John Kerry

Mr. KERRY

Mr. KERRY. Mr. President, as the Senator knows, we have been trying to move this along in a fair-minded way. Three and a half hours ago I asked the Senator how long he thought he might be, and we were talking in terms of an hour or so. I know there have been a series of fascinating and very important questions posed in a spontaneous manner. But that said, I wonder if the Senator might be able to share with his colleagues what opportunities other people might have to debate this issue.

Mr. KERRY. Will the Senator from Missouri yield for a question without losing his right to the floor?

Mr. KERRY

Mr. KERRY. I thank the Senator.

Mr. KERRY. I understand. I ask the Senator from Texas how long he will be speaking, because I understood the Senator from North Carolina was going to offer an amendment.

Mr. KERRY. Mr. President, if I can just inquire, it was my understanding--if I can just inquire----

Mr. KERRY. Mr. President, if I could simply clarify that, also I think we would put it in the context of the unanimous consent request that first recognition be for the half hour to the Senator from Kentucky. But if I could clarify it, we would request that the second- degree amendments would be the right of the Democrat leader, and, likewise, the first-degree amendment placed on the Democrat side would be subject to a second-degree amendment by the Republican side. With that understanding, we ask unanimous consent the Senate accept that as the procedure for the first two amendments.

Mr. KERRY

Mr. KERRY. Mr. President, if I could say to colleagues, there has been a request for some colleagues to be able to speak on the bill. Last night, we were here for a period of time and there weren't many Senators here. Again, tonight, depending on the time that Senator Kennedy is engaged in debate, there will be time, I am confident, for people to be able to speak on the bill. So I hope that Senators who have that desire will take advantage of that. Secondly, I think there has been no effort whatever to try to limit the debate at this point. It is rather an effort to try to gather all the amendments, find out what the second-degree amendments are, share them with everybody on both sides, and have a sense of how we can proceed in an orderly fashion. But as colleagues know, the manager of the bill could have come to the floor, filled a tree, held the floor, gone through an alternative process. We are trying to avoid that, trying to do this in a cooperative, bipartisan way, moving from side to side, recognizing the needs of a lot of Senators to be heard. So we hope Senators will take advantage of that. The Senator from Massachusetts wants to be recognized now as the next Senator to propose an amendment.

Mr. KERRY. I thank the Chair. I will be very brief. I join in thanking Senator Conrad for his very generous comments about the Commerce Committee and about Senator McCain's and my efforts in it. The truth is that so much of the energy of the Senate has been focused as a result of Senator Conrad's leadership. The task force effort that he put together was really exemplary. It reached every corner of every community that has anything to do with this issue. It is one of the most thorough and exacting pieces of work that I have seen in the Senate. I think Senator McCain would agree with me that there are significant components of the product that has been brought to the floor as a result of his efforts and leadership and his vision about this issue. So I think the quality of the presentation he just made to the Senate and to the country is a tribute to the groundwork he has done in order to get us here. Likewise, for years, my colleague from Massachusetts, the senior Senator from Massachusetts, has been at the forefront of all of the health issues with respect to children and, particularly, leading the effort with respect to the awareness of tobacco, and his leadership on this has been essential to our ability to have this product. So I thank them for that. I will say more about this particular issue tomorrow. Very quickly, I might say to the Senator from North Dakota that a few weeks ago there was an article in the New York Times that showed that the smuggling, to the degree there was a problem, has fundamentally been between countries, our cigarettes going out from the United States to Europe as a consequence of the price differential. If anything, as a result of the increase in price, there is a potential of closing that gap, No. 1. No. 2, with respect to those who worry about Mexico or an infusion into this country, we have an increase in the law enforcement and inspection capacity. Most people in the law enforcement community accept that the returns on heroin and cocaine are so much more significant than the bulk difficulties of transferring cigarettes, and that is a deterrent to those becoming a problem. Most people want the quality of the American cigarette. They are not particularly prepared to smoke Chinese or other kinds of cigarettes. There are a whole lot of ingredients that work against the smuggling argument, and we will get to that. I thank the Senator for his efforts.

Mr. KERRY. Mr. President, I would ask the Senator to yield on the time of the Senator from North Carolina.

Mr. KERRY. Not on your time.

