Bob Goodlatte

Mr. GOODLATTE

Mr. GOODLATTE. Madam Speaker, if the chairman would continue to yield.

Mr. GOODLATTE. I thank the chairman for yielding to me. I think those examples really reflect the intent of the legislation. Madam Speaker, the legislation also includes a local controversy exception which is intended to ensure that truly local class actions can remain in State court under the legislation. Under this provision, Federal courts are instructed not to exercise jurisdiction over cases that meet all of the following four criteria: First, more than two-thirds of the class members must be the citizens of the State where the suit is brought; second, there must be at least one in-State defendant from whom significant relief is sought by members of the class and whose conduct forms a significant basis of plaintiffs' claims; third, the principal injuries resulting from the alleged conduct or related conduct of each defendant must have occurred in the State where the action was originally filed; and, fourth, no other class action has been filed during the preceding 3 years asserting the same or similar factual allegations against any of the defendants. Madam Speaker, I would ask that the chairman elaborate on these criteria.

Mr. GOODLATTE. I thank the chairman for yielding once again. Madam Speaker, in this regard I think it is important to note that the exceptions in this legislation are just that, exceptions, and they should not be interpreted in ways that turn them into loopholes. For example, the legislation excludes actions against States. Obviously, this does not mean that plaintiffs can simply name a State in every consumer class action and stay out of Federal court. To the contrary, Federal courts should proceed cautiously before declining Federal jurisdiction under the subsection 1332(d)(5)(a) ``state action'' case exception, and do so only when it is clear that the primary defendants are indeed States, State officials, or other governmental entities against whom the court may be foreclosed from ordering relief. The sponsors intend that primary defendants be intended to reach those defendants who are the real targets of the lawsuit, i.e. the defendants who would be expected to incur most of the loss if liability is found. Thus, the term ``primary defendant'' should include any person who has substantial exposure to significant portions of the proposed class in the action, particularly any defendant that is allegedly liable to the vast majority of the members of the proposed classes, as opposed to simply a few individual class members. It is the sponsors' intention with regard to each of these exceptions that the party opposing Federal jurisdiction shall have the burden of demonstrating the applicability of an exemption. Thus, if a plaintiff seeks to have a class action remanded on the ground that the primary defendants and two-thirds or more of the class members are citizens of the home State, that plaintiff has the burden of demonstrating that these criteria are met. Similarly, if a plaintiff seeks to have a purported class action remanded because a primary defendant is a State, that plaintiff should have the burden of demonstrating that the exception should apply.

Mr. GOODLATTE. I thank the gentleman for yielding. Finally, Mr. Speaker, some critics have complained that the legislation removal provisions will result in delay. Can the gentleman explain why that is simply not the case?

Mr. GOODLATTE. Mr. Speaker, I thank the gentleman for his leadership in moving this legislation forward and in working with the Senate to accomplish that as well. I hope this colloquy will provide guidance on the very important jurisdictional provisions in S. 5 and the sponsor's intent.

Mr. GOODLATTE. Mr. Speaker, I thank the gentleman from Wisconsin for yielding me this time, and I thank the gentleman from New York (Mr. Weiner) for raising the points on those cases on the class action wheel of fortune because he makes a good point. In not one of those cases was there any wrongdoing found on the part of any of those defendants because all of those were settlements. They were extortionate settlements because they are in the jurisdiction of a court where they know they are facing a hanging judge and a hanging jury. The gentleman also raised another good point, and we should not leave plaintiffs in the situation where they get a 33-cent check or a coupon for a box of Cheerios, like in another case, and that is what this bill does. It requires extra-special scrutiny for coupon settlement cases so the courts will no longer let the manufacturers' attorneys and the defendants' attorneys come in with a settlement that simply gets out of the case, that gives the plaintiffs' attorney a huge sum of money and everyone else walks away and the plaintiffs get left holding the bag. Mr. Speaker, the gentleman ought to talk to his colleague, the senior Senator from New York, the predecessor of his seat, who supported this legislation. In addition, when the gentleman talks about abuse of plaintiffs in these cases, take into consideration the nationwide class action lawsuit filed in Alabama against the Bank of Boston, headquartered in Massachusetts, over mortgage escrow accounts. The class members won the case but actually lost money. Amazing. Under the settlement agreement, the 700,000 class members received small payments of just a couple of dollars or no money at all. About a year later, they found out that anywhere from $90 to $140 had been deducted from their escrow accounts. For what? To pay their lawyers' legal fees, of what? $8.5 million. And when some of those class members, some of those beleaguered plaintiffs, that I am glad the gentleman from New York is standing up for, sued their class action lawyers for malpractice, the lawyers countersued them for $25 million saying that their former clients were trying to harass them. This is an extortionate practice. A small cartel of class action lawyers around the country are abusing the system and we need to change it.

Mr. GOODLATTE. Mr. Speaker, I rise in opposition to the motion to commit.

Mr. GOODLATTE. Mr. Speaker, first let me thank Chairman Sensenbrenner for his leadership in bringing us to this historic point. He and I have been working on this for over 6 years. It has passed the House of Representatives three times before. Due to his good work, it has now passed the Senate and we have the opportunity to send it to the President. He is waiting to sign it and we shouldn't waste any more time. Now the truth about class action fairness and Vioxx. Critics have been arguing in the press that S. 5 should be rejected because it will hurt consumers bringing Vioxx cases against Merck. The truth is, however, that this legislation will have absolutely no effect on Vioxx suits, and here is why. The majority of personal injury cases brought against Merck are individual cases that would not be affected by the bill in any manner whatsoever. These include more than 400 personal injury cases that are part of a coordinated proceeding in New Jersey State Court. None of these cases will be affected by the bill because they are neither class actions nor mass actions. Merck has been named in more than 75 statewide and nationwide class actions involving Vioxx, but only a small percentage are personal injury class actions. To the extent these cases do involve personal injury, most were already brought in or removed to Federal Court because each potential class member's claims exceeds $75,000. Thus, these cases are removable to Federal Court under the old rules. There are a few cases which plaintiffs have joined together in mass action-type cases against Merck. However, not a single Vioxx case has been brought against Merck in State court by more than 100 plaintiffs, one of the requirements for removal to Federal Court under the class action legislation. Thus, there is no reason to believe that the mass action provision would affect any Vioxx-related cases whatsoever. Most of the class actions have been brought against Merck. Since the legislation is not retroactive, it would absolutely have no effect on the 75 class actions already filed against Merck in the wake of the Vioxx withdrawal.

Mr. GOODLATTE. Mr. Speaker, I do not yield.

Mr. GOODLATTE. Mr. Speaker, given the large number of suits already filed and the fact that every former Vioxx taker in America is already a proposed class member in numerous class actions, it is unlikely there will be many more class actions after the legislation is enacted. It is bad legislation to have something pass that covers all class actions in the country for all time and name one specific product or one specific company in the legislation. It is irrelevant anyway. Now, let me tell you the kinds of cases that are affected by this legislation. Take a look at the ``Class Action Wheel of Fortune'' on this chart. It will tell you what we are doing here today. You have got the case against Ameritech. Ameritech, the attorneys for the plaintiffs got $16 million in attorneys fees. What did the plaintiffs they represent get? Five-dollar phone cards. The Premier Cruise Line case, the lawyers got almost $1 million; the consumers got a $30- to $40-off coupon for their next cruise. The computer monitor litigation case, the lawyers, $6 million in fees; the consumers, a $13 rebate against your next future purchase of the alleged defective product. Register.com, $650,000 for the lawyers; $5 for the consumers. KB Toys, $1 million for the lawyers; 30 percent off your selected product in a unadvertised 1-week sale at KB Toys. Poland Spring Water, $1.35 million for the lawyers; a coupon for more of the allegedly defective water for the consumers. My favorite case, however, is this one, the Chase Manhattan Bank case, where the lawyers got $4 million in attorneys fees; the plaintiffs, a check, we have got one right here, for 33 cents. But there was a catch, because if you wanted to accept the 33 cents, you had to use a 34-cent postage stamp to send in your acceptance notice. How is that for a bargain for you? And how about the $22 million case that President Bush cited last week against Thompson Electronics? The lawyers got $22 million in attorneys fees; the plaintiffs, one of whom was there, got a $25- to $50-off coupon to buy more of what? The very television set that she was complaining was defective in the first place. It is a racket, it is extortionate. The people of the country know it. When they are asked the question, who benefits from our class action industry today, 47 percent say it is the plaintiffs' lawyers; 20 percent say it is the lawyers for the companies; 67 percent of our public recognizes it is the lawyers who benefit from this system. It is time we change it. This bill does just that. It protects American consumers and makes sure that they get justice by examining these ridiculous coupon settlements. Mr. Speaker, I urge my colleagues to support this legislation, defeat the motion to commit, and send the bill to the President, and starting very soon, we will have justice for American consumers. Mr. Speaker, I yield back the balance of my time. Parliamentary Inquiry

