T. Gorton

Mr. GORTON

Mr. GORTON. This Senator simply wanted to inquire about a time agreement.

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.

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 again we can bring Members here for votes, perhaps more than one vote, but not interrupt their schedules every hour or so.

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. GORTON. Mr. President, is there now an order in which the Senator from Tennessee [Mr. Thompson] is to offer the next amendment?

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 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.

Mr. GORTON. How much time remains to my side?

Mr. GORTON. Excuse me, will the Senator withhold?

Mr. GORTON. Was not the order for voting at 11:15?

Mr. GORTON. Mr. President, I do not think I am authorized to make that distinction at this point. The Senator 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. 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.

Mr. GORTON. Do I have a little bit more than a minute 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. GORTON. Madam President, has all time been utilized?

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.

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.

Mr. GORTON

Mr. GORTON. Yes, it is.

Mr. GORTON

Mr. GORTON. Mr. President, in executive session, I ask unanimous consent that the Senate immediately proceed to the consideration of Executive Calendar No. 106, Charles T. Manatt, to be a member of the Board of Directors for the Communications Satellite Corporation; further, that the nomination be confirmed, and the motion to reconsider be laid upon the table; that any statements relating to the nomination appear at the appropriate place in the Record; and that the President be immediately notified of the Senate's action.

Mr. GORTON

Mr. GORTON. Mr. President, I ask unanimous consent that the Senate proceed to the following treaty on the Executive Calendar, Calendar No. 2, Treaty Document No. 104-3, Extradition Treaty with Jordan.

Mr. GORTON. Mr. President, I further ask unanimous consent that the treaty be considered as having passed through its various parliamentary stages, up to and including the presentation of the resolution of ratification; that no amendments, conditions, declarations, provisos, reservations, or understandings be in order; that any statements be inserted in the Congressional Record as if read; that when the resolution of ratification is agreed to, the motion to reconsider be laid upon the table; that the President be notified of the Senate's action, and that following disposition of the treaty, the Senate return to legislative session.

Mr. GORTON

Mr. GORTON. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Senate Resolution 113, submitted earlier today by Senators Dole and Daschle, authorizing representation by Senate legal counsel.

Mr. GORTON. Mr. President, I ask unanimous consent that the resolution be considered and agreed to, the preamble be agreed to, and the motion to reconsider be laid upon the table, and that any statements relating to the resolution appear at the appropriate place in the Record.

Mr. GORTON

Mr. GORTON. Mr. President, I ask unanimous consent that the Subcommittee on Financial Institutions and Regulatory Relief, of the Committee on Banking, Housing, and Urban Affairs, be authorized to meet during the session of the Senate on Wednesday, May 3, 1995, to conduct a hearing on S. 650, ``The Economic Growth and Regulatory Paperwork Reduction Act.''

Mr. GORTON. Mr. President, I ask unanimous consent that the Committee on Finance be permitted to meet Wednesday, May 3, 1995, beginning at 9:30 a.m. in room SD-215, to conduct a hearing on the alternative minimum tax.

Mr. GORTON. Mr. President, I ask unanimous consent that the Committee on Labor and Human Resources be authorized to meet for a hearing on the nomination of Dr. Henry Foster during the session of the Senate on Wednesday, May 3, 1995, at 9:30 a.m.

Mr. GORTON

Mr. GORTON. I suggest the absence of a quorum.