Mr. KERRY. Mr. President, it is time we really talked about what is really happening here. And it is time that we face reality with respect to this amendment. I am just astounded listening to the Senator from North Carolina and the Senator from Alabama suggest they know better than their own attorneys general, who are elected, after all, who are accountable to the people of their States, just as we are as Senators, and who suddenly, representing the Republican Party, are attacking people because they have made some money and they do not like the way they have made some money. This is an unprecedented situation as far as I know. The Senator from Utah, the distinguished chairman of the Judiciary Committee, could not have put it more strongly or directly. He asked the question, What is our party coming to if this is what we stand for? Now, I ask my colleagues just to read this amendment. This amendment says: No award of attorneys' fees under any action to which this Act applies shall be made * * * until * * * [they] have provided to the Congress a detailed time accounting with respect to the work performed. They want to turn the U.S. Congress into an accounting committee for attorneys, private attorneys who have contracted privately with the attorneys general of their States. But after that, if ever there was a violation of what I thought the Republican Party stood for, here it is. ``This section shall apply to fees paid or to be paid to attorneys under any arrangement * * *'' i.e., retroactively. They are going to go back and say, no matter how many hours attorneys may have worked, no matter how much their firm may have put in, they are going to have to live by a certain fee that may be well below what they have already invested in a case. But even more importantly, they do this for any attorney ``who acted on behalf of a State or a political subdivision of a State in connection with any past litigation,'' ``who acted on behalf of a State or [any] political subdivision of a State in connection with any future litigation,'' ``who acted at some future time on behalf of a State or a political subdivision of a State in connection with any past litigation,'' ``who act at some future time on behalf of a State or a political subdivision of a State in connection with any future litigation of an action maintained by a State against one or more tobacco companies * * *'' Here is the most extraordinary long-arm reach of the Federal Government into the affairs of States from the very people who are most consistently on the floor of the U.S. Senate saying, ``Keep the Federal Government out of our business. Keep the Federal Government away from intruding. Don't put mandates on the State. Don't preempt State action.'' And here we are with the greatest single preemption, intrusion, and nit-picking, micromanaging that I have ever seen. That said, they are not even dealing with reality, Mr. President. They are coming in here and talking about $180,000 fees. That is not what they got in Florida. In point of fact, that is what the attorneys may have asked for because that was their agreement, but that is not-- they are subject to arbitration. Every single State is subject to arbitration. This bill honors the notion that there will be arbitration. No one expects attorneys to be paid the kind of money that is being thrown around on the floor of the U.S. Senate. That is not going to happen. And they cannot point to an instance where it actually has happened. In Minnesota, they settled for 7.5 percent. The Attorney General settled, all of the parties settled. And what is really fascinating is my friend from Alabama says there are not two pots of money. Well, that is not true. In Minnesota there are two pots of money, because they came to an agreement that one pot would pay the people what they get by virtue of a settlement, and the companies, the tobacco companies will wind up paying the attorney fees outside of it. That can happen in each and every other State subject to the determination of the arbitration process, subject to the courts, subject to the attorneys general and others. Who is the Senator from North Carolina, who is the Senator from Alabama to say that the attorney general of a State does not know what he is doing, that the attorney general of a State is incompetent to decide that he wants to run for reelection based on what he thought was a fair approach to arriving at a settlement? Why is it fair? It is fair, Mr. President, because no one wanted to take these cases. No one wanted to take these cases. I stand with my friend from South Carolina as somebody who has tried a case and who has taken a contingency case. When I first got out of school I started a law firm. We did not have the money to carry the case. We did not have anybody supporting us. But about six or seven people who had hairs implanted in their head from rug fibers came to us. It turned out that the hairs were cancer, carcinogenic, and they got extraordinary blisters and reactions to this and spent days in hospitals and being treated. But how were they going to get redress? Well, they got a couple of young lawyers who took the cases on a contingency. And we took those cases based on the notion that we invested our money in the depositions. We invested our money and the time put into it. And we worked for 2 long years, Mr. President, in order to be able to finally take that case to court, win the case in court, and ultimately force the rest of the cases to settlement. There are countless examples like that. America is going to have an opportunity to see a movie soon in which John Travolta will play Jan Schlichtmann, a young attorney up in Massachusetts