John Conyers

Mr. CONYERS

Mr. CONYERS. Mr. Chairman, I rise in support of the amendment. Mr. Chairman, as I understand what we are doing here, we are allowing tribal governments to opt out of coverage, as we have done in other matters like this before, so it is not encouraging this kind of offense to get softer treatment than it would anywhere else in the country. The racially discriminatory impact on Native Americans is pretty clear here, and that is what we are trying to deal with, because the legislation that is proposed applies to conduct occurring on land owned by the United States or within the territorial jurisdiction of the United States. So that is Indian reservations. Most of the cases have indicated that 75 percent of these kinds of cases arising under the bill's provision will involve Native Americans, so to give the tribal government this option is no less rational than when we did it before. We did an opt-out provision in the Three Strikes legislation. It did not work in any kind of way to mitigate the way that law was handled. Therefore, there should be no difference in the action we take here today with respect to these groups. Mr. Chairman, that is my take on the Scott amendment, and I hope that we can reach agreement on it.

Mr. CONYERS. Mr. Chairman, reclaiming my time, I support the Scott amendment because I think we are trying not to expose a countless number of teenagers to mandatory lifetime sentences for being involved in consensual relationships. I am almost inclined to ask the author of the bill if that is his intention, but I am afraid to. Mr. Chairman, if we are not considering the cultural differences and not considering whether family members are aware of the youthful indiscretions of a couple of teenagers, then this is a one-way ticket to a life imprisonment bill; this is not Two Strikes and You're Out. I have to keep thinking that this is an unintended consequence. We are saying to our youth that the circumstances of each case are not relevant and will not be given any consideration at all. So all the gentleman from Virginia is doing is correcting this by permitting the judge to impose a maximum sentence of life. The amendment would restore to the judiciary the discretion to deal with the sentence that he is giving under the circumstances, and the judge would not be stopped from imposing a life sentence; but in other cases, they may be able to tailor a decision that would take into account the appropriateness of something other than life. So I urge my colleagues on the floor to give this some thought from this point of view. This is almost becoming an antijudge bill as well. Who needs judges? The prosecutor is given far more authority and decision-making that determines in effect the whole outcome of the case that comes before the judge. The judge is sitting here saying, I am bound by this, I am caught by this. The prosecutor decides the other thing. So I think it is something that we need to rethink with the gentleman from Virginia (Mr. Scott). I am pleased and happy the gentleman has offered the amendment. Mr. Chairman, I include the following article entitled ``Judges Speak Out'' for the Record. Judges Speak Out ``Statutory mandatory minimum sentences create injustice because the sentence is determined without looking at the particular defendant. . . . It can make no difference whether he is a lifetime criminal or a first-time offender. Indeed, under this sledgehammer approach, it could make no difference if the day before making this one slip in an otherwise unblemished life the defendant had rescued 15 children from a burning building or had won the Congressional Medal of Honor while defending his country.''--J. Spencer Letts, U.S. District Judge, Central District of California. ``We must remember we are not widgets or robots, but human beings. Defendants should be sentenced within the spectrum of what most judges would consider fair and reasonable.''--Leon Higginbotham, Judge, 3rd Circuit Court of Appeals. ``I think that a lot of people do not understand what is going on until, all of a sudden, they are caught up in the system; and they find out that people have been mouthing all kinds of slogans, and when the slogans all come down to rest, they sometimes come to rest very hard on the shoulders of the individual.''--David Doty, U.S. District Judge, Minnesota. ``. . . I continue to believe that sentence of 10 years' imprisonment under the circumstances of this case is unconscionable and patently unjust. . . . [the defendant] will be sacrificed on the altar of Congress' obsession with punishing crimes involving narcotics. This obsession is, in part, understandable, for narcotics pose a serious threat to the welfare of this country and its citizens. However, at the same time, mandatory minimum sentences--almost by definition--prevent the Court from passing judgment in a manner properly tailored to a defendant's particular circumstances.''--Paul A. Magnuson, U.S. District Judge, Minnesota. ``As a consequence of the mandatory sentences, we (judges) know that justice is not always done . . . [Y]ou cannot dispense equal justice by playing a numbers game. Judgment and discretion and common sense are essential.''--Joyce Hens Green, U.S. District Judge, District of Columbia. ``We need to deal with the drug problem in a much more discretionary, compassionate way. We need treatment, not just punishment and imprisonment.''--Stanley Sporkin, U.S. District Judge, District of Columbia.

Mr. CONYERS

Mr. CONYERS. Mr. Chairman, I demand a recorded vote, and pending that, I make the point of order that a quorum is not present.

Mr. CONYERS. I yield to the gentleman from Wisconsin.

