Text 459, 488 rader
Skriven 2005-02-09 23:33:36 av Whitehouse Press (1:3634/12.0)
Ärende: Press Release (050209f) for Wed, 2005 Feb 9
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President Participates in Class-Action Lawsuit Reform Conversation
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For Immediate Release
Office of the Press Secretary
February 9, 2005

President Participates in Class-Action Lawsuit Reform Conversation
Department of Commerce
Washington, D.C.

President's Remarks
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1:31 P.M. EST

THE PRESIDENT: Carlos, thank you. (Applause.) Thank you all. Not so fast,
Senator. Carlos, thanks. I appreciate your service, Carlos. Thanks for
agreeing to be the Cabinet Secretary. Thanks for leaving the private sector
to come to Washington, and bring your family here to serve our country.
You're going to be -- he's going to be a great Secretary. And for those of
you here who work in the Commerce Department, you're lucky to have him as a
boss. Welcome. (Applause.)

I appreciate my friend, Orrin Hatch, joining us. Senator Hatch, thanks for
coming. Senator Hatch, and Senator Cornyn, from the great state of Texas,
are leaders when it comes to legal reform. I want to thank you for being
here. Congressman Bob Goodlatte from the great state of Virginia is with
us, as well. We're honored three members took time out to come and hear
this, what I think is a vital discussion about how to make America the best
place in the world to do business. Welcome, glad you all are here.
(Applause.)

I want to thank the entrepreneurs who are here, the small business owners
and the association members, people who care about legal reform. I
appreciate you coming. I also want to thank our panelists. We're going to
have an interesting discussion about why we need to do something about
class-action lawsuits. That's what we're here to discuss.

I do want to put it in the larger context, though, about why we even ought
to take on this issue. As Carlos said, lawsuits are -- a litigious society
is one that makes it difficult for capital to flow freely. And a capitalist
society depends on the capacity for people willing to take risk and to say
there's a better future, and I want to take a risk toward that future. And
I'm deeply concerned that too many lawsuits make it too difficult for
people to do that.

And so I've called upon Congress to work with the administration on legal
reform, whether it be to reform the asbestos litigation issue or medical
liability reform to make sure medicine is cost-effective to our citizens,
or whether it be class-action reform. Legal reform is part of a larger
agenda to make sure this economy of ours continues to grow. We're seeing
good growth now. As you know, last month, in the month of January, this
country created 146,000 new jobs. The national unemployment rate is down to
5.2 percent. This is all progress. But it's important for the Congress to
work with the administration to keep this progress going. And so legal
reform is part of a strategy for economic vitality and growth.

So is a disciplined budget part of that strategy. I submitted a budget
earlier this week. I'm not surprised some people are yelling about it
already. But it is a budget that is lean and effective and says we'll spend
money on programs that work. And I look forward to working with Congress to
get that budget passed. (Applause.)

It is time for Congress to pass an energy bill. We've been debating it for
too long and now is the time for action. (Applause.) And I'm confident we
can get it done. I believe that Congress has heard the message from the
people that, let's work together to encourage conservation and renewable
sources of energy, and let's spend money wisely on new technologies, and
why don't we promote clean and safe nuclear power -- all aimed at not only
protecting our environment, but at the same time, making us less dependent
on foreign sources of energy.

So my call to Congress again, like I did a week ago today, was, let's stop
the debate on energy and get a bill to my desk to show the American people
that we can respond. We'll continue to open up markets for goods overseas
and, at the same time, enforce our trade laws. Carlos is going to be a part
of the enforcement mechanism of our trade laws. We opened up markets to 12
countries over the past four years through new free trade agreements in
countries like Australia and Singapore. And over the next four years, we'll
continue to open up markets.

And the reason I believe it's important is because when we're good at
something, we ought to make it easier to sell what we're good at overseas
and create new customers for U.S. entrepreneurs and farmers and ranchers.
Given a level playing field, this country can compete with anybody, any
time, anywhere. And so we're going to continue to work with Congress to
advance good trade policy.