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I am pleased to submit for printing in the Congressional Record, pursuant to Rule XI, clause 2(a) of the Rules of the House, a copy of the Rules of the Committee on Agriculture, which were adopted at the organizational meeting of the Committee on this date, February 16, 2005. Appendix A of the Committee Rules will include excerpts from the Rules of the House relevent to the operation of the Committee. Appendix B will include relevant excerpts from the Congressional Budget Act of 1974. In the interests of minimizing printing costs, Appendices A and B are omitted from this submisson. Rules of the Committee on Agriculture, 109th Congress rule i.--general provisions (a) Applicability of House Rules.--(1) The Rules of the House of Representatives shall govern the procedure of the committee and its subcommittees, and the Rules of the Committee on Agriculture so far as applicable shall be interpreted in accordance with the Rules of the House of Representatives, except that a motion to recess from day to day, and a motion to dispense with the first reading (in full) of a bill or resolution, if printed copies are available, are non-debatable privileged motions in the committee and its subcommittees. (See appendix A for the applicable Rules of the House of Representatives.) (2) As provided in clause 1(a)(2) of House rule XI, each subcommittee is part of the committee and is subject to the authority and direction of the committee and its rules so far as applicable. (See also committee rules III, IV, V, VI, VII and X, infra.) (b) Authority to Conduct Investigations.--The committee and its subcommittees, after consultation with the chairman of the committee, may conduct such investigations and studies as they may consider necessary or appropriate in the exercise of their responsibilities under rule X of the Rules of the House of Representatives and in accordance with clause 2(m) of House rule XI. (c) Authority to Print.--The committee is authorized by the Rules of the House of Representatives to have printed and bound testimony and other data presented at hearings held by the committee and its subcommittees. All costs of stenographic services and transcripts in connection with any meeting or hearing of the committee and its subcommittees shall be paid from applicable accounts of the House described in clause (i)(1) of House rule X in accordance with clause 1(c) of House rule XI. (See also paragraphs (d), (e) and (f) of committee rule VIII.) (d) Vice Chairman.--The member of the majority party on the committee or subcommittee designated by the chairman of the full committee shall be the vice chairman of the committee or subcommittee in accordance with clause 2(d) of House rule XI. (e) Presiding Member.--If the chairman of the committee or subcommittee is not present at any committee or subcommittee meeting or hearing, the vice chairman shall preside. If the chairman and vice chairman of the committee or subcommittee are not present at a committee or subcommittee meeting or hearing the ranking member of the majority party who is present shall preside in accordance with clause 2(d), House rule XI. (f) Activities Report.--(1) The committee shall submit to the House, not later than January 2 of each odd-numbered year, a report on the activities of the committee under rules X and XI of the Rules of the House of Representatives during the Congress ending on January 3 of such year. (See also committee rule VIII(h)(2).) (2) Such report shall include separate sections summarizing the legislative and oversight activities of the committee during that Congress. (3) The oversight section of such report shall include a summary of the oversight plans submitted by the committee pursuant to clause 2(d) of House rule X, a summary of the actions taken and recommendations made with respect to each such plan, and a summary of any additional oversight activities undertaken by the committee, and any recommendations made or actions taken with respect thereto. (g) Publication of Rules.--The committee's rules shall be published in the Congressional Record not later than 30 days after the committee is elected in each odd-numbered year as provided in clause 2(a) of House rule XI. (h) Joint Committee Reports of Investigation or Study.--A report of an investigation or study conducted jointly by more than one committee may be filed jointly, provided that each of the committees complies independently with all requirements for approval and filing of the report. rule ii.--committee business meetings--regular, additional and special (a) Regular Meetings.--(1) Regular meetings of the committee, in accordance with clause 2(b) of House rule XI, shall be held on the first Wednesday of every month to transact its business unless such day is a holiday, or Congress is in recess or is adjourned, in which case the chairman shall determine the regular meeting day of the committee, if any, for that month. The chairman shall provide each member of the committee, as far in advance of the day of the regular meeting as practicable, a written agenda of such meeting. Items may be placed on the agenda by the chairman or a majority of the committee. If the chairman believes that there will not be any bill, resolution or other matter considered before the full committee and there is no other business to be transacted at a regular meeting, the meeting may be canceled or it may be deferred until such time as, in the judgment of the chairman, there may be matters which require the committee's consideration. This paragraph shall not apply to meetings of any subcommittee. (See paragraph (f) of committee rule X for provisions that apply to meetings of subcommittees.) (b) Additional Meetings.--The chairman may call and convene, as he or she considers necessary, after consultation with the ranking minority member of the committee, additional meetings of the committee for the consideration of any bill or resolution pending before the committee or for the conduct of other committee business. The committee shall meet for such additional meetings pursuant to a notice from the chairman. (c) Special Meetings.--If at least three members of the committee desire that a special meeting of the committee be called by the chairman, those members may file in the offices of the committee their written request to the chairman for such special meeting. Such request shall specify the measure or matters to be considered. Immediately upon the filing of the request, the majority staff director (serving as the clerk of the committee for such purpose) shall notify the chairman of the filing of the request. If, within 3 calendar days after the filing of the request, the chairman does not call the requested special meeting to be held within 7 calendar days after the filing of the request, a majority of the members of the committee may file in the offices of the committee their written notice that a special meeting of the committee will be held, specifying the date and hour thereof, and the measures or matter to be considered at that special meeting in accordance with clause 2(c)(2) of House rule XI. The committee shall meet on that date and hour. Immediately upon the filing of the notice, the majority staff director (serving as the clerk) of the committee shall notify all members of the committee that such meeting will be held and inform them of its date and hour and the measure or matter to be considered, and only the measure or matter specified in that notice may be considered at that special meeting. rule iii.--open meetings and hearings; broadcasting (a) Open Meetings and Hearings.--Each meeting for the transaction of business, including the markup of legislation, and each hearing by the committee or a subcommittee shall be open to the public unless closed in accordance with clause 2(g) of House rule XI. (See appendix A.) (b) Broadcasting and Photography.--Whenever a committee or subcommittee meeting for the transaction of business, including the markup of legislation, or a hearing is open to the public, that meeting or hearing shall be open to coverage by television, radio, and still photography in accordance with clause 4 of House rule XI. (See appendix A.) When such radio coverage is conducted in the committee or subcommittee, written notice to that effect shall be placed on the desk of each member. The chairman of the committee or subcommittee, shall not limit the number of television or still cameras permitted in a hearing or meeting room to fewer than two representatives from each medium (except for legitimate space or safety considerations, in which case pool coverage shall be authorized). (c) Closed Meetings--Attendees.--No person other than members of the committee or subcommittee and such congressional staff and departmental representatives as the committee or subcommittee may authorize shall be present at any business or markup session that has been closed to the public as provided in clause 2(g)(1) of House rule XI. (d) Addressing the Committee.--A committee member may address the committee or a subcommittee on any bill, motion, or other matter under consideration. (See committee rule VII (e) relating to questioning a witness at a hearing.) The time a Member may address the committee or subcommittee for any such purpose shall be limited to 5 minutes, except that this time limit may be waived by unanimous consent. A Member shall also be limited in his or her remarks to the subject matter under consideration, unless the Member receives unanimous consent to extend his or her remarks beyond such subject. (e) Meetings to Begin Promptly.--Subject to the presence of a quorum, each meeting or hearing of the committee and its subcommittees shall begin promptly at the time so stipulated in the public announcement of the meeting or hearing. (f) Prohibition on Proxy Voting.--No vote by any member of the committee or subcommittee with respect to any measure or matter may be cast by proxy. (g) Location of Persons at Meetings.--No person other than the committee or subcommittee members and committee or subcommittee staff may be seated in the rostrum area during a meeting of the committee or subcommittee unless by unanimous consent of committee or subcommittee. (h) Consideration of Amendments and Motions.--A Member, upon request, shall be recognized by the chairman to address the committee or subcommittee at a meeting for a period limited to 5 minutes on behalf of an amendment or motion offered by the Member or another Member, or upon any other matter under consideration, unless the Member receives unanimous consent to extend the time limit. Every amendment or motion made in committee or subcommittee shall, upon the demand of any Member present, be reduced to writing, and a copy thereof shall be made available to all Members present. Such amendment or motion shall not be pending before the committee or subcommittee or voted on until the requirements of this paragraph have been met. (i) Demanding Record Vote.-- (1) A record vote of the committee or subcommittee on a question or action shall be ordered on a demand by one-fifth of the Members present. (2) The chairman of the committee or subcommittee may postpone further proceedings when a recorded vote is ordered on the question of approving a measure or matter or adopting an amendment. If the chairman postpones further proceedings: (A) the chairman may resume such postponed proceedings, after giving Members adequate notice, at a time chosen in consultation with the ranking minority member and (B) notwithstanding any intervening order for the previous question, the underlying proposition on which proceedings were postponed shall remain subject to further debate or amendment to the same extent as when the question was postponed. (j) Submission of Motions or Amendments In Advance of Business Meetings.--The committee and subcommittee chairman may request and committee and subcommittee members should, insofar as practicable, cooperate in providing copies of proposed amendments or motions to the chairman and the ranking minority member of the committee or the subcommittee 24 hours before a committee or subcommittee business meeting. (k) Points of Order.--No point of order against the hearing or meeting procedures of the committee or subcommittee shall be entertained unless it is made in a timely fashion. (l) Limitation on Committee Sittings.--The committee or subcommittees may not sit during a joint session of the House and Senate or during a recess when a joint meeting of the House and Senate is in progress. (m) Prohibition of Wireless Telephones.--Use of wireless telephones during a committee or subcommittee hearing or meeting is prohibited. rule iv.--quorums (a) Working Quorum.--One-third of the members of the committee or a subcommittee shall constitute a quorum for taking any action, other than as noted in paragraphs (b) and (c). (b) Majority Quorum.--A majority of the members of the committee or subcommittee shall constitute a quorum for: (1) the reporting of a bill, resolution or other measure. (See clause 2(h)(1) of House rule XI, and committee rule

