Arlen Specter

Mr. SPECTER

Mr. SPECTER. Will the Senator yield for a question?

Mr. SPECTER. I thank my colleagues. I will confer further with the Secretary and further study the matter.

Mr. SPECTER. I thank the Chair. Mr. President, I have been following the debate in an effort to understand exactly what the ramifications are of the amendment offered by the Senator from South Dakota [Mr. Daschle] and the second-degree amendment offered by the Senator from Louisiana [Mr. Johnston]. The manager of the bill, the Senator from Utah, has discussed the matter with me, and in order to try to obtain some clarification, I called the Secretary of Agriculture to try to understand the specifics as to what is involved here on the inspection of meat and poultry. I favor regulatory reform and, in the course of the debate and amendments for consideration, I have supported amendments which will reform the regulatory process to try to eliminate some of the red tape which is now present. But I do believe that when it comes to matters of health and safety, we have to be very, very careful about how the reform measures impact the regulatory process. Furthermore, the regulatory process has to be reasonable so business can proceed without undue regulations. There is general agreement today that there is excessive governmental regulation, and it is not easy to find the appropriate balance. In my judgment, it depends upon the specifics. The Secretary of Agriculture pointed out to me the problems which have been discussed at some length regarding E. coli bacteria and salmonella. He said that for some 10 years, there has been an interest in the scientific community in moving beyond the traditional touching and smelling; that from the E. coli and salmonella, some 4,000 people die each year and several hundred thousand are made ill; that the proposed rulemaking, which was submitted in January, has brought comments from many, many people, thousands of comments, and they are in the process of considering those comments. The Secretary says there will be appropriate consideration so that there will not be an undue regulatory burden. He has received many complaints from the small packers who complained, understandably, about the cost in the testing, and there have been some complaints that they have not had enough of an input in the process. Secretary Glickman says that there will not be a final rule until there has been very substantial input from small business. The second-degree amendment which has been offered by Senator Johnston would exempt, as I understand it, the rulemaking process which Secretary Glickman is concerned about here but would not stop at a later time somebody going back and insisting on the kind of cost analysis which might invalidate the rule which the Department of Agriculture is considering at the present time. A question which is on my mind is whether there should not be some input from the Secretary of Agriculture who could make recommendations so that we could have legislative language which would protect the small packers, the small business people and have some guarantees against excessive regulations, but which would not tie the Secretary's hands on taking the steps which are necessary to guarantee the safety of meat and poultry. On this date of the record, it is my view at the moment, and I am prepared to listen to further argument, while the amendment by Senator Johnston is a significant step forward in exempting the current regulatory process at least for the time being, that it is not a guarantee that there will not be some revision at a later time which would jeopardize the sanitary condition of meat and poultry. My colleague from Utah, the distinguished chairman of the Judiciary Committee, asked me to review it to try to give him my thinking, because there is a vote count going on now. As I see it at the moment, I would support the Johnston amendment, but similarly I would support the Daschle amendment. I told my colleague from Utah it might be useful to have a discussion on the record.

Mr. SPECTER. If I may reply for a moment to what the Senator from Louisiana has commented about. I would be interested to see in the unanimous consent request if the issue is just limited to the Department of Agriculture. That would be very weighing on my mind on how I vote on the Daschle amendment. I support the Johnston amendment. I think it is a decisive step forward. I discussed this earlier today off the floor with the Senator from Louisiana. I think it is a step forward. But I want to know what other specific situations might rise to the level of the problem of the E. coli and the salmonella. Is it not true, if I may ask, whether there is not a lookback procedure, as the expression is used, even with passage of the Johnston amendment, that would open the door to reevaluation of this regulatory process that the Secretary of Agriculture is now engaged in?

Mr. SPECTER. To what extent does the Daschle amendment change that?

Mr. SPECTER. Both ways.

Mr. SPECTER. Has there been an effort made to seek any exemption beyond this one on the Department of Agriculture?

Mr. SPECTER. If my colleague will yield for a question, there are a number of questions I would like to discuss with the Senator from Utah, but I will start with the core question. When you talk about not wanting to have an exception because then you would have other exceptions, is not the issue of safety and health as it relates to meat and poultry a very, very unique circumstance which justifies an exception for that very important category? What other categories would the Senator from Utah anticipate seeking exemptions? Because if there are other categories where an exemption is accorded on a case-by-case basis, I think that is something the Senate ought to consider.

