Bob Goodlatte

Mr. GOODLATTE

Mr. GOODLATTE. Madam Chairman, I thank the gentleman from California (Mr. Herger) for yielding. Madam Chairman, the last speaker on the other side raised the administration's position on this, and I think it is important to find out exactly where the administration is. The administration has been AWOL on this issue from the beginning. The administration continues to maintain the Sierra Club/Wilderness Society position of decoupling or nothing, and when the gentleman says we should not have to cut trees in order to fund schools, what the gentleman is overlooking is that this bill moves in the direction of assuring that the schools get the funds no matter what level of timber harvesting takes place but it continues to maintain that connection not just for timber harvesting.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I thank the gentleman for yielding me this time, and I rise in strong support of this resolution and to congratulate my colleague, the gentleman from California (Mr. Cox), for introducing it. This important resolution would direct the U.S. representatives to the upcoming World Trade Organization summit in Seattle, Washington, to advocate making the moratorium on Internet taxation that was adopted at the 1998 WTO conference a permanent Internet tax moratorium. Mr. Speaker, I worked closely with the gentleman from California to move legislation through the House in 1998 that placed a moratorium on new taxes on the Internet. This important legislation set the standard for other nations around the world to follow. As a result, the Internet remains relatively free from the burdens of special and new taxes, and we must continue to put pressure on our fellow nations that would seek to tap this booming economic resource and destroy much of its momentum. Mr. Speaker, we cannot stand by and assume that the rest of the world holds the same distaste for taxing the Internet. That is why we must continue to work actively through measures such as this one to keep the Internet free from new taxes. This includes monitoring the ongoing deliberations of the commission set up by the Internet Tax Freedom Act passed by Congress in 1998. This commission, chaired by the governor of my home State of Virginia, Jim Gilmore, will hopefully return to Congress next year with recommendations to retain the no-new-tax policy that has made this medium so successful. In the meantime, Mr. Speaker, we must send a message to our fellow nations gathering in Seattle next month that to permit taxation of the Internet is to infect it with a virus that will slowly sap its strength, weakening and ultimately destroying the extraordinary growth that has revolutionized the way we live, work, and learn. I urge my colleagues to support this important resolution.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I rise today to introduce the Internet Gambling Prohibition Act of 1999, along with my colleagues, Representative Frank LoBiondo, Representative Frank Wolf, Representative Rick Boucher, Representative Jim Gibbons, and Representative Virgil Goode. I look forward to working with my colleagues from both sides of the aisle to see this legislation signed into law. I would also like to thank my friend in the other Chamber, Senator Jon Kyl for his leadership on this issue. The legislation that Mr. LoBiondo and I are introducing today is similar to legislation which Representative LoBiondo, and I introduced in the last Congress. I am also looking forward to working with Senator Kyl, who has introduced similar legislation in the Senate. The Internet is a revolutionary tool that dramatically affects the way we communicate, conduct business, and access information. As it knows no boundaries, the Internet is accessed by folks in rural and urban areas alike, in large countries as well as small. The Internet is currently expanding by leaps and bounds; however, it has not yet come close to reaching its true potential as a medium for commerce and communication. One of the main reasons that the Internet has not reached this potential is that many folks view it as a wild frontier, with no safeguards to protect children and no legal infrastructure to prevent online criminal activity. The ability of the world wide web to penetrate every home and community across the globe has both positive and negative implications--while it can be an invaluable source of information and means of communication, it can also override community values and standards, subjecting them to whatever may or may not be found online. In short, the Internet is a challenge to the sovereignty of civilized communities, States, and nations to decide what is appropriate and decent behavior. Gambling is an excellent example of this situation. It is illegal unless regulated by the States. With the development of the Internet, however, prohibitions and regulations governing gambling have been turned on their head. No longer do people have to leave the comfort of their homes and make the affirmative decision to travel to a casino-- they can access the casino from their living rooms. The legislation I am introducing today will protect the right of citizens in each State to decide through their State legislatures if they want to allow gambling within their borders and not have that right taken away by offshore, fly-by-night operators. The Internet Gambling Prohibition Act gives law enforcement the tools it needs to crack down on illegal Internet gambling operations by accomplishing two main goals: first, providing that anyone convicted of running an Internet gambling business is liable for a substantial fine and up to 4 years in prison; and second, giving law enforcement the ability to request cessation of service to web sites engaging in illegal gambling, with enforcement by court order if necessary. Additionally, the bill requires the Attorney General to submit a report to Congress on the effectiveness of its provisions. It is also important to note that this legislation does not preempt any State laws, does not cover online new reporting about gambling, and does not apply to wagering over non-Internet closed networks in States that allow such activity. The bill simply brings the current prohibition against interstate gambling up to speed with the development of new technology, as the Internet had not been created when the original law was passed and thus is no covered by it. Mr. Speaker, online gambling is currently a $200 million per year business, and could easily grow to a $1 billion business in the next few years. It is time to shine a bright light on Internet gambling in this country, and to put a stop to this situation before it gets any worse. The Internet Gambling Prohibition Act, which will keep children from borrowing the family credit card, logging on to the family computer, and losing thousands of dollars all before their parents get home from work, will do just that. I urge each of my colleagues to support the Internet Gambling Prohibition Act of 1999.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Chairman, I thank the chairman for yielding me this time, I commend the gentleman from South Carolina for his authorship of this very important legislation, and I rise in support of the gentleman's legislation and in opposition to the substitute. I am proud to cosponsor the Unborn Victims of Violence Act, which promotes justice by holding violent criminals accountable for their conduct. It is unthinkable that under current Federal law an individual who commits a Federal crime of violence against a pregnant woman receives no additional punishment for killing or injuring the woman's unborn child during the commission of the crime. Where is the justice when a criminal can inflict harm upon a woman, even with the express purpose of harming her unborn child, and not be held accountable for those actions? Approximately half of the States, including my home State of Virginia, have seen the wisdom in holding criminals accountable for their actions by making violent criminals liable for conduct that harms or kills an unborn baby. Unfortunately, our Federal statutes provide a gap in the law that usually allows the criminal to walk away with little more than a slap on the wrist. Criminals are held more liable for damage done to property than for the intentional harm done to an unborn child. This discrepancy in the law is appalling and must be corrected. Regardless of whether we are pro-choice or pro-life, those of us who are parents can identify with the hope that accompanies the impending birth of a child. No law passed by Congress could ever heal the devastation created by the loss of a child or replace a child lost to violence. However, we can ensure that justice is done by making the criminals who take the life of an unborn child pay for their actions. When a mother is bringing a life into this world and that life is cut short by a violent criminal, that criminal should be held accountable under the law. Justice demands it and so should we. I urge my colleagues to join me in voting for the Unborn Victims of Violence Act, and I commend my colleagues for their efforts in this matter.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Chairman, I yield 4 minutes to the gentleman from Virginia (Mr. Davis). (Mr. DAVIS of Virginia asked and was given permission to revise and extend his remarks.)

