Bob Goodlatte

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I ask unanimous consent that the Committee on the Judiciary be discharged from further consideration of the bill (S. 305) to amend title 4, United States Code, to encourage the display of the flag of the United States on National Vietnam War Veterans Day, and ask for its immediate consideration in the House.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, the McCarran-Ferguson Act was originally passed to leave the regulation of the business of insurance with the States and to allow insurers to engage in certain procompetitive collaborative activities. This legislation limits significant uncertainty and unnecessary litigation that would likely result from a broader McCarran-Ferguson repeal through the use of safe harbors for such historically procompetitive collaborative activities, specifically the collection and distribution of historical loss data, the determination of loss development factors, the performance of actuarial services that do not involve restraints of trade, and the use of common forms that are not coercive. Absent these safeguards, insurers will likely disengage from certain proconsumer collaborative activities, eliminating or impeding smaller insurers from competing and disincentivizing larger insurers from exploring new products and markets. This will lead to further market consolidation and fewer product choices, the impact of which will eventually be borne by the consumer. These narrow safe harbors create a presumption that certain procompetitive activities can continue while maintaining regulation and oversight to the extent any activity crosses over into a restraint of trade. As a result, insurers can continue to engage in proconsumer business practices, and will be encouraged to provide a diverse range of offerings at fair and reasonable prices. There is no reason to make an exception to these safe harbors. Therefore, I oppose the motion. I urge my colleagues to reject this motion to recommit and to support the underlying bill. Mr. Speaker, I yield back the balance of my time.

Mr. GOODLATTE. Mr. Speaker, I yield back the balance of my time.

Mr. GOODLATTE. Mr. Speaker, I claim the time in opposition to the motion.

Mr. GOODLATTE. Mr. Speaker, pursuant to House Resolution 209, I call up the bill (H.R. 372) to restore the application of the Federal antitrust laws to the business of health insurance to protect competition and consumers, and ask for its immediate consideration.

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 include extraneous materials on H.R. 372.

Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today in support of a bill that will move us a step closer towards restoring healthy competition in the health insurance industry. Today, the health insurance industry is besieged by dwindling competition and skyrocketing premiums. Insurance providers, States, and the public have been dealing with the disastrous repercussions of ObamaCare for the past 6 years and overregulation by States for much longer. Congress finally has the opportunity to pass legislation to reverse the downward spiral of our health insurance industry. Any such legislation must encourage a robust and competitive health insurance market in which insurance providers actively compete for customers. Healthy competition ensures premiums are accurately priced and that customers are able to find a variety of policies to meet their specific needs and demands. H.R. 372, the Competitive Health Insurance Reform Act of 2017, represents a step on that journey, repealing the McCarran-Ferguson Act as it applies to the business of health insurance. There is wide support for this bill, and the Judiciary Committee has favorably reported similar legislation in the past, including legislation that was passed by the House, 406-19 during the 111th Congress. The stated goal of the bill is to help restore competition in the healthcare market. I support this goal and firmly believe this bill must be coupled with larger changes to the existing Federal and State healthcare regulatory schemes. As Speaker Ryan has noted, States ``should be empowered to make the right tradeoffs between consumer protections and individual choice, not regulators in Washington.'' This bill does not impact the State's ability to regulate the insurance market. Rather, this legislation levels the playing field for all healthcare industry participants. While insurers have been exempt from Federal antitrust laws for the past 70 years, healthcare providers and other participants have not. This bill removes this exemption, ensuring that health insurers are better able to compete to provide quality coverage, thereby benefiting hospitals, doctors, and, most importantly, patients. In addition, if separate legislation is passed to allow for the more open sale of health insurance across State lines, the Competitive Health Insurance Reform Act will allow uniform Federal antitrust laws to be applied across the marketplace while allowing States to maintain authority as the primary regulators of the health insurance market outside of the antitrust sphere. The McCarran-Ferguson Act was originally passed to leave the regulation of the business of insurance with the States and to allow insurers to engage in certain procompetitive collaborative activities. This legislation limits significant uncertainty and unnecessary litigation that would likely result from a broader McCarran-Ferguson repeal, through the use of safe harbors for such historically procompetitive collaborative activities, specifically the collection and distribution of historical loss data, the determination of loss development factors, the performance of actuarial services that do not involve restraints of trade, and the use of common forms that are not coercive. Absent these safeguards, insurers will likely disengage from certain proconsumer collaborative activities, eliminating or impeding smaller insurers from competing and disincentivizing larger insurers from exploring new products and markets. This will lead to further market consolidation and fewer product choices, the impact of which will eventually be borne by the consumer. These narrow safe harbors create a presumption that certain procompetitive activities can continue while maintaining regulation and oversight to the extent any activity crosses over into a restraint of trade. As a result, insurers can continue to engage in proconsumer business practices and will be encouraged to provide a diverse range of offerings at fair and reasonable prices. I thank Mr. Gosar for introducing this legislation, and I urge all of my colleagues to vote for the Competitive Health Insurance Reform Act. Mr. Speaker, I reserve the balance of my time.

Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may consume. Our health insurance industry is in a dire situation. Premiums and deductibles are skyrocketing, hundreds of percent in some cases. In the State of the gentleman who is the chief sponsor of this bill, the State of Arizona, there has been a more than 100 percent increase in just the last year. In 2017, the national State average of insurers participating in Federal exchanges dropped to four, down from six the previous year. Five States will only have one insurer providing plans on their Federal exchanges this year. It is time to reverse this trend. The Competitive Health Insurance Reform Act is an important step in restoring competition to the health insurance industry and will help to set the foundation for additional essential reforms that must follow. I say to the gentleman from Michigan (Mr. Conyers), the ranking member of the committee and my friend, I appreciate very much working with him on this legislation, but I would also say to him that this legislation, as bipartisan as it is, cannot save the Affordable Care Act. It is drowning. It is denying people coverage. Its costs are going up so much that somebody who likes it this year will not be able to afford it next year. The promise that if you like your health insurance you will be able to keep it was never true, and it is still not true with ObamaCare. The promise that if you like your doctor you can keep your doctor was never true. The promise that health insurance premiums would go down under ObamaCare has been proven to be totally false. Instead, what we have done is we have denied the American people the right to choose for themselves what access to health care that they need and can afford. We have denied the American people the freedom to decide whether or not they want to purchase a product that is mandated upon them by the Federal Government. That is wrong. It has got to change. That is why we are taking action this week--including the Competitive Health Insurance Reform Act, but certainly not only the Competitive Health Insurance Reform Act--to return a patient-centered healthcare system to the American people, one that reconnects them with their healthcare providers, one that will make sure that they have the maximum amount of choice and the maximum amount of access to real, affordable health insurance and quality health care in America. I support this bipartisan legislation. I urge my colleagues to do the same. Mr. Speaker, I include in the Record three letters in support of H.R. 372. Small Business & Entrepreneurship Council, Vienna, VA, February 27, 2017. Hon. Paul A. Gosar, House of Representatives, Washington, DC. Dear Representative Gosar: The Small Business & Entrepreneurship Council (SHE Council) and our nationwide membership of small business owners and entrepreneurs support the ``Competitive Health Insurance Reform Act of 2017'' (H.R. 372). Perhaps more than any other group, small business owners understand the need for increased competition in the health insurance marketplace. Indeed, it is the actions of entrepreneurs that bring down costs, enhance innovation, and boost quality in a competitive marketplace. H.R. 372 is a common sense and long-overdue step to repeal special-interest exemptions to federal antitrust laws for health insurance companies. These exemptions have existed for more than 70 years, and were initially instituted to help newly formed insurance companies deal with data sharing. Given the dramatic changes in the industry over these past many decades, such special- interest treatment is no longer warranted. Considering the government-imposed distortions within the health care industry as a result of the Affordable Care Act and other regulatory restrictions, full-blown review and reform of health care policies focused on expanding competition, and consumer choice are needed. That includes foundational changes, such as, in the case of H.R. 372, removing special-interest treatment that could reduce or retrain competition. In order to bring down health insurance costs and utilize the models and technologies of our modern economy to drive value and innovation within this sector, entrepreneurs need a system that allows for such freedom and creativity. Your bill is an important step in bringing down artificial barriers that are preventing much needed innovation and competition. Thank you for your leadership on this important issue. Please let SBE Council know how we can help you advance H.R. 372 into law. Sincerely, Karen Kerrigan, President & CEO.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I will be brief. Proponents of the motion to recommit want to allow lawsuits with no basis in law or fact to proceed without penalty in the area covered by their motion. Let that sink in for a moment--and just a brief moment. The proponents of the motion to recommit support certain lawsuits that apparently have no basis in law or fact. Otherwise, they have no relevance to this bill. If they are relevant motions, they won't have to worry about it. They want those frivolous lawsuits to proceed without penalty. Every time a judge decides a company made a defective product that ended up hurting people, damages are awarded. When a lawyer makes up a lawsuit that has no basis in law or fact, that lawsuit is a defective product. The victims harmed by that defective product should be compensated just like everyone else. Oppose this motion to recommit, pass the base bill, and let's show America where we stand on frivolous lawsuits and on the compensation rightfully owed to the victims of frivolous lawsuits. Mr. Speaker, I yield back the balance of my time.

