John Conyers

Mr. CONYERS

Mr. CONYERS. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from Massachusetts (Mr. Delahunt). No one has worked harder in our Committee on the Judiciary than the gentleman.

Mr. CONYERS. Mr. Chairman, I yield myself 30 seconds. Mr. Chairman, the gentleman from Virginia (Mr. Davis) will be delighted now to find out how much the Lofgren-Conyers-Boucher substitute leaves in from the original bill. One, we encourage mediation with a 90-day cooling off period. That is in the bill. We help eliminate frivolous lawsuits by special pleading requirements in mitigation of damages. That is in the bill. We increase legal certainty for Y2K defendants, contracts fully enforceable, preserving defensive impossibility and commercial impracticability. So relax. This is good material from the bill. Mr. Chairman, I yield 3 minutes to the gentleman from Massachusetts (Mr. Frank).

Mr. CONYERS. Mr. Chairman, I yield 5 minutes to the gentleman from Virginia (Mr. Boucher), who has worked very diligently on this alternative substitute.

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

Mr. CONYERS. Mr. Chairman, I yield such time as she may consume to the gentlewoman from California (Ms. Lofgren) to speak on behalf of this very important substitute.

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

Mr. CONYERS. Mr. Chairman, I yield myself 30 seconds. This question of fraud has to be looked at a lot more carefully than the gentleman from Virginia (Mr. Goodlatte) has put forward. The pleadings around fraud have been established over generations of litigation in the American court system. The requirement for particularity that he finds missing in our bill is missing because that is the state of the law. But we added materiality. The base bill talks about fraud. Mr. Chairman, I yield 3 minutes to the gentlewoman from Texas (Ms. Jackson-Lee). (Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. CONYERS. Mr. Chairman, I yield 1 minute to the gentlewoman from California (Ms. Lofgren), the major author of our substitute.

Mr. CONYERS. Mr. Chairman, I am pleased to yield 4 minutes to the gentleman from Michigan (Mr. Bonior), the minority whip.

Mr. CONYERS. Mr. Chairman, I demand a recorded vote.

Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume. This is not a matter about what is going to happen on New Year's Eve and it is not a matter of what will happen to trial lawyers. I am sure somebody here besides me in the Hall must know that punitive damages are regularly set aside by judges who object to large amounts. The high-tech community itself has made it clear that they are interested in a bill that specifically addresses liability issues unique to Y2K, but they are not interested in a far-reaching tort reform proposal. They want a narrowly tailored bill that will address the problem of frivolous lawsuits. We do that. The base bill, H.R. 775, goes well beyond reasonable reform by failing to protect consumers. They shield grossly negligent defenders and they harm innocent plaintiffs. Instead of creating a positive incentive, this creates new reasons to avoid remediation. H.R. 775 should not be supported by ourselves and it will not be signed by the President. We have the real deal. We have the way out for both the high-tech community and those who have been unfortunately affected by it. The Y2K problem, as the gentlewoman from California (Ms. Lofgren) stated earlier, is a legitimate issue, but has, in my judgment, been turned into a political tool. It is unfortunate that the information technology community, with its legitimate concerns, are being used as pawns in this political game. The base bill goes well beyond reasonable reform. It is unprecedented and unjustified and is also going nowhere. So vote for the substitute for a realistic response to a potentially serious problem without overreaching. Mr. Chairman, I urge each of my colleagues to join me in voting for this good faith effort to deal with the Y2K problem. Support the Lofgren-Conyers-Boucher substitute. Mr. Chairman, I yield back the balance of my time.