Mr. GOODLATTE. Mr. Chairman, I ask unanimous consent that the committee amendment in the nature of a substitute be printed in the Record and open to amendment at any point.

Mr. GOODLATTE. Mr. Chairman, in that regard, it is my pleasure to yield 2 minutes to the gentleman from Alabama (Mr. Cramer), yet another Member from the other side.

Mr. GOODLATTE. Mr. Chairman, I yield myself 1 minute to respond to a couple of points. First of all, the President has not indicated that he intends to veto this legislation. There have been communications from his representatives that they might recommend that to him, but that is not the same thing as a veto threat. Secondly, I would point out to my colleague from Michigan that while the diversity amount, the amount in controversy was raised from $50,000 to $75,000 by the Federal judiciary, the purpose of that is to screen out small lawsuits from going into Federal court. But that is not the case here at all. This is about bringing large lawsuits to Federal court. The legislation requires a minimum of $1 million in controversy to bring a diversity case class action into Federal court, so we eliminate the anomaly of a situation where somebody with a $75,000 claim can get into Federal court, but somebody who has a class action suit with 100,000 plaintiffs and an amount in controversy of $10,000 each, or a $1 billion claim, cannot get into Federal court today because they do not meet that diversity requirement. This changes that discrepancy in the law and allows big, diverse cases to come into Federal court.

Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, 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 litigation pending in our legal system. Mr. Chairman, 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 go otherwise unaddressed because the cost to the individuals suing could far exceed the benefit to the individual. However, class actions have been used with an increasing frequency and 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 class 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. 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 which broadly apply class certification rules encourages plaintiffs to forum shop for the court which is most likely to certify a purported class. In addition to forum shopping, parties frequently exploit major loopholes in the 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 right 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, these 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 make 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 counsel 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 involving minimal diversity. That is when any plaintiff and any defendant are citizens of different States to be brought in or removed to Federal court. Article 3 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 plaintiff 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 minimum required by the statute. 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. However, if a class of 25 million product owners, each having a claim of $10,000 living in all 50 States, brings claims collectively worth $250 billion against the manufacturer, the lawsuit cannot be heard in Federal 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 the State court. This legislation does not limit the ability of anyone to file a class action lawsuit. It does not change anybody's rights to recovery. Our bill specifically provides that it will not alter the substantive law governing any claims as to which jurisdiction is conferred. 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. That 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. Chairman, I reserve the balance of my time.

Mr. GOODLATTE. Mr. Chairman, I yield 5 minutes to the gentleman from Virginia (Mr. Moran), another of our lead cosponsors on this legislation.

Mr. GOODLATTE. Mr. Chairman, I yield myself the remaining time. Mr. Chairman, this is very good legislation that serves very good practical purposes, and let me point out two of them. First of all, it ends the abuse of nationwide forum shopping to find the one judge in the one court in the one State that thinks that anything goes with regard to class actions. We have seen those abuses. The gentleman from Alabama (Mr. Cramer) cited the fact that his State has seen class action abuse in the past. There are 4,700 different court jurisdictions in this country. When one has a class action, it is unlike a case where an individual might have two or three different jurisdictions where they can bring their own personal injury suit or contract action. In a nationwide class action suit, they can often choose from all 4,700 different jurisdictions. They should not have the opportunity to do that. There should be more standardized procedures, and we accomplish that by allowing the removal of truly nationwide class action suits to Federal court. Secondly, the most diverse cases in this country involving millions and even billions of dollars are currently unable to be brought in the court that can best handle them, the Federal courts. This legislation cures this. Mr. Chairman, I urge my colleagues to support this legislation and oppose the amendments.

Mr. GOODLATTE. Mr. Chairman, I yield 5 minutes to the gentleman from Tennessee (Mr. Bryant), another lead cosponsor of the legislation.

Mr. GOODLATTE. Mr. Chairman, I yield 5 minutes to the gentleman from Virginia (Mr. Boucher), one of the lead cosponsors of this legislation, a member of the Committee on the Judiciary and my friend. (Mr. BOUCHER asked and was given permission to revise and extend his remarks.)

