Mel Watt

Mr. WATT

Mr. WATT. Mr. Speaker, this is definitely the last time I will be addressing this House. As my colleague, David Price, has indicated, I have been confirmed to a new position as regulator and director of the Federal Housing Finance Agency. I just wanted to take a moment to express to my colleagues how much of an honor it has been to be a part of this body, and to grow and learn and share with my colleagues from all across the Nation. It has been a great honor, and I thank all of them for the expressions in the last few days, and I look forward to working with them in the new position that I will be assuming. I thank you. And, of course, we have already acknowledged my wife in the gallery. I thank her. And with that, Mr. Speaker, I yield back the balance of my time once and for all.

Mr. WATT

Mr. WATT. Mr. Chairman, I rise in support of the Conyers-Watt substitute because the substitute is a superior alternative. The short title of our substitute is appropriately titled ``The Deceptive Patent Practices Reduction Act'' because it narrowly and specifically focuses on areas within our patent system where abuses can be curtailed without imposing onerous and disproportionate burdens on good-faith participants in the system; and in a number of cases, I believe the substitute will create efficiencies that will benefit all patent stakeholders. Our substitute has three core provisions. First, we require patent holders who sue on a patent to provide transparency of ownership and other financial interests in the patent. This will expose those who seek to shield the true identity of the real party with the primary interests in asserting an infringement claim. Second, our substitute reduces the burden on retailers, hotels, restaurants, and mom-and-pop shops that find themselves entangled in legal battles simply for using a product to make their businesses more attractive to their customers. I believe our customer stay provides a better baseline than the provision in the underlying bill, but I also recognize that it too requires further work. Finally, I believe the study required under our substitute sets forth a clearer, more precise definition of demand letters that will avoid intrusions into legitimate business negotiations. Perhaps more important is what the substitute does not do, namely, it does not disregard judicial independence in the courtroom or judicial prerogatives outside the courtroom to study, develop, and promulgate rules of procedure to govern trials and appeals in the courtroom. Our substitute also does not act with utter indifference to the collateral damage levied upon legitimate inventors and businesses that this bill will do.

Mr. WATT. Madam Chair, I demand a recorded vote.

Mr. WATT. Madam Chair, I yield such time as she may consume to the gentlelady from Washington State (Ms. DelBene).

Mr. WATT. I am wondering, if you think this is redundant and extraneous rather than contrary to the intent, why wouldn't we just accept the amendment and keep going?

Mr. WATT. Will the gentleman yield?

