Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, as an original cosponsor of S. 1379, the Nazi War Crimes Disclosure Act, I am very pleased that the Senate is about to pass this important piece of legislation. I congratulate Senator DeWine and Senator Leahy for their bipartisan effort in drafting a bill which addresses the legitimate concerns of federal agencies which will be subject to this legislation, while at the same time ensuring that the original intent and purpose of the law is carried out. Passage of the Nazi War Crimes Disclosure Act will facilitate the speedy gathering and release of documents in the possession of the government which relate to the persecution of, and theft of assets from, the many millions of victims of Nazi atrocities. Our government has an obligation to locate, and make public, documents in the government's possession which shed light on Nazi war criminals, their nefarious allies, and their crimes. Over the fifty- three years since the defeat of Germany and its cohorts, and the discovery of the atrocities committed in the name of Naziism, we have learned a great deal about the organization, operation, and financial structure of that regime. However, recent revelations concerning the acts of certain Swiss banks in the laundering of Holocaust victims' assets show us how much more there is to learn. By passing this bill, we are providing a means of access to information that will be of invaluable assistance in providing answers to those seeking to learn about the past. But just as importantly, by studying that information and learning the lessons of history, we can help ensure that such actions will never be repeated in the future.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce some housekeeping amendments to the Trademark Act. This bill makes a number of technical corrections to the Trademark Act which will clean up the code and make explicit some of the current practices of the Patent and Trademark Office with respect to the trademark protection of matter that is wholly functional. I take it as my duty as Chairman of the Committee on the Judiciary to try to ensure that the U.S. Code is clear, useful, and up-to-date. These housekeeping amendments will help clarify the law in useful ways, and I hope my colleagues will support this bill. For the reference of my colleagues, I ask unanimous consent that a copy of the bill and a section-by-section analysis be printed in the Record.