Mr. GOODLATTE

Mr. GOODLATTE. I thank the gentleman for his support of this legislation and his very cogent reasoning about why it is needed. I have one last chart I want to show before we close, and that is this poll taken in USA Today about the opinions of the public on class action lawsuits. As I said at the outset, this bill does not take away the right of anybody to bring a class action lawsuit, and class action lawsuits have their place in our legal system. But the American public knows what is going on. When they were asked who benefits most from class action lawsuits? Lawyers for the plaintiffs, by far the number one answer. Forty-seven percent. The second answer, lawyers for the companies. They get paid too, 20 percent. The companies being sued 7 percent. Remember they get to give out those products promoting their products. They get out of what could be a worse situation. And the buyers of the products, 5 percent. And the plaintiffs 9 percent. The overwhelming majority of the public, more than 70 percent, know that class action lawsuits are not serving the people that they are supposed to serve. The lawyers get the cash, the plaintiffs get the coupons, the consumers pay higher prices for goods and services, and it is an abuse. Tomorrow we have the opportunity to correct it once and for all, to pass a bill that will be identical to the bill passed by the Senate and send it to the President of the United States for his signature. He has been a champion on this issue. He has indicated his willingness to sign that legislation. I urge my colleagues to get the job done, to pass this legislation and reform the abuses in our class action lawsuit industry that have taken place, and let us return it to class action justice for plaintiffs who deserve it.

Mr. GOODLATTE. Mr. Speaker, with the leave of the Speaker, we have the opportunity for the next hour to talk about major and historic legislation that will come before the Congress tomorrow. The Senate has already passed legislation reforming class action lawsuit abuses, and now the House of Representatives will take it up and pass it and send it to the President of the United States. Why is this such a historic occasion? Because abuses in class actions have been going on for many years. In fact, this House has worked for over 6 years to reform this difficulty and get to the point where we are today. This legislation has passed the House of Representatives in each of the last three Congresses, but each time it was stymied in the United States Senate. The fact of the matter is that as the legislation progressed through the House, it got more and more votes, more and more bipartisan support, but never could get the threshold needed to pass in the other body. That has now changed. The Senate has passed legislation. It is a little different from what the House has passed in the past, but it holds the same core principle of reforming the abuses that are taking place today all across the country with class action lawsuits. Some of these abuses are absolutely startling. In a nationwide class action lawsuit filed in Alabama against the Bank of Boston over mortgage escrow accounts, the class members won the case, but actually lost money. Under the settlement agreement, the 700,000 class members received small payments of just a couple of dollars or no money at all. About a year later they found out that anywhere from $90 to $140 had been deducted from their escrow accounts to pay their lawyers' legal feels of $8.5 million. In other words, they had to pay more than they have received in settlement in order to satisfy multi-million dollar attorneys' fees. When some of those class members sued their class action lawyers for malpractice, the lawyers countersued them for $25 million saying their former clients were trying to harass them. In another classic case, in the settlement of a class action lawsuit in Madison County, Illinois, against Thompson Consumer Electronics over alleged faulty television sets, consumers were eligible for rebates on future purchases ranging in value from $25 to $50 if you spent more than $100 on a Thompson Electronics product. So in other words, your settlements was a coupon to buy more of what was alleged to being defective in the first place. How did the attorneys do? Well, the attorneys pocketed $22 million in attorneys' fees. Some consumers reportedly walked away from the settlement altogether because the form was so complicated and the attorneys' fees were so high. Recently, President Bush had down at the Commerce Department a forum to discuss these abuses, and one of these plaintiffs in this Thompson Electronics case was there. And after explaining what she had been through and the frustration of having a television set that did not work and being represented in a class action that did not work and winding up with a coupon to buy something she did not want to buy and seeing the attorneys get $22 million in attorneys' fees, she said, Where is the justice in that? The fact of the matter is there is no justice in our current class action system and it is, in effect, a racket. How did we get to this point? Well, it has to do with a problem with our Federal laws. When our Founding Fathers wrote our Constitution, they very wisely provided for a Federal judiciary, a judiciary that could hear cases from different people in different States so that if in the founding of our country and ever since people felt that they might not be treated as fairly in a foreign jurisdiction in a court across the country somewhere far from where they have lived, they could have the opportunity to remove it to the Federal courts where they would in theory get more impartial treatment. This has persisted for the entire history of our country. However, our Founding Fathers never heard of class action lawsuits. They are a 20th-century development and they are not without their merit. Class actions afford efficiencies to our courts because if people have an identical claim against one or more defendants, they can be consolidated into a class and brought before the court in an efficient manner and sometimes these cases involve hundreds of thousands or even millions of plaintiffs. This legislation does nothing to affect the right of people to bring their class action lawsuits in State courts or Federal courts. But under the original establishment of our Federal courts, this diversity jurisdiction of the courts where you had parties from different States disputing each other, had to set a minimum amount before you could bring the case into courts; and over the years that number has risen to $75,000 per plaintiff. So in other words, if a person who lives in my State of Virginia has an injury in the State of Maryland across the Potomac River and they bring a lawsuit in the State court, if that case involves more than $75,000 in damages, the case can be removed to the Federal courts. However, when you apply that rule to class actions, it is the same. It is $75,000, but it is per plaintiff. So if you have a million plaintiffs in a case, you have to multiply by one million times $75,000 or show a $75 billion case in order to get into Federal court. That is wrong, that a $75,000 simple case that can easily be handled in the State courts would be entitled to the Federal courts and a $75 billion case or say a $70 billion case, less than the $75 billion threshold there, cannot get into the Federal courts. It is wrong. It should be corrected, and this legislation does it in a very simple fashion. Instead of $75,000 per plaintiff, it is $5 million, but 5 million for the entire class, all the claims added together. And this will mean that no longer will you have what is called ``forum shopping'' taking place where the plaintiffs' attorneys can choose the jurisdiction they want to bring the case in and keep it there. Why is that significant? Because we have over 4,000 jurisdictions across the country, 4,000 different State jurisdictions, sometimes simple county governments, sometimes a collection of counties within a State, but 4,000 different places where you can bring a lawsuit. The plaintiffs attorneys, and there are only a small number of plaintiffs attorneys who handle these big class action lawsuits, the plaintiffs attorneys know which of those 4,000 jurisdictions, maybe a dozen, maybe two dozen of them, are overwhelmingly biased and favorable to the plaintiffs in a class action. There was one State court county in Alabama a few years ago where more nationwide class action lawsuits were considered in that one county than the entire Federal judiciary of more than 600 district court judges combined. That is an abuse. Today the same thing takes place in other jurisdictions around the country, and this legislation would correct that. More importantly, it would treat all the parties fairly because not only could the defendants remove a case to Federal courts, but any or all of the plaintiffs in the case would also have the right to remove that case to Federal court under appropriate circumstances. The judge would have discretion, if the case looked like it really did principally involve people in one State, it would be kept in that State. But if it clearly is a nationwide class action lawsuit, it can be moved to Federal court where it will get more even-handed treatment and a more standard application of the law then these select jurisdictions that are getting all the class action cases today. That is what the problem is. In addition to changing the jurisdictional requirements, there are also other things that will make it easier for plaintiffs to be treated fairly and defendants to be treated fairly as well. The Washington Post is one of more than 100 newspapers around the country that have endorsed this legislation. And they said it so wisely a few years ago. They have been supporting this for a long time. We do not often on our side of the aisle cite The Washington Post, but this gives you an idea of how serious this problem is and how widespread the support for this problem is: ``The clients get token payments while the lawyers get enormous fees. This is not justice. It is an extortion racket that only Congress can fix.'' I say to my fellow Members of Congress, tomorrow we are going to do just that, and send a bill identical to the bill with the Senate to the President of the United States for signing into law to once and for all change this abusive extortion racket. At this time it is my pleasure to recognize some other Members who have come down to speak on this issue. The first one is a new Member of the Congress who campaigned for election on legal reforms and who has identified this legislation as something that has great merit and we thank him for his early support, that is, the gentleman from the State of Kentucky (Mr. Davis).

