Bob Goodlatte

Mr. GOODLATTE

Mr. GOODLATTE. Madam Speaker, I yield 3 minutes to the gentlewoman from New York (Mrs. Kelly).

Mr. GOODLATTE. Madam Speaker, I thank the gentleman for yielding and for his leadership on this issue. Madam Speaker, I rise in strong support of this constitutional amendment. Not all physical actions constitute free speech, and I am hardly alone in asserting that flag desecration is not free speech to be protected under the first amendment. I believe that the States and Federal Government do have the power to protect the flag against acts of desecration and disgrace, wrote former Chief Justice Earl Warren. This view is shared by many past and present Justices of the U.S. Supreme Court across the ideological spectrum, including Hugo Black, Abe Fortas, Byron White, John Paul Stevens, Sandra Day O'Connor, and current Chief Justice William Rehnquist. These eminent men and women have not taken a merely political stance based upon shallow assumptions. Rather, they rely upon well-established principles. ``Surely one of the high purposes of a democratic society'' wrote Rehnquist, ``is to legislate against conduct that is regarded as evil and profoundly offensive to the majority of people, whether it be murder, embezzlement, pollution or flag-burning.'' The flaw with the opposition's entire line of reasoning is their concept of free speech. It is not and never has been the right to do anything you want to do any time you want to do it. Rather, it is a precious liberty founded in law; a freedom preserved by respect for the rights of others. To say that society is not entitled to establish rules of behavior governing its members is either to abandon any meaningful definition of civilization, or to believe that civilization can survive without regard to the feelings or decent treatment of others. To burn a flag in front of a veteran or someone else who has put his or her life on the line for their country is a despicable act not deserving of protection. It is well established that certain types of speech may be prevented under certain circumstances, including lewd, obscene, profane, libelous, insulting or fighting words. When it comes to actions, the limits may be even broader. That is where I will vote to put flag desecration, where 48 State legislatures thought it was when they passed laws prohibiting it. This amendment does not in any way alter the first amendment. It simply corrects a misguided 5-to-4 court interpretation of that amendment. As Justice Rehnquist eloquently observed in concluding his dissent, ``Uncritical extension of constitutional protection to the burning of the flag risks the frustration of the very purpose for which organized governments are instituted. The Government may conscript men into the Armed Forces where they must fight and perhaps die for the flag, but the government may not prohibit the public burning of the banner under which they fight.'' Madam Speaker, I am proud to play a part in trying to right that wrong.

Mr. GOODLATTE. Madam Speaker, I yield 15 seconds to the gentleman from California (Mr. Cunningham).

Mr. GOODLATTE. Madam Speaker, I yield 3 minutes to the distinguished gentleman from North Carolina (Mr. Jones).

