John Conyers

Mr. CONYERS

Mr. CONYERS. Mr. Chairman, I move to strike the last word. Mr. Chairman, we began the debate and the amendment process by first of all amending the least worst part of this bill that loser pays all. Remember, we had an original bill. The original bill in committee provided for the loser as to any claim to pay the attorney fees of the winner. It applied to all fees in the case that applied to that particular claim, was not tied to any offer. Wonderfully, providentially, the consciences of the new majority overcame them, and they accepted the Goodlatte amendment. The Goodlatte amendment, as it was debated in the committee, said that the loser pays the winner's fees after the date of the offer if they come up the short side, and here is where the poker playing began. The person with the greatest resources usually can win in a poker game, especially when you are down to the last couple of chips. Here we have the loser pays the winner's fees after the date of the offer, and the losing means not doing better than the offer; the award is limited to the plaintiff's own attorney fees or reasonable fee based on the hours spent by the plaintiff's attorney. This did make a mean spirited bill less mean-spirited. The problem was that the unlevel playing field, if one party has more wealth than the other, still obtains. I makes it highly risky to pursue a case where liability is in question, and that is what we continue here. Now, fortunately, and I say that seriously, the gentleman from Virginia has found another error in this hastily that if the offeree made an offer under this subsection from the date the last such offer by the offeree was made, if the offeree made an offer under this subsection from the date that last such by the offeree was made, then he would be moving, advancing his cause, which changes considerably the plight of the offeree before this language was inserted. I am sorry that we did not find this out before now, but the problem is that these poker-game-like provisions in terms of negotiating offers being made by both parties are contingent upon the fact that one or both of the parties have some idea as to what the actual outcome is going to be. I suggest to you that in personal injury and tort cases the outcome might vary widely from forum to forum. The outcome could vary very widely depending on whether there is a jury, or whether the judge is trying the facts and the law in the case, and now we are finding that there were other errors made. To me, this improvement which is necessary to the logic that was intended by the gentleman from Virginia originally, does not cure the basic problem to the bill. We still have a bill that is going to be subjected to even more amendments to try to humanize it, to try to live down the reputation that it has so wholesomely earned as being an antiplaintiff's bill, an antiworking people's bill, an antipoor person's attempt to get into court, that it is a way of shutting the door down. The whole provision is confusing. It is a trap for the unwary. I suggest to you attorneys are going to tear their hair out trying to figure out how they can game the system with this new Las Vegas type offer that can and now must be made if you are to protect yourself against being assessed the fees of the opposing party.

Mr. CONYERS. Mr. Chairman, if the gentleman is reserving his time to close debate, I yield 3 minutes to the gentleman from Illinois [Mr. Durbin], a distinguished former member of the bar.

Mr. CONYERS. Mr. Chairman, I reserve the balance of my time.

Mr. CONYERS. Mr. Chairman, I yield myself 1 minute. I cannot help but respond to the gentleman from Virginia, a very well-known lawyer on the committee, that this is the kind of law that people, working-class people and poor people, have been looking to get a chance to help them bring their cases into court. I simply find that preposterous. I think it goes against all of the testimony that we have heard before the committee. For him to suggest that this is just what working-class people need to get into court means that he has now thrown the bill out to the winds and this is just a free-wheeling rhetorical debate. The American Bar Association, whose letter I just recited, said that the bill would work a harm to just people that the gentleman thinks it would be a benefit to, and I remind the gentleman that the American Bar Association is made up of more defendants' lawyers than even plaintiffs' lawyers.