Mr. WATT. Mr. Chairman, I yield myself as much time as I may consume. Mr. Chairman, upon introduction of this bill, the chairman released a statement that section 3(b) of the bill, ``aligns fee shifting in patent cases with the standard that is used for awarding fees against the United States under the Equal Access to Justice Act.'' Unfortunately, the fee-shifting provision in this bill, even as amended, cherry-picks the most burdensome requirements from the Equal Access to Justice Act that mandate that judges award fees against the loser unless they prove that their position was reasonably justified. The bill was amended at the last minute of the markup presumably to relax the burden on the nonprevailing party to escape the requirement to pay the fees of the adverse party. I actually supported the amendment during markup relying on that presumption. Since then, however, it has become apparent both based on the committee report and independent research that the amendment to change the ``substantially justified'' standard to a ``reasonably justified'' standard is practically meaningless. As summarized in the CRS report that I will submit for the record, the Senate Judiciary Committee in the 96th Congress ``considered and rejected an amendment to the Equal Access to Justice Act that would have changed the pertinent language from `substantially justified' to `reasonably justified.' '' Subsequently, the Supreme Court in Pierce v. Underwood held that ``substantially justified'' actually means reasonable. This troubling development highlights the pitfalls to considering legislative language in haste. It also makes my amendment all the more important to a balanced and unbiased fee-shifting mechanism. The American rule, that each party to litigation bears their own cost and attorney's fees, is the bedrock of the civil justice system. I generally oppose litigation that erodes this rule because I believe it provides open access to our courts to anyone who has a grievance. The departure from the American rule as enacted in the Equal Access to Justice Act was far more complex than the provision extracted and incorporated in this bill. For example, the Equal Access to Justice Act prescribes a fee cap of $125 per hour that is not in this bill. It also prohibits, with a couple of exceptions, fee awards to attorneys whose net worth exceeds $2 million, to businesses with a net worth in excess of $7 million or more than 500 employees. This limitation also did not find its way into this provision in the bill. My amendment seeks to amend H.R. 3309 with yet another feature of the Equal Access to Justice Act that is not in the Innovation Act, which is the provision that gives a judge the flexibility to deny or reduce an award that would be required if the nonprevailing party could not establish that their position, as we now know, was reasonable. This amendment injects balance into this regime that represents a departure from the American rule. A judge should be able to assess the behavior of all the parties; otherwise, a wealthy party that is not concerned if they are imposed with the costs and fees of their adversary may engage in behavior intended to deplete the resources of the poorer opposing party. The threshold for authorizing fee-shifting, I think, should be sufficiently stringent so that the exception doesn't become the rule, but it should not be so stringent that it becomes meaningless. Whether that is the case in Octane Fitness v. Icon Health Fitness is the question before the Supreme Court. In Octane Fitness, the Court will consider whether the two-part test of the Federal Circuit that provides that a case be ``objectively baseless'' and brought in ``subjective bad faith'' to qualify a prevailing party for fees is too high. Although I think the Court will adjust the formula downward for identifying cases in which fee-shifting may be appropriate, we are clearly not deferring to the Court's docket. I think my amendment is the preferred and necessary approach. And with that, I reserve the balance of my time. III. The Equal Access to Justice Act Awards of attorneys' fees against the United States were barred at common law not only because of the American rule, but also because of the doctrine of sovereign immunity, under which the United States may not be sued, nor its funds expended, without its consent. ``Congress alone has the power to waive or qualify that immunity,'' and it did so, with respect to awards of attorneys' fees, with the Equal Access to Justice Act (EAJA) in 1980. Prior to enactment of EAJA, the common law exceptions to the American rule were inapplicable against the United States. Even statutory exceptions to the American rule were inapplicable against the United States unless they specifically authorized fee awards against the United States. EAJA allows awards of attorneys' fees against the United States in two broad situations. The first, codified at 28 U.S.C. Sec. 2412(b), makes the United States liable for the prevailing party's attorneys' fees to the same extent that any other party would be under the common law and statutory exceptions to the American rule, including the statutory exceptions that do not specifically authorize fee awards against the United States. This provision, unlike the rest of EAJA, contains no limitations on the assets or number of employees of parties eligible to recover fees, and no maximum hourly rate for fee awards. The second broad situation in which EAJA authorizes fee awards against the United States is codified at 5 U.S.C. Sec. 504 and 28 U.S.C. Sec. 2412(d). These sections provide that, in specified agency adjudications and in all civil actions (except tort actions and tax cases) brought by or against the United States, the United States shall be liable for the attorneys' fees of prevailing parties, unless it proves that its position was substantially justified or that special circumstances make an award unjust. This second portion of EAJA contains two limitations on fee awards that are not found in Sec. 2412(b). First, it prescribes a fee cap unless the court or agency determines that a special factor justifies a higher fee. (Most fee statutes authorize awards of ``reasonable'' fees, with the court determining the amount.) The cap was originally $75 per hour, but P.L. 104-121, 231-233, increased it to $125 per hour for cases commenced on or after the date of its enactment, which was March 29, 1996. Second, this portion of EAJA does not allow (with two exceptions) fees to be awarded to individuals whose net worth exceeds $2 million, or to businesses or organizations, including units of local government, with a net worth exceeding $7 million or more than 500 employees. This portion of EAJA sunset, by the terms of the original Act, on October 1, 1984. In 1985, EAJA was reenacted, retroactive to October 1, 1984, and made permanent. P.L. 104-121, in addition to raising the cap under EAJA to $125 per hour, added the following provision to 28 U.S.C. Sec. 2412(d), and a corresponding one to 5 U.S.C. Sec. 504 applicable to adversary adjudications: ``If, in a civil action brought by the United States or a proceeding for judicial review of an adversary adjudication described in section 504(a)(4) of title 5, the demand by the United States [other than a recitation of the maximum statutory penalty] is substantially in excess of the judgment finally obtained by the United States and is unreasonable when compared with such judgment, under the facts and circumstances of the case, the court shall award to the party the fees and other expenses related to defending against the excessive demand, unless the party has committed a willful violation of law or otherwise acted in bad faith, or special circumstances make an award unjust. Fees and expenses awarded under this paragraph shall be paid only as a consequence of appropriations provided in advance.'' This provision thus authorizes fee awards in favor of losing parties and in that respect is unique in the law of attorneys' fees. In Pierce v. Underwood, 487 U.S. 552 (1988), the Supreme Court decided three issues concerning EAJA: (1) the applicable standard of appellate review, (2) the meaning of ``substantially justified,'' and (3) the ``special factors'' that allow a court to award more than $75 per hour. (1) Standard of Review. Pierce v. Underwood addressed the standard that a federal court of appeals applies in reviewing a decision of a federal district court under EAJA. Either party may appeal a district court's decision under EAJA, and, as the Supreme Court explained: ``For purposes of standard of review, decisions by judges are traditionally divided into three categories, denominated questions of law (reviewable de novo), questions of fact (reviewable for clear error), and matters of discretion (reviewable for ``abuse of discretion'').'' 