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

Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may consume. H.R. 720, the Lawsuit Abuse Reduction Act, would restore mandatory sanctions for frivolous lawsuits filed in Federal court. Many Americans may not realize it, but today, under what is called rule 11 of the Federal Rules of Civil Procedure, there is no requirement that those who file frivolous lawsuits pay for the unjustified legal costs they impose on their victims, even when those victims prove to a judge the lawsuit was without any basis in law or fact. As a result, the current rule 11 goes largely unenforced because the victims of frivolous lawsuits have little incentive to pursue additional litigation to have the case declared frivolous when there is no guarantee of compensation at the end of the day. H.R. 720 would finally provide light at the end of the tunnel for the victims of frivolous lawsuits by requiring sanctions against the filers of frivolous lawsuits, sanctions which include paying back victims for the full cost of their reasonable expenses incurred as a direct result of the rule 11 violation, including attorneys' fees. The bill also strikes the current provisions in rule 11 that allow lawyers to avoid sanctions for making frivolous claims and demands by simply withdrawing them within 21 days. This change eliminates the ``free pass'' lawyers now have to file frivolous lawsuits in Federal court. The current lack of mandatory sanctions leads to the regular filing of lawsuits that are baseless. So many frivolous pleadings currently go under the radar because the lack of mandatory sanctions for frivolous filings forces victims of frivolous lawsuits to roll over and settle the case, because doing that is less expensive than litigating the case to a victory in court. Correspondence written by someone filing a frivolous lawsuit, which became public, concisely illustrates how the current lack of mandatory sanctions for filing frivolous lawsuits leads to legal extortion. That correspondence to the victim of a frivolous lawsuit states: ``I really don't care what the law allows you to do. It's a more practical issue. Do you want to send your attorney a check every month indefinitely as I continue to pursue this?'' Under the Lawsuit Abuse Reduction Act, those who file frivolous lawsuits would no longer be able to get off scot-free and, therefore, they couldn't get away with those sorts of extortionary threats any longer. The victims of lawsuit abuse are not just those who are actually sued. Rather, we all suffer under a system in which innocent Americans everywhere live under the constant fear of a potentially bankrupting frivolous lawsuit. As the former chairman of The Home Depot company has written: ``An unpredictable legal system casts a shadow over every plan and investment. It is devastating for startups. The cost of even one ill- timed abusive lawsuit can bankrupt a growing company and cost hundreds of thousands of jobs.'' The prevalence of frivolous lawsuits in America is reflected in the absurd warning labels companies must place on their products to limit their exposure to frivolous claims. A 5-inch brass fishing lure with three hooks is labeled ``Harmful if swallowed.'' A household iron contains the warning ``Never iron clothes while they are being worn.'' A piece of ovenware warns, ``Ovenware will get hot when used in oven.'' And here are just a couple of examples of frivolous lawsuits brought in Federal court, where judges failed to award compensation to the victims: A man sued a television network for $2.5 million because he said a show it aired raised his blood pressure. When the network publicized his frivolous lawsuit, he demanded the court make them stop. Although the court found the case frivolous, not only did it not compensate the victim, it granted the man who filed the frivolous lawsuit an exemption from even paying the ordinary court filing fees. In another case, lawyers filed a case against a parent, claiming the parent's discipline of their child violated the Eighth Amendment of the Constitution, which prohibits cruel and unusual punishment by the government, not private citizens. One of the lawyers even admitted signing the complaint without reading it. The court found the case frivolous, but awarded the victim only about a quarter of its legal costs because rule 11 currently doesn't require that a victim's legal costs be paid in full. The Lawsuit Abuse Reduction Act would change that. I thank the former chairman of the Judiciary Committee, Lamar Smith, for introducing this simple, commonsense legislation that would do so much to prevent lawsuit abuse and restore Americans' confidence in the legal system. I urge my colleagues to support it today. Mr. Chairman, I reserve the balance of my time.