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, I rise today with my colleague from California, Congresswoman Zoe Lofgren, to introduce the Anti-Tampering Act Amendments of 1999. This important legislation, which I introduced last year and which garnered a majority vote in the House, will provide law enforcement the tools they need to combat the growing crime of altering or removing product identification codes from goods and packaging. This bill will also provide manufacturers and consumers with civil and criminal remedies to fight those counterfeiters and illicit distributors of goods with altered or removed product codes. Finally, this bill will protect consumers from the possible health risks that so often accompany tampered goods. Most of us think of UPC codes when we think of product identification codes--that block of black lines and numbers on the backs of cans and other containers. However, product ID codes are different than UPC codes. Product ID codes can include various combinations of letters, symbols, marks or dates that allow manufacturers to ``fingerprint'' each product with vital production data, including the batch number, the date and place of manufacture, and the expiration date. These codes also enable manufacturers to trace the date and destination of shipments, if needed. Product codes play a critical role in the regulation of goods and services. For example, when problems arise over drugs or medical devices regulated by the Food and Drug Administration, the product codes play a vital role in conducting successful recalls. Similarly, the Consumer Product Safety Commission and other regulators rely on product codes to conduct recalls of automobiles, dangerous toys and other items that pose safety hazards. Product codes are frequently used by law enforcement to conduct criminal investigations as well. These codes have been used to pinpoint the location and sometimes the identity of criminals. Recently, product codes aided in the investigation of terrorist acts, including the bombing of Olympic Park in Atlanta and the bombing of Pan Am Flight 103 over Lockerbie, Scotland. At the same time, manufacturers have limited weapons to prevent unscrupulous distributors from removing the coding to divert products to unauthorized retailers or place fake codes on counterfeit products. For example, one diverter placed genuine, but outdated, labels of brand-name baby formula on substandard baby formula and resold the product to retailers. Infants who were fed the formula suffered from rashes and seizures. We cannot take the chance of any baby being harmed by infant formula or any other product that might have been defaced, decoded or otherwise tempered with. FDA enforcement of current law has been vigilant and thorough, but this potentially serious problem must be dealt with even more effectively as counterfeiters and illicit distributors utilize the advanced technologies of the digital age in their crimes. Manufacturers have attempted, at great expense and with little success, to prevent decoding through new technologies designed to create ``invisible'' codes, incapable of detection or removal. However, decoders have proven to be equally diligent and sophisticated in their efforts to identify and defeat new coding techniques. We therefore must provide manufacturers with the appropriate legal tools to protect their coding systems in order for them to protect the health and safety of American consumers. Currently, federal law does not adequately address many of the common methods of decoding products and only applies to a limited category of consumer products, including pharmaceuticals, medical devices and specific foods. Moreover, current law only applies if the decoder exhibits criminal intent to harm the consumer. It does not address the vast majority of decoding cases which are motivated by economic considerations, but may ultimately result in harm to the consumer. My legislation will provide federal measures which will further discourage tampering and protect the ability of manufacturers to implement successful recalls and trace products when needed. It would prohibit the alteration or removal of product identification codes on goods or packaging for sale in interstate or foreign commerce, including those held in areas where decoding frequently occurs. The legislation will also prohibit goods that have undergone decoding from entering the country, prohibit the manufacture and distribution of devices primarily used to alter or remove product identification codes, and allow the seizure of decoded goods and decoding devices. It will require offenders to pay monetary damages and litigation costs, and treble damages in the event of repeat violations. The bill will also impose criminal sanctions, including fines and imprisonment for violators who are knowingly engaged in decoding violations. The bill would not require product codes, prevent decoding by authorized manufacturers, or prohibit decoding by consumers. It is a good approach designed to strengthen the tools of law enforcement, provide greater security for the manufacturers of products, and most importantly, provide consumers with improved safety from tampered or counterfeit goods. I urge my colleagues to join me in supporting passage of this bill, which will go a long way toward closing the final gap in federal law enforcement tools to protect consumers and the products they enjoy.