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[Congressional Record Volume 141, Number 72 (Wednesday, May 3, 1995)]
[Senate]
[Pages S6033-S6068]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

          COMMONSENSE PRODUCT LIABIL- ITY AND LEGAL REFORM ACT

  The Senate continued with the consideration of the bill.
  Mr. HEFLIN addressed the chair.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. HEFLIN. Mr. President, I would like to address the Dole amendment 
and its relationship to other parts of the bill.
  The Dole amendment, of course, extends the provisions of this 
proposed bill to all civil actions involving interstate commerce. That 
includes almost every automobile accident, and every conceivable type 
of accident, not just product liability cases. And, as we know, the 
language ``interstate commerce'' has been so liberally construed up 
until the very recent Lopez case that it includes almost any situation. 
There are many examples, too numerous to cite here, that can 
demonstrate the liberal construction of the interstate commerce clause.
  Let me first recite the provision not only in the Dole amendment but 
in the overall bill pertaining to punitive damages, that if you seek 
punitive damages and any party can call for a bifurcated trial which 
means that at the request 
[[Page S6034]] of any party, the trier of facts, the jury, shall 
consider in a separate proceeding as to whether punitive damages should 
be awarded. By the way, bifurcated proceedings will result in an 
increase in transitional costs which is somewhat ironic in as much as 
the proponents of this legislation have maintained that one of the 
bill's objectives is to reduce, not increase, transactional costs.
  If there is evidence of punitive misconduct, it is inconceivable to 
me that any defendant would not take advantage of a bifurcated trial. 
So, all punitive damage cases will have two trials. In the first trial, 
which is the trial in regard to underlying liability, compensatory 
damages will be sought, which includes noneconomic damages and economic 
damages, and all of its component aspects. There is this provision in 
the Dole amendment, and also in the overall bill--it is just a 
repetition put here--that evidence relative only to the claim of 
punitive damages as determined by applicable State law shall be 
inadmissible--not admissible, but inadmissible--in any proceedings to 
determine whether compensatory damages are to be awarded.
  That means that in an automobile accident case or in a truck/
automobile case, you could prove negligence in the trial in chief, but 
you could not prove gross negligence. Basically, what that means--and 
every defendant who would come along would argue--yes, you can argue 
that the truck that caused the accident, that did the wrongdoing, 
crossed the center line and hit an individual. But you could not prove 
that the driver had three beers or had a pint of whiskey, because that 
issue would go to the punitive damage aspect of the case. You could not 
prove basically that the owner of the truck knew, under these 
circumstances, that that driver had been convicted four times before of 
drunk driving. You could not prove in the trial in chief that the 
driver of that motor vehicle--and it was known to the owner of the 
truck, the truck company, that defendant had been convicted twice of 
reckless driving. You could not go into any aspect that would be 
evidence relating punitive damages and punitive misconduct.
  Now, you could not prove in the Pinto automobile cases that there was 
a memorandum to the effect that a company will come out financially 
better rather than having a recall because of the location of the fuel 
tank and the certain danger that would result in the case of a rear end 
collisions. The memorandum in question showed that the company would 
come out better financially and with less expense to just pay off the 
claims that might arise from rear end collisions.
  Now, how does this relate also to the Snowe amendment which is in the 
Dole amendment? We have to go in and look to several liability for 
noneconomic loss. Under the Snowe cap, the cap on punitive damages is 
twice the amount of economic and noneconomic damages.
  Section 109 of the bill on the matter of several liability reads

       Each defendant shall be liable only for the amount of 
     noneconomic loss allocated to the defendant in direct 
     proportion to the percentage of responsibility of the 
     defendant determined in accordance to the harm to the 
     plaintiff with respect to which the defendant is liable.

  Therefore, in a motor truck and automobile accident, if a person were 
suing for punitive damages in a particularly egregious situation and 
trying to prove noneconomic damages, such as pain and the suffering, 
for example, and being aware of the basis for the cap of the Snowe 
amendment, that person could not prove against the owner of the truck 
that the owner knew of four convictions of drunk driving and two 
convictions of reckless driving in his efforts to establish the several 
liability of the driver and the owner of the truck.
  How can a person establish under not only the Dole amendment but 
under the bill as a whole the amount of noneconomic damage, for 
example, against the owner of the truck?
  Now, that is just one example, and there are probably a multitude of 
other examples. There are other aspects, but these two relate together 
in that, together, they put an injured party at a terrible 
disadvantage. It in effect says, regardless of the injury or the human 
element in this, we are interested in profits.
  To me, as I look at all of this, and every time I see more and more 
instances which raise serious questions in my mind, there are all sort 
of provisions throughout this particular bill that just really shock 
the conscience as regards to the issue of fairness.
  I am deeply concerned that people do not really understand how the 
provisions interrelate and what ultimate impact the bill will have on 
the individual and his or her rights to seek fair redress for injuries 
he or she may have received.
  How much time is remaining on our side?
  The PRESIDING OFFICER. Sixteen minutes.
  Mr. HEFLIN. I reserve the balance of my time.
  Mr. GORTON. Mr. President, how much time does the Senator desire?
  Mr. McCONNELL. Mr. President, 7 or 8 minutes.
  Mr. GORTON. I yield 8 minutes to the Senator from Kentucky.
  Mr. McCONNELL. Mr. President, the amendment I offered yesterday to 
broaden this bill to include medical malpractice reform, which the 
Senate approved, may have been the shot heard around the civil justice 
system, but the amendment we will be voting on offered by Senator Dole 
to extend punitive damages reform to all civil cases in the country is 
really the beginning of the revolution.
  The Dole punitive damages amendment, together with an Abraham- 
McConnell amendment on joint and several liability, which we will offer 
shortly, are the true tests of whether the Senate is going to provide 
meaningful and comprehensive civil justice reform for every American.
  Let me explain why the Dole amendment is so important to restoring 
justice to our civil justice system. Economic and noneconomic damages 
are awarded to compensate an injured party, to make the person whole in 
every possible way. That is a fundamental purpose of civil liability 
and one which I strongly support.
  Punitive damages, on the other hand, are assessed to punish the 
responsible party for conduct that is almost criminal in its 
recklessness, deliberateness, or malice. Since we assign liability for 
economic and noneconomic damage on the basis of fault, it is clear that 
punitive damages are meant to punish something much more than mere 
negligent conduct. Such damages are to be sought in extreme and unusual 
situations, not as a bonus, in every case, Mr. President.
  However, as any students of the tort system can say, the distinction 
between the two types of civil damages have become seriously blurred, 
making a mockery of the different purposes these damages are meant to 
serve.
  Claims and large awards for punitive damages have become routine. 
Plaintiffs who are fully compensated for their injuries throughout 
economic and noneconomic damages get an extra windfall that bears no 
relation whatever to the harm that they have suffered.
  The lawyers who represent these plaintiffs are stuffing their pockets 
with the money, as many plaintiffs lawyers will take up to half and 
even more of the total amount of these lucrative damage awards.
  Often, Mr. President, the potential for such enormous punitive 
damages awards entices people to sue in the first place. Plaintiffs, 
egged on by their lawyers, will sometimes turn down offers to 
compensate all their harm in the hope of scoring big with punitive 
damages or extorting a much larger settlement out of a defendant, who 
is understandably reluctant to play punitives roulette.
  In other words, what was once intended as a very narrow remedy lying 
somewhere between civil and criminal law has now become a gold mine 
that is exploited without regard to the considerations of justice and 
due process. The Dole amendment is designed to restore the concept of 
punishment to punitive damages.
  If we accept the principle that the law of punitive damages must be 
reformed in product liability and medical malpractice, it follows that 
such reform should be extended to other civil actions as well.
  Punitive damage reform will not limit an injured party's right to be 
[[Page S6035]] fully compensated for any harm. Instead, it will give 
relief to consumers in the form of lower prices at the checkout counter 
and lower insurance costs for their homes and businesses. To confine 
that relief to product liability and medical malpractice gets only part 
of the job done.
  Now, who is hurt by excessive punitive damages awards? The list is 
almost endless. Cities, counties, park districts, nonprofit agencies, 
charities like the Girl Scouts and the Little League and small 
businesses.
  For example, the Girl Scouts in Washington have to sell 87,000 boxes 
of Girl Scouts cookies just to pay their liability insurance premium. 
In southern Illinois, they must sell 41,000 boxes to cover insurance 
liability. Girl Scout camps can no longer afford to offer horseback 
riding because of excessive risk. They have no diving boards in the 
swimming pools--too much exposure to litigation.
  Cities spend $9 billion on liability judgments and settlements every 
year. An employee of the Smithsonian won a $400,000 award--$390,000 in 
the form of punitive damages because his supervisor called him an 
unflattering name. I guess that proves that sticks and stones may break 
my bones, while names earn a lawsuit.
  For small businesses, one lawsuit can mean bankruptcy, even if it is 
won. The huge fee and time spent away from the businesses has literally 
wiped out mom and mop enterprises despite the fact that they win the 
suit. No wonder so many small businesses cave in to legal extortion 
rather than risk court costs, legal fees, disruption of the business, 
harm to their reputation, and exposure to the most expensive lottery in 
America--punitive damages.
  The National Federation of Independent Business, which has been one 
of the true heroes on civil justice reform, brought to my attention the 
case of Hunt Tractor in my home State of Kentucky. They have been sued 
in two cases involving product liability allegations. In one case, the 
equipment operator was obviously negligent; and in the other case, the 
owner had modified the equipment to make it unsafe.
  While Hunt won both cases, it cost the company and its insurance 
carrier more than $100,000 to defend, and countless hours entangled in 
legal proceedings.
  Domino's, the chain of pizza delivery restaurants, was found liable 
for the injuries of a woman harmed when one of its pizza trucks was 
rushing to meet Domino's promised 30-minute-delivery deadline. 
Regardless of whether you believe Domino's had some share of the 
responsibility, the damages awarded in the case were astonishing. Out 
of a total award of $79 million, close to $78 million was punitive 
damages.
  Some of my colleagues have mentioned the situation in Alabama, a 
State I have a great deal of interest in. I was born there and lived 
the first 8 years of my life in Alabama. In Alabama, plaintiffs 
routinely recover punitive damage awards. In three counties studied by 
Prof. George Priest, of the Yale Law School, he found that punitive 
damages were
 awarded in 72 to 95 percent of all cases in these three counties in 
Alabama--all cases.

  It is hard to imagine that in all these cases defendants have behaved 
so egregiously as to warrant an assessment of punitive damages. 
Clearly, we need to bring punitive damages under control and relate 
them to punishment--not another routine part of every case. That is 
what this debate is about. It is not, as the opponents of reform have 
claimed, about taking money away from victims. It is about bringing 
some certainty to civil punishment, just as we do for criminal 
defendants.
  I thank the Chair and I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Ms. MOSELEY-BRAUN addressed the Chair.
  Mr. HEFLIN. Mr. President, I ask for the yeas and nays on the Shelby 
amendment.
  Mr. GORTON. Excuse me, will the Senator withhold?
  Mr. HEFLIN. All right, I yield to the Senator from Illinois.
  The PRESIDING OFFICER. The Senator from Illinois is recognized.
  Ms. MOSELEY-BRAUN. Mr. President, I know that I do not have a great 
deal of time, but I would like to discuss very briefly why I believe it 
would be a mistake for the Senate to adopt the Dole amendment on 
punitive damages. I know that the sponsors of this amendment are 
confident that their amendment, as drafted, will ensure that no 
limitations are placed on the ability to recover punitive damages in 
Federal civil rights cases. I am not sure that I agree with their 
assessment; however, even if it were correct, the pending amendment 
will have disastrous consequences in numerous cases that are brought 
pursuant to State law, including cases to vindicate civil rights. I 
have here a letter from Morris Dees, chief trial counsel for the 
Southern Poverty Law Center, which states:

       The Southern Poverty Law Center has used both Federal and 
     State laws to cripple a number of white supremacist and neo-
     Nazi groups during the past 10 years. If a Senate bill that 
     limits punitive damages is enacted, these judgments would not 
     be possible.

  A description of some of the types of cases that would be impacted by 
the Dole amendment illustrate the major harm that broadening the 
limitations of punitive damages to cover all civil litigation would 
create.
  In 1990, the Southern Poverty Law Center won a $12.5 million judgment 
against the White Aryan Resistance and its leaders--Tom Metzger and his 
son John--for the beating death of a black student in Portland, OR. Of 
that award, $2.5 million was for compensatory damages, while the 
remaining $10 million was for punitive damages, a punitive award that 
was four times the amount of compensatory damages.
  During the trial for civil damages, it was demonstrated that Mr. 
Metzger and the Ayran Resistance had for years preached that nonwhites 
were ``God's mistakes,'' and that Jews were the progeny of Satan. Tom 
Metzger and his son, John, sent agents to Portland, OR, to organize the 
East Side White Pride, a youth division of the Aryan Resistance. At the 
organizational meeting, members were encouraged to commit violent acts 
against blacks, a fact that had disastrous consequences for a 28-year-
old black Ethiopian immigrant named Mulugeta Seraw. While walking home, 
Mr. Seraw was attacked with a baseball bat by three skinheads who had 
attended the White Ayran Resistance meeting. Mr. Seraw--who had come to 
America to attend Portland State University, and who shipped money from 
his part-time job to his family back in Ethiopia--didn't stand a 
chance. He was dead before he ever reached the hospital.
  Mr. President, I mention this case because it was brought not 
pursuant to Federal civil rights laws, but pursuant to a State wrongful 
death statute, the very type of civil action that will be impacted by 
the Dole amendment. And it is not the only lawsuit of its kind that the 
Dole amendment would limit.
  Consider this case: In 1987, a wrongful death claim was brought 
against the United Klans of America for the lynching death of 19-year-
old Michael Donald, a masonry student at Carver State Technical College 
in Alabama. The case resulted in a $7 million judgment against the 
Klan. Again, as this is exactly the type of claim that would be 
impacted by the Dole amendment, I will briefly describe the facts.
  While walking home from his sister's house one evening, Michael 
Donald was kidnapped by two Klan members, Henry Hays and James 
``Tiger'' Knowles. After driving to a deserted woods, Michael was 
ordered out
 of the car. A newspaper account describes what happens next:

       Henry Hays pulls a knife. Michael Jerks free. He runs. They 
     chase him. He grabs a fallen tree limb. They knock it away. 
     Hays has the noose. They wrestle it over Michael's head. 
     Michael pulls on the rope, running in circles. Knowles holds 
     the other end and beats him, again and again, with the tree 
     limb. Michael collapses. Henry Hays pushes his boot into 
     Michael's face and pulls the rope tight. They drag him 
     through the dirt to the car. They lift him into the trunk. 
     Knowles asks Hays if he thinks Michael is dead. ``I don't 
     know,'' Hays replies, ``but I'm gonna make sure.'' He cuts 
     Michael's throat three times. They drive back to Henry Hays' 
     house and throw one end of the rope over the limb of a 
     Camphor tree across the street. Then they lift Michael by the 
     neck--high enough to swing. From the porch, the rest of the 
     Klansmen can see. As Knowles steps back up to join them, he 
     feels a friendly punch. ``Good job, Tiger.''
  Mr. President, Tiger Knowles and Henry Hays were convicted of crimes 
for their role in Michael Donald's brutal death, which some people may 
feel 
[[Page S6036]] is sufficient punishment. But for civil rights activists 
in the deep South, it was not. They recognized that this behavior was 
part of a pattern and practice of conduct by the Klu Klux Klan, 
designed to deprive minorities of their civil rights under law. So 
these activists sued the Klan, not pursuant to Federal Civil Rights 
Laws, but pursuant to State wrongful Death Statutes.
       At trial, evidence was presented to show that on the 
     evening of the murder, Tiger Knowles and Henry Hays had been 
     told by their local Klan leader ``get this down: if a black 
     man can kill a white man, a white man should be able to get 
     away with killing a black man * * * .'' The jurors were shown 
     a Klan newspaper, that had a
      drawing of a black man with a noose around his neck, a 
drawing that Tiger Knowles testified had influenced his behavior. 
Jurors were informed of countless other, similar incidents in which the 
United Klan had been involved. And ultimately--and quite wisely, I 
would assert--they awarded Michael's mother, Beulah Mae Donald, $7 
million.

  Perhaps there are some who feel a lower award would be appropriate in 
this case. Again, I will quote from a newspaper account which describes 
that amount of the award:

       The Klan cannot pay. It has nowhere near that kind of 
     money. So, in addition to a quarter of the wages some of the 
     klansmen will earn for the rest of their lives, and in 
     addition to titan Bennie Hays' house and farm, Beulah Mae 
     Donald accepts every penny of the several thousand dollars 
     that the United Klans of America has to its name, and the 
     deed and keys to its national headquarters. She shuts it 
     down.

  Mr. President, I have outlined two examples of punitive damages in 
wrongful death cases, but these are not the only types of State law 
cases that would limited by the Dole amendment. In 1988, the Southern 
Poverty Law Center won $1 million from two Georgia Klan groups who 
attacked marchers celebrating Dr. King's birthday. Or consider a recent 
award of $7 million in punitive damages against a law firm that 
tolerated sexual harassment--a claim that was brought pursuant to 
California's Fair Housing and Employment Act, not Federal civil rights 
law.
  As I stated at the beginning of debate on this legislation, I hope to 
be able to vote for cloture on a narrow, moderate product liability 
bill. I support reforms such as a statute of repose, or limitations on 
vicarious liability, or limitations of recovery if drug or alcohol use 
caused the injury. But I will never support any legislation that would, 
in the guise of civil justice reform, make it more difficult to bring 
civil rights claims under State law. I would never vote for an 
amendment that will restrict the ability of civil rights groups to sue 
the Klu Klux Klan. I urge my colleagues to reject the Dole amendment, 
and I ask unanimous consent that the text of the letter from the 
Southern Poverty Law Center, as well as the article describing their 
work, be printed in the Record following my remarks.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                              The Southern Poverty

                                                   Law Center,

                                   Montgomery, AL, April 25, 1995.
     Senator Tom Daschle,
     Hart Senate Office Building, Washington, DC.
       Dear Senator Daschle: The Southern Poverty Law Center has 
     used both federal and state tort laws to cripple a number of 
     white supremacist and neo-Nazi groups during the past ten 
     years. If a Senate bill that limits punitive damages is 
     enacted, these judgments would not be possible.
       In 1987, the Center got a $7 million judgment against the 
     United Klans of America for the lynching death of a black 
     teenager. The judgment bankrupted this violent hate group 
     whose members had previously bombed the Sixteenth Street 
     Baptist Church in Birmingham, Alabama, killing four young 
     girls.
       In 1990, the Center got a $12.5 million judgment against 
     the White Aryan Resistance and its leader Tom Metzger for the 
     death of a black student in Portland, Oregon, at the hands of 
     Skinheads. Most of the judgment was punitive damages. The 
     group we sued is now virtually out of business.
       In 1988, the Center got $1 million judgment against two 
     Georgia Klan groups for their assault on a group of marchers 
     celebrating Dr. King's birthday. Almost all of this amount 
     was punitive damages. We bankrupted both groups and took 
     property from several members.
       We presently have a civil damage suit pending against 
     Rescue America and its Florida leader, John Burt. Our client 
     is the family of slain abortion doctor David Gunn. Without a 
     large punitive damage award, a favorable judgment would not 
     be significant or effective.
       Senator, this is a bad bill that is being proposed in the 
     frenzy of political change. I urge you to vote against 
     cloture on any bill or amendments that limit the ability of 
     our civil justice system to punish those people and 
     organizations that inflict unspeakable injuries on our 
     friends, neighbors, family members and communities.
           Sincerely,
                                                      Morris Dees,
     Chief Trial Counsel.
                                                                    ____

          [From the Los Angeles Times magazine, Dec. 3, 1989]

                            The Long Crusade

                         (By Richard E. Meyer)

