[Witnesses sworn.]

    Chairman SENSENBRENNER. Let the record show that all of the witnesses answered in the affirmative. Without objection, each of the witnesses' written statements will be included in the record as a part of their testimony. I would ask that the witnesses limit their oral presentations to 5 minutes or so so that there will be a maximum amount of time for Members of the Committee to ask questions of members of the witness panel.

    Mr. Detkin, you are first.

TESTIMONY OF PETER DETKIN, VICE PRESIDENT AND ASSISTANT GENERAL COUNSEL, INTEL CORPORATION

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    Mr. DETKIN. Chairman Sensenbrenner, Congressman Conyers, distinguished Members of the House Judiciary Committee, thank you for inviting me here to testify before you today on behalf of both Intel Corporation and also the Semiconductor Industry Association. As Mr. Sensenbrenner mentioned, I am a vice president, assistant general counsel at Intel, and I'm also here on behalf of the Semiconductor Industry Association.

    Most of you are familiar with Intel. Intel was co-founded by the person who was one of the inventors of the integrated circuit, and also is responsible for bringing the DRAM and the microprocessor to bear: two of the most important inventions of our age. The Semiconductor Industry Association, also known as the SIA, represents member companies responsible for 90 percent of the semiconductor output of the United States, and more than 280,000 employees here in the United States.

    I am not going to parrot my written testimony. You all have it and had a chance to read it. Instead I am here to explain why the tech community supports class action reform; in particular to draw on Intel's experiences with class action litigation, and to respond in part to some of Congressman Conyers' criticisms of the bill.

    At bottom, the class action system as it is currently comprised encourages forum shopping. It encourages an unseemly race to the courthouse to determine who will be lead plaintiff and which court will have jurisdiction over a particular matter, with no bearing whatsoever on the merits of the underlying claim.

    Just drawing on two of Intel's experiences, in one instance we had 13 class actions filed in a few-week period in six different States. Thirteen different cases in six different States. These all involved the same facts, virtually the same claims, and the same alleged nationwide class of more than 100 million people. In the second instance we had five suits filed against us in just 9 days on two different coasts. Again, same basic facts, same basic claims, and the same nationwide class.

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    What we learned is that there are idiosyncratic local rules that favor the local counsel who are in front of the local elected judges. For example, in one instance we were constantly, on less than 48-hours notice, required to appear on these so-called emergency motions. I would estimate at three or four times a week, by this local counsel who would say, we have another emergency, Your Honor, so Intel has to appear before you, because we were not allowed to appear by phone. So we had to race halfway across the country to respond to these motions.

    At the end of the day which court would have heard this nationwide class action was going to be determined by a race to the courthouse. It had nothing to do with traditional notions such as where should the claims be heard, where could we compel evidence, where are the witnesses, where are the facts? That is where the Federal court system would help, and that is where the minimal diversity aspects that the Chairman referred to would help. There are uniform procedures. You have staff who are experienced with complex litigation of this nature. And perhaps most importantly, you have the ability to consolidate.

    Here is where I would like to respond directly to Congressman Conyers' criticism. Nothing in this bill would bar any plaintiff from any courthouse, or from the courthouse, I should say. Each of these plaintiffs that he refers to would still be allowed to bring claims. The key is that Enron people who have claims against Enron, had it not been in Federal bankruptcy court, or the BAF investors before them, would be ensured of being in the right court, in the right State.

    For example, let us imagine, given the BFA situation, had there been two investors in Illinois. There is nothing to prevent a class action litigator from filing his claim in Illinois, getting the class certified there, and then Mr. Friedman's clients would be forced to have their claims heard by a State court in Illinois determining the rights of the people in Arizona. That is where the class would be heard. I do not think that is the result we want.

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    Similarly, with Enron it is quite possible that Enron employees in Illinois or in Palm Beach, Florida or in Texas could beat the Houston plaintiffs to the courthouse and end up having the class action heard there. I do not think that is an appropriate use of judicial resources.

    So how would the proposed bill help? As I mentioned, the minimal diversity aspects would get the cases to Federal court where they can be consolidated and brought before the court where it would make—in the jurisdiction that would make most sense. In addition, there is a lot of consumer protection in there that also would prevent consumers from being swindled, to use Mr. Conyers' words.

    There is a plain English requirement for the notices. Anybody who has ever received a class action notice knows that these things are impenetrable. I refer in my testimony to the one, the two-foot long receipt I got from Blockbuster, which I defy anybody to understand. There is scrutiny of the so-called coupon settlements, require heightened scrutiny by the judges of settlements involving coupons. There is a restriction on the use of bounties for lead plaintiffs. All of these will protect consumers at the end of the day. I think that is very important.

    Mr. GEKAS [presiding]. Would the gentleman draw to a close, please?