Bob Goodlatte

Mr. GOODLATTE

Mr. GOODLATTE. No, because an individual, after they have been here for 5 years is a lawful, permanent resident, and they are entitled to apply for United States citizenship. And if there is a need to have benefits extended for a longer period of time, they have that option.

Mr. GOODLATTE. Mr. Speaker, I claim the time in opposition, and I yield myself such time as I may consume. As the chairman of the Subcommittee on Department Operations Oversight, Nutrition, and Forestry of the House Committee on Agriculture, I have been charged with the responsibility for attempting to work out this very difficult issue, and I commend the gentleman for his interest in the issue and for his efforts on behalf of people who are in need. However, I must strongly oppose the motion to accept the Senate language here, because to do so would be irresponsible. The fact of the matter is that while there are certainly people here who are in need of assistance, it is definitely not the case that everybody that the Senate language would cover would fit into that category, and it is also not the case that the people that would be covered are as described by the gentleman. For example, he refers to tax-paying legal residents. Well, it is not a requirement under the Senate language that the individual have ever paid a penny in taxes in order to receive these benefits. It only requires that they have been in this country as a lawful, permanent resident for 5 years. The fact of the matter is that some people who have been here for 5 years and may have been taxpaying, contributing members of our society and who, as a result of some misfortune, have fallen on hard times and need to receive food stamps, a good case could be made, as has been made by the President of the United States, that some individuals who have been here 5 years should receive them. But the problem with the Senate language is that it has no definition of that. It does not say you have to have been a taxpayer; it does not say that you had to have been employed for a certain period of time. Many people are not aware, but the fact of the matter is that a number of noncitizens receive food stamps right now. Children, the disabled, refugees, permanent residents who have been in the United States for more than 10 years and have 40 quarters of work history are just some of the categories for which people can receive these benefits right now. The President has said that he would like to see that expanded. However, in making that expansion, we have to do it responsibly. We cannot just open the door and not say that there is no standard to be met, no criteria, such as having been a taxpayer, having had a work history, particularly for people who are able-bodied and are between the ages of 18 and 60, for example. Or we need to look at how long this should be allowed to be provided, because, for example, somebody who has been a lawful, permanent resident of the United States after they have been here for 5 years in that status are eligible to apply for United States citizenship; and when they do so, they then can receive the same benefits as any other American citizen. There is a problem with that, however. The Immigration Service does not work very well. Sometimes it takes a long time for an individual who has qualified, met this 5-year criteria, that everybody has specified, the Republican conferees, the Democratic conferees, the President, have all talked about 5 years of lawful residence. But once you get to that point and you wanted to apply for citizenship to be treated exactly the same as any other American citizen, you cannot always get that done quickly. So we put forward a proposal that said that if you were to reach that point, that you would be entitled to 2 years of food stamps if you had a work history to support that. The fact of the matter is that in 2 years' time, the vast majority of people who apply for citizenship would be processed and become citizens. We do not require you to become a citizen. If you do not wish to do so, then you had the opportunity to receive those benefits for 2 years anyway. The point is that all of these things are in negotiation between the House conferees, the Senate conferees, and the White House to do the responsible thing, to do what recognizes the needs where they exist and provide them as the offer that the House conferees made, which included something the Senate conferees did not include in their most recent offer to us, which is for children, for disabled individuals, and for refugees to receive food stamps. Those are certainly areas that should be covered. But it should not be a blanket coverage where anybody gets it whether they have ever contributed anything or whether they have simply come to this country, stayed here for a period of time, and now want to receive government assistance. So I would urge my colleagues to restrain themselves from saying that just because the Senate has put something out there that we should naturally rush to it. No, we should discuss this with the Senate, we should discuss this with the White House, we should work out a responsible plan, and that is what we are in the process of doing, and this motion to instruct the conferees, which is nonbinding, but nonetheless is an attempt to, I think, make a political statement is not helpful to that process; and I would urge my colleagues to defeat it. Mr. Speaker, I reserve the balance of my time.