       When Morris Dees was 4, his daddy gave him his only 
     whipping. He used a belt, and he whipped him all over the 
     barnyard. It was for speaking with disrespect to a black man.
       It made an impression, but nothing like the impression his 
     daddy left a few years later, when Morris Dees was old enough 
     to tote water. It was summer in Alabama, mercilessly hot. He 
     carried the water in a bucket out to his daddy's workers, 
     hoeing cotton in the fields.
       One of them was Perry Lee. She was black. She kept a big 
     dip of snuff in her cheek. One day, as Morris Dees handed her 
     the water dipper, his daddy drove up. Perry Lee tucked a 
     finger behind her teeth, flicked out her snuff and took time 
     to drink. Morris Dees' daddy did two things his son never 
     forgot.
       With Perry Lee's hoe, he kept up her row, so she would not 
     worry about falling behind.
       Then he took the same dipper and drank.
       Morris Dees grew up with a golden touch. He sold cotton 
     mulch in high school, birthday cakes in college and mail 
     order books after law school. By the time he was 32, he and a 
     partner had sold the business for $6 million.
       He lent the touch to raise money for Democratic 
     presidential candidates--and, at the same time, Morris Dees, 
     his daddy's son, put the touch to work for people like Perry 
     Lee. In 1971, he co-founded and funded by directmail appeals 
     the Southern Poverty Law Center in Montgomery, Ala., a 
     nonprofit group of attorneys who use the law like a sword.
       The law center recently unveiled a civil-rights memorial 
     designed by Maya Lin, creator of the Vietnam Veterans 
     Memorial. But its real importance is its litigation on behalf 
     of the underdog. The center has challenged employment 
     discrimination, hazardous working conditions, denial of 
     voting rights, shoddy education, tax inequities and the death 
     penalty. Its battles against the Ku Klux Klan are legendary--
     so successful that Morris Dees is a man marked for 
     assassination.
       He is praised as a courageous klan-buster, but he also gets 
     crticized--even among those who share his goals. His critics 
     say that some racists are toothless and that he busts them to 
     impress the center's donors.
       Now Morris Dees is coming West--to take on California's own 
     Tom Metzger, of Fallbrook, and his White Aryan Resistance 
     (WAR). Dees has sued Metzger, charging him with inciting neo-
     Nazi skinheads who killed a black man. He wants the courts to 
     order Metzger and his organization to pay damages to the 
     victim's family. His tactic is to ruin Metzger financially--
     as he has empires of the klan--and put him out of business.
       If he succeeds, he will undo one of the most important 
     white supremacists still operating.
       Morris Seligman Dees, 52, is a soft-spoken man with light 
     blue eyes and sandy hair. He is informal, given to wearing 
     open shirts and loafers with no socks. He is wealthy enough 
     to retire. But he does not.
       What is it like to do what he does?
       Why, with the inherent danger, does he keep on doing it?
       It is spring of 1981, a Wednesday might in Mobile, Ala. Out 
     in the suburbs, members of United Klans of America, the 
     biggest, most secretive and arguably most violent of the Ku 
     Klux Klans, are meeting at Bennie Hays' place. Usually they 
     talk about klan business in Bennie's barn, then watch TV over 
     at his house. But by most accounts--testified to, published 
     or simply told--their meeting this night marks the beginnings 
     of something that becomes extraordinary.
       They are preoccupied by what they consider an outrage. A 
     white policeman has been killed in Birmingham, 85 miles from 
     Montgomery. A black has been charged with the murder. And it 
     looks like the jury is deadlocked. Bennie Hays, 64, titan in 
     charge of Klavern 900, commands everyone's attention. 
     Although he will deny it later, two klansmen swear that Benny 
     Hays declares to the meeting assembled; ``Get this down: If a 
     black man can kill a white man, a white man should be able to 
     get away with killing a black man . . .''.
       Klansman James (Tiger) Knowles, 17, borrows a 22-caliber 
     pistol. Then Knowles, fellow klansman Benjamin Franklin Cox, 
     20, and Henry Hays, 26, who is Bennie Hays' son and a member 
     of the klan as well, go to Cox's home and pick up a rope. 
     They tell Cox's mother they need it to tow a car.
       They listen for word. On Friday night, Knowles and Cox go 
     to Henry Hays' home to catch the 10 o'clock news. In the car, 
     Tiger Knowles knots a hangman's noose. As they pull up chairs 
     in front of Henry Hays' TV, a newscaster announces that the 
     jury in the black man's case has, indeed, deadlocked. If the 
     black man is not retried, he will go free.
       Henry Hays and Tiger Knowles burst for the door. They drive 
     straight to a black 
     [[Page S6037]] neighborhood. They see an elderly black man, 
     but he is too far from their car. Besides, he is on a public 
     telephone--he could appeal for help.
       Not far away, Michael Donald, 19, the youngest son of 
     Beulah Mae Donald, 61, is walking home from his sister's 
     house. A masonry student at Carver State Technical College, 
     Michael Donald works part time in the mail room at the Mobile 
     Press Register. He is quite, broad-shouldered and well-
     mannered. He likes music, plays basketball on a community 
     team, dates two or three girls.
       As he detours to a corner gas station to buy cigarettes, 
     Henry Hays and Tiger Knowles pull up.
       They motion him over.
       Knowles asks the way to a nightclub, and Michael Donald 
     starts to direct him.
       ``Come closer,'' Knowles says.
       Michael Donald leans over. Knowles pulls out the pistol.
       ``Be quiet,'' Knowles says.
       They order him into the car and drive across Mobile Bay and 
     into the woods.
       ``I can't believe this is happening,'' Michael Donald 
     pleads. ``I'll do anything you want. Beat me; just don't kill 
     me. Please don't kill me.''
       The car stops. They order him out. Knowles holds the 
     pistol. Michael Donald grabs him. All three scuffle for the 
     gun. It goes off.
       The bullet whines into the air.
       Henry Hays pulls a knife. Michael jerks free. He runs. They 
     chase him. He grabs a fallen tree limb. They knock it away. 
     Hays has the noose. They wrestle it over Michael's head. 
     Michael pulls on the rope, running in circles. Knowles holds 
     the other end and beats him, again and again, with the tree 
     limb.
       Michael collapses.
       Henry Hays pushes his boot into Michael's face and pulls 
     the rope tight.
       They drag him through the dirt to the car. They lift him 
     into the trunk. Knowles asks Hays if he thinks Michael is 
     dead.
       ``I don't know,'' Hays replies. ``But I'm gonna make 
     sure.''
       He cuts Michael's throat--three times.
       They drive back to Henry Hays' house and throw one end of 
     the rope over the limb of a camphor tree across the street. 
     Then they lift Michael by the neck--high enough to swing.
       From the porch, the rest of the klansmen can see.
       As Knowles steps back up to join them, he feels a friendly 
     pinch.
       ``Good job, Tiger.''
       In the dead of night, two of the klansmen drive downtown to 
     the Mobile County courthouse. Out front, they set flame to a 
     cross. And in the cool of the early morning, the city finds 
     Beulah Mae Donald's son, hanging from the camphor tree, 
     bruised, broken, dead.
       Despite the rope and the burning cross, the Mobile County 
     district attorney declares that race--much less the Ku Klux 
     Klan--does not seem to be a factor in Michael Donald's death.
       But the black community calls it a lynching.
       Beulah Mae Donald's attorney, state Sen. Michael Figures, 
     says it is clear to him that, at the very least, white 
     extremists of some kind are involved.
       Whites accuse Figures, who is black, of stirring up racism.
       The police investigate, but they do not question the klan. 
     Instead, they look into a theory that Michael Donald might 
     have been involved with a white woman at the Press Register 
     and gotten killed in a love triangle. Than they investigate a 
     theory that he might have gotten killed in a drug deal. They 
     arrest three men they describe as junkies. But when the case 
     goes to a county grand jury, it tumbles apart.
       Thousands of blacks march in protest.
       All Beulah Mae Donald wants, she says, is ``to know who 
     really killed my child.''
       Michael Figures' brother, Thomas, an assistant U.S. 
     attorney in Mobile, asks for a second investigation--this 
     time by a federal grand jury.
       And this time, Tiger Knowles cracks.
       He plea-bargains. In return for his testimony, Knowles gets 
     life--and Henry Hays gets death.
       There the matter of Michael Donald might remain--but for 
     the district attorney, who continues to maintain the klan's 
     innocence. ``I'm not sure this as a klan case,'' the district 
     attorney says. Rather, he declares, this was a case in which 
     members of the Ku Klux Klan just happen to have been 
     involved.
       Morris Dees simply does not believe it, and he cannot 
     ignore it.
       From what he can plainly see, Tiger Knowles and Henry Hays 
     did not act in a vacuum. Dees calls Michael Figures and 
     suggests that Beulah Mae Donald and the NAACP filed a civil 
     suit against the United Klans of America, headed by Robert 
     Shelton, its imperial wizard. Dees proposes to prove that the 
     killers carried out a policy of violence for which the klan 
     is responsible--just as a corporation is liable for the 
     actions of its employees when they carry out its policies.
       Although individual klansmen--Tiger Knowles and Henry 
     Hays--were prosecuted, nobody has ever tried suing United 
     Klans as a whole for damages. The idea, Dees says, would be 
     to win a financial judgment large enough to bankrupt it.
       Beulah Mae Donald approves.
       On her behalf, Morris Dees sues United Klans of America in 
     U.S. District Court in Mobile for $10 million.
       The klan sees trouble.
       Even before jury selection, it consents to a broad 
     injunction against harrassing blacks. Then, as the trial gets 
     under way, Morris Dees calls Tiger Knowles to testify.
       Flanked by federal marshals, Knowles walks into court, pest 
     Beulah Mae Donald at the plaintiff's table.
       Already a turncoat for testifying against Henry Hays, today 
     he will add to the vengeance the klan feels against him. He 
     walks past former fellow klansmen, seated at the defense 
     table. Next to them is Shelton, their imperial wizard. Not a 
     defendant, he is there as the chief officer of United Klans.
       Morris Dees questions Knowles softly, Knowles tells how it 
     was that Michael Donald died.
       ``We got the gun,'' Tiger recalls, ``and then later . . . I 
     tied the hangman's noose in Henry's car.''
       Throat cut, face bruised, clothing in disarray, wounds on 
     the hands. Was that his work?
       ``Yes.''
       Dees holds up a drawing from a klan newspaper edited and 
     published by Shelton. It shows a black man with a noose 
     around his neck.
       Had Tiger seen the drawing before he killed Michael?
       ``Yes.''
       Had it influenced him?
       ``Yes, it did.''
       Tiger steps down to show how Michael Donald was strangled.
       Beulah Mae Donald sobs softly.
       John Mays, the klan attorney, asks Tiger if he had heard 
     Shelton order violence.
       No, Tiger replies, but ``he instructed us to follow our 
     leaders.''
       Tiger recalls how Bennie Hays had suggested that if a black 
     man could get away with killing a white man, then a white man 
     ought to be able to get away with killing a black man.
       ``Mr. Hays is who I took orders from . . . He took his 
     orders from Mr. Shelton. . . .
       ``All I know is I was carrying out orders.''
       Mays concedes that Michael's murder is a ``horrible 
     atrocity''--but he tries to portray the klan as a political 
     organization. Shelton tells the jury that white supremacy is 
     a political goal--nothing more. He says that nothing in the 
     klan bylaws approves of violence. He says that he does not 
     advocate violence.
       Shelton adds triumphantly: ``I'm not ashamed to be a white 
     person.''
       In America, Mays says, ``we don't punish the organization. 
     We punish the individuals.''
       But Dees counters with a tutorial in klan history. With 
     testimony from some former klansmen and depositions from 
     others, he shows how Shelton personally directed the infamous 
     Mother's Day attack in 1961 on Freedom Riders at the 
     Trailways bus station in Birmingham; how a United klansman 
     was convicted of bombing Birmingham's 16th Street Baptist 
     Church in 1963, killing four black girls as they prepared to 
     participate in the 11 o'clock service; how four klansmen 
     killed Viola Liuzzo, a white civil-rights worker, in 1965 
     after hearing Shelton say, ``If necessary, you know, just do 
     what you have got to do,'' and how in 1978, just 2\1/2\ years 
     before Michael Donald was killed, Shelton told a group of 
     klansmen, ``Sometimes you just got to get out there and stop 
     them,'' after which the klansmen fired shots into the homes 
     of blacks, including the state president of the National 
     Assn. for the Advancement of Colored People.
       Ku Klux Klan policy is hardly politics, Dees declares. Make 
     no mistake, he says, it is violence.
       Finally, Dees calls klansman William O'Connor to the stand. 
     On TV news tape the day that Michael died, Bennie Hays had 
     been pictured walking up to the camphor tree to look at his 
     body. O'Connor tells the jury that Hays had said it was ``a 
     pretty sight.''
       Hays, acting as his own lawyer, calls O'Connor a liar. He 
     says he had no knowledge of any plans to kill Michael 
     Donald--and that anybody who says anything to the contrary is 
     lying.
       ``I have never in my life heard anybody talk about a 
     hanging,'' he tells the jury. He says lynching talk was a 
     ``no-no'' during klan meetings. And, Bennie Hays says, Henry, 
     his convicted son, still maintains that he is innocent.
       As both sides wind up their cases, Tiger Knowles summons 
     Morris Dees to his jail cell. Although he has been testifying 
     for the plaintiffs, Tiger is a defendant--and he wants to 
     offer a closing statement of his own.
       ``Say what you feel,'' Dees counsels.
       When court resumes, Tiger Knowles, one of the killers of 
     Michael Donald, stands in front of the jury box.
       He won't take long, he says. He knows people have tried to 
     discredit his testimony, but everything he has spoken is 
     true. ``I've lost my family, and I've got people after me,'' 
     he says. ``I was acting as a klansman. I hope people learn 
     from my mistakes, learn what it cost me.''
       He turns to the jurors, ``Return a verdict against me,'' he 
     says, beginning to shake, ``and everything else.''
       Then he turns to Beulah Mae Donald. He pauses.
       He is in prison for life--but he is alive. Her son is dead. 
     Trembling, then sobbing, Tiger Knowles apologizes. Jurors are 
     crying, Judge Alex T. Howard, Jr., wipes his eyes. Tiger 
     tells Beulah Mae Donald that he has nothing to pay her, but 
     if it takes the rest of his life 
     [[Page S6038]] to make amends, he will--for any comfort it 
     may bring. As for her son, he says, ``God knows, if I could 
     trade places with him, I would.''
       Softly, from her chair, Beulah Mae Donald forgives him.
       The members of the jury deliberate for four hours. In the 
     end, they award her $7 million.
       The klan cannot pay. It has nowhere near that kind of 
     money. So, in addition to a quarter of the wages some of the 
     klansmen will earn for the rest of their lives, and in 
     addition to Titan Bernie Hays' house and farm, Beulah Mae 
     Donald accepts every penny of the several thousand dollars 
     that the United Klans of America has to its name--and the 
     deed and keys to its national headquarters.
       She shuts it down.
       Before, during and after victory, retribution from the klan 
     and other white racists is a worry for Dees and his staff--
     sometimes a big one.
       One night in the summer of 1983, a man stops his pickup on 
     South McDonough Street, not far from an entrance to the 
     Montgomery city sewer system. Two younger men step out of the 
     truck. Silently they drop down into the sewer, out of sight.
       The older man drives off.
       He is Joe Garner, 37, a convenience store operator. The 
     younger men are Tommy Downs and Charles (Dink) Bailey, both 
     20, who rent a room from Garner behind one of his stores, out 
     in the county near Snowdoun. Besides being their landlord, 
     Garner has become an influence on their lives.
       For their mission of the moment, Garner has given Downs and 
     Bailey a flashlight, a pair of brown gloves, some silver duct 
     tape, a garden sprayer and a container of gasoline. They 
     carry these items, in an old canvas bag, down into the sewer. 
     One block north, on Hull Street, they climb out of the sewer 
     and slip along Hull to the Southern Poverty Law Center. They 
     dash into some bushes in back.
       Earlier the same evening, Morris Dees has returned to the 
     law center from northern Alabama, where he gave federal 
     investigators evidence against members of the Invisible 
     Empire, Knights of the Ku Klux Klan. This particular arm of 
     the klan had attacked the president of the Southern Christian 
     Leadership Conference and other blacks during a civil-rights 
     march in Decatur, and Dees' evidence--including the 
     identities of many of the assailants--eventually will lead to 
     the conviction of several klansmen, including a former grand 
     wizard.
       After the criminal trial, Dees will sue the Invisible 
     Empire, Knights of the Ku Klux Klan, winning an $11,500 
     settlement for the marchers and a ban against further 
     harassment. And--more galling still--he will win a court 
     decree ordering seven klan members to sit down with civil-
     rights leaders, who will teach them race relations.
       Hours before Tommy Downs and Dink Bailey arrive at the law 
     center, Dees and his investigators have locked the front door 
     and gone home.
       Tommy Downs eases out of the bushes. By his signed account 
     to investigators, he sticks some of the duct tape to a back 
     window, then taps along the tape with a tire tool. The glass 
     cracks silently under the tape, and he lifts it out.
       He runs back to the bushes and listens for a burglar alarm. 
     There is none. Someone has forgotten to set it.
       Downs fills the sprayer with gasoline. Then he slips 
     through the broken window. With Dink Bailey standing guard 
     outside, Downs sprays the carpet with gasoline. He sprays 
     around the desks and around the filing cabinets, then opens a 
     few drawers and sprays inside. He lights the gasoline--and 
     crawls back outside.
       Downs and Bailey run along Hull Street and climb back down 
     into the sewer. They wait.
       A smoke detector alerts the fire department. From an 
     opening in the sewer, Downs and Bailey watch as fire trucks 
     and police arrive. Then they duck down and make their escape.
       At the law center, the gasoline vaporizes quickly, and the 
     fire follows the vapor straight up. It scorches the carpeting 
     and the file cabinets and causes $140,000 worth of damage to 
     the walls, frame and ceiling. But virtually all of Dees' 
     evidence against the klan--in the file drawers--survives.
       When Dees arrives, the fire is still burning. On the wall, 
     the law center clock is melted to a halt: 3:48 a.m.
       Morris Dees has a hunch.
       About a month before, he remembers, he had summoned Joe 
     Garner to the law center for a deposition in the Decatur 
     case. Garner had denied being a klan member--but Joe Garner 
     sounded like someone who might carry a grudge, even against 
     being questioned.
       Dees checks into Garner's background--and into the past of 
     his two renters. He discovers that when Tommy Downs moved 
     from a previous address, he left behind a certificate that 
     declared him to be a member of the klan. And the klan 
     certificate is signed by none other than Joe Garner.
       Within weeks, a law center investigator finds, a photo 
     showing Tommy Downs marching at a klan rally--and Joe Garner 
     marching in front of him. Both are wearing klan robes. On the 
     arm of Garner's robe, just above the wrist, are the stripes 
     of an exalted cyclops.
       Dees brings the certificate and the photo to the Montgomery 
     County district attorney.
       The district attorney summons Tommy Downs before a grand 
     jury and points out that lying could mean jail for perjury. 
     Downs begins to cry. He confesses that he torched the 
     Southern Poverty Law Center. It was Joe Garner, he says, who 
     wanted it done--to destroy all of Dees' evidence against the 
     Ku Klux Klan. And Tommy Downs reveals that Joe Garner has 
     more in mind.
       He wants to blow up downtown Montgomery.
       Civil-rights leaders are planning a march. Downs says 
     Garner wants to plant dynamite in the sewers beneath the 
     streets--and touch it off as the civil-rights leaders pass 
     overhead. The district attorney investigates--and finds 123 
     7-ounce sticks of dynamite and 8 pounds of plastic explosive. 
     That, says a bomb expert with the Alabama Department of 
     Public Safety, is enough to destroy an entire city block.
       In addition, Downs says, Garner wants to set explosives on 
     Morris Dees' car and blow it up one day when Dees drives to 
     work.
       The authorities arrest Joe Garner. He, Downs and Bailey 
     plead guilty to a variety of state and federal charges. Joe 
     Garner is sent to federal prison for 15 years. Downs and 
     Bailey get lesser sentences.
       Often, retribution is aimed solely at Morris Dees.
       In one of his early fights, he wins a court order ending 
     harassment of Vietnamese fishermen along the Texas Gulf 
     Coast. The order is against a group of Texas fishermen--and a 
     band of klansmen headed by Louis Beam, the Texas grand dragon 
     of the Knights of the Ku Klux Klan.
       Worse for the Knights, Dees wins a second court order that 
     disbands Beam's Texas Emergency Reserve--a group of 
     paramilitary klansmen organized into what amounts to a 
     private army. During the legal proceedings, Beam calls Morris 
     Dees an Antichrist Jew and holds out a Bible and cross to 
     exorcise his demons.
       And Louis Beam never forgets his humiliating defeat.
       He leaves Texas and goes to Hayden Lake, Ida., where 
     Richard Butler heads the Aryan Nations, an umbrella group of 
     hard-core white racists. From Hayden Lake, Louis Beam writes 
     to Dees and challenges him to a ``dual [sic] to the death--
     you against me. . . .
       ``If you are the base, despicable, lowdown, vile poltroon I 
     think you are--you will of course decline, in which case my 
     original supposition will have been proven correct, and your 
     lack of character verified . . .'' Beam writes, ``Your 
     mother--think of her, why I can just see her now, her heart 
     just bursting with pride as you, for the first time in your 
     life, exhibit the qualities of a man and march off to the 
     field of honor. (Every mother has a right to be proud of her 
     son once). . . .''
       When he gets no reply, Beam goes to Montgomery. He meets 
     with Joe Garner, who has just come under investigation for 
     the law center fire. An FBI report, recounting an agent's 
     interview with Garner, says that Beam tells Garner he thinks 
     Dees is ``scum.''
       According to the report, Garner introduces Beam to one of 
     Dees' cousins--who does not like Morris Dees and shows Beam 
     where Dees lives. The report says Beam videotapes Dees' 
     property, including details of his home. Then Beam talks his 
     way into the lobby of the Southern Poverty Law Center. An 
     investigator throws him out.
       At about the same time, another white supremacist who 
     frequents the Aryan Nations compound in Idaho takes up what 
     is now becoming a growing cause: killing Morris Dees.
       He is Robert Mathews, who organized the Order, which seeks 
     to wrest large portions of the United States away from its 
     ``Zionist Occupied Government,'' and to establish a nation 
     for whites only. The Order has in mind banning all other 
     races, whom it calls ``God's mistakes''--and it wants to kill 
     all Jews, whom it considers the seed of Satan.
       Mathews formulates six steps to accomplish this. Step Five 
     is the assassination of ``racial enemies''--and Dees in at 
     the top of Mathews' hit list.
       After a stop in Denver, where he and his men kill Alan 
     Berg, a radio talk-show host who likes to bait racists, 
     Mathews heads south. A resident of Birmingham who belongs to 
     the Aryan Nations says Mathews asks him to gather all the 
     information he can on Dees--but he refuses because he does 
     not want to become involved.
       Finally, Mathews tries to send a confederate, who is 
     actually an FBI informant, south to finish Dees off.
       The informant says that Mathews orders him ``to kidnap 
     [Dees], torture him, get information out of him, kill him, 
     then bury him in the ground and put lye on it.''
       Within days, the FBI surrounds Mathews' hide-out on Whidbey 
     Island in Puget Sound in Washington state. The FBI wants 
     Mathews for a variety of crimes that include the slaying of 
     Alan Berg and the $3.8 million robbery of a Brinks truck to 
     finance the Order's incipient white racist revolution.
       On Whidbey Island, Mathews and the FBI shoot it out. Night 
     falls. It is a standoff. FBI agents fire flares. The flares 
     ignite Mathews' house, and he is burned to death.
       One of the last of his men to be captured is Bruce Pierce, 
     fingered by others as the Alan Berg triggerman.
       FBI agents arrest him in Rossville, Ga. In his van, the 
     agents find cash, weapons and several news articles, 
     including one about Morris Dees.
       [[Page S6039]] The next day, agents stop Pierce's wife. She 
     is in Dees' state--Alabama. In her trailer, the FBI finds 
     nine weapons and several books:
       ``Hit Men: A Technical Manual for Independent 
     Contractors.''
       ``Assassination: Theory and Practice.''
       Volume 1-5 of ``How to Kill.''
       In August, 1989, the FBI opens an investigation into 
     information from Georgia that some klansmen are yet again 
     plotting to kill Morris Dees.
       The information comes as Dees takes legal steps to collect 
     a judgment he won for 75 civil-rights marchers attacked by 
     the klan in Forsyth County, Ga., two years ago.
       The judgment totaled $1 million. It was a crushing blow to 
     both the Invisible Empire and the Southern White Knights.
       ``We think,'' Dees says, ``it got them riled up.''
       More people are likely to get riled up as Morris Dees moves 
     against Tom Metzger and his White Aryan Resistance.
       Metzger, 51, is a one-time member of the John Birch Society 
     who became the California grand dragon of the Knights of the 
     Ku Klux Klan. As a klansman, he ran for Congress in 1960 from 
     California's 43rd District. It reaches across northern and 
     eastern San Diego County, Imperial County and part of 
     Riverside County.
       In the 1980 primary election, Metzger attracted 33,071 
     vote--enough to win the district's Democratic congressional 
     nomination.
       Although he ultimately got swamped, his primary election 
     success gave him what he called ``great exposure.'' In 1982, 
     he ran unsuccessfully for the U.S. Senate--then founded the 
     White Aryan Resistance.
       Today Tom Metzger, a TV repairman, runs the White Aryan 
     Resistance from Fallbrook, in San Diego County. He is the 
     host of ``Race and Reason,'' a TV interview program available 
     to subscribers on more than 50 cable systems in at least a 
     dozen states. The White Aryan Resistance publishes a 
     newspaper. Metzger is linked by computer to white 
     supremacists across the nation.
       Like members of the Order, Metzger has held to racist 
     tenets over the years, including the belief that non-whites 
     are ``God's mistakes'' and that Jews are the progency of 
     Satan.
       Metzger has a 21-year-old son, John, who heads his youth 
     recruitment. John Metzger runs an organization known as the 
     White Student Union, the Aryan Youth Movement, the WAR Youth 
     or the WAR Skins.
       As the latter name implies, the Metzgers are hospitable to 
     skinheads, young thugs who shave their skulls and favor 
     military-style clothing. Skinheads strut about in heavy boots 
     with steel toes, known as Doc Martens--and they sometimes 
     carry clubs. Often the clubs are baseball bats. Tom Metzger 
     supplies the skinheads with his White Aryan Resistance 
     newspaper. Its comics feature the killing of blacks and Jews.
       In a lawsuit filed in October, Dees and lawyers for the 
     Anti-Defamation League of B'nai B'rith accuse Tom and John 
     Metzger of sending agents to Portland, Ore., to organize and 
     guide a particular group of skinheads called the East Side 
     White Pride. ``The agents reported regularly to . . . [the 
     Metzgers] concerning their organizing efforts,'' the suit 
     says. ``The agents also urged . . . [the skinheads] to call . 
     . . Tom Metzger's telephone hot line to receive aid, 
     encouragement and direction.''
       One night a year ago, the suit says, Metzger's agents and 
     the East Side White Pride held an organizational meeting of 
     particular interest. ``At that meeting,'' according to the 
     suit, ``the agents . . . in accordance with the [Metzgers] 
     directions . . . encouraged members of the East Side White 
     Pride to commit violent acts against blacks.''
       And on that same night, in southeast Portland, two friends 
     drop off Mulugeta Seraw, 28, a black Ethiopian immigrant, in 
     front of his apartment.
       It is 1:30 a.m. Seraw works for Avis Rent-A-Car at the 
     Portland airport. He sends money home to his parents, a son 
     and five brothers and sisters in Ethiopia, where he hopes to 
     return after attending Portland State University. Mulugeta 
     Seraw goes to work at 7 a.m. Bedtime is long past.
       He does not make it to his door.
       Three skinheads attack him. One has a baseball bat.
       Mulugeta Seraw's two friends, also black jump from their 
     car. They are beaten back.
       ``Kick them!'' scream two teen-age girls, watching nearby. 
     ``Kill them!''
       Three minutes later, Seraw is lying in the street, 
     bleeding, broken.
       Neighbors call the police. Mulugeta Seraw is taken to a 
     hospital. Doctors pronounce him dead.
       Working with descriptions provided by witnesses, police 
     track down Kenneth Mieske, 23, a performer of ``hate metal'' 
     rock music who uses the name Ken Death; Kyle Brewster, 19, 
     and Steven Strasser, 20. All are members of the East Side 
     White Pride.
       Mieske pleads guilty to murder and Brewster and Strasser to 
     manslaughter. Mieske gets a life sentence, which carries 
     mandatory imprisonment of 20 years. Brewster gets a 20-year 
     sentence, with a minimum of 10 years' imprisonment. Strasser 
     plea-bargains for a sentence of 9 to 20 years.
       In their lawsuit, filed on behalf of Mulugeta Seraw's 
     uncle, Engedaw Berhanu, who is the executor of his estate, 
     Dees and the Anti-Defamation League charge the Metzgers, 
     their White Aryan Resistance and skinheads Mieske and 
     Brewster with wrongful death and conspiracy to violate 
     Seraw's civil rights.
       ``The actions of the Oregon defendants in attacking Seraw 
     were undertaken pursuant to the custom and practice of the 
     defendant WAR of pursuing its racist goals through violent 
     means,'' the suit says. Moreover, it says, the actions were 
     undertaken `'with the encouragement and substantial 
     assistance of the California defendants.''
       Without specifying an amount, Dees and the Anti-Defamation 
     League ask for punitive and compensatory damages to punish 
     the Metzgers and to deter ``further outrageous conduct of 
     this kind.''
       Legally, this lawsuit is similar to the lawsuit in which 
     Beulah Mae Donald won the last pennies in the coffers of the 
     United Klans of America and the keys to its headquarters. And 
     this is just what Morris Dees and the ADL have in mind.
       But unlike the United Klans of America, Tom Metzger says, 
     he will win. ``They lost more because of the UKA's 
     incompetence than anything else,'' Metzger says. ``And 
     because the UKA failed to appeal.
       ``There is absolutely no basis for this suit,'' Metzger 
     says. ``I don't have agents. We are not into telling anybody 
     to go down out on the streets and get anybody and beat on 
     them. Anybody who says that my son or I have said that is 
     lying.''
       About his chief adversary, Metzger says: ``Morris Dees is a 
     clever fellow, and he's had some success. So we don't take 
     this lightly.
       ``But I am not exactly a pushover, either.''
       For his efforts. Morris Dees gets awards--from civil-rights 
     groups, Common Cause, bar associations and the like. But he 
     also gets criticism--from writers in magazines such as the 
     Progressive and the Other Side, a liberal publication that 
     prints a giver's guide to charitable foundations.
       The criticism focuses on the Southern Poverty Law Centers 
     focuses on the Southern Poverty Law Center's $27-million 
     endowment and its $3-million annual budget. The center has a 
     stylish new building. Wags call it the Poverty Place. When 
     Dees and the center attack racists, these critics say, they 
     attack a foe who is no longer an important threat--but they 
     do it anyway to improve donors and make the center's 
     endowment grow.
       Dees makes no apology for resources. It takes money, he 
     says, to win lawsuits--and to provide the security that the 
     center and its four lawyers need.
       And certainly, Dees says, the klan is not the threat it 
     once was. His own experts at the law center say that klan 
     membership is down to one of its lowest levels in history. 
     Credit goes to good times economically. In bad times, poor 
     whites tend to take out their frustrations on blacks. Credit 
     also goes, the experts say, to police work--as well as to 
     antiklan groups.
       So why does Morris Dees keep on doing what he does?
       He is a multimillionaires. He does not need his law center 
     salary of $79,600--more than what many of the 35 members of 
     his staff earn, but less than the six-figure salary his top 
     staff attorney makes.
       Why does he keep putting himself in bam's way?
       He leans back, crosses a soakless loafer over one knee and 
     pauses.
       First, the threat of racist terror may have eased some, but 
     it has not ended. ``If you don't think skinheads are any 
     threat, then go ask the Seraws if their son is alive.''
       Second, he has always liked a good fight, ``I've had my ass 
     whipped, and I've whipped a few. . . . We absolutely take no 
     prisoners. When we get into a legal fight, we go all the way. 
     . . . Ever since I've been a kid, I've always liked a good 
     challenge.''
       Third, although he was raised a Baptist, he feels a kinship 
     with Jews. ``My middle name is Seligman, and my family may 
     have some Jewish connections. . . . You know, years ago, 
     nobody took the threat to the Jews seriously. I am not saying 
     that Louis Bearn and his crowd will duplicate what happened 
     in Nazi Germany. I would think that this country is quite 
     different. But I do see it as just a personal responsibility 
     to do what I can to stop just a little bit of this happening 
     right here. . . . And with the legal training I've got and 
     what we've put together here, we're in a unique position to 
     do it. . . .
       Like Morris Dees daddy, when he took Perry Lee's hoe. . . .

  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Mr. President, I yield 7 minutes to the Senator from 
Nebraska.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. EXON. Mr. President, I am pleased to be an original cosponsor and 
leading Democratic advocate for the Dole amendment to limit punitive 
damage awards in civil liability cases.
  As a former small business person, I understand the need for 
businesses to plan for contingent liabilities. The litigation explosion 
since the 1970's when I left the private sector and entered public life 
has made the job of running a small business more difficult today than 
it was when my wife and I started our own successful small business. 
The Dole amendment will restore some degree of certainty to business, 
personal and charitable risk management and 
[[Page S6040]] planning; all of which help facilitate commerce in this 
great Nation.
  Punitive damages are a wild card in today's legal system. These 
awards are unpredictable, unrelated to the level of harm caused by a 
defendant and potentially they are unlimited. A particular injury, a 
particular lawyer, and a particular jurisdiction can mean a big 
recovery for the plaintiff and his lawyer and the end of business for 
the unlucky defendant.
  The real cost of the current system is not only measured in the 
number of punitive awards won, but also the legal cost of defending 
against such suits, as well as the increased insurance and product 
costs for all Americans.
  Certainly, no one wants to create a legal system which will encourage 
wrongdoing or careless behavior. The problem is that the relationship 
between punitive damage awards and safe behavior is not proven. One 
could argue that the current punitive damages system creates a bounty
 for the litigators to hunt for the right combination of facts, law, 
jury, and injury.

  This uncertainty has led honest business people to settle even 
unworthy cases in order to avoid risking a spin at litigation and the 
roulette wheel mentality that goes with it.
  The greatest expense of the current uncertainty is the contempt it 
generates from average citizens. They hear about unexplainable cases 
involving cups of hot coffee, or spilled milk shakes and their faith in 
the legal system is shaken. Our hallowed courts could some day take on 
the image of a legal casino.
  A handful of States, including the State of Nebraska, do not even 
permit punitive damages. In the State of Nebraska the total absence of 
punitive damages has not created an unsafe environment or careless 
manufacturers or increased wrongful conduct. What the State of Nebraska 
does have are insurance rates which are more affordable to all 
citizens.
  Under the Dole amendment, States which want to keep punitive damages 
can continue to have such a system, if that is their will. In those 
States, punitive damages would simply need to be related to the actual 
compensatory damages suffered by an injured party. Nothing in this 
amendment would require States to adopt punitive damage systems.
  Mr. President, I am pleased to cosponsor and support the Dole 
amendment. To those who predict the end of American jurisprudence, I 
say come to Nebraska, Washington, or other States where punitive 
damages are not part of the State's legal system. You will see a high 
quality of life, affordable cost of living, and court systems a little 
less jammed with frivolous lawsuits.
  Although not as dramatic as the course chosen by the State of 
Nebraska, I am confident that the Dole amendment is a step in the right 
direction to restore a degree of confidence and predictability to our 
legal system.
  I thank the Chair. I thank my friend from Washington for yielding. I 
yield any remaining time of the 7 minutes originally allotted to this 
Senator.
  Mr. GORTON. Mr. President, I yield 5 minutes to the Senator from 
Utah.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, I want to pay tribute to the distinguished 
Senator from Nebraska for his fine statement and for his support of 
this amendment on this floor. I think many people in this country are 
grateful for his leadership in this matter.
  Let me spend a few seconds on some of the comments made by one of my 
dear friends, Senator Heflin, when he was here. He made reference to 
what evidence may be inadmissible in the compensatory damages phase of 
the trial.
  It must be emphasized that the evidentiary restrictions on the Dole-
Exon-Hatch amendment are based on State law. The relevant language is 
section 107(d)(1).

       Evidence relevant only to the claim of punitive damages, as 
     determined by applicable State law, shall be admissible to 
     determine whether compensatory damages are to be awarded. 
     Whether particular evidence is admissible or inadmissible, 
     therefore, depends on the facts of the case and the law of 
     the State in which the action is brought. Moreover, if 
     evidence is relevant only to punitive damages, there is no 
     reason to object to excluding it in the compensatory damages 
     case, and indeed such exclusion accords with the traditional 
     rule . . . that irrelevant evidence is inadmissible.

  I must mention that bifurcated proceedings in punitive damages cases 
are required or permitted under current law in almost all jurisdictions 
that permit claims for punitive damages.
  Let me turn to the Dole-Exon-Hatch amendment. Naturally, I support 
this amendment. It is an amendment worthy of adoption. Unlike the Dole 
amendment, several other amendments have been offered that, in my view, 
weaken our efforts to reform punitive damages abuses. Thus, I cannot 
support those weakening amendments such as an amendment to remove 
limits on the award of punitive damages.
  Yesterday I came to the floor and spoke at
   length about curbing the abuses in our punitive damages laws and the 
need for meaningful reform in this area. I would like to consider 
another example of out of control punitive damages and their impact. 
Consider the case of Sherridan v. Northwest Mutual Life Insurance, 630 
So. 2d 384 (Ala. 1993). The insurance company in this case undertook a 
background check and numerous interviews of a person who became an 
agent for the company.

  Moreover, in that case, the company, once it became aware that its 
agent had defrauded some policyholders, arguably did everything it 
could to rectify the situation. In fact, it was Northwestern Mutual 
that first notified the plaintiffs that payments made to an agent to 
pay for life insurance premiums were retained by him. The agent fled 
after he was confronted by the company. The company then offered to 
refund money with 10-percent interest and to reimburse them for any 
fees and expenses they may incur related to the money taken by their 
agent. The company appeared to do everything it possibly could do to 
make the victims whole for any and all loss.
  Despite their effort to screen out wayward job applicants and a good 
faith effort to resolve this most unfortunate incident, the company was 
ultimately sued for compensatory and punitive damages. I should also 
mention that the policyholders, owners of a small business, whose 
original loss was $9,000, were the only policyholders out of 40 who 
held out and sued, rather than settle the case. Reportedly, at trial 
there were many repeated and exaggerated references to the wealth of 
the company, yet the jury was not allowed to hear of Northwestern 
Mutual's efforts to resolve the claim.
  The Alabama jury--again an Alabama case, a State where tort law seems 
to be running out of control--awarded the plaintiff $400,000 in 
compensatory damages and $26 million in punitive damages. The Alabama 
Supreme Court reduced the punitive award to $13 million.
  So they have the award. They are prone to do this.
  Now let us think seriously about this case. The owners of a small 
automotive business were defrauded of $9,000 and, in response, the 
courts turned these individuals into multimillionaires. How anyone can 
defend a system that would allow such an injustice is beyond me. It 
really requires some world class rationalization.
  Our legal system is in danger of losing all credibility in the eyes 
of the public as an institution where justice is served. It is unfair 
to American business, to American consumers, and the American public.
 Look. The people who are benefiting primarily by these types of 
outrageous awards and by the lack of restraint in this area are 
attorneys. Not all attorneys, however, should not be maligned because 
of these abuses by a few trial lawyers. Our profession is being hurt by 
trial lawyers who want to win it all at all costs, who will win at all 
costs, who are buying judges, who are influencing judges by 
contributions and who literally are denigrating the whole legal 
profession.

  A competent lawyer can still win big damage awards by getting good 
economic damage awards and good noneconomic damage awards. A good 
lawyer does not need to allege and recover punitive damages to serve 
his client well. In fact, when I practiced law up to 19 years ago, we 
used to get big awards for both economic and noneconomic losses.
  Let me just say this: There is plenty of room to recover a 
significant damage award by arguing persuasively and doing a competent 
job as a trial attorney. We do not need to have runaway 
[[Page S6041]] juries and runaway courts of law and runaway attorneys 
upping runaway punitive damage awards. These abuses are what we are 
trying to correct here through our amendment. Punitive damages needs to 
be corrected because our country is being dislocated by these out-of-
control approaches to the law.
  So I hope that our colleagues will vote down some of these 
amendments. I hope that they will vote for this Dole-Exon-Hatch 
punitive damages amendment. I think that it will correct some of the 
difficulties of our current system, while at the same time provide for 
a continuation of good, fair, reasonable laws in our country.
  Keep in mind, this judgment affects policy holders and insurance 
rates throughout the country, not just in one state. While this case 
arose in Alabama, the cost of these excessive judgments are passed on 
to all its customers throughout the United States.
  Moreover, the very fact that a jury could award such an outrageous 
amount of punitive damages cannot go unnoticed by those who make and 
sell goods and services in this country. An award like this adds to the 
overall litigation climate in this country. It fuels the understandable 
perception that the system is a lottery with more and more jackpots. 
And those who can get socked with such awards by run away juries have 
to take that into account as they price their goods and services--to 
the detriment of consumers.
  Mr. President, I have heard a number of my colleagues who are opposed 
to punitive damage reform claim that there is no increase in reported 
punitive damage awards, and thus no need for reform. The figure they 
repeatedly cite is a figure from one study that found 355 punitive 
damage awards granted by juries in product liability cases in the 
period 1965-90. On that basis, they claim that there is no problem with 
punitive damages in this country and that, consequently, no legislative 
solution is required.
  This could not be further from the truth. I have been well aware of 
that study, as have many others. However, what I have learned in 
studying punitive damages, and in listing to experts testify at 
hearings I chaired in the Judiciary Committee is that no one has a 
precise handle on the number of these awards. That data is simply not 
available. In fact, those who cite to the study seem to have missed an 
enlightening statement on the second page of that study. On that page, 
it is acknowledged:

       The actual number of punitive damage awards in product 
     liability litigation is unknown and possibly unknowable 
     because no comprehensible reporting system exists. [See 
     Michael Rustad, ``Demystifying Punitive Damages in Product 
     Liability Cases'' (1992), at p. 2.]