Mr. HATCH. Mr. President, I rise to introduce the Trademark Law Treaty Implementation Act of 1998. This legislation makes necessary changes in our domestic trademark law and procedures to ensure that we are in compliance when we ratify the treaty, which appears more likely this year than previously. The Trademark Law Treaty was done and signed at Geneva in October of 1994, and entered into force in 1996. The obligations under the Trademark Law Treaty legislation will require some relatively minor changes to U.S. trademark practice, but will bring significant improvements in the trademark practices of a number of important countries around the world in which U.S. trademark owners seek protection. The required changes will eliminate complexities and simplify the process of obtaining, renewing, and managing trademark assets for American firms marketing their products and services around the world. Countries around the world have a number of varying requirements for filing trademark applications, effecting changes of ownership of trademark registrations, and other procedures associated with managing trademark assets. These differences cause considerable aggravation and expense to trademark owners seeking to protect their marks around the world. Many of these procedures and requirements imposed by foreign countries are non-substantive and highly technical. In addition, many of these requirements in the various procedures of foreign trademark offices impose very significant cost burdens, both in official fees to be paid to local trademark offices, as well as agent's fees for fulfilling the various requirements. For example, many countries require that signatures on applications for powers of attorney be notarized, authenticated, and legalized. This very expensive and time consuming procedure is prohibited under the Treaty in all cases except where the registrant is surrendering a registration. The Treaty eliminates these conflicting and expensive practices by setting forth a list of maximum requirements which a member State can impose for various actions. Specifically, the Treaty sets forth maximum requirements for: the contents of a trademark application; the content of a power of attorney; the elements necessary for an application to receive a filing date; a request to record a change in the name or address of a trademark owner; and, a request to renew a trademark registration. These requirements are implemented through the adoption of model forms for trademark applicants and owners to use which must be accepted by every member State. While a member need not impose all of the requirements or elements listed, it cannot demand the inclusion of any additional requirements or elements in respect of a particular action. There are several other guarantees mandated by the Treaty that will benefit trademark applicants and owners. Under the Treaty, countries will have to register and protect service marks, as well as goods marks, an important consideration to the U.S. service economy, which has many valuable service marks, such as Marriott and American Airlines. Applicants will be able to file for protection under multiple classifications for goods and services, which will mature into multiple class registrations. No longer will trademark owners be forced to make a separate filing for each power of attorney; one general power will suffice. Member countries are precluded from considering goods or services as being similar to each other simply on the ground that they appear in the same class of the NICE classification. Moreover, a request to change the name or address of a trademark owner or a request to correct a mistake in a trademark registration may not be refused without giving the trademark owner an opportunity to comment. As I indicated, the Trademark Law Treaty Implementation Act of 1998 makes only minor changes in our domestic trademark law. These changes include: the elimination of the requirement for a statement of the manner in which a mark is used or intended to be used in connection with the goods or services identified in the application; the elimination of the requirement that the applicant verify an application; the adoption of a grace period of at least six months for the filing of a renewal application; the elimination of a declaration or evidence concerning the use of a mark in connection with the filing of a renewal application; and, the elimination of a requirement to file a copy of the actual assignment document as a condition for recording the assignment of a trademark registration. This bill will also harmonize and simplify the procedural requirements under the Trademark Act of 1946. Sections 8 and 9 will be amended to establish a similar period of one year prior to the end of the applicable time period, along with a grace period of six months after that period, for filing both affidavits of use and renewal applications. While it separates the ten-year affidavit of use from the renewal application, as required by the Treaty, the bill permits them both to be filed during the same time period which will benefit trademark applicants. The Trademark Law Treaty Implementation Act of 1998 will help American companies protect their trademark assets in markets around the world thereby facilitating their ability to compete. At the same time, the changes it makes in U.S. trademark law are made in a manner that will assist American trademark owners protect their marks in this country. Mr. President, I hope my colleagues will support this legislation which is so important to American trademark owners. I ask unanimous consent that the text of the bill and an explanatory section by section analysis be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I rise to introduce the Trademark Law Treaty Implementation Act of 1998. This legislation makes necessary changes in our domestic trademark law and procedures to ensure that we are in compliance when we ratify the treaty, which appears more likely this year than previously. The Trademark Law Treaty was done and signed at Geneva in October of 1994, and entered into force in 1996. The obligations under the Trademark Law Treaty legislation will require some relatively minor changes to U.S. trademark practice, but will bring significant improvements in the trademark practices of a number of important countries around the world in which U.S. trademark owners seek protection. The required changes will eliminate complexities and simplify the process of obtaining, renewing, and managing trademark assets for American firms marketing their products and services around the world. Countries around the world have a number of varying requirements for filing trademark applications, effecting changes of ownership of trademark registrations, and other procedures associated with managing trademark assets. These differences cause considerable aggravation and expense to trademark owners seeking to protect their marks around the world. Many of these procedures and requirements imposed by foreign countries are non-substantive and highly technical. In addition, many of these requirements in the various procedures of foreign trademark offices impose very significant cost burdens, both in official fees to be paid to local trademark offices, as well as agent's fees for fulfilling the various requirements. For example, many countries require that signatures on applications for powers of attorney be notarized, authenticated, and legalized. This very expensive and time consuming procedure is prohibited under the Treaty in all cases except where the registrant is surrendering a registration. The Treaty eliminates these conflicting and expensive practices by setting forth a list of maximum requirements which a member State can impose for various actions. Specifically, the Treaty sets forth maximum requirements for: the contents of a trademark application; the content of a power of attorney; the elements necessary for an application to receive a filing date; a request to record a change in the name or address of a trademark owner; and, a request to renew a trademark registration. These requirements are implemented through the adoption of model forms for trademark applicants and owners to use which must be accepted by every member State. While a member need not impose all of the requirements or elements listed, it cannot demand the inclusion of any additional requirements or elements in respect of a particular action. There are several other guarantees mandated by the Treaty that will benefit trademark applicants and owners. Under the Treaty, countries will have to register and protect service marks, as well as goods marks, an important consideration to the U.S. service economy, which has many valuable service marks, such as Marriott and American Airlines. Applicants will be able to file for protection under multiple classifications for goods and services, which will mature into multiple class registrations. No longer will trademark owners be forced to make a separate filing for each power of attorney; one general power will suffice. Member countries are precluded from considering goods or services as being similar to each other simply on the ground that they appear in the same class of the NICE classification. Moreover, a request to change the name or address of a trademark owner or a request to correct a mistake in a trademark registration may not be refused without giving the trademark owner an opportunity to comment. As I indicated, the Trademark Law Treaty Implementation Act of 1998 makes only minor changes in our domestic trademark law. These changes include: the elimination of the requirement for a statement of the manner in which a mark is used or intended to be used in connection with the goods or services identified in the application; the elimination of the requirement that the applicant verify an application; the adoption of a grace period of at least six months for the filing of a renewal application; the elimination of a declaration or evidence concerning the use of a mark in connection with the filing of a renewal application; and, the elimination of a requirement to file a copy of the actual assignment document as a condition for recording the assignment of a trademark registration. This bill will also harmonize and simplify the procedural requirements under the Trademark Act of 1946. Sections 8 and 9 will be amended to establish a similar period of one year prior to the end of the applicable time period, along with a grace period of six months after that period, for filing both affidavits of use and renewal applications. While it separates the ten-year affidavit of use from the renewal application, as required by the Treaty, the bill permits them both to be filed during the same time period which will benefit trademark applicants. The Trademark Law Treaty Implementation Act of 1998 will help American companies protect their trademark assets in markets around the world thereby facilitating their ability to compete. At the same time, the changes it makes in U.S. trademark law are made in a manner that will assist American trademark owners protect their marks in this country. Mr. President, I hope my colleagues will support this legislation which is so important to American trademark owners. I ask unanimous consent that the text of the bill and an explanatory section by section analysis be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce some housekeeping amendments to the Trademark Act. This bill makes a number of technical corrections to the Trademark Act which will clean up the code and make explicit some of the current practices of the Patent and Trademark Office with respect to the trademark protection of matter that is wholly functional. I take it as my duty as Chairman of the Committee on the Judiciary to try to ensure that the U.S. Code is clear, useful, and up-to-date. These housekeeping amendments will help clarify the law in useful ways, and I hope my colleagues will support this bill. For the reference of my colleagues, I ask unanimous consent that a copy of the bill and a section-by-section analysis be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, on August 31, 1995, some 1019 days ago, the head of the Department of Justice's Criminal Division, Assistant Attorney General Jo Ann Harris, resigned. Since that time, the Department of Justice has lacked a confirmed leader for this critical post. Indeed, the Acting Assistant Attorney General has had to recuse himself from one of the most important matters to come before the Department: the Clinton Administration's fund-raising abuses. The failure of the Clinton Administration to fill this crucial position has had, in my mind, a serious impact both on the performance of the Criminal Division and the credibility of its decisions. Over two and a half years later, I am glad to support the nomination of James K. Robinson to be Assistant Attorney General for the Criminal Division. This nomination was reported out of the Judiciary Committee in April by a unanimous vote, and I believe should receive the support of all Senators. The Criminal Division represents the front line of the federal government's commitment to fight crime. We rely on the Criminal Division to enforce over 900 federal statutes and to develop enforcement policies to be implemented by the 94 U.S. Attorneys around the country. Within the division are sections that carry out national responsibilities crucial to protecting our citizens and property, including: Asset Forfeiture/Money Laundering, Child Exploitation and Obscenity, Fraud, Computer Crime and Intellectual Property, Narcotics and Dangerous Drugs, Organized Crime and Racketeering, Public Integrity, Terrorism and Violent Crime, and the Organized Crime Drug Enforcement Task Force. The importance of each of these sections cannot be overstated. I believe that this nominee is up to this demanding task. James Robinson has compiled an impressive record of achievement. Following graduation from Wayne State University Law School, he clerked on the Michigan Supreme Court and then for Judge George Edwards of the United States Court of Appeals for the Sixth Circuit. He served with distinction as United States Attorney for the Eastern District of Michigan during the Carter Administration. Both before and after his service as U.S. Attorney, Mr. Robinson was a member of the Detroit law firm of Honigman Miller Schwartz & Cohn, first as an associate and then as a partner. Since 1993, he has been Dean and Professor of Law at his alma mater, Wayne State University Law School. Finally, Mr. Robinson has served on and often chaired numerous bar and civic associations, many of which related to his expertise in the law of evidence. He will need all of this experience and more to fulfill such a demanding position. One of the most important duties assigned the head of the Criminal Division is to advise the Attorney General on the appointment of independent counsels. In my mind, Attorney General Reno was very poorly served by the Criminal Division over the past year while considering whether to appoint an independent counsel related to the fund raising efforts made by the President and Vice President in conjunction with the 1996 elections. While I was pleased to see the Department secure the indictments of Johnny Chung and Charlie Trie, I believe both the Division and the Attorney General misapplied the independent counsel statute by taking into consideration factors which the law does not allow. There are many both inside and outside Congress, including this Senator, who believe that the statute has many flaws, but so long as the law is on the books it must be applied fairly and consistently. This Department of Justice has not done so, and I place a large part of the blame on the Criminal Division. Congress has responded to the unacceptable levels of crime by increasing the Department of Justice's budget: in fact, the Department's budget has skyrocketed since 1994, rising from under 11 billion dollars in FY 1994 to over 20 billion dollars in FY 1998. However, I am concerned about the decline in federal prosecutions in several critical areas despite this increased funding. First, at a time when the administration is calling for more gun control, I am concerned that the Department of Justice is not adequately enforcing current gun laws. The annual number of weapons and firearms prosecutions brought by this Administration has plummeted. For example, federal weapons and firearms prosecutions are down 18.7 % since 1992. More importantly, I am concerned that the Department of Justice is not enforcing current laws meant to punish gun-toting criminals. Specifically, the number of prosecutions made under Project Triggerlock has collapsed. Initiated by the Bush Administration, Project Triggerlock targets federal prosecution and tough federal sentences on the worst violent offenders committing crimes with guns. In its first year, FY 1992, the program worked remarkably well: 4,353 federal cases were brought against 7,048 defendants for violations of federal law involving the use of a firearm. Yet, the number of these cases has fallen throughout the Clinton Administration, and in FY 1997 the Department of Justice reported only 2,844 cases under Project Triggerlock, a stunning 34.6% decrease since 1992. Through the effective use of federal powers and resources, U.S. Attorneys can greatly assist state and local law enforcement in keeping the most dangerous offenders off the streets. Unfortunately, this extremely effective program has lost priority in the Clinton Administration. I have been concerned about the performance of the Criminal Division and the United States Attorneys in a number of additional areas over the past several years. Whether it has been the intentional failure of U.S. Attorneys in California to enforce Indian gaming laws, the unfortunate surrender of our borders to drug trafficking, the recent decision to distort the Controlled Substances Act to allow doctors to use drugs to assist suicides, or the repeal of a memorandum by Attorney General Richard Thornburgh which ensured federal prosecutors did not settle with charging defendants with lesser violations while more serious offenses were ignored, the administration's crime fighting decisions have, in some areas, not met the high standard the public deserves. These concerns, however, do not diminish my recognition of the work of the thousands of federal law enforcement officials who ably carry out the responsibility of enforcing our federal laws. As I pointed out at his confirmation hearing, Mr. Robinson has been nominated to a position of great trust. If confirmed, he will play a key role in advising the nation's chief law enforcement officer on matters of serious national concern. Mr. Robinson assured the Judiciary Committee that although he naturally would feel loyalty to the administration which selected him, he would stand above politics and serve the public. During his confirmation hearing, I raised many of these important issues with Mr. Robinson. Although he was not in a position to have formed concrete opinions on some issues which have been debated between the Congress and the administration, I was heartened by his promise to work with the Congress and to bring fresh approaches to tough issues. By moving this nomination without further delay, the Congress will ensure that the Criminal Division once again will have the leadership it sorely needs to play a leading and effective role at the vanguard of federal law enforcement.