Mr. CONYERS. Mr. Speaker, this motion to recommit provides for jurisdiction, service of process and discovery in Y2K actions brought against corporate defendants located outside of the United States. It is based on the same amendment I offered on the product liability bill in another Congress which twice passed the House by overwhelming bipartisan votes. Currently, my amendment responds to a couple of problems. It is inordinately difficult for United States citizens and businesses to bring legal actions against foreign defendants to obtain compensation for harm inside the United States. We correct it with this motion to recommit. We respond to the problem, first, by creating a nationwide context test whenever a foreign defendant is sued in Federal court if it knew or reasonably should have known that its conduct would cause harm in this country. This type test has repeatedly been upheld by the Federal courts and is a part of the law in the Foreign Sovereign Immunities Act. The second thing the amendment would do is provide for worldwide service of process. Presently, a major problem with service is that each of our States requires different and varying methods of process. Uniform worldwide service of process will fix this problem and is consistent with other Federal laws, including the Clayton Act and securities laws, permitting service wherever the defendant may be found. Third, my amendment ensures that the foreign persons are subject to the same rules of discovery as our own citizens and corporations when they are sued for wrongdoing. This is a particular problem in the context of Y2K litigation. In the late 1980's and early 1990's, the percentage of foreign-made computer components and U.S. computers was as high as 65 percent. The most recent information supplied by the Commerce Department predicts Asian computer suppliers have now announced their intentions to wrest control away from U.S. rivals and pose a challenge in high-performance computer systems and PCs. If they succeed, the very least we can do is make sure they are subject to the rules of our legal system. So, with a record trade deficit last year of $165 billion, a deficit last month of $20 billion, our Nation can no longer afford to favor foreign defendants in court. Please join us on both sides of the aisle in voting for this important amendment. Mr. Speaker, I yield back the balance of my time.

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

Mr. CONYERS. Mr. Speaker, this is already the law. They do not have to support the amendment. This is an existing law in the United States Code Annotated as we speak.

Mr. CONYERS. The gentleman from Virginia is welcome.

Mr. CONYERS. Mr. Speaker, I demand a recorded vote.

Mr. CONYERS. Mr. Chairman, this from the San Jose Mercury News: Y2K bills are buggy themselves . . . the legislation is still evolving, but the trend so far is that Congress is slighting consumers of hardware and software in its desire to protect the high-tech industry. The New York Times: . . . the legislation is misguided and potentially unfair. It could even lessen the incentive for corrective action . . . the government should not use the Millenium bug to overturn longstanding liability practices. A potential crisis is no time to abrogate legal rights. The Washington Post: The fear of significant liability is a powerful incentive for companies to make sure that their products are Y2K compliant and that they can meet the terms of the contracts that they have entered. So this substitute, Mr. Chairman, seeks to repair the tremendously one-sided advantages that are granted in Y2K. I believe that many responsible computer organizations will have no problem whatsoever working with the Lofgren-Conyers-Boucher substitute. In addition, this substitute increases legal certainty for the defendants in Y2K by specifying that their contracts shall be fully enforceable, by preserving their ability to assert the defense of impossibility or commercial impracticability. The substitute also helps to ensure that defendants who are responsible for only a small portion of their damages are not held responsible for damages caused by other tort feasors. So here we have it. Do we really want to go down in flames by resisting a well-crafted substitute and risk a veto, or do we want to accept something that has many of the elements of the original bill, the underlying bill in it? I think the smarter, wiser, more correct legislative course is to follow the substitute, and let us all work together and get this through the Senate and signed by the President into law. Mr. Chairman, I reserve the balance of my time.

Mr. CONYERS

Mr. CONYERS. Mr. Chairman, I yield myself the balance of my time. Mr. Chairman, this is puzzling. It is one thing to tighten the bankruptcy rules on only the parties that are involved that are borrowing from the lender, but where the changes will harm innocent third parties, the employees and their families, I believe we have an obligation to give the business a reasonable chance to reorganize. The single-asset real estate provision, connected with the five-job requirement that the judge would look at, suppose it was the gentleman's job, I say to the gentleman from Pennsylvania (Mr. Gekas), one of the five. It would not be hard for a referee in bankruptcy or a judge in bankruptcy to make the decision. But what we are doing is saying that every single real estate concern, no matter how large its operation or how many jobs are at stake, be subject to expedited liquidation and bankruptcy. That is, within 90 days after filing, they can be subject to foreclosure by their creditors. Give us a break. All we are doing is giving additional discretion to the judge. I urge the Members on both sides of the aisle to support this modest amendment. Mr. Chairman I yield the balance of my time to the gentleman from New York (Mr. Nadler).

