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CLASS ACTIONS SEVEN YEARS AFTER THE 

CLASS ACTION FAIRNESS ACT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON THE CONSTITUTION 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

JUNE 1, 2012 

Serial No. 112–131 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 

(II) 

COMMITTEE ON THE JUDICIARY 

LAMAR SMITH, Texas, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

DENNIS ROSS, Florida 

SANDY ADAMS, Florida 

BEN QUAYLE, Arizona 

MARK AMODEI, Nevada 

JOHN CONYERS, JR., Michigan 

HOWARD L. BERMAN, California 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

MIKE QUIGLEY, Illinois 

JUDY CHU, California 

TED DEUTCH, Florida 

LINDA T. SA ́ NCHEZ, California 

JARED POLIS, Colorado 

RICHARD HERTLING, Staff Director and Chief Counsel 

PERRY APELBAUM, Minority Staff Director and Chief Counsel 

SUBCOMMITTEE ON THE CONSTITUTION

TRENT FRANKS, Arizona, Chairman 

MIKE PENCE, Indiana, Vice-Chairman 

STEVE CHABOT, Ohio 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

JIM JORDAN, Ohio 

JERROLD NADLER, New York 

MIKE QUIGLEY, Illinois 

JOHN CONYERS, JR., Michigan 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

PAUL B. TAYLOR, Chief Counsel 

DAVID LACHMANN, Minority Staff Director 

(III) 

C O N T E N T S 

JUNE 1, 2012 

Page 

OPENING STATEMENTS 

The Honorable Trent Franks, a Representative in Congress from the State 

of Arizona, and Chairman, Subcommittee on the Constitution ....................... 1 

The Honorable Jerrold Nadler, a Representative in Congress from the State 

of New York, and Ranking Member, Subcommittee on the Constitution ....... 3 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, and Ranking Member, Committee on the Judiciary ......... 37 

WITNESSES 

Martin H. Redish, Ancel Professor of Law and Public Policy, Northwestern 

University School of Law 

Oral Testimony ..................................................................................................... 39 

Prepared Statement ............................................................................................. 41 

Thomas M. Sobol, Partner, Hagens Berman Sobol Shapiro, LLP 

Oral Testimony ..................................................................................................... 51 

Prepared Statement ............................................................................................. 53 

John H. Beisner, Partner, Skadden, Arps 

Oral Testimony ..................................................................................................... 62 

Prepared Statement ............................................................................................. 65 

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Material submitted by the Honorable Jerrold Nadler, a Representative in 

Congress from the State of New York, and Ranking Member, Subcommittee 

on the Constitution .............................................................................................. 4 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Response to Questions for the Record from Martin H. Redish, Ancel Professor 

of Law and Public Policy, Northwestern University School of Law ................ 98 

Response to Questions for the Record from John H. Beisner, Partner, 

Skadden, Arps ...................................................................................................... 105 

(1) 

CLASS ACTIONS SEVEN YEARS AFTER THE 

CLASS ACTION FAIRNESS ACT 

FRIDAY, JUNE 1, 2012 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON THE CONSTITUTION, COMMITTEE ON THE JUDICIARY, Washington, DC. 

The Subcommittee met, pursuant to call, at 9:30 a.m., in room 

2141, Rayburn House Office Building, the Honorable Trent Franks 

(Chairman of the Subcommittee) presiding. 

Present: Representatives Franks, Chabot, King, Nadler, Conyers, 

and Scott. 

Staff Present: (Majority) Zachary Somers, Counsel; Sarah Vance, 

Clerk; (Minority) Heather Sawyer, Counsel; and Veronica Eligan, 

Professional Staff Member. 

Mr. FRANKS. Good morning to everyone. I appreciate the witnesses being here, those in the audience, and the Members. 

Without objection, the Chair is authorized to declare the recess 

of this Committee at any time. 

In 2005, Congress passed the Class Action Fairness Act, or 

CAFA as it is commonly known, and President Bush signed it into 

law. The bill was introduced by Mr. Goodlatte in the House and 

Mr. Grassley and Mr. Kohl in the Senate and received strong bipartisan support in both chambers. Seven years have passed since 

then and, as the primary Subcommittee with jurisdiction over civil 

justice reform, I think it is time to take a look at how CAFA is 

working. So I have called today’s hearing to examine what has 

worked, what hasn’t, and to see what Congress may have missed 

when it wrote CAFA. 

The class action is a mechanism designed to allow injured parties 

to join together with others who have suffered the same harm 

when their claims are not large enough to make pursuing them individually cost-efficient. If used properly, class actions are a valuable tool in our system of justice, but they are only beneficial when 

redress of actual injury suffered by class members is the priority 

of the litigation. However, in recent years, class actions have been 

used with increased frequency and in ways that do not promote the 

interests they were intended to serve. 

CAFA was designed as a balanced approach to address some of 

the most egregious problems in class action litigation. The act was 

not intended to be a panacea that would correct all issues with 

class action litigation. Rather, its goals were to promote fairness, 

ensure that interstate class actions are tried in Federal court, and 

2 

establish new protections for consumers against abusive class action settlements. 

In many ways, the act has been highly successful at achieving its 

goals. Nationwide class actions are now more regularly filed in 

Federal court and defendants can now more easily remove these 

class actions from State to Federal court. CAFA has also been successful at placing coupon settlements, in which the class members 

are compensated in near-worthless coupons, under increased scrutiny. 

However, despite CAFA’s successes, many observers have concluded that some Federal courts have failed to follow congressional 

intent in applying the statute. This has allowed plaintiffs’ attorneys to develop new tactics to get around some of CAFA’s provisions in ways that have undermined the goals of Congress. 

Additionally, other legal commentators have raised concerns 

about abuses that CAFA did not address. One of the problems that 

has emerged since CAFA’s enactment is a new form of forum shopping. Whereas prior to CAFA plaintiffs’ attorneys filed suit in what 

were perceived to be the most favorable State courts, after CAFA 

it appears that attorneys are choosing to file class actions in certain Federal appeals circuits due to a favorable circuit precedent. 

This is a troubling trend considering that Federal law is supposed 

to be applied uniformly throughout the country. 

This nonuniform application of the law has cut against congressional intent that interstate class actions be tried in Federal court 

and has led to attempts to game the system. For instance, certain 

Federal appeals circuits have allowed plaintiffs’ attorneys to avoid 

Federal jurisdiction by putting the burden on the defendant to 

prove to a, ‘‘legal certainty’’ that the damages at issue exceed the 

$5 million jurisdictional minimum. Defendants are obviously reticent to prove the plaintiff’s case on damages to a legal certainty. 