who took a case of people in the City of Woburn, who had been poisoned by toxics put into the well system and their kids were dying of leukemia. This was a case that nobody wanted to take. This was a case that took years to prove, and they brought experts from all over the country. They invested in it themselves to the point, Mr. President, they were floating their own credit cards to the point of bankruptcy. They mortgaged their home to the point of bankruptcy. This lawyer lost his automobile. It was repossessed because he was going to win on behalf of these people. Ultimately, he was able to pay off all the bills and he barely made any money at all. That is a case you win. Most cases in America are stacked against the plaintiffs. In most cases in America, corporations have all the money. That we have seen from the tobacco industry over the last years. And that is why, as the Senator from South Carolina pointed out, in all the years of litigation, not one single penny has been paid out in the court as a result of a victory won in the court at this point in time. Who will bring those cases? This isn't the only example of that. There is the most extraordinary misunderstanding in America about contingency fees and what happens for the cases that are won that create a big stir. There are dozens of cases that are lost. There are dozens of cases litigated where people make an effort and they don't win. And that is our system of jurisprudence in America. That is how we provide the average citizen, the person who doesn't have the bucks, access to the courthouse. And here we are with a system that we have worked out in this bill which sets up arbitration which says, in section 1407, that in any case where the State and their litigation counsel failed to agree on attorney fees and related expenses, the matter of attorney fees and extensions shall be submitted to arbitration. There is no automatic payout in this bill. No attorney walks away with fees that any attorney general or any State thinks are wrong. That is not going to happen. And there are people accountable at the State level if it did happen. It is not the business of the U.S. Senate to step in and suggest that, because the Senator from Alabama finds the lifestyle of a particular individual who may not even have made the money through that case, other cases--finds it onerous, to say we will limit it. I bet any one of us could find any number of corporate executives, chieftains, in this country who have their airplanes, who have their nice cars, who may or may not choose to hit a golf ball in the ocean. I am sure you could say they have a lifestyle that somehow people find a little bit objectionable or they are jealous of, but since when in this country do we say we will limit their capacity for earnings and step in and become the accounting agency for those kinds of transactions? I hope my colleagues will measure carefully the capacity in this bill. This would interfere with private contracts. The amendment is not necessary, because a bill has a means of resolving these. The courts have already shown an unwillingness to prevent any unreasonable fee, and these contingency fees preserve the rights of our citizens to be able to have access to the court. Let me share why that is so important. It was the result of a suit brought on contingency that helped make automatic teller machine operators responsible to put those machines in a way that people weren't attacked or somehow there was a sense of responsibility about the locations. That is one of those victories that you win because people took a case. Another case, where a $10 million punitive damage award against Playtex removed from the market tampons linked to toxic shock syndrome--those problems had been deliberately overlooked by the company. It was only because of the suit that people were protected. In St. Louis, a jury returns a $79 million award against Domino's Pizza because of its fast delivery policy. We had a woman, Jean Kinder, who suffered head and spinal injuries when a delivery driver ran a red light and hit her, because the policy was, you have to push delivery. They changed their policy because a lawyer brought that concept to court, and it was rectified. An 81-year-old died from a fatal kidney ailment after taking an arthritis pain relief drug called Oraflex for about 2 months. The manufacturer had known of the serious problems associated with the drug but failed to warn the doctors, and, in fact, Eli Lilly removed the drug, as a result of that suit, from the world market after it had been available in the United States for less than a year. Eight punitive damages awards were required before the A.H. Robins Company recalled the Dalkon Shield, the IUD, and we all know what happened with respect to that. All of these were instances, Mr. President, where American citizens were protected by virtue of the capacity of a lawyer to take a case. I can tell you, if you limit these fees to the level they want, what you are really doing is limiting the access of the average American to the courtroom, because you will make it impossible for lawyers to take those fees under those circumstances--not to mention the unconstitutionality and questionable practice of how you regulate defendants' fees in totally private contractual relationships outside of anything to do with State action, outside of anything to do with a compelling straight interest, with no appropriate rational nexus that the court requires for that kind of test. This doesn't work. It is not needed. It is wrong. It is an exaggerated problem seeking some kind of solution. This is not the solution. I reserve the remainder of my time.