  In addition, testimony in the Judiciary Committee by Victor Schwartz 
indicated that other research demonstrated that, in just 5 States since 
1990, 411 jury verdicts have awarded punitive damages. Punitive damage 
awards are certainly more frequent than opponents of this measure are 
willing to admit. And, of course, the Dole amendment covers all civil 
actions. There have also been a number of punitive damages awards 
outside the product liability context.
  Perhaps what is by far the most important factor to keep in mind, 
however, is that excessive punitive damage awards have a harmful effect 
regardless of the number of reported cases on punitive damages. The 
number of reported cases bears no relationship to the detrimental 
impact of punitive damages because most cases are settled before trial. 
A mere demand for punitive damages in a case raises the settlement 
value of the underlying case and delay settlement.
  The end result is that plaintiffs' trial lawyers begin to include 
exorbitant requests for punitive damages in the most routine cases. 
Data presented to the Judiciary Committee by Prof. George Priest, of 
Yale Law School, showed that in certain counties in Alabama between 70 
and 80 percent of all tort cases filed include a claim for punitive 
damages. Unfortunately, using punitive damage claims as a threat in 
litigation is incredibly commonplace.
  The allegation of punitive damages makes settlement nearly impossible 
because it is difficult to place a value on the claim for punitive 
damages. It also makes the prospect of a huge loss a real risk for 
defendants. That artificially inflates the cost of settlement.
  Further, liability insurance costs in turn must rise. The bottom line 
is that these costs are passed on through the economic system, where 
consumers and workers ultimately pay the price. That occurs regardless 
of the precise number of punitive damage awards that juries in fact 
granted in any particular period.
  I also urge my colleagues to support Senator DeWine's amendment to 
offer small businesses some further protection against punitive 
damages. In my view, small businesses are the engine that drive our 
economy and provide much of our new employment opportunities. They 
truly deserve our support. Many small business owners are forced to 
live in constant fear of losing their entire investment and livelihood 
as a result of one lawsuit. That fear puts an enormous strain on their 
businesses, and more importantly, on the lives of their family members. 
This amendment offers our small business some modest relief from 
abusive claims.
  Finally, I had intended to offer an amendment concerning the 
important issue of multiple punitive damage awards. I will pursue that 
issue on another day.
                 the multiple punitive damages problem

  Mr. HATCH. Mr. President, I rise today to discuss one of the most 
serious problems facing our civil justice system today--the imposition 
of multiple punitive damage awards against a party for the same act or 
course of conduct. The multiple imposition of punitive damages is 
simply unfair and undermines the public's confidence in our system of 
civil justice. Earlier this year, I introduced the Multiple Punitive 
Damages Fairness Act, S. 671, which addresses the fundamental 
unfairness of a system that allows a person to be sued again and again, 
sometimes in different States, for the same wrongful act. I had 
intended to offer the substance of my legislation as an amendment to 
the Products Liability Act, but have decided to withhold my amendment 
at this time.
  Punitive damages, as we are all aware, are not awarded to compensate 
a victim of wrongdoing. These damages constitute punishment and an 
effort to deter future egregious misconduct. Punitive damage reform is 
not about shielding wrongdoers from liability, nor does the multiples 
bill prevent victims of wrongdoing from being rightfully compensated 
for their damages.
  The people of Utah and the rest of the Nation have known for a long 
time that our system of awarding punitive damages is broken and in need 
of repair. State and Federal judges have repeatedly called upon the 
Congress to address this important issue. The American Bar Association 
House of Delegates, in a resolution approved in 1987, called for 
appropriate safeguards to prevent punitive damages awards ``that are 
excessive in the aggregate for the same wrongful act.'' Although their 
recommendation suggests this action should be taken at the State level, 
there is no practical way to implement meaningful reform addressing 
multiple awards at the State level. The multiple imposition of punitive 
damages is one area where a Federal response is clearly justified.
  Likewise, the American College of Trial Lawyers, a group comprised of 
both plaintiff and defense counsel, in a strongly worded report on 
punitive damages discussed the problems associated with the multiple 
imposition of punitive damages for both plaintiff and defense counsel. 
They wrote:

       From the Defendant's standpoint, there is a very real 
     possibility that the punitive awards will be duplicative and 
     therefore result in punishing the defendant more than once 
     for the same wrongful conduct. This obviously offends basic 
     notions of justice. Conversely, a plaintiff runs the risk 
     that prior awards may exhaust the defendant's resources, and 
     that, not only will there be insufficient funds from which to 
     pay the plaintiff's punitive award, but the funds will be 
     inadequate to pay a compensatory award.

  More recently, Judge William Schwarzer, Director of the Federal 
Judicial Center, wrote abut the problems with multiple punitive 
damages. He concluded: ``Congress needs to adopt legislation that 
creates a national solution, invoking its power over commerce. The 
repeated imposition of punitive damages for the same act or series on a 
firm engaged in interstate commerce surely constitutes a burden on 
interstate commerce.''
  [[Page S6042]] Let me be very clear about what this amendment does. 
This amendment does not in any way affect a person's ability to be 
fully compensated for their economic and noneconomic damages. A 
plaintiff remains entirely able to recover their full compensatory 
damages if this amendment is enacted. Likewise, this amendment does not 
in any way limit the amount of punitive damages that may be awarded 
against a defendant.
  Judge Friendly, a highly respected circuit court judge, first 
recognized the difficulties of the multiple imposition of punitive 
damages in several States in a 1967 opinion, Roginsky v. Richardson-
Merrell, [378 F.2d 832 (2nd Cir.)] where he wrote:

       The legal difficulties engendered by claims for punitive 
     damages on the part of hundreds of plaintiffs are staggering. 
     If all recovered punitive damages in the amount here awarded 
     these would run into the tens of millions. . . . We have the 
     gravest difficulty in perceiving how claims for punitive 
     damages in such a multiplicity of actions throughout the 
     nation can be so administered as to avoid overkill.

  My amendment goes to the heart of the fundamental unfairness so 
eloquently described by Judge Friendly.
  The defendant and consumers are not the only ones hurt by excessive, 
multiple punitive damage awards. Ironically, other victims that the 
system is supposedly intended to protect, may be most seriously 
impacted by multiple punitive damage awards that precede their case. 
Funds that might otherwise be available to compensate them for their 
compensatory damages can be wiped out at any early stage by excessive 
punitive damage awards.
  As mentioned, safeguards are needed to protect these later victims 
against the abuses inherent in the early award of multiple punitive 
damages. The conflict between current litigants seeking punitive 
damages and potential litigants seeking merely compensatory damages was 
addressed in a recent case, Edwards v. Armstrong World Industries, [911 
F.2d 1151 (5th Cir. 1990)]. In that case, the court reluctantly 
affirmed a lower court decision awarding punitive damages explained its 
misgivings in the decision:

       If no change occurs in our tort or constitutional law, the 
     time will arrive when Celotex's liability for punitive 
     damages imperils its ability to pay compensatory claims and 
     its corporate existence. Neither the company's innocent 
     shareholders, employees and creditors, nor future asbestos 
     claimants will benefit from this death by attrition.

  Incidently, just 1 month after Judge Jones wrote those words, 
Celotex, already liable for $33 million in punitive damages, and faced 
with a potential quarter of a billion dollars in additional punitive 
damages as the result of an ongoing trial involving 3,000 additional 
claims, in which it had been decided that punitive damages would be 
calculated at two times the amount of compensatory damages, Celotex 
filed for bankruptcy protection under chapter 11, where it remains 
today.
  Let me give another example that illustrate several of the concerns 
with multiple punitive damages. The Keene Corp. also illustrates how a 
company can be hit with so many punitive damage suits that they 
eventually declare bankruptcy.
  In the late 1960's, the Keene Corp. purchased a subsidiary company 
for $8 million. Unfortunately, the subsidiary had made thermal 
insulation that contained about 10 percent asbestos. When the asbestos 
danger came to light in 1972, Keene closed the subsidiary. The company 
has only sold about $15 million in products while they owned the 
subsidiary.
  From 1972 onward, Keene has had 50 punitive damage verdicts returned 
against it. Most of these verdicts involve claimants who were exposed 
to asbestos 25 years before the Keene Corp. was formed. The Keene Corp. 
has paid out over $530 million in damages as a result of that purchase, 
much of it to lawyers, and it still faces numerous lawsuits.
  Ultimately, Keene was forced into bankruptcy just last year. And, as 
a result, victims who might have been entitled to receive compensatory 
damages may be left out in the cold. Keene filed papers in every case 
that asked for punitive damages, calling on the courts to disallow 
further awards since they no longer served any deterrence value or 
public policy purpose.
  Obviously, the multiple imposition of punitive damages for Keene's 
wrongful conduct served no legitimate purpose. The company had already 
stopped selling the alleged harmful product and the $530 million paid 
out in damages was surely a sufficient punishment and deterrent.
  This imposition of multiple punitive damages awards in different 
States for the same act is an issue that can only be addressed through 
Federal legislation and, thus, necessitates a congressional response. 
State and Federal judges have no authority to address the clear 
inequities confronting these defendants. In Juzwin v. Amtorg Trading 
Corp., [718 F. Supp. 1233, 1235 (D.N.J. 1989)], the court vacated its 
earlier order striking, on due process grounds, the multiple imposition 
of punitive damages. In arriving at this decision the court noted:

       [T]his court does not have the power or the authority to 
     prohibit subsequent awards in other courts. . . . Until there 
     is uniformity either through Supreme court decision or 
     national legislation this court is powerless to fashion a 
     remedy which will protect the due process rights of this 
     defendant or other defendants similarly situated.

  Let me remind my colleagues that it is the courts, and not just 
private interests, that are calling for reform of multiple punitive 
damages.
  My legislation addresses precisely the problems inherent in a system 
that allows every State to punish a defendant separately for the same 
wrongful act or conduct. More important, it is straightforward and 
simple. The legislation prohibits the award of multiple punitive 
damages based on the same act or course of conduct for which punitive 
damages have already been awarded against the same defendant.
  This legislation also allows some flexibility. It allows some 
discretion to the court to allow subsequent cases to proceed to the 
jury on the issue of punitive damages, if there is new and substantial 
evidence that justifies the imposition of additional such damages, or 
if the first award was inadequate to punish and deter the defendant or 
others.
  Under the first exception, if the court determines in a pretrial 
hearing that the claimant will offer new and substantial evidence of 
previously undiscovered, additional wrongful behavior arising out of 
the same course of conduct on the part of the defendant, other than 
injury to the claimant, the court may let the jury decide to award 
punitive damages.
  The second exception included in this amendment was not contained in 
S. 671. This exception gives the court discretion to determine in a 
pre-trial proceeding whether the amount of punitive damages previously 
imposed, was insufficient to either punish the defendant's wrongful 
conduct or to deter the defendant or others from similar behavior in 
the future. If, after a hearing, the court makes specific finding that 
the damages previously imposed were not sufficient to punish or deter 
the defendant or others, the court may permit the jury to make an 
additional award of punitive damages. In both instances, the judge will 
deduct the amount of the prior award from the award in this subsequent 
case.
  Moreover, my legislation will not preempt State law where a State 
prescribes the precise amount of punitive damages to be awarded. Thus, 
if a State desires to fix the amount of punitive damages for a specific 
egregious act, they may do so under my amendment. Likewise if a State 
desires to make an award of punitive damages proportional to the 
compensatory damages awarded, they may do so through State legislation. 
This provision is intended to preserve the discretion of States to 
legislate on this aspect of punitive damages in this limited fashion.
  Finally, my legislation makes it clear that a defendant's act 
includes a single wrongful action or a course of conduct by the 
defendant affecting a number of persons. In applying this act, the 
phrase ``act or course of conduct'' should be interpreted consist6ent 
with our legislative objective of eliminating multiple punishment for 
what is essentially the same wrongful behavior.
  I have looked at the problem of multiple punitive damages for some 
time and have concluded that a federal response is the only way of 
effectively addressing this issue. My legislation is a small step in 
addressing the larger problem of excessive punitive damages, 
[[Page S6043]] but a needed beginning. I hope Senators join me in 
supporting this important legislation. It allows the unfettered 
imposition of punitive damages by a jury to punish and deter those who 
offend our community. However, with limited exception, we punish the 
defendant only once for his misconduct. I believe this is a fair way to 
proceed on this issue.
  Mr. HEFLIN addressed the Chair.
  The PRESIDING OFFICER (Mrs. Hutchison). The Senator from Alabama.
  Mr. HEFLIN. Madam President, how much time is remaining on our side?
  The PRESIDING OFFICER. Eleven minutes.
  Who yields time?
  The Senator from Alabama.
  Mr. HEFLIN. Madam President, again, let me address some of the things 
that I think have escaped the attention of people--the 
interrelationship with the Dole amendment and the underlying bill, the 
underlying Gorton substitute--which deal with the issue pertaining to 
the calculation on each defendant of the noneconomic damages, and then 
its relationship to the Snowe amendment which basically sets the cap on 
punitive damages at twice the noneconomic damages, and the economic 
damages.
  The underlying bill and the Dole amendment provide for a bifurcated 
trial--that is, two--where punitive damages are sought. If punitive 
damages are sought, then any--and I read from the Dole amendment, which 
is the exact language as in the bill --

       . . . evidence relative only to punitive damages as 
     determined by applicable State law shall be inadmissible in 
     any proceedings to determine whether compensatory damages are 
     to be awarded.

  Compensatory damages include noneconomic damages so therefore you 
cannot prove gross negligence; you cannot prove recklessness; you 
cannot prove wantonness; you cannot prove intentional conduct 
pertaining to the compensatory damage trial. The Dole amendment 
includes all civil actions, including automobile accidents that I 
talked about. It would also include this matter of the issue pertaining 
to rental cars.
  Take, for example, a company decides there is need of a recall of 
certain cars, and therefore in the recall of those cars there is an 
immediate danger. But they continue to lease those cars. Then, in 
effect, you could not prove it where you sought also punitive damages.
  Now, the noneconomic damages as it relates to section 109, which is 
several liability for noneconomic damages, provides, and I read:

       Each defendant shall be liable only for the amount of 
     noneconomic loss allocated to defendant in direct proportion 
     to the percentage of responsibility.

  For the harm, in other words, the percentage of fault. Therefore, if 
you seek punitive damages, then under the underlying bill and the Dole 
bill, you cannot prove in the compensatory damage lawsuit in the trial 
in chief those elements of fault which constitute elements that would 
go to the proof of punitive damages. You are precluded. It is 
inadmissible.
  So how can you prove the percentage of fault that may rest on 
defendants that have been guilty of punitive damage conduct, 
wantonness, conscious, flagrant indifference? How can you prove that 
and how can there be any logical sense way of determining what the 
noneconomic loss is? And in its relationship here, it makes it an 
impossibility. Therefore, when it comes to the case, as I pointed out, 
of a motor vehicle, where the company knew that the man had been 
convicted of four drunk driving charges, two reckless driving charges, 
and they continued to allow him to operate and drive trucks, you could 
not prove any of that in the case in chief. Therefore, you could not go 
toward the establishment of the percentage of harm of noneconomic 
damages towards that defendant.
  And then in the punitive damages, it can only be twice the amount 
that might be allocated to him in the overall situation.
  So it seems to me that the relationship of this and the punitive 
damages, particularly with the Snowe amendment really, have so many 
consequences. I have just thought of a few. There are a multitude of 
consequences that occur relative to this matter.
  So I wish to point out that this is a situation which ought to be 
carefully considered, and I just do not believe even the authors of the 
bill and the authors of the Snowe amendment recognize the dangers that 
they are getting into relative to these matters.
  How much time remains?
  The PRESIDING OFFICER. The Senator has 3 minutes 40 seconds.
  Mr. HEFLIN. I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. How much time remains to my side?
  The PRESIDING OFFICER. Eleven minutes 15 seconds.
  Mr. GORTON. Madam President, we are discussing here several 
amendments dealing with the concept of punitive damages in the court 
systems of the United States, a healthy discussion, and it is one that 
I do not believe has been previously debated on the floor of the Senate 
in spite of the invitation to do so extended by the Supreme Court of 
the United States.
  Before we get into any of the details, I believe it important for 
Members and for the public to understand the peculiar nature of 
punitive damages. Punitive damages by the very title are a form of 
punishment imposed by juries on defendants in civil litigation. All 
other forms of punishment under our judicial system come as a result of 
criminal trials, in which case defendants have a wide range of 
constitutional protections and very particularly have the benefit of a 
limitation on punishments--a series of sentences set out by statutes 
either in specific terms or within ranges, together with the 
proposition that their guilt must be proven beyond a reasonable doubt. 
With respect to punitive damages, not only is the standard of proof 
lower but there are literally no limits on the amount of punishment, 
the fines, the damages, which can be imposed.
  I must say that I find it peculiar that any Member of the Senate 
defends such a system which presents to juries, without any guidance or 
any limitation whatsoever, the right on any basis whatsoever to award 
any amount of punitive damages whatsoever, without even the slightest 
degree of relationship to the actual compensatory damages suffered by 
such a defendant. Over a century and a quarter ago, a judge in a New 
Hampshire court said:

       The idea is wrong. It is a monstrous heresy. It is an 
     unsightly and unhealthy excrescence deforming the symmetry of 
     the body of the law.

  We might not use exactly that language today, Madam President, but I 
believe that my friend, the Senator from Nebraska, was entirely correct 
when he pointed out that his State and mine, lacking authority for 
punitive damages in civil cases, do not have discernibly more 
negligent, more outrageous, more unreasonable people engaged in 
business, whether that business is in making and selling products or in 
providing nonprofit services. There simply is not any real indication 
that this form of unlimited punishment has an actual impact on the 
economy other than discouraging people from getting into business in 
the first place, from developing and marketing new products, and other 
than causing them to withdraw perfectly valid products from the 
marketplace.
  More recently, the Supreme Court of the United States has taken up 
this issue itself and in effect has invited us to move into this field. 
The majority opinion in a recent case, Pacific Mutual Life Insurance 
Company versus Haislip, in 1990, says:

       One must concede that unlimited jury discretion, or 
     unlimited judicial discretion for that matter, in fixing 
     punitive damages may invite extreme results that jar one's 
     constitutional sensibilities. 
  And that is exactly what the case is right now. These jar one's 
constitutional sensibilities.
  Justice O'Connor, in a dissent in that same case, said:

       In my view, such instructions--Instructions that the jury 
     could do whatever it thinks best.

     Are so fraught with uncertainty that they defy rational 
     implementation. Instead, they encourage inconsistent and 
     unpredictable results by inviting juries to rely on private 
     beliefs and personal predilections. Juries are permitted to 
     target unpopular defendants, penalize unorthodox or 
     controversial views, and redistribute wealth. Multimillion 
     dollar losses are inflicted on a whim. While I do not 
     question the general legitimacy of punitive 
     [[Page S6044]] damages, I see a strong need to constrain 
     juries with standards to restrain their discretion so that 
     they may exercise their power wisely, not capriciously or 
     maliciously. The Constitution requires as much.

  Madam President, this bill does not abolish the concept of punitive 
damages. It does, however, provide some limit on the sentences which 
juries can impose in the way of punitive damages--a sentence not to 
exceed twice the total amount of all of the economic and noneconomic 
damages which the juries have already found. To me, that seems 
eminently reasonable.
  And I literally fail to understand why there is such a passionate 
defense of a system of absolutely unlimited liability, absolutely 
unlimited punishment, in the American system.
  One would think at the very least that the opponents would come up 
with alternative standards upon which to make judgments with respect to 
punitive damages and other limits if they do not like the limits that 
are here. But we have one second-degree amendment before us that, once 
again, says there are absolutely no limits, absolutely no limits. And 
the opposition to the Dole amendment is that in every case which it 
covers beyond those already covered by the bill there should continue 
to be absolutely no limits on punitive damages. Madam President, that 
is simply wrong.
  The PRESIDING OFFICER. Who yields time?
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Straight to the point in the limited time available 
here, Madam President, it is totally misleading to state that there is 
no test, to say that in criminal law, we have a test, but in civil 
litigation, punitive damages, there is no test whatever.
  To the contrary, there is a stipulation going right straight down the 
line of cases that, in awarding punitive damages, Madam President, you 
have to look at the ability to pay. There is a listed group of tests 
that are included. You have to look at the willfulness. These damages 
have to be found on willful misconduct, and right on down the line.
  I want to get right to the McDonald's case, when they say there is no 
limit, that these punitive damages punish.
  Then in that McDonald's case, I heard the foreman of that particular 
jury in an interview say she thought it was a frivolous charge at first 
until they found out there were some 700 cases and that McDonald's had 
cost-factored out, on a cost-benefit basis, the hotter the coffee, the 
more coffee you received out of the coffee bin. So they just wrote it 
off. They could keep taking the 700 claims and give third-degree burns 
over a sixth of the body and keep them 3 weeks in the hospital and 
everything else.
  But punitive damages were awarded in that McDonald's case for $2.7 
million. The court itself reduced it to $480,000.
  There are limits in every jurisdiction. And punitive damages, if you 
go right to the automobile cases, caused in the last 10 years 
72,254,931 cars to be recalled. That is wonderful safety on the 
highways of America. Why? Because of punitive damages? It has been 
proved from the Pinto case on down in all of these automobile cases. 
Had it not been for the punitive damage portion of the award, none of 
these would be recalled because the manufacturers could put it in the 
cost of the car.
  We have garage door openers redesigned, we have cribs withdrawn, we 
have Drano packaging redesigned, firefighters' respirators redesigned, 
Remington Mohawk rifles recalled, the production of harmful arthritis 
drugs ceased, charcoal briquets properly labeled, steam vaporizers 
redesigned, heart valves no longer produced by Bjork-Shively, hazardous 
lawnmowers redesigned, hotel security strengthened, surgical equipment 
safely redesigned. On and on down the list, punitive damages have 
proved their worth to society.
  And to come now and say in criminal cases we have sentencing 
guidelines, but there are no guidelines whatever in punitive damages 
cases is totally misleading. In fact, they have gone to the U.S. 
Supreme Court and the U.S. Supreme Court has upheld in the several 
States the punitive damages awards that have been made.
  So we go right on down each one of the cases over and over again and 
again and we find, for example, in the leading case to ensure that a 
punitive damage award is proper, one, the defendant's degree of 
culpability, which must be willful misconduct; two, duration of the 
conduct; three, defendant's awareness of concealment; four, the 
existence of similar past conduct; five, likelihood the award will 
deter the defendant or others from like conduct; six, whether the award 
is reasonably related to the harm likely to result.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. HOLLINGS. I thank the Chair.
  The PRESIDING OFFICER. The Senator from Washington has 4 minutes and 
30 seconds remaining.
  Mr. GORTON. Was not the order for voting at 11:15?
  The PRESIDING OFFICER. That was the original intent of the order. The 
Senator may yield back his time, if he wishes.
  Mr. GORTON. This Senator can make one very, very brief comment. He 
finds it curious that his friend from South Carolina, who is the 
leading member of his party and the former chairman of the Senate 
Commerce Committee, on which this Senator serves, and a cosponsor or a 
supporter of all of the automobile safety legislation which has gone 
through that committee in the last 15 years, which is the primary cause 
of a greater safety, should ascribe all changes in safety to product 
liability litigation. If that is true, he and I have certainly been 
wasting our time on hearings on automobile safety and passing laws 
respecting seat belts and air bags and side impact protection and the 
like.
  Mr. DORGAN. Madam President, will the Senator yield?
  My amendment will be the first amendment voted on when we begin this 
series of votes. I wonder if the Senator would yield 1 minute to me.
  Mr. GORTON. Do I have a little bit more than a minute remaining?
  The PRESIDING OFFICER. The Senator has 2 minutes and 40 seconds 
remaining.
  Mr. GORTON. I will finish this thought and I will yield the remainder 
of my time to the Senator from North Dakota.
  In any event, even the Senator from South Carolina has not come up 
with any parallel with respect to punitive damages and the criminal 
code. In the criminal code, maximum sentences for all offenses right up 
to and including the most aggravated forms of murder are set out in the 
statutes, ranges on which sentences can be imposed. With respect to 
punitive damages, there are no such limits. This proposal in its 
present form has such limits tied logically enough to the amount of 
damages which the person has actually suffered. This is the appropriate 
way to go.
  I yield the remainder of my time to my friend from North Dakota.
  Mr. DORGAN. How much time remains?
  The PRESIDING OFFICER. The Senator from North Dakota would have 1 
minute and 40 seconds.

                           Amendment No. 619

  Mr. DORGAN. Madam President, the amendment that will be voted on 
immediately following my 1 minute or so will be the amendment I offered 
that strikes the limitation or the caps on punitive damages.
  I want to explain why I offered this amendment. As I do so, let me 
say is that I have supported the notion of product liability reform. I 
voted for this bill coming out of the committee, although I had a 
problem with this section. I likely will vote for this bill going out 
of the Senate with respect to product liability reform.
  But the standard is that you must prove that a company, that there is 
clear and convincing evidence that the harm was carried out with a 
conscious, flagrant indifference of the safety of others. If you have 
proven that standard of a company that they moved forward with a 
conscious, flagrant indifference of the safety of others, why on Earth 
would you want to put a cap on punitive damages?
  The whole notion of punitive damages is to punish a company that 
would do that. We have very few punitive damages awarded in this 
country. It is not a crisis. Yes, I think we should have some product 
liability reform, and I support that. But the bill last year that was 
brought to the floor of 
[[Page S6045]] the Senate reforming the product liability laws had no 
cap on punitive damages; none at all. Now this year they bring a bill 
to the floor with this cap. This cap should be stricken.
  I hope that Members of the Senate will support my amendment. Again, 
the standard is conscious, flagrant indifference to the safety of 
others. If a corporation or a company has demonstrated that, then we 
say to them, ``By the way, when someone tries to punish you for 
conscious, flagrant indifference to the safety of others, we won't let 
them punish you very much. We will put a cap on that.''
  Why would we do that? That is absurd. That makes no sense. It was not 
done last year; it should not be done this year.
  I hope Members will support my amendment to strike that cap.
  The PRESIDING OFFICER. The time of the Senator from North Dakota has 
expired.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Madam President, has all time been utilized?
  The PRESIDING OFFICER. All time has expired.
  Mr. GORTON. Madam President, I ask unanimous consent that all votes 
in the stacked sequence, following the first vote, be reduced to 10 
minutes in length.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GORTON. I also call for the regular order which would make the 
voting sequence begin with the Dorgan amendment, with one exception.
  I ask unanimous consent that the Shelby amendment be the last of the 
second-degree amendments to the Dole amendment considered.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. GORTON. What is the pending business, Madam President?
  The PRESIDING OFFICER. Amendment No. 619, the Dorgan amendment, will 
be the first amendment to be voted on.
  Mr. GORTON. Madam President, I move to table the Dorgan amendment and 
ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.

               Vote on Motion to Table Amendment No. 619

  The PRESIDING OFFICER. The question is on agreeing to the motion to 
lay on the table amendment No. 619. The yeas and nays have been 
ordered. The clerk will call the roll.
  The bill clerk called the roll.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 51, nays 49, as follows:
                      [Rollcall Vote No. 145 Leg.]