Mr. SPECTER

Mr. SPECTER. Mr. President, this amendment would leave it to the discretion of the trial judge, as the Federal judges have discretion in all other cases, to decide whether there ought to be discovery after the defense files a motion to dismiss. The judges currently have the full authority to stop discovery if it is inappropriate. What is happening here, as with many of the other rules changes in the bill, is a wholesale revolution in the way securities cases are handled without having followed any of the usual procedures prescribed by law under which the Supreme Court of the United States establishes the rules after hearings and consideration by advisory committees and recommendation from the Judicial Conference, and without ever having had the Committee on the Judiciary consider these issues. It is true that there are some frivolous lawsuits which are filed in America today, but we are dealing here with an industry which in 1993 had transactions on the stock exchanges of $3.663 trillion, new issues of $54 billion, and the savings of many small investors and the proverbial widows and orphans at risk. The Securities and Exchange Commission does not have the resources to handle all the potential violations as enforcement matters. That is why there are private actions. When you take a look at the lawyers' fees, they are a pittance compared to the over $3.6 trillion involved. What is happening here, Mr. President, is we are not throwing the baby out with the bath water. We are throwing out the entire family with the bath water.

Mr. SPECTER. Mr. President, I have asked my colleagues to listen to this amendment. In the well of the Senate, I won several votes, finally having received a hearing on the last amendment. What this amendment does is to accept the very stringent standard of the second circuit on pleading to show state of mind, and then it adds to the legislation the way the second circuit says you can allege the necessary state of mind. The bill, quite properly, tightens up the pleading standards by establishing the most stringent rule of any circuit. The committee report takes pride and says that the committee does not adopt a new and untested pleading standard but takes the second circuit standard. But then in four lengthy, well-reasoned opinions, the second circuit has said this is how you can allege the required state of mind. They set two ways down to prove it, which I would like to read to you but I do not have time. All this amendment does is says that when you take the second circuit standard, admittedly stringent, this is how you get it done--not the exclusive way--but the way you get it done. In asking the managers and the proponents of the bill, I have yet to hear any reason advanced why this is not sound, even after they conferred with their staffs. This is just basic fundamental fairness that if you take the second circuit standard, you ought to take the entire standard, which is very tough on plaintiffs to establish state of mind, which is hard to prove. How do you get into somebody else's head? But at least when the second circuit says this is the way it ought to be done and the bill says let us make it really tough, at least let the plaintiff know how they are going to be able to plead it by the way the second circuit itself permits.

Mr. SPECTER. Mr. President, before my 2 minutes commence, may we have order in the Chamber.

Mr. SPECTER

Mr. SPECTER. Mr. President, this is the amendment which I referred to earlier dealing with a provision of the bill in its current form which prohibits any discovery after a motion to dismiss has been filed, except under very limited circumstances. The general rule of Federal procedure is that discovery may proceed after a complaint has been filed and a motion to dismiss has been filed unless on application by the defendant the judge stays the discovery. The current bill provides as follows: In any private action arising under this title during the pendency of any motion to dismiss, all discovery proceedings shall be stayed unless the Court finds, upon the motion of any party, that a particularized discovery is necessary to preserve evidence or prevent undue prejudice to that party. It is more than a little surprising, Mr. President, to find securities litigation separated out from all of the other litigation in the Federal courts. And for those who may be watching this matter on C- SPAN, while this may be viewed as somewhat esoteric, somewhat hypertechnical, it will not be hypertechnical if you are a stockholder and the stock goes down and you find you have been misled and defrauded by people who have made misrepresentations. What this means in common parlance, common English, is that a lawsuit is started. It is a class action started, and this private right of action has been developed in order to protect shareholders, especially small shareholders who band together in a class, and after the complaint is filed the plaintiffs' attorney seeks to find out the details as to what happened with the defendant; the plaintiff does not know all the details of the facts at the time of filing suit. The corporation or the officers may have made some very fine promises which sounded very good when the promises were made but no one can tell about the details of the facts unless you go into the records of that party because those facts are not generally known. In lawsuits, discovery is permitted where one party seeks to take the deposition, that is, to ask the other party questions, or propounds interrogatories, that is, submits written questions, or makes a motion for the discovery of documents to take a look at records. In discussing this issue with the proponents of the legislation, I was given a response--it is a little disappointing not to find somebody to argue against here. It is not easy to make an argument when there is nobody to disagree. Perhaps my distinguished colleague from Iowa wishes to disagree with me. My distinguished colleague from Utah chooses not to. The response I got was that it changes the mindset of the litigation, and I would say that the trial judge who is sitting on the spot has ample discretion, if it is inappropriate discovery, to say the discovery is not going to go on, instead of having a mandatory change singling out this legislation from all other legislation. Well, may I defer to my distinguished colleague from Utah, who I know, having warning in advance, now has had ample opportunity to muster the legal arguments, or am I to infer that the managers of the bill have fled the scene because there is nothing to be said in response to the overwhelming arguments I have presented?