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 include extraneous materials on H.R. 720.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, this amendment should be rejected. The discovery process--the pretrial process in a lawsuit in which trial lawyers demand documents and other things from the people they are suing-- imposes huge costs on defendants, particularly because of the astronomical costs associated with the discovery of electronic information, such as emails. Law Technology News has reported that the total cost of electronic discovery rose from $2 billion in 2006 to $2.8 billion in 2009 and estimated that the total cost would rise 10 to 15 percent annually over the next few years. In a more recent case study of Fortune 500 companies, the RAND Institute found that the median total cost for electronic discovery among participants totaled $1.8 million per case. These costs are asymmetric. While defendants typically are subject to gigantic discovery costs, because they are large organizations possessing large amounts of data, plaintiffs have little information in their possession, and, therefore, are subject to a very small financial burden during the discovery process. Moreover, discovery conducted before a motion to dismiss is decided is unfair. Why should defendants bear the burden of paying for discovery before a complaint is held legally sufficient, especially when the threat of huge costs may coerce an unjustified settlement? The reality for most civil litigation is that the defendants' obligation to bear these exorbitant discovery costs incentivizes plaintiffs to serve burdensome discovery requests on defendants with zero downside risk to themselves. As professor Martin Redish has explained: ``The fact that a party's opponents will have to bear the financial burden of preparing the discovery response actually gives litigants an incentive to make discovery requests, and the bigger expense to be borne by the opponent, the bigger incentive to make the request.'' Because defendants seek to avoid these exorbitant costs, discovery is all too often used as a weapon to coerce settlement of claims regardless of their merit. Even the Supreme Court has recognized this problem, lamenting that the threat of discovery expense will push cost-conscious defendants to settle even anemic cases before reaching trial. For example, assume that a defendant moves to dismiss a class action because it doesn't assert any valid claims. Under current law, the named plaintiff can serve massive discovery requests that force defendants to spend $10 million to collect the requested documents. A rational decision for that defendant is to settle the case for millions, even if 4 months later the court grants the motion to dismiss, finding the class claims to be totally without merit. That is because, without a stay in discovery, the defendants will, in the meantime, have been required to spend all or part of the $10 million costs complying with the discovery requests for, it turns out, no legitimate reason. Trial lawyers pursue discovery in this circumstance primarily in an effort to pressure the defendant to settle invalid claims. The subsection of the bill entitled ``Stay of discovery'' would stop the use of discovery to coerce unjustified settlements by requiring Federal courts to stay discovery pending resolution of rule 12 motions--that is, motions to dismiss for failure to state a claim-- motions to strike class allegations, motions to transfer, and other motions that would dispose of class allegations unless the court finds that particularized discovery is necessary to preserve evidence or to prevent undue prejudice to a party. Mr. Chairman, this amendment should be defeated, and I reserve the balance of my time.

Mr. GOODLATTE. Mr. Chairman, I would just say to the gentleman that there is nothing in this bill that would restrict access to class actions based upon fraud claims. And in fact, this bill is designed to maximize the recovery for those fraud victims, rather than lining the pockets of attorneys. Mr. Chairman, I urge my colleagues to oppose the amendment, and I yield back the balance of my time.