487 U.S. at 558. The Supreme Court found that EAJA did not provide a clear prescription as to the appropriate standard of review (unlike, for example, 42 U.S.C. Sec. 1988(b), which provides that ``the court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee''). The Court, therefore, for a variety of reasons, held that the ``abuse of discretion'' standard was most appropriate for appeals of EAJA court decisions. Awards of attorneys' fees under EAJA at the agency level may be appealed to a court only by the prevailing party, not by the United States. The statute, at 5 U.S.C. Sec. 504(c)(2), provides: ``The court's determination on any appeal heard under this paragraph shall be based solely on the factual record made before the agency. The court may modify the determination of fees and other expenses only if the court finds that the failure to make an award of fees and other expenses, or the calculation of the amount of the award, was unsupported by substantial evidence.'' Prior to the 1985 amendments to EAJA, this provision stated that the court could modify an agency decision only if it found ``an abuse of discretion.'' It was intended that the new standard--``unsupported by substantial evidence''--permit ``a broader scope of review . . . consistent with the normal scope of judicial review of agency actions. (2) ``substantially justified.'' The United States may avoid liability for attorneys'' fees under EAJA by proving that its position ``was substantially justified or that special circumstances make an award unjust.'' 5 U.S.C. Sec. 504(a)(1), 28 U.S.C. Sec. 2412(d). The legislative history of the original EAJA stated that ``Nile test of whether the Government position is substantially justified is essentially one of reasonableness in law and fact.'' Twelve of the thirteen federal circuits subsequently interpreted ``substantially justified'' to mean reasonable. See, Pierce v. Underwood, 487 U.S. at 565-566. The U.S. Court of Appeals for the District of Columbia was the exception. It reasoned: ``The Senate Judiciary Committee considered and rejected an amendment to the bill that would have changed the pertinent language from ``substantially justified'' to ``reasonably justified.'' S. Rept. 96-253 [96th Cong., 1st sess.] at 8. That refusal suggests that the test should, in fact, be slightly more stringent than ``one of reasonableness.'' According to this view, the government's position may be reasonable, yet fail to be substantially justified, making it easier to recover fees under the substantially justified standard than under a reasonableness standard. The 1985 amendments to EAJA did not alter the text of the substantially justified language, but an accompanying committee report expressed support for the D.C. Circuit's interpretation: ``Several courts have held correctly that ``substantial justification'' means more than merely reasonable. Because in 1980 Congress rejected a standard of ``reasonably justified'' in favor of ``substantially justified,'' the test must be more than just reasonableness.'' The Supreme Court in Pierce v. Underwood held that substantially justified means reasonable. The Court found that a ``more than mere reasonableness'' test would be ``out of accord with prior usage'' and ``unadministerable.'' ``Between the test of reasonableness,'' the Court wrote, ``and a test such as `clearly and convincingly justified' . . . there is simply no accepted stopping-place, no ledge that can hold the anchor for steady and consistent judicial behavior.'' 487 U.S. at 568. The Court found that the 1985 committee report was not controlling because it was neither ``(1) an authoritative interpretation of what the 1980 statute meant, or (2) an authoritative expression of what the 1985 Congress intended.'' Id. at 566. (3) Exceeding $75 (now $125) per hour. EAJA provides that fees ``shall be based upon prevailing market rates for the kind and quality of the services furnished,'' but ``shall not be awarded in excess of $75 [$125 for cases commenced on or after March 29, 1996] per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.'' 28 U.S.C. Sec. 2412(d)(2)(A)(ii). (The same cap applies in agency proceedings; see, 5 U.S.C. Sec. 504(b)(1)(A)). The Court in Pierce v. Underwood held: ``If ``the limited availability of qualified attorneys for the proceedings involved'' meant merely that lawyers skilled and experienced enough to try the case are in short supply, it would effectively eliminate the $75 cap--since the ``prevailing market rates for the kind and quality of the services furnished'' are obviously determined by the relative supply and quality of services . . .. We think it refers to attorneys having some distinctive knowledge or specialized skill needful for the litigation in question--as opposed to an extraordinary level of the general lawyerly knowledge and ability useful in all litigation. Examples of the former would be an identifiable practice specialty such as patent law, or knowledge of foreign law or language. 487 U.S. at 571-572. As for other ``special factors,'' the Court wrote: ``For the same reason of the need to preserve the intended effectiveness of the $75 cap, we think the other ``special factors'' envisioned by the exception must be such as are not of broad and general application. We need not specify what they might be. . . .'' Id. at 573. The Court, however, specified some items which are not special factors for purposes of exceeding the $75 per hour cap: ``the novelty and difficulty of issues,'' ``the undesirability of the case,'' ``the work and ability of counsel,'' ``the results obtained,'' ``customary fees and awards in other cases,'' and ``the contingent nature of the fee.'' All these ``are factors applicable to a broad spectrum of litigation; they are little more than routine reasons why market rates are what they are.'' Id. In Commissioner, Immigration and Naturalization Service v. Jean, 496 U.S. 154 (1990), the Supreme Court held that, under EAJA, a prevailing party may recover attorneys' fees for services rendered in seeking a fee award without regard to whether the position of the United States was substantially justified. If the prevailing party is entitled to fees in the main action, then he is automatically entitled to fees for the time spent seeking fees. To hold otherwise could ``spawn a `Kafkaesque judicial nightmare' of infinite litigation for the last round of litigation over fees.'' Id. at 163. In Scarborough v. Principi, 541 U.S. 401 (2004), the Supreme Court addressed EAJA's requirement that fee applications be filed ``within thirty days of final judgment in the action,'' and ``allege that the position of the United States was not substantially justified.'' 28 U.S.C. Sec. 2412(d)(1)(B). The Court held that, when a fee application is filed within 30 days, but fails to allege that the position of the United States was not substantially justified, the application may be amended to remedy the oversight, even after the 30 days have elapsed. In Richlin Security Service Co. v. Chertoff, 128 S. Ct. 2007, 2019 (2008), the Supreme Court held that, under EAJA, ``a prevailing party . . . may recover its paralegal fees from the Government at prevailing market rates.'' The lower court, which the Supreme Court reversed, had held that the prevailing party could recover fees for paralegal services only at their cost to the party's attorney. Source of Fees Paid by the Government Both agency-awarded and court-awarded fees are ``paid by the agency over which the party prevails from any funds made available to the agency by appropriation or otherwise.'' 5 U.S.C. Sec. 504(d), 28 U.S.C. Sec. 2412(d)(4). Fee awards under 28 U.S.C. 2412(b) are presumably paid from the source that pays damages awarded under the statute that authorizes fee awards. Formerly Required Annual Reports to Congress With respect to agency-awarded fees, the EAJA provides, ``The Chairman of the Administrative Conference of the United States, after consultation with the Chief Counsel for Advocacy of the Small Business Administration, shall report annually to the Congress on the amount of fees and other expenses awarded during the preceding fiscal year pursuant to this section.'' 5 U.S.C. Sec. 504(e). This provision remains on the books, but it has no effect because the Administrative Conference of the United States has not been functioning since 1996. With respect to court-awarded fees, the EAJA formerly provided, ``The Attorney General shall report annually to the Congress on the amount of fees and other expenses awarded during the preceding fiscal year pursuant to this subsection.'' 28 U.S.C. Sec. 2412(d)(5). This provision was repealed by P.L. 104-66, 1091(b)(1995).