Mr. CONYERS. I would like the rest of my colleagues that are a party to this bill to take into consideration the American Bar Association's evaluation of this measure. They say that the ``loser pays'' bill as amended, although extensive revisions have been made to this legislation, to the legislation as introduced, and were made by the Committee on the Judiciary, ``serious problems remain with the current loser pays provisions of H.R. 988.'' ``The case has not been made for jettisoning the tradition in this country of requiring each party to bear its own attorneys' fees. While some fee-shifting occurs under some State or Federal statutes and procedures, the heavy burden of persuasion must rest on proposers of such variance from the American rule. The American Bar Association is particularly troubled because of the accelerated timetable under which H.R. 988 has been considered in the House. There has been no opportunity to have this debate. ``The ABA is concerned that H.R. 988 may undermine diversity jurisdiction and will surely encourage undesirable forum shopping. In addition, it imposes a requirement that is inconsistent with the American system of justice. Among the fundamental problems inherent in the current proposal is that it places an extra burden on the poor, the middle class, and small businesses who are entitled by law to choose a Federal forum. This extra burden is unrelated to the merits of their claims. Worse yet, its weight is involuntary when it falls on the poor, the middle class, and small businesses when they are brought to the Federal forum by a litigant much better able to bear the burden of possible fee-shifting. Any such procedure could only be justified if it provided safeguards to allow reasonable access to the Federal courts for all litigants and provided safeguards against an abusive misuse of the fee-shifting procedures. Unfortunately, the exemption and the relief provided for manifest injustice do not begin to level the playing field.'' For shame, that out of the Committee on the Judiciary of the House would come a bill of such draconian magnitude that we are now asking working people, middle-class people, poor people now to bear the corporate defendant's fees if they do not win. There are too many good cases that are so close that not even the most skillful plaintiff's counsel or defense counsel can predict the outcome. There are too many variables. We see that in the history of civil litigation. I am stunned by the punitive nature, the severity and the unfairness that is all rolled together in this one bill to say now that the historic tradition of the American system of justice should be jettisoned this week because we are tired of so many frivolous claims being brought. I urge that the Members reject this bill and any of the feeble attempts to improve it that may ensue on the floor. Mr. Chairman, I reserve the balance of my time.

Mr. CONYERS. I yield to the gentleman from California.

Mr. CONYERS. You are tightening the tourniquet. You are making it tougher on people to bring lawsuits. You are making it impossible for an injured person without means or resources who may have an excellent lawsuit to bring them at all because we keep talking about, what about a person that walks into a lawyer's office having read a television advertisement saying that he will take the case without any up front payment of attorney fees on a contingency basis? What is wrong with that? The attorney that would take a case knows that if he does not have a reasonable case, he is not going to get anywhere, and he is not even going to get paid by his own admission. So I would urge the gentleman to consider the harm that we are bringing to working people and people bringing tort suits who may be injured with meritorious claim but may not have the $500 or $1,000 or $3,000 that an attorney might reasonably claim to start a suit.

Mr. CONYERS. Mr. Chairman, I am delighted to yield 3 minutes to our distinguished colleague, the gentleman from Virginia [Mr. Scott].

Mr. CONYERS. Mr. Chairman, the loser pays provision now gives a wealthy party or a corporate party the power to slam the courthouse door shut in the face of a working class individual, or heaven help him if it is a poor individual, or an individual who was injured by the very claim that they are suing and seeking to get recompensed. The proponents of the bill say that this measure will encourage the parties to settle, but our goal, however, should not be to encourage the parties to settle at any cost. The goal should be to encourage reasonable settlements with all parties on a level playing field. This bill encourages unreasonable settlements in cases where the liability is a close question and there is great economic disparity between the parties. We are now turning the negotiating into rolls of the dice that neither party can accurately predict what will happen if the case is a close one. Remember, we are not talking about cases with no merit, or cases that have a clear potential, we are talking about close cases, and close cases are the ones that are being forced to be settled at any cost. Mr. Chairman, I think that is a very difficult proposition. I would like Members to know that former Senator George McGovern on television this week is now beginning to virtually recant the ads we have all been seeing. He said ``I'm not sure Federal legislation is the way to go,'' and he disavows his remarks in the ad. I would say sorry about this, fellows, I know they wanted to rely on George McGovern to build their case here; that ``frivolous lawsuits helped drive my small inn in and out of business.'' Like most of those who claim that suits, not competition or other factors, are the cause, he now says that that comment is an exaggeration, and that his biggest problem leading to bankruptcy was the economic national downturn that he and his competition with other hotels sustained.