Mr. SPECTER. But I must say, I do not understand the logic of what the committee has done when they utilize the second circuit standard which they say is the most stringent standard, and the second circuit is given a road map as to how you meet it. The legislation might not say this is the only way to meet it, but this is one of the ways to meet it so that when somebody is drafting a pleading, a party has knowledge and notice as to how to go about it. When the committee takes credit here for not adopting a new and untested pleading standard, I give them credit, because it is something which has already been tested. It is not new, but is incomplete if it does not have the second part of what the second circuit said as to how you meet the standard. It simply to me does not follow. I shall not pursue it because I understand the distinguished Senator from Utah is not the draftsman. Mr. President, that concludes the argument, and I do not think there is any point at this late hour in keeping the staff here if we are not going to have any reply. So, Mr. President, I yield the floor. If my colleagues are here and intend to make some reply, if they are on the premises, I will wait a reasonable period of time, but only that, in view of the lateness of the hour.

Mr. SPECTER. Mr. President, I thank my distinguished colleague for that response.

Mr. SPECTER. I think that question may be even understandable on C- SPAN2. [[Page S 9172]] Mr. BENNETT addressed the Chair.

Mr. SPECTER. If the Senator will yield for a question? Can you give me in a beholder's eye what you are about to say is comprehensive?

Mr. SPECTER. Mr. President, I thank the clerk. I sense that the clerk was surprised I had not asked unanimous consent and permitted the clerk to read the amendment. But I did so just for a change of scene on C- SPAN2. Since there is nobody here to argue with me, at least let there be some break in the action. The formulation of the amendment by my distinguished chief counsel, Richard Hertling, was as clear and succinct as I could have articulated it. Mr. President, this again involves a question which might be viewed as being esoteric and legalistic unless you are someone who has lost money in the stock market and seek to make a recovery, unless you are one of the people who has participated in the stock transactions in excess of $3.5 trillion or have been among those who have bought stock in the market, more than [[Page S 9171]] $54 billion worth in 1993, the most recent year available for statistical summary. And what this amendment seeks to do, Mr. President, is to amplify the language of the bill which imposes a very difficult pleading burden on the plaintiff. Let me take just a moment or two to say what goes on in a lawsuit. When somebody loses money because they bought stock where there has been a misrepresentation, and that person goes to a lawyer, they may have a relatively small amount of stock, say $1,000 worth, or $10,000 worth, or even $100,000 worth. That is not a sufficient sum to be able to carry forward litigation which is very, very costly on all sides, so class actions are authorized under the rules of civil procedure where many plaintiffs can join together and there is a sufficient sum so that the lawsuit can be brought forward. Then the lawyer--and I have been on both sides, filing complaints and filing motions to dismiss--has to prepare a complaint, and the complaint involves allegations. An allegation is a statement of what the party represents happened. And then there is an answer filed by the defendant or the defendant may file what is called a motion to dismiss, if the defendant makes the representation that even assuming everything in the complaint is true, there is not a sufficient statement to constitute a claim for relief under the Federal rules, to warrant a recovery. When these rules of civil procedure were formulated back in the 1930's, and I had the good fortune in law school to have the distinguished author of the Federal Rules of Civil Procedure, Charles E. Clark, the former dean of Yale Law School who was then a judge on the Court of Appeals for the Second Circuit and came to the law school to instruct us law students--there was done what was called notice pleading so that there did not have to be any elaborate statement as to what the case was about. It could be very simple. There was a case called Jabari versus Durning, if my recollection is correct, where a person just scribbled some notes on a piece of paper, went to the clerk's office and filed it. And the effort was made at that time to have a notice pleading, contrasted with a common law pleading under Chitty where the averments had to be very, very specific. If he did not say it exactly right, you were thrown out of court. It was very complicated. And I can recall the early days practicing, going to the prothonotary in the Philadelphia Court of Common Pleas, which draws a smile from my learned colleague who is also a lawyer. There was no way that I could draw the complaint with sufficient specificity to satisfy the clerks, who would take some delight in rejecting legal papers filed by young lawyers. So at any rate, this bill seeks to have a very tough standard for pleading. And I think that it is a good point. And what the draftsmen have done is gone to the Court of Appeals for the