In other cases, plaintiffs’ attorneys have been permitted to avoid 

CAFA’s requirements by splitting mass actions into groups of 99 or 

fewer plaintiffs to avoid CAFA’s requirement that mass actions 

with 100 or more plaintiffs be tried in Federal court. 

Additionally, although CAFA did restrict coupon settlements in 

many class actions, an equally egregious replacement has emerged: 

cy-pres settlements. In these cases, an uninjured third-party with 

no connection to the litigation, usually a nonprofit organization, is 

awarded money as part of a settlement because it would be too difficult or costly to identify alleged victims. These settlements 

present a whole host of problems, not the least of which is that 

they almost certainly violate the Constitution’s Article III ‘‘case or 

controversy’’ requirement. 

Now, these, I am sure, are just a few of the problems that have 

emerged since CAFA was enacted 7 years ago. Although I believe 

that CAFA has been a success overall, I hope that through this 

hearing we can examine what improvements may be needed to ensure that this system is functioning as it should. We must make 

sure that the rules governing class actions are fair to both plaintiffs and defendants and that they comply with the dictates of Article III of the Constitution. 

And, with that, I would now yield to the Ranking Member of the 

Subcommittee, Mr. Nadler, for his opening statement. 

3 

Mr. NADLER. Thank you, Mr. Chairman. 

At the start of the 109th Congress 7 years ago, Republican leadership made the Class Action Fairness Act one of their top legislative priorities. Having failed to pass similar legislation in prior 

Congresses, they wasted no time after taking control of both houses 

in the November 2004 elections. Republicans introduced a bill on 

January 25, 2005, rushed it through both chambers, and got it on 

the President’s desk for signature 24 days later. They moved so 

fast that the Committee report, upon which many defendants rely 

in making removal arguments to the courts, was not even filed 

until 10 days after the bill had been signed into law. 

CAFA’s proponents claimed that the law was needed to stop 

plaintiffs’ lawyers from bringing class actions to State courts 

known to be hostile to defendants, particularly out-of-State defendants, and then leveraging those cases to force large settlements. 

Never mind the many State class actions have uncovered significant corporate wrongdoing, vindicated protections provided under 

State law, and compensated victims. It was, after all, State class 

actions that finally uncovered years of corrupt practices in the tobacco industry, including its promotion of addiction through manipulation of nicotine levels and efforts to recruit teenage smokers. 

These class actions required the tobacco industry to pay $200 billion for the public health disaster caused by smoking, dismantled 

certain industry groups that had spearheaded the industry’s public 

disinformation campaigns, and banned certain forms of advertising 

and marketing. 

State class actions have similarly uncovered contamination of 

groundwater that cause certain forms of cancer, fraudulent pricing 

practices and misleading advertising by drug companies, and predatory payday lending practices. Lawsuits asserting State common 

law tort and fraud claims and seeking the protection of State consumer and environmental laws have resulted in much needed reform of corporate practices and have compensated those harmed by 

corporate wrongdoing. 

Despite these benefits, CAFA’s proponents unquestionably 

sought to discourage class actions altogether by funneling them 

away from State courts into the Federal courts, where it was believed that Federal judges would be reluctant to certify classes and 

would prove more favorable to defendants. Seven years later, CAFA 

certainly appears to have achieved its core goal of removing class 

actions from State to Federal courts. Studies undertaken on behalf 

of the Federal Judicial Conference, for example, show that the 

number of class actions either removed to or filed originally in Federal court have greatly increased since CAFA’s passage. 

These empirical studies tell us nothing about whether CAFA has 

had an overall positive or negative impact on the enforcement of 

legal rights, access to the courts, or the just, speedy, and inexpensive resolution of class actions. 

Kevin Clermont and Theodore Eisenberg, professors of law at 

Cornell University, studied Federal court decisions involving CAFA 

and concluded that the law has ‘‘produced a lot of litigation in its 

short life,’’ mostly over questions regarding who bears the burden 

of proving removal or the law’s effective date, and that ‘‘most of 

this litigation has been socially wasteful.’’ 

4 

I would ask unanimous consent to submit their article, ‘‘CAFA 

Judicata: A Tale of Waste and Politics,’’ for the record. 

Mr. FRANKS. Without objection. 

Mr. NADLER. Thank you. 

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Mr. NADLER. Their conclusion is quite a blow for a law touted as 

a key part of the Republicans’ tort reform agenda. Far from reducing frivolous, time-consuming, and expensive litigation, CAFA appears to have encouraged such litigation, enmeshing the parties 


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37 

and the courts in lengthy battles over threshold questions that 

threaten meaningful access to the courts and delay resolution of 

claims on their merits. Of course, that may be the real intent of 

the law. 

I, along with several colleagues, expressed grave concerns and 

voted against CAFA because of the threat it poses to meaningful 

vindication of State-based rights. It is State, not Federal, law that 

provides many core health, safety, and consumer protections. It is, 

therefore, the State, and not Federal courts, that have authority to 

interpret their State’s law and enforce their State’s vision of justice. CAFA upends this system, making it far more likely that Federal judges will have the last word on the meaning of State law. 

While Federal judges presiding over a case under CAFA must 

apply State law under the principles of judicial federalism announced long ago in Erie Railroad Company v. Tompkins that this 

task will prove more difficult as more and more cases are removed 

from the State court. Gaps in States’ substantive law will grow 

wider as State courts are deprived of the opportunity to address 

certain areas of State law, weakening the ability of States to regulate activity within their borders, and protect their citizens. 

It has also become fairly common for defendants to remove cases 

to Federal court and then to argue that a removed case is too complex and unmanageable, because of the variety of State laws that 

must be considered in the cases; it is too complex and unmanageable to be certified as a class action under the Federal rules. So, 

first, get it into Federal court; and, second, say that Federal courts 

are incapable of handling it, case dismissed. This seems like a onetwo sucker punch, and I am curious to hear from our witnesses 

today on how this practice falls within the rubric of fairness under 

the Class Action Fairness Act. 

