Mel Watt

Mr. WATT of North Carolina

Mr. WATT of North Carolina. I have parliamentarian inquiry, Mr. Chairman. My inquiry is, is the Chair planning to consult with the parliamentarian?

Mr. WATT of North Carolina. My inquiry is, is the Chair expecting to consult with the parliamentarian? Because the parliamentarian clearly gave me this morning a completely contrary opinion. Is the Chair planning to consult with the parliamentarian?

Mr. WATT of North Carolina. A parliamentary inquiry, Mr. Chairman.

Mr. WATT of North Carolina. I thank the Chair. I thought we had gotten to the point in this body that a Member cannot even make a point of order anymore. The inquiry that I made this morning was on Mr. Schumer's amendment which struck nothing from the bill, and I was told at that time by the parliamentarian that any amendment that was contrary to the position, and it was presumed that the position of the bill was that it would not be amended at all, it would be the party that was defending the committee's position, which in this case is presumed to be the bill itself, not the amendment, that would be allowed to close.

Mr. WATT of North Carolina. Mr. Chairman, I have a parliamentary inquiry.

Mr. WATT of North Carolina. Mr. Chairman, I make a point of order.

Mr. WATT of North Carolina. My inquiry has to do with why the gentleman on that side has the right to close debate. We are defending the committee position on this side this time.

Mr. WATT of North Carolina. Mr. Chairman, I thank the gentleman for yielding time to me. Mr. Chairman, I rise in reluctant opposition to the amendment, reluctant because one of the sponsors is my colleague, the gentleman from North Carolina [Mr. Burr]. However, I have concerns about this amendment on three counts. First, the FDA's responsibility is to set minimum standards for bringing a product to the market, and we should note that while we are setting a clear and convincing standard in our courts of law to win these cases, no such standard applies to the FDA. Second, the regulatory process is subject to political pressures, economic pressures, and pressures that hopefully the jury system is not subject to. We factor out all of these things in the court, we hope, to the best extent possible, and get a fair and impartial verdict in the process. The third point I want to make, Mr. Chairman, is when all else fails, I have started to read the fine print in these amendments that are being offered. I would submit to my colleague, the gentlewoman from California [Ms. Harman], that I do not see anything in this amendment which talks about full compliance. I do see a second provision in the bill that goes beyond simply FDA approval, which says that the producer or manufacturer is exempt if the drug is generally recognized as safe and effective, pursuant to conditions established by the Food and Drug Administration. I have no idea, and I would submit to my colleagues that they have no idea, what kind of Pandora's box that opens up for litigation, because every kind of product or drug which comes to the market that ever gets through the process is going to be recognized, we hope, as generally safe and effective. Mr. Chairman, I think when we start setting one standard, clear and convincing, to win cases, we ought to at least be holding the regulatory bodies to that same standard if we are going to say that compliance with their regulations will make the manufacturer immune from liability.

Mr. WATT of North Carolina. Mr. Chairman, I make this point of order, and I have already gone through this with the parliamentarian today.

Mr. WATT of North Carolina

Mr. WATT of North Carolina. Mr. Chairman, I demand a recorded vote.

Mr. WATT of North Carolina. Mr. Chairman, it is clear that this is not about what the appropriate standard should be for burden of proof for punitive damages. The issue is not what that appropriate standard should be. The issue is, who ought to be setting that standard? If Members believe that the States have a place in our federation, which is what I have heard over and over and over again, I submit to my colleagues that the States ought to be determining for themselves what their own burdens of proof are and that we ought not at this level, at the Federal level, to be telling them that. Regardless of whether we think it ought to be one thing or the other, higher or lower, the States have the right to make this decision, not my colleagues here in this body.

Mr. WATT of North Carolina. Mr. Chairman, I yield myself the balance of my time.

Mr. WATT of North Carolina. Mr. Chairman, I yield 1 minute to the gentleman from Texas [Mr. Doggett] .

Mr. WATT of North Carolina. Mr. Chairman, I yield 1 minute to the gentleman from California [Mr. Berman].

Mr. WATT of North Carolina. Mr. Chairman, I yield 2 minutes to the gentleman from Virginia [Mr. Scott].

Mr. WATT of North Carolina

Mr. WATT of North Carolina. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, I would like to thank you for recognizing me because I really had intended to stay out of this discussion, but I got more and more outraged as I heard the debate taking place on the floor about what was going on. I want to respond to my colleague from Louisiana, Mr. Tauzin, who said we were trying to go back to a negligence standard. I want to admit to my colleagues that if it were me, I would be happy with a negligence standard. I did not come to the floor to play games with you. Lawyers are subject to negligence standard, doctors are subject to a negligence standard, ordinary people who drive automobiles and run into folks are subject to a negligence standard. If they make a mistake and they injure somebody, they are held liable. But I will not recognize to you that under the law as it is written Congress has already imposed a higher level of standard for folks in the stock brokerage business and those who engage in securities business. They have said, ``You can be held liable only if you do something fraudulently, knowingly, recklessly.'' That is a higher standard or actually, from the common, ordinary people's vernacular, it is a lower standard.

