Class Action Fairness Act of 2005

CLASS ACTION FAIRNESS ACT OF 2005 -- (House of Representatives - February 17, 2005)

BREAK IN TRANSCRIPT

Mr. SCOTT of Virginia. Mr. Speaker, I thank the gentleman for yielding me this time.

Mr. Speaker, we hear all this hoopla about these coupon settlements, but we do not hear any suggestion as to what to do about them. There are a lot of situations where corporations are ripping people off for small amounts of money.

For example, if a person at a checkout counter calibrates the machine to just cheat one out of a few cents, what is one's recovery in that case? Just a few cents. And the only way one can stop that is with a class action. But they would suggest there is no point in bringing the class action; as long as they did not rip them off for too much, they ought to get away with it.

Furthermore, a lot of these coupon settlements are in Federal courts anyway, so there is not going to be much change. But some of these coupon cases are the only way that we can rein in corporate abuse.

But this bill just increases complications in a gratuitous way. It took a half an hour for the proponents to explain when it is a class action and when it is not a class action. In normal cases they file it in State court. Either they certify it or not, and then one goes forward. There is not much complication. But this invites mischief. Whether it is really a class action or not, remove it anyway, and let the Federal courts mess around with it and mess around with it and mess around with it. They may never get their day in court. And if they do not certify it, what happens to one's case? They may not be able to get back to State court. So the fact that they did not certify a class action will deny one the right to even have their day in court.

This complicates venue. They do not know where the case is going to be heard. It could be that an injury happens in one State, they have corporations in that State involved, they have State plaintiffs, and here one has to go chasing around, trying to figure out where they are going to be.

The Attorneys General across the States, 47 Attorneys General in States and territories, have come out against the bill because it puts the Attorneys General in the same crack. They do not know where the case is going to be heard. If they bring a State action in State court, they may get removed. Some of the States have better wage laws, civil rights laws, sometimes consumer protections, and if the Attorneys General want to come in to protect their own citizens in their own States, they ought to have that right and not get jerked around to Federal court.

Finally, Mr. Speaker, some Federal courts are more clogged up than State courts. Some in the same area, the State courts are more clogged up than the Federal courts. Why do we have to always go into Federal court on these cases rather than have some kind of choice? Every time we have a criminal case, it will take preference over the civil cases. And in some cases where we have some terrorist cases or a backlog of Federal cases, one may never get to hear their case in Federal court.

If we want consumers to get timely justice, we need to defeat this bill, and I hope that is what we do.

BREAK IN TRANSCRIPT

Mr. SCOTT of Virginia. Mr. Speaker, I rise in support of the substitute. One of the problems with the substitute is you have to debate all of the different issues all at once. If we had the opportunity to introduce individual amendments, we could have discussed them one at a time and had a much more coherent discussion.

As it has been said, the underlying bill does not extinguish the right to get to court but it does gratuitously complicate the litigation. It does not fix coupons, it just moves them from State court to Federal courts. It adds procedural hurdles, and this substitute removes many of those hurdles.

The main thing it does is it carves out many of the different cases that belong in State court or at least ought to have the opportunity in the State court. It also fixes the yo-yo effect where you start off in State court, get removed to Federal court, Federal court does not certify the class, and then what happens? I guess you come back to State court or, I do not know, you might not be able to get back to State court. You may end up in a procedural trap where you have lost your case just in the time it takes to get over there and try to get back.

This amendment fixes that quagmire. It also carves out, as has been said, the State civil rights cases where some States have civil rights laws that are stronger and cover different people, different classes than the Federal laws. Wage and hour laws, some States have better laws than the Federal court. Mass torts where you have not class actions per se, but a lot of different litigants all in the same State. It fixes the problem with Attorneys General in bringing a case in State court on behalf of not only members of their State, but if the injury has occurred to a lot of other people, the Attorney General might want to bring that case.

I have a letter, Mr. Speaker, signed on this specific issue by 47 Attorneys General.

It also denies benefits under the bill for tax traitors, those who move their corporate headquarters off shore to avoid corporate taxes; and it also provides a limitation on sealed settlements that the gentleman from New York (Mr. Nadler) has been very active in making sure that cases that are settled cannot be sealed beyond public view, unless if such a sealing would violate public health or other important considerations.

This is a well-reasoned substitute. It eliminates many but not all of the problems in the underlying bill, and I would hope that the House would adopt the substitute.

BREAK IN TRANSCRIPT

http://thomas.loc.gov