Congressional Record, Volume 144 Issue 78 (Tuesday, June 16, 1998)

[Congressional Record Volume 144, Number 78 (Tuesday, June 16, 1998)]
[Senate]
[Pages S6364-S6372]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT

The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of S. 1415, which the clerk will report.
The legislative clerk read as follows:

A bill (S. 1415) to reform and restructure the processes by
which tobacco products are manufactured, marketed, and
distributed, to prevent the use of tobacco products by
minors, to redress the adverse health effects of tobacco use,
and for other purposes.

The Senate resumed consideration of the bill.
Pending:
Gregg/Leahy amendment No. 2433 (to amendment No. 2420), to
modify the provisions relating to civil liability for tobacco
manufacturers.
Gregg/Leahy amendment No. 2434 (to amendment No. 2433), in
the nature of a substitute.
Gramm motion to recommit the bill to the Committee on
Finance with instructions to report back forthwith, with
amendment No. 2436, to modify the provisions relating to
civil liability for tobacco manufacturers, and to eliminate
the marriage penalty reflected in the standard deduction and
to ensure the earned income credit takes into account the
elimination of such penalty.
Daschle (for Durbin) amendment No. 2437 (to amendment No.
2436), relating to reductions in underage tobacco usage.
Gorton amendment No. 2705 (to amendment No. 2437), to limit
attorneys' fees.

Amendment No. 2705

Mr. GORTON. Mr. President, what is the pending business?
The PRESIDING OFFICER. The pending business is amendment No. 2705 by
the Senator from Washington.
Mr. GORTON. Thank you, Mr. President.
Mr. President, this will mark the third occasion on which the Senate
has debated a limitation on attorneys' fees in connection with the
litigation that led to this debate on tobacco legislation. As a
consequence, I do not believe this debate need last for as extended a
period of time as did those on the earlier Faircloth amendments, and I
believe the leadership is attempting to reach a time agreement on this
amendment, with a vote to take place perhaps right after the official
Senate photograph early this afternoon. On the other hand, I do not
have any official notification about a formal time agreement, but I
will proceed on the basis that this Gorton amendment can be debated
relatively expeditiously.
I have examined the debate on the last amendment on attorneys' fees
that took place on June 11, less than a week ago, and I believe that
the rationale for passing legislation with some limits on attorneys'
fees in connection with this litigation was so well stated by the
Senator from North Carolina, Senator Faircloth, and by the Senator from
Alabama, Senator Sessions, and by others that I do not need to repeat
in detail their scholarly approach and analyses of the subject.
Mr. President, you may say, agreeing with their rationale, why is it
that this Senator voted against both the first and the second Faircloth
amendments? The answer to that is simple. I believe that it is
appropriate for the Congress to limit attorneys' fees in connection
with this litigation for reasons that I will outline briefly in the
course of these comments. At the same time, I did not believe that the
particular limitations contained in the two earlier Faircloth
amendments were fair or just. So, with some regret but with firmness, I
voted to table each of those amendments.
The fundamental reason for my opposition to those two amendments was
the fact that they treated all attorneys in all tobacco cases as being
subject to the same cap or the same limitation. Whether that litigation
and those attorneys were involved from the very beginning with the
States of Mississippi and Minnesota, at a time at which tobacco
companies had not lost any litigation at all, when those initial
attorneys came up with what were novel and difficult theories of law
and took a tremendous risk in the litigation in which they were hired,
those attorneys were treated the same in the two earlier amendments as
attorneys who have just recently gotten into litigation on this issue
after it was obvious that, at the very least, settlements were
available to all of the plaintiffs and, for that matter, were treated
the same as any attorney who brings litigation in the future when both
the States and this bill have so substantially changed the burden of
proof in tobacco litigation that one may almost say that an attorney
who loses a tobacco case will be exposed to malpractice litigation
thereafter.
Mr. President, that is fundamentally unfair. And so the amendment
that I have put before the Senate today, for our vote, treats
attorneys' fees differently depending on when the litigation was
commenced. I have adopted all of the considerations for judges to use
in determining the amount of attorneys' fees that are fair in a given
case that were a part of the second Faircloth amendment. They, in turn,
are an expanded version of considerations that the Supreme Court of the
United States has articulated as used when the question of reasonable
attorneys' fees has come before the Supreme Court.
So the dollar figures that we use per hour in this amendment are
ceilings; they are not floors. If, in any case, the courts or others
who make judgments in this connection feel that those figures are too
high--and I think there will be many instances in which they do--they
may be reduced below that ceiling. We simply set a ceiling.