We'll work on things like simplifying the tax code, reasonable, wise
immigration reform, good health care policy, as well as taking on the tough
task of strengthening the Social Security system for younger generations to
come.

Now, I understand some have been listening closely to this debate, and I
want to make two points about Social Security before we get to the subject
at hand. One is, we have a problem. For those of you in Washington who say
we don't have a problem, all you got to do is look at the facts. We don't
have enough people paying into the system to take care of baby boomers like
me who are living longer and longer and longer and are going to be promised
more benefits. We've got more people who are going to be receiving benefits
over time, with fewer payers into the system. And those who are receiving
benefits will live longer and will receive more money. That says we've got
a problem.

It is a funding problem. In the year 2027, the federal government is
somehow going to have to come up with $200 billion more than the payroll
tax to make sure we fulfill the promise. And the problem gets worse and
worse. Starting in 2018, which isn't all that far away, 13 years away from
now, the system goes into the red. That means more money coming out of
Social Security than going in.

Some in our country think that Social Security is a trust fund -- in other
words, there's a pile of money being accumulated. That's just simply not
true. The money -- payroll taxes going into the Social Security are spent.
They're spent on benefits and they're spent on government programs. There
is no trust. We're on the ultimate pay-as-you-go system -- what goes in
comes out. And so, starting in 2018, what's going in -- what's coming out
is greater than what's going in. It says we've got a problem. And we'd
better start dealing with it now. The longer we wait, the harder it is to
fix the problem.

Secondly, if you're a person who is retired or near retirement, nothing
will change, there is enough money. You're in good shape. I know there are
some who have heard talk about Social Security around the country here,
saying, oops, he's going to take away my check. That's not going to happen.
I don't care what the rhetoric is, what the mailings say, what the TV ads
say, you're in good shape. It's the younger workers who ought to be asking
the members of the Congress and the President of the United States, what
are you going to do to fix the problem.

And I'm looking forward to working with Congress to fix the problem. All
ideas are on the table except running up the payroll tax. And I'm convinced
by setting aside partisan politics and focusing on what's right for younger
Americans, we can do the job that people expect us to do here in
Washington, D.C. (Applause.)

We're here to talk about class-action lawsuit abuse. And we've got some
experts here to help us understand what class-action lawsuits are all
about, and how best to effect good public policy. Look, there is a bill
working its way through the Senate now, and I want to thank both
Republicans and Democrat members of the Senate for working on that bill. My
call to them is to listen to the experts. And we're about to hear from two
-- actually three -- two people who have studied the issue, and one who has
actually lived with it.

It is important, for the sake of this country and for the sake of our
economy, to have a fair answer to a problem that is escalating. The problem
is people are filing suits all over the country in a state courthouse
that's affecting people in other states. And oftentimes businesses are
getting drug into it, or people are getting drug into it that are unaware
they're getting drug into it, and if they are getting drug into it, when
there's finally a settlement, they don't get much. And the people -- the
lawyers get a lot.

And so we've worked with Congress to come up with a reasonable solution.
And they've come up with a reasonable solution that says interstate
class-actions ought to be conducted in the federal court. And my call to
the Senate today is to get that bill done as quickly as possible so we can
get it to the House and get it to my desk. And the Senate has got to pass
the bill on the floor without amendment. They need to pass a clean bill,
one that makes sense for the American people. (Applause.)

I have asked, and Walter Dellinger has kindly agreed to come. He is a
practicing attorney. He is a professor. He's so good at being an attorney,
he's teaching others how to be an attorney, at Duke University, if I'm not
mistaken. He was telling me today -- I don't know if you know this or not,
this falls in the "small world" category -- and if our mutual friend is
listening on C-SPAN, it will blow his mind we're talking about him -- but I
was raised in Midland, Texas, and the fellow who lives across the street
from him in North Carolina's father, was the baby doctor for my three
little brothers. (Laughter.) Now, how about that for small world? Tell
Rodin hello.

MR. DELLINGER: I will.