second circuit, and they have drafted a type of pleading requirement which was articulated by the chief judge of the court of appeals by the name of John Newman, who was a classmate of mine in law school and studied at the same one as the distinguished jurist, Charles Clark, the chief judge. And now Judge Newman is chief judge in his place. And this required state of mind provides that: In any private action arising under this title, the plaintiff's complaint shall, with respect to each act or omission alleged to violate this title, specifically allege facts giving rise to a strong inference that the defendant acted with the required state of mind. Now, that is the toughest standard around. And that is fine. We ought to move away from notice pleading and really make the plaintiff state with specificity the state of mind. But when the Court of Appeals for the second circuit handed down this very tough rule, they went just a little farther and said what would give rise to an inference so that there would not be guessing on the part of the plaintiffs. And this is what Judge John Newman, who established this standard in the case of Beck versus Manufacturers Hanover Trust Co., said: These factual allegations must give rise to a ``strong inference'' that the defendants possessed the requisite fraudulent intent. A common method for establishing a strong inference of scienter is to allege facts showing a motive for committing fraud and a clear opportunity for doing so. Where motive is not apparent, it is still possible to plead scienter by identifying circumstances indicating conscious behavior by the defendant, though the strength of the circumstantial allegations must be correspondingly greater. Now, what my amendment seeks to do, Mr. President, is to put into the statute the same things that Judge Newman was citing when he posed this very tough standard pleading. Judge Newman and the court said that the strong inference that the defendant acted with the required state of mind may be established either: (a) alleging facts to show the defendant had both motive and opportunity to commit fraud, or (b) by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness by the defendant. Now, in the committee report, which accompanies this bill, the committee says this: The Committee does not adopt a new and untested pleading standard that would generate additional litigation. Instead, the committee chose a uniform standard modeled upon the pleading standard of the second circuit. Regarded as the most stringent pleading standard, the second circuit requires that the plaintiff plead facts that give rise to a ``strong inference'' of the defendant's fraudulent intent. The committee does not intend to codify the second circuit's caselaw interpreting this pleading standard, although courts may find this body of law instructive. Now, I am a little bit at a loss--and I know that the distinguished Senator from Utah will have a response at this time, or Senator Grassley will, or the Chair will--as to why the--I am just joking about that because there is nobody here to argue with me about this. And it may create some change in my agreeing to the unanimous consent for 2 minutes tomorrow to discuss this with the managers of the bill. But the committee does say here that they are not adopting a new and untested pleading standard. They are correct. This is tested by the second circuit. But the second circuit in the whole series of cases has found that the way to make this determination is through these inferences which I have added in this amendment. And the committee does say accurately that this is the most stringent pleading standard around. And then the committee says that it does not intend to ``codify the second circuit's caselaw interpreting this pleading standard, although the courts may find this body of law instructive.'' Well, if we do not have it the way the second circuit says you plead it, but only saying this is instructive, then this bill allows courts to interpret this tougher pleading standard anyway they choose, and courts may impose some standards which go far beyond what the second circuit and Judge Newman had in mind in imposing this tough pleading standard. And it is one thing for the committee to say that they are not adopting a new and untested pleading standard, but it is only halfway if it does not put into the statute but leaves open the question of how you meet this standard. I do wish I had the managers here to question them about precisely what they have in mind. And I am going to have to figure out some way, Mr. President, to raise this issue. Maybe I will offer this amendment in another form later so we can have some discussion and debate on it, because there is not really any explanation or any way to respond to or to understand what the committee has done here, because what they have done in essence is say the second circuit has a tough pleading standard; let us take it. But when the second circuit amplifies and says how you meet that standard, the committee says no, no, we are not going to adopt that. What I am trying the do in this amendment is simply complete the picture and have in the statute this standard so that people know what they are to do on the pleading. Now, I know my colleague from Utah will have a comprehensive reply on this substantive issue.