[[Page S6365]]

The ceiling, unlike the $1,000 ceiling in the last Faircloth
amendment which was mitigated by allowing a cost recovery greater than
the actual cost expenditures, is simply this. For lawyers who are part
of litigating cases that began before 1995, the ceiling will be $4,000
an hour--four times that in the Faircloth amendment. For lawyers as a
part of litigation that was brought after the beginning of 1995 but
before April of 1997, the maximum figure, the ceiling, will be $2,000
an hour. Why, you may ask, April 1997, 2 months before the tobacco
settlement was announced? That was the date, the time, that Liggett
gave up--in effect, turned state's evidence--turned all of the internal
memoranda, which show the horrendous way, the unprincipled way, the
tobacco companies had acted, over to the general public, to all of the
lawyers.
So after that date, after a date at which tobacco litigation was not
only unprecedented and of extraordinary difficulty but really quite
simple and easy, the maximum figure will be the $1,000 an hour--in this
case, identical to the overall limit in that Faircloth amendment, but
only a recovery of actual costs.
And, finally, beginning on a date that roughly corresponds with the
beginning of this debate on the floor of the Senate, in the
anticipation that even the rules of evidence will be lower and lesser
if this bill should pass, the ceiling will be $500 an hour--actually
lower than the Faircloth amendment itself.
It seems to this Senator, Mr. President, that that is more nuanced
and more fair than the one-size-fits-all proposition that was contained
in the two earlier amendments on which we voted.
As a consequence, this amendment is suggested to all of my colleagues
here in the Senate, both those who felt that a lower limit was
appropriate but were unsuccessful in getting a majority and those who,
like myself, objected to the two earlier Faircloth amendments.
I believe it is very difficult to stand for the proposition that
there should be no limitation under any set of circumstances. That
might be an appropriate position for Members of the U.S. Senate if we
were not engaged in this debate. If the very people whose clients have
come before us asking us to pass that bill--ratify the settlement made
by the great majority of States of the United States--had not come here
to Congress to ask us to pass this legislation, we would have no
business simply debating attorneys' fees in the abstract in this
connection. But they are here. They have used up, as the Senator from
Idaho said, too much of our time already, time which might more
profitably have been devoted to other legislation.