I am most interested in hearing about whether the additional 

burden that CAFA imposes on Federal courts is harming the quality of justice, not just for CAFA cases, but for all other cases on 

the Federal docket. We raised concerns about the vacancies in the 

Federal bench before CAFA was passed. The percentage of vacancies has since doubled, from 5 percent to 10 percent as of September 2011. Yet the Senate refuses to confirm the President’s 

nominees. Something must give in this equation. Congress cannot 

and should not continue to burden and hamstring the courts simultaneously, particularly where there is no demonstrated need to do 

so and no corresponding assurance that Federal judges are willing 

and able to undertake the task that we have imposed. 

With that, I look forward to hearing from our witnesses, and I 

yield back the balance of my time. 

Mr. FRANKS. I thank the gentleman. 

And I now yield to the Ranking Member of the full Committee, 

Mr. Conyers, for his opening statement. 

Mr. CONYERS. Thank you, Mr. Chairman. 

Anyone listening to our opening statements would think that we 

are talking about two different things. The wide differences of the 

view are astounding, but they happen regularly in the Judiciary 

Committee. I tend to lean toward the Nadler description of what 

it is we are doing here today and why we are doing it, and I would 

like to add a few other additional points to that viewpoint. 

38 

First of all, I think the Class Action Fairness Act was seriously 

misnamed. It is anything but that. It was designed to benefit the 

defendants and work to the detriment of the large numbers of people who suffered harm. The fact is that the Class Action Fairness 

Act has worked well in helping defendants remove cases to the 

Federal court, where the proponents think they will have a greater 

advantage. As much as this bill was promoted as a necessary curb 

to forum shopping, it has proved to be the ultimate form of forum 

shopping for the defendants. 

I had three concerns in 2005. I still have them, and would point 

out that, first, the Class Action Fairness Act undermines State 

laws and State courts. State law provides the source of many consumer and environmental protections through tort and statutory 

law. Class actions are vital to enforcing these rights, as they allow 

the aggregation of smaller claims that otherwise might not warrant 

individual litigation. The Class Action Fairness Act makes virtually 

every class action, by allowing removal by the defendant so long as 

at least one defendant and one class member are diverse, removable to the Federal courts, divesting State courts, of course, of the 

ability to interpret and develop State law. 

Secondly, the Class Action Fairness Act makes class certification 

more difficult and expensive. We warned that Federal courts would 

be less likely to certify class actions, especially given the requirements of the Federal rules of civil procedure for predominant questions of law and fact. And then especially in the wake of the Supreme Court decision in Wal-Mart Stores v. Dukes, where a million 

and a half female workers had their case thrown out as a result 

of a five-four ideological division in the Court on whether the suit 

satisfied the requirement, whether these were questions of law or 

fact common to the class of female employees. The five conservative 

justices said ‘‘no,’’ shutting down the suit and limiting the ability 

of other plaintiffs to ban together. This rule makes Federal courts 

an even more favorable forum for defendants in both environmental/consumer and employment discrimination cases. 

Third, we expressed the concern that the bill would increase the 

workload of our already overburdened courts. It has been already 

observed that the number of vacancies has doubled and there are 

far fewer Federal judges than State judges. And growing caseloads 

leave Federal judges even less time. 

And so I look forward to the testimony, and I yield back the balance of my time. 

Mr. FRANKS. And I thank the gentleman. 

And, again, I welcome the witnesses here this morning. 

Our first witness is Martin Redish, the Ancel Professor of Law 

and Public Policy at Northwestern University School of Law. He 

has been described as ‘‘without a doubt the foremost scholar on 

issues of Federal court jurisdiction in this generation’’ and has been 

recognized as the 16th most cited legal scholar of all time. Professor Redish is the coauthor and the author of more than 80 articles and 15 books, including the book ‘‘Wholesale Justice: Constitutional Democracy and the Problem of the Class Action Lawsuit.’’ 

Our second witness is Thomas Sobol, a managing partner of Hagens Berman Sobol Shapiro’s Cambridge office. In practice for almost 30 years, he leads drug-pricing and healthcare class actions 

39 

against pharmaceutical and medical device manufacturers, recovering more than $12 billion for his clients. Mr. Sobol has served as 

a Special Assistant Attorney General for the Commonwealth of 

Massachusetts and the States of New Hampshire and Rhode Island 

and as private counsel for Massachusetts and New Hampshire in 

litigation against the tobacco industry. 

Our final witness is John Beisner, co-head of Skadden’s Mass 

Torts and Insurance Litigation group. Over the past 25 years, he 

has defended major U.S. and international corporations in more 

than 600 purported class actions filed in Federal courts and in 40 

State courts at both the trial and appellate levels, including matters before the U.S. Supreme Court. Mr. Beisner a frequent writer 

and lecturer on class action and complex litigation issues and has 

been an active participant in litigation reform initiatives. 

And, again, I want to thank you all for appearing before us 

today. 

And each of the witnesses’ written statements will be entered in 

the record in its entirety. I would ask that each witness summarize 

his testimony in 5 minutes or less. To help you stay within that 

time, there is a timing light on the table. When the light switches 

from green to yellow, you will have 1 minute to conclude your testimony. When the light turns red, it signals that the witness’ 5 minutes have expired. 

And before I recognize the witnesses, it is the tradition of the 

Subcommittee that they be sworn. So if you will please stand. 

[Witnesses sworn.] 

Mr. FRANKS. Thank you. You may take a seat. 

Also, to the witnesses, please turn on your microphone before 

speaking. 

I would now recognize our first witness, Professor Redish, for 5 

minutes. 

TESTIMONY OF MARTIN H. REDISH, ANCEL PROFESSOR OF 

LAW AND PUBLIC POLICY, NORTHWESTERN UNIVERSITY 

SCHOOL OF LAW 

Mr. REDISH. Thank you, Mr. Chairman. 

I would like to preface the substance of my comments by emphasizing that it is now time for Congress to take control of important 

procedural issues. Normally, Congress cedes to the Rules Advisory 

Committee and ultimately to the Supreme Court the control of the 

Federal Rules of Civil Procedure. But there are certain procedural 

devices—class actions being perhaps the most important, but others, including discovery abuse and discovery cost allocation, which 

are deserving of significant concern now—have enormous impact on 

the lives of our citizens, have sociopolitical impacts on the Nation 

and on the economy that go well beyond the four walls of the courthouse. 

The Advisory Committee is not elected, is not accountable, is not 

representative. The Supreme Court, for very important reasons, is 

not elected or accountable. It is only this body, the Congress of the 

United States, that is representative of and accountable to the electorate. It is this body that should be making the basic moral socioeconomic choices as to how procedure operates when that procedure 

has significant impact outside of the four walls of the courthouse. 