Mr. CONYERS. Mr. Chairman, I am pleased to yield 5 minutes to the distinguished gentleman from North Carolina (Mr. Watt).

Mr. CONYERS. Mr. Chairman, I yield 3 minutes to the gentleman from Virginia (Mr. Boucher), although he is not opposed to the action but supports this bill, and we on this side do not. (Mr. BOUCHER asked and was given permission to revise and extend his remarks.)

Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume. My friend from Virginia has suggested, I thought I heard him say that this is a consumer-friendly piece of legislation. In the interest of all the Members knowing about the objections to this bill, I bring to them communications from the Consumer Federation of America, which urges that we oppose the measure, indicating that this bill will create numerous barriers to participating in class actions by permitting defendants to remove most State class action suits to Federal court and will clog the already-crowded Federal court system. In addition, we have a letter from Public Citizen sent to myself and the gentleman from Wisconsin (Mr. Sensenbrenner) which writes to comment about the importance of class actions and how these so-called ``procedural changes'' will do great damage to groups of consumers who, in trying to bring action against corporate defendants, would be forced either to bring individual suits or to remove themselves to a Federal docket for reasons that are not quite clear to most of us that are not happy about the bill. Some of these notions are not in the public interest. I hope that, first of all, everybody voting on this bill will not think that this is a consumer-supported bill. It is opposed by consumer organizations and would clearly be damaging to consumers trying to get into the court. Public Citizen, Washington, DC, March 5, 2002. Hon. James Sensenbrenner, Hon. John Conyers, Jr., Committee on the Judiciary, House of Representatives, Washington, DC. Re H.R. 2341, Class Action Fairness Act. Dear Chairman Sensenbrenner and Ranking Member Conyers: We are writing to comment on H.R. 2341 relating to class actions. This bill would give the federal courts jurisdiction over most class action lawsuits, and add a ``Consumer Bill of Rights'' for members of a class. Public Citizen has a long history of working to make class actions fairer and more beneficial to plaintiffs. We have participated in nearly forty cases to advocate for more equitable settlement terms for consumers, oppose excessive attorneys fees, and ensure that the class action vehicle is not weakened. For the reasons stated in our testimony on an earlier version of this bill, which is attached, we strongly oppose this bill. We ask that you include these comments and our earlier testimony in the hearing record. The Importance of Class Actions Proponents of this bill have expressed concerns that businesses are being unfairly targeted by class action litigation. We recognize that most businesses are working hard to provide good products to American consumers. But the fact is that many of the business enterprises that are being sued are really no different from the old-fashioned flim-flam men, taking the corporate guise for the legitimacy it bestows, and also for its insulation from liability. This is illustrated best by the tremendous problem of predatory lending. There are lenders who pay bribes and kickbacks to mortgage brokers, to induce them to sell out their clients and sign them up for higher rather than lower interest rate loans. There are mortgage companies accepting kickbacks from overpriced title insurance companies. There is also nickel-and-dime chiseling, turning $85 recording fees into $100 recording fees, $325 appraisal fees into $500 appraisal fees, and the like. There are $10,000 credit life insurance policies being packed on to loans, which have little if any value to the consumer. The defendants in most class actions are not acting like legitimate businesses, but are simply fast-buck artists and con men. In other cases, the businesses are legitimate and are trying to provide valuable services, but corner-cutting or overreaching has prevailed. These problems may be caused by ambitious individual managers, a bean-counter mentality, a chainsaw-CEO, groupthink, or just plain greed. As the Enron scandal has demonstrated, in some cases you find that the moral compass has failed. In many of these cases, it is only the class action lawsuit that can protect the victim. In some instances, the amount of money stolen is too small on a per-person basis to support an individual lawsuit; in others, there are vulnerable, unsophisticated consumers, who are unable to recognize that they have been fleeced. The class action device permits aggregation of cases and a more efficient disposition of claims. Federalism and Class Actions When Congress perceives a problem in an area that is traditionally handled by state and local government, it has five legislative options. You can provide (1) grants or (2) technical assistance to state and local governments to help them solve the problem; (3) you can exercise concurrent jurisdiction; (4) you can mandate state and local compliance with your standards; or (5) you can pre-empt state law with federal law. Obviously, as you move down this list, you are usurping local control to increasingly greater degrees. So it seems odd that here, broad federal preemption has been the first impulse, rather than the last resort, of those who suggest that class action changes are needed. We believe that this issue calls for the least onerous federal intervention, for a number of reasons. First, proponents of the legislation have argued that some rural counties in a few states have become magnets for class actions and invite abuse. If that is the case, the appropriate response is at the state level, not in Washington. Responding to due process and forum shopping concerns expressed by corporate defendants, the Alabama Supreme Court acted to abolish the practice of ex parte certifications of class actions. We are confident that any local problems will be resolved by state governments. Second, the basic