John Kerry

Mr. KERRY

Mr. KERRY. Mr. President, I will be very brief. I join my colleague in saying that I think what Senator McCain and I and others hoped for was the opportunity to be able to come to the floor and fight these tough issues. That is what we did. We just had a tough vote. Clearly, some of us had hoped that the outcome would be different, because we had a different view of where the bill might travel. But this by no means prevents us in any way from continuing forward in the process of molding this legislation. This is precisely what the Senate ought to be doing. It ought to be fighting hard over these votes. We ought to be able to come to an understanding of where the 51 votes lie. And then, ultimately, we all know that hopefully we can come together with a piece of legislation that finds a conference committee and, ultimately, both Houses of Congress. So I thank my colleagues for this spirited debate and for the fact that we have voted on two of the most critical issues with respect to this legislation. I thank Senator Durbin for now bringing to the floor, through the leadership, an amendment on the issues of the look-back, one of the other very important issues that needs to be resolved. I am confident that we will have another healthy round of debate on that. I look forward to continuing to proceed. Mr. GRAMM addressed the Chair.

Mr. KERRY. If I could just ask a parliamentary, procedural question.

Mr. KERRY. I send an amendment to the desk.

Mr. KERRY. Mr. President, without prolonging this, I would ask the Senator from Arizona if he would agree--since there is no immunity and no liability limitation but only a cap on how much liability--that voting to sustain the cap and against the Gregg amendment is, in fact, completely consistent with the budget amendment vote?

Mr. KERRY. Mr. President, before the Senator so moves, I would just ask him if he might answer one question.

Mr. KERRY. I thank the Senator.

Mr. KERRY. Fair enough. Might I ask, Mr. President, if the Senator would give me some idea of the length of time he expects to speak?

Mr. KERRY. Mr. President, will the Senator yield for a question?

Mr. KERRY. I thank the Chair. And I thank the Senator from Utah.

Mr. KERRY. At which point, Senator McCain will move to table.

Mr. KERRY. The minority leader be recognized; and after the minority leader, the Senator from New Hampshire be recognized----

Mr. KERRY. Mr. President, with the agreement of the Senator from Arizona, we want to try to structure the order for the next three speakers, if we could. I ask unanimous consent that after the Senator from Utah speaks----

Mr. KERRY

Mr. KERRY. No. I thank our colleague. I will reserve my comments. amendment no. 2433