Mr. GOODLATTE. Mr. Speaker, the base bill contains provisions that allow all claims to go forward as class actions and also maximize awards to deserving victims. Why would anyone want to single out safe drinking water victims for adverse treatment and deny them the benefits of the base bill that would maximize any recovery they might receive in a class action? This motion to recommit would do that, and it should be defeated. In closing, let me say that we know that only the tiniest fraction of consumer class action members ever bother to claim the compensation awarded them in a settlement. That is clear proof that the vast majority--the vast large numbers of class members are satisfied with the product they purchased. They don't want compensation. They don't want to be lumped into gigantic class action lawsuits. Federal judges are crying out for the Congress to reform the class action system, which currently allows trial lawyers to file classes with hundreds and thousands of unmeritorious claims and use those artificially inflated classes to force defendants to settle the case. As I have recounted, some class action settlements have left lawyers with millions in fees while the alleged victims receive absolutely nothing. This bill prevents people from being forced into class actions with other uninjured or minimally injured members, only to have the compensation of injured parties reduced. It requires that lawyer fees be limited to a reasonable percentage of the money injured victims actually receive. I urge my colleagues to join me in opposing this motion to recommit and supporting this bill on behalf of the consumers and injured parties everywhere. Mr. Speaker, I yield back the balance of my time.

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

Mr. GOODLATTE. Mr. Chairman, with great deference and respect to my friend and colleague, the ranking member, this amendment would subject certain class members to unfair treatment and, thus, should be rejected. First, the bill's provisions on type and scope of injury only apply to proposed classes ``seeking monetary relief for personal injury or economic loss.'' Insofar as civil rights cases do not seek money damages, they are completely unaffected by the bill and would proceed just as they do today. However, if money damages are sought by a proposed class, then, of course, they should be subject to the procedures in the bill. The purpose of a class action is to provide a fair means of evaluating like claims, not to provide a means of artificially inflating the size of a class to extort a larger settlement value. Exempting a subset of money damage cases from the bill, as this amendment would do, would serve only to incentivize the creation of artificially large classes to extort larger and unfair settlements from innocent parties for the purpose of disproportionately awarding uninjured parties. Any claims seeking monetary relief for personal injury or economic loss should be grouped in classes in which those who are the most injured receive the most compensation. Why should civil rights claimants seeking money damages be subject to particularly unfair treatment by being allowed to be forced into a class action with other uninjured or minimally injured members, only to see their own compensation reduced? That does a disservice to those claimants. Yes, that is exactly what this amendment would do. Further, the bill's provision on attorneys' fees won't affect fee awards in civil rights cases at all because both the monetary and equitable relief attorneys' fees provision in the bill are qualified with the initial phrase ``unless otherwise specified by Federal statute.'' The Civil Rights Attorney's Fee Award Act of 1976 allows a court, in its discretion, to award reasonable attorneys' fees as part of the costs to a prevailing party in Federal civil rights lawsuits, including cases brought under 28 U.S.C. section 1983, the statute most commonly used to assert civil rights claims. Consequently, this bill will not affect attorneys' fees in civil rights class actions at all, including, of course, cases brought under the Americans with Disabilities Act, which has its own attorneys' fees provision. The conflicts of interest provision reflects a valid concern in all class actions. The courts need to know how the named plaintiffs came to be involved in class actions in all types of cases to ensure there aren't conflicts and that the due process rights of all class members are protected. The issues class provision won't disrupt the manner in which civil rights cases are normally litigated. Discovery stays while dispositive motions are pending won't disrupt civil rights cases. Like any other case, the plaintiffs need to show they have a facially valid complaint before discovery should commence. Disclosure of third-party funding is no less important in civil rights cases than in other class actions. The appeals provision benefits both plaintiffs and defendants, giving either side the right to appeal if class certification is granted or denied. I urge all my colleagues to oppose this amendment, which would set back the just causes of civil rights claimants. Mr. Chairman, I yield back the balance of my time.