Mr. HATCH

Mr. HATCH. Mr. President, it is my privilege to call to my colleagues' attention the recent announcement by the U.S. Small Business Administration that Ms. Bernadette Martinelli of Park City, Utah, has been named the National Women in Business Advocate for 1998. I am sure all senators will agree that she is well-deserving of this prestigious award. In November 1992, Ms. Martinelli founded the Park City Women's Business Network. As the owner of ``Blinds of Bern,'' she observed that a lack of educational and networking opportunities stifled the entrepreneurial potential for many women in the Park City area. Bernadette Martinelli decided to make a difference. In founding the Park City Womens' Business Network, she has brought women small business owners together to meet one another, to share ideas, and to learn techniques for improving productivity. The results have been nothing short of remarkable. These efforts have helped launch the creation and fuel the expansion of many women-owned businesses in Utah. Ms. Martinelli's organization also fulfills an important role in the community. Members volunteer their time speaking to high school students about entrepreneurial careers and providing indispensable mentoring programs for interested students. The Park City Womens' Business Network has also established an all-important ``Future Entrepreneur'' scholarship, awarded annually to a female high school graduate to help her to reach her goal of business ownership. Ms. Martinelli has accomplished all of this through great personal sacrifice and perserverance. In the past few years, she found the strength to build her business, establish the networking organization, and to care for her children and her husband who is battling cancer. Mr. President, I am proud of Bernadette Martinelli's achievements and grateful for her many contributions to the growth of small businesses in the state of Utah and to the opening of doors and possibilities for the next generation. I join with the U.S. Small Business Administration and small business leaders around the nation in congratulating Ms. Martinelli. I ask all Senators to join me in saluting her for this well-earned national honor.