premise behind the bill, that federal judges are ``better equipped'' to monitor cases (to quote Senator Grassley) and ``likely to give closer scrutiny'' to settlements (in the words of Senator Kohl) is untrue. With regard to the ``better equipped'' proposition, it is argued that federal judges have more ``complex litigation experience'' than state judges. In fact, less than 1 percent of the federal courts' caseload is class actions. Moreover, of the 2,393 class actions filed in the entire federal system in 2000, only 321 involved state law claims. The vast majority of the cases involved uniquely federal law questions, such as securities, civil rights, or antitrust. Only 105 of the cases involved consumer fraud-type claims, which are the mainstay of state court class actions. That's about one consumer fraud claim per federal district, not per judge. If a federal judge has experience with this sort of class action, it is probably because he or she was a state court judge before elevation to the federal bench. The authors of this bill acknowledge that certain state court judges have expertise in particular areas--the bill makes an exception for corporate governance cases to be heard in Delaware. We believe that expertise among state judges is not limited to Delaware chancery judges. The state court bench in Arizona is perhaps the most innovative in the nation, and has been at the forefront of reforms that have spread to other states and to the federal system. In responding to horror stories from a few rural counties, this bill could take cases away from well-qualified state judges in places like Phoenix or Chicago. As to the claim that federal judges would do a better job scrutinizing class action settlements, we believe that is, unfortunately, not true. A number of attorneys have alleged that a federal judge in Chicago recently approved an unfair ``reverse auction'' settlement, whereby defendants settled with plaintiffs' firm that accepted the least benefits for the class members. This case involved competing state and federal class actions over ``refund anticipation loans.'' The attorneys intervening to stop the settlement allege that the plaintiff's attorneys accepted a mere $25 million in return for releasing a nationwide class' claims worth a billion dollars. We have no way of knowing the actual value of the claims, but the incident leaves one important question unanswered: If it is true that federal judges are more likely to give close scrutiny to settlements, why did the defendants choose to settle a federal court case rather than one of six identical state court cases? If the premises underlying this bill are correct, shouldn't they have settled one of the state court cases instead? The fact that the federal judge here had law clerks did not deter this settlement. Moreover, we note also that the RAND Institute's report was very clear in finding no empirical evidence to support the argument that federal judges are better able to manage class actions than state judges. Public Citizen's own experience shows that federal judges can err just as often in approving abusive settlements. Procedural Changes H.R. 2341 also contains several ``Consumer Bill of Rights'' provisions. Some of these ideas have merit and some plainly do not. However, we believe Congress should refrain from making adjustments to Rule 23 and leave such changes to the federal judiciary's Advisory Committee on Civil Rules. The Rules Advisory Committee consists of judges, academics, and practicing lawyers who are among the nation's top experts on civil procedure. Pursuant to the Rules Enabling Act, the Advisory Committee is empowered to review the current rules, study problems, and propose amendments. The Advisory Committee solicits and carefully considers input from the bar and from interest groups in formulating changes. Class actions have been the subject of their attention in recent months, and they are currently considering extensive changes to Rule 23. We respect the expertise that the Congress and its Judiciary Committees have on civil procedure matters. Nonetheless, we feel that these contentious issues are best resolved outside the heated political process. Finding a Solution Sound congressional policymaking must take account of the advantages and disadvantages of our federal system. Achieving good federalism means understanding the competing values of local control and national uniformity, and striking the appropriate balance between these values in individual policy areas. Unfortunately, the dispersion of authority among 50 states can sometimes create perverse incentives. The reverse-auction phenomenon in overlapping class actions is an example of this. Narrowly tailored federal legislation could fix this problem without upsetting the delicate state/national balance by bringing most state class actions into federal court. But that in no way resembles the legislation that the sponsors of H.R. 2341 have proposed. Another avenue to explore is RAND's suggestion that one way to improve judicial scrutiny would be to allow judges to seek assistance from neutral experts and auditors to assess the value of settlements. Congress could use its spending power to assist judges, both state and federal, by increasing the resources available to them to manage class actions. A grant program through which individual courts could secure funding for neutral experts and special masters would exemplify cooperative, rather than coercive federalism. Such a program could be administered by the Justice Department, the National Center for State Courts, or the Administrative Office of the U.S. Courts. As an organization that vigorously opposes abusive class action settlements, we can only conclude from H.R. 2341 that the business community wants this legislation not to end such practices, but because they perceive an advantage to defending class actions in federal court. We urge you not to move forward with this bill. Sincerely, Joan Claybrook, President, Public Citizen. Frank Clemente, Director, Public Citizen's Congress Watch. Mr. Chairman, I reserve the balance of my time.