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

Mr. GOODLATTE. Mr. Chairman, this amendment would subject certain class members to unfair treatment and should be rejected. The purpose of a class action is to provide a fair means of evaluating like claims, not to provide a means of artificially inflating the size of a class to extort a larger settlement value. Exempting a subset of cases from the bill, as this amendment would do, would serve only to incentivize the creation of artificially large classes to extort larger and unfair settlements from innocent parties for the purpose of disproportionately awarding uninjured parties. Why should only the claimants covered by the amendment be subject to particularly unfair treatment by being allowed to be forced into a class action with other uninjured or minimally injured members, only to see their own compensation reduced? This does a disservice to those claimants. Yet, that is exactly what this amendment would do. Regardless of the subject matter, class action plaintiffs are increasingly inclined to include fraud claims in their complaints. If they are suing about an allegedly defective product, they will add fraud claims, alleging that the manufacturer committed fraud by not disclosing the defect. If they are suing for a breach of contract, they will add fraud allegations, saying that the defendant didn't disclose the alleged breach, and so on and so forth. Thus, this amendment would effectively gut the entire bill, since, to avoid its important reforms, class action lawyers would simply add fraud claims to their complaints, as they are increasingly prone to do in any event. Regarding the Volkswagen case, some opponents have urged that, if enacted, the base bill would have prevented the filing of the class actions related to the Volkswagen diesel emission controversy. Those assertions are false. This bill's injury provision would be readily satisfied in the VW cases, as class members presumably would argue that they have been injured by their purchase of vehicles with noncompliant emission systems. Further, if the scope or type of injury differed among class members, separate class actions could be filed for each group, as actually occurred with respect to differing models in the Volkswagen MDL proceeding. The bill's requirement about class representative disclosures would be easily satisfied. Many class members are interested in the litigation and presumably ready to serve as conflict-free class representatives who would not run afoul of these provisions. The bill's ascertainability provisions would pose no obstacles because vehicle registration records would provide reliable class member lists and counsel could easily demonstrate a method to get any relief to class members. Requiring that payment of counsel fees await distribution of class benefits and that fees reflect a reasonable percentage of benefits actually received by class members would not impede bringing such cases. The cases would be litigated without resort to issues classes. Disclosure of any third-party litigation funding of the class actions wouldn't preclude such cases. The provision doesn't prohibit such funding. Only disclosure is required. Staying discovery while motions to dismiss are pending also poses no roadblock. Mr. Chairman, again, I urge my colleagues to defeat this gutting amendment, and I reserve the balance of my time.

Mr. GOODLATTE. Mr. Chairman, constitutional rights are priceless, but attorney's fees have to be set by the court. Who else is going to set them in those cases? I want to correct the gentleman, again, on this point about section 1983 cases because this bill says very clearly: unless otherwise specified by Federal statute. So this bill is not affected by the very example that he cites because that is something that is otherwise specified by Federal statute. Mr. Chairman, I urge my colleagues to oppose this needless and harmful amendment, and I yield back the balance of my time.