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Speaker, today I rise on behalf on my colleagues Mr. Boucher, Mr. Bryant and Mr. Moran of Virginia to introduce important bipartisan legislation to correct a serious flaw in our federal jurisdiction statutes. In recent years, the number of class action filings has risen dramatically and the large majority of these cases are brought in state courts. A 1999 survey indicates that the number of state court class actions pending against surveyed companies has increased by 1,042 percent over the ten-year period 1988-1998. This increase in class action filings has been accompanied by a number of abuses of our judicial system. Interstate class actions are flooding into certain state courts because those courts tend to favor local lawyers in cases against out- of-state companies; however, state courts are often ill-equipped to handle such cases. Many state courts don't have either the support staff and other resources or the complex litigation experience to handle interstate class actions, which often involve thousands (and sometimes millions) of purported class members. In addition to forum-shopping, lawyers frequently exploit major loopholes in federal jurisdiction statutes to block the removal of class actions that belong in federal court. For example, plaintiffs' counsel may name parties that are not really relevant to the class claims in an effort to destroy diversity. In other cases, counsel may waive federal law claims or shave the amount of damages claimed to ensure that the action will remain in state court. Some state courts use very lax class certification criteria, making virtually any controversy subject to class action treatment and allowing state courts to hear purely interstate class actions. The result is that state courts are increasingly deciding out-of-state residents' claims against out-of-state companies under other states' laws. When state courts preside over class actions involving claims of residents of more than one state (especially nationwide class actions), they end up dictating the substantive laws of other states, sometimes over the protests of those other states. At present, our federal diversity jurisdiction statutes essentially provide that interstate disputes involving significant sums of money may be heard in a federal court. But because class actions (as we now know them) did not exist when those statutes were initially framed, class actions were omitted, leading to outrageous results. For example, under current law, a citizen of one state usually may bring in a federal court a simple $75,001 slip-and-fall action against a party from another state. But if a class of 25 million product owners living in all 50 states bring claims collectively worth $15 billion against the product manufacturer, that lawsuit usually must be heard in a state court. Our legislation offers a solution to class action abuse by making it easier for plaintiff class members and defendants to remove class actions to federal court, where cases involving multiple state laws are more appropriately heard. This legislation does not limit the ability of anyone to file a class action lawsuit. It does not change anybody's rights to recovery. It merely closes the loophole, allowing federal courts to hear big lawsuits involving truly interstate issues, while ensuring that purely local controversies remain in state courts. This is exactly what the framers of the Constitution had in mind when they established federal diversity jurisdiction. I urge my colleagues to support this important legislation.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Chairman, I yield myself 45 seconds. Mr. Chairman, in a moment I will yield the remaining time to the gentleman from Virginia (Mr. Davis), the sponsor of the legislation, to close our arguments against this substitute and for the bill. Before I do that, I think it is only appropriate that we recognize some people. I particularly want to commend the gentleman from Virginia (Mr. Davis), as well as the chief cosponsor of the legislation, the gentleman from Virginia (Mr. Moran), the gentleman from California (Mr. Dooley) and the gentleman from Alabama (Mr. Cramer) of the Democratic side, the gentleman from California (Mr. Dreier) and the gentleman from California (Mr. Cox) on our side of the aisle for their chief cosponsorship of this legislation. In addition, I want to recognize the staff, who worked very, very hard on this; particularly Diana Schacht of the Committee on the Judiciary; Ben Kline of my office; Trey Hardin, Amy Heering and Melissa Wojak from the office of the gentleman from Virginia (Mr. Davis); as well as John Flannery, from the office of the gentlewoman from California (Ms. Lofgren); Perry Apelbaum and Semora Ryder of the office of the gentleman from Michigan (Mr. Conyers); Ben Cohen of the office of the gentleman from California (Mr. Cox); and Brian Bieron, and Don Freeman. They all worked very hard. This has been done in the spirit of comity. Mr. Chairman, I yield the balance of my time to the gentleman from Virginia (Mr. Davis).