Mr. KERRY. Mr. President, I was not able to be here at the exact moment that the Senator from Vermont was speaking. But I do understand that the Senator suggested that a rationale for his cosponsorship of the Gregg amendment is that he opposes ``a lot of immunity for the tobacco companies,'' and opposes the ``protections'' that are contained in the Commerce Committee. I will try to emphasize again, because I think we are really either talking past each other here or there is just not an awareness of what is in the bill--there are no protections for the tobacco companies. There is no protection. None. Zero protection. There is no such thing as a lot of immunity in this bill. There is no immunity in this bill. None. Zero immunity. The tobacco companies will be liable to lawsuits under any circumstances. Whether they play in the tent or they are out of the tent, they are liable for lawsuits. The only distinction here is, if those lawsuits are successful, how much will they be required to pay out in 1 year? That is the only thing that is contained here that is some kind of a limitation. Instead of being required conceivably to pay out $20 billion in 1 year and go bankrupt so you have no payments to kids, there is a limitation of $8 billion. So you can choose between the system that allows you to conceivably make them go bankrupt in the court system as, I might add, 70-plus percent of the asbestos companies did. We have lines of people who are suing today on asbestos who will never collect because the companies went bankrupt. In fact, there are people who want them to be able to collect under the tobacco settlement because there is a lot of confusion between those diseases that are asbestos-induced versus tobacco-related. Let's get the terms of this debate correct. We are not talking about immunity; we are talking about whether or not, in exchange for companies giving up their constitutional rights to advertise, in exchange for companies abiding by the look-back provisions, in exchange for companies agreeing not to sue in court, in exchange for companies agreeing to be part of the document depository, in exchange for companies being part of the effort to get our kids not to smoke, we are going to tell them in any one year, ``You're liability is only going to be $8 billion.'' If the court finds that you are liable for $20 billion and there is no finding of liability next year in the court, they are going to have to pay the difference. The $8 billion from the $20 billion means they are still going to have to come in and pay an additional $12 billion, and they will pay up to $8 billion in the next year. This is rational, in my judgment, Mr. President, because if you don't do this, then you are voting for the status quo, which is a system that is not a system. You would be voting to say, ``OK, we've got this one little option here that invites the companies to come in and be part of the process, but we're going to strip that option away because we want to show how tough we are on the tobacco companies and we're just going to let the lawyers go sue for the next''--whatever, recognizing that, for the last 20 years, not one lawsuit has yet produced a dime for a plaintiff. Obviously, circumstances have changed. We now have evidence that no plaintiff had in those past years. I understand that. As a lawyer, I would love to go to court with the current level of documentation, and clearly, with the document depository, it will be a lot easier for a plaintiff to go into court and get a judgment. But you are not going to get that judgment in any sense of order. You are going to have what we call a rush to the bar: First lawyers come, first served. The first people to get the biggest judgments will be the first people paid off. All these people coming in here and talking about the kids and talking about how they want to have some kind of system to get the kids to stop smoking will have abandoned those kids, because those kids are not going to benefit during those years of litigation. That is what we are talking about here. We are talking about whether or not we are going to have a rational approach to this or whether we are all going to feel good and say no liability. I respect Dr. Koop and Dr. Kessler enormously. We wouldn't be where we are without them. There is no question about that. But I regret enormously that it is somehow their judgment that it is better off for the children to be in that position where we are just going to have these open-ended lawsuits without any incentive whatsoever to try to get the companies to become part of the process. There is no guarantee they will. There is no guarantee that they will. We may well pass this legislation in its current form, and a lot of those companies will say, ``We still think it is too punitive. We don't want the look-back provisions. We're still going to challenge.'' This bill does not disadvantage us one iota with respect to that choice, because we have a two-part structure where, if they don't agree to participate in giving up their constitutional rights, in setting up the document depository, in being part of the look-back provision, then they can be sued under this bill in the very form that the Senator from New Hampshire is seeking. No loss, no setback, nothing. The choice here is between whether you are going to go with the status quo or you are going to hold out some hope that you are going to invite the tobacco companies to be part of a process of giving up what nobody will suggest under the law they could give up otherwise. The Senator from Utah is one of our strongest experts on the law in the Senate, and he knows full well how the look-back provisions may be challenged. He knows full well how these constitutional rights cannot be given up except by consent. You can't restrict some of the advertising we seek to restrict unless the tobacco companies sign the protocol. Unless you are willing to say to them something that invites them in, they are not going to sign a protocol, and there is no guarantee they will sign it even if you say that. So I think the choice for the U.S. Senate is very, very clear, and I hope colleagues will vote for common sense and not for the sense that the status quo is somehow going to serve the interests of the country. I yield the floor. Mr. HATCH addressed the Chair.

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

Mr. KERRY. Mr. President, I suggest the absence of a quorum.