Mr. GOODLATTE. Mr. Speaker, it is an either/or work requirement. Someone can be here 5 years and never work a day, or be here for 16 quarters of work and qualify, not both. That is the crux of the matter. There has got to be a work history requirement for an able-bodied adult, and there is no such requirement in the motion.

Mr. GOODLATTE. Mr. Speaker, I yield myself 1 minute. I thank the gentleman from California (Mr. Becerra) for his kind words, and we are trying to work this out. I would say to him, however, that this motion to instruct conferees is not well geared toward accomplishing that because it only deals with the section of the Senate bill that covers the 5 years and above. It does not take care of children, refugees, and disabled individuals who have been here a shorter period of time; and so that, I think, is why this is counterproductive. The President has also shown considerable leadership on this issue. He would like to provide assistance for noncitizens who have been here for 5 years or more as lawful, permanent residents of the United States; but the fact of the matter is that when we do that we have got to have some guidelines. We have got to have some standards of what kind of work history they need to have shown before they get it and how long these benefits are going to be available to them. That is all we ask is to work that out, but supporting this motion to instruct the conferees moves us in the opposite direction, does not move us toward that.

Mr. GOODLATTE. I yield to the gentlewoman from North Carolina.

Mr. GOODLATTE. Mr. Speaker, I yield myself 15 seconds. Mr. Speaker, the gentleman has it exactly backwards. The proposal that we have put forward provides food stamps for children, the disabled, and refugees. The proposal that the gentleman refers to, section 452, only refers to citizens who have been in the country for more than 5 years. So if you are a child who has been here less than 5 years, you are not covered by the proposal of the gentleman from California (Mr. Baca). Mr. Speaker, I am pleased to yield 4 minutes to the gentleman from Colorado (Mr. Tancredo).

Mr. GOODLATTE. Mr. Speaker, I yield myself 2\1/2\ minutes. Mr. Speaker, I agree with much of what the gentleman from Washington (Mr. Inslee) said, but the problem is when he refers to lawful citizens working over 5 years, what the gentleman is asking us to support has no such work requirement in it. I think it is certainly negotiable within the conference, within the House and Senate Committees on Agriculture that are meeting to work this out, that we could come up with a work history requirement that would be acceptable for both sides. But the gentleman from California (Mr. Baca) does not have that in the language that he refers to in the Senate bill. For that reason, I have to oppose this motion.

Mr. GOODLATTE. We certainly could work that out. The proposal we put forward was 20 quarters.

Mr. GOODLATTE. Absolutely. We put a time limit on it, as well.

Mr. GOODLATTE. I would tell the gentlewoman, we offered a standard. The Senate did not accept that. We have been continuing to negotiate with the Senate, with the White House, on what that standard would be. Yes, we have been talking about how long an individual has to have been working, if they are an able-bodied individual.

Mr. GOODLATTE. I yield to the gentlewoman from North Carolina.

Mr. GOODLATTE. Mr. Speaker, we limit it to 2 years, I believe, in the offer.

Mr. GOODLATTE

Mr. GOODLATTE. For better or for worse, if the gentleman would yield, I have to say that I never enjoyed such remuneration for the work that I did.

Mr. GOODLATTE. I did not handle class action lawsuits, but I will tell you that the measure of a good lawsuit is not how much work the attorneys put into it relative to what they receive, but whether they accomplish anything for their clients. And when they get a coupon for Cheerios, they are accomplishing nothing in exchange for the large fees they receive.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Chairman, will the gentleman yield?

Mr. GOODLATTE. Mr. Chairman, would the gentleman from Colorado (Mr. McInnis) agree that not only is this not the right place to do this, but this amendment does not cure the problem that the gentleman is talking about? It has nothing to do with changing the tax laws of these corporations.