Mr. GOODLATTE. Mr. Speaker, I thank the gentleman. We are also joined by another leader for legal reforms, the gentleman from Florida (Mr. Keller), who has been very supportive of this class-action legislation for several years now, and we thank him for his leadership on the issue and I am pleased to yield to him.

Mr. GOODLATTE. Mr. Speaker, I thank the gentleman. One of the issues that the critics of this legislation argue is that it would undermine federalism principles by removing to Federal courts cases that should be decided by the State courts. Well, that is exactly the opposite of what is going on here. These critics are wrong. The Class Action Fairness Act restores, rather than undermines, federalism principles. Why is that? Because, as I noted earlier, the fact of the matter is that these cases involve plaintiffs from often all 50 jurisdictions, and when the case is brought in one State court, in one county in that State, and that judge then makes a decision, that judge is deciding the law, not just for the State of Illinois, if you happen to be in Madison County, but he or she is deciding that case for all 50 States, and that is something that our Constitution intends be available to people to have decided not in one particular State court jurisdiction but in our Federal courts. That is one of the principal reasons why our Federal courts were established, and it is in those courts that these types of cases should be heard, but under the current rules they cannot be. So what happens in Madison County, Illinois, as this chart shows, affects the whole country. The overwhelming majority of class actions filed in Madison County are nationwide lawsuits in which 99 percent of the class members live outside of the county. As a result, decisions reached in Madison County's courts affect consumers all over the country, and the county's elected judges effectively set national policies on important commercial issues. So, in terms of restoring States rights, that is exactly what this legislation does. It makes sure that the rights of all 50 States are protected in the judicial proceedings related to class-action lawsuits and that one State does not have the opportunity to establish policy that directly affects other States. Let me give my colleagues another example of that. Several years ago, State Farm Insurance Company was sued because they were requiring their adjusters in automobile cases to calculate the adjustments using what are called after-market parts. After-market parts are not used parts. They are new parts, but made by companies other than the original manufacturer of the automobile. There is nothing wrong with the quality of the parts, but they are often less expensive because they are manufactured in a competitive environment where anybody can make these parts. Therefore, the price is generally lower. And the reason why State Farm was doing that was in part because it is good policy to save money for your insureds and keep your insureds premiums low, but also because many of the insurance commissioners of the 50 States also encouraged or, as in the case of Massachusetts, even required the use of after-market parts wherever possible. Well, this suit was brought, alleging that that was wrong, and State Farm was put in a position of being in a court in Illinois in which they were going to have the decisions of the 50 State insurance commissioners, none of whom had any problem with this policy, overturned by one court judge who was not even experienced in terms of handling insurance policies like the insurance commissioners are that do it day in and day out every day, but one judge could overturn the policies of the other 50 States. So that, indeed, is a reason for concern. What happened? State Farm decided to go to court, to go to trial in that case and they lost. That jury and that judge found a $1.3 billion liability for something that 50 State insurance commissioners said was a perfectly legitimate thing to do, that was actually saving consumers money, but now, because they could not remove the case to Federal court, they got stuck with a $1.3 billion judgment. Can my colleagues imagine the effect that has on the company's ability to borrow money on the value of the stock of the shareholders of a company? It has a devastating impact. That case is still under appeal. Other companies see that and they know that when they get into these particular hand-picked jurisdictions where the judges and juries are known to be biased in favor of the plaintiff, in virtually every instance they know that when you get brought into those courts and you cannot remove the case to Federal court, where they will get fairer treatment, they better settle up. That is why we get some of these abusive cases like this one I want to bring to my colleagues' attention. This one involved Chase Manhattan Bank. Chase Manhattan Bank was sued, and they settled the case rather than go to court and risk that. Well, what do you suppose the plaintiffs got in that settlement? This is an actual copy of one of those settlements. Thirty cents. That is what each plaintiff got in the case. What did the plaintiffs' attorneys get? They got $4 million in attorneys' fees. But the people they represented got 33 cents each. There was a catch, though. That was back when postage cost 34 cents and you had to use a 34 cent postage stamp to mail in your acceptance of the 33 cent settlement, for a net loss of one cent. How ridiculous can you get. It has an impact on other insurance companies, too. A few years ago, I found I had been made a plaintiff in a case brought in Santa Fe, New Mexico, against Massachusetts Mutual Life Insurance Company. What was it alleged Massachusetts Mutual had done wrong? Well, when you get your premium, your bill, from Massachusetts Mutual, you can pay it on a monthly, quarterly, or annual basis. If you pay it on a monthly basis, you pay a little more than on a quarterly basis, and that is a little bit more than on an annual basis. Why? Because if you pay on an annual basis, it costs them a lot less money to send out one bill than to send out 12 bills a year, and they have the opportunity to get that money sooner invested. So it is a little less expensive to them, and they pass that savings along to the consumer. The plaintiff in this case and their attorney said they should have to spell out exactly what the difference in savings is rather than simply look at the bill and see that these payments are 12 times what there is and that that is a little more. They said they had to make a disclosure under laws that are not even supposed to apply to insurance companies. Well, they went ahead and settled that case. Why? I asked them. They said because they did not want to get in the same situation that State Farm Insurance Company found itself in with a $1.3 million lawsuit. What was the agreed-upon settlement they sent to the judge in that Santa Fe, New Mexico, court? Well, it provided for $13 million in attorneys' fees, $5 million up front, $5 million over a period of time, and a nice $3 million universal life insurance policy for the plaintiffs' attorneys. Is that not nice? Now, what did the plaintiffs get? The plaintiffs, all the plaintiffs got a promise that Massachusetts Mutual would not do this again. Now there is a new settlement proposed because that one actually was withdrawn when they realized how embarrassing it was for the plaintiffs' attorneys to get $13 million in fees and the plaintiffs would simply get a promise for nothing. Now they have changed it so the plaintiffs might get as much as $50 off on their policy. The plaintiffs' attorneys would still get the massive 8-digit settlement amount in the multimillions of dollars. That is wrong. And it is just one more clear example of evidence why this is an extortion racket. Here are some more of what we call the class action wheel of fortune. If you are a company, or if you work for a company that gets caught up in the class action wheel of fortune, watch out, because it can affect your job, it can affect the success of your company and get you tied up in these multimillion dollar cases where there really is little or no damage; or, even if there is, like there was in the Thompson Electronics case, where the television sets were not working, the attorneys got $22 million and the plaintiffs got a coupon, a $50 coupon or a $25 coupon to buy more of the same thing they were not happy about in the first place. Now, let us look at the class action wheel of fortune. Kay Bee Toys. The lawyers spin the wheel and get $1 million. The consumers get 30 percent off on selected products for 1 week. One week to go to the store and use your coupon to buy certain selected products. Maybe if you are unhappy with Kay Bee Toys in the first place you do not want to go back to settle with them. But that is okay, that is what you get, and the lawyers get a million. Poland Spring Water, $1.35 million for the lawyers, and the consumers got a coupon for more water. Ameritech, $16 million for the lawyers. The consumers? A $5 phone card. Premier Cruise Lines, the lawyers got $887,000. The consumers, $30 to $40 cruise coupons. If you were not happy with your cruise and were part of this lawsuit, the lawyers got almost $1 million and you got a $30 to $40 coupon for future use on a cruise. How about computer monitor litigation involving several companies. The lawyers got $6 million and the consumers got a $13 rebate on future product purchases. Register.com, the lawyers got $642,500 and the consumers $5 coupons. This kind of abuse is what this legislation is designed to correct. It is time to end the class action wheel of fortune and benefit all consumers in America who do not seek companies treated in this fashion and lawyers lining their pockets with excessive attorneys' fees because they have an extortion situation or the defendant in the case knows that if they do not pay those big attorneys' fees and get away with giving a coupon or something to the plaintiffs themselves, they could go to court and wind up with a much larger judgment because they are in an unfair, hostile court, just like State Farm found itself in. We are going to change that so that people, when they see this situation, both the plaintiffs who find themselves made a party to a case and the defendants, can remove that case to Federal court. They will still have a right to bring the class action, but it will be examined and