Mr. GOODLATTE. Mr. Chairman, this amendment should be defeated. Abraham Lincoln left behind pages of notes on a lecture he was to give to lawyers. They say: ``Never stir up litigation. A worse man can scarcely be found than one who does this. Who can be more nearly a fiend than he who habitually overhauls the register of deeds in search of defects in titles, whereon to stir up strife and put money in his pocket?'' That was Lincoln in the 1850s. Here is Forbes Magazine just a couple of years ago: The lead plaintiff in the 5-Hour case . . . worked in marketing for a cosmetic surgery center in California. But in a grueling 5-hour deposition, she admitted she had been recruited to serve as a plaintiff by her cousin, who worked for a Texas lawyer; had purchased two bottles of 5-Hour ENERGY specifically to sue the manufacturer; had never complained to the company or sought a refund; and had signed a backdated retainer agreement with the trial lawyer, Rubinstein, the fellow seen here at his own deposition. . . . Another one of Rubinstein's clients . . . admitted she had served as a plaintiff for Rubinstein in at least four class actions over products like Swanson pot pies and lipstick. . . . Emails and other communications 5-Hour's lawyers uncovered in their suit showed that Rubinstein belonged to a loose affiliation of lawyers who ran an assembly-line process of identifying companies to sue and then helping each other find plaintiffs. Lawsuits are supposed to be initiated by truly injured plaintiffs seeking redress, not invented by lawyers who hunt for a plaintiff to assert a supposed injury made up by the lawyer. Few class members bother to collect the payments available in class action settlements, in large part because they don't feel injured by the supposedly wrongful conduct in the first place. In too many cases, trial lawyers come up with an idea for a lawsuit and then search for a person who has bought the product, or they send a relative or employee to buy the product so they will have someone who can sue on behalf of a proposed class of all other buyers. No product purchaser has actually complained or feels cheated; it is just lawyers in pursuit of money. That is a major reason why so few class members bother to collect the payments available in class action settlements. They don't feel injured by the supposedly wrongful conduct in the first place. This abuse of the class action lawyer-driven lawsuits must end. The base bill, therefore, requires lawyers to disclose how proposed class representatives became involved in the class action. Further, it prohibits class actions in which any proposed class representative, that is, a named plaintiff that will be representing everyone else in the class action, is a relative of or an employee of the class action lawyer. Further clarifications making clear that this provision will not apply to present or former clients of, or those who have had any contractual relationship with, class counsel have already been made to the bill in the manager's amendment. The only prohibition that remains in the bill is the bar on class counsel using a relative or employee as a class representative. Clearly, that shouldn't be permitted. The class representative is supposed to be representing the class interests, to independently ``be the client'' for the class, and tell counsel what to do. That independence will be gone if the class representative is a relative or employee of the class counsel. This amendment should be defeated. Mr. Chairman, I yield back the balance of my time.

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

Mr. GOODLATTE. Mr. Chairman, this amendment should be defeated. Insofar as a class action seeks equitable relief, that is, the nonmonetary relief, including any injunctive relief that seeks to stop the defendant from doing something wrong, the portion of any class action lawyer's fee should be limited to a reasonable percentage of the value of that relief as determined by the court. This provision won't affect fee awards in civil rights cases because both the monetary and equitable relief attorney's fees provision in this bill are qualified with the initial phrase, ``unless otherwise specified by Federal statute.'' The Civil Rights Attorney's Fee Award Act of 1976 allows a court, in its discretion, to award reasonable attorney's fees as part of the costs to a prevailing party in Federal civil rights lawsuits, including cases brought under 28 U.S.C. section 1983, the statute most commonly used to assert civil rights claims. Consequently, this bill won't affect attorney's fees in civil rights class actions at all. Regarding other equitable relief cases that don't involve civil rights claims, Federal courts routinely determine the value of intangible relief such as equitable or injunctive relief for purposes of determining whether the amount in controversy requirement--currently, $75,000 to get into court--is met. A majority of courts consider only the value of the injunctive relief from the plaintiff's perspective or viewpoint. Some courts determine the jurisdictional amount by evaluating the claim from the perspective of the party seeking Federal court jurisdiction. Others have adopted the ``either viewpoint'' rule, which allows the court to look to either the plaintiff's or the defendant's viewpoint in establishing the amount in controversy in cases seeking some form of injunctive relief. The bottom line is that, under this bill, Federal courts will be able to use either approach in deciding the value of the injunctive relief provided to class members; and generally speaking, counsel should be paid on the basis of what lawyers actually deliver to their clients. This base bill, of course, does not alter in any way the relief that would be granted to equitable relief class action members. It only limits the fees attorneys would receive to a reasonable percentage of the value of what the class members actually received. So all this amendment would do would be to put more money in the hands of lawyers and less in the hands of victims. I urge my colleagues to oppose this amendment, and I reserve the balance of my time.

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

Mr. GOODLATTE. Mr. Chairman, the gentleman will be pleased to know that tomorrow we will consider on the floor of this House legislation that, under rule XI, would impose mandatory sanctions on attorneys who engage in the type of activity he just described. That is an abuse as well. It will be covered by that legislation. But this legislation is appropriate to make sure that justice is done in class action litigation. Mr. Chairman, I urge my colleagues to oppose this amendment, and I yield back the balance of my time.