But it has been a serious debate. It has been a debate in which we
have examined every single element not only of the litigation that led
to this debate but of the whole relationship between tobacco, the
tobacco industry, and the farmers, teenagers, adults, health care, and
the like. And to say that the only aspect of tobacco policy that we
cannot and should not examine is the fees of the attorneys who are
involved in this litigation, to me, Mr. President, is an unsupportable
proposition.
Mr. President, a couple of weeks ago I came across a short essay by
Stuart Taylor, Jr., which appears in the May 30 edition of the National
Journal. I ask unanimous consent that that essay be printed in the
Record at the conclusion of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. GORTON. Mr. President, Mr. Taylor, in stating the case for
limitations on lawyers' fees, sets up the five fundamental arguments
against doing so and deals with each of those five.
The first is, ``Don't mess with the marketplace''--that these were
accounts freely entered into. In the first place, I am not sure that
there was a great deal of ``marketplace'' in connection with litigation
much of which was solicited by the lawyers themselves.
But in any event, the marketplace disappears with this legislation.
There is no real marketplace for tobacco products anymore. It will be
the most regulated marketplace for any legal commodity in the United
States, far exceeding the degree of regulation applied to alcohol and
alcoholic beverages, for example. So if we can regulate the marketplace
for tobacco, we can regulate the marketplace for tobacco lawyers.
The second objection that is brought up is that these are sacrosanct
contract rights. But, of course, these are contract rights that are
subject to review by the courts, by the judges who are dealing with
this litigation. There have already been judgments made in that
connection. The law is clear that attorneys' fees must be reasonable.
And when they are unreasonable or overreaching, the courts, with their
equity powers, said, ``We can intervene.'' Well, then, Mr. President,
it seems to me that we can intervene as well. We represent the
conscience of the people of the United States. And I believe
overwhelmingly the people of the United States will reject the kind of
attorneys' fees running up into the billions of dollars that seem
clearly possible and perhaps close to certainty should we not intervene
in this aspect of the marketplace.
The third objection is States rights--that all of this litigation was
brought by the States; we ought to stay out of it. Again, Mr.
President, a good argument had the States not come to us and asked us
to pass this legislation, because literally, in the case of most of
them, they could not reach the goals they sought without the assistance
of the President and the Congress of the United States.
The fourth reason--and it has been expressed on this floor--is that
these lawyers deserve these big, huge fees. I was presiding, Mr.
President, when Senator Hollings eloquently made that case, that
whatever they get they earn. Well, I suppose one can make that
argument, but I do not believe that most of the American people believe
that lawyers, under any circumstances, should earn $10,000 or $50,000
or $92,000 or $200,000 an hour for their work, no matter how
imaginative and how successful that work may be.
I think there are very few Members of this body who believe firmly
that they deserve fees larger than the $4,000 cap that is included in
this amendment.
The final argument that Mr. Taylor set out in his essay 2 or 3 weeks
ago was that $250 an hour was not enough. That, of course, was a
reference to the first Faircloth amendment, and I agreed with Mr.
Taylor, $250 was not enough for those who had begun this litigation by
any stretch of the imagination. I don't think, myself, $1,000 was
enough.
That is why, with a bit more reluctance, I voted against the second
Faircloth amendment. But I certainly believe that the staged amount
that we have in this amendment is enough and is enough for each of the
four different categories of lawyers to whom it applies. It is for that
reason that I have placed this proposal before the Senate once more in
a different fashion than the fashion in which it previously appeared.
This is a legitimate part of the debate over tobacco legislation. We
should reflect the conscience of the American people in this
connection. We should try to see to it the maximum amount of money,
consistent with fairness, that changes hands in one respect or another
as a result of this legislation goes to the social and mostly
antismoking purposes for which it is intended. We don't need to make
billionaires out of lawyers simply because they were lucky enough or
even wise enough to get into this field at an opportune time. We
particularly don't need to do that for those lawyers who didn't either
bother or have enough imagination to get into it until this kind of
litigation was a slam dunk.
This is perhaps one element of our system of justice that
increasingly disturbs the American people. We have dealt with it a
little bit at a time in tort reform legislation. I hope that the Senate
will take up a product liability bill and I hope now we can get a
bipartisan degree of support here on the Senate floor and get a
signature from the President on a modest attempt to reform our legal
system.
I voted for all such reforms that have come before the Senate while I
have been here in the last 7 years. I am not generally considered to be
someone who defends trial lawyers. I found it a little bit awkward to
vote against the first two Faircloth amendments, but I think even with
respect to people with whom I disagree, with whom many of

[[Page S6366]]

us disagree, fairness is vitally important. I have designed this
amendment in a way to be fair and to be equitable, to treat people in
different circumstances differently. I submit it to the consideration
of the Senate on that basis.

Exhibit 1

[From the National Journal, May 30, 1998]

(Stuart Taylor Jr.)