Mr. WATT of North Carolina. No, I will not yield. I want to make sure that you can confuse the issue if you want, but right now is my time to try to relate this to some semblance of sanity rather than missed--come and go that you all are engaged in. What my colleagues want to do is take the already high standard, the one that is a step up, that applies to every other member of society, and create what I would call an impossibility standard, because if we adopted this language, you would never ever be able to win any cases in the securities area because any time recklessness is alleged or somebody is engaged in fraudulent conduct, the securities person would come back and say, ``Oh, well, that might be true, but I forgot to tell you,'' and all of a sudden they would be off the hook. Well, my colleagues, I thought the purpose of this bill was to get rid of frivolous lawsuits and to cut down on the amount of securities litigation which we have built in a wonderful procedure for trying to stop those kinds of lawsuits, but, Mr. Chairman, when we start to raise the standard to an even higher level of care, an impossibility standard, then I start to wonder is the purpose really to get rid of frivolous lawsuits or is it to protect the buddies up on Wall Street from what goes on in the real world, from the standard that everybody else in our society, these people, all of whom are seated in the gallery, are subject to, this common, everyday standard, and all of a sudden securities people, whom we have already given a higher level of protection to, now they want to give an impossible level of protection to. So, Mr. Chairman, I want to make sure that everybody understands in common, everyday language what is being proposed here: If I do something, if I am reckless, if I do it knowingly, and I come into court and say, Oh, no, I forgot, all of a sudden I am shielded from liability under this amendment.

Mr. WATT of North Carolina. I yield to the gentleman from California.

Mr. WATT of North Carolina

Mr. WATT of North Carolina. Mr. Chairman, I think the gentleman from Michigan [Mr. Conyers] has yielded me such time as I may consume because I have gotten the reputation for talking a long time, but I want to surprise people tonight. I know it is late, and I want to make three concise points and sit down. I think this has been a good debate, not long enough to do justice to this issue, but certainly a good debate. The first point I want to make, Mr. Chairman, is that this bill is referred to by my colleagues as the Common Sense Legal Reform Act, and I have seen it go through the process over time through the Committee on the Judiciary, and I suspect tomorrow and the next day on the floor it will cease to be a Common Sense Legal Reform Act and become a Nonsense Legal Reform Act. I think it is nonsense because it is contrary to everything I had thought my Republican colleagues stood for in their Contract With America. I thought they believed in States rights, but here I find in this bill that we are preempting all State law on punitive damages on products liability, and tomorrow an amendment will be offered to preempt State law in a number of other areas that have been traditionally reserved to the States, and I will remind my colleagues that the folks at the State level cannot want conservatives telling them what their values are and imposing their values on them any more than they want liberals doing that. I thought my colleagues believed in not mandating things to the States. But in this bill, after they have preempted State law on punitive damages, preempted State law even on the burden of proof, which is a procedural issue, I would submit to my colleagues, they have turned around at the end of the bill and said, ``We deny you the right to the Federal courts even though we have set the standards by which you must comply.'' So I am scratching my head a little bit and wondering if that is not a Federal mandate, then what is? The second point I want to make is that the chairman of the Committee on the Judiciary, for whom I have the utmost respect, said in general debate earlier that we have the most costly legal system in the world. I want my colleagues and the American people to know that not only do we have the most costly legal system in the world, but we have the very, very best legal system in the world; we are the envy of the world. Our jury system is something that every person around the world will tell you works, and despite that, with $6 trillion in GNP, we spend less than 1 percent resolving all of the disputes that take place on this issue. All of our disputes, we spend less than 1 percent. So I do not think we can take this as a justification for the massive revisions that we are undertaking. The justification, it seems to me, is that we are hurting little people at the same time that we are protecting and upping the standards and protections for wealthy people, and that leads me to the third point that I want to make, and by far the most serious point that I will make on this bill. I raise the question with my colleagues, what will the people do when they cannot get justice in the courts? What is their alternative when there is no justice in the courts? I want my colleagues to contemplate this issue. People go to court because they feel vigorously about issues. You deprive them of that right, it does not do away with the vigor with which they approach these issues. It just means they must direct it in some other way. They must seek their justice in the streets. We used to, I understand, dual and take out our guns and shoot each other. Heaven forbid if we ever get back to that kind of system. I will close and tell you that I am deeply troubled by the direction of this bill, and I hope that there will be a process for making it better, but it will not happen.

Mr. WATT of North Carolina

Mr. WATT of North Carolina. If the gentleman will yield further, I think what the gentleman is doing is sanctioning by this bill that kind of attitude, and giving latitude to it by saying you shall make, you shall do this; and the finding of frivolousness that there will be an inclination to do it anyway, and once you add on to it the word ``shall'' what we have done here is sanctioned that kind of attitude. At least under the other standard we can at least try to get in the head of the judge and say look, Judge, you are applying a different standard in noncivil rights cases than you are in civil rights cases and try to embarrass him. But once you give him that extra little piece of ammunition, the ``shall'' in this bill, you have given that judge abuse the system.