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HATCH. Mr. President, I rise once again to address the issue of the constitutionality of the Commerce bill, as modified by the floor substitute. A buzz seems to be in the air that perhaps the pending substitute bill might actually pass. What seems to be forgotten--or ignored--however, is there are serious questions surrounding the bill's constitutionality. In a rush to do good, in the haste to pass legislation that limits youth cigarette smoking, some have either ignored the constitutional problems or deluded themselves that no such problems exist. In 1845, Justice Joseph Story complained ``how easily men satisfy themselves that the Constitution is exactly what they wish it to be.'' Well, the courts will not ignore the Constitution. They will scrutinize the legislation according to applicable case law and constitutional doctrine and, most assuredly, will strike down as unconstitutional pertinent provisions of the bill. So what will we have accomplished? Major portions of this bill will fail. Teen smoking may not decrease. Or, even worse, from a public health standpoint, the bill will be tied up for a decade or more in litigation; no national tobacco program could be implemented until the litigation is resolved; and more and more teens will start and continue smoking. Many of our youth, naturally, will die prematurely--at least 10 million kids--while this is litigated, assuming it passes in its current form, as unconstitutional as it is. There will be at least 10 years of litigation, and another 10 million kids will become hooked on smoking, a high percentage of whom will probably die prematurely as a result of that. We must, as a body, address the constitutional concerns raised by the tobacco legislation, and we should not evade this issue. Mr. President, I want to make clear that I am a strong advocate of legislation that will reduce youth consumption of tobacco products. I also want to make it abundantly clear that I am a vociferous critic of the tobacco industry. But should our disdain for tobacco and our desire to help young people prevent us from crafting an efficacious bill that meets constitutional requisites? We must heed Justice Oliver Wendell Holmes, Jr., who in 1904 observed that it must always be ``remembered that legislatures are the ultimate guardians of the liberties and welfare of the people in quite as great degree as the court.'' So we must act as guardians of the Constitution. Our oaths of office require it. The American people demand no less of us. The Commerce bill raises a number of serious constitutional issues which involve the following: No. 1, the first amendment; 2, the prohibition of bills of attainder contained in article I; 3, the takings clause; and 4, the due process clause. Allow me to address each of these issues in the order I listed them. Let me first turn to the first amendment issue. The Commerce bill unconstitutionally restricts tobacco product advertising, one, by apparently enacting the August 1996 FDA rule, and, two, by imposing additional restrictions that go beyond these regulations through a so-called ``voluntary protocol'' modeled after my original tobacco plan. Section 103 of the floor vehicle deems the FDA rule to be ``lawful and to have been lawfully promulgated under the authority of this chapter.'' The meaning of this is unclear, but the language will probably be interpreted as codifying the rule. As to the protocol section of the Commerce bill, one must remember that it is intended to be voluntary. It is null and void without the participation of the tobacco companies and the other parties to the June 20, 1997, settlement. Both of these restrictions violate the first amendment and the Supreme Court's cases defining commercial speech. Moreover, the ``counter-advertising'' provisions--the ``coerced speech doctrine''--of the bill are subject to first amendment challenges unless consented to by the tobacco companies, who have said they will not consent to this Commerce Committee bill. Let me discuss these concerns in more detail. On August 28, 1996, the U.S. Food and Drug Administration published a rule which restricted tobacco advertising. These limitations include: No outdoor advertising for cigarettes and smokeless tobacco, including billboards, posters, or placards, within 1,000 feet of the perimeter of any public playground, elementary school, or secondary school; other advertising must be in black text on a white background only, in FDA- approved publications; labeling and advertising in audio format must be in words only, with no music or sound effects, and in video format in static black and white text only, on a white background; the sale of any item--other than cigarettes or smokeless tobacco--or service, which bears the brand name, logo, et cetera, identical or similar to any brand of cigarettes or smokeless tobacco is prohibited; offering any gift or item--other than cigarettes or smokeless tobacco--to any person purchasing cigarettes or smokeless tobacco is prohibited; and sponsoring any athletic, musical, or other social or cultural event is prohibited. In April 1997, the U.S. District Court in Greensboro, NC, while upholding the FDA's general jurisdiction over tobacco, held that the FDA did not have statutory authority to regulate advertising. The first amendment issues, therefore, were not addressed by the court. An appeal is pending in the Fourth Circuit Court of Appeals. Oral arguments were heard earlier this week. These advertising restrictions propose to be codified in a freestanding FDA regulation of the tobacco section of the Commerce bill. The Commerce bill also broadens these restrictions, and, much like the original Hatch bill, it places these broader restrictions in a voluntary yet binding contract termed the ``protocol.'' Pursuant to the protocol, the tobacco companies waive their first amendment rights in exchange for the settlement of existing suits and the scaled-back civil liability limitations--in the original floor vehicle, the ``soft'' cap on annual payments--that is, $6.5 billion per year. These modest civil liability limitations may be nullified if the Gregg amendment is adopted. As the bill currently stands, the proposed incentives for the tobacco industry to agree voluntarily are largely illusory, hence the explanation for the recent withdrawal by the industry from the June 20 settlement. So there is no longer any voluntary consent protocol. Private parties may waive their constitutional rights. I cite with particularity the Snepp v. United States 1980 case. We can only assume that without this waiver, parties will tie up the legislation in the courts for years. I don't think there is any question about it. The Supreme Court has consistently held that constitutional rights may be waived provided that such waiver is knowing, voluntary and intelligent. [See Fuentes v. Shevin, 407 U.S. 67, 95 (1972); D. H. Overmyer Co., Inc. Of Ohio v. Frick Co., 405 U.S. 174, 187 (1972).] Of course, the tobacco companies have now withdrawn from the settlement, so no waiver can occur unless they rejoin the negotiations. So, the tobacco industry will not enter into the protocols and we must analyze the bill's constitutionality on this fact. With this bill, we are not discussing restrictions which will be agreed to. Hence, the constitutionality is the problem. Because the advertising restrictions affect only commercial speech, they are entitled to less First Amendment protection than, let's say, political speech. [E.G., Central Hudson Gas & Elec. Corp. v. Public Service Comm'n, 447 U.S. 557 (1980).] Yet, according to the 1980 Supreme Court decision in Central Hudson v. Public Service Commission, the government still bears the burden of justifying a restriction on commercial speech. I also cite, Rubin v. Coors Brewing Co. [, 115 S.Ct. 1585, 1592 (1995).] According to Central Hudson, the Supreme Court has enunciated a four-part test governing the validity of commercial speech restrictions: 1. Whether the commercial speech at issue is protected by the First Amendment, whether it concerns a lawful activity and is not misleading; and 2. Whether the asserted governmental interest in restricting it is substantial; If both inquiries yield positive answers, then; 3. Does the restriction directly advance the governmental interest asserted; and 4. Is the restriction not more extensive than is necessary to serve that interest? In the 1996 case of 44 Liquormart, Inc. v. Rhode Island, [116 S. Ct. 1495 (1996)], the Supreme Court heightened the protection that the Central Hudson test guarantees to commercial speech. It makes clear that an effectively total prohibition on ``the dissemination of truthful, non-misleading commercial messages for reasons unrelated to the preservation of a fair bargaining process'' will be subject to a stricter review by the courts than a regulation designed ``to protect consumers from misleading, deceptive, or aggressive sales practices.'' The proposed restrictions would fall with in the scope of the first prong of the test because, presumably, the advertising is lawful and not misleading. They would also meet the second prong because protecting the public health, safety, and welfare (particularly when the public group being protected is comprised of children) is a substantial interest. So, a court in analyzing the constitutionality of the advertising restrictions will be left to question seriously whether the third and fourth prong of the Central Hudson test has been met. In other words, the questions facing the Congress and a future court are whether the government could carry its burden of proving the advertising restrictions will directly advance the reduction of youth smoking and that the restrictions are not more extensive than necessary to accomplish this objective. Because ``broad prophylactic rules in the area of free speech are suspect,'' courts rigorously apply the third and fourth factors of the Central Hudson test. The Supreme Court noted in Edenfield v. Farre [507 U.S. 761, 777 (1993),] that as to the third and fourth factors ``[p]recision of regulation must be the touchstone in an area so closely touching our most precious freedoms''. Although Congress may reasonably believe that the severe curtailment of tobacco product advertising will impact youth smoking, that fact alone will not satisfy the government's burden of providing a direct advancement of its interest. As the Second Circuit held recently, to satisfy this burden, the government must ``marshall . . . empirical evidence'' supporting its ``assumptions,'' and must show that its putative interest is advanced ``to a material degree'' by the restriction on speech. [Bad Frog Brewery, Inc. v. New York State Liquor Authority, 134 F.3d 87, 98, 100 (2d Cir. 1998).] This burden is a heavy burden. It is unlikely that there is uncontroverted ``empirical evidence'' proving, for example, that prohibiting sponsorship of athletic, social, or cultural events under the brand name of a tobacco product, or that prohibiting advertising without notice to the FDA in any medium not pre-approved by the FDA would have a material impact on youth smoking. The Senate has held more than 30 hearings on the tobacco settlement, but have we been provided any such ``empirical evidence?'' And the answer is ``no.'' But, even if the government could carry its burden of proving direct advancement of its interest, it cannot survive the fourth prong of the Central Hudson test and prove that the FDA regulations are not more extensive than necessary. The Supreme Court has found that a restriction on commercial