Mr. SPECTER. Mr. President, I now send a third amendment to the desk and ask for its immediate consideration.

Mr. SPECTER. It is a little difficult to proceed, Mr. President, without opposition. But permit me at this time, Mr. President--and may I note ascension to power of my distinguished colleague from Pennsylvania, Senator Santorum. Mr. President, in the absence of a reply, I would ask unanimous consent to proceed with the third amendment which I propose to offer.

Mr. SPECTER. Good. Will the Senator yield for a question or two?

Mr. SPECTER. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. SPECTER. Mr. President, I ask unanimous consent that the amendment be set aside so that I may proceed to offer my second amendment. [[Page S 9170]]

Mr. SPECTER. Mr. President, I now refer again to the letter from Judge Becker citing the draft of a rule from Circuit Judge Patrick Higginbotham, who is chairman of the Judicial Conference Advisory Committee on Civil Rules, which sets out the amendment which I have submitted, and it is to this effect: that the sanction for abusive litigation would arise in any private action when the abusive litigation practice is brought to the district court's attention by motion or otherwise. The court shall promptly decide with written findings of fact and conclusions of law whether to impose sanctions under rule 11, and upon the adjudication, the district court shall include the conclusions and shall impose the sanctions which the court in the court's discretion finds appropriate. Mr. President, I submit to my colleagues that leaving the discretion to the judge really is the right way to handle these matters. These judges sit on these cases, know the cases, and have ample authority as a discretionary matter to impose the sanction. As one judge said, all these rules cannot make a bad judge do the right thing. But I think we can rely upon the discretion of the judges without tying their hands. Mr. President, I would be glad to yield the floor at this time to argument by the managers if they would care to do so. We can then proceed to conclude the argument on this amendment. Exhibit 1 United States District Court, District of New Mexico, Albuquerque, New Mexico, May 2, 1995. Hon. Arlen Spector, U.S. Senate, Committee on the Judiciary, Wsshington, DC. Dear Senator Spector: Thank you for your letter of April 24, 1995 and the opportunity to express comments on issues involving Rule 11 of the Federal Rules of Civil Procedure. For purposes of clarity, I have restated each question posed in your April 24, 1995 letter followed by my response. (1) Is there a significant problem with frivolous litigation in the Federal Courts such as to justify ``loser pays'' and strengthening of FRCP 11? Response: Rule 11, as amended effective December 1, 1993, gives federal judges adequate authority to impose appropriate sanctions for conduct that violates Rule 11. Rule 11(c) states that if Rule 11 has been violated ``the Court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation.'' Rule 11(c)(2) describes the sanctions that may be imposed for a violation. These include directives of a non-monetary nature, an order to pay a penalty into Court, or an Order directing that an unsuccessful movant who has violated Rule 11 pay ``some or all the reasonable attorneys' fees and other expenses incurred as a direct result of the violation.'' At this point there appears to be no need to change Rule 11, or to pass legislation, to introduce a more stringent ``loser pays'' sanction. (2) How well did FRCP 11 work after the 1983 Amendment, which strengthened the rule, and since the 1993 Amendment, which weakened the rule? Response: In this judicial district, considerable satellite litigation developed under Rule 11 after the 1983 amendment. This required judges to devote significant time to resolving squabbles among counsel unrelated to the merits of the case. The 1993 amendment of Rule 11 has dramatically reduced the number of motions alleging Rule 11 violations. This I attribute directly to the ``safe harbor'' provision found in Rule 11(c)(1)(A). The ``safe harbor'' provision has forced lawyers to communicate and to resolve their disputes in most instances without the need for Court intervention. My personal opinion is that this feature of the 1993 amendment of Rule 11 strengthened instead of weakened Rule 11. It has made the lawyers talk to each other about claims or defenses perceived by their opponents to be frivolous and this has resulted in most disputes being resolved without extensive briefing and devotion of valuable court time. Removal of the ``safe harbor'' provision from Rule 11 would be extremely detrimental to the orderly functioning of the courts. (3) What suggestions, if any, do you have in relation to this issue? Response: As a member of the judiciary I implore members of the legislative branch of government to follow the Rules Enabling Act procedures for amending rules of evidence and procedure that the courts must apply. Congress demonstrated great wisdom in passing the Rules Enabling Act which defines the appropriate roles of the legislative and judicial branches of government in adopting new rules or amending existing rules. Those who hold a strong and sincere belief that changes should be made to the current formulation of Rule 11 should present their views and proposals in accordance with the procedures set forth in the Rules Enabling Act. If you wish, I will be happy to provide additional information on this subject either orally or in writing. Sincerely, James A. Parker.

