Washington, D.C. – House Judiciary Committee Chairman Bob Goodlatte (R-Va.) today delivered the following remarks during the Regulatory Reform, Commercial and Antitrust Law Subcommittee hearing on “Oversight of the Activities of the Justice Department’s Civil, Tax and Environment and Natural Resources Divisions and the U.S. Trustee Program.

Chairman Goodlatte: Welcome.  I second the Subcommittee Vice-Chairman’s remarks about the need for reforms at DOJ.

I am very pleased that already a major reform is in place.  Yesterday, Attorney General Sessions announced a ban on payments to non-victim third parties in DOJ settlements.  I applaud the attorney general’s action.  The new Justice Department’s respect for the Separation of Powers stands in stark contrast to the behavior of Obama Administration officials, who used their positions to funnel billions of settlement dollars to their political allies.

The Committee will continue working to pass the bipartisan Stop Settlement Slush Funds Act of 2017 which would ban this practice permanently.

Additional reforms are also needed.  DOJ did not just force settling defendants to pay non-victims.  In 2013, a shocking New York Times exposé revealed that the Obama Administration bilked over a billion dollars from the taxpayer-funded Judgment Fund and handed it to special interests.

The vehicles for this giveaway were parallel, weak cases alleging bias by the Department of Agriculture.  The Times described how after a succession of DOJ legal victories, including in the Supreme Court, “political appointees . . . engineered a stunning turnabout: they committed $1.33 billion to compensate . . . thousands of Hispanic and female farmers who had never claimed bias in court.”  The deal was “fashioned in White House meetings despite the vehement objections . . . of career lawyers . . . who had argued that there was no credible evidence of widespread discrimination.”

The government’s statistical expert from UC Berkeley told the Times regarding the parallel Keepseagle case, “[i]f they had gone to trial, the government would have prevailed . . . . It was just a joke . . . . I was so disgusted.  It was simply buying the support of the Native-Americans.”

The Keepseagle settlement was based on the plaintiffs’ lawyers’ self-serving estimate that there were 19,000 claimants.  Plaintiffs’ attorneys collected $60.8 million in fees.  Just a year before, the lead plaintiffs’ attorney, Joseph Sellers, had served on President Obama’s 2008 transition team.

In the end, there were just 4,400 claimants – fewer than even the government had estimated – and $380 million left over.  This was taxpayer money, but instead of demanding it back, DOJ agreed to direct it to non-victim third-parties.  This troubled the presiding judge, who wrote:

Although a $380,000,000 donation by the federal government to charities . . . might well be in the public interest, the Court doubts that the judgment fund from which this money came was intended to serve such a purpose. The public would do well to ask why $380,000,000 is being spent in such a manner.

On May 25, 2017, I wrote the Attorney General alerting him to a potential opportunity for DOJ to recover the $380 million for taxpayers.

I look forward to discussing remedies for the larger issue of Judgment Fund abuse.

Overreach is not limited to the Executive Branch.  District court judges are issuing preliminary injunctions outside of their jurisdictions and for the protection of non-parties.

According to a forthcoming article in the Harvard Law Review, this is a recent development not in accord with traditional practice.  The traditional view was that court injunctions restrain the defendant’s conduct vis-à-vis the plaintiff, not vis-à-vis the world.  Nationwide injunctions trample the sovereignty of sister courts.  They also create a “shop till the statute drops” problem.  Opponents of government action can lose in 93 judicial districts, win one preliminary injunction in the 94th, and then government action can be stayed nationwide, despite it being upheld everywhere else.  Such perverse results might be avoided if DOJ insisted on the original understanding that courts do not have authority to issue such sweeping injunctions.

There are many additional issues to cover.  This hearing is one of a series that the Committee is holding on the Justice Department, to identify areas that are in need of reform.

I thank our witnesses and look forward to hearing their thoughts on restoring the Justice Department to its proper role.

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