dealt with under more standard rules and in a fairer and more impartial judiciary. We have more examples. This is the apple juice example. As this chart shows, in the settlement of a class action lawsuit alleging that Coca Cola improperly added sweeteners to apple juice, it was the lawyers who got a sweet deal: $1.5 million in fees and costs. Unfortunately, class members came up empty again, receiving 50-cent coupons but no cash. Crayola Crayons. Another favorite American brand. In the settlement of a class action lawsuit over alleged improper manufacturing of Crayola Crayons, consumers received 75-cent coupons to buy more of the crayons, while their lawyers pocketed $600,000 in attorneys' fees. Then we have the famous golf ball case. In the settlement of a class action lawsuit over the terms of a promotion for Pinnacle golf balls, the manufacturer paid $100,000 in attorneys' fees and no cash to class members, who received three free golf balls. Well, thankfully, people are beginning to recognize this abuse. Newspapers all across the country, newspapers whose editorial boards reflect widely different ideological viewpoints on many issues have found common ground on the need to adopt the Class Action Fairness Act. More than 100 editorials so far support the legislation. I earlier cited The Washington Post. They also had this to say about it: ``No area of U.S. civil justice cries out more urgently for reform than the high-stakes extortion racket of class actions, in which truly crazy rules permit trial lawyers to cash in at the expense of businesses. Passing this bill would be an important start to rationalizing a system that is out of control.'' The Chicago Tribune said that the Class Action Fairness Act would ``substantially end the practice of forum shopping, stop seeking a home in State courts that are deemed most likely to produce juicy settlements. This would go a long way to halt the worst class action abuses. It should be the law.'' And very soon after tomorrow, it will be the law. News Day, a Long Island newspaper, said: ``In a deal that should cement class action lawsuit reform, three Democratic Senators have now signaled support for a bill. The tweaks they won made a good bill better. Class action lawsuits are ripe for reform. The Senate bill would curtail abuses by moving the largest nationwide class actions into Federal courts and toughening judicial scrutiny of settlements. The changes Democrats won will help ensure that largely local cases remain in State courts. Congress should enact this needed reform.'' The Orlando Sentinel said: ``The Senate's proposal is worthy of becoming law.'' The Providence Journal, from Rhode Island: ``The Senate should pass a long overdue reform to curb abuses in class action lawsuits. Class action suits involving interstate commerce, which is implied by having plaintiffs in more than one State, clearly belong in Federal court. The consumers should no longer have to bear the onerous costs of the practice of venue shopping.'' Spokesman Review, from Washington State: ``The Class Action Fairness Act would restore common sense to a valid and needed legal procedure.'' The Hartford Courant: ``After 5 years of trying, Congress appears ready to curtail the worst abuses. Legislators have debated the issue long enough. There is no good reason to wait another year to adopt this important reform.'' They said that last August. They had to wait another year. Let us hope they do not have to wait any longer than tomorrow when we will have a big bipartisan vote in support of this reform. Earlier, I think one of my colleagues mentioned the Blockbuster case. That is the deal where in the settlement of a class action lawsuit filed in Texas against Blockbuster Video over late fees, currently on appeal to the Texas Supreme Court, the plaintiffs' lawyers will receive $9.25 million in fees and expenses and the class members will receive two coupons for movie rentals and a $1-off coupon. While the lawyers made enough money to produce their own movie, Blockbuster customers could not even use their coupons to buy a bag of popcorn, because their coupons only covered nonfood items. The settlement allows Blockbuster to continue its practice of charging customers for a new rental period when they return a tape late. Blockbuster later changed that policy, but they should not be put in a position of being in a hostile court where attorneys get a $9.25 million settlement, and all they do is antagonize their consumers by giving them coupons. In State court class actions, the lawyers take the money. The Bank of Boston case. The lawyers, $8.5 million. The plaintiffs actually lost money. The Blockbuster case. The lawyers, $9.25 million. The plaintiffs, $1 off the next movie. The Coca Cola case. The lawyers, $1.5 million and the plaintiffs, 50-cent coupons. And how about Cheerios? A honey of a deal if you are an attorney. As part of a settlement of a class action lawsuit in Cook County, Illinois, against the manufacturer of Cheerios, the company put coupons for a free box of cereal in the newspapers, but it was the plaintiffs' lawyers who got the prize at the bottom of the cereal box. They milked the company for $2 million in fees, an estimated $1,200 per hour for their legal services. For these class action attorneys, Cheerios truly proved to be a ``honey of an O.'' In the case involving a lawsuit filed in California, more than 50 well-known computer manufacturers and distributors were accused of misrepresenting the screen size of their computer monitors. The nationwide class of an estimated 40 million consumers received an offer of a $13 rebate on new computers. That is great. You have a computer screen that probably does not bother most people that the size of the computer screen was a little different than was represented to them, but if they want to go out and buy a whole new computer, get a new screen, the size they might want, they get a $13 rebate. How do you suppose the attorneys did? Well, they got $6 million in legal fees. In a recent class action lawsuit in Cane County, Illinois, against Poland Spring, the class members claimed that the company's bottled water was not pure and was not from a spring. Under the settlement, the consumers received coupons for a discount. On what? More Poland Spring water. Poland Spring admitted no wrongdoing, and it is not changing anything about the way it bottles or markets its waters. So what was that worth to all those plaintiffs, who were represented by the attorneys in that case, who got the opportunity to get a coupon for more water? Well, those lawyers who did that good work, they got $1.3 million in attorneys' fees. How about this one, where the lawyers sail away with fees and the consumers get coupons. In a class action lawsuit filed in Florida against Premier Cruise Lines, consumers allege they were charged for port charges higher than Premier actually paid. Under the settlement, the class members received coupons for a $30 to $40 discount on another cruise line, because Premier had since gone out of business. Imagine that. A many-thousands-of-dollars cruise, and you can get a $30 or $40 discount if you use this coupon. What do you suppose the lawyers got? They got nearly $900,000 in attorneys' fees. While the lawyers made off with all the money, another cruise line gained a promotional opportunity. The lawyers receive $1 million and sell out their class in the Cook County, Illinois, case against Kay Bee Toys over alleged deceptive pricing practices. The toy company paid attorneys and fees costing $1 million, but no cash to the class members. As part of the settlement, the store held a 1-week, unadvertised 30-percent-off sale on selected products. My colleagues, this is indeed an abuse. In addition, we want to mention something that helps these consumers in these cases. These coupon settlements will get much closer scrutiny after this law takes effect. The bill provides a number of new protections for plaintiff class members, what you might call a consumer bill of rights, including greater judicial scrutiny for settlements that provide class members only coupons as relief for their injuries. The bill also bars the approval of settlements in which class members suffer a net loss. In addition, the bill includes provisions that protect consumers from being disadvantaged by living far away from the courthouse. These additional consumer protections will ensure that class-action lawsuits benefit the consumers they are intended to compensate. This legislation does not limit the ability of anyone to file a class-action lawsuit. It does not change anyone's right to recovery. It simply closes the loophole allowing Federal courts to hear big lawsuits involving truly interstate cases, while ensuring that purely local controversies remain in State courts. This is exactly what the framers of the Constitution had in mind when they established Federal diversity jurisdiction. It has taken us more than 200 years but it is now time to make clear that these devices that the framers of the Constitution did not know about, but, certainly if they did, would be very concerned about, now would be entitled to be heard in the court best suited to decide these complicated, multistate, multiplaintiff, sometimes millions of plaintiff cases, sometimes many defendants in the case. Mr. Speaker, there are more abuses of class-action lawsuits. I think we have covered a great many of them. I think we have made plain that this is a situation deserving of repair by the Congress. In fact, I have been working on this legislation for over 6 years and it is long overdue. These abuses keep piling up. Each time we bring the legislation up, we have more and more of these examples. It is long overdue that we finally have the opportunity to correct this problem. It is one that has a very simple correction. End the abusive forum shopping by a handful of lawyers who specialize in these cases and know the handful of jurisdictions where they are going to get this kind of spectacular treatment on one side and unfair treatment on the other side, and let us go to what our judicial system is supposed to be all about; and that is fair treatment, equal application of the laws and standards that are imposed to make sure that these kinds of abusive cases are heard in fair courts, so that businesses do not feel like they are forced to deal with a situation where they have to settle the case because they know