40 

Now, today our concern is the class action. The Class Action 

Fairness Act was a major reform that I believe has done a great 

deal of good, but it is time to move on to other areas of reform. The 

modern class action has significant pathologies that undermine 

basic due process rights of individual litigants and, more importantly for present purposes, the separation of powers and distribution of authority between the judicial and legislative branches. 

The class action, contrary to the views of many, is not a roving 

instrument to do justice. The class action is a Federal Rules of 

Civil Procedure appearing in Rule 23. It comes right after Rule 22 

dealing with interpleader and before Rule 24 dealing with intervention. A lawsuit does not arise under Rule 23. A lawsuit arises 

under the substantive law, be it legislative, common law, or constitutional law, that is being enforced in the particular proceeding. 

What has happened in all too many situations is that, through 

a process equivalent to a type of alchemy, the class action procedure, in direct contravention to the directives of the Rules Enabling 

Act pursuant to which the Federal rules were enacted and in direct 

contravention to the separation of powers between the branches, alters the underlying DNA of the substantive law. 

Substantive law contains two portions: a proscriptive portion, 

what primary behavior is prohibited or restricted; and a remedial 

portion, how are we to remedy violations of the proscriptive portions of the law. In all the laws that are being enforced in the modern class action, the remedial device chosen by Congress or in diversity cases by the state, legislatures is a compensatory device. 

The legislative body simultaneously deters future harm and compensates individuals who have been injured as a result of the violation of their legal rights. 

But in all too many situations, the class action is what I call a 

‘‘faux class action.’’ It is a cardboard cutout of a class action. Many 

class members, because they become members of the class through 

mere inertia rather than by any affirmative choice on their part, 

are completely unaware that they are involved in a lawsuit. Many 

are unfindable and unreachable. Oftentimes the claims are so 

small that it wouldn’t make sense for them, as a matter of economic efficiency, to file. 

What happens in these cases is that the lawyers become the real 

parties in interest. The lawyers, bringing these suits, who are 

uninjured in any legally cognizable way, are the ones pursuing the 

remedy. This is not necessarily illegal because we have qui tam 

suits, but that is not what these underlying laws have provided. 

The cy-pres remedy that has been provided as a means of covering these kinds of violations of substantive law has been used all 

too often where the money that goes unclaimed is given to a charity. The charity is not an injured party, the charity has not suffered harm, and this is a symptom of the perversion of the class 

action process. I believe significant legislative reforms are called 

for. 

Thank you. 

Mr. FRANKS. Thank you, Professor. 

[The prepared statement of Mr. Redish follows:] 

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Mr. FRANKS. And I now recognize Mr. Sobol for 5 minutes. 

TESTIMONY OF THOMAS M. SOBOL, PARTNER, 

HAGENS BERMAN SOBOL SHAPIRO, LLP 

Mr. SOBOL. Good morning, Mr. Franks. Good morning, Members 

of the Subcommittee. 

I bring to bear 30 years of the practice of law and some realworld experience in dealing with class actions. And while I do so, 

my views are my own, not those of my clients or my firm. 

Now, if the proponents of CAFA made one promise about the new 

statute, it was, to use their own words, this: that CAFA does not 

change substantive law—that is, in effect, it is a procedural provision only. 

Now, judged by those terms, CAFA is an abysmal failure. It is 

true that over the past 7 years since its passage, CAFA has 

changed where cases get filed, and it has stopped or prevented the 

occasional reverse auction where the rights of consumers are not 

sufficiently recognized. But CAFA’s biggest impact has been to 

deny consumers access to substantive State laws that protect consumers. 

CAFA usurped from State courts the ability to interpret their 

own laws and protect their own citizens. It vested in the Federal 

judiciary with virtually sole authority over nationwide or multiState class actions. But, at the same time, CAFA did not provide 

any instruction as to how the Federal judiciary was to handle these 

numerous large State-law-based consumer protection cases. It did 

not explain how a single Federal judge was to handle what previously had been the work of numerous State court judges addressing many separate State class actions involving State law. 

By failing to do so, CAFA presents the Federal judiciary with a 

problem for which there is no immediate solution. As a result, Federal courts often deny certification of multi-State class actions 

when multiple States’ laws are at play. The denial of access of justice is not based on the merits of the case but on a technical procedural issue under the Federal Rules of Civil Procedure—manageability. And the result is that consumers are denied access to justice. 

Decades ago, every State passed consumer protection statutes 

prohibiting unfair or deceptive trade practices. But when all is said 

and done, State consumer protection laws are based on a single 

simple proposition: Don’t lie, don’t steal, don’t cheat. Most big and 

small businesses have no problem complying with this simple proposition. It is only the rare and unethical of businesses or 

businesspersons who become defendants in significant consumer 

protection matters. On this, there can be no partisan view and no 

belief that businesses need to be free to lie, steal, or cheat. 

Now, contrary to most Federal statutes and regulations, every 

State consumer protection statute provides both public and private 

enforcement. And the predominance of State action in this area is 

consistent with tradition. The Supreme Court has long recognized 

the historic primacy of State regulation in matters of health and 

safety. But then Congress enacted CAFA, brandishing a machete 

where a scalpel would have sufficed to address complaints about 

the class action vehicle. In wielding this awkward instrument, ConVerDate Aug 31 2005 10:37 Sep 25, 2012 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6601 H:\WORK\CONST\060112\74418.000 HJUD1 PsN: DOUGA
52 

gress ignored its potential and likely effects on consumers’ ability 

to bring State consumer protection and common law claims. 

Since the passage of CAFA, Federal courts have denied efforts to 

certify claims by consumers basically on the basis that the cases 

are too complicated or too unmanageable. In other words, as I 

think that Mr. Nadler indicated, there has been a one-two punch. 

First, the cases must go to Federal court, and they all get consolidated into one place. But now that they are all consolidated in one 

place, they are too complicated to proceed. 

As the grounds of the denial of class certification, Federal courts 

often cite the need to apply the law of the State where each consumer resides because each respective State’s interest in enforcing 

its consumer laws trumps its interest. But by refusing to certify 

any class in the face of unmanageability or insurmountable obstacles posed by multiple State laws, these certification refusals deny 

American citizens their constitutional guarantee to a day in court. 

Thank you, Mr. Chairman. 

Mr. FRANKS. Thank you, sir. 