Tobacco Fees: The Rewards of Winning Could Be Stunning

It's an estimate, but perhaps not all that far-fetched: In
some cases, lawyers suing the tobacco companies could make as
much as $100,000 an hour if the cozy contingency fee deals
they have signed with state attorneys general and others are
left intact.
That helps explain why some in Congress are pressing to add
curbs on lawyers' fees to the $515 billion tobacco bill
sponsored by Sen. John McCain, R-Ariz.
In Texas, five leading plaintiffs lawyers would split a pot
of $2.3 billion over the next 25 years--15 percent of a $15.3
billion statewide settlement--under a contingency fee deal
signed by Democratic state Attorney General Dan Morales for a
lawsuit to recover health care costs attributable to tobacco.
The five lawyers did not keep track of the hours they
worked. Nor have they specified how much of the money they
would share with the dozens of other lawyers who helped them.
But professor Lester Brickman of Benjamin Cardozo Law School,
an expert witness in a court challenge brought by Texas'
Republican Gov. George W. Bush against the fee deal, says the
lawyers' hourly rates come to at least $92,000, based on his
estimate that they almost surely put in no more than 25,000
hours on the cases.
In Florida, West Palm Beach Circuit Judge Harold J. Cohen
invalidated as ``unconscionable'' a deal that would give the
state's 12 lead private lawyers $2.8 billion--25 per cent of
a similar, $11.3 billion statewide tobacco settlement. But
his decision was overturned on May 18, on procedural grounds,
and sent back for further action.
The total cut for the plaintiffs lawyers in all current and
future tobacco cases covered by the McCain bill could run as
high as $5 billion a year, with the biggest bucks coming from
future class action suits on behalf of sick smokers and their
families.
The plaintiffs lawyers and their champions--one of them
Sen. Ernest F. Hollings, D-S.C.--make no serious efforts to
knock down the numbers. In fact, they dismiss the dollar
figures as irrelevant. ``Don't give me this billable hours or
$180,000 an hour or $5 an hour or whatever it is,'' Hollings
declared in a May 19 debate. ``This isn't any hourly thing. .
. . They deserve every dime of it and more.''
Hollings was speaking against an attempt by Sen. Lauch
Faircloth, R-N.C., to amend the McCain bill by capping the
anti-tobacco lawyers' fees at $250 an hour. Faircloth's rider
was rejected, 39-58. The bipartisan majority's objections
were essentially these:

don't mess with the marketplace

Congress does not curb the gargantuan compensation packages
of, say, tobacco executives, other corporate fat cats, actors
or star athletes. So why should it selectively restrict the
fees of the entrepreneurs of litigation--especially those who
take on Big Tobacco?

contract rights

Any move by Capitol Hill to override contingency fee deals
would interfere with the lawyers' contract rights. ``A deal
is a deal,'' in the words of Sheldon Schlessinger, one of the
Florida lawyers pressing for a full 25 per cent cut.

states' rights

In the many cases in which attorneys general and other
state officials have retained private lawyers to sue tobacco
companies, federal fee-capping legislation would interfere
with the states' rights to sign whatever contingency fee
deals they choose.

they deserve big fees

The plaintiffs' lawyers are entitled to generous rewards
because they took extraordinary risks--which even state
governments could not take on their own--and used their
expertise, financial resources and entrepreneurial flair to
bring to their knees the mighty tobacco companies, which
until recently had seemed invincible.