Mr. KERRY. Mr. President, let me say, for the benefit of colleagues who were anxious to speak on this issue, that this is a good time. There is nobody here at this time seeking recognition, so we invite Senators who were particularly anxious to try to address this question to come to the floor and do so. I want to try to clarify, if I can, what this amendment does and what it doesn't do, because I think there is a misunderstanding here. I think it is absolutely vital that when the Senate votes on this, we vote with clarity as to what the impact will be. Some people have come to the floor suggesting that this is a shield for tobacco companies and that it is an unwarranted shield for tobacco companies. I think the Senator from Arizona and I would stress, as strongly as either of us knows how, that there is no shield here for tobacco companies. Tobacco companies will be liable. They will be liable under any circumstances under this bill. There is only one circumstance in this bill by which they might be limited in the amount of a 1-year payment. That is not a limit on liability. That is a limit on how much of their liability they would pay in any 1 year. But if the liability were more than that payment for 1 year, the payment carries over into the next year. So, in effect, there is no limit on liability. There is simply a rollover process by which a fixed amount, on an annual basis, is arrived at. Why does that component of the bill exist? Let me emphasize, there are two parts of this bill. If the opponents of the so-called cap, of an annual cap, if they were to prevail here today, what they would succeed in doing is stripping this bill of the one invitation that it offers to tobacco companies to come into the tent, if you will, and be part of the solution of how we are going to reduce smoking among teenagers. If you strip out that cap, what will happen is we will return to the status quo. We stay in the position where tobacco companies are merely being sued. We get no cooperation with respect to any of the advertising restrictions, any of the document depository, any of the health programs that will help our kids reduce smoking. We get none of that cooperation, and we guarantee that there will be a challenge on the look-back provisions. We guarantee it. If people think stripping that out creates a stronger bill, to leave us in a situation that we have been in for all the last years--which is simply endless lawsuits that produce no cooperative effort and ultimately result, at least to this date, in no winnings in court--I would have a hard time understanding how that is a better situation. The fact is that all of the concerns that people expressed about immunity have been addressed between the time of the tobacco company settlements and the time the Commerce Committee brought a bill out of committee. Let me clear up that understanding as strongly as I can. When the settlement was agreed to, back in June of 1997, it contained sweeping immunities for the tobacco companies. Those are gone. There is no longer any elimination of class actions. Tobacco companies will continue to be subject to class actions. There is no longer an elimination of punitive damages. Tobacco companies will be subject to punitive damages. There are no longer any restrictions on the aggregation of claims, which means different individuals could come together, one lawyer representing them--you can aggregate the claims and come in with a larger claim. That is now permitted. And there are no restrictions on third party claims. They are now permitted. So, as reported by the Commerce Committee, the bill contained certain other immunities. Those are gone, too. Parent companies and affiliates are no longer shielded from liability. Advertisers, attorneys, and PR firms are no longer shielded from liability. Addiction and dependency claims against the tobacco industry are preserved, including claims where addiction is the only injury alleged and claims where addiction is the basis of a broader claim relating to the manifestation of a tobacco-related disease. There are no longer any restrictions on the type of evidence that is discoverable or admissible, and all limits on the industry's obligations to produce documents have been removed. The ability of plaintiffs to maintain actions in State courts and grounded in State law is preserved. And, finally, there is no longer any exemption for tobacco companies from the Nation's antitrust laws. All of that is gone, Mr. President--gone. They have been totally exposed. And that is one of the reasons, I might add--you know, when you look at the price of $1.10, and you look at the settlement in Minnesota, if you extrapolate the settlement in Minnesota and the settlement in Mississippi, if you add up the potential of all the settlements in the country, you come out with an amount of money that is exactly or almost exactly where we are with respect to the $1.10. The fact is the tobacco companies are settling cases now at a rate that basically accepts the $1.10. They are not fighting about price because they know ultimately that is a price they can bear. What they are fighting about is the liability. That is the reason these millions of dollars are really being spent. That is the real bone of contention here. The fact is, they are offered two choices in this bill. They don't have to participate, in which case the situation the Senator from New Hampshire wants is exactly what will exist. They will be subject to suits, endless suits. That can happen. But, if they choose to try to come into the tent, as we have said --and we have no way to force them into the tent. There is no way we can do that. So my fellow Senators have a choice. You can either leave them out there subject to lawsuits, subject to all of this litigation without any cooperation. Or you can decide maybe there is something sufficiently good that we, the Government, can get in exchange for their participation, for which we are willing to tell them only one thing: You are not going to pay more than $8 billion in any 1 year. It doesn't let them off the hook. It doesn't say they don't have to pay. It doesn't say they are not liable. It doesn't give them immunity. It simply restricts the amount of money in any 1 year. What is it worth getting for that restriction for not having any more money in 1 year? We settle the State actions and we give them that $8 billion cap. That cap is importantly indexed to inflation, so there is not some sort of reduction in the purchasing power or in the value of that. It will rise with inflation and it will increase according to--at least 3 percent we have had each year and perhaps more, if the CPI is higher than 3 percent. I think it is important to make it clear--there is no concession in this bill unless the tobacco companies decide to be involved. And that is a critical component. The tobacco companies would have to come in and sign a protocol, sign a consent decree, and they would agree to abide by the provision of the payments. Most important, they would agree to abide by the look-back assessments. I would like to just run through the look-back assessments, because