                                YEAS--51

     Abraham
     Ashcroft
     Bennett
     Bond
     Brown
     Burns
     Campbell
     Chafee
     Coats
     Cochran
     Coverdell
     Craig
     DeWine
     Dole
     Domenici
     Exon
     Faircloth
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Hatfield
     Helms
     Hutchison
     Inhofe
     Jeffords
     Kassebaum
     Kempthorne
     Kyl
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Moynihan
     Murkowski
     Nickles
     Nunn
     Pressler
     Robb
     Santorum
     Smith
     Snowe
     Stevens
     Thomas
     Thurmond
     Warner

                                NAYS--49

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Byrd
     Cohen
     Conrad
     D'Amato
     Daschle
     Dodd
     Dorgan
     Feingold
     Feinstein
     Ford
     Glenn
     Graham
     Harkin
     Heflin
     Hollings
     Inouye
     Johnston
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Mikulski
     Moseley-Braun
     Murray
     Packwood
     Pell
     Pryor
     Reid
     Rockefeller
     Roth
     Sarbanes
     Shelby
     Simon
     Simpson
     Specter
     Thompson
     Wellstone
  So the motion to lay on the table the amendment (No. 619) was agreed 
to.
  Mr. GORTON. Madam President, I move to reconsider the vote.
  Mr. ROCKEFELLER. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

                       Vote on Amendment No. 622

  The PRESIDING OFFICER. The question is on amendment numbered 622, 
offered by the Senator from Ohio [Mr. DeWine].
  Mr. GORTON. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GORTON. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ABRAHAM. Mr. President, the amendment I have offered with the 
distinguished Senator from Ohio [Mr. DeWine], is extremely important 
for small business owners across the country. This amendment protects 
small businesses and other small entities with 25 employees or less 
from excessive punitive damage awards over $250,000. Individuals, 
including small businesses organized as sole proprietors, whose net 
worth does not exceed $500,000 would also be protected.
  Let me make it clear that small business owners support requiring 
someone to make restitution when they cause injuries. However, under 
our current liability structure businesses can be bankrupted by the 
addition of punitive damage awards that are vastly in excess of the 
business' ability to pay. The result is fewer small businesses and lost 
job opportunities. Our amendment will not limit plaintiffs from 
receiving full compensation for their economic and noneconomic damages.
  Mr. President, this small business punitive cap amendment will be 
rated by the National Federation of Independent Business as a key small 
business vote for the 104th Congress. This amendment is also strongly 
supported by the 739,000 members of the National Restaurant 
Association. I ask unanimous consent that letters of endorsement by the 
NFIB and National Restaurant Association be printed in the Record. I 
yield the floor.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                            National Federation of

                                         Independent Business,

                                      Washington, DC, May 2, 1995.
     Hon. Spence Abraham,
     U.S. Senate,
     Washington, DC.
       Dear Senator Abraham: On behalf of the more than 600,000 
     members of the National Federation of Independent Business 
     [NFIB], I commend you for offering an amendment that would 
     protect small business owners from excessive punitive damage 
     awards.
       Small business owners support requiring someone to make 
     restitution when they cause injuries. However, our current 
     liability rules can mean that businesses can be bankrupted by 
     the addition of punitive damage awards that are vastly in 
     excess of the business' ability to pay. Because of the 
     potential for such an outcome, many small business owners 
     are, in effect, forced to settle out of court. This results 
     in higher insurance premiums, higher consumer prices, and 
     worst of all, increased disrespect for our legal system.
       Your amendment does not mean that plaintiffs will not be 
     compensated; they will still be able to recover unlimited 
     economic and non-economic losses. It merely means that 
     punitive damage awards over and above actual restitution will 
     be capped at a level that permits many small businesses to 
     survive a lawsuit.
       Thank you for offering this important common sense small 
     business amendment. Passage of your amendment along with the 
     underlying Dole amendment will be Key Small Business Votes 
     for the 104th Congress.
           Sincerely,

                                           John J. Motley III,

                                                   Vice President,
     Federal Government Relations.
                                                                    ____

                              National Restaurant Association,

                                      Washington, DC, May 3, 1995.
     Hon. Spence Abraham,
     U.S. Senate,
     Washington, DC.
       Dear Senator Abraham: On behalf of the National Restaurant 
     Association and the 739,000 units the foodservice industry 
     represents, I want to express our support for your amendment 
     providing protection for small businesses from excessive 
     punitive damage awards.
       In an industry dominated by small businesses--72% of all 
     eating and drinking establishments have sales of $500,000 per 
     year or less, and experience profit margins in the 3 to 5% 
     range--an excessive damage award can force a restaurant to 
     close its doors. This hurts not only the business owner and 
     his/her family, but the employees and their families as well.
       Everyone agrees that citizens should have the right to sue 
     and collect reasonable compensation if they are wrongfully 
     injured. 
     [[Page S6046]] However, common sense legal reform is needed 
     to bring balance back into the system. Your efforts in this 
     regard are greatly appreciated.
       Again, thank you for your efforts to protect America's 
     small businesses.
           Sincerely,
                                                 Elaine Z. Graham,
                              Senior Director, Government Affairs.

  Mr. BAUCUS. Mr. President, I want to voice my support for two 
amendments offered by Senator DeWine to S. 565 that were passed by 
voice vote today. The first amendment places a $250,000 cap on the 
amount of punitive damages that can be awarded against small businesses 
that have a net worth of less than $500,000. The second amendment 
allows juries to consider a defendant's assets when determining the 
appropriate amount to award for punitive damages.
  I oppose S. 565. I believe that this bill extends the reach of the 
Federal Government into an area that properly belongs to the States. 
And rather than slowing litigation, I believe S. 565 will create 
confusion and therefore more litigation. Under this bill you will have 
50 different State courts interpreting the impact on this law on 
existing State case and statutory law. It is a result that only the 
lawyers will benefit by.
  At the same time, I recognize just how hard small businesses struggle 
to stay afloat. And, I am well aware that Montana law recognizes the 
need to appreciate small business concerns. For example, Montana allows 
small companies to operate as ``limited liability'' companies. By doing 
this, small companies are able to limit their liability exposure to the 
amount of capital invested. Montana also requires to look at a 
defendant's financial resources in determining punitive damages awards.
  To the extent that we are going to enact Federal legislation 
governing certain aspects of tort law, I believe it is important to 
include provisions that are specifically targeted to small businesses. 
For this reason, I support the DeWine amendments as offered.
  Mr. GORTON. Madam President, this amendment and the next amendment 
have been worked out by the two managers and can be agreed to by voice 
vote.
  The PRESIDING OFFICER. The question is on agreeing to the amendment 
numbered 622, offered by the Senator from Ohio [Mr. DeWine].
  So the amendment (No. 622) was agreed to.
  Mr. GORTON. Madam President, I move to reconsider the vote.
  Mr. BENNETT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

                       Vote on Amendment No. 623

  The PRESIDING OFFICER. The question is on amendment No. 623, offered 
by the Senator from Ohio [Mr. DeWine].
  If there be no further debate, the question is on agreeing to the 
amendment.
  The amendment (No. 623) was agreed to.
  Mr. GORTON. Madam President, I move to reconsider the vote.
  Mr. JOHNSTON. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

          Amendment No. 621, as modified, to Amendment No. 617

  Mr. SHELBY. Madam President, I send to the desk a modification of the 
amendment I have at the desk.
  The PRESIDING OFFICER. Without objection, the amendment is so 
modified.
  The amendment (No. 621), as modified, is as follows:

       At the appropriate place insert the following:

     SEC.   . LIABILITY FOR CERTAIN CLAIMS RELATING TO DEATH.

       In any civil action in which the alleged harm to the 
     claimant is death and, as of the effective date of this Act, 
     the applicable State law provides, or has been construed to 
     provide, for damages only punitive in nature, a defendant may 
     be liable for any such damages without regard to this 
     section, but only during such time as the State law so 
     provides.

  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Is the Shelby amendment now the pending business?
  The PRESIDING OFFICER. The Shelby amendment as modified is the 
pending business.
  Mr. GORTON. Madam President, this is worked out with the two Senators 
from Alabama who are opponents to the bill but who nevertheless have a 
legitimate question about a quirk in Alabama law. The amendment applies 
only to certain cases in Alabama, and is acceptable.
  THE PRESIDING OFFICER. If there be no further debate, the question is 
on agreeing to the amendment.
  The amendment (No. 621), as modified, was agreed to.
  Mr. SHELBY. Madam President, I move to reconsider the vote.
  Mr. GORTON. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

                 Vote On Amendment No. 617, As Amended

  The PRESIDING OFFICER. The question is on the Dole amendment, No. 
617, as amended.
  Mr. GORTON. Has a rollcall been ordered?
  Madam President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
617, as amended. The yeas and nays have been ordered. The clerk will 
call the roll.
  The assistant legislative clerk called the roll.
  The result was announced--yeas 51, nays 49, as follows:
                      [Rollcall Vote No. 146 Leg.]

                                YEAS--51

     Abraham
     Ashcroft
     Bennett
     Bond
     Brown
     Burns
     Campbell
     Chafee
     Coats
     Cochran
     Coverdell
     Craig
     DeWine
     Dole
     Domenici
     Exon
     Faircloth
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Hatfield
     Helms
     Hutchison
     Inhofe
     Jeffords
     Kassebaum
     Kempthorne
     Kerrey
     Kyl
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Nunn
     Pressler
     Santorum
     Simpson
     Smith
     Snowe
     Stevens
     Thomas
     Thurmond
     Warner

                                NAYS--49

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Byrd
     Cohen
     Conrad
     D'Amato
     Daschle
     Dodd
     Dorgan
     Feingold
     Feinstein
     Ford
     Glenn
     Graham
     Harkin
     Heflin
     Hollings
     Inouye
     Johnston
     Kennedy
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Mikulski
     Moseley-Braun
     Moynihan
     Murray
     Packwood
     Pell
     Pryor
     Reid
     Robb
     Rockefeller
     Roth
     Sarbanes
     Shelby
     Simon
     Specter
     Thompson
     Wellstone
  So the amendment (No. 617), as amended, was agreed to.
  Mr. DOLE. Mr. President, I move to reconsider the vote by which the 
amendment was agreed to.
  Mr. HATCH. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. GORTON. Mr. President, is there now an order in which the Senator 
from Tennessee [Mr. Thompson] is to offer the next amendment?
  The PRESIDING OFFICER (Mr. Thomas). That is correct.
  Under the previous order, the Senator from Tennessee is recognized.
  Mr. GORTON. Mr. President, I will shortly suggest the absence of a 
quorum. But, Mr. President, with the cooperation of the other side of 
the aisle, we will seek time agreements on future amendments and will 
hope to stack votes on any amendments which are ready to vote for 
sometime late in the afternoon so Members are not called back and forth 
willy-nilly.
  While we look for that and wait for the Senator from Tennessee, I 
suggest the absence of a quorum.
  Mr. FORD. Mr. President, we could not understand the distinguished 
Senator from Washington. May we have order?
  The PRESIDING OFFICER. We will have order in the Senate. The Senator 
is exactly right.
  Will the Senator repeat his statement?
  Mr. GORTON. Under the previous order, the Senator from Tennessee, who 
is now present, has the right to offer the next amendment. I was 
suggesting that we attempt to get time agreements on as many amendments 
as possible in the future, but at the same time, to stack votes for 
sometime later 
[[Page S6047]] this afternoon, if it is possible to do so, so that 
again we can bring Members here for votes, perhaps more than one vote, 
but not interrupt their schedules every hour or so.
  Mr. HEFLIN. Mr. President, might I say, before we agree to that, we 
would have to see what the amendments are.
  Mr. GORTON. I fully agree. This is simply a suggestion. I hope it 
will work. If it does not, we will proceed to the regular order.
  Mr. President, I see the Senator from Tennessee is present. I yield 
the floor.
  Mr. THOMPSON addressed the Chair.
  The PRESIDING OFFICER. Under the order, the Senator from Tennessee 
has the floor.
  Mr. THOMPSON. Thank you, Mr. President.

                 Amendment No. 618 to Amendment No. 596

 (Purpose: To limit the applicability of the uniform product liability 
   provisions to actions brought in a Federal court under diversity 
                             jurisdiction)

  Mr. THOMPSON. Mr. President, I call up an amendment numbered 618, 
which is at the desk, and I ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Tennessee [Mr. Thompson] proposes an 
     amendment numbered 618 to amendment No. 596.

  Mr. THOMPSON. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       In section 102(a)(1), after ``commenced'' insert the 
     following: ``in a Federal court pursuant to section 1332 of 
     title 28, United States Code, or removed to a Federal court 
     pursuant to chapter 89 of such title''.
       In section 102(c)(6), strike ``or'' at the end.
       In section 102(c)(7), strike the period at the end and 
     insert ``; or''.
       In section 102(c), add the following new paragraph:
       (8) create a cause of action or provide for jurisdiction by 
     a Federal Court under section 1331 or 1337 of title 28, 
     United States Code, that otherwise would not exist under 
     applicable Federal or State law.

  Mr. THOMPSON. Mr. President, we are now engaged in a national debate 
on an issue that is important to the future of this country. The issue 
before us essentially is should the U.S. Congress federalize certain 
portions of our judicial system that, up until now, have been under the 
province of the States? And, if so, should we make major changes or 
more modest ones?
  I cannot think of a more important subject for us to consider than 
our system of justice. The judicial system is a bedrock of our free 
society. It must be fair. It must be perceived to be fair. Our citizens 
must have confidence in it. As we continue our deliberations, we must 
do so with the purpose in mind of striving for a system that is most 
likely to achieve justice in most cases. It is serious business, and 
our decisions should not depend upon whose favorite ox is being gored 
at the moment.
  At the outset, I must say that we could do this process a service by 
refocusing the terms of this debate. It seems that we have in large 
part gotten off to a somewhat rocky start, and have been spending too 
much time arguing about which side is the most greedy and which side 
has contributed the most to which party's political campaigns.
  Most of the literature, most of the press, and a lot of the 
conversation has had to do with those subjects, and it is an all-too-
easy refuge for those who really do not understand the issues or who do 
not care and are simply trying to win the debate.
  As far as the debate going on between the private interests of each 
side of this legislative battle, I have not noticed that either side is 
going against its own economic interest.
  They are all sophisticated and well financed.
  It seems that nowadays the debate on important issues is going the 
way of political campaigns: concentrating on grossly distorted 
anecdotes, sound bites, and 30-second commercials designed to appeal to 
ignorance and emotion. That is fine for the contestants in this matter 
to engage in if they choose to do so, but this body has a duty and a 
different function.
  First, we need to address the issue of federalism. At the outset, I 
must state that I have great concern with any proposal that imposes a 
Federal standard in an area that has been left up to the States for 200 
years. I would remind many of my Republican brethren that we ran for 
office and were elected last year on the basis of our strong belief 
that the government that is closest to the people is the best 
government; that Washington does not always know best; that more 
responsibility should be given to the States because that is where most 
of the creative ideas and innovations are happening. Whether it be 
unfunded mandates, welfare reform, or regulations that are strangling 
productivity, we took the stand that States and local governments 
should have a greater say about how people's lives are going to be run, 
and the Federal Government less.
  People have different notions about the importance of philosophical 
consistency. But let there be no mistake about what we are doing if by 
legislative fiat we usurp significant areas of State tort law, passed 
by State legislators, elected in their own communities. We are going 
against the very fundamentals of our own philosophy which has served as 
our yardstick by which we measure all legislation.
  In the Contract With America, every provision, in one way or another, 
has to do with limiting the power or authority of the Federal 
Government or one of its branches with regard to the States or 
individuals except one: the change in the legal system. That provision 
has nothing to do with limiting or changing the rules with regard to 
the Federal Government--but, rather, with the Federal Government 
changing the rules between two private parties, the very thing we have 
been so critical of in the past. I would say to my friends who are 
conservative in all matters except this one: If and when we are no 
longer in the majority, we will stand naked against our opponents as 
they rewrite our tort law for America to fit their wishes and 
constituencies because we will have lost the philosophical high ground.
  It is ironic that all of this is occurring at a time when the 
philosophical battle that we have been fighting for so many years is 
finally being won. Several recent Federal court decisions, including 
the recent Supreme Court decision in the Lopez case, have finally begun 
to place some restrictions on Congress' use of the commerce clause to 
regulate every aspect of American life. Conservatives have been 
complaining for years that congressional expansion into all areas, with 
the acquiescence of the Federal courts, has resulted in rendering the 
restrictions of the commerce clause meaningless. Now the courts have 
let Congress know that there are limitations to Congress' authority to 
legislate in areas only remotely connected to interstate commerce. And 
yet as we won the war, we take the enemy's position. We are now the 
ones who seek to legislate and regulate medical procedure in every 
doctor's office in every small town in America. And we are the ones who 
now seek to legislate and regulate the fee structure between a lawyer 
and his client in any small town in America.
  It is not as if the States have abdicated their responsibilities in 
this area. Many States have tougher and more restrictive laws than 
those advocated before this body.
  Four States have no punitive damages. Some States have caps on 
punitive damages. Most States have gone from a preponderance of the 
evidence standard to a clear and convincing standard for punitives. My 
own State of Tennessee has a 10-year statute of repose while the 
products bill before us allows 20 years. And as was recently pointed 
out by the National Conference of State Legislatures, ``Each of the 50 
State legislatures, many configures by a fresh influence of Republican 
tort reformers, is considering some type of overhaul of the legal 
system.''
  It is not as if State legislatures wish to be relieved of the burden 
of dealing with the subject of tort reform. As the president of the 
National Conference of State Legislatures recently said:

       As you know, NCSL regards the unjustified preemption of 
     State law as a serious issue of federalism, comparable in 
     many ways to the issue of Federal mandates. Federal mandates 
     erode the fiscal autonomy of States, while Federal preemption 
     erodes the legal and regulatory authority of States. Every 
     year Federal legislation, regulations, and court decisions 
     preempt additional areas of State law, steadily shrinking the 
     jurisdiction of State legislatures.
       [[Page S6048]] NCSL opposes Federal preemption of State 
     product liability law, strictly on federalism grounds. Tort 
     law traditionally has been a State responsibility, and the 
     imposition of Federal products standards into the complex 
     context of State tort law would create confusion in State 
     courts. Without imposing one-size-fits all Federal standards, 
     States may act on their own initiative to reform product 
     liability law in ways that are tailored to meet their 
     particular needs and that fit into the context of existing 
     State law.

  However, we are told that, while all of the above may be true, the 
system has totally gotten out of hand. It is said that our Nation is 
smothering under an avalanche of litigation and frivolous lawsuits; 
that our legal system is nothing more than a lottery system and that 
the lawyers are the only ones who really win the lottery. Well let us 
examine all of that.
  In the first place, I want to say that in any system run by human 
beings there are going to be abuses and miscarriages of justice and our 
legal system is no exception. For example, there is no question but 
that some frivolous lawsuits are filed. However, it should be 
understood by the American public there is not one thing about any of 
the substantive legislative proposals we have considered or will 
consider that will in any way diminish the possibility of frivolous law 
suits. No proponent of reform will argue that there is. There is simply 
no way to prejudge a case before it is filed. What we can do and should 
do is impose a penalty upon the litigants and the lawyers once a court 
has determined that a lawsuit is frivolous. The Brown amendment, which 
strengthened rule 11 in Federal cases, does that. I voted for it, and I 
hope it finds its way into any legislation that is finally adopted.
  Also, I am convinced that some industries in some States are being 
hit especially hard. I am very sympathetic to those that produce 
products or render professional services, that provide jobs for working 
people, and that make the wheels go around in our economy. That is why 
I am working to help relieve the burden of regulation that they face 
and the tax burden that too often penalizes investment and 
productivity.
  My own personal opinion is that the number of lawsuits brought in 
this country is too high and that it is a reflection of more serious 
things going on in our society.
  However, nothing in the proposed legislation would cut down on the 
number of lawsuits, and I do not think anyone believes that it is 
Congress' role to place a quota on the number of lawsuits that can be 
filed in this country.
  We have reached a point where a lot of people would support any 
legislation if they thought it would hurt lawyers. And there is no 
question that lawyers are often times their own worst enemy. My own 
opinion is that the profession has become too much
 like a business, too bottom line oriented, that lawyer advertising has 
hurt the profession that some of the fees being reported from Wall 
Street and other places over the last decade or so have caused the 
public's regard for the legal profession to fall dramatically. Frankly 
that is something that the U.S. Congress should be able to appreciate. 
So we have an imperfect system in an imperfect world.

  However, there is another side to the story. The fact of the matter 
is that all things considered, the system has served up pretty well for 
a long period of time. Our State tort system has provided us with a 
form of free market regulation. Goals like achieving product safety are 
reached without additional and intrusive government mandates that other 
countries have imposed as a substitute for a tort-based compensation 
system.
  Also, in the State courts during 1992, all tort cases amounted to 9 
percent of the total civil case load. In the Federal courts, product 
liability claims declined by 36 percent between 1985 and 1991, when one 
excludes the unique case of asbestos. Since 1990, the national total of 
State tort filings has decreased by 2 percent. If this trend continues 
in the next 10 years, State courts will experience a decline of 10 
percent in State tort filings. As a matter of fact, the primary cause 
of the surge in litigation in Federal courts has been disputes between 
businesses. Contract cases, which make up only one type of all 
commercial litigation, have increased by 232 percent over the period of 
1960 through 1988.
  And there is a lot going on that does not meet the eye that has to do 
with self regulation in a free society. Every day all over the country 
lawyers are telling clients that they do not have a winnable case, or 
that, although they have a pretty good case, the expense involved is 
not worth the potential recovery. You see, lawyers do not make money on 
frivolous lawsuits. Insurance companies learned a long time ago that 
paying off on frivolous cases in order to avoid potential litigation 
expense does not pay off. And the plaintiff lawyers know that the 
insurance companies will not pay extortion.
  Also going on every day in this country are cases which are settled 
where a person was wrongfully injured and received a reasonable amount 
of compensation. That is most cases. They do not make the newspapers.
  Also going on every day in this country are decisions by insurance 
companies not to settle with the plaintiff even though he is clearly 
entitled the recovery because he is a little guy and stretching it out 
for a couple of years and causing his lawyer to have to bear the burden 
financing the depositions and other expenses will make the plaintiff 
and his lawyer more amenable to a lower settlement later on. Besides, 
they know that they can put the settlement money to good use for that 
2-year period and make money on that money. On balance, it more than 
makes up for their own attorneys' fees.
  Also, going on quite often, are situations where a large corporate 
defendant is caught having committed outrageous conduct which resulted 
in tremendous injuries to innocent people. Often these cases are 
settled even before suit is filed because the plaintiffs do not want to 
go through a lawsuit and defendants know what might be in store for 
them if the plaintiffs get a mean lawyer who knows what he is doing.
  This is the real world. This is the rest of the iceberg of our legal 
system that most people do not see. It is free market, give and take, 
sometimes rough and tumble, and sometimes produces injustices. But we 
have always believed in America that, with all its faults, the best way 
to resolve disputes is not at 20 paces but with a jury from the local 
community who hears all the facts and listens to all the witness and 
who is in the best position of anybody in America to decide what is 
justice in any particular case. Then you have a judge who passes on 
what the jury did and then you have at least one level of appeal to 
pass on what the judge did. And I can assure you--and anybody who has 
ever been there knows this--that you do not find much run-away emotion 
left by the time you get to the appellate level in most State courts.
  So if we are determined to ring out the injustices that slip through 
the State system here at the Federal level, what are we going to 
replace it with?
  What are we going to replace it with? A one-size-fits-all standard? 
One standard that would apply to mom and pop and to General Motors? One 
standard that would cover both the frivolous lawsuit and the lawsuits 
involving gross misconduct by the defendant? In our haste to correct 
one problem, are we not running the danger of creating greater 
problems?
  Let me give you another example from real life. A lot of people are 
concerned about frivolous lawsuits against the medical profession. I 
share that concern. There have been good physicians wrongfully sued in 
this country. I think the system pretty well takes care of the problem 
in the end, but I regret that they have to go through that process. I 
am sure most of them were very displeased with me--my good friend and 
his supporters--when I could not go along with a $250,000 punitive cap 
on their exposure. I wish I could have gone along with it. But I could 
not. Because, not only do I have grave reservations about Congress 
legislating in this area, but in addition, the same cap that would 
legitimately and properly help them in some cases would unfairly hurt 
others in other cases. That is the problem with the one-size-fits all 
approach in Washington.
  Let me tell you a little story. David and Tammy Travis from 
Nashville, TN, came to see me last Wednesday, April 26. They have been 
following this debate and they wanted to tell me about their daughter 
Amanda. Amanda was a 5-year-old girl who was scheduled to 
[[Page S6049]] have a routine tonsillectomy at a medical clinic in 
Nashville. Amanda arrived at the clinic at 6 a.m. A nurse, not an 
anesthesiologist, administered the anesthesia and he administered the 
wrong anesthesia. Also, Amanda was hooked up to the wrong intravenous 
solution, as well.
  The errors continued as Amanda was given demerol even though she was 
not complaining and was not even awake. When Amanda began throwing up 
blood, the nurse informed the family that this was normal. By 2 o'clock 
that afternoon Amanda was lethargic. The nurse told
 the family that a doctor wanted to keep Amanda overnight, which was 
represented to be normal. However, the nurse had not contacted the 
doctor and had made that decision herself.

  Later in the afternoon, Amanda could not breathe. The short-staffed 
hospital had only a nurse and a sitter on duty. In fact, the nurse who 
administered the anesthesia was a drug addict, who subsequently died of 
an overdose while preparing to go into an operating room for another 
patient. The clinic had known that the nurse had this drug problem.
  When Amanda was hooked up to emergency equipment, her head blew up 
like a balloon, and she began to bleed out of her mouth, as her father 
used his handkerchief to try to stop the flow. The nurse ran off to get 
more equipment to open the airways. By this point, Amanda was getting 
so little oxygen that Mrs. Travis pleaded that 911 be called. Someone 
at the clinic did call 911 and the paramedics rushed Amanda to 
Vanderbilt Hospital. By this point, Amanda was essentially dead, 
although the paramedics did their best to revive her.
  After Amanda died, her parents were not given timely copies of her 
records from the clinic. Amanda's parents did, however, obtain the 
records from Vanderbilt. When they received the clinic's records, it 
was obvious that the clinic had altered the records to cover up their 
errors. The clinic tried to make it look like Amanda had been fine when 
she left the clinic, and that it was the paramedics who had messed up.
  The case went to trial about 2 years after the lawsuit was brought. 
The Travises are people of modest means. Their lawyer, Randy Kinnard of 
Nashville, financed 48 depositions and other expenses out of his own 
pocket over the 2-year period. The case was settled during trial for $3 
million, an amount that reflected the clear liability of the clinic and 
availability of punitive damages. The lawyer's fee, incidentally, was 
30 percent.
  The Travises traveled to Washington with their story even though Mrs. 
Travis was under doctor's orders not to travel as a result of recent 
knee surgery. They came to my office with Mrs. Travis in a wheelchair. 
The Travises have no further financial interest in any of this 
legislation. They simply want to ask me to try to help make sure that 
we did not do anything up here that would make it more likely that 
other parents would lose their little girls the way they did; that we 
did not do anything to make it more economically feasible for hospitals 
or large companies to hire on the cheap or to cut corners.
  The question presented to me is whether or not I am going to be a 
part of a process that tells Tennesseans that they cannot award this 
family $3 million if a jury in Tennessee, after hearing all the 
evidence, gives them that amount, or a company, realizing that they are 
finally at the bar of justice, coughs up that amount. I will not be a 
party to that.
  We had another situation in Hardeman County in rural west Tennessee a 
few years ago that is instructive. A chemical company contaminated the 
region's groundwater. Residents exhibited various forms of disease: 
cancer, liver damage, kidney, skin, eye and stomach ailments, and 
nervous, immune, and reproductive system disorders. The jury found the 
chemical company had knowingly and recklessly dumped the chemical waste 
at its landfill site, failed to make the dumping site leakproof, 
disregarded the warnings of contamination by one of its own senior 
employees, failed to warn residents or government officials of the 
dangers, and attempted to cover up evidence when an investigation was 
initiated. Residents of Hardeman County recovered $5.3 million in 
compensatory damages and $7.5 million in punitive damages. Do I think 
that Congress should tell Tennesseans that they cannot allow the jury 
who heard the case to award those damages? I do not.
  I get the feeling that there are cross currents running through the 
Senate at this point in our deliberations. I believe that there is a 
strong and understandable feeling that we should pass some tort reform 
measure in this session of Congress. I think, however, that there is 
another feeling that we are not quite sure of what we ought to pass and 
we fear that we do not fully appreciate or understand the effect of 
what we may be about to do.
  It seems to me that the responsible thing to do is to take a second 
and harder look at the proposals before us and try to respond to a 
legitimate Federal interest while resisting the temptation to 
federalize 200 years of State law that has undergone substantial reform 
and is still being reformed as we deliberate. I suggest that because of 
the interstate nature of the activity that there is a legitimate 
Federal interest in the products liability laws of this Nation. 
Approximately 70 percent of all manufactured goods in this country 
travel in interstate commerce. I believe that this is one area under 
consideration that would pass the commerce clause test. Furthermore, 
not only do the products travel in interstate commerce but the 
litigants in product litigation are often also
 interstate in nature in that they are citizens of States different 
than that of the manufacture, thereby creating diversity jurisdiction, 
and are able to avail themselves of the Federal court system. 
Therefore, it would seem reasonable to legislate in an area involving 
interstate commerce with regard to litigation involving our Federal 
court system.

  Therefore, I am offering on behalf of myself, Senator Cochran, and 
Senator Simon an amendment to limit the bill's application to cases in 
Federal court. If my amendment were adopted, and a plaintiff filed a 
case in Federal court under diversity of citizenship jurisdiction, this 
Federal legislation would govern the case. If the plaintiff filed this 
suit in State court, State law would control. However, if the defendant 
successfully removed a case filed in State court to Federal court, this 
Federal law would apply.
  My amendment would restore the federalism that the bills currently 
drafted would threaten. At a time when the American people 
overwhelmingly believe that the Federal Government has obtained too 
much power at the expense of the people and the States, we should not 
adopt a Washington-knows-best approach to tort law.
  Particularly troubling is the selective preemption H.R. 956 creates. 
States cannot provide less protection to defendants than the bill 
mandates, but States are not prohibited from providing more. It is the 
bill's selective preemption that guarantees that it will not produce a 
uniform response to a supposedly national problem. The preemptive 
features of the bill overlook that Americans are unique individuals. 
Moreover, States have their own right to determine the law that should 
be applied to their own special situations.
  My amendment is based not only on theories of federalism, it also 
recognizes the enormous practical problems the bill, as currently 
drafted, would cause to State-Federal relations.
  Because State law would still govern tort cases to the extent that 
the bill did not preempt it, there would be numerous questions to 
litigate concerning the relationship between the Federal law and 
existing State laws. New, different, and inconsistent interpretations 
of the Federal law and the State laws would result. Under the 
underlying bill, Federal courts of appeal would resolve these issues. 
Those courts, not State courts, would ultimately determine the scope 
and meaning of State law as it interacts with this bill. To my mind, 
Federal courts should be bound by State court decisions on the meaning 
of controlling State law. By contrast, this bill would make State 
courts follow Federal court interpretations of controlling State law. 
Such a regime turns federalism on its head.
  As I previously stated, my amendment recognizes that interstate 
commerce is the justification for a Federal tort reform bill. And it is 
interstate commerce that justifies Federal court 
[[Page S6050]] jurisdiction in cases brought by citizens of one State 
against citizens of another State. I believe that the commerce clause 
rationale of the bill corresponds precisely with the reasons underlying 
Federal diversity jurisdiction. Moreover, by adding this amendment, the 
bill would actually provide a uniform law in Federal court to resolve 
the tort cases to which it applies. The existing bill would not achieve 
that result.
  Despite the claims made, no one truly knows the effect that this 
underlying bill will have on the ability of injured persons to recover 
adequate compensation for their injuries. Nor will anyone know whether 
competitiveness of American businesses will be enhanced or insurance 
premiums will fall if H.R. 956 is enacted. At the same time, the bill 
would displace 200 years of law based on actual experience. If the bill 
failed to achieve its objectives, there would be almost no means of 
unscrambling the federalized egg. By contrast, applying the bill only 
to Federal court cases would provide an opportunity to experiment. If 
the bill's ideas work, States can adopt these rules as their own. 
Potentially, a preemptive approach might then make sense. But if the 
bill created numerous practical problems, well-tested State law would 
remain undisturbed while Congress acted to fix the problems in the 
Federal law.
  The practical effect of the amendment would be that defendants sued 
out of State in many instances would be able to remove their cases to 
Federal court and obtain the Federal rule. Defendants sued in their 
home State courts would not be able to remove the case to Federal 
court. Thus, those defendants would be governed by their State law as 
applied by their own State court. I believe that this is a much more 
sensible approach than the one now before the Senate, and one 
consistent with the Federal system and the Constitution.
  Mr. President, we should protect the right of the States we represent 
to maintain their core function of crafting law designed to compensate 
injured persons. We should also permit Federal courts to apply Federal 
law to those cases that represent truly national concerns. We should 
certainly be careful before we displace many years of law based on 
experience. My amendment would accomplish all those goals. I strongly 
recommend its adoption.
          amendment no. 618, as modified, to amendment no. 596

  Mr. THOMPSON. Mr. President, I send the amendment to the desk.
  The PRESIDING OFFICER. The Senator from Tennessee has sent up a 
modification. Is there objection to the modification? Without 
objection, it is so ordered. The amendment is so modified.
  The amendment (No. 618) as modified, is as follows:

       On page 9, line 3, after ``commenced'' insert the 
     following: ``in a Federal court pursuant to section 1332 of 
     title 28, United States Code, or removed to a Federal court 
     pursuant to chapter 89 of such title''.
       On page 10, line 19, strike ``or'' at the end.
       On page 11, line 4, strike the period at the end and insert 
     ``; or'' and add the following new paragraph:
       (8) create a cause of action or provide for jurisdiction by 
     a Federal Court under section 1331 or 1337 of title 28, 
     United States Code, that otherwise would not exist under 
     applicable Federal or State law.