Mr. KERRY. Mr. President, I yield myself such time as I use. I will not use that much time.

Mr. KERRY. I presume the Senator can yield himself more time if he wants to.

Mr. KERRY. I thank the Chair.

Mr. KERRY. If I could ask the Senator from Alabama how much time he might use so other colleagues can plan, so we can proceed down?

Mr. KERRY. Mr. President, point of inquiry?

Mr. KERRY. I thank the Chair. I understand the Senator wants to yield some time now. I think we can go back and forth.

Mr. KERRY. Mr. President, I believe the time agreement was the time would come from the Senator from North Carolina.

Mr. KERRY. Mr. President, I appreciate the Senator being willing to yield. And I just wanted to make it clear that the record was clear in his answer that there were tax cuts of significance. You can make adjustments as to who might have benefited and who did not, but those were not just tax increases. I think that is an important point. I thank the Senator.

Mr. KERRY. Didn't most of those also have tax cuts in them?

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

Mr. KERRY

Mr. KERRY. Mr. President, I thank the distinguished chairman, the manager, for his eloquent comments with respect to the debate that now begins in the U.S. Senate. Senator Hollings has asked me to open on behalf of the committee, and I do so with great respect for his leadership and his involvement in helping to bring the U.S. Senate to a point where we can engage in this consideration. He continues to fight extraordinarily for what he believes in very deeply, and particularly, along with the Senator from Kentucky, for the farmers who may be impacted by this legislation. And that is a fight that we will continue to have over the course of the days ahead. This is not just the opportunity, Mr. President, for a historic debate; it is an extraordinary opportunity for historic action by the U.S. Senate. For years, many people across this country have worked hard for this moment. For years, we have waited for the opportunity for the Senate to be able to step up to bat and exercise its responsibility to protect the children of the country. And literally we have the opportunity, whether it is this week, which we hope it might be, or in the next weeks, when it might inevitably be, we have the opportunity to act on behalf of the children of this country in a very direct way that expert after expert, Surgeon General after Surgeon General, pediatrician after pediatrician, cancer specialist after cancer specialist, all have said is necessary for the better health policy of our Nation. It is a tribute to the outrage in this country that by now millions of Americans understand that 3,000 children will start smoking today and will get hooked--some 6,000 will try it, but 3,000 children will wind up smoking. And of those, 1,000 of them will die early because of the habit they get that they could not kick. Every American has now come to understand the way in which children have been manipulated, aggressively marketed to, in order to suck them into this addiction which ultimately can cost their lives. That is what we are voting on on the floor of the U.S. Senate. That is what this debate will be about over the course of the next few days. There is a growing awareness now in America that we lose the lives of over 400,000 of our fellow citizens each year because of smoking- related illnesses--more people than we lost in all of World War II, more people than we lost in all of Vietnam and all of Desert Storm combined. And we lose this every year. And it costs us billions of dollars in the health care system of our Nation, in our insurance, in the hospital wards where some people who have no insurance are paid for by the rest of their fellow Americans. So this week in the Senate, we are moving beyond the point of simply articulating a threat to the children of our country. No one, I think, now disputes the notion that there is harm associated with smoking. And now the U.S. Senate and the Congress need to act with legislation that carries the imprints of both parties, of Senators of both parties, of Governors of both parties, of 44 very tenacious and courageous attorneys general. Now is the time to follow through on their efforts. I urge all my colleagues--Democrat, Republican, liberal, conservative, no matter what particular passion politically brings them to the U.S. Senate--I urge them over the course of the next days to put aside that partisanship and to try to set aside the inclination to make the perfect the enemy of the very good and to focus today and throughout this week on passing effective legislation that puts America's children out of harm's way and secures for the Senate's legacy one of cooperation and accomplishment, something that many people have felt has been too absent in the workings of the Senate these recent years. There is a growing feeling that unless we act with a sense of bipartisan and a real dedication to doing what is in the national interest on smoking, that somehow we might let this historic opportunity slip through our fingers. I do not dispute the possibility of that, but, on the other hand, I believe that the Senate clearly has shown its willingness on many occasions in the past to rise to this kind of occasion, to ignore those that Senator McCain just referred to who will spend billions and billions of dollars, who have a long record of misleading America and the Congress with respect to this issue--that we will ignore those special, narrow interests in favor of the larger common interests of our fellow citizens. That