speech is not sufficiently narrow, and is, thus, unconstitutional, when there are available to the government ``alternatives that would prove less intrustive to the First Amendment's protections for commercial speech.'' [Rubin v. Coors Brewing Co., 514 U.S. 476, 491 (1995).] There are obvious regulatory and legislative alternatives here. First, the entire premise of the Commerce bill is that other regulations that do not impact First Amendment freedoms will advance the government's interest in reducing youth smoking. These include (1) enforcement of the current access restrictions, public education and counter-advertising projects (2) price increases, and (3) cessation programs. For example consider the 44 Liquormart case I mentioned earlier, [116 S. Ct. at 1510], which held that liquor price advertising restrictions failed Central Hudson's fourth factor, since the government could have accomplished its objective through increased taxation, limits on purchases, and educational campaigns. Moreover, any assertion by the government that non-speech alternatives would be ineffective in reducing youth smoking would not be viewed favorably by the courts. In publishing final regulations promulgated under the ADAMHA Reorganization Act of 1992, that's alcohol, drug abuse, mental health administration, an act which conditioned federal grants on state enforcement of tobacco access restrictions, Department of Health and Human Services--the federal agency with expertise on the matter-- proclaimed that ``aggressive and consistent enforcement of states are likely to reduce substantially illegal tobacco sales.'' [61 Fed. Reg. 1492 (Jan. 19, 1996).] Likewise, the Surgeon General stated that the ADAMHA Amendments would ``provide significant new leverage for increased enforcement of laws to reduce sales of tobacco products to youth.'' I might add, this was included in ``A Report of the Surgeon General: Preventing Tobacco Use Among Young People,'' 254 (1994). In addition, other measures directed at youth contained in the Hatch bill, but not the Commerce bill--such as imposing criminal penalties on purchases or possession of cgiarettes by underage persons, or making entitlement to a driver's license dependent on a record without such offenses--would clearly advance the government's interest more directly than would advertising restrictions. Finally, the Commerce bill's Protocol restrictions, if they are somehow imposed without consent, would work an even more clear violation of the First Amendment. The Protocol restrictions are no less broad than the voluntary restrictions in the Proposed June 20 settlement. And nearly every First Amendment scholar who has testified before Congress has concluded that such restrictions would violate the First Amendment if enacted unilaterally. I refer my colleagues to the testimony of Laurence H. Tribe, who testified before the Senate Judiciary Committee last July that any legislation containing the Proposed Resolution's advertising restrictions would be ``extremely problematic under the First Amendment.'' I also refer my fellow Senators to the testimony of Floyd Abrams, one of the leading legal experts in the first amendment privileges and rights, before the Senate Judiciary Committee on February 10, 1998, where he asserted that any act containing the proposed resolution's advertising restrictions would be ``destined to be held unconstitutional'' under Reno v. American Civil Liberties Union, [117 S. Ct. 2329,2346 (1997)]. Now, let me next discuss the counteradvertising provisions. Another first amendment problem plaguing this bill is that, if enacted, the bill would also violate the U.S. Constitution insofar as the ``counteradvertising'' provisions would require the tobacco industry to fund directly political and commercial speech with which it disagrees. This violates the so-called ``coerced speech'' doctrine. Section 221 of the Commerce bill would directly require the tobacco industry to fund a tobacco-free education program, which would award grants to public and nonprofit, private entities to carry out public informational and educational activities designed to reduce the use of tobacco products. Section 1172 would direct the Secretary of Health and Human Services to disburse funds appropriated for the tobacco industry to be used ``to discourage the use of tobacco products by individuals and to encourage those who use such products to quit.'' Now, I do not question these objectives or the motives of those who drafted these restrictions. They certainly had the best interests of the public at heart in doing so. Nevertheless, the Commerce Committee bill would--in these two separate instances--compel the tobacco industry to directly fund political and commercial speech to which they may be opposed, in derogation of the first amendment rights to be free from compelled speech and compelled association. Compare this to a situation where speech is subsidized by Government, but the revenues come from the General Treasury. In this situation, there would be no constitutional violation. But the bill is constitutionally infirm and violates the Constitution. As the United States Supreme Court has held, the first amendment prohibits Government from ``requiring a speaker to associate with speech with which it may disagree.'' That is Pacific Gas & Electric Co. v. Public Utilities Commission of California [475 U.S. 15 (1986)]. Government-compelled funding of objectionable speech infringes upon both the right of free speech and the right of free association. [Id. at 20-21] At issue in the Pacific Gas case was a State order that required the Pacific Gas and Electric Company to disseminate the views of one of its regulatory opponents. In finding that such an order violated the first amendment, the Supreme Court held that ``for corporations, as for individuals, the choice to speak includes within it the choice of what not to say. . . . Were the Government freely able to compel corporate speakers to propound messages with which they disagree, this protection of the first amendment would be empty.'' I refer my colleagues to Abood v. Detroit Board of Education [431 U.S. 209, 234-35 & n.31], a 1977 case, where the Court held that Government-compelled union dues may not be used for ideological purposes. Various Federal courts of appeals, including the Third, Seventh and Ninth Circuit Courts of Appeal, have also held that the freedom of speech includes the right not to be compelled to render financial support for other speech, especially when the views expressed are contrary to one's own. These cases include Cal-Almond, Inc. v. U.S. Department of Agriculture [14 F. 3d 429, 434-35 (9th Cir. 1993)], U.S. v. Frame [885 F. 2d 1119, 1132-33 (3rd Cir. 1989)], and Central Illinois Light Company v. Citizens Utility Board [827 F. 2d 1169 (7th Cir. 1987)]. This right to be free from compelled funding of objectionable speech is hardly a new development in the law. As early as 200 years ago, Thomas Jefferson declared that ``to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical.'' [See Abood, 431 U.S. at 235 n.31.] Moreover, as recently as last year, the Supreme Court reiterated that the protections of the first amendment are called into play whenever Government seeks to ``require speakers to repeat an objectionable message out of their own mouths, or require them to use their own property to convey an antagonistic ideological message. . ..'' That is Glickman v. Wileman Brothers & Elliot, Inc. [117 S. Ct. 2130, 2139 (1977)], a 1997 case decided last year. Thus, the Commerce bill--by essentially forcing tobacco manufacturers to finance an advertising campaign--could be found to infringe on their rights to be free from compelled speech and compelled association. Unless heightened legal strictures are first met, the Commerce bill may not constitutionally require the industry to fund antitobacco speech. Keep in mind, this is a legal industry. As bad as it is, as much harm as it does, it is still legal. We are unwilling to ban this industry and to force these companies to leave our country because we have approximately 50 million smokers in this country who are hooked on cigarettes. And it has always been approved as a legal business through all of these years. So these constitutional points are important points, in spite of the fact that we may despise what these companies do. In order for the ``counter-advertising'' provisions of the Commerce bill to pass constitutional muster, there must be a ``narrowly tailored means of serving a compelling State interest.'' [See Pacific Gas, 475 U.S. at 19] Although the Federal Government may have a ``compelling State interest'' in reducing the health hazards associated with smoking, the Commerce bill addresses that concern with a broadside approach that is far from narrowly tailored, and which unnecessarily tramples on important first amendment rights. The lack of ``narrow tailoring'' is most evident from the fact that Congress has available to it a whole host of alternative methods to encourage and finance antitobacco speech that would not impinge on any constitutional concerns. For example, Congress could provide tax incentives to members of the mass media in exchange for their cooperation in supporting counter- advertising. Or Congress could condition the receipt of certain Federal funds--that is educational and research grants--on the requirement that recipients promote measures to reduce tobacco use. Or Congress could even directly subsidize antitobacco advertising through the Department of Health and Human Services, provided that all such funding was drawn from taxpayers ``generally''--and not exacted from the tobacco industry in particular. I refer my colleagues to the Supreme Court's opinion in U.S. v. Frame [885 F. 2d 119, 1132-33 (3d Cir.)], a 1989 case, which emphasized the distinction between ``money from the general tax fund'' and money from ``a fund earmarked for the dissemination of a particular message associated with a particular group.'' Should this bill become law, a Federal court would have to conclude that instead of choosing any one of these constitutionally permissible methods of funding counter-advertising, the Congress will have adopted a scheme that unnecessarily infringes upon the first amendment rights of the tobacco industry. Let me discuss bill of attainder, takings, and due process issues raised by the Commerce bill. The Commerce bill would impose large annual payments on these tobacco product manufacturers that enter into a voluntary protocol. Keep in mind, they have said they are not going to enter into a voluntary protocol if the McCain bill is the bill that passes. But let's assume otherwise. The first six annual payments are to be made regardless of sales or profits. The bill would also provide for a $10 billion up-front payment. Any attempt to impose the Commerce bill's payment scheme on an involuntary basis would be subjected to legal challenge under at least three independent constitutional provisions--the Bill of Attainder Clause, the Takings Clause, and the Due Process Clause of the Constitution. The implementation of the ``look-back'' penalties--if the industry is without fault--raises the same constitutional concerns. The Comprehensive Tobacco Resolution agreed to between the tobacco companies and the State attorneys general contains a ``look-back'' provision, whereby, if prescribed goals for reducing teen smoking rates in future years are not achieved, the tobacco companies would be subject to specified monetary liabilities. The Commerce bill imposes greater ``look-back'' liabilities upon the tobacco companies--amounting to more than $5 billion per year--without the consent of the industry. Thus, the bill would impose multibillion dollar liabilities upon tobacco companies--over and apart from the ongoing payments the companies would be called upon to make as part of the resolution. Even if the companies fully complied with all measures imposed by the resolution to prevent teen smoking, they would be subject to the penalties without any showing of illegal or wrongful conduct whatever. Let me discuss why certain provisions in this bill violate the prohibition of bills of attainder contained in Article I, Section 9, Clause 3 of our Constitution. This provision simply reads, ``No Bill of Attainder or ex post facto Law shall be passed.'' What is a bill of attainder? The Bill of Attainder Clause prohibits the imposition of a punishment by Congress without a judicial trial. That was decided as early as 1866 in the Cummings v. Missouri case [71 U.S. 277 (1986)]. The clause reflects the framers' belief that ``the legislative branch is not so well suited as politically independent judges and juries to the task of ruling upon blameworthiness.'' That is U.S. v. Brown [381 U.S. 437. 