[The prepared statement of Mr. Sobol follows:] 

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Mr. FRANKS. And, Mr. Beisner, we recognize you for 5 minutes, 

sir. And don’t forget your microphone. 

TESTIMONY OF JOHN H. BEISNER, PARTNER, SKADDEN, ARPS 

Mr. BEISNER. Good morning, Chairman Franks, Ranking Member Nadler, and Members of the Subcommittee. Thank you for inVerDate Aug 31 2005 10:37 Sep 25, 2012 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6601 H:\WORK\CONST\060112\74418.000 HJUD1 PsN: DOUGA

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viting me to testify here today about the Class Action Fairness Act 

and paths forward for improving Federal class action practice. 

CAFA’s success in reforming Federal class action practice, I believe, is undeniable. The law has accomplished each of its stated 

primary goals: one, assuring fair and prompt recoveries for class 

members with legitimate claims; two, restoring the intent of the 

Framers of the Constitution by authorizing Federal jurisdiction 

over interstate class actions of national importance; and, three, encouraging innovation on the part of American businesses. 

Most importantly, CAFA has allowed a substantial number of 

class actions to be heard by Federal courts that otherwise would 

have proceeded in State courts. Many of those State courts were 

previously regarded as magnet jurisdictions because they allowed 

lax class certification standards and therefore attracted huge numbers of class actions. 

One such magnet jurisdiction was Madison County, Illinois. Prior 

to CAFA, this small, otherwise quiet county was a hotbed of class 

action activity, with 177 class actions, many of them nationwide 

cases, filed in the 2 years before CAFA was enacted. In the 2 years 

following CAFA’s enactment, only 16 class actions were filed in 

that county, representing an annualized decline of over 90 percent. 

CAFA has also accomplished its stated goal of assuring fair and 

prompt recoveries for class members with legitimate claims. This 

important success of CAFA is largely attributed to increased scrutiny of coupon class actions that frequently offered class members 

only illusory benefits. 

CAFA has also encouraged innovation by sounding the death 

knell for improper coercive nationwide class actions. Prior to 

CAFA, magnet State courts frequently certified nationwide class 

actions. And the way they did it—and I think this is important, because there have been many references to this point—the way they 

did it was by ignoring what the State laws were. The State court 

in Madison County, Illinois, frequently said, we don’t care what the 

other States’ laws are; we are going to apply Illinois law to all 

claims nationwide. And that was depriving consumers of access to 

justice under the laws of their home State, what their home State 

legislators had decided to do. 

And the complaints about nationwide class actions not being certified by Federal courts, it is in respect of those principles that the 

applicable State laws should be applied. And the simple solution is 

to bring single State class actions, which is what most counsel are 

doing these days. 

Now, like every piece of legislation, there have been a few bumps 

along the road in implementing the statute. A few courts have misconstrued the intent of the legislation. Most notably, some courts 

have ignored CAFA’s presumption of Federal jurisdiction by imposing legal certainty-type obligations on defendants seeking to remove claims to Federal court. Some courts have also erred by applying CAFA’s home State and local controversy exceptions to Federal jurisdiction, I believe, more broadly than Congress intended. 

And some recent rulings by Federal courts and the Judicial 

Panel on Multidistrict Litigation have suggested that single State 

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cation is decided, I think undermining Congress’ intent to have 

uniform decisions made in those cases, or at least consistent decisions. 

Now, because CAFA was primarily a jurisdictional statute, there 

are a few troubling aspects of class action practice that were not 

addressed by the legislation and remain. One is that some Federal 

courts are not following the requirement that courts conduct a rigorous analysis of Rule 23 prerequisites to class certification. As 

Professor Redish has noted earlier, there are concerns about cypres settlements. And a small number of Federal courts, particularly in California, have endorsed extremely overbroad class actions 

in which many of the class members do not have Article III standing because they were not injured. These include cases in which a 

case is permitted to go forward even though the vast majority of 

class members never had a problem with the product or service at 

issue. 

CAFA was a landmark piece of legislation, and I commend the 

Subcommittee for holding today’s hearing. And thank you again for 

inviting me to speak. 

Mr. FRANKS. Well, thank you, Mr. Beisner. 

[The prepared statement of Mr. Beisner follows:] 

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Mr. FRANKS. And I will now recognize myself for 5 minutes for 

questions. 

Professor Redish, I will begin with you, sir. You certainly come 

to the Committee with unimpeachable credentials. And I will therefore just ask an overarching question here at the beginning, and 

that is, given all of the challenges and all of the information that 


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you have related to these types of court and jurisdictional issues, 

what would you say to Congress collectively would be the most important things we could do to improve or fix the system as it is 

now? What changes would we make, if you had the power to be Republicans and Democrats at the same time—and I probably would 

warn you not to try. But, please. 

Mr. REDISH. Mr. Chairman, I think there are two vitally important reforms that could cure many of the significant problems to 

which I pointed. 

The first, and the simplest I think, would be to insert into the 

certification process an additional requirement that shockingly 

doesn’t appear there, which is that before a court certifies a class 

action, it must assure itself that a victory would significantly benefit the members of the class. If the court cannot be convinced by 

the parties seeking to bring the class proceeding that a victory will 

be able to distribute funds to injured individuals, then there is no 

business for that case being certified as a class in the first place. 

And the second major change, both to assure that due process 

rights of litigants to be able to control their own litigation when 

their claims are of significant value and to prevent the class from 

turning into this cardboard-cutout, faux class action, where their 

claims aren’t of significant value, would be to abandon the opt-out 

process, where—I call it ‘‘Book of the Month Club service’’—by inertia, by doing nothing, you are a member of the class, but require 

somebody to make the affirmative decision that he or she wants to 

participate as a passive class member. In that sense, we will be 

bringing the class action procedure back within the framework of 

the Federal rules. It will then be a true aggregation device and not 

a manipulator of the underlying substantive law. 

Mr. FRANKS. That sounds frighteningly logical to me. Yes, sir. 

Let me turn to you, Mr. Beisner. As I mentioned in my opening 

statement, Federal law is supposed to be applied uniformly, of 

course, in all Federal courts. In your written testimony, however, 

you point out that certain Federal appeals courts are applying 

CAFA’s provisions in significantly differing ways. 

How big a problem is this? And should Congress get involved to 

fix this issue, or do we just leave it to the Supreme Court to sort 

it out? 

Mr. BEISNER. I think that it is a significant problem. And I think, 

as you noted in your opening statement, it has resulted, to some 

extent, in counsel favoring certain circuits over others in bringing 

class actions to start with. 