Mr. SPECTER. Mr. President, this amendment is designed to leave discretion with the trial judge in place of the very onerous provisions of the pending [[Page S 9165]] bill which require a mandatory review by the court after each securities case is concluded and then a requirement that the court impose sanctions on a party if the court finds that the party violated any requirement of rule 11(b) with the presumption being that attorney's fees will be awarded to the losing party. I submit that this is a very harsh rule which will have a profoundly chilling effect on litigation brought under the securities acts, and will in addition spawn an enormous amount of additional work for the Federal courts by causing what is called satellite litigation. That means that in any case where the litigation is concluded under the securities acts, the judge will be compelled, under the mandatory review provision, to review all the pleadings filed in the case to determine whether rule 11 was violated, whether or not either party chooses to have that review made, and then will be compelled to impose the sanction with the presumption being payment of attorney's fees, which is really the British system, not the United States' system, where we have had open courts. This provision risks causing a tremendous imbalance between plaintiffs and defendants in these cases because the defendants are characteristically major corporations with much greater resources to defend, contrasted with the plaintiffs who do not have those resources, or their lawyers who bring the suits on their behalf. I have surveyed the Federal bench, the judges in the U.S. district courts and in the courts of appeals, to see how the judges respond to changes in rule 11 to take away the discretion of the trial judges and have what is, in effect, micromanagement of the judiciary by the Congress of the United States. I have done this to try to get a sense as to what is going on in the courts. It has been some time since I practiced there. I submit that the views of a few Senators, the authors of this bill and the Senators who are voting on this legislation, are a great deal more limited than the insights of the Federal judges who preside in the administration of these cases day in and day out. The procedures which are being followed in this legislation are not those customarily followed where the rules of civil procedure are formulated by the Federal courts under the Rules Enabling Act--the Supreme Court which has the authority to do so, and the delegation of that authority to committees where the judges work with it all the time, and representatives of the bar, as opposed to the Members of Congress, who have very, very limited experience in this field and, in this particular case, had this provision added very late in the process, late in May, a few days before there was final markup of the bill in the Banking Committee, which does not normally deal with issues of the Federal Rules of Civil Procedure. Earlier in the consideration of this bill I made an effort to have these issues on procedure referred to the Judiciary Committee, on which I serve, which has the most experience of any committee in the Congress--certainly more than the Banking Committee, which has jurisdiction over this bill--because hearings were not held and consideration was not given to this rule 11 provision. Among the responses which I received, some 164 responses from Federal judges, there was a general sense that the trial judges ought to have the discretion and were in the best position to make a determination as to whether sanctions ought to be imposed without having a mandate from the Congress, the micromanagement from the Congress, saying you must make this determination. Even though the winning party did not ask for it, even though there are not procedures for one party to say to the other, ``You are undertaking something which our side considers frivolous and, if you do not cease and desist, we will bring an action to impose sanctions,'' to have a chance to correct it. A very lucid statement of the problem was made by a very distinguished judge for the Court of Appeals for the Third Circuit, Judge Edward R. Becker, who had this to say. The mandatory sanctions are a mistake and will only generate satellite litigation. By satellite litigation, Judge Becker is referring to the situation where another lawsuit, another issue has to be litigated as to whether a rule 11 sanction should be instituted. Again, not at the request of the losing party. Judge Becker continues to this effect: The flexibility afforded by the current regime enables judges to use the threat of sanctions to manage cases effectively. Well-managed cases almost never result in sanctions. Moreover, the provisions for mandatory review, presumably without prompting by the parties, will impose a substantial burden on the courts and prove completely useless in the vast majority of cases. Requiring courts to impose sanctions without a motion of a party also places the judge in an inquisitorial role, which is foreign to our legal culture, which is based on the judge as a neutral arbiter model. A very cogent reply was made by Judge James A. Parker, of the United States District Court for the District of New Mexico, who had this to say: As a member of the judiciary, I implore members of the legislative branch