate defendants.

To the extent there are abuses in the class action process, it should be addressed with a scalpel, not a sledgehammer, which this bill does. If the problem is concentrated only in a handful of State courts, the solution isn't to remove every case to Federal court. That is what this bill does.

The American Tort Reform Association, which represents all of the special interest groups that would close the courthouse doors, obviously championed this bill. They released a study recently which I find amazing and, in a way, offensive.

In their report, entitled, "Bringing Justice to Judicial Hellholes 2002," this organization identified 13 counties or cities that they define as "judicial hellholes," because they supposedly attract lawsuits from around the Nation to plaintiff-friendly courts.

What does that mean? If you are a lawyer in some part of the country and want to file a class action suit, this association argues that you can shop around to find the friendliest judges who will certify your class. That is the first step in a class action suit. The court has to basically certify under State law whether you can gather together the individuals you call your "plaintiffs' class" to sue a defendant. They argue that in some parts of America it is more likely to be certified than not.

They characterize those as judicial hellholes. One of them is near and dear to me because it is in my home State, in Madison County, IL. I was born in St. Clair County, the adjoining county. I am familiar with Madison County and most of the people who practice law there and the judges on the bench.

Well, with all of their valiant and well-funded national research, the American Tort Reform Association came up with about a dozen "hellhole" counties, and a few more they call "honorable mentions."

That is about a total of 20 counties they have identified out of over 3,000 counties in the United States and more than 18,000 cities, villages, and towns—20 problem counties out of 21,000 cities and counties. That is fewer than .0001 percent of all the counties and cities in the country.

Clearly, if that is where the problem lies, with 20 places, why would we pass Federal legislation to affect every county and every city in America? Yet the solution the sponsors seek is exactly that.

Let me speak for a moment about the real story of Madison County because it has been recounted over and over by the advocates of tort reform as an outrageous, out-of-control situation.

It is said there have been hundreds of consumer class action cases filed in the last few years and rarely are any not certified for trial. That is what the American Tort Reform Association says. Yet while the number of filings increased, the number of
consumer class action certifications in that county has actually declined over the last 2 years.

State judges, including those in Madison County, are disposing of frivolous consumer class action cases by refusing to certify them for trial. Moving them to Federal court simply transfers the responsibility for making that determination.

Let me give some numbers so we can get a feel for one of these judicial "hellholes" from the groups that advocate this legislation.

Madison County, IL: Consumer class actions filed—1999, 12; 2000, 39; 2001, 60; 2002, 76; 2003, 44 as of July 2.

Let's go back for each of those years and find out how many were actually certified to go forward and be tried. In 1999, 12 were filed, 6 were certified; in 2000, 39 filed, 14 certified; in 2001, 60 filed, 2 certified; in 2002, 76 filed, 1 certified; in 2003 so far, 44 filed, none certified.

Does this sound like a situation out of control? The sum total of all the class action lawsuits for these 5 years so far is 23 over 5 years—23 class action lawsuits in Madison County, IL, the so-called judicial "hellhole." Frankly, the arguments made on the floor just are not borne by the facts.

Additionally, of 166 verdicts that were reached in all cases filed in Madison County, 55 resulted in no monetary verdicts to plaintiffs. Only 11 verdicts in the 166 cases tried resulted in verdicts in excess of $1 million. The median verdict for all cases in Madison County, IL, is $28,649.

If there are problems in any jurisdiction or any State, they can be solved there. In Alabama, for example, one of the favorite targets for criticism by tort reformers, the State supreme court reprimanded a few State judges who had certified numerous classes.

In Mississippi, another jurisdiction frequently mentioned by supporters of class action reform, the State legislature recently repealed Mississippi's venue and joinder statutes, making it more difficult to bring mass tort claims.

Removing these cases to Federal court does not solve the problem. In fact, it is going to heap more of a burden and demand for more specialization and responsibility on our Federal courts, many of which are already overburdened.

I see my colleagues are on the floor. I am going to take a few minutes to point out the kinds of lawsuits about which we are talking.

When the average person hears "class action lawsuit," they may not have an idea of what it is about. I would like to give a few examples of class action lawsuits and understand, I hope, for a moment that those who are coming to the floor trying to restrict the rights of plaintiffs to come into a class and file a lawsuit have to face the reality of the history of class action legislation. We will find in these cases some recurring themes, but the most recurring theme is this:

The plaintiffs in a class action lawsuit were usually damaged a very slight amount or in a very limited way individually or as families, but when you take together the sum total of all the damage done by the defendant, it becomes substantial. If someone—Senator Leahy used this example in committee—if someone overcharges a person 2 cents a gallon for gasoline so that each time they fill up they lose 40 cents, there is not a great loss to an individual. But when you put that together in terms of the millions of people buying gasoline, one can understand that if the defendant corporation has been guilty of fraud or wrong dealing, they have made millions of dollars at the expense of 40 cents a fill-up of individual consumers. So class action lawsuits bring all these consumers in one group against a corporation that may have harmed them only a slight amount individually.