$250 is not enough

While it may seem a princely wage to most people, $250 an
hour is barely half the rate tobacco companies and other
corporate clients pay their highest-paid lawyers. And those
lawyers are paid whether they win or lose. Contingency fee
layers, on the other hand, get nothing when they lose. So
when they win, they should get more--far more, in some
cases--to compensate for their risks.
This last point is so clearly, well, on the money, that by
itself it warrants rejection of Faircloth's $250-an-hour cap,
which smacked of standard conservative Republican lawyer
bashing.
But what about a fairer, more realistic curb on fees in
tobacco cases covered by the McCain measure? Brickman--a
leading scholar on contingency fees and a fierce critic of
excessive ones--proposes an upper limit of $2,000 an hour,
several times the rates charged by the tobacco companies'
lawyers.
Although some of the points noted thus far could be raised
against a $2,000-an-hour fee cap, the counterarguments seem
more persuasive.
Don't mess with the marketplace? Precious little evidence
suggests that many contingency fee lawyers engage in the kind
of competition for business that is the essence of a health
marketplace--perhaps because most smokers and other
individual plaintiffs don't have the time or expertise to
bargain or shop around for better fee deals.
And even some of the fee deals signed by presumably astute
state attorneys general, such as Dan Morales, seem remarkably
unsophisticated (at best), with the same fixed percentage of
the award going to the lawyers no matter how large the award.
Noting that Morales (like many other politicians) got
campaign contributions from some of the same lawyers, Bush
and Brickman have suggested that he either sold out or was
snookered or both. (Morales, returning the fire, has called
Bush a lackey of the tobacco companies.)
Be that as it may, the McCain bill would not leave much
freedom in any corner of the tobacco marketplace. It would
subject tobacco products, advertising and litigation alike to
pervasive federal regulation, in a manner somewhat analogous
to the government's Medicare and Medicaid systems, which of
course impose strict limits on doctors' fees.
The McCain measure would also make winning a lawsuit
against tobacco companies far easier (by superseding key
state tort law rules), while at the same time giving the
companies strong financial incentives to offer plaintiffs
generous settlements rather than fighting tort suits and
class actions all the way to trial. For a Congress that would
thus be enriching both plaintiffs and their lawyers--by
eliminating much of the risk of litigation and enabling them
to win with relatively little effort--it would be a bit odd
to ignore the matter of how much money the lawyers should be
able to take off the top.
Contract rights? As fiduciaries, lawyers everywhere are
subject to ethical rules barring them from charging
``excessive'' or ``unreasonable'' fees. So Brickman's
proposed fee cap would clash with the contract rights of only
those who can show that they can reasonably demand more than
$2,000 an hour.
Individual lawyers should be free to try to make such a
showing, on a case-by-case basis, and, if they are
successful, obtain an exemption from the $2,000-an-hour cap.
But few would (or should) succeed. And a requirement that
lawyers present justifications in court for such
exceptionally high fees would have the wholesome effect of
spurring judges to put teeth into the seldom-enforced ethics
rules against unreasonable fees.
States' rights? The McCain bill would virtually take over--
at the behest of the states themselves--the pending state
lawsuits to recover tobacco-related costs incurred by
combined state-federal Medicaid programs. In this context, on
what basis could any state official object to attaching a
$2,000-an-hour fee cap, especially one that would benefit the
state's citizens?
While some opponents of any fee cap assert that the main
beneficiaries would be the merchants of death (aka the
tobacco companies), it seems more likely to affect only the
split between the merchants of litigation (aka the trial
lawyers) and their clients--the states themselves, smokers
and others.
Do the lawyers really deserve more than $2,000 an hour?
Many surely do not, because their risk of loss has
diminished, and will diminish even more if the McCain bill
passes. Fred Levin, a Florida lawyer, helped illustrate this
point by boasting on ABC's 20-20 program not long ago that he
not only had brokered the contingency fee deal between the
state and its private lawyers for his ``good friend''
Democratic Gov. Lawton Chiles, but also had the lawsuit
against the tobacco companies ``a slam dunk,'' by slipping
through the state Legislature obscure amendments that
virtually guaranteed victory to the state.
Not much risk there. Could even so stalwart a champion of
the trial lawyers as Sen. Hollings explain why, for such
lawyers, $2,000 an hour is not enough?

Mr. McCAIN. Mr. President, first of all, I say the Senator from Idaho
came to the floor to argue that the tobacco legislation now spends more
money than it takes in. The argument neglects one fundamental fact, and
that is the legislation can't spend more than it takes in because the
authorizations, including the drug amendment, come from the trust fund
only. You can earmark all you want to, but unless the money is in the
trust fund, it can't be spent. That is, obviously, up to the
appropriators.
Having only been here for 12 years, I have, time after time after
time, observed authorizations of large amounts of money which are then
reduced by the appropriators, as which is their job, to fit into the
overall budget. These authorizations that are a result--the drug
amendment, prevention, cessation, counterads, research, et cetera--that
are authorized, cannot be appropriated unless the money is there in the
trust fund.
By the way, those who would argue that we need to reduce the size of
this bill by about $100 billion, I say that is a very likely outcome if
we are successful in reducing teen smoking, because the volume of
cigarettes sold in