Mr. WATT. Mr. Chairman, I have an amendment at the desk which was made in order under the rule.

Mr. WATT. I thank the gentleman for yielding time. Mr. Chairman, I want to rise not so much in opposition to the manager's amendment, but in opposition to the bill and so that we can try to make sure that people understand what it is that they are voting on. We set out to solve a problem of patent trolls, and that term has become a convenient shorthand to refer to a class of plaintiffs who engage in abusive litigation tactics against deep-pocketed alleged infringers as well as individual inventors and small companies. I certainly recognize, as I have in my previous statement, that there are entities that exploit the litigation system to gain leverage against businesses, large and small, that represent a vital part of our economy, and I would like for Congress actually to deal with that issue in a meaningful way. Unfortunately, this bill adopts an extreme, unbalanced approach to address those abuses. The term ``patent troll'' simply has no concrete contours in application, making it nearly impossible to craft legislation specifically targeted to a category of entities or particular business models. And because not only patent trolls initiate litigation to enforce patent rights, legislation aimed at patent litigation system must not erect unfair barriers that deter legitimate, meritorious claims of infringement, nor should this bill be treated as if it will apply only in the troublesome jurisdictions in which these abuses are taking place. This bill has broad application across our entire patent ecosystem. The bill suffers from a rushed process and responds to only a part of the constituency in the patent ecosystem. What is most regretful and regrettable to me is that, I believe that with thoughtful, inclusive deliberation, the goals of the bill could be achieved if we would simply take the time to do it.