is precisely what most of us came here to see this Senate do. And now we can take pride in the possibility of being part of that. I believe that when my colleagues read the managers' amendment, the bill that is before them, they will find that there is in this a mainstream concept, that there is in this a view that really does represent common sense. I think it is a rare occasion that, on a subject as ripe for dissent as the subject of tobacco, any committee in the Senate could conceivably send a bill to the floor of the Senate by a vote of 19-1. The Commerce Committee is, in point of fact, a microcosm of the whole Senate. There are the extremes that we have on both sides, the hard- line points of view on both sides; and there is, of course, every point of view in between that somehow finds a center. And I believe that in the end, when all of the debate and all of the anguish over this bill has been worked through, we will find that we will be somewhere relatively close to what the managers' amendment proposes and to what the Senate has advocated. As I say that, I personally believe there are improvements that can be made. There are things in this bill with which I don't agree. There are things that we have all reserved the right to try to change. What is important, Mr. President, that we permit the Senate, at this moment, to affect that change, that we permit it to work its will and to ultimately vote on a bill. Senator McCain, I might say, has approached this task by reaching out all across party lines, reaching out to every sector of interest group that is represented in this debate. I know that he and others on the committee have tried to listen hard. It is my belief that when Senators examine the bill, while they will undoubtedly find a particular point of view here or there with which they could find disagreement and make suggestions for improvement, I believe the fact is that they will have a renewed respect for the way in which Senator McCain and the Commerce Committee and Senator Hollings reached out to demonstrate some tough decisionmaking under difficult pressures. I also believe that in the end the changes that have been made, most of those in the managers' amendment, clearly make this a stronger and better bill than it was when it did leave the Commerce Committee. I remind my colleagues that the Commerce Committee, at the time we sent it out of committee, reserved the right at that point, knowing there were some issues that weren't quite completely vetted, to make changes in a managers' amendment as we brought it to the floor. The structure of the bill has now been changed so that the provisions that are most critical--for reducing youth smoking, the annual payments, the look- back assessments, and the advertising restrictions--will be implemented without the tobacco industry's assent, if that is our only choice. I think every member of the committee, I am sure every Member of the Senate, would prefer that the tobacco companies were part of the solution and not a continued part of the problem. We would prefer that they were, in fact, signing on to all, everything, that we may embrace here in the Senate. I believe that the industry's participation in youth smoking reduction efforts is obviously preferable, but I think we have made a genuine effort to try to respond to most of their needs. As the chairman pointed out and I will underscore, almost every concept in this bill was embraced by the tobacco companies in their settlements that they arrived at with the attorneys general. In fact, most of the concepts are arrived at in the settlements they have still reached, most recently last week in Minnesota, with a few exceptions. The fact is there are some aspects of this that are tougher--but tougher in fact, not tougher in total concept. They do reach farther in amount of money. There are greater limitations on liability because many people believe those liability provisions were too great. But the fundamental principle that there should be some restraints, that there should be some kind of look back, that there should be advertising restraints, that there should be an increase in the price, were all accepted by the companies themselves, and it is certainly subject to debate and to discretion within the Senate to ultimately agree on what those levels ought to be. When first presented to the Commerce Committee, the tobacco settlement would have provided the tobacco companies with what most people believe was an unprecedented level of immunity from civil action--elimination of class actions, punitive damages. Aggregation of claims would not have been allowed. Claims based on addiction would not have been allowed. It would have allowed parent companies to shield their tobacco profits from liability. It would have risked the ability of injured persons to file State claims. It would have kept those State claims in State courts. Mr. President, those restraints on the ability of our citizens to be able to seek redress were plain and simply excessive. These liability restrictions are especially dangerous to the public health because this kind of liability threat is, in the final analysis, the strongest and most important insurance that the tobacco companies will take public health concerns seriously, finally, after so many years of ignoring them. Let me be clear: The bill before the Senate no longer contains special protections for the industry. That, I believe, was an important step towards a workable piece of legislation. We also must pass legislation that contains high compliance standards to ensure