  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Illinois.

                             Change of Vote

  Mr. LAUTENBERG. Will the Senator yield for a unanimous-consent 
request? I have just a short unanimous-consent request to make.
  Mr. President, on vote 139 that took place yesterday, I voted 
``yea.'' It was my intention to vote ``no.'' It does not change the 
outcome of the vote in any way. I ask unanimous consent that that be 
recorded as a ``no.''
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SIMON. Mr. President, I will be very brief, I say to my friend 
from Washington, because I have a satellite TV feed to high school 
students in Illinois that is going on right now.
  Mr. GORTON. This Senator simply wanted to inquire about a time 
agreement.
  Mr. SIMON. I will be very brief.
  Mr. President, I strongly support and am pleased to cosponsor this 
amendment. It is right in theory. It is in line particularly with the 
Court decision that was made the other day about guns in school. I 
happen to disagree with that Court decision, but that is the law of the 
land. But it is right practically.
  What we are doing without this amendment is massively overturning two 
centuries of tort law and tort decisions. What this amendment says is, 
``Let's move a little slowly. Let's apply this in the Federal courts 
but not in the State courts.''
  So we can learn, and maybe we will want to, after we have had a 
little experience, apply it to the State courts. I think it is a sound 
amendment. I am pleased to support and cosponsor the amendment of my 
colleague from Tennessee.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Mr. President, first, I should like to inquire of the 
Senator from Tennessee, and those who support his amendment, whether or 
not we might reach a time agreement for the disposition of this 
amendment.
  Mr. HEFLIN. Will the Senator yield?
  Mr. HOLLINGS. Not at this time.
  Mr. HEFLIN. I do not think so at this time. I think we want to ask 
some questions and do some things and have a clearer understanding of 
what the Thompson amendment does.
 I want to engage in a colloquy at least and so forth relative to the 
matter. So I would think at this time we ought to know.

  The PRESIDING OFFICER. The Senator from Washington has the floor.
  Mr. GORTON. If that is the case, I obviously will defer asking for 
such a unanimous-consent but will hope that with support of the 
amendment we will agree to one. The debate will ultimately be 
terminated, perhaps, or at least dealt with by a motion to table. But 
if we can plan the afternoon and evening, it will be helpful.
  Mr. EXON. Will the Senator yield for a question?
  Mr. GORTON. Yes, I will.
  Mr. EXON. Since there is a time deadline of 1 p.m., I would like to 
ask my friend from Washington whether or not there could be general 
agreement on the passage of an amendment that he and I have worked out 
with regard to product liability that I think has been cleared on both 
sides of the aisle. We have been trying to find an appropriate time to 
do that. If possible, I think we can do it in 2 or 3 minutes if we can 
get unanimous-consent and if that is the will of my friend from 
Washington, the manager of the bill.
  Mr. GORTON. Parliamentary inquiry. Is the rule that all amendments 
must be filed or formally introduced by 1 o'clock?
  The PRESIDING OFFICER. Rule XXII requires that they be filed.
  Mr. GORTON. This Senator is perfectly willing to deal with the 
amendment of the Senator from Nebraska, with which he is familiar. I am 
not sure that the other Senators here are, however. So I do not know 
that it is cleared yet.
  Mr. EXON. I thought it had been cleared.
  Mr. GORTON. I suggest the Senator file it and discuss it with the 
principal opponents to the overall bill, and perhaps we can do it in 1 
or 2 minutes. It looks to me that they do not know what it is about.
  Mr. HEFLIN. Mr. President, as I understand it, he is filing it with 
the idea of meeting the post-cloture requirement. In the event of that, 
all he has to do is file it at the desk and we can do it. Is that not 
all he has to do is file it at the desk?
  The PRESIDING OFFICER. The amendment must be timely filed to be 
germane.
  Mr. HEFLIN. All right.
  Mr. EXON. Mr. President, I will comply with the wishes of my 
colleagues.
  Mr. HEFLIN. In order to clarify, I think if there are amendments 
people have, if there is no objection, I think it may be extended until 
3 o'clock or something like that, if people have them. I do not know of 
any more I am going to file myself.
  The PRESIDING OFFICER. The Senator from Washington has the floor.
  Mr. HEFLIN. Are there any objections to that?
  Mr. GORTON. Mr. President, I do not think I am authorized to make 
that distinction at this point. The Senator 
[[Page S6051]] can file it right now, and then, if we settle it later, 
we can take it up and dispose of it promptly, which I hope will be the 
case.
  Mr. President, I find myself in a somewhat paradoxical situation. 
With almost all of the remarks and policy positions presented by the 
Senator from Tennessee, I find myself in agreement. Yesterday, for 
example, I voted with him against a limit on noneconomic damages in the 
medical malpractice portions of this bill, at least in part for the 
very kind of reasons that he outlined. I also found most forceful and 
persuasive--having used it myself--his arguments that the strongest 
case for congressional legislation in this field rests in the field of 
product liability, because we deal, almost without exception, with 
products manufactured in one State, sold in interstate commerce in a 
national market.
  I lost him, however, on the last turn--that that very forceful 
argument for greater uniformity in the rules under which product 
liability litigation was conducted therefore meant that we should apply 
this bill only to litigation conducted in Federal courts, whether it be 
product liability or presumably other forms of litigation which have 
now been adopted as a part of this bill. In that, I profoundly disagree 
with him and find it somewhat surprising that he and other good, 
thoughtful lawyers and former judges in this body would countenance 
this amendment, even if they oppose this bill overall.
  Now, one set of my reasons is purely pragmatic. The other is academic 
and theoretical, but nonetheless vitally important, perhaps more 
important than the practical reasons. The practical reasons are that 95 
percent of product liability cases are filed in State rather than in 
Federal courts. Ninety-five percent. That is not unlike the proportion 
of all cases in State and in Federal courts. Overwhelmingly, legal 
disputes are decided in State courts, not in Federal courts themselves.
  So, if interstate commerce is a justification, at least for the 
product liability provisions of this bill, why should the rules of this 
bill be limited to litigation conducted in Federal courts? That is to 
say, 5 percent of such litigation. The interstate commerce impacts of 
the development, the production, the distribution, and the use of 
products, is not affected in the slightest by the location of the court 
in which disputes or problems in connection with those products arise. 
If the interstate commerce clause is justification for any Federal 
rules in this field, it is justification for such rules in State courts 
to exactly the same extent that it is justification for such rules in 
Federal courts. There simply is no difference.
  The interstate commerce is not the lawsuit, it is not the litigation, 
Mr. President; the interstate commerce is the travel of the product, 
the fact that the product is produced in one place, sold in another, 
perhaps developed in a third and used by a particular individual in a 
fourth State, or maybe in 10 or 20 States if it is a movable product. 
If we are going to have a set of rules with respect to product 
liability litigation, obviously, they should apply in all courts.
  Let us go beyond that. We have said that, at the present time, the 
distribution of these cases is approximately 95 percent to 5 percent. 
We also have opposition to this bill primarily on the grounds that it 
will make some litigation more difficult or will limit the recovery of 
punitive damages. So the choice now of any lawyer representing a 
plaintiff in any case which does not have more severe limits on this 
litigation than are contained in this bill will be to bring that 
litigation in State court. In fact, if a lawyer who has a choice 
between the two brought it into Federal court, that lawyer would 
probably be guilty of malpractice. What earthly reason would there be 
to bring such a case in Federal court?
  So instead of 5 percent of all cases in Federal court, would it be 1 
percent? Would it be less than 1 percent? For all practical purposes, 
it would approach zero. We would gain no experience in finding which 
set of rules were better by the passage of this amendment.
  In fact, what we are learning with the present experimentation is 
some States have more product liability litigation and some have 
greater punitive damage awards than others do.
  Now, of course, this amendment applies not only to litigation which 
is commenced in Federal Court but litigation which is originally 
commenced in the State court and removed to Federal court. And, Mr. 
President, to oversimplify the case, getting into the Federal court 
with a product liability case like this is almost always going to be 
based on what is called ``diversity of citizenship.''
 That is to say, the claimants, the plaintiff; in one State, the 
defendant is from another State, or a certain amount is in issue.

  If that is the case, and the original action is brought at a State 
court, it can be removed by the defendant to a Federal court. This 
right, however, does not exist when the parties are from the same State 
or when there is more than one party and there is a complete and total 
diversity of citizenship.
  Again, Mr. President, given the way in which claimant lawyers operate 
in these situations, always suing or almost always suing not just the 
manufacturer but the retailer, sometimes the wholesaler, the developer, 
and the like, again, almost any competent lawyer can prevent the 
existence of diversity jurisdiction.
  Mr. President, I would predict, I think there is not much opportunity 
to be contradicted, we would not have 1 percent of this kind of 
litigation actually conducted in Federal courts if this amendment were 
passed. We would not get this experimentation. We would simply see to 
it that the relatively small handful of such lawsuits now conducted in 
Federal courts ended up being conducted in State courts.
  Even more troubling to me, at least, Mr. President, is the 
proposition that this so profoundly changes the nature of diversity 
litigation in Federal courts, and gives such a reward to those who game 
the system to find the best place in which to sue, that it has been 
exactly the opposite role that has obtained for a minimum of 60 years 
in this country.
  Everyone in this body now who went to law school, or were at one time 
in law school, is familiar with the case in the Supreme Court of the 
United States called Erie Railroad Co. versus Tompkins in the year 
1938.
  The Supreme Court, as long ago as that year, found lawyers gaming the 
system, figuring out if a more favorable rule of law were going to be 
applied in the Federal court than the State court, they would try to 
get in to the Federal courts.
  So the Supreme Court quite wisely said ``Look, you bring one of these 
product liability lawsuits in Federal court or remove it to Federal 
court, we are going to apply exactly the same legal rules that State 
courts in that State would apply.''
  So we cannot get a better deal, a more favorable law, a more 
favorable rule by going into Federal court. A person would get exactly 
the same rules. That, of course, has been the law of the country ever 
since. It is that Supreme Court case that this amendment would 
overturn.
  I do not mean to say it would be unconstitutional; certainly it would 
be constitutional. That is simply a ruling by the Supreme Court on 
these relationships. But if Congress wants to create an entirely 
different rule, it can do so.
  In fact, this Congress has always in the past followed the rule of 
Erie versus Tompkins. When Congress does create Federal rules of tort 
law--and it does in the Federal Employees Liability Act and the Federal 
Longshore and Harbor Workers Compensation Act, and the Merchant Marine 
Act--it always says that those rules are going to be applied in any 
court wherever it is located in which such an action is brought, so 
that the system cannot be gamed.
  It would be utterly improper, Mr. President, to depart from that wise 
set of rules and to move to a system in which consciously we set up one 
set of rules for actions in Federal court and another completely 
different set of rules for actions in State courts.
  Nor does anything in the bill criticized by the Senator from 
Tennessee on the relationship between State and Federal courts, 
undercut or contradict that. If I understood him correctly, the Senator 
from Tennessee, said that this bill would have Federal courts 
interpreting State law through the circuit courts of appeal. Not so.
  [[Page S6052]] I will read the section that has to do with that 
relationship from the current bill. It says, ``Notwithstanding any 
other provision of law, any decision of a circuit court of appeals 
interpreting a provision of this title,'' that is to say, Federal law 
if we pass this ``this title shall be considered a controlling 
precedent with respect to any subsequent decision made concerning the 
interpretation of such provision by any Federal or State court within 
the geographical boundaries of the area under the jurisdiction of the 
Circuit Court of Appeals.''
  This does not change the law. This is the law right now--Federal 
courts have priority in the interpretation of Federal law. At least at 
the Supreme Court level, that determination is binding on State courts 
when State courts interpret Federal law.
  Nothing in this section gives Federal courts of appeal the right to 
interpret State laws. It only gives them the right to interpret this 
law, assuming that we pass it, which is something in my view that we 
did not have this section in the bill itself.
  But to return to the argument, the argument is presented very 
forcibly by those who do not want the Congress legislating in this 
entire field, who are content with 50 to 53 different jurisdictions on 
tort law. They have a lot of precedent on their side. This has been, by 
and large with the exception of certain Federal statutes, the way in 
which these relationships have been conducted in the past.
  The impact of changes in the legal system, more litigious system, 
higher judgments, greater risks to research and development of 
products, has created an urgency, I think a sufficient urgency, to move 
cautiously into this field. It can certainly be properly argued as it 
is on the other side that, no, we should not interfere at all.
  I think it is that argument that ought to be made, Mr. President, 
that we should not involve ourselves in these issues, that we should 
defeat this bill. I do not think we should do it by presenting an 
amendment, first, which will not have any effect because there will be 
so few cases brought; and, second, reverses a wise decision of the 
Supreme Court of almost 60 years in age designed to prevent forum 
shopping, by saying whatever court a person is in they will abide by 
the same rule which this bill is consistent and which this amendment is 
not.
  I hope we can get on to debating the merits of the entire bill, 
product liability, medical malpractice, rules relating to punitive 
damages and the like.
  As I say, the Senator from Tennessee illustrated the fact that we 
have a problem, that we have a problem that crosses State lines. I 
believe we should do something about that problem, but I would rather 
see Members do nothing than to totally change the relationship between 
the State and the Federal courts in the manner which would be 
accomplished by this amendment.
  Mr. COCHRAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. COCHRAN. Mr. President, let me, first of all, compliment the 
distinguished Senator from Tennessee for bringing this issue to the 
Senate in the form of this amendment. I think it highlights the 
frustration that many Members feel at this point in the consideration 
of this legislation.
  The Senator from Washington very correctly points out that this may 
be an amendment on which reasonable scholars, even, could disagree in 
terms of its impact on this bill before the Senate.
  I think it speaks to a frustration that we have seen so many 
amendments adopted now, and have been rejected, that seek to enlarge 
considerably the subject matter which was first presented to this 
Senate in this product liability bill.
  I think it is clear that there is a sound jurisdictional basis for 
the Congress to legislate in this area under the commerce clause--at 
least that is my opinion--but it does not necessarily extend to all of 
the subjects that have been debated on this floor after the bill has 
been called up.
  We have now undertaken to fully explore the Federal role in limiting 
or modifying or writing new rules for professional liability of 
physicians and others in the health care area, why not insist that 
there be included a title on architects and engineers who are also 
professionals and who are held to a higher standard of conduct because 
they are professionals, but they are not included.
  Are we going to permit, then, the legislation to proceed and have all 
other professionals excluded because of this omission? Even lawyers are 
professionals in the view of most. I mean, they are held to the same 
high standard of conduct as professionals. So when they breach their 
duty to provide skilled and thoughtful and professional assistance for 
pay to some member of society, they are held liable if they breach that 
duty, under the standards that are written into the law, just as 
physicians are, or hospitals, or others. So I think what the Senator 
from Tennessee is pointing out is that we are out into the deep water 
now in an effort to comprehensively reform the civil justice system of 
the United States, piecemeal, on the floor of the Senate.
  We have committees that have jurisdiction over some of these areas. 
The Labor Committee, for example, had a markup session and reported out 
a bill dealing with malpractice liability and reforms in that area. As 
I understand it, that was the basis of the amendment of the Senator 
from Kentucky, Senator McConnell, on medical malpractice, which the 
Senate has now adopted.
  I understand the Banking Committee also is considering reporting out 
legal reform legislation dealing with securities transactions where 
class action suits are brought against companies or brokerage houses 
for various alleged acts of negligence or breaches of duty to the 
general public with respect to the value of securities or the conduct 
of officers and board members with respect to running the companies in 
a skilled way, or at least up to that standard that is owed to the 
investor who might buy stock in that company.
  There has developed, as I understand it, a sort of cottage industry 
in some legal circles of bringing these kinds of actions, and now there 
is a cry for reform and restraint and restrictions on those kinds of 
actions. The Banking Committee has taken that up. They are considering 
it, and I understand they are going to report out a bill. If we are 
going to reform comprehensively the civil justice system of this 
country, why not await the advice of the Banking Committee on that 
subject and include that as a title in this bill or some bill?
  I understand the Judiciary Committee has now before it a proposal by 
the chairman of that committee, Senator Hatch from Utah, which includes 
suggestions for other reforms in the civil justice system of the 
country.
  My concern, which is reflected in this amendment of the Senator from 
Tennessee, is that we have gone so far now, we need to stop and say: 
``Wait a minute. This is not a civil justice reform bill. It is not 
all-inclusive,'' and try to narrow the application and the scope of 
this legislation to something that more narrowly fits the purpose of 
the bill that was brought to the floor by the Commerce Committee.
  This bill relates to products liability. While some of us disagree 
about some of the provisions--we might want to change it, amendments 
ought to be considered--nonetheless, it had a fairly narrow application 
that was firmly based upon the commerce clause of the Constitution 
giving the Congress the power to legislate in this area. Some of these 
arguments that I have heard have absolutely nothing whatsoever to do 
with the Federal role in our society.
  When they were talking about setting the lawyers' fees in certain 
contingent cases, I thought back to the time when I remember organized 
professional groups pleading with the Congress to do something about 
the Federal Trade Commission because they were about to get into the 
fee schedules of local professional organizations. Do you remember 
that? Several years ago there was a great hue and cry by the--well, I 
am not going to name the groups. They might get more attention than 
they want.
  But the point is, we were arguing that the Federal Trade Commission 
did not have anything to do with the setting of fees at the local level 
by professionals. That was something that was regulated by professional 
societies, or State laws, or other entities--not the Federal 
Government. And now here we are being asked to pass judgment on a 
[[Page S6053]] fee charged by a lawyer to his client in a purely local 
action maybe. It does not have anything to do with the Federal 
Government. And the Federal Government should not have anything to do 
with that. If you want to read and give effect to the Constitution, 
that separates the Federal role from State governments' roles in these 
areas.
  So I am troubled about where we are now. I think at some point we may 
have an opportunity to consider whether this bill should be modified in 
a way that puts it more nearly back to where it started and that is 
dealing with product liability rather than an effort to comprehensively 
fix or modify every conceivable area of civil justice procedure or 
substantive law that strikes a Senator in a moment of serious concern 
that needs to be addressed on this bill, and we have seen those 
amendments come up now, and I guess we will see many others.
  So I again compliment the Senator from Tennessee for trying to put in 
perspective what we are doing here and what we ought not to be doing 
here.
  I intend to vote for his amendment.
  The PRESIDING OFFICER (Mr. DeWine). The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, we had the occasion to attend the 
funeral of our distinguished former colleague, Senator Stennis. Time 
and again the visiting Senators who had served with him talked about 
his wisdom. My only comment is the wisdom of that distinguished 
gentleman is not lost to the Senate when you hear the Senator from 
Mississippi, Senator Cochran, talk. He does talk with professionalism. 
He does talk of trying to act professionally with respect to a Federal 
legislative body, and his statement on the amendment of the 
distinguished Senator from Tennessee is music to my ears.
  This has been sort of a run-amok situation. When the Senator from 
Mississippi says it is not the intent to reform the whole civil justice 
system, we started on product liability--that is what he thought and 
that is what I thought but that is not what the contract calls for. I 
do not want somebody to say I had gotten partisan on this thing, 
because I am welcoming the bipartisanship with respect to the amendment 
of the Senator from Tennessee. But the RNC talking points show they do 
not have any idea of product liability. But they do have the civil 
justice. The contract calls for that. And you have seen what has been 
provided, Senator, on the House side, which is very, very disturbing.
  Right to the amendment of the Senator from Tennessee, and 
particularly his address, which has really been music to my ears. It is 
like a drink of water in the desert, because he talks professionally of 
the duty and responsibility here of the U.S. Congress and the Federal 
Government. We do not find--and I agree with the Senator from 
Tennessee--the need for the Federal Government to start preempting 
local jury trials and the handling of tort cases at the local level. So 
what he is saying is, to try to keep step with the theme upon which he 
was elected--and incidentally it has been the theme upon which I have 
been elected for 28 to 29 years--is that the government that is the 
best government--the Jeffersonian phrase most often quoted--``is that 
closest to the people'' and the local folks decide these things.
  As I have said time and again here, you have a solution looking for a 
problem, because product liability cases are on a diminishing scale. 
There is no Federal problem with respect to the lawyers' fees 
nationally with respect to their clients.
  It is only to deter and enhance and enrich the manufacturer that we 
even had the Abraham-McConnell amendment. But what the Senator from 
Tennessee does, as I read this amendment, is sort of bring a little 
order out of chaos. With respect to applicability, and in diversity 
cases under title 18 what we have is a jurisdiction and a 
responsibility.
  So this would apply to the provisions of this bill, and diversity 
only in those cases that have been removed from the State courts to the 
Federal system. Yes. We have in Federal court a responsibility at the 
Federal level. And let us apply whatever they desire, which is almost 
open sesame now around here. I cannot tell what the next thing is 
coming up. But like the sheepdog can taste the blood, they are going to 
gobble up all the rights of the individuals back home because all of a 
sudden we, who have been elected by the people back home--think the 
people back home have totally lost judgment. We have to tell them how, 
why, where, and when. You can put in this evidence but you cannot put 
in this.
  If that is necessary, the Senator from Tennessee says, let it apply 
in those diversity and removal cases, and then we will have fulfilled 
our responsibility. I hate to talk longer on the amendment because you 
become identified with your position in these matters. Somebody would 
say--I can hear them now--``Well, Hollings is for the Senator from 
Tennessee's amendment, you had better vote against it.''
  I am trying to laud the distinguished Senator from Tennessee, 
particularly his comments. I just listened as he went chapter and verse 
right down the line. That is the first address of which I had the 
occasion to hear the distinguished Senator from Tennessee. I listened 
to him through his client, Senator Howard Baker, years ago in earlier 
proceedings. But now he is speaking in and of himself. I find that 
solid. When they talk about common sense, that solid common sense is 
coming through with respect to this particular issue of product 
liability and the amendment of the Senator from Tennessee. So I 
heartily endorse the attention, particularly of my colleague from West 
Virginia, one of the leading sponsors on this bill.
  When it comes down to law, yes. We have a responsibility on the 
Federal side--diversity and removal. And let us apply whatever 
everybody decides by a majority vote is necessary to occur. But let us 
not in the context of simplicity and uniformity come back in and jumble 
this whole thing into the 50 jurisdictions with the 50 different 
interpretations and bring it up to the Federal system for even further 
interpretations and appeals and say that what we have now is 
uniformity.
  The Senator from Tennessee gives us uniformity. There is no question 
about it in this particular amendment. I heartily endorse his 
initiative and his amendment.
  I hope we can sort of calm down now without all of the little 
amendments of interested parties. They are on a roll--you can see by 
the way the votes are going--to affect all civil cases with respect to 
punitive damages. You would never think that would occur on the floor 
of the U.S. Senate because punitive damages had a salutary effect in 
our society. All I have heard is about runaway juries and the legal 
system as a lottery; these catcalls you might call it. It is almost 
like an athletic event up here. The deliberative body is the 
cheerleading section. The Senator from Tennessee says let us get out of 
the stands, get out of the chair, and get down on the field of 
responsibility and act like Senators and legislate where we have that 
responsibility, and leave the States and the local folks to their own 
judgments, their own considerations.
  It is not a national problem. There have been problems arising. 
States have treated it differently. They have all revised practically 
all of their product liability laws in the last 15 years. These State 
legislatures come up and say, ``For Heaven's sake, leave us alone.'' 
They testified before the Commerce Committee. The Association of State 
Supreme Court Justices, a bipartisan group says,

       For Heaven's sake, let us not put this thing in where we 
     have to take all of these words of art and interpretation in 
     the 50 States. Leave us alone.