445 (1965)], a 1965 case. Legislation violates the Bill of Attainder Clause if it singles out a specific group for unique treatment imposing punitive liability upon that group without a trial. I refer my colleagues to Selective Service System v. Minnesota Public Interest Research Group, [468 U.S. 841, 846 (1984)], and also generally to Nixon v. Administrator of General Service [433 U.S. 425, 469-475 (1977).] In sum, a general definition of what constitutes a bill of attainder demonstrates that a bill of attainder prohibited by the Constitution is composed of two elements: first, an element of punishment inflicted by some authority other than a judicial authority; and second, an element of specificity, that is, a singling out of an individual or identifiable group for the infliction of the punishment. In other words, a bill of attainder is primarily a legislative act designed to punish an individual or discrete class of individuals without a hearing or a demonstration of fault. It is clear that a court would interpret the floor vehicle's penalties as punitive and would thus violate the Bill of Attainder prohibition. The so-called ``look-back penalties'' in the floor vehicle--in other words, in the Commerce bill before this body--which are imposed on the tobacco companies if teen smoking does not meet certain goals for reduction, are subject to constitutional challenge unless they are voluntarily agreed to by the tobacco companies. I might add, which, of course, is not the case. The companies have said they will not voluntarily agree to what they consider to be the exhorbitantly punitive bill that is before the Senate at the present time. I am talking about even the substitute as brought forward by the distinguished Senator from Arizona. I might add that the bill now terms the penalties ``surcharges.'' But this simply is an attempt to elevate form over substance. No matter how they are termed, these payments are the functional equivalent of fines. Thus, the Supreme Court in United States v. Lovett, [328 U.S. 303 (1946)], held that legislative acts--no matter what there form or what they are called--that apply either to an individual or a discreet class in such a way as to impose punishment without a trial--are bills of attainder prohibited by the Constitution. Given what we know--or do not know--about how teens react to advertising, it is possible that even if the tobacco industry does all it can to prevent teen smoking, and teen smoking still will not meet the target, then they are being punished unnecessarily, Moreover, besides the look-back penalties, the floor vehicle contains an additional provision that companies lose their liability cap protection if underage smoking exceeds the targets by a set amount. This is also done without a showing of fault. The Bill of Attainder Clause has been invoked by lower courts to invalidate similar punitive economic legislation aimed at particular industries, companies, or individuals. Thus, for example, in SBC Communications, Inc. v. FCC, the District Court struck down provisions of the recently enacted Telecommunications Act, which subjected regional telephone companies to burdensome requirements for entry into the long distance business. [981 F. Supp. 996, 1004 (N.D. Tex 1997).] Because the ``Baby Bells'' were singled out for unique and economically punishing regulatory treatment--based on an unproved legislative presumption that they were engaged in ongoing anti-competitive practices--the Court held that the provisions violated the Bill of Attainder Clause. As another example, in News America Publishing, Inc. v. FCC, the D.C. Circuit invalidated on First Amendment grounds a law that singled out Rupert Murdock for unfavorable treatment. [844 F.2d 800, 813 (D.C. Cir. 1988).] Explaining that the ``safeguards of a pluralistic system are often absent when the legislative zeros in on a small class of citizens,'' the D.C. Circuit found that the challenged provision ``strikes at Murdoch with the precision of a laser beam,'' and held the provision unconstitutional. ``Congress' exclusive focus on a single party clearly implicates values similar to those behind the constitutional proscription of Bill of Attainder.'' The Supreme Court in Nixon v. Administrator of General Services, [433 U.S. 425, 468-484 (1977)] has indicated that the existence of punishment is dependent upon the circumstances of individual cases. A three-part test to determine whether a legislative act is a bill of attainder was developed. One test is that of historical experience under the law of England and our own country the United States. This test involves an analysis of punishment in terms of what traditionally has been regarded as punishment for purposes of bills of attainder--which were used to seize or escheat property--and bills of pains and penalties--which were used to deprive individuals of their civil rights. A second test is a functional one which takes into account the extent to which any enactment challenged as a bill of attainder furthers any non-punitive purposes underlying it. A third test for determining the existence of the punishment element is a motivational one, involving an assessment of the purposes or motives of the legislative authority. There can be little doubt that applying the Supreme Court's three- part test would result in the conclusion that the look-back penalties constitute a bill of attainder. Imposing the floor vehicle's payment scheme upon the tobacco industry without its consent would, in effect, be a fine for the tobacco industry's past conduct and would therefore constitute a bill of attainder, even if a due process hearing were held to determine factually whether goals were met or not. First, the scheme would single out a discrete group for unique treatment, since the payments would be forced only upon the country's five major tobacco manufacturers. And, second, payments would be imposed by the terms of a congressional decree, not through a trial. That these measures are ``punitive'' would be readily apparent to any court (1) from the huge payments which historically and functionally amount to a deprivation and confiscation of property; and (2) from the legislative record, which is replete with expressions of congressional condemnation of the tobacco industry and, therefore demonstrate a clear motive to punish. Thus, the bill punishes and is directed at a discrete group, that is, the tobacco companies. Let me make clear that there is no greater critic of the tobacco industry than Orrin Hatch. I have fought them vigorously for most of my career. I believe that the tobacco companies have done great harms particularly to the children of this nation. They have hidden documents demonstrating the addictive nature of nicotine. They have concealed evidence that cigarette smoking is a significant contributor to such diseases as cancer and emphysema. Nevertheless, we must put our faith in the judicial process. If wrongs have been committed by the tobacco industry, the courts will reveal and punish them. That specter is what has brought the tobacco companies to the bargaining table. That threat is what caused the tobacco companies to settle with the 40 state attorney generals. That risk is what led the tobacco companies to settle the individual state suits in Mississippi, Florida, Texas, and Minnesota. Our task is to pass moderate legislation that implements the settlement and adheres to the Constitution. Passing legislation that amounts to a bill of attainder is a very dangerous precedent. the takings clause Mr. President, let me now turn to the property rights issues that the bill raises. The Takings Clause in the Fifth Amendment provides, ``nor shall private property be taken for public use without just compensation.'' The Takings Clause ``conditions the otherwise unrestrained power of the sovereign to expropriate, without compensation, whatever it needs.'' United States v. General Motors Corp., [323 U.S. 373, 377 (1945).] As the Supreme Court in Dolan v. City of Tigard, [512 U.S. 374, 384 (1994).] held: ``One of the principal purposes of the Takings Clause is `to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.' '' Where there is, in fact, a permanent physical occupation--no matter how small--the Supreme Court has held that there is a per se taking, immune from application of the balancing test, which I will discuss shortly. [See Loretto v. Teleprompter Manhattan, CATV Corp., 458 U.S. 419 (1982). I refer my colleagues to the Lucas v. South Carolina Coastal Council, [505 U.S. 1003 (1992)] case and its discussion on the distinction between per se or categorical takings and regulatory takings. As the Supreme Court noted in the 1984 case of Ruckelshaus v. Monsanto Co., while ``[c]ondemnation of land by the power of eminent domain is the commonest example of [a] taking,'' it is well-established that the ``taking of personal property'' is likewise protected by the Takings Clause. [Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1003-04 (1984).] And the Supreme Court has held explicitly that the Takings Clause protects not only against government expropriations of intangible personal property but also against government expropriations of money. [Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 162-63 (1980).] In Webb's Fabulous Pharmacies v. Beckwith, a state court, which had maintained funds owed the plaintiff in a court bank account, tried to withhold over $9,000 of interest as a fee for ``receiving money into the registry of court.'' The Supreme Court held that because ``the exaction [amounted to a] forced contribution to general governmental revenues, and [was] not reasonably related to the costs of using the courts,'' it constituted a taking. It seems to me that the Commerce bill's expropriation falls under the bright line per se takings rule. Clearly, monies and assets are being expropriated, and this is not an example of a regulatory taking, where a court must balance certain factors to determine whether a diminution of value constitutes a taking. [See generally Ruckelshaus v. Monsanto, 467 U.S. 986 (1984).] Moreover, even if the regulatory takings balancing test were applied, the Commerce bill's confiscations probably would be considered unconstitutional. In determining whether expropriation of money from the tobacco product manufacturers constitutes a taking, a reviewing court would focus upon the following factors: the character of the government action; the