Class Action Fairness Act of 2005
Class Action Fairness Act of 2005
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Mr. GRASSLEY. Mr. President, I have been working on this legislation for five Congresses, and I would like to get this legislation to the President without any amendments. We have heard from the highest levels of the House of Representatives that if we can pass this bill without amendments, we will be able to get it to the President without going to conference; in other words, the House will adopt it the way we do.
I don't know how many times I would like to have heard that in the House of Representatives. I don't know when I have ever heard that in my entire career. I hope everybody in the Senate has a strong heart. If I didn't have a strong heart, I wouldn't say that. And if I heard it, I wouldn't believe it. I would pass out if the House was going to take something the Senate did without question. We ought to grab the ball and run with it.
Regardless of the merits of the amendment by the Senator from Arkansas, I hope we can defeat that amendment.
This amendment would exclude this language from the bill: ``Any action brought by or on behalf of the Attorney General of any State.''
I ask my colleagues not to be fooled. Although this amendment sounds good, and there was a good presentation made by the authors of the amendment, it is potentially harmful and could lead to gaming by class action lawyers. I will explain what I mean by gaming.
First, before I do that, in my judgment, the amendment is not necessary. I will explain. State attorneys general have authority under the laws of every State to bring enforcement action to protect their citizens. Sometimes these laws are parens patriae cases, similar to class actions in the sense that the State attorney general represents the people of that State. In other instances, their actions are brought directly on behalf of that particular State. But they are not class actions; rather, they are very unique attorney general lawsuits authorized under State constitutions or under statutes.
One reason this amendment is not necessary is because our bill will not affect those lawsuits. Our bill provides class actions under that term ``class action'' as defined to mean any civil action filed in a district court of the United States under rule 23 of the Federal Rules of Civil Procedure or any civil action removed to a district court that was originally filed under State statute or rule authorizing an action to be brought by one or more representatives as a class action.
The key phrase there is ``class action.'' Hence, because almost all civil suits brought by State attorneys general are parens patriae suits, similar representative suits or direct enforcement actions, it is clear they do not fall within this definition. That means that cases brought by State attorneys general will not be affected by this bill.
The supporters of this amendment say it is necessary because State attorneys general can bring class actions and those cases might become removable to Federal court. That possibility does not make this amendment necessary. That is because State attorneys general are not required to use class actions to enforce their State laws. If State attorneys general want to recover on behalf of their citizens, they can always bring actions as parens patriae suits under statutes that authorize representative actions or even as direct enforcement actions. Again, such lawsuits will not be subject to this bill.
In addition, our bill has been drafted so as to distinguish between solely truly local class action lawsuits and those that involve national issues. That compromise, which was not part of my original bill, was reached with Senator Feinstein on the home State exception provision as well as further compromises made with Senators DODD, SCHUMER, and LANDRIEU, dealing with the local controversy exception. As a result of these compromises, they will keep then truly local cases where they ought to be--in State court.
Another concern with this amendment is that it is worded in such a way to exclude class actions, not just by State attorneys general but also, in their words, on behalf of State attorneys general. The way this provision is drafted would allow plaintiffs' lawyers to bring class actions and simply include in their complaint a State attorney general's name as a purported class member, arguably to make their class action completely immune to the provisions of this bill. Plaintiffs' lawyers could simply ask State attorneys general to lend their name to a class action lawsuit so as to keep them in the State court.
That creates a very serious loophole in this bill. We should not risk creating a situation where State attorneys general can be used as pawns so that crafty class action lawyers can avoid the jurisdictional provisions of this bill. Our bill would put an end to class action abuses without diminishing the ability of State attorneys general to protect their citizens in State court. This is another way for lawyers to keep cases in State courts.
This is what this bill is all about, to make sure that cases that have national significance are not determined by some county judge in one of our 50 States that end up having national implications. Those cases should be in Federal court and, for the most part, under our legislation will be.
This amendment would seriously create a loophole in the reforms we are trying to accomplish with this bill. I urge my colleagues to join me in opposing this amendment.
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Mr. GRASSLEY. Mr. President, when I spoke prior to Senator Pryor's amendment, I made a pitch that I want to repeat about the opportunity we have now, after four Congresses--this is the fifth Congress--to get this bill to the President. It has passed the House so many times, and we have never been able to get it to finality in the Senate. We have the House in position now, even after all of these compromises we have made which have diluted the bill more than I would have liked to have done, of passing a bill the leadership in the House of Representatives tells us they will take the way we pass it and send it to the President as long as there are no changes, and this assurance about no changes comes from two standpoints.
One, in the previous Congress we made compromises to get Democratic votes with the idea that once those changes were made and we got this bill through the Senate, they would not be changed in the House. We also got the assurance from the House that they would not change it, even though the House has passed much stronger legislation a couple of times. So there is an assurance in this body for people who would rather not pass strong legislation but they know there needs to be some changes in class action regime, to make some modest changes, and make sure that what they agree to will be what gets to the President, and then the House saying now for a new Congress they will pass this legislation without amendment.
So every Democrat who has made a compromise with us so we can get this bill behind us can be satisfied that they will not be nickeled and dimed to death.
Obviously, not all Democrats are satisfied with this sort of agreement and that is their right as individual Senators to try to change it more. But as I said before, any changes in this bill negate both promises that have been made. It means the promise to go through the House will not be kept because the bill has been changed in the Senate, and then for those Senators who got the assurance from me that this bill would not be changed in the House so that they were not nickeled and dimed away with their compromises are going to lose the opportunity of getting what they want without the assurance that somewhere else in the legislative process, probably conference, there might be a much stronger bill than they want.