  The American Bar Association, a bipartisan group if there ever was 
one, and a study group of lawyers said we studied it again. It is 
totally off base. We oppose this bill. Mr. President, 123 legal 
scholars have come forward and said now you really, in an effort to 
give what you call common sense or uniformity or fairness--to get the 
buzzwords going--what you have really done is given the highest degree 
of unfairness, the highest degree of complexity that you could possibly 
imagine. They testified. The attorneys general testified against this 
measure. There it is.
  How do I get that over to my colleagues? Well, thank heavens. I know 
a lot of them would listen to the leadership of the Senator from 
Tennessee, 
[[Page S6054]] and I hope they will on this particular score.
  I yield the floor.
  Mr. HEFLIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. HEFLIN. Mr. President, I certainly join Senator Hollings with 
regard to the remarks that have been made by the distinguished Senator 
from Tennessee and the distinguished Senator from Mississippi.
  The Senator from Mississippi talked about the fact that here we are 
really going with this, a product liability to, in effect, change all 
civil actions; changing the tort laws. All of a sudden, we have adopted 
the Dole amendment which extends to all civil actions affecting 
commerce. Of course, under the laws pertaining to commerce, it does not 
say ``interstate commerce.'' It says ``commerce.'' I mean some people 
resent the decision pertaining to the Lopez case that was handed down. 
But this does not say ``interstate commerce.'' It says affecting 
``commerce''--the language in the Dole amendment.
  I wonder, how far does this go? Of all civil actions? Civil actions, 
if there are civil rights cases, based on State law? Is it covered by 
this? Does this apply to that? If there are civil rights cases under 
Federal law, are they affected by this? There are so many questions 
that are raised. There have been, for example, longstanding railroad 
laws pertaining to FELA cases. Are they affected by that? There are 
longstanding admiralty laws which are civil cases; are they affected by 
these amendments? Is the Jones Act, which is another matter pertaining 
to seafarers, affected by this act? There are so many things that just 
immediately come to mind that raise concerns in my mind.
  Consider, for example, the antitrust laws that are enacted by States. 
You have the standard of three times damages, and as the bill is now 
amended, it is reduced down to two times.
  Economic? If there are no noneconomic damages, then it is reduced 
down to twice. Are we changing the antitrust laws in reducing the 
penalties pertaining to those?
  Senator Cochran mentioned that here we are attempting to change all 
of these laws on the floor of the Senate.
  I said there have been groups that have studied the tort law. There 
is the American Law Institute that has published the restatement of 
torts. They have published the restatement of a great number of various 
fields of law. This product liability bill, the underlying bill, has no 
resemblance to that study group which has over the years included 
defense counsel, plaintiff's counsel, professors, scholars, and people 
who have worked on the concept of tort law, including product liability 
law. But this has been written by lawyers that are interested in trying 
to save themselves money, and they are trying to save themselves money 
at the expense of injured people. And now it is being extended to all 
civil actions.
  Now, I am not exactly sure what the Thompson amendment does, and I 
would like to sort of engage in a colloquy and ask the Senator some 
questions pertaining to it.
  From what I have been able to read and in listening to my colleague 
speak, really the Senator's amendment, as I understand it, limits the 
application of the underlying bill as now amended to Federal courts 
only. Is that correct?
  Mr. THOMPSON. That is correct, I say to the Senator.
  Mr. HEFLIN. In other words, it is not controlling on actions that are 
tried in State courts, such as the Senator's State and such as Senator 
Cochran's State.
  Mr. THOMPSON. That is correct.
  Mr. HEFLIN. It does not impose any of those provisions that are in 
the underlying bill, as amended, upon the State of Tennessee, the State 
of Mississippi, the State of Alabama, the State of New York, or any 
other State--it does not impose those provisions on them; is that 
correct?
  Mr. THOMPSON. That is absolutely correct.
  Mr. HEFLIN. All right. Now, the provision dealing with the 
interpretation of the court of appeals, which is in the underlying 
bill, the court of appeals that might interpret a district court and 
the Federal courts, that decision that is made relative to the 
underlying bill, as amended, would not affect proceedings in a State 
court?
  Mr. THOMPSON. Under my amendment, that is correct.
  Mr. HEFLIN. As I understand it, the Senator's amendment does not 
create a new cause of action or a Federal cause of action. Is that 
correct?
  Mr. THOMPSON. That is exactly correct.
  Mr. HEFLIN. In other words, the Senator's amendment, in effect, says 
that the provisions of the underlying bill--you have provisions dealing 
with punitive damages; you have provisions dealing with misuse and 
alteration; you have standards that are created relative to punitive 
damages; you have provisions dealing with intoxication and defenses on 
that----
  Mr. THOMPSON. In the medical area also.
  Mr. HEFLIN. You have the biomaterials provision and all of that in 
the product liability bill. Are those provisions limited strictly to 
cases that are tried in Federal district courts?
  Mr. THOMPSON. That is correct.
  Mr. HEFLIN. All right. So, now, if I understand it from the Senator's 
speech and also Senator Simon's speech, the Senator's idea is that this 
would be an experiment, in effect a pilot program for a period of time 
in which you would determine how it would work, and from it, State 
courts could use the experience. State could learn from that 
experience? And, of course, Congress could look at the same thing and 
learn from the experiences that might be contained therein; is that 
correct?
  Mr. THOMPSON. Yes, that is correct.
  It occurs to me on that point that States have learned, for example, 
from the Federal Rules of Civil Procedure and I believe also perhaps 
the Federal Rules of Criminal Procedure. Federal courts adopted rules 
that proved to be effective, and after a period of time States like 
Tennessee and others adopted State rules that resemble very much or in 
some cases are identical to the Federal rules, because over a period of 
time they proved to be salutary and desirable.
  Mr. HEFLIN. All right. The distinguished Senator from Tennessee, I am 
sure, knows of the doctrine which came out of a case in the Supreme 
Court called Erie versus Tompkins. Now, Erie versus Tompkins basically 
says that State law prevails in diversity cases and prevails in Federal 
cases in the event that the Federal law is not written to approach it. 
In other words, if there is a void in Federal law, then the concept is 
that State law will be followed under the doctrine of Erie versus 
Tompkins in the Federal courts.
  Mr. THOMPSON. Yes. The Federal court can follow the substantive law 
of the State.
  Mr. HEFLIN. The Senator is correct in regard to substantive law. So 
if this particular bill, as amended, is silent relative to a State law 
and is not preempted, then a Federal court would continue to apply 
State substantive law in a case brought in the Federal courts? Is that 
correct?
  Mr. THOMPSON. That is absolutely correct. In other words, in other 
diversity cases not covered by the provisions of this amendment or the 
underlying bill, Erie would apply and the substantive law of the States 
as always would still apply in those cases.
  Mr. HEFLIN. Basically, I have a reservation on the philosophical 
viewpoint. I think, No. 1, as the bill presently stands, as it is 
amended, the Senator's amendment is an improvement. I do have 
reservations as to whether or not from a philosophical viewpoint we 
ought to be legislating in an area that has been left to the States for 
many years. And so it is a question of federalism. I am in somewhat of 
a conflict as to whether or not I would support the Senator's 
amendment, and that is something I am going to think about and give a 
little more thought to.
  Mr. THOMPSON. If I could respond to that point just a moment, I think 
the Senator is reflecting a conflict that is going on within a lot of 
us. A lot of us understand the concern of our constituencies that 
businesses, and so forth, have legitimate complaints. A lot of us are 
also concerned about this rush to judgment, where the U.S. Congress and 
the Federal Government are on the verge of supplanting 200 years of 
State law, at a time when many of us are saying in other areas, whether 
it be welfare reform, regulatory reform, 
[[Page S6055]] taxes, or unfunded mandates, we are all saying get the 
Government out of the States' business. States are where the innovation 
is going on. Let them take care of themselves. So we are all engaged in 
that conflict.
  Product liability has been discussed in the Chamber of this body for 
many years, long before I arrived. The Senator, I am sure, has engaged 
in those debates over the years. I think there is a feeling that this 
is an area wherein there is more justification for our involvement on 
the Federal level because of the inherent interstate nature of the 
activities. Seventy percent of all manufactured goods now travel in 
interstate commerce.
  If I had my desire, if I could write the legislation, or I could come 
to the conclusion, perhaps this is not where I would be. But I see the 
freight train going down the tracks, and I think we at some point have 
a responsibility to at least try to make sure that we wind up in as 
good a position as we can. And for me, that is carving out an area and 
saying, look, if we are going to do this, let us not go all across the 
board. Let us not usurp all State laws across the board dealing in 
these areas without knowing what we are doing.
  The Senator from Alabama mentioned and in 5 minutes raised a dozen 
questions that nobody knows the answers to. The answers will be decided 
through reams and reams and reams of court decisions throughout this 
Nation over the next several years. We will create more lawyer work 
than we ever dreamed of because of what is going on here.
  So what I am saying is, let us take the basic part of the original 
underlying legislation, which has to do with products liability, which 
has more of an interstate nature to it than what goes on in some small 
law office, what goes on in some accountant's office, what goes on in 
some doctor's small office or any of these other areas, and couple that 
with the interstate nature of most of products litigation, and that is 
diversity cases.
  Incidentally, I disagree with my distinguished colleague from 
Washington concerning the number of diversity cases filed in Federal 
courts. Last year, the Administrative Office of the U.S. Courts 
reported that 22,000 products cases were filed--tried or disposed of--
in Federal courts. That represents approximately 45 percent of all 
products cases.
  So, close to half of all products cases, under my amendment, would 
get the benefit of this new Federal rule and legislation that we are 
proposing. But at least we would not be, in one fell swoop, supplanting 
all of the State law that has been developed over 200 years.
  I believe that it is justified and it makes some sense in this area 
and would allow us to take a deep breath and look and see what we have 
wrought, whether or not it is working, whether or not insurance rates 
are being affected, whether or not this is something that States want 
to emulate or something that we, as the U.S. Congress, want to 
backtrack on and say we made a mistake. Under this, we could unscramble 
the Federal egg a whole lot better than if we changed all the laws in 
the States, got years of decisions, new decisions based on those laws, 
learned that we were wrong, got a new group in the majority in this 
body and in the House and had them come in and impose their will and 
their concept of justice and respond to their clients and their 
constituents.
  I think it would be a mess. I think we are asking for a real mess 
down the road. What I am trying to avoid with this amendment is that 
kind of result, which I think would wreak havoc with our court system 
in this country.
  (Mr. HATCH assumed the chair.)
  Mr. HEFLIN. Mr. President, the Senator keeps using the word 
``interstate.'' As I read the language that we have now adopted, it is 
applied in regard to punitive damages in any civil action whose subject 
matter affects commerce, not interstate commerce, but commerce. 
Actually, it seems to me that commerce is affected almost by every 
conceivable type of action if there is a transaction. That, to me, 
under this language that is now in here, makes it so broad. It affects 
commerce and affects that aspect of it.
  Now, under the Senator's amendment, he would allow for actions that 
are transferred, removed from the State courts to the Federal courts. 
And that is what is known as a removal action.
  It is my understanding today that I think we passed in the Senate 
some bills that would enlarge the jurisdiction. But the present 
jurisdiction is that if the suit is for $50,000 or less, you cannot 
remove it from the State court to the Federal court. So, therefore, 
those types of cases of a frivolous nature seeking small damages 
relative to this matter would stay in the State court if they are 
$50,000 or less. Does the Senator interpret it that way?
  Mr. THOMAS. Yes, I do.
  Mr. HEFLIN. Now, if you are seeking punitive damages, you are limited 
in the amount that you claim with regard to the removal. So, chances 
are, you are not going to have many punitive damage cases that are 
affected, since there is a limit in the amount of money that you sue 
for, in the removal of those small type cases. Does the Senator agree 
with that?
  Mr. THOMPSON. I am sorry, I missed that.
  Mr. HEFLIN. I was just saying that, looking at punitive damages, we 
look upon that as being in big figures. But if the suit is only for 
$50,000, then the amount that you sue for includes if you seek punitive 
damages and it puts a cap on it. You cannot recover more than you can 
sue for and if you do not sue for more than $50,000, then you stay in 
the State courts and it is not removable to the Federal court.
  Mr. THOMPSON. I think that is correct.
  Mr. HEFLIN. All right.
  Now, I am not sure that I understand this provision, the last one, 
which is No. 8. It reads:

       In section 102(c), add the following new paragraph:
       (8) create a cause of action or provide for jurisdiction by 
     a Federal Court under section 1331 or 1337 of title 28, 
     United States Code, that otherwise would not exist under 
     applicable Federal or State law.

  Now, that provision in there, I believe, is in the bill that was 
introduced. That is to prevent saying: ``Create a Federal cause of 
action,'' and therefore leaves it strictly to the preemption that is in 
this bill as amended and does not create a separate cause of action at 
the Federal courts; is that correct?
  Mr. THOMPSON. That is correct.
  Mr. HEFLIN. I thank the Senator. I appreciate the distinguished 
Senator from Tennessee responding to my questions relative to these 
matters. I have a better understanding relative to what his amendment 
attempts to do.
  I might just ask him, too, in this regard, I believe if we look at 
the Federal law and the Federal Rules of Civil Procedure that apply, 
the distinction between equity and civil cases is now combined into 
civil cases.
  So in the Federal law that we have today under the Federal Rules of 
Civil Procedure, cases that we used to make a distinction between--we 
used to have really three types of cases. You would have criminal 
cases, you would have civil cases, and equity cases.
  But the Federal Rules of Procedure, of course, which are not affected 
by Erie versus Tompkins, are now combined and you have equity and civil 
cases in it. So, basically, under the present Dole amendment, basically 
what we are looking at are really two types of cases--criminal cases 
and civil cases.
  Under this, in regard to the Dole amendment as to punitive damages, 
in other words, the only thing it really excludes is criminal cases. 
Would the Senator agree with that?
  Mr. THOMPSON. That seems to be the result of it.
  Mr. HEFLIN. I yield the floor.
  Mr. THOMPSON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. Mr. President, I, too, share the concern of the Senator 
from Alabama concerning the application of the commerce clause to some 
of the amendments that we have already adopted. I suppose the courts 
will have to determine whether or not there is sufficient interstate 
commerce with regard to some of these matters in the future.
  In response to some of the comments made by the Senator from 
Washington, I have already pointed out that according to the American 
Bar Foundation, which is an independent body, separate from the 
American Bar Association, 
[[Page S6056]] that if you include all the product liability cases 
filed in Federal court, plus those removed to Federal court--in other 
words, the subject of this amendment--you have approximately 45 percent 
of the product liability cases that were filed last year. So this is 
not a situation where only a handful of cases would be brought in 
Federal court.
  Second, the amendment which I propose is not, as it has been 
characterized, a killer amendment designed to oppose any kind of 
reform. We started off early on in this body dealing with frivolous 
lawsuits. The only provision in any of this debate that actually deals 
with frivolous lawsuits is the one Senator Brown proposed concerning 
rule 11. I supported that. We need a stronger rule 11 to take care of 
frivolous lawsuits.
  Beyond that, it would be easy enough to simply oppose any legislation 
because it interferes with States' legitimate rights in these areas. We 
are not doing that. We are trying to strengthen this and come up with 
something that not only will pass but will not cause us to regret our 
actions later. Our amendment will give us an opportunity to see whether 
or not these broad-range measures work in the Federal court system, 
which is the system that we ought to be concerned with and with which 
we can legitimately deal.
  The question arises: Why would anybody ever file a lawsuit in Federal 
court anymore under the Thompson amendment? There are several reasons. 
For example, the underlying bill, I believe, has a 20-year statute of 
repose. Tennessee has a 10-year statute of repose. If it is past 10 
years since the product was manufactured, you would certainly bring the 
case in Federal court, not State court, because you would want to get 
the benefit of that statute of repose.
  Also, the State of Washington and other States have no punitive 
damages at all. A plaintiff would certainly not want to bring a case in 
State courts in Washington if he had an opportunity to do otherwise.
  On the preemption of State law, perhaps we are just passing in the 
night, as far as our conversation is concerned, but the underlying bill 
certainly preempts State law with regard to the subject matter covered 
by the underlying bill. So you have a Federal circuit determining what 
the interpretation of that law is and then the States have to follow 
that Federal court interpretation of that Federal law in cases that are 
decided before them.
  On the question of forum shopping, under the underlying bill, you 
could have 50 different sets of rules in 50 different States. For 
example, with regard to caps, they are only caps. States are free to do 
more restrictive things if they are within those caps. They cannot do 
more liberal things, as far as plaintiffs are concerned. They can do 
more restrictive things.
  You can have 50 different sets of rules. You can have plaintiffs 
shopping through 50 different States in some situations under the 
underlying bill. At least under this amendment, there will be many 
cases that are properly removable to Federal court. When those cases 
are removed, we will have one Federal standard.
  So, Mr. President, I respect my distinguished colleague from 
Washington and what he is trying to do in his strong fight for a 
products bill. I suggest to him that what we are doing here, in the 
long run will strengthen his efforts instead of diminish them. I 
certainly hope this amendment gets full consideration in this body. 
Thank you. I yield the floor.
  Mr. HATCH addressed the Chair.
  The PRESIDING OFFICER (Mr. Burns). The Senator from Utah.
  Mr. HATCH. Mr. President, I am proud the Senator from Tennessee is on 
the Judiciary Committee working with us on many issues. With regard to 
this amendment, I am very concerned about it because I believe this 
amendment would undermine much of what our tort reform efforts on the 
floor of the Senate really are about and undermine what we have been 
trying to do this week.
  Senator Thompson's amendment, as I view it, would strictly limit the 
coverage of tort reform legislation and, in my opinion, would take the 
whole substance out of this legislation.
  Only 4 to 5 percent of tort cases are filed in our Federal courts. 
That is still a significant number, but it is still only 4 to 5 
percent. That is according to the Department of Justice figures. Thus, 
under the Thompson amendment, the vast majority of litigation abuses in 
this country would go unchecked if his amendment is adopted. Plaintiffs 
would be able to sue in State courts to avoid having their suits 
subject to the Federal law. Although in some cases defendants might be 
able to remove State-filed cases to Federal courts, plaintiffs' lawyers 
will surely plead their cases in ways to prevent removal to Federal 
courts. The end result is that defendants may be subjected to vastly 
different substantive legal standards, depending on the whims or 
designs of plaintiffs, and that simply is not fair.
  Under the Thompson amendment, parties would be uncertain about what 
laws would apply to their conduct. If sued in State court, one rule 
would apply. If sued in Federal court, an entirely different set of 
laws could apply. That uncertainty will not address the harmful effects 
on our economy today and the harmful effects that this bill is trying 
to cure. For example, higher liability insurance rates have been a 
problem in this country for years due to abusive litigation. Under the 
Thompson amendment, insurance companies will not be able to 
significantly reduce liability insurance rates because they will have 
no idea what risks they are going to face. They will have no idea where 
businesses and other groups they insure will be sued. The rates will 
continue to remain high, and all of those higher rates will continue to 
be passed on to you and me as consumers.
  So the people who really lose, if we do not pass this tort reform 
legislation, this product liability legislation, as amended in its 
current form, will be every consumer in this country. Consumer losses 
amount to trillions of dollars over time, and I think it is time for us 
to face up to these problems.
  Look, I have been a trial lawyer. I have tried hundreds of cases in 
my legal career, many of which are cases involving torts. I have to 
tell you that I think much good is done by trial lawyers who try to 
stand up against some of the evils in society by bringing litigation 
with regard to torts that are committed. However, we really in this 
country have gone way over to one side to the point where the deck is 
stacked. This bill is an attempt to try to bring our laws back to the 
middle where people are treated fairly, where lawyers can still win 
their cases, where lawyers can still win substantial verdicts, but 
where lawyers no longer get these runaway verdicts. These runaway 
verdicts really are happening in this country with greater frequency.
  I might add, this kind of legislation, as evidenced by the Thompson 
amendment, is highly unusual. It is one thing to apply different 
procedural rules to cases brought in Federal or State courts. It is 
entirely another question to apply a different substantive rule. Ever 
since the landmark decision in Erie versus Tompkins, it has been clear 
that Federal courts sitting in diversity cases apply the substantive 
rules of State law.
  This amendment would present a striking, perhaps even unprecedented, 
application of a Federal law. The very same tort case would proceed in 
State court under one substantive law, but if removed to Federal court 
in the same State, because of diversity, a different substantive law 
would apply to it. In my view, this does not make sense.
  Senator Thompson acknowledges that the commerce clause clearly 
empowers Congress to act over product liability cases. This is not an 
area in which Congress ought to stay its hand, because the high cost of 
litigation abuses cross State lines and because they are a serious 
problem. I personally believe this is an area in which a limited 
Federal solution is amply justified.
  Now, I have had judges all over this country come to me and say, 
``You must do something about punitive damages''--from the highest 
courts of this land--because they try not to be activist judges and do 
not believe that they can resolve this problem, and it is going to take 
congressional enactment to do so.
  In the last amendment, the Dole-Exon-Hatch amendment, we made a great 
effort--and it did pass--to try to 
[[Page S6057]] resolve some of these punitive damage problems. I think 
that amendment will help us to get those problems resolved. If we 
bifurcate the system saying that amendment only applies to the Federal 
courts and not to the State courts, we will continue this runaway 
system of punitive damages that is hurting everybody in America. And in 
the process, we will be hurting the Federal courts as well and the 
right of people to go to Federal court.
  As a trial lawyer, I went to both State and Federal courts on a 
regular basis. I have to say that I enjoyed both of them, and I found 
competent people in both courts. But there were areas of the law where 
the Federal courts were better. There were areas of the law where the 
State courts were better. I tried, in the interest of my clients, to do 
the best I could by bringing the cases, when I could, in either of the 
courts and made the choice.
  As a trial lawyer in those days--true, I am arguing for a time past, 
19 years ago as a trial lawyer--our major claims were for economic and 
noneconomic damages, compensatory or noneconomic damages. We were able 
to get substantial verdicts by presenting our cases on those two 
theories. You very seldom alleged punitive damages unless there was 
egregious or intentional or willful conduct that justified punitive 
damages. But in this day and age, it is almost malpractice to not plead 
punitive damages, even in simple negligence cases in some of these 
States where the laws have gone awry and where the courts have in 
essence been captives of certain trial lawyers who literally are 
hurting the practice of law throughout this country by their voracious 
desire to make money at all costs, under the guise that they are 
helping consumers and those who are injured, when in fact the people 
who are primarily being helped are really those particular trial 
lawyers who have been doing this.
  I can remember in one State, in a contest over a Supreme Court 
nomination, where there was a reformer running for the Supreme Court 
and the other person was a total captive of certain trial lawyers in 
that State. In one evening, 15 trial lawyers raised over $1\1/2\ 
million for their clone, for their captive, for the person who would 
rule for the plaintiffs no matter what the law said, or no matter what 
the law meant. Now, that is wrong. We are trying to resolve these 
problems with this particular bill.
  My colleague from Tennessee is very sincere in this amendment. I have 
some feelings about it myself, because I personally do not want to see 
injured parties unable to receive adequate compensation for the 
injuries they suffered. On the other hand, I do not want to see 
everybody else in America irked because we will not curtail some of the 
abuses that really go on in trial practice every day.
  I am also very concerned because I think some of these lawyers are 
really hurting my beloved profession. To some of them, these problems 
do not mean anything. It is just a voracious desire to make money at 
the expense of really virtually everybody. I think it is time to get 
some system that works, that is fair, that still protects the injured 
parties, but does not run away, like our current system has been doing 
in a great number of States.
  Now, there are few States where it is just outrageous, and in a great 
number of States we are finding outrageous punitive damage awards from 
time to time. In some States, it is almost all of the time. As I said, 
it has become a rule rather than an exception to plead for punitive 
damages, even in cases where formerly there would be no real claim at 
all. I think it is time to do something about this. I hope our 
colleagues will vote against this amendment, as sincere as it is, and 
as well argued as the distinguished Senator from Tennessee has done it.
  I respect him, I respect what he is trying to do, I respect our 
profession, and I respect trial lawyers. Most trial lawyers are very 
decent, honorable people who want to do the job for their clients. They 
want to do what is right. But there are a few who are distorting the 
profession and I think making a mockery out of trial law and out of the 
damages system of this country. That is what we are trying to resolve 
and trying to solve with this legislation. There is no simple way of 
doing it. This is the best way I know how.
  To that degree, I want to praise the two leaders on the floor, 
Senators Rockefeller and Gorton, for the excellent efforts they have 
made in order to try to keep this bill together, get it passed, and to 
get legislation that might help solve some of these vicious tort 
problems in our society today.
  I yield the floor.
  Mr. ROCKEFELLER. Mr. President, I thank the Senator from the State of 
Utah for his very nice closing sentence and also his general argument.
  Mr. President, I have been--in case nobody has noticed--trying to 
enact what I call moderate product liability for many years--8 or 9--
because I am convinced that consumers and businesses alike are ill 
served by the current disjointed State-by-State legal system.
  Under this patchwork system of State laws that we have--glorified by 
those who propose this--victims are forced to wait far too long for 
compensation after their injury, and far too often it is the lawyers 
who benefit more from the awards, the settlements received, than the 
victims, which is not what I thought America was about.
  This is simply unjust. I am absolutely convinced that the flow of 
goods in interstate commerce is severely hampered by the patchwork of 
product liability laws across this Nation. Businesses of every size and 
type simply have no way of knowing, under the current system, what 
rules they need to follow. How could they? They have 50 States to deal 
with. Businesses are hard pressed these days, small businesses in 
particular. This is especially onerous on those same small and startup 
enterprises which, in my State of West Virginia and most of the rest of 
the Nation, are in fact the backbone of the economy. I daresay that the 
Presiding Officer would say that that is true for his State of Montana.
  The amendment by the Senator from Tennessee, the very distinguished 
Senator Thompson, seeks to limit the bill's application to only those 
cases brought in Federal court. Make no mistake about it, this 
amendment would effectively kill product liability reform. It is a bill 
killer.
  The reasons we must reject this amendment are the very same reasons 
we need product liability reform in the first place. I have stated that 
many times during the debate. The overwhelming majority--and this was 
said more ably by my colleague from the State of Washington, Senator 
Gorton--about 95 percent of product liability cases, are brought in 
State courts now. He suggests that number might go down closer to 1 
percent. They would be totally untouched if this amendment were 
approved.
  Additionally, it is very likely that even fewer cases would be 
brought in Federal courts because plaintiffs would keep their options 
open for forum shopping, as we call it, for better rules in some other 
State courts.
  Consumers lose under the current system and that would not change if 
the Thompson amendment were adopted. Why do they lose? Consumers lose 
because they receive inadequate compensation under current State law. 
Consumers lose because they have to wait far too long to receive 
compensation.
  Far too often, injured consumers are forced into poverty while 
waiting for their cases to be resolved. They have to depend on their 
own insurance or their own individual resources, if they have any.
  Consumers lose because they are forced to pay outrageous legal fees 
under a State-by-State system. Consumers also lose because the 
patchwork of State statutes of limitation are so severe under the 
current law and result in barring legitimate claims. That is the 
subject I will discuss in a moment.
  The underlying bill would correct these problems by replacing the 
State-by-State patchwork with a far more uniform system. The Thompson 
amendment would completely unravel that new uniform system.
  In earlier debate, I have also set forth why manufacturers lose under 
the current State-by-State system. But I think this bears repeating. 
Manufacturers lose simply because they face unpredictable and 
escalating costs of litigation. These stifle research, these stifle 
development, they prevent investment, they cause products to be 
withdrawn, they cause products not to 
[[Page S6058]] be improved, and they cost--guess what--jobs.
  We have been working hard, very hard. The Senator from Washington and 
Senators on his side of the aisle and Senators on my side of the aisle 
have been working very, very hard to find the right balance.
  Senator Gorton is not an extremist. The Senator from West Virginia is 
not an extremist. We are trying to find the right balance between 
consumers, plaintiffs, and businesses, with a special attention to 
small businesses, which is the majority of our businesses. We have been 
working very, very hard to find that right balance, to assure that the 
rights of the injured are fully protected while we meet the needs of 
business to manufacture and to invest.
  We need both in this country. A person cannot just say, well, it is 
only consumers that count and business does not count, because if we 
did not have business, nobody would work. They would have no income. It 
is also equally silly to say it is only business that counts, because 
then that might take America back to a day when business practiced 
differently than they do today.
  We have developed, I think, in America, a system whereby we try to 
protect consumers, and we do in the bill that the Senator from 
Washington and I suggest. The Gorton-Rockefeller substitute strikes 
that important balance for consumers and business. The Thompson 
amendment, I say again, would destroy that balanced solution.
  The amendment of the Senator from Tennessee has a familiar and, I 
think, a very curious ring to it: Familiar because so far, the only 
suggestion concerning the problems of the product liability maze that I 
have heard from the opponents to this bill is the idea embodied in this 
amendment; curious because where is the logic in limiting the surgery 
proposed in our product liability bill to the equivalent of only one 
finger, when the problem plagues both hands?
  We should face it. This amendment is based on a refusal to 
acknowledge the ridiculous cost, delays, and burdens of a very big 
problem called the patchwork of 55 sets of product liability rules and 
laws across the States and the territories.
  I might add at this point that in earlier years, in hearings in the 
Commerce Committee, those opposing product liability reform always said 
that there will be this massive confusion if we have some kind of 
uniformity at the Federal level in certain areas, everything else being 
reserved to the States, which we do in this bill.
  They always say, well, imagine a higher court trying to interpret 50 
sets of laws. It is a specious argument. It needs to be said that it is 
a specious argument.
  Right now, we are plagued by the 50 sets of laws, all different, to 
all States. So people forum shop, and I guess it is fairly well-known 
that if a person wants to go for punitive damages, there are three 
States to go to, and that is where most of the amount of the punitive 
damages come from. If they can find a way to drag somebody in--and 
Alabama is one of those States, curiously, ironically, interestingly--
then people go there and they get very good results. There are two 
other States, in particular, also.
  The point is that the Federal courts will not take very long--and a 
Federal judge pointed this out a couple of years ago--to figure out 
when we get uniformity and they have to take these 50 State laws, that 
there will now only be one law in a certain area and 50 laws in other 
areas.
  It will not be confusing very long. It is permanently confusing now 
because everybody is running all over the place. Judges are smart 
folks. They do not get there because they cannot pass an SAT test; they 
get there because they are smart and they have to figure things out 
quickly. They will be able to do it.
  This will actually make the whole process of interpreting State laws 
easier, more efficient, and better. Let that be said, because it has 
not been said in this debate. The argument that uniformity somehow 
confuses this by throwing open all of these State laws is specious. I 
pick that word for no particular reason.
  I suggest to the Senators opposing the bill before the Senate and 
supporting this amendment, they should both vote against the amendment 
of the Senator from Tennessee.
  Face it: This amendment guts the purpose of this product liability 
reform bill. We are trying to respond to problems that States on their 
own simply cannot fix themselves. What can the State legislature of 
West Virginia, for example, do about the fact that most of my State 
manufacturers sell their products in other States, where the rules 
dealing with punitive damages, with joint and several liability, with 
the statute of limitations, et cetera, come in every conceivable form? 
It is chaos.
  I hear the Senator from Tennessee talk about innovation in the 
States, and I want to get on to the subject of innovation, since we do 
not have a time agreement on this. And I think the Senator from 
Washington and I would be glad to agree to a time agreement if any 
person shows any interest.
  Let me discuss a little bit about product liability. I think the 
reason why the bill needs to pass and why I think the bill will pass, 
is that consumers lose, Mr. President, under the current system. 
Consumers receive inadequate compensation. That is, people who are 
injured, through product litigation, severely injured people--
consumers--only recover about one-third of their actual damages.
  Just think about that, severely injured, chewed up in a machine, or 
something of that sort, and they end up averaging only about a third of 
what they should actually get. While those who are mildly injured, who 
are also important, recover approximately five times their economic 
losses. That is totally unjust. And anyone on this floor who would 
defend that should choose not to.
  Consumers have to wait a long time to get any kind of justice under 
the current system. Injured consumers in need of assistance must suffer 
through approximately 3 years of litigation before they receive a 
nickel of compensation. That is not the American way. And where we can 
improve it we ought to do so.
  Consumers pay outrageous costs. To put it another way, the current 
tort system which rules the Nation at this point, and which the Senator 
from Washington and I are trying reasonably and in a balanced fashion 
to change, pays more to lawyers than it does to claimants. It pays more 
to lawyers than it does to claimants? Yes. That is wrong. This is 
America--that is wrong.
  If there are those on this floor who choose to defend that and say 
that is good for injured people, that is good law, that is exactly the 
way we should leave the law, that we should leave that entirely 
unfettered so that lawyers make more off of this than do the people who 
are injured whom they purport to be defending, then let them defend 
that. Let them defend that. I am interested in their argument. They 
always talk about something else. They bring up Victor Schwartz, or 
they bring up some little thing here or there, but they never defend 
these things because they cannot, because they are dead wrong and they 
know it.
  Another reason we need to change the product liability system in this 
country is because consumers face closed courthouse doors. What do I 
mean by that? A lot of people who are injured in this country by a 
product cannot file a claim because of something called the statute of 
limitations. I am not a lawyer, but I at least know what that means. 
And if, for example, I am injured in Virginia, my time for filing a 
claim runs out after 2 years from the time that I am injured.
  I have had several debates with the Senator from California, Senator 
Boxer, about DES. She has said anybody involved with DES hates this 
bill. She has used that word many times--hates this bill. Hates the 
bill. Hates the product liability reform bill the Senator from 
Washington and I are trying to get passed.
  What I cannot seem to make clear enough is that under our bill, 
anybody who faced the kind of problems that somebody who faces DES 
faces, or somebody who faces asbestos, or somebody who faces some other 
kind of toxic harm or chemical harm--the Persian Gulf war syndrome, 
agent orange, all of this--wherein they do not discover they are 
injured for maybe 4 years, 5 years, 6 years, 7 years, 12 
[[Page S6059]] years, in our bill we say the statute of limitations, 
that is the time you can make application to file suit against the 
manufacturer, that person who injured you or that company that injured 
you--the two year limitation--should not start until you know that you 
are injured and you know what caused your injury. Which means all the 
DES people would have been fine under our bill, while they are 
completely cut off under the current law if the State has a statute of 
limitations which runs out, as most of them do, before DES would have 
been discovered.
  I posit that, as lawyers say. I posit that. It is fact. People can 
say it is not true, I do not like the bill. There is a mindset around 
here on this whole subject which is very surprising and disturbing to 
me. I think this is not true--reasonable people, I am just looking at 
the Senator from Tennessee whom I consider a very reasonable person. I 
think he is thoughtful, he weighs things. But a lot of people in the 
fighting of this battle over the years have become so hardline that any 
kind of a change, any suggestion of a new fact, any suggestion that 
maybe the law could be improved, brings 100 percent disapproval and 
anger.
  It is like somebody just puts out an idea and somebody is afraid the 
idea might be good so they immediately squash the idea. They just pound 
it down into the ground with their fists and crush the idea for fear it 
might be good or develop into something which is good and useful for 
the American people and for business.
  It is a tendency which I regret in this body, which I do not consider 
worthy of the U.S. Senate. It is encouraged, I think, by a sort of 
hard-line mentality, and a lack of civility even, in discussing all of 
this.
  Again, we want to open the courthouse doors through the statute of 
limitations. The opponents want the courthouse doors closed. Let them 
explain otherwise. Let them explain otherwise.
  States with statutes of limitation that begin to run out at the time 
of injury, there are four of them: Arkansas, Virginia, Hawaii, Wyoming.
  States with statutes of limitation which begin to run when the injury 
is discovered or should have been discovered, there are 16 of them. So 
that does not mean when the cause was discovered, that just means when 
the injury was discovered. That is not enough. It has to be when it was 
discovered and when the cause was discovered. We know from the Persian 
Gulf war veterans--and I do not know whether this applies to them or 
not--but we know they know when they are sick. But we also know that 
the U.S. Government and Department of Defense says that they are not 
sick. I go visit them and their hands are trembling, they cannot sleep, 
they cannot keep their marriages together, they are tired all day, they 
cannot keep their jobs, and they cannot focus their eyes on a newspaper 
for more than 5 minutes. But the Department of Defense says there is 
nothing wrong.
  I beg to differ because I visit these people when I go back to my 
State of West Virginia, because I care about this and this is a cause 
of mine, to unmask Persian Gulf war syndrome. They know they are sick, 
but they cannot say why. What caused it? Was it Pyridostigmine? Was it 
some other kind of vaccine?
  So you have 16 States--20 States--automatically where people are shut 
out. If those who oppose this legislation want to say, ``We are for 
that, let them continue to be shut out,'' then let them get up and say 
so. Or if they say I am wrong, the Senator from West Virginia is wrong, 
then let them get up and say that. Let them get up and say we do not 
open the courthouse doors and that they do not close them--as they do, 
the courthouse doors--and keep them closed.
  It is cruel. It does not make sense. It is based upon old-time life 
when it was all machines. Now a lot of the stuff is chemicals, toxins, 
and all kinds of things. That is where a lot of accidents happen. The 
industrial age has evolved. Just as you can sue somebody under current 
law for a piece of machinery that was built in the 19th century and 
that has passed through 15 different owners, all of whom have altered 
it. That was made for that time, that generation, that industrial 
revolution period. That idea is not made for the current times at all.
  So we are trying to open the courthouse doors to consumers. 
Manufacturers lose under this current system. We are talking about 
people and manufacturers, yes, a balanced bill. Liability stifles 
research and development. This country is great because of our research 
and development, our spirit, our entrepreneurial spirit, which is 
embodied in research and development. Japan does not do basic research. 
The United States does. Then they come and buy it from us, or we sell 
it to them, however you want to characterize it. And on that the 
Senator from South Carolina would agree. We sell them our technology. 
But we do the basic research. That is the heart of America's greatness, 
the basic research we have done and the uses to which we put it.
  But because of the current law, the fact is that many businesses 
spend far more money on litigation than they do on research and 
development. That is bad for business. That is bad for America. The 
fact remains that many companies these days--I think it is something 
like 47 percent of companies--have withdrawn products because of 
litigation fears. And a lot of companies now, if this is possible to 
believe, are afraid to improve their current products because by the 
act of improving their current products, it would imply that the 
previous iteration of that product was somehow defective and, 
therefore, they could be sued and, therefore, they do not improve the 
product so they cannot be sued. How ridiculous. How unlike America. If 
those who oppose this bill want to defend that, then let them go ahead 
and do that.
  Phyllis Greenberger, who is the executive director of the Society for 
Advancement of Women's Health Research, in testimony before the Senate 
Commerce Committee on March of this year said:

       Liability concerns are stifling research and development of 
     products for women.