they are in a jurisdiction that is going to be unfair to them and do not want to wind up in the same situation that State Farm Insurance Company found itself in several years ago, and is still in, because of the slow time it takes to handle an appeal through the courts. In recent years State courts have been flooded with class actions. As a result of the adoption of different class-action certification standards in the various States, the same class might be certifiable in one State and not another, or certifiable in State court but not in Federal court. This creates the potential for abuse of the class-action device, particularly when the case involves parties from multiple States or requires the application of the laws of many States. For example, some State courts routinely certify classes before the defendant is even served with a complaint and given a chance to defend itself. Other State courts employ very lax class-action treatment certification criteria, rendering virtually any controversy subject to class-action treatment. There are instances where a State court in order to certify a class has determined that the law of that State applies to all claims, including those of purported class members who live in other States. This has the effect of making the law of that State applicable nationwide. Where is the State's rights in that? Where are the principles of federalism in that, where one State court judge can tell the other 49 States what the law should be in their States? That is not what is intended and that is why our Founding Fathers intended to have Federal courts handle cases just like these. The existence of State courts that broadly apply class certification rules encourages plaintiffs to forum shop for the court that is most likely to certify a purported class. Believe me, they do just that. Because most State courts are going to do a good job handling class actions, but because the system is designed the way it is, those attorneys will bring those cases to just a handful, a dozen or two dozen jurisdictions around the country, and that is what creates the unfairness and that is why the Federal courts need to be available as a forum to decide these cases if any of the parties choose to seek to remove the case to those courts. In addition to forum shopping, parties frequently exploit major loopholes in Federal jurisdiction statutes to block the removal of class actions that belong in Federal court. For example, plaintiffs' counsel may name parties that are not really relevant to the class claims in an effort to destroy diversity. How fair is that? Somebody gets sued and added to a lawsuit not because they have done anything wrong, but because by adding them into the case they can prevent the case from being removed to Federal court. That abuse is also corrected. In other cases, counsel may waive Federal law claims. In other words, not fully represent their clients, the plaintiffs, in some of the measures that may be available to them under Federal laws, simply ignore those rights, ignore those laws, and bring the case in State court so that it cannot be removed to the Federal court. It will remain in the State court. Another problem created by the ability of State courts to certify class actions which adjudicate the rights of citizens of many States is that oftentimes more than one case involving the same class is certified at the same time; in other words, in two different States or in two different counties of the same State. Under the Federal rules, that problem is solved. In the Federal court system, those cases involving common questions of fact may be transferred to one district for coordinated or consolidated pretrial proceedings. When these class actions are pending in State courts, however, there is no corresponding mechanism for consolidating the competing suits. It is inefficient, it is wasteful, and it results in unfair and differing results when you have two different State courts deciding the same thing for the same nationwide group of plaintiffs. There is no corresponding mechanism for consolidating the competing suits in State courts. Instead, a settlement or judgment in any of the cases makes the other class actions moot. This creates an incentive for each class counsel to obtain a quick settlement of the case, to be the first one to settle, and an opportunity for the defendant to play the various class counsels against each other and drive the settlement value down. The loser in this system is always the class members, the plaintiffs, the people who are getting these coupons and so on, while they watch their attorneys get multimillion-dollar settlements. The loser in the system is the class member whose claim is extinguished by the settlement at the expense of counsel seeking to be the one entitled to recovery of fees. This bill is designed to prevent these abuses by allowing large interstate class-action cases to be heard in Federal court. It would expand the statutory diversity jurisdiction of the Federal courts to allow class-action cases to be brought in or removed to Federal court. Mr. Speaker, I yield to the gentleman from Georgia (Mr. Gingrey), another Member of the House who has been a major contributor to our effort to reform class-action lawsuit abuse, someone who has championed legal reform and has done an outstanding job representing his constituents.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Chairman, I rise today in support of h.r. 418, the REAL ID Act. I supported the Intelligence Reform and Terrorism Prevention Act last December. That legislation helped to streamline the intelligence community and tightened some asylum rules that allowed potential terrorists to remain in our country. That was a good bill, but it did not go far enough. So I am pleased that the House is debating H.R. 418--A bill that I believe will continue to strengthen our borders, further improve identification standards, and close even more asylum loopholes. We know that Mohamed Atta and his gang of terrorists exploited weak identification rules, and, as stated in the 9/11 Commission Report, ``All but one of the 9/11 hijackers acquired some form of identification document, some by fraud.'' H.R. 418 will require that Federal agencies only accept licenses and State-issued ID cards when States have determined that the holder is lawfully present in the country. The bill will also require that temporary visitors to our country receive only temporary identification, and that this identification expire when the terms of the visit expire. Mr. Chairman, this only makes sense. I am also pleased that this bill further reforms our asylum system, a system that has unfortunately been ripe for corruption for years. We are also addressing the San Diego border fence issue and will ensure the expeditious completion of the border fence. Further, the bill makes aliens deportable for terrorism-related offenses. Incredibly, current law provided that not all terrorism-related grounds for keeping an alien out of the country are also grounds for deportion. This bill closes that loophole. The simple fact is that we need to secure our borders. Today's bill is another step toward this effort and I believe it will make our country safer. I urge my colleagues to support the REAL ID Act.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I rise today to introduce the ``Internet Spyware (I-SPY) Prevention Act.'' This bipartisan legislation, which I introduced with my colleagues Zoe Lofgren of California and Lamar Smith of Texas, will impose tough criminal penalties on the most egregious purveyors of spyware, without imposing a broad regulatory regime on legitimate online businesses. I believe that this targeted approach is the best way to combat spyware. Spyware is a growing and serious problem. The Federal Trade Commission has testified that ``spyware appears to be a new and rapidly growing practice that poses a risk of serious harm to consumers.'' Spyware is software that provides a tool for criminals to crack into computers to conduct nefarious activities, such as altering a user's security settings, collecting personal information to steal a user's identity, or to commit other crimes. The I-SPY Prevention Act would impose criminal penalties on the most egregious behaviors associated with spyware. Specifically, this legislation would impose up to a 5 year prison sentence on anyone who uses software to intentionally break into a computer and uses that software in furtherance of another federal crime. In addition, it would impose up to a 2 year prison sentence on anyone who uses spyware to intentionally break into a computer and either alter the computer's security settings, or obtain personal information with the intent to defraud or injure a person or with the intent to damage a computer. By imposing stiff penalties on these bad actors, this legislation will help deter the use of spyware, and will thus help protect consumers from these aggressive attacks. Enforcement is crucial in combating spyware. The I-SPY Prevention Act authorizes $10 million for fiscal years 2006 through 2009, to be devoted to prosecutions, and expresses the sense of Congress that the Department of Justice should vigorously enforce the laws against spyware violations, as well as against online phishing scams in which criminals send fake e-mail messages to consumers on behalf of famous companies and request account information that is later used to conduct criminal activities. I believe that four overarching principles should guide the development of any spyware legislation. First, we must punish the bad actors, while protecting legitimate online companies. Second, we must not over-regulate, but rather encourage innovative new services and the growth of the Internet. Third, we must not stifle the free market. Fourth, we must target the behavior, not the technology. By imposing criminal penalties on those that use spyware to commit federal crimes and other dangerous activities, the I-SPY Prevention Act will protect consumers by punishing the bad actors, without imposing liability on those that act legitimately online. The targeted approach of the I-SPY Prevention Act also avoids excessive regulation and its repercussions, including the increased likelihood that an overly regulatory approach would have unintended consequences that could discourage the creation of new and exciting technologies and services on the Internet. By encouraging innovation, the I-SPY Prevention Act will help ensure that consumers have access to cutting-edge products and services at lower prices. In addition, the approach of the I-SPY Prevention Act does not interfere with the free market principle that a business should be free to react to consumer demand by providing consumers with easy access to the Internet's wealth of information and convenience. Increasingly, consumers want a seamless interaction with the Internet, and we must be careful to not interfere with businesses' abilities to respond to this consumer demand with innovative services. The I-SPY Prevention Act will help ensure that consumers, not the federal government, define what their interaction with the Internet looks like. Finally, by going after the criminal behavior associated with the use of spyware, the I-SPY Prevention Act recognizes that not all software is spyware and that the crime does not lie in the technology itself, but rather in actually using the technology for nefarious purposes. People commit crimes, not software. The I-SPY Prevention Act is a targeted approach that protects consumers by imposing stiff penalties on the truly bad actors, while protecting the ability of legitimate companies to develop new and exciting products and services online for consumers. I urge each of my colleagues to support this important legislation.