Mr. DETKIN. I will. Finally, it allows for interlocutory appeal of the outcome determinative of class certification decision, and that helps both sides because if a case is denied certified then the plaintiffs want the ability to have that reviewed by an appellate court. If it is granted certification then it should be reviewed by an appellate court because at the end of the day that drives settlement.

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    So in summary, class actions are clearly a valuable tool. They are needed in our jurisprudential system. We are all for them. We have no intention of using this as a system to try to help corporations swindle anybody. But they are subject to abuse, and the proposed bill will eliminate the manipulation of the system that allows abuse, while still keeping, and in fact strengthening, meritorious claims.

    Thank you for your time.

    [The prepared statement of Mr. Detkin follows:]

PREPARED STATEMENT OF PETER N. DETKIN

    Chairman Sensenbrenner, Congressman Conyers, and distinguished members of the House Judiciary Committee, thank you for inviting me to testify before you today on behalf of Intel Corporation and the Semiconductor Industry Association (SIA), on the subject of class action litigation reform. My name is Peter Detkin, and I am Vice President and Assistant General Counsel at Intel Corporation.

    For more than three decades, Intel Corporation has developed technology contributing to the computer and Internet revolution that has changed the world. Founded in 1968 to build semiconductor memory products, Intel introduced the world's first microprocessor in 1971. Today, Intel supplies chips, boards, systems, software, networking and communications equipment, and services that comprise the building blocks of the Internet. Intel's mission is to be the preeminent building block supplier to the worldwide Internet economy.

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    The Semiconductor Industry Association is the premier trade association representing the U.S. microchip industry. SIA member companies comprise 90 percent of U.S. semiconductor production and employ a domestic workforce of more than 284,000. The SIA provides a forum for domestic semiconductor companies to work collectively to advance competitiveness of the $75 billion U.S. chip industry.

    Intel, the SIA, and much of the rest of the technology community are hopeful that you will act during this Congress to address a growing problem in our legal system: abusive class action litigation. Recently, a broad array of technology companies, including Intel and other members of the SIA, came together as signatories of an open letter to members of Congress, encouraging your support for H.R. 2341, the Class Action Fairness Act of 2001. I want to thank Congressman Goodlatte and Congressman Boucher for sponsoring this bill, as well as its many Republican and Democratic cosponsors. The technology community supports H.R. 2341 because we believe that it represents a good faith, bipartisan approach to preserving what is useful and effective about the class action mechanism, while at the same time discouraging abuse and improving the class action process to make it simpler, fairer, and faster for all parties involved.

    The class action device is intended to promote more efficient resolution of suits involving multiple plaintiffs or defendants with very similar claims. It can enable plaintiffs of limited means to pursue small but nonetheless significant claims. It also may, in rare cases, be the only practical method of litigating and resolving important social issues.

    In recent years, however, there has been an increase in the number of abusive class action lawsuits filed in state courts. Of particular concern, we are seeing an aggressive move by a limited number of plaintiffs' attorneys to file class actions against technology companies in areas such as allegedly defective products. It is obvious that many of these suits are brought as class actions because the injury alleged is either trivial, highly speculative, or wholly nonexistent.

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    As most of you are aware, technology companies have long been a prime target in securities litigation. Quite often, these private securities suits are without merit and are designed simply to coerce settlements out of deep-pocketed defendants. Many of you joined to support enactment of the Private Securities Litigation Reform Act of 1995 (PSLRA) and later the Securities Litigation Uniform Standards Act of 1998 (SLUSA), to address this problem. These narrowly tailored laws were designed to weed out frivolous ''strike'' securities suits without unduly impeding the ability of shareholders with legitimate claims to seek relief in federal court. The record suggests that a similar response is now needed to address other forms of abusive class action litigation.

I. THE PROBLEM

    Until the last decade, virtually all national class actions were filed in federal court. In recent years, however, we have seen an explosion of class action filings in state court. Although the absence of centralized data-keeping in the state courts makes it impossible to quantify the problem precisely, the available empirical and anecdotal evidence leaves no doubt in my mind that state court class actions against out-of-state defendants have increased many-fold since 1990. This point is not controversial. The migration of national class actions to state courts has been acknowledged by leading plaintiffs' lawyers,(see footnote 1) noted by federal judges,(see footnote 2) demonstrated by empirical studies,(see footnote 3) and widely reported in the press. In fact, the Washington Post recently ran an editorial entitled ''Actions without Class,''(see footnote 4) which highlighted the seriousness of the problem.

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