Mr. GOODLATTE. Mr. Chairman, I yield myself the balance of the time. Mr. Chairman, frankly this amendment is not just wrong, it does not make any sense at all. What the other side is proposing to do here will not have the effect that they are suggesting. They are limiting the options of those who would bring class action lawsuits against some of these corporations that they refer to. There are many instances now in which a case cannot be brought in Federal court because of this diversity rule which could be brought against those corporations; in my State of Virginia, for example, a State that does not recognize class action lawsuits, so making it easier to bring actions in Federal court is not something that is going to harm these corporations whatsoever. As explained during the Committee on the Judiciary markup, the purpose of this amendment is to discourage companies from moving their parent entities offshore, to turn them into foreign corporations in order to achieve tax advantages. Thus, although this amendment does not seek to derail enactment of the core provision of the bill, that is, the provisions expanding Federal diversity jurisdiction over interstate class actions, it would preclude companies owned by foreign or offshore companies from exercising that change. This effort to establish tax policy through procedural and jurisdictional rules applicable to civil litigation is truly bizarre, the ultimate non sequitur. As stated by its authors, the purpose of the amendment is to punish companies with offshore owners by forcing them to litigate class actions brought against them in State court, while companies that have U.S. parents may remove their cases to Federal court under the expanded Federal jurisdiction of provisions of this bill. Obviously, making this sort of distinction among companies based on foreign ownership is a constitutionally suspect policy, but equally important is the fundamental premise of the amendment, that forcing parties to litigate interstate class actions in State courts constitutes a sort of punishment. Thus, although this amendment should be defeated, it does suggest agreement on the key predicate for H.R. 2341: State courts are not an ideal place for parties to litigate class actions. This amendment should be defeated, but this amendment should be remembered as confirming the key reasons why the overall bill, the fundamental provisions of H.R. 2341, should be enacted. Let us not limit the choice that is involved here where these cases can be considered. Let us make the Federal diversity rules work. That is what this bill is about. That is what this amendment would defeat, and I urge my colleagues to oppose the amendment. Mr. Chairman, I yield back the balance of my time.

Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I rise in strong opposition to this amendment. This is a red herring if there ever was one. There is nothing in this legislation that has anything to do with the tax liability of corporations that may have been moved offshore. To raise it in this class action lawsuit is a big mistake. It would provide more jurisdiction over larger cases to State courts and undermine our effort to allow Federal courts jurisdiction over large, interstate class actions, the very point of bringing this legislation forward. The most complex cases should be heard in the courts designed to hear them: the Federal courts. Attempting to redefine the home base of a corporation just for the purposes of class action lawsuits will not affect any other lawsuits brought against the corporation. It certainly will not affect their tax liability. If this amendment is about tax loopholes, then that is something that should be dealt with by the Committee on Ways and Means. This amendment is intended to prevent nationwide, even international, class actions having national implications then plaintiffs from many States from being heard in Federal court. The premise of H.R. 2341 is to allow Federal courts to resolve these large class actions in a balanced and fair way. That is why the Founding Fathers created article III courts, to resolve Federal questions and issues of a wide degree of diversity. That is what class actions are by their very nature. The fact of the matter is that a dispute between two individuals from different States for slightly more than $75,000 can be resolved by a Federal court, but with a national class action worth billions of dollars, in the case of this amendment a foreign corporation, the case cannot be heard in Federal court. That is wrong. I urge my colleagues to oppose this amendment. It is something that would give State courts jurisdiction over cases that involve U.S. companies that have been purchased by foreign companies. These are generally large, nationwide lawsuits that we are talking about. They are precisely the kind of cases that should be brought and heard in Federal court. I urge my colleagues to oppose the amendment. Mr. Chairman, I reserve the balance of my time.

Mr. GOODLATTE. Mr. Chairman, I claim the time in opposition.