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America, if we are successful, would be reduced significantly, which
would, first of all, mean less revenues and less payments into the
trust fund which is set up, and over time, obviously, would then reduce
the amount of money that can be spent. Most experts believe that if
this legislation is enacted that we could effectively reduce teen
smoking in America.
So I say to my friend from Idaho when he comes to the floor, when we
come to the floor in a day or so with a defense authorization bill
which greatly exceeds the amount that is budgeted, I hope that he will
make the same arguments that we exceeded in practically every other
authorization bill. As the Senator from Idaho well knows, the way we do
business around here is we authorize a certain amount of expenditures
and then that is subject to the appropriators who are guided by the
budget--in this case, guided by the amount of money that will be in the
trust fund. I think it is important that be mentioned.
I think most of us agree it is time we made a decision on this bill.
I want to comment on the Gorton amendment. I think it is important. I
think it is a good amendment. I think Senator Gorton, Senator Sessions,
and Senator Faircloth have great credibility in this body--both Senator
Gorton and Senator Sessions having been former attorneys general. I
believe that it is appropriate if we are going to designate how the
money is spent that comes from the increase in the price of a pack of
cigarettes, then there should also be some limitation on the amount of
money that is paid for legal expenses.
Senator Gorton's amendment calls for initially $4,000 an hour and
scales down as to what time in the calendar the legal entities entered
into these settlements. I think most Americans would believe that
$4,000 an hour is a rather generous wage. In fact, there are very few
Americans who are compensated to the tune of $4,000 an hour.
The argument will be made on the other side that we are dictating
something that should be left up to the States, should be left up to
arbitration. We have just passed several amendments that come from that
side that dictate exactly what the States should do. We just passed one
that said a certain amount of money had to go to early child
development. We passed one that said a certain amount had to go to a
specific kind of research.
In all due respect to the arguments that somehow we are interfering
with some kind of States rights here, then obviously an amendment
should be supported that says the States can do whatever they want to
with any of the money that goes to them, which contemplated in the
original bill is some 30 to 40 percent of the entire amount of money
that is collected.
Most Americans, when asked if $4,000 per hour is adequate
compensation to anyone--there may be some exception to that, perhaps
brain surgery--but for legal services I think the overwhelming majority
of Americans would view $4,000 per hour as more than generous
compensation. In fact, if we pass the Gorton amendment, there will be
some who will complain that this is far too generous. I remind
observers that this is the third iteration we have attempted to try to
bring some restraint to what many Americans are appalled to discover--
that a single law firm, in the case of the Florida settlement, could
make a couple of billion dollars.
I don't think that is appropriate, and I believe that we ought to act
overwhelmingly in favor of the Gorton amendment.
We have been told of two possible substitute amendments--one by
Senator Hatch and the other by Senators Gramm and Domenici. I hope and
expect that if those amendments are to be offered, we can move to them
shortly.
As I said, the Senate has adopted several significant amendments,
particularly with respect to how funding under this bill is
apportioned. I thought it might be helpful to recap for the Senate
where the bill stands in that regard.
The Joint Tax Committee estimates that under the managers' amendment,
$52 million would be available in the trust fund in the first 4 years
and an additional $72 billion in the following 5 years, producing a 9-
year total of $124 billion.
The Senate adopted amendments to the bill to provide $3 billion to
assist veterans with smoking-related diseases and $46 billion in tax
cuts, leaving a total of $75 billion over 9 years for apportionment to
the four major accounts authorized under the bill--the State account,
the public health account, the research account, and the farmer
assistance account.
Under the bill, 40 percent of the money, or $30 billion over the next
9 years, would be made available to the States to settle their Medicaid
and legal claims against the tobacco industry. This would mean a payout
of approximately $3.3 billion per year, or an average of $66 million
per State per year, to compensate State taxpayers.
And 22 percent of the money, or $16.5 billion over 9 years, would be
made available for public health programs, including
counteradvertising, smoking prevention and cessation services, as well
as for drug control programs authorized under the Coverdell-Craig
amendment. As the bill currently stands, the precise amounts and
selected purposes would be subject to appropriations.
This means an amount of approximately $1.8 billion available for
public health and subject to drug control purposes. Under the bill, 90
percent of the money reserved for public health is to be block-granted
to the States.
Another 22 percent of the funds, or $16.5 billion over 9 years, would
be made available for health research at the National Institutes of
Health and Centers for Disease Control. This would mean a payout of
nearly $1.8 billion per year for advanced medical research.
As you know, Mr. President, lately the public health groups have
complained about some of the reductions as a result of setting aside $3
billion for veterans' treatment of tobacco-related illness as a result
of tax cuts and as a result of an anti-illegal drug program. It still
provides $1.8 billion per year for advanced medical research. I would
say that is a significant amount of money.
The bill designates 16 percent of the fund to tobacco farmer and farm
community assistance. Also, Mr. President, $1.8 billion is available
for public health. And $1.8 billion is, I think, a sizable amount of
money. This is a total of $12 billion over 9 years, or a yearly payout
of $1.3 billion.
The farm provisions still have to be worked out. I hope we can
accomplish that end expeditiously and in a manner that is fair and
appropriate.
I remind my colleagues again that the bill, as modified, contains
measures of enormous benefit to the Nation, including vital anti-youth
smoking initiatives that will stop 3,000 kids a day from taking up a
habit that will kill one-third of them, critical funding for
groundbreaking health research, and assistance to our Nation's veterans
who suffer from smoking-related illnesses.