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I am delighted to recognize the Texas Tavern restaurant in Roanoke, Virginia on its 75th anniversary. Texas Tavern opened for business on February 13, 1930. It's known as ``Roanoke's Millionaires Club'' and for seating ``1,000 people--10 at a time.'' From breakfast to hot dogs, hamburgers, and chile, Texas Tavern's menu is as much an institution as the eatery itself. The founder of the Texas Tavern was Nick Bullington, an advance man for the Ringling Brothers and Barnum and Bailey Circus, who also hoped to open a small, short order restaurant in one of the cities he visited on the circus route around the United States. Bullington recognized that the railroad was making Roanoke a major city. He located a vacant lot on Church Avenue in downtown Roanoke for the restaurant. Construction began and a short five months later, the Texas Tavern was open for business. Texas Tavern has been a family operation from day one. Nick Bullington's son, James G. Bullington, became owner and operator of the restaurant when his father passed away in 1942. In 1966, James N. Bullington became a night manager for his father and in 1983, he purchased the business and property on which the restaurant sits, ensuring that the Texas Tavern would remain in the small, whitewashed brick building it's always called home. Matt Bullington--Nick Bullington's great grandson--worked at the restaurant throughout college in the mid-1990s and then took over for his dad, serving today as the man at the helm of one of Roanoke's favorite gathering places. To visit Texas Tavern is to visit a slice of Americana. The Cheesy Western and chile are the signature dishes that have kept diners-- famous and otherwise--coming back for 75 years. Glen Miller, Debbie Reynolds, and even former Sixth District Congressman Caldwell Butler are on the roster of Texas Tavern aficionados, and so are Gerald Williams and Bill Ammons--two of the original customers who still eat there today. Estimates are that nine and a half million hot dogs and 1,100 tons of pinto beans have been served to those who've sat at the small counter--rubbing elbows with friends and foes alike but never leaving the restaurant unsatisfied. The Texas Tavern has operated in the best spirit of American enterprise in Roanoke--the Star City of Virginia--for three-quarters of a century. I offer my congratulations to the Bullington family for helping show us that the American dream remains alive and well all these years later.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I am pleased to introduce today, along with my good friend from Virginia, Mr. Boucher, the Class Action Fairness Act of 2005. This much-needed bipartisan legislation corrects a serious flaw in our Federal jurisdiction statutes. At present, those statutes forbid our Federal courts from hearing most interstate class actions--the lawsuits that involve more money and touch more Americans than virtually any other type of litigation in our legal system. The class action device is a necessary and important part of our legal system. It promotes efficiency by allowing plaintiffs with similar claims to adjudicate their cases in one proceeding. It also allows claims to be heard in cases where there are small harms to a large number of people, which would otherwise go unaddressed because the cost to the individuals suing could far exceed the benefit to the individual. However, class actions are increasingly being used in ways that do not promote the interests they were intended to serve. In recent years, State courts have been flooded with class actions. As a result of the adoption of different class action certification standards in the various States, the same class might be certifiable in one State and not another, or certifiable in State court but not in Federal court. This creates the potential for abuse of the class action device, particularly when the case involves parties from multiple States or requires the application of the laws of many States. For example, some State courts routinely certify classes before the defendant is even served with a complaint and given a chance to defend itself. Other State courts employ very lax class certification criteria, rendering virtually any controversy subject to class action treatment. There are instances where a State court, in order to certify a class, has determined that the law of that State applies to all claims, including those of purported class members who live in other jurisdictions. This has the effect of making the law of that State applicable nationwide. The existence of State courts that broadly apply class certification rules encourages plaintiffs to forum shop for the court that is most likely to certify a purported class. In addition to forum shopping, parties frequently exploit major loopholes in Federal jurisdiction statutes to block the removal of class actions that belong in Federal court. For example, plaintiffs' counsel may name parties that are not really relevant to the class claims in an effort to destroy diversity. In other cases, counsel may waive Federal law claims or shave the amount of damages claimed to ensure that the action will remain in State court. Another problem created by the ability of State courts to certify class actions which adjudicate the rights of citizens of many States is that oftentimes more than one case involving the same class is certified at the same time. In the Federal court system, those cases involving common questions of fact may be transferred to one district for coordinated or consolidated pretrial proceedings. When these class actions are pending in State courts, however, there is no corresponding mechanism for consolidating the competing suits. Instead, a settlement or judgment in any of the cases makes the other class actions moot. This creates an incentive for each class counsel to obtain a quick settlement of the case, and an opportunity for the defendant to play the various class counsels against each other and drive the settlement value down. The loser in this system is the class member whose claim is extinguished by the settlement, at the expense of counsel seeking to be the one entitled to recovery of fees. Our bill is designed to prevent these abuses by allowing large interstate class action cases to be heard in Federal court. It would expand the statutory diversity jurisdiction of the Federal courts to allow class action cases to be brought in or removed to Federal court. Article III of the Constitution empowers Congress to establish Federal jurisdiction over diversity cases--cases between citizens of different States. The grant of Federal diversity jurisdiction was premised on concerns that State courts might discriminate against out of State defendants. In a class action, only the citizenship of the named plaintiffs is considered for determining diversity, which means that Federal diversity jurisdiction will not exist if the named plaintiff is a citizen of the same State as the defendant, regardless of the citizenship of the rest of the class. Congress also imposes a monetary threshold--now $75,000--for Federal diversity claims. However, the amount in controversy requirement is satisfied in a class action only if all of the class members are seeking damages in excess of the statutory minimum. These jurisdictional statutes were originally enacted years ago, well before the modern class action arose, and they now lead to perverse results. For example, under current law, a citizen of one State may bring in Federal court a simple $75,001 slip-and-fall claim against a party from another State. But if a class of 25 million product owners living in all 50 States brings claims collectively worth $15 billion against the manufacturer, the lawsuit usually must be heard in State court. This result is certainly not what the framers had in mind when they established Federal diversity jurisdiction. Our bill offers a solution by making it easier for plaintiff class members and defendants to remove class actions to Federal court, where cases involving multiple State laws are more appropriately heard. Under our bill, if a removed class action is found not to meet the requirements for proceeding on a class basis, the Federal court would dismiss the action without prejudice and the action could be refiled in State court. In addition, the bill provides a number of new protections for plaintiff class members, including greater judicial scrutiny for settlements that provide class members only coupons as relief for their injuries. The bill also bars the approval of settlements in which class members suffer a net loss. In addition, the bill includes provisions that protect consumers from being disadvantaged by living far away from the courthouse. These additional consumer protections will ensure that class action lawsuits benefit the consumers they are intended to compensate. This legislation does not limit the ability of anyone to file a class action lawsuit. It does not change anyone's right to recovery. Our legislation merely closes the loophole, allowing Federal courts to hear big lawsuits involving truly interstate issues, while ensuring that purely local controversies remain in State courts. This is exactly what the framers of the Constitution had in mind when they established Federal diversity jurisdiction. I urge each of my colleagues to support this very important bipartisan legislation.