Mr. WATT of North Carolina. Mr. Chairman, I thank the gentleman for yielding. I would just simply say to the gentleman, there is a predisposition, there is a disposition, and fortunately over time it is beginning to wane I would acknowledge, and I do not want to leave the impression that our whole Federal or State benches are still where they were 15 or 20 years ago, but I would submit to the gentleman that in these cases there is a substantially higher likelihood that goes beyond insignificant statistical probability, if you go back and look at the statistics that the gentleman from Michigan [Mr. Conyers] was talking about, that a finding of frivolousness is going to be found in these cases.

Mr. WATT of North Carolina. Mr. Chairman, will the gentleman yield?

Mr. WATT of North Carolina. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, I will struggle on this issue to be nonemotional. I will struggle because I remember 25 years ago the very day I returned to North Carolina to practice law in what was regarded and is regarded as a civil rights law firm. In the middle of the night someone came and set a fire to the law firm office before I had practiced law in that office one day. I will struggle because I have seen how much courgage it takes for a plaintiff or a group of plaintiffs to come forward in the face of racial oppression and assert their civil rights. I will struggle because I have been before judges, 99 percent of whom I would remind my colleagues here are members of the majority race in this country, and I have heard them not understand the underlying basis of a civil rights claim because they have no history to relate that claim to, and to have them in the final analysis find that some portion of the claim is frivolous because they just simply cannot relate to people being abused and having their rights abused in that way. My colleagues, this is not about some kind of theoretical fear that is being expressed here. There is a concern with frivolous lawsuits, but I remind my colleagues that in this amendment, and I want the gentleman from California to read the amendment, starting at line 9 of the amendment it specifically says ``rule XI of the Federal Rules of Civil Procedure as in effect immediately before the effective date of such amendments shall apply with respect to such civil actions.'' This is not doing away with rule XI. I have heard my colleague here, the gentleman from Michigan [Mr. Conyers], read without anybody paying attention, apparently, the disparity in the percentages of frivolous and sanction cases that exist in civil rights cases, 7 percent of the cases yielding a substantially disproportionate share of the sanctions. But I will remind my colleagues that nobody comes forward in the South in the time in which I grew up and brought forward any kind of frivolous civil rights action. It took courage. It took running the risk that your House would be burned down; it took running the risk that your law office would be burned down; it took running the risk that your friends down the street who call you Mr. Charlie would not speak to you again if you brought to light the fact that the employer down the street was discriminating on the basis of race in hiring of people. This is not some theoretical concern that is being expressed in this amendment. I beg of my colleagues to take this amendment seriously, and vote it up and agree to put this exception in, and provide the kind of protection that these hardworking people, these law-abiding people who simply want to have their civil rights vindicated are bringing to the courts.

Mr. WATT of North Carolina. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, I want to commend my colleague, the gentleman from Indiana [Mr. Burton], for bringing a real-life situation into this debate which demonstrates the severe adverse impact that this bill would have on ordinary working people in this country. I also want to commend him for this effort to improve the provisions of the underlying bill, which I think his amendment would do. However at the same time I want to point out the problem that the amendment demonstrates that the underlying bill presents to us. I say to my colleagues, ``When you try to apply this bill to other than frivolous cases, you are inevitably going to get into the very kind of situation that Mr. Burton's amendment is trying to address, and, once you start to do this sliding scale approach, or once you try to do 25 percent, or 50 percent, or 75 percent, or 10 percent, what you have started to do is demonstrate the sheer irrationality of the entire approach that is being applied here because, once you get on that kind of slippery slope, as we used to call it in the law, you can't figure out where to draw the line in a way that it makes any kind of sense, and it doesn't show that a higher threshold necessarily makes any more sense. What it shows is that the underlying approach that you are using when you apply it to nonfrivolous lawsuits doesn't make any sense.'' So, Mr. Chairman, while I commend the gentleman for coming forward with the amendment, which is an improvement, it gets us on that slippery slope and moves us on this sliding scale toward a better bill, we would really be limiting the underlying bill only to frivolous cases.

Mr. WATT of North Carolina

Mr. WATT of North Carolina. Mr. Speaker, when I showed up yesterday with my hole puncher in one hand and the Constitution in the other hand and represented that the Contract With America was beginning to punch holes in the Constitution, I got calls yesterday saying, ``Are you crying wolf?'' So I went back and here is the record. Line item veto, article I, section 1. Effective death penalty action, habeas corpus, article I, section 9. National Defense Revitalization Act, this review commission, article II, section 2. Exclusionary Rule Reform Act, fourth amendment, punched a hole. Takings legislation, fifth amendment, punched a hole, America. The Contract With America is punching holes in our Constitution. As the Speaker comes in here to punch a hole in this contract, they are punching a hole in the Constitution of the United States.