I would like to mention again, Mr. President, that for reasons that
are still not clear to me, money was taken to use for highways that
should have been used for treating veterans who suffer from tobacco-
related illnesses. This provision of the bill is an effort to provide
some funding for veterans who were encouraged to smoke during the
period of time they were serving this Nation.
The bill will also fund a major antidrug effort to attack the serious
threat posed by illegal drugs, and it contains one of the largest tax
decreases ever to eliminate the marriage penalty for low- and moderate-
income Americans, and achieve 100 percent deductibility of health
insurance for self-employed individuals. In fact, every penny raised
above the amount agreed to by the industry last June is returned to the
American people in the form of a tax cut.
Let me repeat that, Mr. President. I think it is rather important. It
happens that this tax cut takes into consideration all of the
additional funds above that which were agreed to by the attorneys
general and the industry last June.
The bill provides the opportunity to settle 36 pending State cases,
collectively, efficiently, and in a timely fashion. I argue that it is
now time to finish our business and move the process forward.
There are those who labor under the unfortunate misapprehension that
if we do nothing, the issue will go away. I don't believe that is
correct. I don't

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believe it is correct because the facts won't go away. Mr. President,
3,000 kids take up the habit every day, teen smoking is on the rise,
and that probably won't stop unless we do something.
Mr. President, 418,000 Americans die of smoking-related illnesses
every year--the No. 1 cause of preventable disease and death in America
by far. This death march won't stop unless we do something. The
taxpayers must shell out $50 billion a year to pay for smoking-related
health care costs--nearly $455 per household. That number is increasing
because the number of youth smokers is rising. I want to again repeat,
those who call this a ``big tax bill''--and I congratulate the tobacco
industry for doing polling and finding that most Americans
understandably are opposed to ``big tax increases,'' but I argue that
the tobacco industry is responsible for one of the biggest tax
increases in the history of this country. That tax increase is what
taxpayers have to pay to treat tobacco-related illnesses. Those
tobacco-related illnesses are directly related to the sale of their
product.
If the bill disappears--which would be much to the industry's
delight--the State suits will not disappear with it. If we fail to act,
the States will continue their suits and they will win judgments and
the price of cigarettes will increase sharply. So please don't be
misled by those who would have the public believe that killing this
bill would eliminate taxes or relieve smokers of an undue price
increase. Following the Minnesota settlement, the price of a pack of
cigarettes went up 5 cents, on an average, throughout the country, not
just in Minnesota.
Mr. President, we have a tendency to throw around polling data quite
frequently. Recently, there was a poll paid for by the tobacco
companies, and some of the opponents took great heart in that the
American people somehow did not support legislation to attack the
problem of kids smoking. There was another telephone survey conducted
by Market Facts TeleNation, which is an independent polling firm, and
this poll was paid for by the Effective National Action to Control
Tobacco. Mr. President, these polls' questions are always very
important because how they shape the question quite often dictates the
answer. We know very well how highly paid pollsters are.
Here is the question:

As you may know, the Congress is currently considering the
McCain tobacco bill, which creates a national tobacco policy
to reduce tobacco use among kids. Based on what you know
about the bill, do you favor or oppose Congress passing the
McCain bill?

Registered voters in favor were 62 percent. It is broken down: 45
percent strongly favor; 17 percent somewhat favor; strongly oppose, 23
percent; somewhat oppose, 9 percent. All adults who favor are 62
percent; oppose, 30 percent.