Mr. CONYERS. Mr. Chairman, I yield myself 4 minutes. Mr. Chairman, I rise to point out the problems that we are confronted with, which are multiplying rapidly. First, the gentleman from Pennsylvania has suggested that rule 68 somehow has application here. I think he challenged me or someone on this side as to whether we support rule 68 or not. I would hope he would revisit this important Federal rule, because it has nothing to do with this bill in terms of assessing attorney fees. It has a lot to do with assessing costs of the parties, but it does not apply to the consideration of attorney's fees that are taking up our time at the moment. Second, Mr. Chairman, there is another additional reason why loser pays is not a highly desirable proposal that we codify into law at this time. It is true, we do have a Federal rule that permits the court to assess pay to any of the parties that he considers to be frivolous, upon a motion properly brought. But this bill changes the option that the court has to mandatory consideration, that the court will assess attorney fees in these kinds of situations. It is there that I think we need to examine this vary carefully for the prejudicial impact that it has on plaintiffs who may be working- class people, and heaven help them if they are poor. They do not have anything to put up. That gets to another point that has been made about cases that are being accepted without cost. They are seen on television advertised all the time. First of all, an attorney is unlikely, after hearing a person come into his office, that he would accept a case that he does not see some merit in, because it would be a cost he would be bearing, so many of those cases are washed out. In a way, those attorneys are doing the bar a great service. On the other hand, those that advertise that they will take tort cases without pay for a plaintiff are doing the plaintiff a great service, because if a poor person does not have the means to pay for a lawsuit, he or she is then put upon to go through the entire list of dozens, sometimes hundreds, sometimes more than hundreds of lawyers to find out what office, what lawyer in which office, might entertain their case, assuming that they have merit. Therefore, Mr. Chairman, it is very important that we understand that these kinds of cases exist; that poor people do have important tort claims; that they have no way of financing the attorney as they go along. Mr. Chairman, let me turn to the goal of deterring frivolous lawsuits, which everyone would like to do, even without statistical information. Notice that this general debate, like the debate in the Committee on the Judiciary, has gone on without one statistic ever being cited to determine that this is the problem, none. Now the loser pays provision goes well beyond it.

Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, one of the complaints that has been lodged against this bill is the unreasonable haste with which it has been brought out of the Committee on the Judiciary, which has five or six of the items of the contract of America which are now being given precedence in the House. And unfortunately the original bill provided that the losers to any claim pay the attorney's fee of the winner. It applied to all of the fees in the case, at least as to that claim and was not tied to any offer whatsoever. Then we had the modest improvement by the gentleman from Virginia, the famous Goodlatte amendment, which made the bill less worse. It adopted a rule 68 type settlement offer. The loser pays the winners' fees after the date of an offer, and the losing means not doing better than the offer. The award is limited as in the original bill to the plaintiff's own attorney fees, and we are in a real roll of the dice in terms of whether a person can make an that plaintiffs' lawyers and defendants' lawyers know how these cases are going to come out, which in many instances, particularly if the case is not an open and shut one, is the last thing that any of the parties knows. It is an improvement over the original bill. Now I am told by the gentleman from Pennsylvania [Mr. Gekas] to look to my own State for the Michigan-type awards where they split it down the middle and do not get into the crap shooting deal of who made the right offer at the right time so that they would have less attorney's fees to pay. What we have is an unlevel playing field where the party with more wealth can engage in pursuing a contest against the party with less wealth, no matter how meritorious their claim might be to bring this matter forward and it puts plaintiffs at peril, it puts plaintiffs at peril. It jeopardizes the civil adversarial process that we have honored for so long. This is yet another provision within the contract with corporate America that we are so anxious to have raised at this time. I will tell Members one other thing. This is going to jeopardize civil rights lawsuits, and there has been very little said about that at this point, but it is very, very, important that we understand that rule XI is going to impact upon the 1983 Federal rule. I just want my colleagues to know that the critics are claiming that the infamous 1983 amendment to the Federal Rules of Civil Procedure has turned into a tool for judges and defendants to punish those who pursue unpopular causes of action. Two recent cases show how this can happen, and a lawyer may be litigating at his or her own peril when they are suing the government inside the Federal court, according to some of the lawyers that have been bringing civil rights cases for a lot of time. It is inhibiting civil rights cases which ought to be a new cause for concern to many of us in this Chamber who remember with what difficulty and what great sacrifice we were able to bring civil rights suits to litigation in the first place. Actions under civil rights based on gender, race or religious freedom could be made infinitely more complex to bring and could further inhibit attorneys representing plaintiffs in this very, very important area of Federal law. I urge my colleague to please examine this fairly. This is not a matter of being a Republican or Democrat, this is a matter of how the judicial system will work for ordinary people in America. I say the time has finally come in this contract for us to do something for the working people, for the people who will be put in peril in having to bring these suits under the strictures that would now require them to mortgage their home, spend their children's college fees or to make outrageous loans in pursuit of what they consider to be a fair claim. Please let us examine and turn back the bill and the premises underlying H.R. 988. Mr. Chairman, I yield back the balance of my time.