economic impact of the regulation on the claimant; and the extent to which the regulation has interfered with reasonable investment backed expectations. Application of this three factor Penn Central test shows that forcing the Commerce bill's payment scheme upon the tobacco industry would constitute a taking. First, the character of the governmental action is--quite clearly--a seizure of money. It does not even purport to function as a ``fee'' or a ``tax,'' since the initial $10 billion payment and the first 6 annual payments are owned regardless of whether there is any income and regardless of whether there are any sales. Moreover, there is no effort to make the amount of the payments relate in any way to the costs of smoking programs that the bill authorizes. And, no industry--not even the tobacco industry--could be said to ``expect'' that its capital could be simply expropriated in lump sum amounts for the public's benefit. Indeed, the Supreme Court found a taking in Webb's Fabulous Pharmacy when the Government merely interfered with the right to receive interest on capital. In this nation's history, there is no statutory precedent whatsoever for forced lump sum payments in anything even approximating the amounts contemplated here in this proposed legislation. In addition, the floor vehicle's document provision is constitutionality suspect. I must point out that the June 20 settlement agreement presupposed voluntary participation by the tobacco companies in releasing proprietary documents. While litigation documents already made public can be released to the FDA, as required in the bill, it is problematic that the industry could be required to release additional documents, especially work product, confidential, or privileged documents without the Court saying so. Such documents are property as defined by the Fifth Amendment. Thus the district court in Nika Corp. v. City of Kansas City, [582 F.Supp. 343 (W.D.Mo. 1983),] held that a corporation's documents constitute property under the Fifth Amendment. I now refer my colleagues to other cases--United States v. Dauphin Deposit Trust Co., 385 F.2d 129 (3rd Cir. 1967), where the court found that a trust company has property interest in documents and business records. I also refer my colleagues to Webb's Fabulous Pharmacies, Inc. [at 162-63.] Pursuant to the same theory, the forced funding by the industry of the depository--the leasing of the building, the salaries of the personnel, etc., indeed as for any confiscation of cash or any valuable assets--would constitute a taking under the Fifth Amendment requiring compensation. [See Webb's Fabulous Pharmacies, Inc. at 162-63.] Furthermore, the multi-billion-dollar appropriation by the government of the tobacco companies' funds through ``look-back'' provisions constitutes the very type of government expropriation that the Supreme Court has held in the past to be an unconstitutional taking. Thus, where the Government does not merely impair an owner's use of private property, but actually seizes ownership of private property (such as money) for its own use without compensation, there is an unconstitutional taking. [See, e.g., Webb's Fabulous Pharmacies, 449 U.S. at 163; Loretto, 458 U.S. 419 (1982).] due process In addition to First Amendment, Bill of Attainder, and Takings concerns, forced industry payments would also violate due process. The substantive due process guarantee of the Fifth Amendment bars ``arbitrary . . . government actions `regardless of the fairness of the procedures used to implement them.' '' [Zinermon v. Burch, 494 U.S. 113, 124 (1990).] The Commerce bill's payment scheme--if imposed involuntarily--would arbitrarily compel settlement of various pending and potential litigations for the arbitrary amount. Indeed, the arbitrariness of the payments is clear on its face: the Bill expressly provides that the payments would be, in part, to settle the state attorneys general actions. But, at the same time, the Bill gives each state the right to opt out and pursue its claims, yet fails to give the tobacco product manufacturers any offset if the states choose to exercise this right. The possibility remains that, through no fault of the tobacco industry--and indeed despite the industry's full cooperation in efforts to end tobacco use by minors--teen smoking reduction goals established as part of a resolution may not be reached within the planned timetable. In that event, if look-back obligations were imposed by legislative edict without the companies' consent, the companies would incur massive and unpredictable monetary liabilities, not because they failed to implement the terms of the resolution in good faith or otherwise acted improperly, but merely because the nation was unsuccessful in fully achieving its goals for reasons unrelated to any conduct of the tobacco companies. Such a legislative imposition of ``look-back'' liability-- absent any finding of actual responsibility on the part of the tobacco companies--would flout fundamental tenets of due process. Due Process contains two components: procedural due process and substantive due process. A statutorily imposed, non-consensual look- back scheme violates each of these components. procedural due process As the Supreme Court restated in 1992, the right to procedural due process guarantees a ``fair procedure in connection with any deprivation of life, liberty or property.'' [Collins v. City of Shaker Heights, 503 U.S. 115, 125 (1992).] Among other things, procedural due process requires that individuals must receive notice and an opportunity to be heard before government deprives them of property, [United States v. James Daniel Good Real Property, 510 U.S. 43, 48 (1993),] and a fair trial in a fair tribunal. [In re Murchison, 349 U.S. 133, 136 (1955).] Here, no such fair procedures exist. The proposed legislatively-mandated ``look-back'' schemes essentially provide that if teen smoking fails to decline by certain percentages, there will be no notice, no opportunity to be heard as to whether that event were caused by any tobacco company conduct, and no trial. Instead, the tobacco companies are automatically proclaimed liable to pay billions of dollars if the Secretary determines that the goals are not met. This violates procedural due process. The Commerce bill does provide for court review upon imposition of a penalty. But this review is simply to determine the factual determination of the Secretary of HHS on whether the targets of reduction in youth smoking have been met. If not met, the penalties, according to the bill's language, must be imposed. Substantive Due Process Even apart from its manifest failures as a matter of procedural due process, a legislatively imposed ``look-back'' scheme would violate substantive due process as well. The substantive due process guarantee of the Fifth Amendment bars ``arbitrary . . . government action `regardless of the fairness of the procedures used to implement them.' '' [Zinermon v. Burch, 494 U.S. 113, 124 (1990).] Here, the arbitrariness of the look-back scheme is clear; the look- back scheme would automatically assign massive liability to tobacco companies even if the companies fully complied with all steps to reduce teenage smoking. Indeed, if one steps back from the current issues surrounding tobacco and looks to analogies for other industries, the arbitrariness, and, therefore, the unconstitutionality, of the proposed look-back scheme is even more obvious. Thus, the proposed legislative mandate would be the equivalent--for constitutional purposes--of imposing multi-billion- dollar liabilities on the automobile industry if--despite car companies' full compliance with government safety and design mandates-- death rates from automobile accidents did not decline by certain desired percentages; It would be the equivalent of imposing liabilities on the beef industry if--despite its funding of increased public health advertising programs--Americans failed to limit their meat intake and the instance of heart disease in America did not decline by certain percentages; It would be the equivalent of imposing liabilities on the alcohol industry if--despite its best effort to educate the public and promote enforcement of state minimum age purchase laws--underage drinking and drunk driving fatalities will not decline by certain percentages. It would be the equivalent of imposing liabilities on the airline industry if its on time performance failed to satisfy government targets, without regard to whether such deficiencies resulted from failures in the government-run air traffic control system or bad weather, rather than industry conduct. In each of these cases, such liability would be imposed regardless of the reasonableness of the ``targets.'' There can be no question but that the look-back provisions here would be just as arbitrary and irrational as the above hypotheticals. Thus, the various proposed look-back schemes irrebuttably presume that, if teen smoking does not drop by a certain percentage, it definitively is a result of conduct by the tobacco companies. This would be irrespective of any showing a tobacco company could make that it fully complied with all steps to reduce teen smoking and that the failure of the nation to meet its teen smoking goals was based solely on external factors. Such irrebuttable presumptions have been repeatedly struck down by the Supreme Court. [Vlandis v. Kline, 412 U.S. 441, 446 (1973),] The Court struck down as an irrebuttable presumption a stricture that anyone who had an out-of-state address at the time they applied for admission to a university remained a non-state-resident throughout their tenure at the university. [See also Tot v. United States, 319 U.S. 463, 467-68 (1943).] Moreover, in only recently striking down a punitive damage judgment, the Supreme Court has held that the Due Process Clause precludes the imposition of liability that does not bear a justifiable relationship with actual conduct. [BMW v. Gore, 116 S. Ct. 1589, 1599 (1996). Here, the proposed ``look-back'' scheme would impose multi-billion- dollar liability without any showing of any improper conduct whatsoever. The Due Process Clause simply does not permit such a ``deprivation [of property], through the application, not of law and legal processes, but of arbitrary coercion.'' [Id. at 1605 (Breyer, J., concurring).] [I refer my colleagues to Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 689 n.27 (1974), where the Supreme Court noted that liability must be imposed ``with a due regard to the rights of property and the moral innocence of the party incurring the'' liability.] Mr. President, we can be sure--as sure as anything--that the tobacco industry will challenge the constitutionality of this bill on these, and perhaps even other issues. I am confident that every argument that I have made is legitimate. The tobacco companies need only prevail on one of these theories and this opportunity we have had will have been squandered. Mr. President, in 1878, William E. Gladstone, the famous future Prime Minister of Great Britain, remarked that the ``American Constitution is . . . the most wonderful work ever struck off at a given time by the brain and purpose of man.'' Indeed, the Constitution by limiting the scope of government has fostered individual autonomy, which in turn has unleashed the creative energies of the American people. The Constitution, for over two centuries now, has been the source of our prosperity, as well as our liberty. Let us abide by its strictures. Let us pass legislation that both helps our kids and is also constitutional. explanation of vote