Mr. GOODLATTE. Mr. Chairman, I yield myself 45 seconds. I have some bad news for the gentleman from Massachusetts. The provisions of the Conyers-Boucher-Lofgren substitute related to economic losses are very similar. In fact, ours are more limited than theirs are with regard to that position. In addition, the White House in a letter that they submitted yesterday, signed by Bruce Lindsey and Gene Sperling, states, Many States have legal rules limiting the recovery of economic loss damages in certain tort lawsuits. These rules are designed to bar parties to contracts from avoiding contract limitations on liability by suing in tort. We would support statutory recognition of this rule as a way to limit frivolous Y2K claims, provided that the rule is limited appropriately so that it would not effectively prevent recovery in cases of fraud. Ours is more limited than theirs. Mr. Chairman, I yield 5 minutes to the gentleman from Virginia (Mr. Davis), the principal sponsor of this legislation and my good friend. (Mr. DAVIS of Virginia asked and was given permission to revise and extend his remarks.)

Mr. GOODLATTE. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from Florida (Mr. Stearns).

Mr. GOODLATTE. Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. Gary Miller). (Mr. GARY MILLER of California asked and was given permission to revise and extend his remarks.)

Mr. GOODLATTE. I thank the gentleman for yielding. My question is, the gentleman is not suggesting that the governor of Texas is opposed to this legislation, is he?

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

Mr. GOODLATTE. Mr. Chairman, I yield 3 minutes to the gentlewoman from Illinois (Mrs. Biggert). (Mrs. BIGGERT asked and was given permission to revise and extend her remarks.)

Mr. GOODLATTE. Mr. Chairman, I yield 30 seconds to the gentleman from Virginia (Mr. Davis), the author of the bill.

Mr. GOODLATTE. Mr. Chairman, I am pleased to yield 3 minutes to the gentleman from California (Mr. Royce).

Mr. GOODLATTE. Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. Dooley). (Mr. DOOLEY of California asked and was given permission to revise and extend his remarks.)

Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may consume. As we all know, the end of the millennium is rapidly approaching, and rather than looking ahead to the promise and possibility of the 21st century, Americans are approaching it with concern. They are fearful because January 1, 2000, will bring with it the Y2K computer bug, a result of the decision made in the 1960s by computer programmers to design software that recognized only the last two digits rather than the full four digits of dates in order to conserve precious computer memory. When the clock turns from December 31, 1999, to January 1, 2000, some computers will interpret ``00'' to mean that the date is 1900 rather than 2000. With dates being critical to almost every layer of our economy and across vast numbers of industries, systems that are noncompliant will disrupt the free flow of information that forms the underpinnings of our Nation's economy. Many Y2K computer failures could occur weeks and months before January 1, 2000, and the barrage of Y2K lawsuits has already begun. CNETnews.com has reported over 80 Y2K lawsuits already filed, with 790 demand letters for new Y2K suits issued. These legal obstacles are preventing good-faith efforts toward fixing Y2K computer problems. We are fighting the clock; we should not also be fighting an unnecessarily hostile legal environment. It has been estimated that Y2K litigation could cost $2 to $3 for every dollar spent on actually fixing the problem. Y2K litigation cost predictions range from $300 billion to $1 trillion, compared to just $15 billion for 1990's asbestos suits and $18.4 billion for Superfund suits. These enormous costs could cripple our high-tech sector, diverting billions into litigation that should go to work force training, research and innovation and global competition. Fear of lawsuits is stifling efforts to fix the Y2K problem. Corrective efforts by software engineers must be scrutinized and pre- approved by corporate legal divisions. Software consultants think twice before offering help for fear of incurring complete, joint and several, liability for systems they try to fix. Small business entrepreneurs face the impossible choice between spending funds for expensive Y2K fixes or saving cash for the potentially bankrupting litigation to come. The Y2K glitch is not a partisan issue. It is a problem that could impact all Americans. Congress must act to address the problems that are currently discouraging businesses from addressing the Y2K problem and that will ultimately harm consumers. The legislation we are considering today will continue the efforts which we initiated with the administration in the 105th Congress through the passage of the Year 2000 Information and Readiness Disclosure Act that furnished the first steps towards facilitating year 2000 remediation and testing. Mr. Chairman, H.R. 775 is designed to implement a reform framework that will encourage a fair, fast and predictable mechanism for both plaintiffs and defendants for resolving Y2K disputes, ensuring that litigation will become the avenue of last resort, rather than the first option for settling institutes. While it is estimated that American businesses have poured hundreds of billions of dollars into making the transaction to the year 2000, the simple reality is that some problems will go unresolved because of fear of litigation. A basic premise of the bill is that contracts between suppliers and users will be fully enforceable in a court of law. All economic losses suffered by an individual or business as a result of a year 2000 failure, provided that their duty to mitigate damages was fulfilled, will be compensable. Claims brought by individuals or businesses based on personal injury are outside the scope of this legislation. Further, the Act creates a pre-filing notification period intended to encourage potential plaintiffs and defendants to work together to reach a solution before they reach the courtroom. The pre-filing notification period requires potential plaintiffs to give written notice identifying their Y2K concerns and provide potential defendants with an opportunity to fix the Y2K problem outside of the courtroom. After receipt of this notice, the potential defendant would have 30 days to respond to the plaintiff stating what actions will be taken to fix the problem. At that point, the potential defendant has 60 days to remedy the problem. If the defendant fails to take responsibility for the failure at the end of the 30-day period, the potential plaintiff can file a Year 2000 action immediately. If the injured party is not satisfied once the 60 days have passed, he or she still retains the right to file a lawsuit. There are also provisions encouraging alternative dispute resolution and offers in compromise language for nonclass-action suits. As a result, we expect that there will be more attention given to Y2K remediation and an elimination of many Y2K lawsuits. Also included are provisions that apply a proportionate liability standard to damages caused by multiple actors, some of whom may not necessarily be parties to a Year 2000 action. A defendant found to be only 5 percent liable in causing a Year 2000 problem would only be responsible for 5 percent of the damages, not 100 percent liable. Furthermore, the legislation minimizes the opportunities for those who may try to exploit the unknown value of potential Y2K failures and pursue litigation as a first resort rather than permit the parties to resolve problems. This bill contains provisions that will make sure that businesses are confident that they can spend their dollars fixing the Y2K problem rather than reserving those dollars for costly lawsuits that will increase costs for consumers, push small innovative businesses into extinction, and endanger, and in some instances eliminate, many American jobs. The bill grants original jurisdiction to Federal District Courts for any Year 2000 class action where certain diversity requirements are met. Punitive damages in a Year 2000 action are capped at $250,000, or three times the amount of actual damages, whichever is greater, except for businesses with fewer than 25 employees, including State and local government units or individuals whose net worth is no greater than $500,000, wherein punitive damages are capped at the lesser of $250,000, or three times the amount of actual damages. Since 1996, there have been more than 50 bipartisan hearings in the Congress examining a wide-ranging array of issues that are directly related to the Y2K challenge that is facing our global economy. We have listened to computer users and to industry, and what we have consistently heard is that small and large businesses are eager to solve the Y2K problem. Yet many are not doing so primarily because of the fear of liability and lawsuits. The potential for excessive litigation, and the negative impact on targeted industries are already diverting precious resources that could otherwise be used to help fix the Y2K problem. My substitute aims to eliminate those fears and hasten the repair of Y2K problems while we still have time to resolve them. I should say the bill that is now on the floor. I urge my colleagues to support this important legislation. Mr. Chairman, I provide for the Record a letter dated May 10, 1999, to the chairman of the Committee on the Judiciary from the chairman of the Committee on Commerce regarding H.R. 775: House of Representatives, Committee on Commerce, Washington, DC, May 10, 1999. Hon. Henry J. Hyde, Chairman, Committee on the Judiciary, Washington, DC. Dear Henry: I am writing with regard to H.R. 775, the Year 2000 Readiness and Responsibility Act. Although the Committee on Commerce did not receive a named additional referral of H.R. 775 upon introduction, the Speaker has nevertheless granted my Committee a sequential referral of the bill. This sequential referral results from provisions in the introduced legislation within the Commerce Committee's jurisdiction pursuant to Rule X of the Rules of the House of Representatives. As you know, during the markup of H.R. 775, your Committee adopted amendments which eliminate the Commerce Committee's jurisdictional concerns over these provisions. Because of the importance of this legislation, I recognize your desire to bring it before the House in an expeditious manner. I will therefore agree to discharge the Commerce Committee from further consideration of H.R. 775. By agreeing to waive its consideration of the bill, however, the Commerce Committee does not waive its jurisdiction over H.R. 775. In addition, the Commerce Committee reserves its right to seek conferees during any House-Senate conference that may be convened on Y2K legislation. I ask for your commitment to support any such request with respect to matters within the Rule X jurisdiction of the Commerce Committee. I request that a copy of this letter be included as part of the record during consideration of the legislation on the House floor. Sincerely, Tom Bliley, Chairman. Mr. Chairman, I reserve the balance of my time.