  She said:

       Contraceptive development in the U.S. provides an excellent 
     example of how the threat of litigation can devastate an 
     entire industry. Thirty years ago there were 13 companies in 
     this country putting their resources towards research and 
     development of new contraceptives. Today, there are only two.

  And then what does she say?

       This is not because there is no market demand. Liability 
     concerns are keeping products which have already been 
     developed off the market despite a known therapeutic need.

  I will use an example which I have used before. It is a very good 
one. It is Benedictine.

       Benedictine is the only prescription medicine ever approved 
     in the United States for the treatment of nausea and vomiting 
     during pregnancy. None other has ever been approved. It was 
     approved by the Food and Drug Administration. The drug was 
     used by 30,000 women until assertions arose that it caused 
     birth defects. While scientific evidence failed to 
     demonstrate any link and the FDA continued to back the 
     product.

  Remember this is still Phyllis Greenberger talking:

       While . . . the FDA continued to back the product, the 
     manufacturer voluntarily removed Benedictine from the market 
     due to the overwhelming cost of defending the product. 
     Currently, therefore, there is no approved product available 
     to treat pregnant women who experience severe and prolonged 
     nausea, which can be harmful to the mother and to the fetus.

  If that is what the opponents of this legislation want, let them 
defend it. They are using Benedictine all over the world--all over the 
world but not in the good old U.S.A. because of the fear of product 
liability litigation under our present system, which some of us are 
trying to change.
  I think the United States loses under the current system. Insurance 
rates disable U.S. manufacturers. American manufacturers pay 10 to 50 
times more for product liability insurance than their foreign 
competitors.
  You have the European Economic Community, which has adopted uniform 
product liability laws. I believe, although I am not 100 percent sure, 
that 60 affiliated countries have done the same.
  So we will continue to pay as a country 10 to 50 times more in 
insurance because we have all of these State laws, which all compete 
with each other, and other countries will have a uniform law, and they 
all will be our main competitors for exports and imports in this 
[[Page S6060]] world. And who loses? The American people, the American 
workers, American business. America loses.
  In a single year, Mr. President, the liability system cost the State 
of Texas 79,000 jobs. If that is the case, then let those who want to 
see that current system continue to get up and defend it. When people 
run for office, they talk about the need for jobs. Texas is losing jobs 
because of this. They have a lot of research and development in Texas, 
which is a very progressive, industrial State. So they are very much 
hurt by this.
  Interestingly, when I say the United States loses under the current 
system, part of this is that the current system does not enhance 
product safety. I will have something to say about that. I would beg 
those listening to listen to this one sentence.
  Though the number of torts--that is, suits--in product liability rose 
dramatically in the 1980's, consumer interest steadily declined during 
the 1980's as it did during the 1970's. So to link this with product 
safety is open to some substantial question.
  Let me just make some more points. I go back to this problem of 
injured people having to wait so long to receive compensation. Mr. 
President, after I ran for Governor of West Virginia, an event little 
noticed and not long remembered, I gave my inaugural speech on the 
steps of the capitol. It was on a day in which the temperature was 37 
degrees below zero. So in order for me to say it, I had to really mean 
it because people were just freezing all over the place. I made four 
promises to the people of West Virginia. I talked about education. I 
talked about roads. I said I wanted to remove the sales tax from food, 
at that time 3 percent, which I eventually moved to zero. And I wanted 
to make the workers compensation system, which at that time we called 
the workmen's compensation system, more efficient because I was 
offended that in the State of West Virginia when a worker was injured 
it took the State 77 days on average to get a check to an injured 
worker. I said, how can we be a humane State and do that? And I pledged 
in my inaugural address, which is sort of like your constitution, that 
I would get it done in 4 days.
  Well, I did. I got it down to 4 days. If I am offended by the 77 days 
it took under the old West Virginia workers compensation system, what 
am I meant to feel about a 3-year period of time on average for an 
injured worker under U.S. laws, and State law in particular, to receive 
compensation for the first time. Three years later.
  An Insurance Service Office study found that it took 5 years to pay 
claims with the average dollar loss and that ``larger claims''--that 
is, the more seriously injured victims--``tend to take much longer to 
close than the smaller ones.''
  Now, this is interesting. ``Several injured victims cannot afford to 
wait years to receive compensation.'' So what do they do, Mr. 
President? They know they are going to have to wait a long time while 
the lawyers rake in the money and they wait. They know they are going 
to have to wait a long time. They know they do not have the resources. 
So what do they have to do? The delays force them to settle, to not use 
the system as it is meant to be used but to settle for inadequate 
amounts of money. That is shameful. That is shameful. If those who 
oppose this bill want to stand up and defend that, I will be here to 
hear their argument. That is shameful. They have to settle because they 
know they cannot go through the business of paying the lawyers the 
money.
  Let us talk about the business of bringing the lawsuit, and costs 
being so high. The GAO--who I think people respect pretty much 
throughout this Hill--estimated that 50 to 70 cents of every jury-
awarded dollar goes to lawyers and legal costs. Fifty to 70 cents of 
every jury-awarded dollar goes to lawyers and legal costs. That is 
wonderful news for the injured person. It leaves him or her maybe 30 
cents, maybe 50 cents. They are hurt. They are the ones hurting. The 
lawyers are just running these things through.
  I am not picking on trial lawyers in particular. I have always made a 
point of saying lawyers on both sides--the trial lawyers and defense 
lawyers. They are both part of the act. Defense lawyers are very, very 
good at stringing it out, putting in more paper, asking for more 
information. They are very, very good at it. But the point is the 
people do not get the money. The injured person does not get the money. 
The lawyers and the legal process get the money.
  A further illustration came in 1994 in a survey by the Association of 
Manufacturing Technology. This is hard to follow, so I would ask people 
just listen. It found that every 100 claims filed against its members 
result in outlays of $4.45 million in defense costs and $8 million in 
subrogation paid to employers or their workers compensation insurers. 
Claimants, therefore, received only $8.35 million of these 100 claims 
in the Association of Manufacturing Technology survey, and since 
plaintiffs' attorneys usually received one-third of the awards, injured 
people get to keep about $2.2 million while transaction and legal costs 
totaled $8.6 million.
  Something that bothers me greatly about the current system is that 
the current system discourages the development of innovative products.
  This is where I got off when I was talking about the amendment of the 
Senator from Tennessee. I used the word ``innovation'' in the States. 
The chairman and CEO of Biogen, Jim Vincent, stated to the Senate 
Commerce Committee in September 1993 that he has decided not to pursue 
research into the development of an AIDS vaccine because of the current 
U.S. product liability system.
  The Immune Response Corp. of California is attempting to develop an 
AIDS vaccine, but in 1992 it had to delay important clinical trials 
because of liability concerns, and I believe they are not doing it 
anymore.
  An Office of Technology Assessment study found that liability fears 
are a barrier to research testing and marketing of AIDS vaccines and 
called for Federal action.
  Health Industry Manufacturers Association Vice President Ted Mannon 
told a House Energy and Commerce subcommittee that joint liability law 
is having an adverse effect on the ability of medical device 
manufacturers to obtain biomaterials--the raw materials that make 
products such as hip replacements and pacemakers.
  I will just do one or two more of these.
  In 1994, April 25, the New York Times reported:

       Big chemical companies and other manufacturers of materials 
     used to make heart valves, artificial blood vessels, and 
     other implants have been quietly warning medical equipment 
     companies that they intend to cut off deliveries because of 
     fear of lawsuits.

  Now, if we simply want to stop that stuff and the people who have 
pacemakers and all the things that we can do in modern medicine do not 
matter anymore, then let those who oppose this bill defend that; that 
the very essence of modern research and the very essence of modern 
medical innovation is being cut off or cut down or cut back or cut out 
by the product liability system that we currently have in this country.
  One more. The fear of exposure to product liability lawsuits again 
has diminished investment in basic scientific research. The reason I 
mention the word ``basic'' is because it has always distinguished us 
from other countries. We are the ones who do the basic research. The 
other countries do the applied research, particularly Japan, and Asian 
countries. We do the really hard stuff, which costs a lot of money. You 
do the basic research and you come up with materials or products or 
possibilities. Then during the applied research and getting it to 
commercialization--here the Senator from South Carolina and I would 
agree completely--that has been our American problem, the 
commercialization of products. But not basic research. That has been 
our strength.
  Well, Mark Skolnick, who is a professor of biophysics at the 
University of Texas, has noted that areas where litigation has occurred 
will not receive support for exploration and development. Producers 
fearful of possible suits simply make that impossible.
  The Conference Board, as I indicated earlier, said that 47 percent of 
U.S. companies have withdrawn products from the marketplace because of 
product liability concerns.
  Gallup, in a 1994 survey, said that one in five small business 
executives report 
[[Page S6061]] that they have decided not to introduce a new product or 
not to improve an existing one out of concern for product liability 
litigation.
  What are we doing to ourselves, Mr. President? Why is it that such a 
small group can prevent our country from progressing while, at the same 
time, we protect our people?
  I want to say a word about punitive damages.
  I want to discuss the punitive damages concept, what it actually is, 
so that it becomes clearer.
  Again, I am not a lawyer, so I have to look at these things from the 
point of view of somebody who is not a lawyer. I do not think the 
Presiding Officer is a lawyer, although he has all the attributes 
sometimes of that kind of sharp insight. But, as far as I know, I do 
not think he is a lawyer. There are a few of us in this body who are 
not.
  The U.S. Supreme Court--which I do not consider to be a trivial 
body--has said that punitive damages have run wild in the United 
States.
  Jay Rockefeller, representing the people of West Virginia, did not 
say that. The U.S. Supreme Court said that.
  There are virtually no standards for when punitive damages may be 
awarded under the current law and no clear guidelines as to their 
amount. Good behavior is swept in with bad. The result is uncertainty 
and instability and a chilling effect on innovation.
  Now, I go back to Science magazine, 1992. A Science magazine article 
reported that at least two companies have delayed AIDS vaccine research 
and another company abandoned one promising approach as a result of 
liability concerns.
  European parents can place children in built-in baby seats in cars. 
American parents cannot as easily, because the companies who make baby 
seats do not want to improve them on the fear that they will get sued 
because a previous iteration might therefore have been inferred to have 
been deficient. That's crazy.
  So clear, rational rules are needed to promote innovation and 
responsible manufacturing practices while, at the same time, providing 
assurances that wrongdoers will be justly punished and deterred from 
future misconduct.
  Please let us not have this as an argument between those who care 
about business and those who care about consumers. In fact, and I 
believe my colleague from the State of Washington would agree, those of 
us who are trying to reform the system care a whole lot more and are 
willing to do a whole lot more to help plaintiffs who are injured than 
are those who oppose this. Although they claim that they wear the halo 
for consumers, they do not. We are trying to help them. They are trying 
to keep the system as it is. They say that status quo is perfect; just 
leave it exactly as it is.
  I have not done it every year, but I have routinely called in the 
American Trial Lawyers Association to my office to say: ``Is there some 
way that we can work with you to try to work out some compromise on 
this subject?'' The answer has always been no. Clear, but not 
encouraging. No. Into which I read, therefore, they want the system to 
be exactly as it is. Little changes? Big changes? Halfway changes? No. 
No changes. No changes.
  I remember once one of the leaders of one of the consumer groups 
several years ago brought a woman from West Virginia who had been 
injured to my office. I guess the idea was to shame me, and to show me 
what anguish I had caused this woman. She came in and I saw them.
  And at the end of the meeting, the woman was in fact sobbing, holding 
onto my hand, saying, ``Your bill would have helped me, perhaps saved 
me.''
  Now, the leader of the consumer group was, obviously, at something of 
a loss. But I have to note that, for the Record, this is the case.
  So a clear understanding of the nature of punitive damages is an 
essential prerequisite to meaningful reform. Punitive damages are 
punishment. They are quasi-criminal in nature and developed in England 
and the United States to serve as an auxiliary or helper to the 
criminal law. They have nothing to do with compensating a person who 
has been harmed and are not in any way intended to make the plaintiff 
whole. That purpose is served by compensatory damages, which provide 
recovery for both economic--which is lost wages--and medical expenses.
  Let me make a point here, too. A lot of people say, ``Oh, economic 
damages. Persons making $35,000 a year. They are 30 years old. Now they 
cannot work.'' Which, of course, is horrible, if it comes to that.
  But they say, ``Well, gee; I guess that is going to be $35,000 for 
economic wages.'' No, no, no. It is $35,000 for every year that that 
person would have deemed to have been able to work, plus all benefits, 
plus all retirement, and all the rest of it.
  In fact, if you did that, let us say somebody was making $30,000 a 
year, and is 30 years old. They could work for another 35 years. I am 
not very good at math, but that would be many, hundreds of thousands of 
dollars; way above $250,000.
  Mr. THOMPSON. Will the Senator yield for a point?
  Mr. ROCKEFELLER. Yes.
  Mr. THOMPSON. Was the Senator present when I made my statement 
concerning the family who visited me in my office concerning their 5-
year-old daughter recently?
  Mr. ROCKEFELLER. I apologize; I was not here.
  Mr. THOMPSON. You mentioned the lady who was sobbing in your office. 
It reminded me of that visit I had last week. It was a family from 
Nashville who had lost their 5-year-old daughter. She had gone in for a 
routine tonsillectomy. One error followed another; many, many things 
went wrong. The clinic was hiring on the cheap. They had a drug addict 
there administering to this person.
  Mr. ROCKEFELLER. Is the Senator discussing product or malpractice?
  Mr. THOMPSON. Well, this is part of the underlying bill, as I 
understand it, the McConnell amendment.
  Mr. ROCKEFELLER. I was trying to discuss product.
  Mr. THOMPSON. Well, the Senator was talking about punitive damages, 
and that is the subject of my question.
  And then the clinic sought to cover up. Finally, one of them called 
911.
  They did several things totally, totally that would constitute gross 
misconduct. They finally called 911, and then tried to cover up the 
records. They were caught. A lawyer represented them, charged 30 
percent, incidentally, financed the litigation out of his own pocket 
for 2 years because the plaintiffs did not have the money to do that. 
Finally, they got to court. The defense, the insurance company, would 
not settle the case until they got to court. The mother broke down in 
court and they found out what they were up against in there and settled 
the case for $3 million.
  Under this legislation, if this passed, I wonder what the Senator 
would tell that sobbing mother who was in my office last week in terms 
of whether or not we ought to tell the State of Tennessee they cannot 
allow a jury in Tennessee any longer to make that kind of award in a 
punitive damage case.
  Mr. ROCKEFELLER. My answer to the distinguished Senator from 
Tennessee is that this particular Senator is trying to work to find a 
way in which there will not be caps as classically defined on punitive 
damages.
  I say to the Senator from Tennessee that I voted, for example, with 
Senator Dorgan on his amendment to remove caps. And the Senator did 
that for a very specific purpose, because I think we can find a way, 
because I do not think we can pass the bill without finding that way, 
and I am convinced that we can find a way to do this so that I would 
have been as comfortable or as uncomfortable in that room with your 
constituent as I was with mine.
  Now, I also want to say, when I talk about pain and suffering, the 
State of Washington has no punitive damages whatsoever. They have no 
punitive damages. Is it not interesting then that within the last 6 
weeks that the State of Washington came down with a jury award for 
economic and pain and suffering of $40 million?
  The only reason I mention that is to say, one, that economic is much 
more than people think of it as. It is the rest of your life's wages. 
It includes the raises that you might have gotten. It even presumes 
promotions you might have gotten, as well as the benefits, insurance, 
retirement and all the rest of it.
  But pain and suffering is where a jury can get very subjective and 
where 
[[Page S6062]] a jury does often get very subjective in a proper way 
and, in this case, a $40 million award. I do not think anybody who 
opposed this bill could have guessed there would have been a $40 
million award out of a State that does not even have punitive damages. 
That happened 6 weeks ago in Washington.
  So, Senator Gorton's and my bill understands and accepts the basic 
premise that punitive damages are punishment and provides the 
fundamentals that are part of any criminal punishment; a definition of 
the crime establishing a level of proof necessary for punishment and 
making the sentence fit the crime. So let us define the crime.
  S. 565 defines the crime as conduct specifically intended to cause 
harm or conduct manifesting a conscious, flagrant indifference to the 
safety of those persons who might be harmed by the product. The 
standard is fair and is similar to the standards of many States, in 
fact. It conveys that punitive damages are to be awarded only in the 
most serious cases of extremely outrageous conduct.
  Level of proof: S. 565 explains how a claimant must prove the crime 
and requires that the proof be clear and convincing. This standard 
reflects, I think properly, a middle ground between the burden of proof 
standard ordinarily used in civil cases, which is proof by a 
reponderance of the evidence and criminal law standard which is proof 
beyond a reasonable doubt. So this is in between, clear and convincing.
  The U.S. Supreme Court has endorsed clear and convincing evidence 
burden of proof standards in punitive damage cases. In addition, each 
of the principal groups to analyze the law of punitive damages since 
1979 has recommended the standard, including the American Bar 
Association, which the Senator from South Carolina mentioned some time 
ago is bipartisan if anything ever was bipartisan, and the American 
College of Trial Lawyers.
  Recently, the standard was recommended in a 5-year study of scholars 
by the American Law Institute and, incidentally, the standard is now 
law in 24 States.
  Making the sentence fit the crime: Most importantly, we try to put 
reasonable parameters on sentencing to make it fit the crime; an 
established principle of law. Even very serious crimes, such as 
larceny, robbery and arson have sentences defined with a maximum 
sentence in statute.
  As a result of adopting the amendment by the Senator from Maine and 
drawing on the interest expressed by colleagues on this side, we 
modified the bill to allow punitive awards to go as high as two times 
compensatory damages.
  Opponents to this bill have argued that unlimited punitive damages 
are necessary to police corporate wrongdoing. Absolutely unlimited. 
This is not necessarily supported by facts. There is no credible 
evidence that products are any less safe in either those States that 
have set reasonable limits on punitive damages or in six States--
Louisiana, Nebraska, Washington, New Hampshire, Massachusetts, and 
Michigan--that do not permit punitive damages at all. In fact, 
Brookings makes no link whatsoever between what is happening in 
punitive damages and product safety. That is an argument which is used 
by the opponents often.
  Furthermore, plaintiffs in those States have no more difficulty 
obtaining legal representation than in those States where the sky is 
the limit.
  I am coming to a close.
  Bifurcation: This is a general remedy proposed to ease adverse 
impacts of punitive damages awards that permits a trial to be divided 
into segments, and this makes sense. The first part of the trial is 
addressing compensatory damages, the second dealing with punitive 
damages.
  One has to do with helping the person. The second with punishing the 
manufacturer. Judicial economy is achieved by having the same jury 
determine liability and amounts of both compensatory damages and 
punitive damages.
  This remedy we give the shorthand name of ``bifurcation.'' 
Bifurcation trials are equitable because they prevent evidence that is 
highly prejudicial and relevant only to the issue of punitive damages--
that is, the wealth of the defendant--from being heard by jurors and 
properly considered when they are determining basic liability. 
Bifurcation also helps jurors compartmentalize the trial, allowing them 
to easily separate the lower burden of proof required for compensatory 
damages and the higher burden of proof, clear and convincing evidence, 
for punitive damages.
  So, Mr. President, I will soon yield the floor. First, I simply 
conclude by saying that product liability reform--the bill before the 
Senate--is not a child, a stepchild, not even a foster child of the 
Contract With America. It is the result of people of both sides of the 
aisle here in the Senate agreeing that the legal system, where it deals 
with interstate commerce, needs to be fixed, and it is precisely 
Congress' role, and only Congress' role, to step in where the States 
cannot do the job on their own, which is why we need to pass the bill.
  I thank the Chair and yield the floor.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington is recognized.
  Mr. GORTON. Mr. President, I want to make a few remarks on the 
Thompson amendment. Before that, I want to see whether or not we can 
accommodate a number of Members. Rather than seeking a unanimous-
consent agreement on a vote for a time certain, I hope that we will be 
able to debate the Thompson amendment fully. At the same time, there is 
another amendment that will be proposed by the Senators from Michigan 
and Kentucky. I hope that we will be able to set aside the present 
amendment and allow them to speak.
  I know the Senator from Kentucky is the chairman of the Ethics 
Committee and must meet with that committee between 4 p.m. and 6 p.m. I 
would like to know whether or not the proponents of the Thompson 
amendment will permit that amendment to be introduced, for them to 
speak, and then speak back and forth on both of them--however they want 
to utilize their rights to continue debate on in this amendment.
  Mr. HOLLINGS. Without objection, I will go along with the 
distinguished author of the amendment, Senator Thompson. I will need a 
little bit of time. You were asking for a time agreement?
  Mr. GORTON. I will not make a motion to table until the Senator from 
South Carolina has all the time he wishes to speak.
  Mr. THOMPSON. Does the Senator from Kentucky need to proceed before 4 
o'clock? Otherwise, I believe we can finish in short order. We need a 
very few minutes. I think that will probably wind us up.
  Mr. McCONNELL. I say to my friend from Tennessee that it is my hope 
and the hope of the Senator from Michigan as well, with your 
permission, to call up an amendment we are going to offer for 
discussion purposes. It could be stacked or laid aside. It will give 
both of us a chance to discuss this--in my particular case, the need to 
discuss it some time between now and 4 o'clock, because I will not be 
available for 2 hours after that. I do not know when these are going to 
be voted on in any event.
  Mr. THOMPSON. How much time does the Senator from South Carolina 
need?
  Mr. HOLLINGS. Ten minutes.
  Mr. THOMPSON. I think I will need approximately the same. Would it be 
all right if we went 20 minutes or so and then brought up the amendment 
of the Senator from Kentucky?
  Mr. McCONNELL. I say to the Senator from Tennessee it is fine with 
me, provided it is all right with the Senator from Michigan.
  Mr. ABRAHAM. That would be fine.
  Mr. GORTON. Then I will be relatively short.
  Mr. HOLLINGS. I defer to the Senator from Tennessee. He is the 
author. If the Chair recognizes me, I can proceed----
  Mr. GORTON. I think the Senator from Washington has the floor.
  The PRESIDING OFFICER. Yes, the Senator from Washington has the floor 
at this time.
  Mr. GORTON. Mr. President, I wanted to speak briefly on the Thompson 
amendment and will do so only relatively briefly to give him some more 
ammunition for his wonderful presentation on this subject.
  I must start my remarks by confessing that he really had me dead 
[[Page S6063]] to rights on one of the comments that he made about the 
impact of his own amendment. I will have to confess error and then say 
that I believe that error strengthens my case rather than weakens it.
  I had said earlier during the course of this debate that the result 
of the passage of this amendment, giving litigants in every State two 
choices of different laws to enforce would simply mean, because of the 
restrictions included in the bill here, that all plaintiffs' lawyers 
would seek to bring their actions in the State courts in order to avoid 
the restrictions on punitive damages and on joint liability. And the 
Senator from Tennessee quite properly pointed out that there are a 
number of instances in which this bill, the Rockefeller-Gorton bill, 
treats plaintiffs' claimants more liberally than do the laws of various 
States. He took the statute of repose, which is 20 years in this bill, 
10 to 12 years in most States that have a statute of repose--obviously, 
if the cause of action was based on a piece of machinery or a product 
that was 15 years old, the choice would be to go into Federal court and 
get the advantage of that more liberal provision. He even spoke about 
my own State, which does not allow punitive damages and, therefore, 
would impel the plaintiff to go into Federal court if the plaintiff 
wished punitive damages rather than into the State court.
  He is correct. There are certainly some cases in which the claimant 
would have a better climate in which to bring such an action in Federal 
Court than in State court. But, Mr. President, one of the great vices 
of the present system, one of the vices that this bill--to focus on 
product liability for the moment--is designed to deal with is the 
myriad of 50 different sets of laws and procedures in the courts of 50 
States. The justification, as the Senator from Tennessee pointed out 
himself, for any legislation in the field of product liability is the 
interstate commerce clause and the desire to smooth commerce among the 
several States, to have a degree of predictability.
  This bill does not attempt to do what bills a decade ago in this 
field did, and that is to define negligence and strict liability and 
deal with a number of other matters of substantive law. It calls for 
limitations only in the field of a statute of repose and joint 
liability and punitive damages and allows more restrictive regimes in 
the various States to remain enforced. But, certainly, as compared with 
the present status of the law, there will be a greater degree of 
predictability and a greater degree of uniformity.
  As the Senator from Tennessee so eloquently pointed out, if his 
amendment passes and should become law, instead of having 50 different 
systems in 50 different States, we would have 100 systems in 50 
different States. We would double the complexity of the present system, 
because he is right--while I am right that in most States most 
plaintiffs would seek out the State court and attempt to avoid this 
law, under some circumstances in some States they would seek the 
Federal court in order to avoid the greater restrictions of State law. 
Not only would we not increase predictability and uniformity, we would 
double the degree of complexity. And there would be far more gaming of 
the system.
  I think that every small business in the United States should greatly 
fear the Thompson amendment, because now at least if the defendant is 
large and obviously capable of paying a large judgment, many plaintiffs 
will only sue the manufacturer of a particular product. That 
manufacturer will be from a different State than the plaintiff, a case 
which under most circumstances could be brought in Federal court. But 
if the plaintiff of the future does not want to be in Federal court, we 
can bet their sweet life if this is a piece of equipment, a stepladder, 
the subject of lawsuits, the Ace Hardware Store in the hometown of the 
plaintiff will end up being a defendant.
  There will be a lot more small business defendants in product 
liability litigation in the future if this amendment passes than there 
are now, because that will be the way to avoid diversity of citizenship 
and bring the action in State court when the State law is more 
favorable.
  There will be more defendants, Mr. President. There will be twice as 
many applicable laws--two in every State in the United States rather 
than one. And there will be less uniformity and less predictability.
  Now, Mr. President, it seems difficult for me to imagine any person 
thinking seriously about the practice of law and uniformity who really 
wants to overturn the doctrine in Erie Railroad versus Tompkins, in 
1938, in which the Supreme Court said: ``We are going to end this forum 
shopping. We will say it does not matter whether a person brings the 
diverse action in State or Federal court; the same law is going to 
apply.''
  This amendment would reverse that doctrine, would double the number 
of applicable laws in the United States, and increase infinitely the 
degree of forum shopping on the part of claimants' lawyers.
  Mr. HOLLINGS. Mr. President, I want to touch on just two or three 
things quickly, and I want to yield, of course, to the principal author 
of the amendment, the Senator from Tennessee, with respect to punitive 
damages.
  The statement was made by Senator Rockefeller that the Supreme Court 
said that the punitive damages would just run amok. The fact is, the 
Supreme Court of the United States of America has not turned down or 
reversed punitive damages.
  The most recent case happens to be a West Virginia case of this 
particular court, dated June 25, 1993, TXO Production Corp. versus 
Alliance Resources. Actual damages were $19,000, Mr. President. Do you 
know what the punitive damages were? Punitive damages, $10 million.
  Do you think that disturbs the Senator from West Virginia, who says 
he is here for consumers? He is for corporations. They can get all the 
punitive damages they want. They are not subject to this bill. Oh, no; 
as a matter of fact, they are not subject to this bill. The leading 
case in his own State, $19,000 in actual damages, $10 million in 
punitive damages, upheld by the U.S. Supreme Court.
  Second, with respect to keeping all the products off the shelf, and 
particularly as the Senator refers to AIDS and AIDS drugs, and how they 
are all going out of business.
  Mr. President, I ask unanimous consent we have printed in the Record 
a statement by Gerald J. Mossinghoff, president of the Pharmaceutical 
Manufacturers Association, made last year before the Committee on 
Energy and Commerce.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                   Statement of Gerald J. Mossinghoff

       Mr. Chairman and Members of the Subcommittee: I am Gerald 
     J. Mossinghoff, President of the Pharmaceutical Manufacturers 
     Association. PMA represents more than 100 research-based 
     pharmaceutical companies--including more than 40 of the 
     country's leading biotechnology companies--that discover, 
     develop and produce most of the prescription drugs used in 
     the United States and a substantial portion of the medicines 
     used abroad. I appreciate the opportunity to appear today at 
     this important hearing on the role of the pharmaceutical 
     industry in healthcare reform.
       Our companies support President Clinton's goal of assuring 
     healthcare security for all Americans without sacrificing 
     quality of care. To accomplish this goal, comprehensive 
     healthcare reform is needed. Total healthcare costs are 
     rising too fast. And too many people lack coverage for 
     necessary medical care, including prescription drugs. These 
     problems must be addressed.
       The Administration is to be commended for proposing a 
     comprehensive healthcare-reform plan that addresses all 
     elements of an extremely complex healthcare system. We 
     support strengthening consumer choice among competing private 
     plans, rather than mandating a single-Government payer. We 
     support providing comprehensive benefits, including 
     prescription drugs, for all Americans. We support continuous 
     coverage regardless of illness. We support greater emphasis 
     on prevention and medical outcomes. And we support strong 
     safeguards to ensure quality care. We also are pleased that 
     the Administration has indicated that it will remain flexible 
     and open to constructive suggestions on ways to improve its 
     proposal. We believe that there must be greater reliance on 
     the free competitive market in a reformed healthcare system.