Mr. CONYERS. May I respond to my colleague on the Committee on the Judiciary by saying that there are relatively rare instances where a defense counsel is paid on a contingency basis except that the way that they are paid is contingent upon an outcome as well. So in the larger sense, I want to just make sure that we have everybody wearing the same restriction, to the extent that that is possible. By the way, I want to commend the gentleman, I understand that civil rights litigation is excluded from this provision. I think that is a very thoughtful provision. I would hope that the gentleman would accept this perfecting amendment.

Mr. CONYERS. Mr. Chairman, I yield 15 minutes to the gentleman from North Carolina [Mr. Watt].

Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, when the loser-pays provision was unveiled, it was part of the controversial Contract With America. Now we know that H.R. 988 is really part of the Republican majority's contract with corporate America. And reading the fine print of this provision makes clear that the average American citizen is not a party to the contract. This bill, and all of the other bills we debate this week on civil justice reform are drafted from a single point of view: the corporate defendant's. All these bills seek to cut out the plaintiffs' right to bring cases in the first place by either eliminating who you can sue, where you can sue, or how much you can receive in compensation for harm suffered. If this bill really strived in a neutral fashion to penalize frivolous lawsuits cases, no one in this Chamber would have any trouble supporting this proposition. But when the bill is clearly drafted to deter middle- income persons from pursuing reasonable claims in court and placing them at a severe disadvantage with risk-free parties, such as large corporations whose legal fees are normally deducted as a business expense, then I have great objection to this legislation. We are told that the motivation behind the loser-pays provision is the tremendous number of frivolous lawsuits filed every day in America. But the proponents offer no empirical data to support their claims. They did not in the committee, perhaps there will be some arriving here today. The so-called explosion in litigations throughout the 1980's and 1990's upon examination we find was brought by corporations suing other corporations or domestic relations suits, it was not an explosion of product liability actions or medical malpractice actions, or of tort actions in general. It is notable that the new majority of Republicans are eager to embrace the so-called English rule just as prominent voices in England are calling increasingly for the abandonment of the rule in that country itself. In a January 14 editorial, the conservative British magazine, The Economist, called for the abandonment of the rule because ``only the very wealthy can afford the costs and risks of most litigation'' under the English rule. I continue to quote, ``This offends one of the most basic principles of a free society: equality before the law.'' This comes from England, not from the United States. It is clear that the loser-pays provision in H.R. 988 fails to distinguish between frivolous cases and reasonable cases in which liability is closely contested, and thus will deter many, particularly middle-income citizens and small businesses, from pursuing reasonable claims for defenses. As one scholar has noted, for a middle-income litigant facing some possibility of an adverse fee shift, defeat may wipe him out financially. The threat of having to pay the other side's fee can loom so large to be intimidating in the mind of a person without considerable disposable assets that it deters the pursuit of even a fairly promising and substantial claim for defense. It is intimidating to have such a proposal now brought before the Congress to become part of our law. Middle-income parties and small businesses may have to place their very solvency on the line in order to pursue a meritorious claim. And frequently in tort cases we do not know what a meritorious claim is because the evidence might determine a case becoming a big winner or a total loser. The burden of proof in a civil case is preponderance of the evidence often described as the amount of evidence that shifts the scale, if even only slightly, from the point of balance. A middle- income plaintiff confronted with a written offer to settle under section 2 of this bill must settle at that point, must settle at that point unless he or she is willing to assume the risk of payment of the other side's attorney's fees, and for a middle-income plaintiff who would be financially ruined by such an award, the calculus becomes in effect whether it is reasonable beyond doubt that they will prevail. That is a pretty high standard, and it is notable that the States often referred to as the laboratories of democracy have not in any significant numbers perceived the English rule to be an appropriate measure for their court systems, nor do I. The Florida experience, in which doctors first demanded the English rule and then demanded that it be abolished, should be a reminder to us that unintended consequences often overtake the intended ones, particularly when we act hastily and without thoughtful deliberation. Mr. Chairman, I reserve the balance of my time.