Mr. GOODLATTE. Mr. Chairman, I thank the gentleman for yielding me this time. I too oppose this amendment. A rose by any other name would smell as sweet; a class action by any other name is still a class action. This legislation is designed to treat all similar types of actions similarly, and it is totally unfair to place parties in other States at the mercy of those who would have an exception to this rule that if it were brought by a local prosecutor or other attorney, that they would then be able to keep these cases in State court. As to the concern raised by the gentlewoman regarding the bringing of these actions in Federal court, no, they do not have to be moved to Federal court; and if they are, the Federal court judge has wide latitude to remand cases to State court where the judge finds that an inequity would result or where it would be better to bring that case in State court in the first place. So there is no reason to draw a distinction. There are many, many class action lawsuits that can and should be heard in the State courts. If they meet the criteria of the law, they should do it. This bill is simply designed to make sure that cases that otherwise could be brought in Federal court because of diversity of jurisdiction can indeed be brought for that reason and not bogged down under a $75,000 per plaintiff limitation, which in so many, many of these class actions involving peanuts, being the amount of the settlement for the plaintiffs, could not be brought in Federal court and, instead, gets brought in that favorite jurisdiction, whether it is in California or any other State. This levels the playing field and makes sure that all of these actions are treated fairly and equally. There is no reason to make a distinction for this type of action. Mr. Chairman, I would encourage my colleagues to oppose this amendment.

Mr. GOODLATTE. Mr. Chairman, I thank the gentleman for yielding me this time. I also strongly oppose this amendment. This amendment is doing what those offering amendments have already done on two other occasions in this debate so far, and that is to try to obscure what this legislation is all about with unrelated issues. Whether or not a case is heard in Federal court or State court has nothing to do with whether or not documents have been destroyed. In the earlier debate with regard to the Waters amendment, we pointed out all of the tools that are available to a Federal court judge when documents are destroyed in a case. It could very well be much better that the case is in Federal court rather than State court, and we should not write law based upon unrelated matters. That is exactly what has been offered here repeatedly today to try to obfuscate the issue here, which is a very simple one, and that is that our Federal diversity rules are written in such a way that the most complex litigation in the country cannot get into the courts that were not designed to handle diversity cases and designed to handle more complex litigation and designed to consolidate class actions brought in various parts of the country related to the same issue. When we create these artificial barriers to removing the case, we are not accomplishing justice for the plaintiff or the defendant. Somebody in the case has to have the ability to remove the case to Federal court. What we say is that any party in the case should be able to do that. If they have unclean hands, address that with the Rules of Procedure that exist in the Federal Rules.

Mr. GOODLATTE. Mr. Chairman, I thank the gentleman from Florida for yielding me this time. I commend him for offering this amendment and I strongly support it. Let me tell you why. To the gentleman from Texas, the plaintiffs in a class action lawsuit do not pay the defendants' attorneys' fees, but they sure do in some class actions. How about the Bank of Boston settlement? Would it not have been a good idea for all the plaintiffs in that case if they knew, after the attorneys in the case were paid $8.5 million in attorneys' fees, that the members of the class would then be sued by their own attorneys to pay $25 million more? Would that not have been a useful thing for the plaintiffs to have had in that case, when they decide whether or not they want to support this particular proposed settlement of the class? Or how about the plaintiffs in the airline case where the attorneys received $16 million in fees, and the plaintiffs themselves received coupons for $25 off a $250 or more airline flight, in other words, a 10 percent reduction? Many of those plaintiffs may have said the attorneys are getting $16 million and I am getting a coupon, no, I do not want that settlement. They ought to know that ahead of time. How about the case against the National Football League, where the attorneys received $3.7 million and the subscribers got somewhere between $8 and $20? Maybe they would like that, maybe they would not, but they ought to know ahead of time before they vote on the settlement. How about the Blockbuster case? Twenty-three class action lawsuits in which the class members got dollar-off coupons and buy-one-get-one-free coupons; and the attorneys are estimated, we do not know for sure because we do not have this disclosure requirement, are estimated to get $9.2 million in attorneys' fees. I think disclosure would be good in that case as well. And then, of course, my favorite again, this case where, against Chase Manhattan Bank, the attorneys get $4 million in fees and the plaintiffs get a check for 33 cents. But, of course, I remind you again they had to mail in that acceptance, so it cost them 34 cents to mail it in to get their 33 cents. I bet people who knew that the attorneys in this case were getting $4 million would not vote to get a penny off which is what the net result of that is. Again, that is the actual check from Chase Manhattan Bank. They cut all these checks. It cost 33 cents apiece to issue the check plus more than that to mail the checks to the plaintiffs. The attorneys, of course, their check is $4 million and I think if the plaintiffs knew that, they would vote against these settlements. They would let the court know, do not approve a settlement where all we get is a 33-cent check and the plaintiffs' attorneys get a $4 million fee. I urge my colleagues to support this very good amendment.