Mr. GOODLATTE. Mr. Chairman, I thank the gentlewoman for yielding. I commend her for her amendment, which I think is a positive addition to the legislation. I support it. We will accept the amendment.

Mr. GOODLATTE. As a part of the self-executing rule that was just passed by this House those provisions were taken out.

Mr. GOODLATTE. Maybe that would have changed the gentleman from Massachusetts' vote on the rule, had he known that.

Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I urge my colleagues to support this important legislation. We have the reforms in it that were contained in the Contract with America 4 years ago, including caps on punitive damages so that no one unelected jury in some part of the country can give a multi-million-dollar award that can wipe out a business, change national public policy without the Congress or other State legislative bodies having the ability to do that. We limit the effect of joint and several liability by making it proportionate liability so that if one is 1 percent at fault they are not held responsible for a hundred percent of the damages in a case which is under current law. We change that so that if one is 1 percent at fault they only pay 1 percent of the liability. In addition, we have reforms here of class action lawsuits so that one cannot go forum shopping in a particular State, to a particular county, to a particular court, to a particular judge that may be favorable to bringing what is otherwise a frivolous class action lawsuit. There are States in this country that have certified a great many nationwide class action lawsuits; in fact, more than the entire Federal judiciary has certified in some years, and that reform is badly needed. This legislation encourages parties to get together, work out their problems, solve the Y2K problem without first filing a lawsuit; and they do that by encouraging alternative dispute resolution. We do that by discouraging the filing of frivolous lawsuits because, if we do that, they may wind up paying some of their opposing side's attorney fees if their suit is deemed nonmeritorious. And I encourage my colleagues to support this legislation and to oppose the amendments that are going to be offered by the gentleman from New York (Mr. Nadler) and the gentleman from Virginia (Mr. Scott) which we will address shortly.

Mr. GOODLATTE. Mr. Chairman, will the gentlewoman yield?

Mr. GOODLATTE. Mr. Chairman, I yield 3 minutes to the gentleman from Virginia (Mr. Davis).

Mr. GOODLATTE. Mr. Chairman I yield myself the balance of my time. Mr. Chairman, it is the consumers who benefit from a cap on punitive damages. A $580 million punitive damage award against the Whirlpool Corporation that I cited earlier reported in the May 11, that is yesterday's, edition to the Wall Street Journal and Washington Times gets passed on to every single consumer who buys products manufactured by the Whirlpool Corporation, washers and dryers and dishwashers and refrigerators and freezers and everything else that they manufacture. All of them have to pay more when one unelected jury in the State of Alabama gives a $580 million punitive damage award. The company has to spread that cost over every single item that they sell to consumers. Punitive damages represent a large and growing percentage of total damages awarded in all financial injury verdicts, rising from 44 percent to 59 percent of total awards between 1985 and 1989 and 1990 to 1994. In Alabama, the figure was 82 percent. In the jurisdictions studied for 1985 to 1994, the total amount awarded for punitive damages nearly doubled, from $1.2 billion in 1985 to 1989 to $2.3 billion in 1990 to 1994. This does not relieve any plaintiff of any injury. It is simply a windfall. We do need to deter future action of bad actors. Y2K is a particularly good area to have caps on punitive damages because of the fact that there is not going to be, in most instances, any future action related to Y2K cases because, once we get passed next year, there are not going to be any more new actions or new suits related to this. I urge my colleagues to oppose this amendment.

Mr. GOODLATTE. Mr. Chairman, I demand a recorded vote, and pending that, I make the point of order that a quorum is not present.