Mr. CONYERS. Mr. Chairman, I am pleased to yield 3\1/2\ minutes to the distinguished gentlewoman from Texas (Ms. Jackson-Lee), a member of the Committee on the Judiciary. (Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. CONYERS. Mr. Chairman, I yield 30 seconds to the gentlewoman from Texas (Ms. Jackson-Lee).

Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, for the benefit of my distinguished chairman, the gentleman from Wisconsin (Mr. Sensenbrenner), who referred to the infamous airline cases where the plaintiffs were given airline coupons, and he illustrates this as really something that is not good, that we should not do it, that occurred in a Federal Court. That was a Federal district court case that the gentleman I think is trying to use as an argument against keeping the law the same way that it is.

Mr. CONYERS. Mr. Chairman, I am pleased to yield 4 minutes to the gentleman from Texas (Mr. Gonzalez), himself a judge, a former judge, and a former lawyer as well.

Mr. CONYERS. Mr. Chairman, I yield myself 1 minute before yielding to the gentleman from Washington. Mr. Chairman, sometimes we have to look to see where the interest is in these bills. Are the consumer organizations supporting this legislation? Answer: No. Is the Firestone Corporation supporting this legislation? Answer: Yes. Is Monsanto supporting this legislation? Answer: Yes. Is W.R. Grace Corporation supporting this legislation? Answer: Yes. Are the tobacco companies supporting this legislation, all of them? Answer: Yes. Are the asbestos people, Johns Manville formerly, supporting this legislation? Answer: Yes. Are the mining companies, the results of the black lung class action cases, supporting this legislation? Answer: Yes. Are the Pintos, the airbag cases? Answer: Yes. All the corporations are supporting this. But I am being told by my friends on the other side that this is a consumer-friendly bill. Mr. Chairman, I yield 3 minutes to the distinguished gentleman from Washington (Mr. Inslee). (Mr. INSLEE asked and was given permission to revise and extend his remarks.)

Mr. CONYERS. Mr. Chairman, I yield 3 minutes to the gentleman from Texas (Mr. Sandlin).

Mr. CONYERS. Mr. Chairman, I am pleased to yield the balance of my time to the gentlewoman from California (Ms. Waters).

Mr. CONYERS. Mr. Chairman, will the gentlewoman yield?

Mr. CONYERS. Mr. Chairman, I ask unanimous consent to withdraw the amendment.

Mr. CONYERS. Mr. Chairman, will the gentlewoman yield?

Mr. CONYERS. Mr. Chairman, will the gentlewoman yield?

Mr. CONYERS. Mr. Chairman, I would ask the gentlewoman, is it not true that in the Enron case that the shredding was flagrant and outrageous in the sense that even after they were discovered shredding, they continued to shred?

Mr. CONYERS. Is he aware or is he not?

Mr. CONYERS. I know they are shocked, but are you aware? You know that, do you not?

Mr. CONYERS. You do not know that. I thank the gentleman very much. He is not aware of it.

Mr. CONYERS. Just a moment, sir. I am not yielding you any more time.

Mr. CONYERS

Mr. CONYERS. Mr. Speaker, I would just like to ask my good friend, who is on the Committee on the Judiciary, the gentleman from Virginia (Mr. Goodlatte), who is himself an ex-trial lawyer, what is his solution to this horrible problem of trial lawyers making too much money? I would like to yield to the gentleman from Virginia (Mr. Goodlatte), a former trial lawyer himself. I will repeat the question. What is the Republican solution to this horrible practice that has allowed trial lawyers, like you used to be, from reaping these incredible profits? I yield to the gentleman from Virginia.

Mr. CONYERS. Mr. Speaker, I thank the gentleman for yielding me time. Mr. Speaker, the gentleman from California (Mr. Cox) is one of the best lawyers in the House. I do not know if he was a trial lawyer or not. But I just wanted to point out to him a couple of cases. This discussion is not new in the Federal judiciary. We have been trying to figure out when you get to State Court and when you get to Federal Court for quite a while. So I want to refer the gentleman, the gentleman has probably seen this case before, Strawbridge v. Curtis, that was decided way back in 1806, dealing with how one has to have complete diversity to bring a State law case into a Federal law case. Indeed, they brought it up to date in another case of which I hope the gentleman is aware, Schneider v. Harris, in 1969, where the court held that the court should only consider the citizenship of named plaintiffs for diversity purposes.