                              World leader

       For many years, the pharmaceutical industry's success in 
     developing new and better medicines has made it one of the 
     country's most innovative and internationally competitive 
     industries. The industry has a good chance to remain 
     innovative and competitive--if the incentives for 
     pharmaceutical innovation are preserved.
       [[Page S6064]] In its 1991 study of the industry, the ITC 
     reported that U.S. firms accounted for nearly two-thirds of 
     the new drugs introduced in the world market during 1940-
     1988. In his recent study, Heinz Redwood stated, ``The 
     American industry has a clear and outstanding lead in 
     discovering and developing major, medically innovative, 
     globally competitive, and therapeutically accepted new drugs 
     . . . Perhaps the most important finding is that the American 
     lead includes all but one of the therapeutic classes.'' The 
     General Accounting Office, in a September 1992 study, 
     concluded that the pharmaceutical industry maintained its 
     competitive position and strong international leadership 
     during the 1980s, while most other high-technology industries 
     experienced some decline in their position. A report in the 
     March 9, 1992 edition of Fortune magazine placed the 
     pharmaceutical industry at the very top of the list of the 
     country's most internationally competitive industries.
       In conclusion, we believe the three principles outlined 
     earlier in this statement--coverage, competition and cures--
     are fully consistent with the six goals specified by 
     President Clinton for his healthcare-reform plan. Our 
     industry firmly believes we can contribute significantly in 
     helping to meet these worthy goals. We look forward to 
     working with this Subcommittee in your efforts to achieve 
     healthcare reform in a way that will accommodate our major 
     concerns.
       Mr. Chairman, that concludes my prepared Statement. I will 
     be pleased to answer any questions that you or other Members 
     of the Subcommittee may have.

  Mr. HOLLINGS. Mr. President, I will read two sentences. ``For many 
years''--says the leader of the pharmaceutical industry--

       For many years, the pharmaceutical industry's success in 
     developing new and better medicines has made it one of the 
     country's most innovative and internationally competitive 
     industries.

  In a study of the industry, the ITC reported that U.S. firms 
accounted for nearly two-thirds of the new drugs introduced in the 
world market during the period 1940 to 1988.
  Forty-eight years, almost fifty years.
  There is Fortune Magazine, there is the head of the industry, 
speaking for itself. Now we will bring it up to date, to February and 
April of this year.
  February 23, 1995. I hold in my hand an advertisement entitled ``Drug 
Companies Target Major Diseases with Record R&D Investment.'' It is an 
advertisement by America's pharmaceutical research companies, and I 
read:

       Pharmaceutical companies will spend nearly $15 billion on 
     drug research and development in 1995.

  Remember, the Senator from West Virginia said they are all going out 
of business on account of product liability, and they could not invest. 
The overwhelming evidence is the opposite of what the Senator from West 
Virginia contends.

       New medicines in development for leading diseases include 
     86 for heart disease and stroke, 124 for cancer, 107 for AIDS 
     and AIDS-related diseases, 19 for Alzheimer's disease, 46 for 
     mental diseases, and 79 for infectious diseases.

  The pharmaceutical industry categorically refutes the statements made 
by the distinguished Senator from West Virginia.
  Now, going right to less than a month ago, April 5, 1995, another 
advertisement: ``Who Leads the World in Discovering Major New Drugs,'' 
put out by the America's pharmaceutical research companies.

       Between 1970 and 1992, close to half of the important new 
     drugs sold in major markets around the world were introduced 
     by the U.S. pharmaceutical companies. Here at home, the broad 
     drug industry has been making 9 out of every 10 new drug 
     discoveries. So when a breakthrough medicine is created for 
     AIDS, heart disease, Alzheimer's disease, stroke, cancer, or 
     any other disease, chances are it will come from America's 
     drug and research companies.

  That totally refutes the Senator from West Virginia's statement. Now 
finally, the arithmetic, simple arithmetic, refutes this pose for the 
consumer, whereby the consumer is not getting the majority of the 
money; the lawyer is getting the majority of the money. Of course, the 
inference is that the injured party, the plaintiff's lawyers, get the 
money. Arithmetic says that 33\1/3\ percent, which has been agreed to 
generally in the debate on both sides of the aisle, and parties pro and 
con, on a particular measure, 33\1/3\ percent is less than 100 percent 
and less than 50 percent, so the other 66\2/3\ percent goes to the 
client.
  Or take the amendment of the Senator from Kentucky on malpractice: A 
25 percent limitation there; 25 percent leaves 75 percent for the 
client.
  Now, what are the facts? Why does the Senator use that distorted 
representation about being so concerned that the consumer is not 
getting the money he deserves, like every case brought is a winner?
  No. 1, according to the Rand study of product liability injuries, of 
100 percent injured, we find that only 7 percent of the injured parties 
consult an attorney; only 4 percent hire an attorney; and only 2 
percent file a lawsuit. According to the New York Times, one-half of 
those filing are losing.
  Now, who pays for all of those expenses, except for the plaintiff's 
attorney? So it gives no regard and no account for our distinguished 
group of professionals who are willing to take it on a contingency 
basis, although they are losing half the time, to try to get middle 
America and poor injured parties their day in court.
  I can tell you now, come to this town and get injured, do not go 
downtown on billable hours. I tried to point that out with my 
particular amendment. You could not afford to hire the lawyer and we 
all know that. But they are being derided here as somehow the lawyers 
are running off with all the money.
  Where does the money go? According to the National Consumers 
Insurance Organization, according to this survey, in our hearings,

       For every dollar paid to claimants, insurers paid an 
     average of an additional 42 cents in defense costs while for 
     every dollar awarded a plaintiff, plaintiff pays an average 
     contingent fee of 33 cents out of that dollar. Thus, in cases 
     in which the plaintiffs prevail, out of each $l.42 spent on 
     litigation, half of that goes to attorney's fees, with the 
     defendants' attorneys on average paid better than plaintiffs' 
     attorneys.

  They go take it down to where they are getting 56 percent.
  Now here are the poor plaintiffs' lawyers. They are not even seen but 
in 2 percent of the product liability injury cases, and of the cases 
they file they are only recovering in half. So they are taking the 
expenses of the others. You can bet your boots when they finally 
prevail and get their third, that is still 66 2/3 percent going to the 
client and 33 1/3 percent going to the lawyer. So the lawyers they are 
interested in trying to restrict and with their amendments have voted 
to limit, they are the ones already in a sense losing.
  The Senators stand here and say it is shameful? It is shameful to 
misrepresent the idea that this crowd sponsoring this bill is for the 
consumer. They know they are for the corporations. They know they are 
for the insurance companies. They know the drive. It is corporate 
America: Business Round Table, Conference Board, NAM--National 
Association of Manufacturers--they have been sponsoring this bill for 
15 years and they know it. No consumer organization has come forward 
with this bill. All the consumer organizations of size and repute 
absolutely oppose the bill. To come up here and talk about shame, and 
the consumers are not getting the money, and misrepresenting the facts 
with respect to percentage when simple arithmetic shows no one gets 
over a third, and if limited by a vote, 25 percent. That leaves 75 
percent for the client if they win.
  And on that contingent fee, that trial lawyer who is representing the 
injured party has to assume all the costs and all the burden and all 
the risk. Otherwise that poor injured party would not have a lawyer 
because they cannot afford it. They found out $50 an hour was not 
enough. I tried to limit it here in my amendment. So they come forward 
here in this town with $100 an hour billable hours and going on up to 
$500 and more. They could just never get their day in court. We know 
that is being cared for back home.
  That is why I am so interested in the amendment of the Senator from 
Tennessee, because we can stop this pell-mell march to Washington with 
the Washington bureaucrats administering and determining, not hearing 
any of the facts, disregarding the 12 jurors sworn to listen to the 
facts, bureaucrats who say,

       Forget about you, you all are runaway. You do not know. You 
     have not heard. There is no relief. And it is a national 
     problem and we are going to correct it with this mish-mash 
     bill.

  I favor the amendment of the Senator from Tennessee.
  The PRESIDING OFFICER. The Senator from Tennessee.
  [[Page S6065]] Mr. THOMPSON. Mr. President, I thank the Senator from 
South Carolina for his remarks, which were eloquent as usual. I do 
think it is important that we refocus on what we are about here. The 
debate most of this afternoon has gotten off onto who is making the 
money, who is supporting who, scare tactics and figures taken out of 
thin air. I do not know where most of these figures are coming from.
  I would like to refocus on what we are about here. We are about our 
judicial system in this country. There is nobody on the floor here who 
does not want a fair system, one that is fair to all parties. We 
certainly all recognize that manufacturers and sellers of products 
ought to be treated fairly and should not be put in a position where 
they cannot reasonably manufacture products and send them in interstate 
commerce and not be put out of business unfairly. We also understand 
that there are innocent people out there, children, other innocent 
people who sometimes are injured through the negligence and sometimes 
through the willful misconduct of large companies. And they need to be 
protected. We all know that.
  We are talking about a system here. We are not talking about good 
guys and bad guys. We are talking about a system. What is the system 
that is best designed to produce a good system of justice across the 
board for this country?
  Traditionally, we have had a system where States determine what their 
laws are. They learn, they change laws, a lot of innovation is going on 
in a lot of different States as has been pointed out here today. 
Changes are being made. Radical changes, in some States, are being 
made.
  It has been suggested now that in the area of products liability, 
primary, we need to take a little bit different look. I am trying to 
take a little bit different look.
  My amendment is called a killer amendment. This is the first time, I 
guess, in the history of the Senate, where we have ever gotten a 
product liability debate on the floor. I was one of the ones who said I 
will not support a filibuster. I will support bringing this up on a 
motion to proceed. I, and people like myself, presumably carried the 
day and we got this debate here. And I am suggesting now an approach 
that makes sense from the standpoint of what we as a U.S. Congress 
ought to be about. Not rewriting all the State laws in this country. 
That is against our basic philosophy. That is what I campaigned 
against, the Washington-knows-best attitude.
  The Senator from West Virginia makes an eloquent plea for a 2-year 
statute of limitations. He is entitled to his opinion on a 2-year 
statute of limitations. I may agree with a 2-year statute of 
limitations. But why should the people of Tennessee have to follow the 
dictates of the Senator from West Virginia as to what the proper number 
of years for a statute of limitations is? It is just not right. I 
cannot go down that road.
  Perhaps we can involve ourselves in an area that involves interstate 
commerce, that involves products; 70 percent of them which travel in 
interstate commerce and which also involves interstate litigants, if 
you will. And that is litigants who are in the Federal court because of 
diversity of jurisdiction, because you have citizens of various States.
  To me, that makes some sense. That makes some sense. That is not a 
killer. That is an attempt to legislate in an area that we properly 
legislate in. I hope we do not, in this area or any other, rush to 
judgment to change longstanding rules or longstanding procedures that 
the States have enacted over the years, over 200 years, simply because 
of pressures and editorials in newspapers and some rush to judgment.
  I support the Contract With America. I have simply pointed out that 
this is the only provision in the Contract With America that goes 
against our basic philosophy. All the rest of the Contract With America 
is limiting the Federal Government. It has to do with limiting one 
branch or another: Term limits, line-item veto. It has to do with 
limiting the Federal Government with regard to the States. How do we 
handle our welfare system? With regard to individuals, how much in 
taxes do we take from them or not? It all has to do with limitations on 
the Federal Government except this one thing.
  What I am suggesting is that with regard to these cases that can 
legitimately be called interstate in nature, with regard to litigants 
who are legitimately interstate in nature--not because of what I 
thought up but because of what has been the law of this country for 
many, many years--let us apply some of these things, which are really 
broad and far reaching in many respects, but let us go ahead and do it. 
Let us go ahead and try it and see and experiment, if you will, and see 
if this is going to save the world as we think it is.
  I think we have to get straight on our statistics. We keep hearing a 
figure, some low figure of tort cases that are brought in Federal 
court, and that is true. But the indications from the Administrative 
Office of the U.S. Courts, an unassailable source, are that 
approximately 45 percent of products liability cases are either brought 
in Federal court or removed to Federal court because you have diversity 
of jurisdiction.
  So is it suggesting that we apply these rules to 45 percent of the 
cases gutting this bill? Or is it saying instead of going 100 percent 
overnight, interfering in areas that people who are concerned about 
States rights and intrusive Federal Government are concerned about, 
that we take one step at a time. Under my amendment we would have 
uniformity in Federal courts in all States. Under the underlying bill 
you have caps in various areas but States are still free within those 
caps, as long as they do not go over the caps, to pass what legislation 
they want.
  You still have 50 different States and 50 different State laws. That 
is not uniformity under the underlying bill. At least with regard to 
the diversity cases you would have uniformity. Is it bad for small 
business because they would be joined in order to defeat diversity? 
Would you have complete diversity? Would you join an interstate 
defendant? That is happening now. That is what is happening now. The 
courts have to determine. Are they properly joined in? So be it? You 
follow the legal consequences from that. If they are, you are in State 
court. If they are not properly joined then the court throws them out, 
and you have diversity and you can go to Federal court, if you want to.
  Applying this to 45 percent of the cases before we rush pell-mell to 
take over State law in this country is not a killer amendment.
  I must say that I understand the legitimate points of both sides of 
this argument. I understand the problems the manufacturers have. I am 
trying to redress the legitimate problems that manufacturers have in 
this country. I understand the proponents believe that we need to level 
the playing field some. But for me it is trying, I say to my friends on 
the other side, let us at least acknowledge that this is the case and 
this is what we are doing, and we are trying to level up the playing 
field.
  Let us not try to convince the American people that this is a 
consumer's bill. This is not a consumer's bill. They say this is a 
consumer's bill because of attorney's fees. Most of the attorney's fees 
do not go to the litigants. Why is that? Often the defendant company or 
the insurance company representing them will string out a case for 2 or 
3 years knowing it is a meritorious case causing costs to rise, having 
to pay defense attorney's fees and all of that, and then settle a case. 
Then they complain about the cost of the system.
  That is what happened to the family that came into my office last 
week. They had a clear-cut situation where a clinic, if they had been 
trying to kill their 5-year-old daughter for a routine medical 
procedure they could not have done it any more efficiently. There was 
one mistake after another. A drug addict working on the premises who 
later OD'd. A comedy of errors; had to call 911; then covered up their 
activities. I cannot imagine of a more clear-cut case. Yet, it took 2 
years, a lawyer having to finance that lawsuit out of his own pocket as 
often happens because they have been dragged around and deposed all 
around, running all the expenses up.
  Anybody who has ever been involved in this knows the way it happens. 
Only when the mother got on the witness stand and broke down they said, 
OK, let us settle this case for $3 million. 
[[Page S6066]] Should we be terribly impressed with the defense costs 
and the court costs and also what was involved in that particular piece 
of legislation? Whose fault is that? The parents of that little girl 
last week in my office who have no further ax to grind, they have no 
monetary or economic interest in this anymore, in this system, did not 
think that it was a consumer piece of legislation. They were saying 
please do not get into a situation where in this unusual case--thank 
God it does not happen every day. But it does happen. And when that 
does happen, let us make sure that we set an example that it does not 
pay for a clinic or a manufacturer to hire on the cheap, operate on the 
cheap thinking that they have a situation out here that is going to 
favor them in court, and they do not have to worry about it too much.
  Some say it is a consumer bill because of the delays. You are going 
to have more delays under this underlying bill, if it passes, without 
this amendment than you have ever had before because we are creating 
new law. In all of the circuits this new law is going to have to be 
interpreted. There is all kinds of language in there. Every word of it 
will be subject to court interpretation, new interpretation, new law in 
every circuit which will then, with regard to that legislation, be 
binding on the States.
  Other points that were made: The fact that we have a system with 50 
different sets of laws in this country with 50 different States. That 
we do. It is called a Federal system. I kind of like it. I thought most 
of my colleagues kind of liked it. I may have a different idea about 
what the statute of limitations ought to be in Tennessee than the 
Senator from West Virginia. People in Tennessee might have different 
ideas about a lot of things than other people of other States. They 
have a right to address those things.
  The suggestion was made that we could under the present system forum 
shop and go to Alabama, I believe the State was mentioned, and get a 
favorable situation there. Of course, the practical difficulties of 
that are well known. To anybody that has gone in the system you are a 
long way from home. You hire another lawyer. You expand your expenses--
all of that. But assuming that does happen on occasion, my amendment 
would prevent that. If a fellow from Tennessee decided he wanted to get 
favorable State law from Alabama and went to the State of Alabama to 
sue an Alabama defendant, there would be diversity jurisdiction. They 
could go into Federal court and have the Federal standard apply, not 
the Alabama State standard.
  The point is made that products are being restrained from the 
marketplace under our present system. I am sure that is true to a 
certain extent. It was said we could have all of these other products 
and people are now making products because of liability laws. Of 
course, there are no statistics on that. All of this is what somebody 
said. But I will take it at face value. So we do not have all the 
products that we otherwise would have if we had a different system.
  I asked the question. What do we do about that? Assuming that is 
true, what do we do about it? Has anybody come up with a solution other 
than just wringing our hands and saying that products are being 
restrained? Are we going to say that beforehand you cannot sue these 
companies? Are you going to say that we can only bring x number of 
lawsuits a year--citizens of the United States of America--against 
these companies? Of course, not. You cannot do that.
  On the other hand, are we going to say what these questions are going 
to be like if anybody gets hurt without any proof of negligence, 
without any proof of responsibility? Of course, not. We are not going 
to say that either.
  What is the solution? The solution has always been let them 
manufacture their products with the knowledge that if they are 
manufacturing a product that affects human life, if they are proven to 
be negligent and they kill somebody, they are going to pay damages. And 
if they knew that they were likely to kill somebody, they are going to 
pay a lot of damages.
  I do not know that any of this legislation addresses that problem 
except to put some caps on the amount of damages. I do not know a way 
in a free judicial system other than the way we have where we let 
juries decide these things under the supervision of a judge, under the 
supervision of the court of appeals, under the supervision of the State 
supreme court. I do not know that anybody has come up with a solution 
that is perfect that will make sure the right number of products come 
to market and no good products are restrained but bad products are kept 
off the market. The U.S. Congress cannot solve that problem. What we 
can have is a fair, open, responsible, judicial system with fair rules 
for everybody across the board.
  Texas has lost how many jobs; how many thousands of jobs because of 
its product liability? I do not know where you get these figures. But 
my suggestion is that Texas changes law. As a matter of fact, from what 
I read in the paper, Texas has made and is in the process of making 
substantial changes in its tort law as we speak. Do we need to do that 
for Texas? Do we know more about what Texas needs than Texas does?
  The Senator from Utah a while ago pointed out that only 5 percent of 
the tort cases are filed in Federal court. That is not the product 
liability cases which is the major thrust of the underlying bill and my 
amendment. But that proves their point, does it not? Most tort cases do 
not belong in Federal court because you do not have diversity. But 35 
percent of product liability cases are in Federal court because you do 
have diversity, and you are more properly in an area that we can 
legislate in.
  So, Mr. President, I would conclude simply by saying let us refocus 
on what this is about. The basic question is do we have a problem? How 
bad is it? And what do we do about it? I suggest that we do have some 
problem. It is certainly not in the dimension of the world coming to an 
end that we have heard on the Senate floor.
  For anybody who knows anything about the system, looks at any of the 
statistics, it is just not there. But let us address the problem that 
we do have. Let us do it in a responsible manner, and let us not lose 
our philosophical integrity, those of us who have campaigned on the 
basis of limited Federal Government, having States do more in the areas 
of welfare, having States do more in the areas that affect the people 
who elected the members of the State legislatures who write those laws, 
and have Federal Government do a lot less. I suggest that having these 
reforms in this area involving interstate commerce, with regard to 
litigants who are involved in interstate commerce is a reasonable 
approach to a problem that will allow us to see whether or not it 
works, how it works, perhaps will wind up in uniformity if States 
desire to go in that direction, but does not represent a wholesale 
takeover of 200 years of State tort law in this country.
  I yield the floor.
  Mr. McCONNELL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, I would like to speak to another 
amendment that will be offered by the occupant of the chair at some 
time in the next 30 minutes or so dealing with the question of joint 
and several liability.
  Put another way, Mr. President, we all know what that means. That is 
the looking-for-somebody-with-a-deep-pocket problem which is a 
pervasive problem in American litigation.
  Interestingly enough, the mayor of the city of New York was before a 
subcommittee of the judiciary yesterday, and I obtained a copy of his 
testimony. It is really quite interesting. The mayor outlined the 
problems of the city of New York in recent years with regard to our 
tort system, which has clearly run amok. It is very interesting that 
last year New York City paid out $262 million in tort cases on roughly 
8,000 claims which either proceeded to settlement or verdict.
  And the mayor goes back and compares that to earlier years. In 1977, 
the mayor pointed out, the city paid out $24 million as compared to 
$262 million last year. In 1984, the city paid $84 million compared to 
$262 million last year. In 1990, the city of New York paid out $177 
million--that was just 5 years ago--compared to $262 million in tort 
cases last year.
  Most of these, of course, Mr. President, are cases where the 
plaintiff was trying to get into the pockets of the 
[[Page S6067]] taxpayers of the city of New York. The mayor in his 
testimony proceeded to describe it in another way that kind of brings 
it home for all of us.
  There has been a lot of talk here about whether statistics do or do 
not exist in various areas of this debate. The mayor put it this way. 
He said--and this was just yesterday before a Senate Judiciary 
Committee subcommittee. ``With just half of our annual tort payments,'' 
said Mayor Giuliani, ``the city could hire 2,900 additional police 
officers or firefighters or more than 3,700 teachers.'' The city could 
have hired 2,900 additional police officers or firefighters or more 
than 3,700 teachers for the money they paid out in tort claims in the 
city of New York last year alone.
  The mayor went on. He said, ``In terms of our operating budget, the 
amount we spent on these cases is more than 61 of 75 agencies of city 
government spent over a year.''
  Let us go over that. They spent more in tort cases in the city of New 
York than 61 of 75 agencies of the city of New York spent last year and 
more than the combined amount budgeted to sustain the operation of the 
DA's, district attorneys, in all five boroughs of the city of New York. 
They spent more money in tort claims last year in the city of New York 
than the amount of the district attorneys' budgets of all five boroughs 
of the city last year.
  The mayor proceeded to say that New York City's personal injury 
payout is an enormous expense no matter how you look at it and falls 
squarely on the taxpayers, he says, the consumers in the city of New 
York.
  The mayor went on. It is kind of interesting the way he put it. He 
says, ``As individuals, Americans are the most generous people in the 
world. They are equally generous with their hard-earned tax dollars, 
but they would like to know that their money is being put to use 
wisely. When they learn, however, their money is being wasted, 
Americans rightly demand an accounting. I submit the time has come,'' 
said the mayor of New York, ``for an accounting of the waste associated 
with the tort system as we know it.''
  What he was talking about, Mr. President, is the deep-pocket issue. 
``Municipalities and other public entities are often viewed as deep 
pockets that can easily afford to pay extra sums to plaintiffs claiming 
to be injured.'' He also mentioned a few of those cases.
  I thought I might relate to the Senate the mayor of New York 
yesterday mentioned one case in which a subway mugger was caught in the 
act and shot by an alert transit cop. What did the robber do? Why, he 
sued the city and he won $4.3 million. The robber sued the city.
  Here is another interesting one that New York experienced. He said in 
another case an 18-year-old student in direct contravention--direct 
contravention--of a teacher's instructions jumped over a volleyball 
net. The teacher said, ``Don't do it.'' And the 18-year-old student did 
it anyway. The student suffered tragic injuries. But the city's 
liability for the teacher's effort to supervise cost the city $15 
million.
  The mayor cited another case. The city was ordered by a jury to pay a 
woman's estate $1 million after she entered a closed city park, ignored 
all the instructions, entered a closed city park and drowned in 3 feet 
of water.
  So there you have it, Mr. President. That is the kind of thing that 
is going on all across America under the concept of joint and several 
liability, and it is clearly costing taxpayers, consumers, a lot of 
money.
  The Senator from Michigan on behalf of himself and myself will bring 
up shortly with the permission of the Senate the Abraham-McConnell 
joint and several liability amendment which would permit an injured 
plaintiff to collect a full judgment from any defendant found to be 
liable for any part of the injury.
  Mr. President, the doctrine of joint liability permits an injured 
plaintiff to collect the full judgment from any defendant found liable 
for any part of the injury. It means that no matter how remotely 
connected a defendant is to the events leading to plaintiff's injury, a 
defendant could be required to satisfy the entire judgment.
  That is the kind of thing I was seeking to illustrate in referring to 
the testimony of the mayor of New York just yesterday.
  The result is that lawyers for the plaintiffs add a whole host of 
defendants to a lawsuit in an effort to ensure the plaintiff can get 
the full judgment paid. With joint liability, it does not matter if you 
had anything to do with the events leading up to the plaintiff's 
injury. Instead, the chances of your getting sued depend upon how deep 
your pockets are. The deeper the pocket, the more likely to be sued.
  For example, if a drunk driver injures an individual on someone 
else's property, the property owner will be joined in the lawsuit. It 
happened to the Cincinnati Symphony Orchestra, only it was not even the 
property owner. The accident happened near one of the orchestra's 
performance facilities. And the orchestra, a nonprofit entity, was 
needless dragged into a $13 million lawsuit and put at risk for the 
judgment.
  Nonprofit organizations, municipalities, and small businesses can be 
hardest hit by joint liability. Although we do not think of these 
defendants as wealthy or rich, they are usually adequately insured, 
which also makes them good candidates to be deep pockets. New York 
City, to which I just referred, spends more on personal injury awards 
and settlements--$262 million in the last fiscal year--than it spends 
on funding public libraries.
  One industry that is severely impacted by joint liability is the 
engineering profession. Often engineering firms are small and 
entrepreneurial. The American Consulting Engineers Council reports that 
of its 1,000 members, more than 700 are involved in lawsuits. The 
typical case involves a drunk or reckless driver speeding down a road 
that is undergoing construction. Although the road is well marked with 
a detour sign, an accident occurs. The driver sues everybody involved 
with the road: the local government, the highway department, anybody 
who owns adjoining property and, of course, the engineers who designed 
the road improvement. While the engineers--and any of the other 
defendants--may ultimately prevail, the costs of defense can be 
staggering. The Consulting Engineers report that in 1993, they paid out 
more than $35 million in awards and settlements. That is a huge amount 
of money, especially considering 80 percent of the engineering firms 
employ fewer than 30 people.
  What does it mean for consumers and taxpayers? Higher prices and more 
taxes, since the engineering firms will have to pass their costs on to 
their customer. The local governments who hire engineers to build their 
roads and bridges will pay more and the American people will pay higher 
taxes to cover these lawsuits.
  So, make no mistake about it. The tort tax is real. Every American 
lives with it. And every potential defendant has to take account, in 
the prices they set, for the possibility of being dragged into a 
lawsuit.
  I recently received a letter from the institute for the National 
Black Business Council, an association of minority business owners. Mr. 
Lou Collier, the president of the council, writes in support of 
expanding the product liability bill.
  Without an expansion of the joint and several liability reform, Mr. 
Collier states, ``Millions of small businesses--restaurants, gas 
station owners, hair stylists, nearly every small business you can 
think of, would still face the threat of bankruptcy. That includes most 
African-American firms.'' The latest census data shows that 49 percent 
of all black-owned firms are service firms, and Mr. Collier, on behalf 
of minority small business owners, asks us to improve the climate for 
small business, ``Small business owners and entrepreneurs have to 
overcome staggering odds to build a successful company. They shouldn't 
have to face a legal system where one frivolous lawsuit can force them 
to close their doors.''
  Now, that is Mr. Collier on behalf of the minority businesses of this 
country.
  The amendment offered by Senator Abraham and myself, by eliminating 
joint liability for noneconomic damages, would relieve some of those 
burdens.
  Injured plaintiffs would still recover their full economic loss. But 
for the 
[[Page S6068]] subjective noneconomic loss, each defendant would be 
responsible only for his or her proportionate share of harm caused.
  This amendment is fair and consistent with principles of individual 
responsibility. It will put an end to the gamble taken by the trial bar 
when they join everyone in sight of an injury.
  Let me just say in conclusion, Mr. President, having chaired a number 
of hearings years ago as chairman of the Courts Subcommittee of the 
Judiciary Committee, I had a hard time ever getting any plaintiff's 
lawyer to make a good argument in support of joint and several 
liability, because it is obviously not just. It violates any standard 
of American justice to require that someone who contributed little or 
nothing, just a little bit of what may have caused the harm, to end up 
getting assessed 100 percent of the damages simply because they are 
able to pay. That is not just. That does not have anything to do with 
civil justice.
  It is astonishing to me, Mr. President, that our tort system in this 
country has evolved to the point where essentially innocent parties can 
end up being assessed all of the damages for a harm that they did not 
cause.
  That is what the Abraham-McConnell amendment will be about when it is 
subsequently offered. I hope that I will be able to come back to the 
floor and speak again on this amendment at the appropriate time.
  I wish to commend the occupant of the chair, the Senator from 
Michigan, for his great leadership in this tort reform field. He has 
been in the Senate now about 4 months, and I cannot remember anybody 
who has taken a subject and made a difference on it any more quickly 
than he has. I have enjoyed working with him.
  We have another issue that we may be talking about later in the 
debate, something called an early offer mechanism, which I do not have 
the time to address at this point.
  I just want to say how much I have enjoyed working with him. We are 
greatly in hope that the Senate will decide that changing the way we 
handle joint and several liability will be in the best interest of the 
American people.
  Mr. President, I believe no one is about so speak. I suggest the 
absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mrs. MURRAY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Kyl). Without objection, it is so ordered.
  Mrs. MURRAY. Mr. President, I ask unanimous consent that I be allowed 
to speak as in morning business for approximately 2 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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