of government to follow the Rules Enabling Act procedures for amending rules of evidence and procedure that the courts must apply. Congress demonstrated great wisdom in passing the Rules Enabling Act which defines the appropriate roles of the legislative and judicial branches of government in adopting new rules or amending existing rules. Those who hold the strong and sincere belief that changes should be made to the current formulation of Rule 11 should present their views and proposals in accordance with the procedures set forth in the Rules Enabling Act. Judge Parker further writes that ``Rule 11 * * * gives federal judges adequate authority to impose appropriate sanctions for conduct that violates Rule 11.'' Mr. President, a number of the judicial comments which I am about to read apply to my second amendment as well. That second amendment relates to a provision in the bill which requires that the court not allow discovery after a motion to dismiss is filed. On that particular line, the rule is that discovery may proceed unless the judge eliminates discovery. Under the pending legislation, there would be no discovery as a matter of mandate unless under very extraordinary circumstances, but the mandatory rule applies. And the comments of Judge Parker would apply to the second amendment as well, the second amendment which I propose to bring. Mr. President, the statement by Judge Bill Wilson of the Eastern District of Arkansas, in a letter dated April 27, is to the same effect, as follows: Federal Rule . . . 11, as it now reads, gives a judge all he or she needs to handle improper conduct. And I think we should all keep in mind that we can't promulgate rules good enough to make a good judge out of a bad one. On that point, Mr. President, I think it is fair and appropriate to note that we have a very able Federal judiciary which can administer justice if left to do so with appropriate discretion. Judge Prentice H. Marshall of the Northern District of Illinois said this in a May 5 letter: Rule 11 . . . gives the judge greater flexibility in the imposition of sanctions; it affords the offending party the opportunity to correct his or her misdeed. A letter from Martin F. Loughlin of the District of New Hampshire, dated May 2 reads: Federal Rule of Civil Procedure 11 is working well. It gives the judge adequate discretion to deal with frivolous litigation and untoward conduct by attorneys. A letter from Federal Judge Miriam Goldman Cedarbaum from the Southern District of New York, dated May 10, 1995, says in part: I have found the general supervisory power of the court as well as 28 U.S.C., Section 1927, and Rule 11 adequate sources of judicial authority to discourage frivolous litigation. A letter from Federal Judge J. Frederick Motz from the District of Maryland, dated May 9, 1995, referring to the mandatory rules said that they are: . . . counterproductive in that it increased judges' workloads and contributed to litigation cost and delay by requiring judges to impose sanctions whenever a Rule 11 violation was found. Satellite litigation in which one lawyer or party sought fees from another became commonplace. Continuing to quote: I oppose any amendment to the Rule that would make imposition of sanctions mandatory. A similar view was expressed by Judge Ilana Diamond Rovner of the Court of Appeals for the Seventh Circuit in a letter dated April 1995: [[Page S 9166]] The current Rule 11 gives the District Court ample discretion to address frivolous litigation. A letter from Senior Judge Floyd R. Gibson from the U.S. Court of Appeals for the Eighth Circuit, dated April 20, 1995: I believe more discretion should be given to the district judge in the how and when to apply the sanctions under Rule 11(c) on sanctions. Similarly, Judge Avern Cohn from the Eastern District of Michigan, dated May 5, 1995, says, in part: I firmly believe that Congress involves itself too deeply in the procedural aspects of the litigation process. A letter from Martin Feldman from the Eastern District of Louisiana, says, in part: I believe that giving district courts more discretion in applying the Rule was good thinking. And Judge Jimm Larry Hendren of the Western District of Arkansas, writes, in part: I am not sure the Congress needs to pass any legislation. I think the courts, themselves, can handle this matter with the rules already in place and their inherent powers. And a letter from Judge Leonard I. Garth, a distinguished member of the Court of Appeals for the Third Circuit, says: In my opinion, abandoning mandatory sanctions and permitting district court judges to exercise their judicial discretion was a welcome measure. A good many of these comments apply to the change in rule 11, which had been mandatory from 1983 to 1993. It would apply equally well to the kind of a rule which is in effect here. The letter from Senior Judge William Schwarzer from San Francisco says that the sanctions ought to be discretionary. Mr. President, I ask unanimous consent that these letters, which represent only a small sample of the responses I received supporting discretionary imposition of sanctions, appear in the Record at the conclusion of my statement, with the exception of the letter from Judge Becker.

Mr. SPECTER. At this time, Mr. President, I send an amendment to the desk and ask for its immediate consideration.