Mr. GOODLATTE. Mr. Chairman, I thank the gentleman for yielding me this time. There are two major problems with this amendment, which I strongly oppose and which is not well thought out. First, it betrays a serious misunderstanding about how discovery works in civil litigation. The amendment says if documents subject to a discovery order are destroyed or withheld such action shall be deemed an admission of any fact with respect to which the order was issued. The problem is that discovery orders normally are not issued with respect to facts. The orders normally say that certain categories of documents should be retained or produced. For example, the order may say produce all letters sent between person A and person B; or the order may say preserve all documents regarding subject X. Thus, the punch line to this amendment does not make any sense. If a party withheld a letter sent between person A and person B, what fact would be admitted? And if a party destroyed a document regarding subject X, what facts would be admitted? In sum, the amendment is fatally flawed because it bears no relationship to how civil discovery really works. Second, and perhaps more importantly, the amendment would actually disrupt and water down existing rules that apply to the destruction or withholding of documents in the discovery process. Federal Rule of Civil Procedure 37 already provides for an array of sanctions if a party destroys or withholds documents. The court may order that certain facts be admitted. The court may order that a party may not introduce certain defensive evidence at trial. The court may order that monetary sanctions be paid. And most importantly, the court may order a default judgment. The court may issue an order that the party that disobeyed a discovery order loses the entire case and must pay the plaintiffs what they requested. There is a considerable risk that courts would view this amendment as replacing this very tough rule 37 in the context of class actions. The amendment only requires admissions. Rule 37 authorizes a court to impose much more serious penalties. Thus, this amendment likely would substantially weaken existing law in addressing and correcting discovery abuses in the context of class actions. Rule 37 is a preferable approach to discovery abuse issues because it awards various levels of sanctions that may be imposed depending upon the seriousness of discovery abuse. Not every document destruction or withholding situation is the same, and rule 37 allows courts to impose even stronger sanctions than this amendment, if the circumstances warrant. The chairman of the Committee on the Judiciary is exactly right. If we allow a person making an allegation and then demanding a production of documents to be deemed to have proven their point; that whatever they allege was in those documents to have been what that party alleged, a serious misjustice will occur and abuses will crop up all throughout our legal system. This is a bad approach and I urge my colleagues to oppose it.

Mr. GOODLATTE. Mr. Chairman, reclaiming my time, there are a multitude of Federal Rules of Civil Procedure, and I do not know of other ones, in which the law says in advance that because somebody did something else somewhere else unrelated to the issue of whether the case belongs in Federal court or State court would be prohibited from raising that issue. It is a matter of fairness for everybody involved, but that is particularly true of the plaintiffs. We are trying to create an environment here where cases can be heard in such a way that uniform fairness applies. If we start drawing distinctions between domestic corporations and foreign corporations and somebody who may have shredded documents for a good reason or for a bad reason and deciding whether or not they can remove cases to court, that is simply bad public policy and should not be the measure upon which this bill is voted upon; and certainly this amendment should be opposed.

Mr. GOODLATTE. Mr. Chairman, I thank the gentleman for yielding me this time. I would say to the gentleman from Texas that he has mischaracterized this legislation. This legislation creates the kind of choice that he is talking about, because right now if a plaintiff or a defendant wants to have these cases heard in Federal court, they cannot be heard in Federal court simply because of a Federal rule, even though these are the most complex cases in the country. As to the case load, more than 12 percent of our Federal judges are awaiting appointment in the other body right now. Help us get our colleagues in the Senate to appoint President Bush's nominees, and we will easily have the ability to handle these cases in the jurisdiction that was actually created in our Constitution in article 3 for the very purpose of handling diversity cases, disputes among folks from many different States. It is wrong to allow the current system to persist where the plaintiffs' attorney can choose from more than 4,000 jurisdictions in the country, and whatever judge they know is the most favored judge gets the case; and then nobody has the option to have it heard in a fair and neutral court. That is what this legislation is all about.