I do think that there are a number of circuit splits that are out 

there on CAFA issues—that is, circumstances in which the circuits 

are divided. Some of those have been presented to the Supreme 

Court. So far, it has not concluded to hear those cases, which is of 

course the Court’s prerogative. But some of them, I think, are causing significant issues and preventing the full intent of the statute 

being fulfilled. 

Mr. FRANKS. I might go ahead to ask you then generally the 

same question I did Professor Redish, and that is, if you could do 

any one or two things to improve the system as it is, what would 

be your recipe? 

Mr. BEISNER. I think that two things would be important. 

90 

One is an effort to find ways for this system to be more transparent. One of the things that greatly concerns me is a reference 

to consumer class actions. Because if you peek behind the curtain 

about what really happens in those cases, to the extent that any 

money moves at the end of those cases it is normally between the 

defendant and the attorneys, primarily, in the lawsuit. And although I am not going to sit here and say that there is no class 

action that benefits consumers—I acknowledge that there are some 

instances where that occurs. But in many, many cases, the benefit 

to consumers in these class actions is very hard to find. 

The second thing I would note is—and this is along the lines of 

what Professor Redish noted earlier—I think that we need to recognize that the class action is a very powerful device. An attorney can 

walk into court and say, I am here to represent millions of people 

in this lawsuit. Has he or she asked any of them whether they 

want to be represented in this particular lawsuit? No, you just go 

in and do it. And it seems to me that some provisions that provide 

assurances up front that there are actually people out there interested in this lawsuit—not just the lawyer, who has, potentially, 

profit motives for being there—would be interesting. 

I know, for example, years ago, back in 1966, Congress passed 

the Magnuson-Moss Warranty Act, a landmark piece of legislation, 

and it authorized the bringing of consumer class actions dealing 

with products and warranties in Federal court. One of the requirements they put in there is, if you are going to bring a class action, 

you have to have 100 named plaintiffs. The lawyer has to go out 

there, and so there must be some interest in consumers, because 

I have 100 people who are willing to be part of this lawsuit. And 

it was a way of sort of testing the waters to make sure that there 

was real class interest in the lawsuit. 

Mr. FRANKS. Again, the logic seems to be breaking out all over 

the place here. 

And I would now recognize Mr. Nadler for 5 minutes. 

Mr. NADLER. Thank you. 

Mr. Sobol, you testified that Federal courts, once cases are removed from State courts, routinely deny certification of multi-State 

cases when multiple State laws are at play because of manageability concerns. Do you have recommendations for what we could 

do help with this problem? 

Mr. SOBOL. I think it is important to draw a distinction—— 

Mr. NADLER. Before that, actually, let me—why is this a terrible 

problem? 

Mr. SOBOL. The reason it is a terrible problem is that the vast 

majority of consumer rights are based upon State laws, not Federal 

laws. You cannot recover under most Federal laws any type of consumer remedy. Instead, you must rely upon State law. 

Now, if you bring a State law case, therefore, you either bring 

a State law case—and this is important to draw a distinction between what Mr. Beisner said. A case can either be on behalf of all 

the States in the country for one class, or, alternatively, you might 

have, as we used to have, State actions, State by State by State, 

for the residents in that State, on the basis of that State’s law— 

50 State cases. 

91 

Now, if those 50 separate cases or 24 or whatever number of 

cases get removed to Federal court, invariably they will be sent a 

single judge, by reason of the operation of the Judicial Panel on 

Multidistrict. And you then give one Federal judge the task of performing what a couple of dozen State court judges—— 

Mr. NADLER. Let me just hurry this along. And they will find 

that unmanageable and decertify. 

Mr. SOBOL. And then they say it is unmanageable—— 

Mr. NADLER. And decertify. 

Mr. SOBOL [continuing]. So they don’t certify. 

Mr. NADLER. And what is the result to the litigant? He has no 

opportunity in State or Federal court, and there is no forum for his 

rights at all? 

Mr. SOBOL. And is left high and dry. 

Mr. NADLER. And there is no forum to vindicate his rights under 

State law at all. 

Mr. SOBOL. No forum. 

Mr. NADLER. Thank you. 

Mr. Beisner, you just heard that exchange. Mr. Sobol testified 

that Federal judges routinely deny class certification and have removed cases that raise issues under multiple State laws based on 

the arguments of the Federal rules of commonality and that manageability requirements cannot be met. 

How often have you made that argument or something similar on 

behalf of a client? 

Mr. BEISNER. Let me state that that is not the way it is happening anymore. I think Mr. Sobol—— 

Mr. NADLER. Anymore? It happened but it is no longer happening? 

Mr. BEISNER. Before CAFA was—— 

Mr. NADLER. No, under CAFA. 

Mr. BEISNER. Under CAFA? Under CAFA, what is happening is 

that people, as Mr. Sobol is describing, are bringing class actions 

on a single State basis. As he said, Indiana residents, class action 

is brought on behalf of Indiana residents. It is true, they are—— 

Mr. NADLER. It is then removed to Federal court. 

Mr. BEISNER. Removed to Federal court, they are brought before 

an MDL judge. And the judge is looking at those cases individually 

and deciding certification in those cases. 

Mr. NADLER. But wait a minute, wait a minute. Isn’t it true that, 

in many cases, the Indiana case is brought and the Illinois case is 

brought and the New York case is brought, they are brought before 

the same judge combined, and then dismissed on the grounds of 

unmanageability? 

Mr. BEISNER. No, that is not true. 

Mr. NADLER. That is not true? 

Mr. BEISNER. There is no manageability issue in those cases, because only one State law is applied to the law of the single State. 

Mr. NADLER. Would you comment on that, Mr. Sobol? 

Mr. SOBOL. I differ considerably with Mr. Beisner on that. 

The practical reality, both in what happens in front of the judges 

and what happens before you even file the pleadings, is that the 

judges say, ‘‘This is too much. I am not in a position to sit on a 

multiple State court case. I don’t have the time, I don’t have the 

92 

attention, I don’t have the law clerks to make 12 or 13 or 24 separate class certification decisions. Pick your State, or let’s find one 

State’s law, let’s try it that way if we can, or find a Federal 

law’’—— 

Mr. NADLER. Why can’t that be done? 