Mr. WATT. Madam Chairwoman, I thank the gentleman for yielding. I am pained to be here today in opposition to this bill. I stood shoulder to shoulder with the chair of our full committee 2 years ago in patent reform after working almost 6 years to find consensus on a patent bill that moved our Nation forward. We are here this time a maximum of 6 months into the process, and we haven't done our due diligence because we have heard all morning people coming to the floor and saying this is a work in progress. I thought the place we did works in progress was in our committee system. Here we are on the floor with a bill that everybody is bragging about it being a work in progress. The result of that is that the work will be done on this bill by the United States Senate. They will write this bill. We won't write it because we didn't take the time to do what we should have done in the Judiciary Committee to refine this bill. I stood shoulder to shoulder with the former director of the Patent and Trademark Office 2 years ago, David Kappos, and this is what he says in an op-ed piece today: Our news is peppered these days with reports of ``patent trolls,'' dark, ugly creatures shaking down innocent companies based on absurd claims of patent infringement. Congress should quickly pass legislation to curtail this abusive behavior. However, some are using the need to address the patent troll issue as cover to unnecessarily weaken our Nation's patent laws. If passed in this current form, the focus of legislative discussions would undermine U.S. innovation and job creation. That is what the former director of the Patent and Trademark Office says because we haven't done what we should have done. We set out to solve a problem dealing with patent trolls, and there is an argument about whether that is 5 percent, 20 percent. The GAO says it is a maximum of 20 percent, regardless of where these statistics are coming from. We are imposing a burden on 100 percent of the people in the patent litigation system to deal with a problem that at most is 20 percent of the litigation in our system. Everybody is going to pay the price of this bill if it goes forward in its current form. That is the problem I have with this. We have a problem. Patent trolls are a problem, but you can't define what a patent troll is; and in order to deal with patent trolls, we are imposing a burden on the other people in the litigation system who are not patent trolls. That is unfair. We are imposing a burden on small innovators because they will fear that they will lose a lawsuit and end up paying exorbitant costs of the people who they litigated against, even though their claim was a legitimate claim; and they will spend extra money to litigate about whether they should have to pay the cost. Millions of dollars will be spent litigating about whether the fees should be shifted or not, and that is not the way we have done this in our American system. The problem is we haven't done anything in this bill--and you have heard it discussed in the debate up to this point--about the real problem here, which is people who are writing demands on little people out in the stream of commerce. That is before they ever get to litigation. This bill says nothing about demand letters. We are going to concede that, we say, to the Commerce Committee. Well, what is this bill going to do? It is going to encourage a burden on everybody in the litigation system as we try to deal with a 20 percent problem or a 5 percent problem, at most.

Mr. WATT

Mr. WATT. Mr. Speaker, for the record, I neglected to indicate in my comments that our colleague, the chair of the subcommittee, announced last week during the period that we were out on the Veterans Day district work period that he was not planning to run for Congress again, and I hadn't recognized that he was still on the floor. So I wanted to express how important a contribution he has made to this institution for many years. I am not going to tell you how many. More than I have been here, and I have been here 21 years. He was here when I got here. I always tell people that, of all of the people in the North Carolina delegation when I was elected to Congress, he was the first member of the North Carolina delegation to come to my office and welcome me to Congress, and we have been very good friends ever since then. I am sure all of his virtues in the next year will be appropriately extolled, but it is going to be a big loss for us. I appreciate the gentleman yielding to me to make those comments because I thought Mr. Coble had left the floor, and I had intended to make them earlier when he was here. I am glad to see he is here.

Mr. WATT. Will the gentleman yield?