Mr. GOODLATTE. No, Mr. Chairman. Reclaiming my time, I must say that I do not want to inject us into that dispute going on between the Senate and the President for this legislation or any other legislation we have on the floor. This legislation should stand on its own merits, and it does. One of the concerns addressed is that somehow we are overloading the Federal judiciary. But let me point out that the concern fails to look at our judicial system as a whole. One of the reasons we need this bill is that many of our State courts are not equipped to deal with these massive complicated class action cases. Indeed, many State courts have crushing case loads and far less staffing, such as magistrate judges and law clerks and other staff, available to manage such cases. Civil filings in State courts of general jurisdiction have increased 28 percent since 1984 versus only 4 percent increase in our Federal courts. By barring interstate class actions from Federal court one is not solving any problem. One is just keeping these cases before courts that cannot deal with them effectively and fairly. This concern also ignores the fact that the number of diversity jurisdiction cases being filed in Federal court is going down dramatically. During the 12-month period ending March 31, 1998, diversity jurisdiction case filings in Federal courts fell 6 percent. Through the end of 1998, the decrease is even more dramatic. This concern also ignores the fact that, since 1990, the number of Federal district court judgeships that Congress has authorized to deal with the workload has increased 12.3 percent to 646 judgeships and that the number of senior judges with staff who are now assisting with the case load is up 64 percent, now 276 judges since 1985. This concern also fails to take account of the fact that this bill actually has the potential to reduce judicial workload. At present, when identical class actions are filed in Federal and State courts all over the country, as often occurs, there is no mechanism for consolidating those cases before one judge for efficient uniform treatment. So numerous different judges are dealing with the same cases, processing the same issues, and all dealing with the same problems. However, if these cases were in Federal court, all of those cases would be consolidated before one judge who could deal with the issues once and be done with it. The opponents' arguments also do not take account of the fact that many completely frivolous lawsuits are being filed because attorneys know they can get away with it before certain State courts. I doubt that many of these wasteful suits would be filed if the attorneys know that they will be facing a Federal district court judge. Finally, I note that this amendment effectively states that we will let interstate class actions into Federal court if they have the time. That is horrible policy. What we are talking about here is a right conferred to those engaged in interstate commerce by Article III of the Constitution to have access to our Federal courts to avoid the biases that might be encountered in State courts. When it comes to criminal rights issues, we do not say to defendants they can have them if the court has time. When it comes to civil rights cases, we do not say that plaintiffs can have access to Federal courts if they have time. Why should this be any different? Mr. Chairman, I urge opposition to this amendment.

Mr. GOODLATTE. I am delighted to yield to the gentlewoman from California.

Mr. GOODLATTE. Mr. Chairman, I rise in opposition to the amendment. Mr. Chairman, I must say to the gentlewoman from California (Ms. Waters) the reason I was smiling is because, to state it kindly, this amendment is sort of a sneak attack on the bill, because it has the effect of gutting the bill. What her amendment provides for is the bill does not go into effect until the Federal court vacancies are below 3 percent. Well, guess what? In the last 15 years, the Federal court vacancies have never been below 3 percent, including a number of instances where there have been Democratically controlled U.S. Senates and Republican Presidents. So I do not think we should inject ourselves into that debate going on over in the Senate. In fact, the time that the vacancy rate was the highest was just before when President Bush went out in 1991. Instead of the over 8 percent vacancy rate that the gentlewoman cited that exists today, the vacancy rate in 1991 was 16.4 percent. So there is no doubt that the purpose of this amendment is simply to defeat the legislation; and, therefore, I strongly oppose it.

Mr. GOODLATTE. I thank the gentleman for yielding, Mr. Chairman. Would it not be possible that both facts are true; that in some States the certification process is different than the standards followed in the Federal courts and followed by most of the other States, and it could also be true that in some States some judges do not follow standards that are loosely applied?

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

Mr. GOODLATTE. Mr. Chairman, even after the case is dismissed in Federal court, it can be refiled in State court. After the class certification fails, it would not preclude the plaintiff from offering additional class proposals. They just cannot go back in with the same class proposal, because that class has not been certified in Federal court. Suggestions that H.R. 1875 would federalize all class action rules ignore the current situation, and it ignores the situation that I referred to earlier. It has been suggested that this amendment would prevent H.R. 1875 from federalizing class action rules. In reality, the amendment would perpetuate the federalization of class action rules that is occurring now. At present, a handful of State courts dictate Federal class action policy. By taking an ``anything goes'' approach to class actions, those few State courts have become a magnet for class actions. Such courts hear a disproportionate number of multi-State and nationwide class actions because they are very lax about what they will certify for class treatment. Passing this bill will standardize the process and make sure that no one State court drives the policy. Oppose this amendment and support the bill.