This bill was originally introduced in the 105th Congress, then the 106th Congress, then the 107th Congress. We moved it in the 108th Congress. Now we are here in the 109th Congress. Almost everybody seems to believe there is some reform that needs to be done in the class action tort regime. This bill is it.
Now we have amendments. We defeated the amendment of Senator Pryor. We had an amendment by Senator Bingaman that we were going to deal with, that would have destroyed this compromise. There must have been a belief on the part of the people behind the Bingaman amendment that it would not go, so instead of the Bingaman amendment we have in front of us a Feinstein modification of the Bingaman amendment.
I am in the same position I was with the amendment of Senator Pryor, asking people to defeat the Feinstein-Bingaman amendment. I will be very precise why that needs to be done. But the substance of the amendment and my arguing against the substance of the amendment should not carry as much weight with my colleagues as my pleading with them that we defeat all amendments because this bill has been compromised to satisfy a supermajority of Senators--not a bare majority, a supermajority.
So I take this opportunity to speak out against the Feinstein-Bingaman ``choice of law'' amendment, and I urge my colleagues to oppose it. Pure and simple, this amendment blows a hole in the bill and guts the modest reforms we are finally going to be able to get to the President.
This amendment would require the Federal courts to certify a class that does not meet basic class action requirements. In addition, what the amendment does is a contravention of the requirements of rule 23 of the Federal Rules of Civil Procedure, which rule says you have to have similar law in fact in order to certify a class. The net result of this amendment is that it would require Federal judges to hear dissimilar claims that do not belong together as a class action, and would not be allowed to proceed as a class action under current law. Requiring courts to subclass does not make this amendment any better.
This amendment would require Federal judges to not follow the requirements for certifying class under rule 23. Why do the proponents of this amendment want to do that? They have given reasons for their amendment and I think, whether this is their intention or not--and I should not question the motives of people--but the end result is perpetuating the abuses that were already seen in the magnet courts, these infamous judicial hellholes which have been referred to. I remember only one out of dozens throughout the country, but one was in Madison County, IL.
The purpose of class actions is obvious: to enable courts to decide large numbers of similar claims and to do it fairly and to do it in an efficient manner. Different claims cannot be pulled together as a class action because that would be unfair and it would violate the due process rights of both plaintiffs and defendants. But the Feinstein-Bingaman amendment would require judges to do just that. As you know, that is exactly what the problem is all about, what our bill was trying to correct: judges certifying classes that should never have been certified in the first place. Rules are in place as to what should or should not be certified, and the Feinstein-Bingaman amendment blows those rules off. The efficiency and the rationale of that rule should not be followed.
The Federal courts should undertake a review to determine whether multistate class actions involving State law claims should be certified. They need to determine that the legal claims are sufficiently similar to warrant class certification. Most State courts make the same kind of determinations as well. The magnet State courts, on the other hand, do not make this determination and that is why they certify huge classes that involve claims that are completely dissimilar, to the detriment of both plaintiff and defendant. That ends up being a due process problem.
In addition, this amendment before us ignores how diversity jurisdiction works, and it eviscerates the reforms that are contained in our bill.
Another argument for this amendment by Senator Feinstein and Senator Bingaman is allegedly that Federal courts refuse to certify nationwide class actions. That sort of presumption is plain wrong. That is not the case. There are numerous examples of where Federal courts have certified multistate class actions based on State law claims. There is not a rule against nationwide class actions. Federal courts do certify nationwide class actions where the laws that govern the claims are similar.
Class actions are also certified when the plaintiffs' lawyers organize the claims in a manner so that they may be litigated fairly, even under differing State laws, where they appropriately organize the claims into subclasses. But this amendment does not give the courts any choice to determine whether it is appropriate to subclass.
So for a third time during this period that I am standing, I remind my colleagues again about the extensive efforts on the part of Senator Kohl of Wisconsin, Senator Hatch of Utah, and this Senator from Iowa, getting to this version of the Class Action Fairness Act. No one can question that we negotiated in good faith with our colleague Senator Feinstein, as well as our colleagues Senators DODD, SCHUMER, and LANDRIEU, to make changes to address concerns they had about the original bill introduced.
The bill we have now will keep many class actions in State court under the Feinstein home State exception. That was accepted in committee, way back there in early 2003, in the 108th Congress. Also under the local controversy exception we crafted with Senators DODD, SCHUMER, and LANDRIEU, that will stay in State court.
So I hope I get us back in an understandable way, and what people think is rational after all these compromises, so that there is no further need to change this bottom-line compromise. Again, the purpose of this amendment is to gut the modest, commonsense reforms contained in this bill. This is an attempt to legitimize the class action abuse we have been seeing in the magnet State courts. It is an attempt to legalize the problem by putting it into the rule.
All I can say is, that is not all right. It is not OK. If we are serious about putting a stop to class action abuse, I urge my colleagues to oppose this amendment.
Mr. President, I ask unanimous consent to have printed in the RECORD the letter by Walter Dellinger.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
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Mr. GRASSLEY. Mr. President, there is no loophole in this bill. This amendment would force the Federal courts to certify dissimilar and unmanageable claims, which is the problem occurring in certain magnet State courts right now. This is a fairness and a due process problem. This is not really a compromise at all. It defeats the purpose of the bill.
The amendment tells courts to ignore State law and forget about fairness just so a class can be certified. It would require courts to subclass even where it would be unwieldy and impractical.
If you want to stop the abuses and pass class action reform, you will oppose this amendment. This underlying bill is the compromise.
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