Mr. SOBOL. Well, first, there are no Federal laws that you can 

do it. And then when you try it under a single State law, then you 

are butchering the fact that there are separate rights for the—— 

Mr. NADLER. So that doesn’t happen, and the case gets dismissed 

on manageability. 

Mr. SOBOL. Right. 

Mr. NADLER. Is that what happened in the Wal-Mart case? 

Mr. SOBOL. I didn’t hear you? 

Mr. NADLER. Oh, never mind. Never mind on that. 

What should we do to solve that problem, Mr. Sobol, aside from 

repealing CAFA entirely, but within CAFA? 

Mr. SOBOL. Right. The specific issue that we are talking about 

is the ability of consumers to bring a single State class action in 

that State’s courts. If CAFA permitted those cases to stay in State 

court, you would get rid of the significant problem of denying consumers access to the protection of their State laws. 

Mr. NADLER. And what about—let me ask you a different question on same thing. That would be logical, but let’s assume that for 

some reason Congress chose not to the do that. What would you 

think of a provision that said that if a Federal court denied certification on the grounds of unmanageability because too many States 

were involved, that the State could be unremoved back to State 

court? 

Mr. SOBOL. That would be another way to deal with it. Of course, 

you are talking years down the road, rather than having the ability 

to do it then, because you are not going to find that ruling for, as 

a practical matter, 2, 3, 4 years down the road. 

Another solution would be to have an alteration to the civil rules 

of procedure that say that you don’t deny manageability on the 

basis of the fact that you have multiple State laws. You are still 

burdening the Federal judiciary with a task that is—— 

Mr. NADLER. That amendment was rejected in this Committee 

when Mr. Conyers and I offered it 7 years ago. On the floor, not 

in the Committee—I am sorry. 

Thank you very much. My time has expired. 

Mr. FRANKS. Thank you, Mr. Nadler. 

And I now recognize the distinguished gentleman from Iowa, Mr. 

King. 

Mr. KING. Thank you, Mr. Chairman. I appreciate being recognized and the testimony of the witnesses and the professional opinion that you bring to the hearing here today. 

I am listening to this testimony and this discussion, and I am 

thinking about the class action lawsuits that stand out in my mind. 

And some of them may or may not fit into the category of this discussion here today. I am thinking of the Pigford Farms issue as 

one—and I think you would all be familiar with that case—on 

down through the Love case, the Keepseagle case, the Garcia case. 

And I am interested in an opinion of each of you gentlemen as 

to whether the executive branch should be legally allowed to enter 

93 

into a de facto class action agreement without the oversight of Congress. 

And I turn first to the gentleman, Mr. Redish. 

Mr. REDISH. Congressman, that creates a very sensitive question 

of separation of powers. I believe the executive branch has the authority to enforce the law as it sees fit. And if we are talking about 

the exercise of authority in an individual case, to vest supervisory 

authority in Congress could be seen as undermining the executive 

power. 

So my tentative response would be, I think that is not only appropriate, it may well be constitutionally required. But I haven’t 

studied the issue closely, so I wouldn’t like to commit myself irrevocably on that. 

Mr. KING. Okay. Mr. Sobol? 

Mr. SOBOL. I can make my remarks brief, for I have no opinion 

on that subject. As far as I know, there are no procedural safeguards that need to be added to that situation, and I would leave 

it at that. Thank you. 

Mr. KING. Mr. Beisner? 

Mr. BEISNER. I am familiar with those cases, but I am much in 

the boat of Professor Redish. I am not sure I am in a position to 

offer an opinion on that, not having studied it all that carefully. 

Mr. KING. I might take the opportunity to offer an opinion myself, but I think I would like a follow-up question instead. And that 

is, you are aware of the judgment fund that the Department of Justice maintains, Mr. Beisner? 

Mr. BEISNER. Yes. 

Mr. KING. And do you have any idea what is in the judgment 

fund? 

Mr. BEISNER. No, I don’t. 

Mr. KING. Does the public have access to the amount of that 

judgement fund, to your knowledge? 

Mr. BEISNER. I am not aware if they do. 

Mr. KING. Does anyone on the panel know if there is public access to the amount in the judgment fund of the Department of Justice? 

Mr. SOBOL. Don’t know. 

Mr. REDISH. No. 

Mr. KING. Neither of the witnesses do. 

And are each of you aware that the Department of Justice occasionally reaches into the judgment fund and pays out in a de facto 

class action suit? And I am speaking specifically of the Garcia case. 

And I would ask Mr. Beisner first. Are you aware of that? 

Mr. BEISNER. I am not aware of that. 

Mr. KING. Okay. 

Are any of the witnesses familiar with the Pigford Farms issue? 

I am putting you all on the spot here. 

All right. I will make my brief statement on that, and then I do 

have a follow-up question, and I will change the subject a little bit. 

I can see what I have broached here this morning. 

But my statement is this, that I have watched class action lawsuits be blown out of proportion to the original claimants, out of 

proportion to the original definition. I watched the Pigford Farms 

issue come through this Judiciary Committee and an attempt to 

94 

pass a Pigford 2, which did finally pass this House, but the same 

version did not pass the Senate. I saw Barack Obama be elected 

as President, and then I saw the Secretary of Agriculture, Tom 

Vilsack, team up with Attorney General Holder and go negotiate 

with the Black farmers and hand them another $1.25 billion on top 

of the $100 million that was authorized within the 2008 Farm Bill 

that was designated to be the total sum to resolve any outstanding 

claims on Pigford. 

So we have seen the executive branch go outside the directive of 

the Congress and reach into a slush fund of the Department of Agriculture for Pigford. We are watching them reach into this judgment fund in the Justice Department for Garcia and perhaps others. And I am very troubled by this lack of formal oversight for de 

facto class action suits and actual class action lawsuits. 

But I would pose this question also, as I promised I would 

change the subject, and pop this one up. And I would start first 

with Mr. Redish. And that is, the term ‘‘fairness’’ was something 

that—well, I should actually go to Mr. Beisner, I am running out 

of time. 

You use the term ‘‘fairness.’’ Can you define that for me? It always confuses me when I hear that word. Marilyn and I have 

raised more than one child. We know there is no such thing as fair. 

How do you deal with that in the legal arena? 

Mr. BEISNER. I think the important thing to me in that regard 

is that both sides get a fair hearing in court, that both sides have 

the ability to present their viewpoints. And I think that the law 

providing Federal court jurisdiction certainly has achieved that. 

Mr. KING. But that is not really a definition, is it, Mr. Beisner? 