Mr. CONYERS. Mr. Chairman, how much time remains on my side?

Mr. CONYERS. So would I, but that is not what is in the bill unfortunately. I quite agree. But why would we make this a more difficult lawsuit for a working person who thinks he might have a 70- percent chance than he already has? I mean, if it is a frivolous lawsuit, he is going to be subject to attorney fees under the present law.

Mr. CONYERS. I yield to the gentleman from New Jersey.

Mr. CONYERS. Mr. Chairman, I move to strike the requisite number of words, and I rise in opposition to the amendment. Mr. Chairman, this is the final insult upon those who may depend on attorneys with contingency fees, who may not be able to afford an attorney, and we are now saying that somehow we have got to regulate the relationship between a plaintiff and his or her attorney. We are now into wage and price controls. What we are trying to do now is unilaterally tell plaintiffs that we are now going to have not through the rules of procedure that control the conference, the judicial conference, the Supreme Court where these kind of rules normally travel and then come to the Congress for disposition, we are now ruling on the floor how we are going to deal with these kinds of questions. And I think that this is a very, very discouraging circumstance for plaintiffs' attorneys to now be prescribed what they will get regardless of what the contract between the plaintiff and his attorney may be.

Mr. CONYERS. I yield to the gentleman from Texas.

Mr. CONYERS. I yield to the gentleman from Virginia.

Mr. CONYERS. I yield to the gentleman from Texas.

Mr. CONYERS. Mr. Chairman, will the gentleman yield?

Mr. CONYERS. I say to the gentleman, ``Mr. Cox, this issue didn't come up before our Committee on the Judiciary, and if there are as many good arguments as you suggest there are, couldn't we take this back? Chairman Hyde would be, I'm sure, willing to hold hearings on it. But here we are regulating an incredibly important matter, normally one that's left to the Judicial Conference, and the Supreme Court, and then to the Congress, and here tonight late, rather late in hour, we're going to just decide to alter this subject matter.'' Mr. Chairman, I would hope that we can send it, if we reject the amendment, we can send it back to----

Mr. CONYERS. The base underlying the bill is worse than that English rule, because at least the English rule let people who had lawyers appointed be free of being assessed costs. This rule does not take that into consideration. I urge the Berman amendment be agreed to.

Mr. CONYERS. I thank the gentleman for yielding to me. Does not the gentleman concede that this moves the measure out of the draconian nature of punishing people for bringing lawsuits to dealing with lawsuits that may in fact be frivolous, malicious, or fraudulent? Is that not a good thing?