Mr. GOODLATTE. Mr. Chairman, again reclaiming my time, all I am saying to the gentleman is that we should not allow anybody to have two bites of the apple, and that is what the gentleman's amendment provides for. The amendment would create enormous inefficiencies and a parade of abuses. In particular, if a defendant fights to defeat class certification and wins in Federal court, it will have to turn around and mount the fight all over again. The amendment is premised on the false assumption that class proponents will not get a full opportunity to obtain class certification under the current bill. They will. As presently drafted, the legislation will allow litigants multiple chances to obtain certification of proposed classes after removal to Federal court. If the first class proposal in a removed action fails, nothing in this bill precludes the class representatives from making revised class proposals to the Federal court.

Mr. GOODLATTE. Mr. Chairman, reclaiming my time, the legislation does not make any distinction between the wisdom of State court judges in general or Federal court judges in general; it says that State court judges should not be determining the law of other States.

Mr. GOODLATTE. I yield to the gentleman from Massachusetts.

Mr. GOODLATTE. Mr. Chairman, I rise in opposition to the amendment. Mr. Chairman, this amendment would defeat the whole purpose of H.R. 1875. I must strongly disagree with the gentleman from Massachusetts (Mr. Frank), with regard to the issue of States' rights. It is not a States' rights issue to allow one State court judge to determine the law in 20 or 30 or 40 other States, and that is what happens now when nationwide class-action lawsuits with tens or hundreds of thousands of plaintiffs cannot be removed to Federal court because of this flaw that has existed in our diversity rules that says that a $75,000 slip and fall involving parties between two States can be removed to Federal court, but a multimillion dollar or multibillion dollar lawsuit involving tens of thousands of parties cannot be removed to Federal court. To allow one State court judge in one county in one State to determine the laws of a multitude of other States; to allow a judge in the State of Alabama to interpret the laws of New York and New Jersey and Pennsylvania and California and Texas is wrong, and that is what this bill is designed to do. If the gentleman's amendment passes, the effect will be to say, once the matter is removed to Federal court, if the Federal court does not believe that the legislation constitutes a class action and refuses to certify it as a class action, then it would go right back to the State court and they could proceed with their lawsuit just as if nothing had ever happened. It would defeat the entire purpose of eliminating forum shopping and it would defeat the entire purpose of making sure that State court judges do not interpret the laws of a multitude of other States. The whole purpose is to allow the removal of more interstate class actions to Federal courts where they are most appropriately heard. This amendment would make that change worthless. The amendment would constitute a full endorsement, not a correction, of the rampant class-action abuse that is occurring in State courts. When a Federal court denies class certification in a case, it is typically because litigating the case on a class basis would likely result in a denial of a class member's or a defendant's due process rights or basic fairness principles. This amendment would invite State courts to overrule such Federal court determinations; it would invite State courts to advance class actions that a Federal court has determined would deny due process rights or be unfair to unnamed class members. The amendment is based on the myth that most States have class-action rules radically different from the Federal class-action rule, and that if a Federal judge judges that a class case may not proceed as a class action under the Federal rule, counsel should be able to take their case back to State court and try their luck under the State rule. In reality, the vast majority of States have class action rules that track the Federal court class-action rule, or have held that the Federal court precedence should guide State courts in making class certification determinations. The problem is that when the rules are largely the same, local judges in many States do not rigorously follow these rules, and their misguided class certification determinations are not readily subject to proper review.

Mr. GOODLATTE. Mr. Chairman, I thank the gentleman from Virginia (Mr. Boucher) for yielding. Mr. Chairman, I want to commend the gentleman from Virginia (Mr. Boucher) for what I think is a very appropriate secondary amendment to the amendment of the gentleman from North Carolina (Mr. Watt), and commend both gentlemen for working this out. We can certainly accept this amendment, and we urge our colleagues to vote for it.

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 and to include extraneous material on H.R. 1875, the bill to be considered in the Committee on the Whole shortly.