Mr. BEISNER. I think—— 

Mr. KING. How does the court define it? Is there a legal definition that would help someone who has a blurry understanding of 

this word ‘‘fair’’? It seems like it is a utility word that can be used 

in any circumstance, and it is always unfair to the other person. 

Mr. BEISNER. I think it is grounded in the due process clause of 

the Constitution, which I think underlies Rule 23. And I think the 

notion is that you have a procedural device here, the class action, 

which puts enormous power in the hands of those who are bringing 

the lawsuit and often invites a lot of corner-cutting. And I think 

that, in this context, the notion of fairness is to ensure that you 

don’t get that sort of corner-cutting in the lawsuit. 

Mr. KING. There is no word ‘‘fair’’ in the Constitution. 

Mr. BEISNER. There is what? 

Mr. KING. The word ‘‘fair’’ doesn’t exist in the Constitution or 

any of the amendments, correct? 

Mr. BEISNER. It doesn’t exist in the Constitution, but I think in 

the class action context the underpinnings of that word lie in the 

due process—— 

Mr. KING. It is a long definition, I grant you that. 

And I thank you for your response, all the witnesses. 

And I yield back. 

Mr. FRANKS. Thank you, Mr. King. 

And I now recognize Mr. Scott for 5 minutes. 

Mr. SCOTT. Thank you, Mr. Chairman. 

95 

First of all, the Pigford case, just to make a note about it, that 

was a case of well-documented historic discrimination against African American farmers that went on for years and years. And, 

thankfully, with the Pigford decisions, some of them have gotten 

compensation. 

Mr. Sobol, can a lawyer walk into court without any clients? 

Mr. SOBOL. No, sir. 

Mr. SCOTT. Thank you. 

And, as you are aware, justice delayed is justice denied. If a 

State class action is filed and a removal action takes place when 

the case should stay in State court, how much time is wasted going 

to Federal court to try to get a removal that is subsequently denied 

and the case remains in State court? How much time is wasted in 

that process? 

Mr. SOBOL. Typically, a very considerable amount of time. More 

often than not, it is going to take at least several months to have 

a removal petition heard. 

More commonly, though, for class actions, you will end up having 

to be brought into the multidistrict panel process, wait months for 

a hearing there, have the case go to the multidistrict judge, and 

then have removal issues heard there. Those issues are sometimes 

deferred for years while the court sits on the remaining Federal 

court cases. 

So a long, long time. 

Mr. SCOTT. And if it ultimately goes back to the State court, 

years could be wasted? 

Mr. SOBOL. Yes. 

Mr. SCOTT. Now, if the desire is just to waste time, how often do 

Rule 11 sanctions get applied to that situation? 

Mr. SOBOL. Rarely. 

Mr. SCOTT. Ever? 

Mr. SOBOL. I would say, in my experience, never. 

Mr. SCOTT. How often do class actions get caught up in multidistrict litigation where there may be commonality but State laws differ, comparative versus contributory negligence, for example, that 

would dictate different outcomes? How often do cases that could be 

resolved expeditiously in State court get caught up in that, where 

you have multiyear expensive litigation that is often at a very inconvenient forum? I guess if you are in the east coast, you may just 

have the unfortunate situation that it is assigned to a judge on the 

west coast. 

Mr. SOBOL. Since CAFA, the vast majority of cases get removed 

or filed in Federal Court, and they get delayed at a very considerable period of time. And the State case—as opposed to what a State 

case would do, which is, classically, it would move along at a relatively swift pace, unencumbered by these extra procedural issues. 

Mr. SCOTT. Thank you. 

Now, Professor Redish and Mr. Beisner, you have both talked 

about these coupons. One has said it is not big enough to make a 

difference, and the other said these things are illusory. 

A lot of times, the only way you can bring a case for which there 

are even nominal damages—for example, if a bank is miscalculating interest for a few cents a month, nobody can bring that case. 

Nobody can bring a case if a grocery store scanner is miscalculating 

96 

the amount owed. The only way you can bring the case and stop 

it is to bring a class action and get an injunction. 

Now, if you do not have coupons, is your suggestion that you not 

be able to bring the case at all? Or that if you have a class action, 

people would be entitled to reasonable compensation; say, you have 

a couple of million people involved, everybody gets a couple hundred dollars? I mean, when is your suggestion alternative to the 

coupons? 

Mr. REDISH. Well, Congressman, my understanding is that CAFA 

pretty much did away, at least in the Federal system, with the use 

of coupons in any event. And what has developed as an alternative 

to that is the use of this cy-pres doctrine whereby the bulk of the 

funds awarded will never, as a practical matter, be distributed to 

the actual victims, those whose legal rights have been violated, and 

instead—— 

Mr. SCOTT. But their legal rights are vindicated with an injunction. You get the people to stop doing it. 

Mr. REDISH. Well, if we are talking about an injunction class action under the (b)(2) category, that might well be sufficient, real relief. 

My concern is that we have a bilateral process with those whose 

rights have been violated, those who have allegedly violated them, 

and some kind of meaningful relief, whether it is compensatory or, 

if appropriate, injunctive, being awarded. But if that is not feasible, 

the idea of just bringing the proceeding as some sort of generic deterrent is a dramatic change in the underlying substantive law. 

Mr. SCOTT. Mr. Sobol, can you say a word about the workload in 

the Federal Court and what this has done to it? 

Mr. SOBOL. I couldn’t hear you. 

Mr. SCOTT. The workload in the Federal Courts? 

Mr. SOBOL. The Federal judiciary is very much overworked. Particularly those judges who get MDL cases tend to be the most overworked and the most qualified judges. It is very difficult for them 

to sit on an MDL case and be expected to handle a dozen or two 

dozen or three dozen separate State court cases. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Mr. FRANKS. Well, this has been enlightening to me, if no one 

else. 

I appreciate all of you for coming. I appreciate the witnesses for 

your very insightful testimony, and appreciate the Members for 

being here. 

And, without objection, all Members will have 5 legislative days 

to submit to the Chair additional written questions for the witnesses, which we will forward on and ask the witnesses to respond 

as promptly as they can so that their answers may be made part 

of the record. 

Without objection, all Members will have 5 legislative days within which to submit any additional materials for inclusion in the 

record. 

And, with that, again, I sincerely thank the witnesses, and I 

thank the Members and observers. And this hearing is now adjourned. 

[Whereupon, at 10:35 a.m., the Subcommittee was adjourned.] 

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