Mr. HATCH

Mr. HATCH. By capping a fee, such an interference is a taking under the Fifth Amendment of the Constitution. The Supreme Court cases clearly show that the Federal Government cannot confiscate money or interfere with a lawful contract. Is the Senator aware of that point?

Mr. HATCH. I remember when Jackie Pressler was the chairman of the Teamsters. He came before our committee and somebody brought out that he made over half a million dollars a year and was kind of needling him that it was too much money for a labor union leader to make. He looked right up at him and said, ``Well, I want you to know that almost every one of my corporate counterparts makes a lot more. And I'm worth every penny that I make for my union.''

Mr. HATCH. If Congress, as it would be doing here, at least as I understand the intent of this amendment, were to interfere retroactively with private contracts, it would be unconstitutional for a variety of reasons; isn't that right?

Mr. HATCH. Isn't it also true a contract between a plaintiff and his attorney is a legally enforceable contract, which Congress should not impair?

Mr. HATCH. Many of them have millions of dollars in unpaid fees in this matter. Is that correct?

Mr. HATCH. I had to agree with him. I thought he was worth every penny he made, whether you agree or disagree. What about entertainers? Do we set an amount of money they can make?

Mr. HATCH. Or sports figures?

Mr. HATCH. If Michael Jordan wants to make $60 or $80 million a year, or Tiger Woods, who is earning millions of dollars a year, should Congress be setting their salary?

Mr. HATCH. Is it your understanding that not one of those plaintiffs has been paid a dime for this case so far?

Mr. HATCH. We would not have had a settlement that amounts to $368.5 billion; not anywhere near that amount without those attorneys.

Mr. HATCH. As you have been an attorney who has tried cases on both sides of the issue, you understand very well that without the attorneys in the Castano group, we would not be where we are today with the original settlement.

Mr. HATCH. Let me ask one other question. I admire some of the top corporate leaders in the world as well as the top sports figures in the world.

Mr. HATCH. I admire people who are innovative and creative. Take Bill Gates, for example. I admire him. I think what he has done at Microsoft is nothing short of phenomenal. But should we begrudge the fact that he has earned his spot in our society as one of the wealthiest men in the world, worth somewhere between $40 and $50 billion?

Mr. HATCH. Not to dwell on that industry--Steve Jobs; he deserves every penny he made. He helped make the computer industry what it is today. Isn't that correct?

Mr. HATCH. The head of Compaq, or the head of Hewlett-Packard or Larry Ellison, the head of Oracle, or any of them for that matter are all very wealthy people who some people think lucked their way into this wealth. I happen to believe they worked hard and with innovation and creativity they were able to make this kind of compensation. Are they really that much different from really top-notch plaintiffs' lawyers like the Castano group lawyers who really made a difference here and who are responsible for bringing the tobacco industry to the table and getting their agreement on the $386.5 billion settlement?

Mr. HATCH. Nobody has been able to accomplish what these attorneys have achieved. They brought the whole tobacco industry to their heels and tried to get the U.S. Congress--at least the Senate, so far--to try to do something about the deplorable behavior of tobacco companies. Isn't that correct?