THE PRESIDENT: Walter, why are you interested in the issue? He's actually
served in government for the previous administration. He represents the
spirit needed to have good legal reform, and that is the bipartisan spirit.
And tell us why you're here and give us your interest in the subject.

* * * * *

THE PRESIDENT: Tell people what a class-action is.

MR. DELLINGER: Well, a class-action -- the idea of class-action started
when we realized that often there were many people that had small -- the
same small injury. If I cheat a million people out of $10 apiece, I ought
not be able to sit back and think, well, they'll never be able to sue me
because it's $10 apiece. So if they're really common questions of law, and
you can resolve the whole dispute in one action, it's a very effective way
of doing it.

* * * * *

THE PRESIDENT: So in other words, a class-action lawsuit that is tried at a
state level means you could be doing business in California, but be sued in
Illinois court.

MR. DELLINGER: That's right. And one of the problems is that you sometimes
have, in one of these state class-actions, a state court judge making law
for the whole country -- making law for D.C. or for California, for
Arizona, sitting right in West Virginia, or in Illinois, when he's not
elected by these other people.

* * * * *

THE PRESIDENT: Before we get to how it does it, why is it more fair to be
in the federal court, in your judgment? I think people need to understand
why the remedy is going to make the system more fair to them. I mean, I
agree with you completely that there needs to be a judicial system that
honors people who have been harmed. We want the system to be fair. If you
get hurt, you ought to have access. And yet, on the other hand, we
understand the cost of frivolous lawsuits, people just filing lawsuits for
the sake of filing lawsuits, forcing people to settle even though there's
no merit to the lawsuit.

But explain why going from a state court to a federal court, in your
judgment, would be -- he actually testified on the bill, so, I mean, you
talk about an expert, we're beyond just somebody who theorizes, we're --
somebody who went up and front -- dared go to the halls of the Senate and
testified. How did Senator Cornyn treat you?

MR. DELLINGER: They did very well. (Laughter.) And Senator Hatch.

* * * * *

THE PRESIDENT: It sounds fair to me. I mean, it sounds reasonable. I think
if somebody is out there wondering whether or not this is a reasonable
proposal, it's reasoned to use the federal courts for what they were
intended to be used for, which is adjudicate disputes among the states, for
example. Anyway, why is this fair, beyond moving to the federal court? I
interrupted you before. You were saying, this bill is particularly fair
because --

MR. DELLINGER: Well, because it still allows these cases to proceed under
the standards we've developed for where you can try cases involving people
from different states. You get into federal court, and if some of the
harmful amendments that are being suggested are defeated so that you get a
clean bill sent to you, the federal courts will do what they've always done
-- they look at a case involving multiple states and they say: Can we
fairly try this? Are the state laws sufficiently alike that we can try this
in one lawsuit? If they're not, then you can bring those suits back in a
single state -- everybody in Pennsylvania can bring a lawsuit in
Pennsylvania courts. But you can't do it for multiple states if you just
tell judges -- you can pick the law of one state, whether people in other
states like that law, or not.

And you're going to hear this afternoon some very telling examples of
what's gone wrong when one state makes law for the whole country, without
the rest of the country being able to participate. People in Texas and
North Carolina don't get to vote for who's the state court judge in
Illinois. And we don't get to vote on what the law should be in those other
places. And this is precisely designed for that.

* * * * *

THE PRESIDENT: Great job. Thanks for coming. Appreciate you taking time.

He mentioned -- he said, they're trying to amend the bill. That's code word
for, they're trying to weaken the bill. They're trying to make the bill not
effective. That's why I called for a clean bill, and Walter called for a
clean bill, as well. And I'm confident that the Senate will hear that call
and get a good piece of legislation off the floor. Then we'll move it to
the House, and then it will get to my desk quickly and we'll show progress,
working together.

By the way, I repeat, this is a bill that is -- by a cosponsor with
Republicans and Democrats. It's a good piece of legislation.

Larry Mirel -- what do you do, Larry?