I heard the Senator from Utah yesterday on the floor--the Senator from Utah was pointing out to everybody how unconstitutional are the look- back assessments. The look-back assessments are a dramatic way of engaging the tobacco industry into compliance with the things we want them to do. The tobacco industry accepted, they are the ones who helped come up with the look-back agreement. The look-back agreement was in the original settlement with the attorneys general. So they have accepted it once already. They have shown their willingness to come in and live by the standard of the look-back agreement. What the look-back agreement says is that they must meet a target for the reduction of underage tobacco use. These targets are the same as those they agreed to in the June 20 agreement. The targets are as follows: In 3 years, there must be a 15-percent reduction. In 5 years, there must be a 30-percent reduction. That is for cigarettes. For smokeless tobacco, it is 25 percent. There is a 50 percent reduction over 7 years and 35 percent for smokeless. Over 10 years, the tobacco companies are agreeing that they must reduce teenage smoking by 60 percent. That is what this bill is about. This bill is an effort to reduce teenage smoking, and here we are trying to get the tobacco industry to specifically accept responsibility to be part of the process of doing that. You can't order them to do it. They are certainly not going to do it if all we do is leave them out there subject to endless lawsuits. There ought to be some incentive that says to those companies, ``Come on in and be part of the solution,'' and the look-back provisions are that. But the look-back provisions also say that if the industry doesn't meet the target, they will pay $80 million for each percentage point missed between 1 and 5. They will pay $160 million for each percentage point missed between 6 and 10 percent, and $240 million for each percentage point missed above 10 percent. That is not a bad penalty. That is not a bad assessment. That is an assessment based on a target that they agree to meet, and if they don't meet the target, they pay a regulatory fee accordingly. Mr. President, you can't get them to do that unless they agree. If you don't want them to challenge it and to tie us up for years in a court challenge that would not do what we want to do to reduce smoking, then, Mr. President, you have to find some way to bring them in. I say to all of my colleagues, yesterday on the floor of the U.S. Senate, there was a lot of hue and cry about how kids are going to lose out per 10 cents that we didn't raise the price, and if we had raised the price by 40 cents, we were going to save another 240,000 lives and people were deeply concerned about that and are deeply concerned about that. Those people who were concerned about that should not come in and vote to leave the tobacco companies in a position where all they are going to do is litigate lawsuits over the next 10 or 15 years, because during those intervening years, those numbers of kids are the kids who are going to be the victims. It is much more intelligent, it seems to me, to get the tobacco companies to be part of the solution in a way that reduces the level of smoking so those kids are, in fact, saved. I think that is a critical choice here. What we do in this bill is ask the tobacco companies to come in and do things that we have absolutely no right to get them to do without their cooperation. Let me be specific. A participating company, if they consented, would come in and make a significant up-front payment. They would abide by far broader advertising restrictions than those that were contained in the 1997 settlement. They would be required to create a document depository, where all those people who are going to sue in the future would have access to the documents that have come out of all of the tobacco litigation or out of their existing files. And they would agree--and this is the most important thing, Mr. President--they would agree not to challenge the provisions in the bill. They would agree to abide by these provisions, notwithstanding any future court decision on their constitutionality. I ask my colleagues to, again, measure that. If the tobacco companies sign an agreement not to sue in the future, not to challenge any of the advertising restrictions that we can't achieve unless they agree, that is an enormous step forward. Those advertising restrictions are as follows: There would be a complete ban on human images, on animal images and cartoon characters. There would be a ban on outdoor advertising, including stadia and mass transit. There would be a ban on advertising over the Internet. And there would be a ban on payments to glamorize tobacco use in media when such use would be appealing to minors. There would be a ban on payments for tobacco products placement in movies, TV programs and video games, and there would be severe restrictions on point of sale advertising of tobacco products. All of those things--all of those things--none of which could be achieved without the consent of the tobacco companies, we would gain as a result of just one thing: allowing them to know the level of their exposure and liability on an annual basis. It seems to me that is an enormous gain for the children, it is a gain for us putting together a responsible approach to reduction of smoking, and it is certainly a gain for the Congress, which would then have constructed a piece of legislation that had a chance of passing. It seems to me what we have here is a fundamental choice: If we want to put together a piece of legislation that can pass or whether we are going to come out here and put ourselves in the position of simply bashing tobacco because that is the feel-good position. I might add that in addition to the advertising restrictions, they would also abide by the look-back provisions. The look-back provisions will almost certainly be challenged. They won't be challenged, and even if they were challenged by someone else yet found unconstitutional, if the tobacco companies come in and sign a consent decree and a protocol, they must abide by that. If the tobacco companies at any time in the future were to violate that protocol, violate any component of this act, they would lose the cap on the annual liability payment. They would suffer the full exposure, just as they would if they don't participate. The final comment I make to my colleagues is very simple. This is a clear, clear choice. Under the managers' amendment, no tobacco company gets any liability restriction, any cap, any restraint whatsoever unless they decide to give up their rights on the first amendment, unless they give up their rights to challenge, unless they agree to abide by every component of the act. We have a fundamental choice here, whether we are going to be reasonable in the approach to try to bring them into the tent, or whether we are going to try to abide by something I think most people would feel would be destructive to this legislation as a whole. I reserve the remainder of my time. I know others want to speak at this time. Mr. McCAIN addressed the Chair.