that retailers will stop selling cigarettes to minors. We believe we have strengthened this element of the bill. We penalize States which do not achieve a 90-percent compliance rate after a 5-year grace period. When 62 percent of 12-to 17-year-old children in this Nation report they could succeed in buying their own cigarettes, that nearly half of them have never been asked to provide a positive identification, it seems to me it is time for us, as a nation, to get serious about compliance. This bill does that. In order to ensure that the tobacco companies actually have sufficient incentives to reduce youth smoking, they and their shareholders must now know that they will pay significantly if youth smoking rates do not decrease dramatically, which means they must join in the efforts to help us reduce smoking among our youth. That is why the look-back assessments are so important. Under the managers' bill, the cap on industry-wide assessments has been raised to $4 billion, and there are new uncapped company-by- company payments of $1,000 per child who smokes. That is an incentive to be helpful. Not only have the assessments been significantly increased but they are no longer tax deductible. That is, in fact, a greater incentive for people to understand that this bill means business. In addition, and this is very important to many who have been part of the process, the look-back assessments are now tied to the liability provision so that companies which continue to entice minors will lose any liability protections whatever--that is to say the cap particularly or any other protections in the aggregation preemption. I think it is nearly universally agreed that we cannot fundamentally regulate tobacco without a strong and effective FDA authority over tobacco products. The distinguished Presiding Officer has played a critical role, along with Dr. Koop and Dr. Kessler, the White House, and the Department of Health and Human Services, in helping to come together in a considerable effort of negotiation in order to come up with FDA authority within this legislation. The FDA will have specific and broad new authority to regulate tobacco products. Indeed, Dr. Koop has publicly praised the provision as a substantial improvement over the provision in the proposed settlement. I am confident that Dr. Koop, Dr. Kessler, and others will continue to work with Congress on this matter to ensure that the FDA has the authority it needs to protect kids and to promote public health. What we have before the Senate is not perfect legislation. None of us has ever known a perfect piece, I think, to come to the floor of the Senate. We will have a critical debate in the days ahead about whether or not we can find room for improvement. There are many ideas that different Senators will offer. I look forward to that debate with respect to children, with respect to farmers, with respect to liability, attorney's fees, and other issues. Finally, we owe a great deal to the leadership and hard work of our colleague, Senator Kent Conrad, who has spoken out on tobacco with a great deal of passion, but more importantly, who helped, through a long process of working with the task force, to shape and fold what is in front of the Senate today. I appreciate how sensitive Senator Conrad has been toward passing legislation in this Congress and how seriously he has fought to make certain that Congress will find a middle ground place where all of us can, hopefully, ultimately come to agreement. In the managers' amendment there are several improvements that reflect Senator Conrad's priorities and the great work that he has performed as leader of the Democratic task force on tobacco. So now the full Senate has the opportunity to work its will, to pass this bill with the managers' amendment, to send America into the next century with the knowledge that we are a Nation not just with a responsible policy toward an addictive substance, not just with a responsible policy toward our children, but that we know how to translate our conscience into public legislation, that we can reach beyond partisanship in order to find the common ground. To my colleagues, I say simply that history has finally put this legislation on the floor of the Senate in a decade-long fight to protect our children. We weren't fighting for party. No one in this fight ought to have an ideological ax to grind. In the final analysis, the one priority that will bring us together is fundamental: This debate is about our children and it is about our responsibility of raising a generation of healthy children who will live up to their potential, free from the grasp of a dangerous drug. That is our challenge, and I believe that the Senate can meet it. I join with my colleague, the Senator from Arizona, in suggesting that this is the moment for the Senate to break away from the mendacity, the deception and willful effort to try to undercut the health of our kids over such a long period of time. I hope we are going to do that. I yield the floor. Mr. FRIST addressed the Chair.

Mr. KERRY. I yield to the Senator from Arizona.

Mr. KERRY. I will yield the floor.

Mr. KERRY. I would be happy to yield after I finish my comment. I will not object, Mr. President. But I would simply say that I think the Senator from Arizona would agree that in the judgment of most of us we thought we made it smaller and slimmer and easier, but that will be proven over the course of the next days. I appreciate what the majority leader has said, and I think hopefully we can find some way to resolve this as we go through the next days.