MR. MIREL: I'm the Commissioner of Insurance, Securities, and Banking for
the District of Columbia.

THE PRESIDENT: Right around the corner.

MR. MIREL: Right around the corner -- right across the street.

THE PRESIDENT: Right across the street. Well, that's good. So that seems
like an unusual connection. Here you are, sitting next to the President
talking about class-action lawsuit and it seems like you're really not
involved in the law, but are you?

MR. MIREL: Yes, indeed. And let me explain and add to what Walter said
before. My job -- I'm actually a state official -- and my job is to protect
the people of my jurisdiction, the District of Columbia, and in particular,
those who buy insurance. And I worry about that and I take that seriously.
I implement the laws of the District of Columbia, as passed by the Council
and approved by the Congress.

* * * * *

THE PRESIDENT: They settled because -- not necessarily because of the
merits of the lawsuit, they settled for threat of loss. In other words,
it's kind of like a lottery sometimes when the system isn't balanced right.

MR. MIREL: Right. I'll give you some examples of it. The first one settled
$7.5 million to the attorneys who brought the suit, nothing for the class
members. Those class members are all over the United States, including
people in the District of Columbia, everybody who bought a policy from that
company. The second one settled for $10 million to the lawyers, nothing to
the plaintiff class --

THE PRESIDENT: I'm beginning to get the picture of why there was 34 filed.
Slowly but surely, the settlements are getting bigger. Anyway --

MR. MIREL: Even the Association trial attorneys objected to that one. So
they went back and they gave something now to the members of the class.
What is it? One hundred dollars off your next life insurance policy that
you buy from that company.

THE PRESIDENT: If it's still around.

MR. MIREL: That's right. And the lawyers walk off with $10 million. Seven
cases were settled; the total payout so far is $40 million. And nothing has
gone to trial. And that's the real evil.

THE PRESIDENT: See, it's interesting. What he's saying is, is that he has
said -- he's doing his job in the District, and yet, a lawsuit that affects
people in the District begins to redefine what you've laid out is what is
fair.

MR. MIREL: That's exactly right. I'll give you another simple example.
There's a case in Los Angeles Superior Court claiming that one of our very
largest companies, State Farm, which is a mutual company, has too much in
reserves and should give that reserves back to its members. Well, what I do
for a living is make sure the companies that sell insurance in this
jurisdiction, including State Farm, have enough reserves.

THE PRESIDENT: -- enough reserves. (Laughter.)

MR. MIREL: Right. And the notion that a jury of laypersons in the Los
Angeles County Court can overturn my decision --

THE PRESIDENT: Do your job better than you can -- yes.

MR. MIREL: That's the part that I have problems with.

THE PRESIDENT: It's an interesting -- it's an interesting situation, isn't
it? And it's one that really goes back to what -- what Walter was talking
about as far as the framers' view of how a fair system ought to work. If I
were someone who was out there wondering whether or not we were making the
right decision, I would go back and harken back to the papers of the
Founding Fathers, when they talked about adjudicating disputes like this.
In this case, the jury doesn't make the decisions for the good folks in
Washington, D.C., a jury afar.

We've also got with us Alita. Are you ready to go? All right, how many kids
do you got?

MS. DITKOWSKY: I have two children.

THE PRESIDENT: They don't happen to be here, are they?

MS. DITKOWSKY: Yes, they are.

THE PRESIDENT: I can see them. How old are they?

MS. DITKOWSKY: Marissa is 10 and Jessica is going to be nine in two weeks
-- three weeks.

THE PRESIDENT: Going to be nine. Fabulous. Well, happy birthday-to-be. Got
mom up here on stage. Pretty cool, huh? (Laughter.) Where do you live?

MS. DITKOWSKY: I live in Commack. Commack, Long Island.

THE PRESIDENT: State? New York?

MS. DITKOWSKY: New York.

THE PRESIDENT: Not everybody knows where Commack is. Of course, I did.
(Laughter.) So why are you here? No --

MS. DITKOWSKY: Well, Mr. President --

THE PRESIDENT: Give us your story. This is a very interesting tale.