Mr. WATT. Mr. Speaker, I yield myself such time as I may consume. I rise in support of H.R. 2922. I thank the chairman of the committee, Mr. Goodlatte, and the gentleman from North Carolina (Mr. Holding) for introducing this commonsense legislation on which I am also an original cosponsor. This bill extends the authority of the U.S. Marshal Service and the Supreme Court Police to provide for the security of the Justices on and off the grounds of the Supreme Court for an additional 6 years. It also authorizes those enforcement agencies to protect Supreme Court employees performing their official duties and official guests of the Court when they are not on Court premises. In 1982, Congress first responded to the call of Chief Justice Warren Burger to provide for the safety of the Justices while traveling or away from the Court grounds. Since then, Congress has regularly reauthorized the statute for various lengths of time. H.R. 2922 provides for an extension for a period of 6 years. Because the current authorization expires in a matter of months on December 31, 2013, it is imperative that we act to provide the Justices the security we have sanctioned over the years. The work of the Supreme Court is vital to our Nation, and the role of any one Justice can tip the scales one way or the other on matters of grave consequence. The security we have consistently authorized since 1982 seems to work well, and we should act expeditiously to prevent a lapse in security for the Justices, employees, and dignitaries visiting the Court. Mr. Speaker, I have no further requests for speakers, and I urge my colleagues to support this important bill. I yield back the balance of my time.

Mr. WATT

Mr. WATT. Mr. Speaker, as I have no further speakers, I urge my colleagues to support this bipartisan, commonsense bill, and I yield back the balance of my time.

Mr. WATT. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in support of H.R. 2871, which I am pleased to be a cosponsor of. This straightforward, bipartisan measure will realign the Southern District of Mississippi. The bill has widespread support that includes Representative Bennie Thompson, who represents a part of Mississippi, as well as the affected judges and local bar. Rarely is a bill introduced that is forthright, uncomplicated, has universal bipartisan support, and is expected to save money. H.R. 2871 has all of these characteristics. The bill simply reorganizes the existing district into four divisions which will be designated as northern, southern, eastern, and western divisions. This simple reorganization is estimated to save approximately $135,000 due to reduced expenditures for juries and the services of the U.S. Marshals. I urge my colleagues to support this commonsense measure. I reserve the balance of my time.

Mr. WATT

Mr. WATT. Madam Speaker, I simply wanted to rise and pay tribute to the memory of my dear friend and colleague, Major Owens, who passed last week. I express my condolences to his family. As new Members, we take for granted sometimes that there is a system in place to provide support and mentorship to new Members. It is not just the way things operate. When I came to Congress in 1993, Major Owens was already here. He became one of the monitors and advisers who taught me the rules of how this institution operates--the rules of civility, respect, and honor-- and the rules by which we operate the floor of the House. I learned so much from him, and over the years became a good, close friend of Major Owens and the members of his family, all of whom we join in grieving with on this occasion. I simply wanted to say how much I respected him and how much appreciation I had for the advice and mentorship he provided to me.

