F. Sensenbrenner

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1437) to improve the United States Code.

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, today I rise to express my strong support for H. Res. 296, which recognizes the 100th anniversary of one of America's greatest companies--the Harley-Davidson Motor Company. For one hundred years, Harley-Davidson has been a testament to American hard work, perseverance, and ingenuity. Today, Harley-Davidson remains an American institution and is recognized all over the world as the manufacturer of the best motorcycles in the world. Born in Milwaukee, Wisconsin, the company retains its domestic roots by maintaining production facilities in Missouri, Alabama, Pennsylvania, and, of course, Wisconsin. I am proud to have in my district, Harley-Davidson powertrain operations in Wauwatosa and Menomonee Falls, and a product development center in Wauwatosa. I am pleased to echo the sentiments of former President Ronald Reagan, who called Harley-Davidson ``an American success story''. To all the members of the Harley-Davidson family, please allow me to express my sincerest congratulations on the 100th anniversary of this great American company.

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.

Mr. SENSENBRENNER. Mr. Speaker, I yield myself the balance of the time. Mr. Speaker, no one is as frustrated as I am at the lack of progress on the overall bankruptcy reform bill, which is comprehensive and which will make this economy work better and more efficiently, particularly for those people who pay their bills and obligations on time. Without the overall bankruptcy reform bill being enacted into law, there will be those that use bankruptcy reform as a financial planning tool. That is absolutely wrong. Bankruptcy should exist for people and organizations that are genuinely down and out and who need to go through bankruptcy in order to get a fresh start, and the bill that is in the other body which this House passed by an overwhelming margin does just that. I can understand the desire of people who are opposed to an overall bankruptcy reform bill to try to cherry-pick the popular items out of it and pass them piecemeal so that their opposition will end up sinking the overall bankruptcy reform bill once and for all. I do not go along with that, and I do not think the majority of this House will either. The reason we have a temporary extension of chapter 12 here is to make sure that these protections for family farmers are maintained. But if chapter 12 and other issues are cherry-picked out, then the $44 billion a year of debt that is written off in bankruptcy will be passed on to those who pay their bills, including farmers who pay their bills in the form of higher goods and services. That is why the overall bankruptcy reform bill ought to be enacted into law. And while the gentlewoman from Wisconsin might be prepared to give up on that issue, I am not, and that is why this bill is a temporary extension. We are going to do the job that needs to be done for the farmers today, and then, hopefully, later on this year, when the other body passes the overall bankruptcy reform bill, we will be able to do the job that needs to be done for people who pay their bills on time and, as agreed, to prevent this huge shift of costs from those who do not pay their bills to those who do. Mr. Speaker, I yield back the balance of my time.

Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2465) to extend for six months the period for which chapter 12 of title 11 of the United States Code is reenacted.

Mr. SENSENBRENNER. 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 material on H.R. 2465.

Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in support of H.R. 2465, the Family Farmers Bankruptcy Relief Act of 2003. Earlier this year, the National Oceanic and Atmospheric Administration reported that certain parts of our Nation, particularly the western and Great Plains States, were experiencing ``one of the worst droughts in 108 years.'' Other parts of the country, like the Northeast, are currently enduring seemingly unending days of rainy weather. While bad weather may be merely an inconvenience for some of us, uncontrollable weather conditions represent just one of the many difficult challenges that confront family farmers. Like many small businesses, family farmers must also endure and react to rising energy costs, volatile marketplace conditions, and increasing competition from larger businesses. Unfortunately, these economic forces can negatively affect the financial stability of the family farmer. In response to the particularized needs of family farmers in financial distress, chapter 12 of the Bankruptcy Code was enacted in 1986 as a part of the Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act. Although originally enacted on a temporary basis to address the farming crisis of the 1980s, chapter 12 has been extended on nine occasions in recognition of the vital relief it offers to family farmers in financial distress. Unless further extended, chapter 12 will sunset at the end of this month. It is crucial that this specialized form of bankruptcy relief for family farmers not be allowed to sunset for two fundamental reasons. First, family farmers, absent chapter 12, would be forced to file for bankruptcy relief under the Bankruptcy Code's other alternatives, none of which work as well for them as does chapter 12. Chapter VII of the Bankruptcy Code, for instance, would require a farmer to liquidate; that is, sell the family farm to pay the claims of the farmer's creditors. Many farmers would be precluded from choosing bankruptcy relief under chapter 13 of the Bankruptcy Code because of its restrictive eligibility standards. Furthermore, Chapter XI, the Bankruptcy Code's business reorganization alternative, is not farmer- friendly in various respects, as it often entails an expensive and time-consuming process that does not readily accommodate the special needs of farmers. Second, recent statistics demonstrate that there is not only a continuing need for chapter 12, but that this need is apparently increasing. According to the Administrative Office of the United States Courts, chapter 12 bankruptcy filings jumped by more than 62 percent over the past year. I introduced H.R. 2465 to extend chapter 12 for an additional 6 months through December 31, 2003, and thereby maintain the status quo while the Congress completes its consideration of comprehensive bankruptcy reform. As my colleagues may recall, last March the House overwhelmingly passed H.R. 975, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2003, which is now awaiting consideration in the other body. H.R. 965 contains many farmer-friendly provisions that would make chapter 12 a permanent fixture of the Bankruptcy Code for family farmers and generally make it easier for farmers in financial distress to be eligible for this form of bankruptcy relief. In addition, H.R. 975 would raise the debt limit and lower the income threshold so that many more family farmers could avail themselves of chapter 12. Also, this bill, for the first time, would extend the benefits of this specialized form of bankruptcy relief to family fishermen. It is my sincere hope that in the very near future, we will see comprehensive bankruptcy reform legislation finally enacted, together with the permanent extension of chapter 12. Thus, I urge my colleagues to vote for H.R. 2465. Mr. Speaker, I reserve the balance of my time.

Mr. SENSENBRENNER. Mr. Speaker, I yield such time as he may consume to the gentleman from Nebraska (Mr. Bereuter). (Mr. BEREUTER asked and was given permission to revise and extend his remarks.)

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Chairman, I yield myself 15 seconds. What the gentleman from Michigan is saying is this is a good amendment but not good enough. I think if it is a good amendment, it ought to be supported; and I know my cosponsor, the gentleman from Virginia (Mr. Boucher), will tell us it is a very good amendment. Mr. Chairman, I yield 2 minutes to the gentleman from Virginia (Mr. Boucher).

Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I rise in strong support of H.R. 1115, the Class Action Fairness Act of 2003. In years past, the occasional news account of some outrageous class action verdict or settlement was light humor. Now the stories are so common there is no punch line, the class action judicial system itself has become a joke, and no one is laughing except the trial lawyers, all the way to the bank. Abuse of State class action lawsuits is now systemic and this mounting crisis is a threat to the integrity of our civil justice system and a persistent drain on the national economy. Since this House passed nearly identical class action reform legislation in the 107th Congress, a bill which died in the Democrat-controlled Senate, the problem has only gotten worse. One major element of the worsening crisis is the exponential increase in State class action cases, many of which deal with national issues and classes. In the past 10 years, State court class actions filing nationwide have increased over 1,000 percent. In certain ``magnet courts'' known for certifying even the most speculative class action suits, the increase in filings over the last 5 years is approaching 4,000 percent. Take, for example, the court in Madison County, Illinois, a rural county of 250,000 people which is on pace for a projected 3,650 percent increase in class action filings over 1998 levels. Eighty-one percent of those cases sought to certify nationwide cases, including all nationwide Sprint customers ever disconnected on a cell phone, all Roto-Rooter customers nationwide whose drains were repaired by unlicensed plumbers, and all nationwide customers who purchased a ``limited edition'' Barbie doll at a higher price. So why are all these class action cases filed there? Madison County did not experience a similar growth in population during this time, nor did it suddenly become a hub for interstate commerce. Furthermore, there is no evidence to suggest that the good people of Madison County are somehow cursed or more plagued by injuries than the average citizen. Indeed, the only explanation for this phenomenon is aggressive forum shopping by trial lawyers to find courts and judges who will act as willing accomplices in a judicial power grab, hearing nationwide cases and setting policy for the entire country in a local court. A second major element of the present class action crisis is a system producing outrageous settlements that benefit only lawyers and trample the rights of class members. Class actions were originally created to efficiently address a large number of similar claims by people suffering small harms. Today they are too often used to efficiently transfer large fees to a small number of trial lawyers doing great harm. The present rules encourage a race to any available State courthouse in hopes of a rubber-stamped nationwide settlement that produces millions in attorneys' fees. Clearly, some trial lawyers are winners in this race, but as the Justice Department testified at the committee's last hearing, the losers in this race are the victims who often gain little or nothing through the settlement, yet are bound by it in perpetuity. These same victims and all consumers often bear the cost of these settlements through increased prices for goods and insurance. Mr. Chairman, I would like to share with Members a survey that was published in the USA Today newspaper on Monday, March 24, 2003: ``Opinions on Class Action Lawsuits, Who Benefits the Most From Class Action Lawsuits.'' Forty-seven percent said lawyers for plaintiffs, 20 percent said lawyers for companies, 12 percent said don't know, 9 percent said plaintiffs, 7 percent said companies being sued, and 5 percent said buyers of products. Two-thirds of the American public according to this survey indicate that the beneficiaries of class action lawsuits are lawyers and only 14 percent said plaintiffs and buyers of products. This bill is designed to change this mix so that the consumers and the plaintiffs are the ones that benefit rather than lawyers for plaintiffs or lawyers for defendants. Summarizing the problem last November, The Washington Post editorial board in a critique of the present system wrote: ``Class actions permit almost infinite venue shopping; national class actions can be filed just about anywhere and are disproportionately brought in a handful of State courts whose judges get elected with lawyers' money. These judges effectively become regulators of products and services produced elsewhere and sold nationally. And when cases are settled, the clients get token payments while the lawyers get enormous fees. This is not justice. It is an extortion racket only Congress can fix.'' Mr. Chairman, today Congress has an opportunity to end this extortion racket and fix this problem. Article 3 of the Constitution empowers Congress to establish Federal jurisdiction over cases between citizens of different States, but current rules on class actions require that all plaintiffs and defendants be residents of different States and that every plaintiff's claim be valued at $75,000 or more. These jurisdictional statutes enacted before the advent of modern class actions lead to results the framers would find perverse. For example, under current law, a citizen of one State may bring in Federal court a simple $75,001 slip-and-fall claim against a party from another State. But if a class of 25 million product owners or users living in all 50 States bring claims collectively worth $15 billion against a manufacturer, that lawsuit usually must be heard in State court. H.R. 1115 would apply new diversity standards to class actions by changing the diversity requirements for class actions where any plaintiff and any defendant reside in different States and where the aggregate of all plaintiffs' claims is at least $2 million. These modest changes will keep large actions of a national character in Federal court where they belong. H.R. 1115 also addresses the other major area in need of reform, the incentives for settlements in class action cases and scrutiny of those settlements. Under current rules, the first case settled wins. Those left out must either find a way to join the settlement or forego their claim. This leads to bad settlements favoring lawyers over consumers in jurisdictions with lax class action requirements. In the last year, more such one-sided settlements benefiting only the lawyers occurred. Example: A settlement with Blockbuster over late fees produced $9.25 million in lawyers' fees, and nothing more but dollar coupons for the consumers represented, only 20 percent of which are likely to be redeemed. Another example: A settlement with Crayola over asbestos included in crayons produced $600,000 in attorneys' fees, and nothing but a 75-cent discount on more crayons for affected consumers. In order to prevent abuses like this, H.R. 1115 aims to protect plaintiffs by prohibiting the payment of bounties to class representatives, barring the approval of net loss settlements, adopting better notice requirement provisions which clarify class members' rights, and by requiring greater scrutiny of coupon settlements and settlements involving out-of-State class members. Finally, Mr. Chairman, it is important to note that the costs of class action abuses are not limited to the parties of the settlements. They are shared by the American consumer through higher prices and higher insurance premiums. Class action lawsuits also pose a threat to investors and the security of American retirement plans, which are largely invested in equity securities of American corporations. While class action liability can be enormous, news of these lawsuits on Wall Street can drive down any particular stock by as much as 10 points in one day. I also would note that we are likely to hear names like Enron, Adelphia and WorldCom tossed about today, and rhetoric that this bill would let such noted corporate wrongdoers off the hook. The truth of the matter is that nothing in H.R. 1115 would limit the rights of plaintiffs to seek redress in court in these types of cases. Under current law, most lawsuits against these companies will be heard in Federal bankruptcy court, for the same reasons that Federal courts should be able to resolve many of the class actions. Federal courts protect the interests of diverse parties from all parts of the country. In addition, section 4 of H.R. 1115 specifically excludes a number of Federal securities and State-based corporate fraud lawsuits. Mr. Chairman, the need to restore some common sense, fairness, certainty, and dignity in our class action system is clear. The time to act is now, and I urge my colleagues to vote for this bill and to put some sense back into our legal system. Mr. Chairman, I reserve the balance of my time.