Mr. CONYERS. Mr. Chairman, under those circumstances, we approve of the amendment; and I yield back the balance of my time.

Mr. CONYERS. Mr. Chairman, I yield 4 minutes to the gentleman from New York (Mr. Nadler).

Mr. CONYERS. Mr. Chairman, I first want to commend the gentleman from New York (Mr. Nadler) who has worked indefatigably on this bill. No one has put in more time than him, and as a result we have crafted a democratic substitute that I am proud to urge my colleagues' consideration of. This amendment retains the vast majority of the provisions in the underlying bill, but at the same time responds to the most egregious and one-sided provision in the legislation. In addition to fixing the problems with the use of IRS expense standards, which is an anathema, and the bill's impact on jobs also would be corrected, the substitute also eliminates many of the problems the bill creates for single mothers and their children as well as the problem of credit card abuse. So here we are. Here is an amendment that deals with the IRS expense standards, the small business loss of jobs, the problems created for single mothers and their children and the problem of credit card abuse. These four items are so critical to any kind of reasonable bill. As the bill presently stands, it is a disaster for single mothers and their children. There has been a lot of conversation that it is not, but that is the bare truth revealed now at the end of a day's debate. In addition to the overall impact of the bill on women struggling to raise families and make ends meet, the legislation will have a particularly harsh impact on the payment of alimony and child support. The problem arises from the fact that bankruptcy and insolvency are, by definition, a zero sum gain. By design, this bill will increase the amount of funds being paid to unsecured creditors, and it therefore comes as no surprise that such payments will often come at the expense of other less aggressive creditors, those without lawyers such as women and children owed child support or alimony. This problem is by no means insignificant given that an estimated 243,000 maybe to 325,000 bankruptcy cases per year involve child support and alimony orders. And so, Mr. Chairman, for these Members who want to support real and balanced bankruptcy reform without unnecessarily piling on the middle class, the mothers and their children and without giving the credit industry a complete pass, I urge a yes vote for the democratic substitute now being debated.

Mr. CONYERS. Mr. Chairman, I yield 30 seconds to the gentleman from Illinois.

Mr. CONYERS. Mr. Chairman, I yield myself 2 minutes. Mr. Chairman, first I would point out to the gentleman that the court would merely disallow those claims that the gentleman rattled off from the newspaper. Just because someone files them does not mean they are going to get them. I cannot think of a Federal bankruptcy court that would allow that sort of thing. Mr. Chairman, it is no answer to assert that ``glitches'', so-called, can be resolved through the bill's allowance for extraordinary circumstances, that has been raised more than once here, because establishing that a particular expense is extraordinary is neither simple nor cost free. These circumstances can only be established on a motion to the court prepared by legal counsel. We are talking about bankrupts. The motion must be detailed, documented and subject to creditor challenge. Moreover, the burden of proof lies with the debtor in establishing extraordinary circumstances. So if the debtor's motion fails, he is then subject to paying the creditor's fees and costs. Collectively, these risks provide a tremendous disincentive for debtors to claim extraordinary circumstances. To add insult to injury, the bill does not even provide for the deduction of the legal expenses needed to establish extraordinary circumstances. The IRS standards should offend us all, every Member of this body. They have been rejected by us, abandoned by the IRS, and, yet, the credit card companies would have us apply them in bankruptcy. We, who are so strongly opposed to abusive IRS collection tactics in the income tax context, cannot be supportive of incorporating these same standards into bankruptcy law. Mr. Chairman, this amendment goes to the heart of my concerns about the bill. If it is adopted, we may have a chance. I urge Members to give it their unfettered support.

Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume. (Mr. CONYERS asked and was given permission to revise and extend his remarks.)

Mr. CONYERS. Mr. Chairman, I rise in opposition to the amendment, and I yield myself such time as I may consume. Mr. Chairman, I think that we can accept this amendment. This is a provision that we think will be helpful. We want to make sure that, whatever fees, that that would come out of the debtor's assets so that that would not be something else he would have to confront. Mr. Chairman, I yield to the gentleman from Kentucky (Mr. Whitfield).