Mr. WATT

Mr. WATT. Mr. Speaker, today I introduced H.R.__, the Free Market Royalty Act (FMRA), which creates a ``performance right'' that will obligate AM/FM radio stations to compensate performers for the use of their music just as cable, satellite, and Internet radio are obligated to do. Currently, cable, satellite, and Internet radio compensate writers, publishers and performers for the use of their music. However, when a song is played on AM/FM radio, the songwriter and publisher receive compensation, but the performer does not. The failure of terrestrial broadcasters to compensate the vocalists, musicians, and background performers sets the U.S. apart from most industrialized nations where performers are compensated for their performances. As a result of this lack of reciprocity, royalties collected internationally for over-the-air performances are not available to American sound recording artists. As part of the revision process that culminated in the Copyright Act of 1976, the Register of Copyrights was directed to examine whether the performance right should be extended to sound recordings. The Register's study considered whether a law should be enacted providing a performance right for sound recordings and also evaluated copyright systems developed in foreign countries. The exhaustive study transmitted to Congress in 1978 found that ``[s]ound recordings fully warrant a right of public performance'' that would address a major gap in the copyright laws. However, AM/FM broadcasters have fought against this equitable change for the last 35 years contending that AM/FM stations provide unique and valuable promotion to performers. In 1995, the Clinton Administration noted that ``[t]he copyright owners of sound recordings should be able to decide for themselves, as do all other copyright owners, if `free advertising' is sufficient compensation of their works. If the users' arguments regarding the benefit copyright owners derive from the public performance of their sound recordings are correct, the users should be able to negotiate a very low rate for a license to do so.'' In 2009, I joined a broad, bipartisan majority of the House Judiciary Committee in favorably reporting the ``Performance Rights Act'' to the full House. The Senate judiciary Committee reported similar legislation to the full Senate. These bills would have established in law a performance right for sound recordings. Airtime on AM/FM radio is no different from exposure on other mediums. Cable, satellite, and Internet radio also promote artists to new audiences, yet all these services pay performance royalties because clearly the value in these relationships runs both ways. AM/FM stations profit from advertising revenue. Why do advertisers pay? Because people listen. Why do people listen? To hear the songs. For many stations, take away the music and you take away the audience. I was happy to hear Bob Pittman, the CEO and president of Clear Channel, the nation's largest broadcaster, say ``[t]here are plenty of people in radio who think we already give the record labels so much by giving them free promotion to break their artists, and they say that ought to be enough. But clearly that is not enough, or there wouldn't be a decades-long battle over it.'' I agree that promotion is not adequate compensation. I was less happy to hear the National Association of Broadcasters' claim that certain direct licensing deals that Mr. Pittman has reached with a handful of record labels illustrate that performance rights legislation is not needed. In fact, those deals expose the unfairness and inadequacy of the current system and they strongly point out the need for a legislative solution that will apply market wide. Indeed, Scott Borchetta, the president and CEO of Big Machine Records and one of the architects of the first private deal with Clear Channel that has become the template for others, wrote Congress in November that ``the absolute need for legislation cannot be emphasized enough.'' What these deals really highlight is the uneven patchwork of rights that infects any effort to negotiate in the market as it stands today. AM/FM broadcasters get songs for AM/FM airplay without paying a single cent to the performers. That gives them a source of revenue they can leverage in negotiations, for example to obtain lower royalty rates for digital radio play. But digital-only services don't have this unfair advantage. Meanwhile, only some labels and artists and only some broadcasters are in a position to undertake the costly negotiations that these deals require. At the same time, Internet broadcasters have come to the Judiciary Committee to complain of the separate unfairness in the market under which they pay performance royalties at a different rate than satellite radio (which has its own illogical grandfathered exception) while AM/FM doesn't pay at all. In some respects, I agree. The Obama Administration recently echoed some of these concerns noting that ``in the context of the growing digital audio market . . . there is still no public performance right when sound recordings are used by over-the-air FCC- licensed broadcasters. As a result, over-the-air broadcasters enjoy a competitive advantage over emerging digital services.'' The solution to all these problems is for everyone to pay and for all royalties to be set under the same fair-market standard. That is essentially what the 2009 bill did. Unfortunately, however, we've reached a legislative stalemate in which a reasonable compromise that virtually everyone agrees makes sense has become stuck. And the parties have all become locked into their positions and unwilling to make a move. The FMRA seeks to end that stalemate by putting a new idea on the table that respects the equities and responds to the arguments of all. This bill creates an AM/FM performance right, to match the digital right that already exists in law. This would jumpstart meaningful private negotiations for all. The FMRA's solution for royalty setting is the one the broadcasters have called for: let the market decide. But it also provides equal rights and bargaining power to both sides by allowing recording artists to reject offers they find unacceptable--something they currently cannot do under the copyright laws because the compulsory license requires them to make their music available. To implement this free market approach, the bill would repeal the existing compulsory license. Internet radio says it pays too much, that the current ``willing buyer, willing seller'' standard results in rates that are too high. Under this bill, they may negotiate any rates they can. While Congress will establish a right, it will get out of the business of essentially establishing a price for that right. The value of music will be determined by the market. There are of course many useful features of the current system that we should retain. Radio services have been able to use the compulsory licensing as one-stop licensing, allowing them to get access to any music they wish to use at an established price. To preserve that convenience to radio, the bill empowers broadcasters, and rights holders with SoundExchange as their agent, to collectively negotiate a one-stop licensing rate that will be available to all. Broadcasters and music creators are also free to negotiate separately alternative arrangements on top of those backstop terms. Current law also contains critical protections for artists requiring that they receive a statutorily mandated fair share of performance royalties and that those royalties be paid directly to them through SoundExchange. The bill retains those requirements. In 2009, we hoped all stakeholders could reach an agreement that would end the years of waiting for fair pay for airplay. This proposal makes it in everyone's interest to reach such an agreement.