MS. DITKOWSKY: Okay. Well, first, I would never believe in a million years
I'd be talking to you face-to-face, and I would never believe that I'd be
talking about my TV set. (Laughter.) But here goes.

THE PRESIDENT: This is being recorded on film, so you can play it back just
to prove it actually happened. (Laughter.)

* * * * *

THE PRESIDENT: I'm going to stop you there. So you open up the mail --

MS. DITKOWSKY: Right.

THE PRESIDENT: -- and somebody sends you a coupon.

MS. DITKOWSKY: Correct.

THE PRESIDENT: -- meaning that you were a party to a lawsuit.

MS. DITKOWSKY: Exactly.

THE PRESIDENT: -- but you didn't know you were the party to the lawsuit.

MS. DITKOWSKY: Had no clue.

THE PRESIDENT: Interesting isn't it? Whew. (Laughter.) First, I'm glad I
wasn't the Thomson salesman, you know? (Laughter.) So you get the -- what,
you get a $50 --

MS. DITKOWSKY: A $50 rebate if you make a purchase of $100 or more.

* * * * *

THE PRESIDENT: So, therefore, there should have been a recourse. I mean, a
just society is one in which she buys the TV that is a lousy product, and
there's a warranty, and there's some protections for a consumer. They ought
to reward her those protections.

MS. DITKOWSKY: And as a consumer of this product, we sent out a warranty
card that said if there's a problem with the TV, the company is supposed to
notify us.

THE PRESIDENT: Right. And so the TV company was wrong, and the verdict was,
guilty, and you got $25.

MS. DITKOWSKY: I got a $50 rebate --

THE PRESIDENT: Fifty dollars.

MS. DITKOWSKY: -- to go buy a new TV from them.

THE PRESIDENT: Yes, I know. So it made you even hotter.

MR. DELLINGER: Why did you get such a bad deal?

MS. DITKOWSKY: Well, as I was going to tell the President, that I just
found out that the lawyer in this case, who took this case to a very small
court in Madison County, Illinois --

THE PRESIDENT: Oh, yes, I've been there. (Laughter.)

MS. DITKOWSKY: Madison County. I am going to --

THE PRESIDENT: It is the most -- there are more lawsuits filed in Madison
County, Illinois, than anywhere in the country, I think. I mean, I went
there to talk about legal reform in Madison County, Illinois. People are
filing lawsuits there all the time. You had your case heard in Madison
County -- I cannot believe it. Anyway, keep going.

MS. DITKOWSKY: Well, apparently this lawyer -- and nowhere is it in the
fine print of this little $50 coupon that this lawyer got $22 million.

THE PRESIDENT: We've got a problem.

MS. DITKOWSKY: Twenty-two million dollars. I'm still left with a broken TV.
He got $22 million. Where is the justice in this? (Applause.)

THE PRESIDENT: Yes, and that's exactly why -- thank you. We're all here
because we want the system to be fair. The economy depends upon a fair
legal system. People's faith in the system, our country depends upon a fair
legal system. And what we're highlighting here is the system isn't fair.
And the positive news is, in this town, people have come up with a fair
solution that will treat people with respect and give them justice when
they need it, and at the same time, hold people to account when they need
to be held to account, without affecting our capacity to grow our economy.
Fairness is all we ask for.

The scales of justice need to be balanced, and they're not balanced today.
And so good people from around the country, including Walter and Larry,
have come to the halls of Congress to help balance those scales. And,
fortunately, there are good senators and fair congressmen who understand
that all we seek is balance. And now is the time for the United States
Congress to balance the scales when it comes to class-action lawsuits; to
do their duty to make this country as good a country as it can possibly be.

I want to thank our panelists for coming. I hope you've enjoyed this as
much as I have. I'm honored that you would take time and stay over from
getting back home to help explain the need for this country to act on this
important issue.

Thank you for coming. God bless.

END 2:03 P.M. EST
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