Let me give some examples. Foodmaker, Inc., the parent company of Jack-in-the-Box restaurants, agreed to pay $14 million in a class action settlement in the State of Washington. The class included 500 people, mostly children, who became sick in early 1993 after eating undercooked hamburgers tainted with E. coli. The victims suffered from a wide range of illnesses, from more benign sicknesses to those that required kidney dialysis. Three children died. The settlement was approved in 1996. So 500 individual families, instead of suing Jack-in-the-Box and its parent company Foodmaker, came together as a class because that corporation was selling products so tainted and adulterated that it led to death and serious illness—500 people, $14 million, but deaths were involved in the process.

Let me give another example. General Chemical of Richmond, CA. On July 26, 1993, the chemical oleum, a sulfuric acid compound, leaked from a railroad tank car. The leak caused a cloud to spread directly over North Richmond, CA, a heavily populated community. Over 24,000 people sought medical treatment because of that leak. General Chemical entered into a $180 million settlement with 60,000 northern California residents who were injured and sought treatment for the effects of that pollution. Individual plaintiffs received up to $3,500.

What is the likelihood that if you personally or a member of your family ended up going to a hospital or a doctor and had $500 or $600 or $1,000 in medical bills that you would turn around and hire a lawyer and sue General Chemical responsible for that illness in your family? I don't think the likelihood is very strong. But when they brought together the 60,000 people who were damaged because of this environmental leak of a sulfuric acid compound, the company agreed to pay $180 million to some 60,000 people.

Let me give another example. Beech-Nut Corporation, and its parent company Nestle, were accused of deceptive business practices, guilty of selling—listen to this—Beech-Nut and Nestle were found guilty of selling sugar water labeled as pure apple juice for infants. After passing blame back and forth between companies and suppliers, they eventually agreed to settlements of $3.5 million to reimburse consumers who unknowingly fed their babies sugar water instead of apple juice. Is that the kind of thing that merits a lawsuit? In an individual situation you may ask, How sick is the baby?

The bottom line is, these companies were trying to make money by deceiving parents into believing they were selling a nutritious product and ended up paying $3.5 million because of it.

Class action lawsuits by consumers who as individuals would never have a day in court, but coming together finally found justice in their State courts, a justice which is threatened by the so-called class action fairness bill which is before us today.

There was a class action lawsuit brought against Ford Motor Company for defective ignition systems in millions of cars that stalled on highways, and Mobile Corporation paid a $14 million settlement because of a class of residents in New Orleans who, after a fire at a Mobile Oil refinery and scattered debris sent volatile and hazardous compounds in the air, were forced to evacuate. The settlement was $13.4 million to those exposed to this pollution from the Mobil Oil refinery.

It was a class action lawsuit against a corporate giant. How many of those individual families would stand together seeking justice? In this case, they did stand together successfully. Individually would they have gone to court? Highly unlikely.

Blue Cross and Blue Shield of Iowa paid a $14.6 million settlement in three class action lawsuits because of fraudulent billing practices. Blue Cross apparently negotiated secret discounts with hospital and providers and failed to pass those along to those who should have received them—their customers. The list goes on and on.

I see several of my colleagues on the floor. I will close and say I am sure we are going to return to this issue in a short time.
I ask my colleagues in the Senate who may not have practiced law, who may not be familiar with class action lawsuits to please do the following: Read these cases. Understand class action lawsuits are not always frivolous ideas.

I can recall some that were. There was a lawsuit brought by a class, not certified, for all the people who bought Milli Vanilli records, and then came later to learn that those two people were not even singing on the records. To me, that is a joke, a bad one. It is a fraud on the public but certainly not deserving of a class action suit.

How can one compare that to companies that sell tainted and adulterated food, to companies that deceive parents about the nutritious value of the foods they sell, or companies that are engaged in pollution that endangers the lives of individuals?
Those companies need to be held accountable.

This bill tries to absolve them from liability, to move the cases to Federal court, to make it more difficult to push the classes together, and make it more difficult to recover. These are real live stories of ordinary families and people who will ultimately lose if this bill passes.

I hope the Senate has the good sense to stop this in its tracks, stand up for consumers and working families who need a voice in this Chamber even if they cannot afford a lobbyist in the hallway.

I yield the floor.