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

Mr. SENSENBRENNER. Everybody has a right to have a lawyer, but you ought to be for court reform.

Mr. SENSENBRENNER. Mr. Chairman, I offer an amendment.

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

Mr. SENSENBRENNER. Mr. Chairman, I yield myself the balance of my time. Mr. Chairman, I really regret that the gentlewoman from California was not interested in the compromise and clarification that I proposed, where we would allow elected district attorneys to continue to utilize the State court, but not private citizens with private attorney general actions which are authorized only in California and no place else. One of these private attorney general actions should not set national legal and economic policy. When you have an elected official like a district attorney or a State attorney general, that is one thing, because these people represent the public and it is their job to do this. When you have a private citizen in a procedure that has not been adopted by 49 out of the 50 States, they should not get a carve-out under this bill. Because there was no compromise that was agreed to, I would urge the rejection of this amendment. Mr. Chairman, I yield back the balance of my time.

Mr. SENSENBRENNER. Mr. Chairman, I yield myself 1 minute. Mr. Chairman, I would like to commend my friend from Maryland and my friend from Texas for being very consistent on the issue of retroactivity. Retroactivity is in here to prevent a race to the courthouse to avoid the new rules that are contained in this bill, should it be enacted into law. But, then again, they were against the retroactive tax cut. The tax cut that was enacted into law just a little while ago is retroactive to the first of January and, as a result of that retroactivity, there is going to be a reduction in withholding rates beginning the first of July that would be twice the amount if it were not retroactive. So I guess they are against providing benefits of good legislation retroactively to anybody, because they are against good legislation. Mr. Chairman, I yield the balance of my time to the gentleman from Virginia (Mr. Goodlatte).

Mr. SENSENBRENNER. Mr. Speaker, I rise in opposition to the motion to recommit.

Mr. SENSENBRENNER. Mr. Chairman, I yield 3 minutes to the gentleman from Texas (Mr. Smith), the chairman of the Subcommittee on Courts, the Internet, and Intellectual Property of the Committee on the Judiciary.

Mr. SENSENBRENNER. Mr. Chairman, I yield myself 1 minute. Mr. Chairman, I would be happy to invite the gentleman from Michigan to my district, or I would be happy to go to Detroit, and have him explain to my constituents or me explain to his constituents why giving a consumer a coupon for 75 cents or $1 off a product that was manufactured by the company that injured that consumer and had a judgment entered against them, while giving a lawyer hundreds of thousands or millions of dollars' worth of legal fees, or having the lawyer send a deficiency bill to every member of the class, this bill takes care of this, is correct, and how it puts consumers in charge rather than lawyers. Mr. Chairman, I yield 3 minutes to the gentleman from Virginia, Mr. Goodlatte.

Mr. SENSENBRENNER. Mr. Chairman, I yield myself 1 minute. The gentleman from New York unfortunately has got it all wrong. What this bill does is it takes the power away from one State court judge to decide national legal and national economic policy and puts it in the Federal courts where the founders intended it to be when they established the right of Congress to establish diversity jurisdiction. The second point that I would like to make is why did all of these consumers only get 33-cent checks? It is because the lawyers signed off in the settlement that filled their pockets to overflowing with legal fees and giving 33-cent checks to the clients that they supposedly represented. Now, if those lawyers were a little bit more fighting for their clients and less for themselves, maybe those checks would have been bigger because the fees would have been smaller. Mr. Chairman, I yield 2 minutes to the gentlewoman from Pennsylvania (Ms. Hart).

Mr. SENSENBRENNER. Mr. Chairman, I yield 1 minute to the gentleman from Virginia (Mr. Boucher), as well.

Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentlewoman from Tennessee (Mrs. Blackburn).

Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentleman from Ohio (Mr. Chabot).

Mr. SENSENBRENNER

Mr. SENSENBRENNER. 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 material on the bill, H.R. 1115.