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I rise today to introduce a resolution congratulating the James Madison University football team, the ``Dukes'', for their outstanding and historic victory in the National Collegiate Athletic Association's Division One--Double-A Championship Game. James Madison University is located in Virginia's 6th congressional district, in Harrisonburg, VA. JMU is one of the nearly twenty colleges or universities in my congressional district. The school was established in 1908 as the State Normal and Industrial School for Women, and remained a women's college until 1966. The school's name was officially changed to honor our Nation's fourth president, one of eight Virginia presidents, James Madison, in 1977. JMU is currently home to more than 15,000 students and more than 2,000 faculty members. In addition, the JMU athletic program has more than 500 student athletes who compete in eleven men's and thirteen women's sports. Mr. Speaker, JMU received an at-large-bid to compete in the I-AA playoffs and defeated Lehigh, Furman, and the College of William and Mary (another wonderful Virginia school) to advance to the championship game. JMU ultimately defeated the University of Montana Grizzlies with a final score of 31 to 21, before 16,771 fans and a national television audience, at the home field of the University of Tennessee-Chattanooga. The Dukes became the first team to win four straight road games in Division I-AA postseason history. I would like to also congratulate the University of Montana Grizzlies, who were seeking their third national title in ten years. The Grizzlies finished the season with a wonderful record of twelve and three. I was pleased to participate in a wonderful parade and community celebration a few weeks ago in downtown Harrisonburg to honor the Dukes. Again, congratulations to James Madison University and I am pleased to have the support of the entire Virginia delegation as I offer this resolution.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, on the occasion of his retirement from the United States Air Force, I want to take this opportunity to honor Col ``Tom'' Shubert for his 30 years of dedicated service to our country. In his most recent assignment he served as the Chief, Congressional Inquiries Division, Office of Legislative Liaison. He managed, on behalf of the Department of the Air Force, all constituent inquiries from the White House, Office of the Vice President, Members of Congress and state and local governments. Colonel Shubert began his illustrious Air Force career as a distinguished graduate of the Reserve Officers Training Corps at East Carolina University and was commissioned in 1974. Following graduation from Undergraduate Pilot Training in 1975, his operational assignments included piloting B-52 strategic bombers and T-39 airlift support mission aircraft both in the United States and in the Far East. From April 1986 to April 1989, Colonel Shubert served as a Political- Military Affairs Officer on the Joint Staff at Headquarters, United States Pacific Command. He then served as the Assistant Air Attache for Operations at the American Embassy in Canberra, Australia until June of 1993. Colonel Shubert was then assigned as a Congressional Inquires Liaison in the Congressional Inquiry Division, Office of the Secretary of the Air Force, Department of the Air Force. In June 1995, Colonel Shubert entered Danish language training and then served as the Air Attache at the American Embassy in Copenhagen, Denmark from December 1995 to July 1998. He then returned to the Pentagon, where he served as the Military Assistant to the Assistant Secretary of Defense for Legislative Affairs, Office of the Secretary of Defense, until October 2000. From October 2000 to June 2002, Colonel Shubert headed the Assessments Branch, Policy Division, Defense Technology Security Administration, which reviewed both Munitions and Dual-Use export license applications. In July 2003, Colonel Shubert assumed duties as the Chief of the Congressional Inquiry Division, Office of Legislative Liaison, Secretary of the Air Force. During this time, Colonel Shubert escorted scores of Members of Congress on more than twenty Congressional Delegations, in furtherance of Members' oversight responsibilities. Colonel Shubert assisted me and Members of the Committee on Agriculture during trips to Afghanistan, Iraq, and, last year, to Africa. He upheld the highest standards of professional conduct and his thorough and efficient planning assured that these trips were a complete success. He will be missed. Colonel Shubert holds a Bachelor of Arts in Political Science (Honor Graduate) from East Carolina University, a Master of Science in Systems Management from the University of Southern California, and a Master of Arts Degree in National Security Affairs from the Naval Postgraduate School. Mr. Speaker, I ask that my Colleagues join me in expressing our sincere appreciation to COL Tom Shubert for his outstanding service to both the Legislative and Executive Branches and to the United States Air Force. I wish him, his wife Kathy, and their daughters Victoria and Joanna, the very best as they face new challenges in the coming years. I will miss his unfailing good humor and hard work. Colonel Shubert has consistently conducted himself in a professional manner and therefore brings great credit to the United States Air Force.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on the bill just considered.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in strong support of S. 2856. Conservation was a significant part of the 2002 farm bill. Congress increased the conservation budget by nearly $2 billion per year, a 75 percent increase. However, there is a current shortfall in the Conservation Technical Service Assistance budget at the Natural Resources Conservation Service. This shortfall represents the costs necessary to administer the Conservation Reserve and Wetlands Reserve programs. So far, those costs have been taken directly out of the pockets of farmers and ranchers, and, if you permit me, the environment, when fewer conservation benefits are provided by the Environmental Quality Incentives Program and the other so-called donor programs. In other words, the NRCS takes money from EQIP and farmland protection so that CRP and the Conservation Reserve Enhancement Program and WRP can be administered. The USDA has also been using the Wildlife Habitat Incentives Program, or WHIP, the Farmland Protection Program, FPP, and the Grasslands Reserve Program as donor programs for CRP and WRP. S. 2856 will help alleviate some of the implementation problems that have occurred during the last 2 years when approximately $100 million per year was being taken from the four donor programs. When the farm bill was written, it was Congress' intent that each conservation program would pay for its own technical assistance. I have been working with the Committee on the Budget and the Committee on Appropriations committees to ensure S. 2856's passage will prevent funds from being diverted from the donor programs. I have numerous groups supporting the bill, and I will include for the Record these letters. House of Representatives, Washington, DC, December 3, 2004. Dear Congressman: We write today to ask for your support of S. 2856 on Monday, December 6, 2004. This bill, which has been adopted in the Senate, addresses a misunderstanding that has existed between the U.S. Department of Agriculture and the Congress as to the source of funding for the technical assistance costs for certain Farm Bill conservation programs. S. 2856 ensures that the original intent of Congress will be used in the implementation of these programs where each of them will be expected to pay for their own technical assistance from their own share of the total funding made available to them. As passed by the Farm Bill, these programs have a significant backlog of requests from farmers and ranchers for conservation assistance. We wholeheartedly support S. 2856 because without it several of these conservation programs will be significantly hampered from achieving their intended purpose--helping farmers and ranchers improve and conserve soil, air and water quality and restore and improve wildlife habitat. We ask for your strong support of this measure when it comes before the House on December 6, 2004. Sincerely, National Soybean Association. National Pork Producers Council. National Cattlemen's Beef Association. National Association of Conservation Districts. National Association of Wheat Growers. National Corn Growers Association. National Cotton Council. National Farmers Union. National Milk Producers Federation. National Turkey Federation. Southeast Dairy Farmers Association. Western United Dairymen.

Mr. GOODLATTE. Mr. Speaker, it is my pleasure to yield such time as he may consume to the gentleman from Oklahoma (Mr. Lucas) the chairman of the Subcommittee on Conservation, Credit, Rural Development and Research of the Committee on Agriculture, who has been a real leader in fighting for fairness in these conservation programs.

Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I want to thank the gentleman from Pennsylvania (Mr. Holden) for his contribution, as well, to this effort, and also more especially thank him for the kind words he has extended to our colleague, the gentleman from Texas (Mr. Stenholm), who has served this Congress with distinction for 26 years, the last 8 of which as the ranking member of the Committee on Agriculture. He is known across the country as somebody who has helped American agriculture. He worked with my predecessor, our colleague Congressman Combest, his neighbor, former neighbor in Texas, to write the last farm bill which has been a noteworthy success in the first almost 4 years now of its implementation. He is somebody that I will miss as my partner in working with American agriculture, and I thank him and commend him for more than a quarter century of service to the people of this country. Mr. Speaker, I reserve the balance of my time.