Mr. WATT

Mr. WATT. Mr. Speaker, I rise today to honor the life of Julius L. Chambers, an extraordinary American, civil rights leader and my friend and mentor, who died on August 2, 2013. Julius Chambers committed his professional and personal life to improving the lives of others by working tirelessly for civil rights, social justice and human rights. After overcoming substantial odds and graduating number one in his class from the University of North Carolina School of Law, Julius founded the first integrated law firm in North Carolina in 1964. I was fortunate to have had Julius as a source of inspiration and advice throughout my undergraduate and law school years and I was privileged to join his law firm in 1971. Under his leadership, the firm did as much to influence evolving civil rights law as any private law firm in the United States. Julius litigated a number of landmark civil rights cases, including Swann v. Charlotte- Mecklenburg Board of Education which resulted in the desegregation of Charlotte-Mecklenburg County public schools. In 1984 Julius left his law firm to become Director-Counsel of the NAACP Legal Defense Fund (LDF) in New York. Under his leadership, the LDF continued to be the leading civil rights organization engaged in defending against legal assaults on civil and constitutional rights. In 1993 Julius Chambers became the Chancellor of North Carolina Central University, his undergraduate alma mater, where he provided exceptional leadership and continued to be a role model and to have an important influence on young people. Even as he did so, he also continued to make significant legal contributions in the area of civil rights as one of three lawyers who argued the Shaw v. Hunt case before the Supreme Court in December 1995. In Shaw v. Hunt and a subsequent case, the Supreme Court ultimately upheld the constitutionality of North Carolina's 1st Congressional District and North Carolina's 12th Congressional District, the district I am honored to represent. In fact, during his career Julius Chambers argued a total of nine cases in the United States Supreme Court and won all of them, a record that probably has never been matched. Mr. Speaker, not only was Julius an outstanding citizen and lawyer, he was also a devoted husband to Vivian Chambers, to whom he was married for 52 years before she predeceased him in June 2012, and he was a loving father to Derrick and Judy. I ask my colleagues to join me today in honoring and remembering the life of Julius Chambers and celebrating the far-reaching influence of his life. Julius' example and the lasting legacy of his incredible work will continue to inspire me and countless others to continue working to advance us toward a fairer and more just society.

Mr. WATT

Mr. WATT. Mr. Speaker, I rise today to recognize and honor a constituent and distinguished veteran, Dr. Roy D. Moore. For decades, Dr. Moore has dedicated his service to the citizens of Guilford County, the State of North Carolina and our country helping to enhance and protect their quality of life. Dr. Moore was instrumental in organizing and directing programs and initiatives that have added value to communities in Greensboro and across the state of North Carolina, including the first After-School Program for Children at the Hayes Taylor YMCA and the Summer Food Program for children administered by North Carolina A&T State University. In the late 1980's Dr. Moore was instrumental in initiating dialogue that eventually created district based representation on Greensboro's City Council. This opened the door for minority representation on that governing body. He also served as the first Chairman of the 12th Congressional District of North Carolina which I am proud to represent. Dr. Moore's accomplishments also include the 1988 Man of the Year Award at St. James Presbyterian Church (Greensboro, NC), the 1997 Community Service Award from the Greensboro Chapter of the NAACP, the 2001 Guilford County Democrat of the Year Award and being the 1st Chair of the African American Democratic Caucus in Guilford County. Dr. Moore will be honored on September 14, 2013 in Greensboro, North Carolina at the Grand Opening of the new Disabled American Veterans headquarters. I hope my colleagues will join me in recognizing and congratulating Dr. Roy Moore for his September 14 honor and for his tireless work for many years to improve the lives of all people by strengthening the voices of those who are often ignored.

Mr. WATT

Mr. WATT. Mr. Speaker, on that I demand the yeas and nays.

Mr. WATT. Mr. Speaker, I appeal the ruling of the Chair.

Mr. WATT. This is not a proper ruling. It did not constitute debate. It was simply a unanimous consent request, and I do not believe this is a proper ruling of the Chair.

Mr. WATT. Mr. Speaker, I make a point of order.

Mr. WATT. Mr. Speaker, I ask unanimous consent to revise and extend my remarks in opposition to this bill because it injures and makes it impossible for children in my congressional district to be fed, and it makes it impossible for poor veterans to be fed. It disconnects the farm policy from nutrition, which has been at play forever and a day in this country. I cannot support the bill.

Mr. WATT

Mr. WATT. I ask unanimous consent to restore the time to the gentleman from Massachusetts (Mr. McGovern).