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

Mr. KERRY. Mr. President, I will speak at greater length at a later time, but let me just say with respect to two of the concerns that were expressed by my colleague from Massachusetts, the Senator expressed the notion that the managers' amendment has left an ambiguity with respect to preserving addiction claims and also preserving the ability of States to bring future enforcement actions against the tobacco companies. I would assure the Senator that it is neither the intention of the Senator from Arizona nor myself that that be the case. It is our understanding that the language in the managers' amendment is clear with respect to the fact that we do preserve addiction claims, and we also preserve the right of the States to bring future enforcement actions. If there is any ambiguity about that, I know the Senator from Arizona and I would be only too happy to accept an amendment of clarification to make it clear that neither of those are in fact the intent. So I think that that is an issue that can be dealt with exceedingly easily. The larger issue, sort of the question of whether there is a shield or not, is something that I will address a little bit later. At this moment I suggest the absence of a quorum.

Mr. KERRY

Mr. KERRY. I amend that by asking if Senator Hagel, the Senator from Nebraska, could be recognized after Senator Carol Moseley-Braun?

Mr. KERRY. Mr. President, I thank the distinguished chairman for his excellent comments. I would not say anything more substantively except to say I think both the Senator from Arizona and I, and others involved in this, believe that there are a number of good suggestions that have been made. I think we laid this down with the statement this is not perfect in the way that no piece of legislation that comes here is perfect. I am confident that in the process, if we are not seeking to kill it, we can find a way to meld some of the good suggestions that are being made into both acceptable amendments and amendments which can pass by their own weight. I hope we will do that. Mr. President, I ask unanimous consent the Senator from California be recognized for 10 minutes. Following the Senator from California, the Senator from Texas, Senator Gramm, will be recognized--not for a specific period of time--and following the Senator, the Senator from Illinois, Senator Carol Moseley-Braun, would be recognized for 15 minutes.

Mr. KERRY

Mr. KERRY. Is the Senator not aware that each of those responsibilities which are designated to existing entities are already existing programs and existing efforts? Most of the requirements, whether it is money in public health, money in farmer community assistance, or health research, they are all ongoing programs, but that this augments their ability to be able to achieve the goals of existing programs?

Mr. KERRY. Mr. President, will the Senator further yield for a question without losing his right to the floor?

Mr. KERRY. I did not propound a question yet. I was waiting for the Senator to finish. I simply wanted to ask the following. There was an effort between the other manager and myself to try to have comity here so that we weren't really operating in a strict sense by asserting rights to the floor. We were trying to move back and forth in a relatively fair manner, without any sense of trying to cut anybody off. There is no effort here to stop somebody from being able to speak. There is an effort to try to share the opportunities with a lot of busy Senators. So what we are trying to do is get a sense of the length of time, in fairness to colleagues who are lined up to speak. If the Senator wants to continue to speak, that is obviously his privilege. He can also come back at any time and resume speaking. We are making no effort to hold the floor on this side. We are making no effort to delay. Each of the Senators will speak for a brief period of time. So we are very happy to accommodate our colleagues. I simply ask him if he might give us, at this point, some indication of either when he would complete this round or whether he would be willing to allow some other Senators, perhaps, to have a chance to also speak and then perhaps come back. We are trying to do this in a fair-minded way.

Mr. KERRY. I thank the Senator from Missouri very much.