Question: The McCain bill includes public education to
discourage kids from smoking, help for smokers to quit,
enforcement of laws to prevent tobacco sales to kids and
increases in the price of tobacco products to discourage use
by kids. There would also be strict limitations on tobacco
advertising and marketing to kids, as well as authority for
the Food and Drug Administration to regulate tobacco like it
does other consumer products. These programs would be funded
by increasing the price of a pack of cigarettes by $1.10 over
the next 5 years. Knowing this about the McCain bill, do you
favor or oppose the bill?

This is what we call usually a ``push question.'' And the number goes
up to 66 percent registered voters strongly favor, and about 4 percent
oppose.

Question: If two candidates for Congress were otherwise
equal, but one supported the McCain bill and the other
opposed it, would you be * * *

More likely to support the candidate who supports the bill, 44
percent more likely; more likely to support the candidate who opposes
the bill, 18 percent; 37 percent would say no effect on their vote; 44
percent would most likely support the candidate who supports the bill.

Question: Some in Congress have proposed amendments to the
McCain bill that address issues other than tobacco use--like
tax reductions and the war on illegal drugs. Which of the
following statements do you agree with most?

The tobacco bill should address issues only, and other issues should
be dealt with in separate legislation, 79 percent.
Mr. President, I ask unanimous consent that this poll be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Effective National Action to Control Tobacco: A Public Health Coalition

tobacco survey results

Telephone survey using a random digit sample, commissioned
by the Campaign for Tobacco-Free Kids and conducted June 12-
15, 1998 by Market Facts' TeleNation, an independent polling
firm. The poll included 924 adults and 784 registered voters.
Responses below are based on the full sample of respondents
unless otherwise noted. Margin of error is +/-3.2 percent for
all adults and +/-3.5 percent for registered voters.
Question: As you may know, the Congress is currently
considering the McCain tobacco bill which creates a national
tobacco policy to reduce tobacco use among kids. Based on
what you know about the bill, do you favor or oppose Congress
passing the McCain bill?

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
Favor (Net)...................................... 62 62
Strongly Favor............................... 45 44
Somewhat Favor............................... 17 17
Oppose (Net)..................................... 31 30
Strongly Oppose.............................. 23 22
Somewhat Oppose.............................. 9 8
DK/Refused....................................... 7 8
------------------------------------------------------------------------

Question: The McCain bill includes public education to
discourage kids from smoking, help for smokers to quit,
enforcement of laws to prevent tobacco sales to kids and
increases in the price of tobacco products to discourage use
by kids. There would also be strict limitations on tobacco
advertising and marketing to kids, as well as authority for
the Food and Drug Administration to regulate tobacco like it
does other consumer products. These programs would be funded
by increasing the price of a pack of cigarettes by $1.10 over
the next five years. Knowing this about the McCain bill, do
you favor or oppose the bill?

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
Favor (Net)...................................... 66 65
Strongly Favor............................... 50 49
Somewhat Favor............................... 17 17
Oppose (Net)..................................... 32 33
Strongly Oppose.............................. 24 24
Somewhat Oppose.............................. 9 8
DK/Refused....................................... 1 2
------------------------------------------------------------------------

Question: If two candidates for Congress were otherwise
equal, but one supported the McCain bill and the other
opposed it, would you be:

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
More Likely to Support The Candidate Who Supports 44 44
The Bill (Net)..................................
Much More Likely............................. 30 31
Somewhat More Likely......................... 14 13
More Likely to Support The Candidate Who Opposes 18 19
The Bill (Net)..................................
Much More Likely............................. 14 13
Somewhat More Likely......................... 5 5
No Effect On Vote................................ 36 37
DK/Refused....................................... 1 1
------------------------------------------------------------------------

------------------------------------------------------------------------
Registered All
Randomized voters adults
(percent) (percent)
------------------------------------------------------------------------
The tobacco bill should address tobacco issues 79 79
only, and other issues should be dealt with in
separate legislation............................
Issues such as tax reduction and illegal drugs 18 18
are so important that they should be addressed
in the tobacco bill even if it means reducing
funds for programs to combat tobacco use among
kids............................................
DK/Refused....................................... 4 4
------------------------------------------------------------------------

Question: Now let me ask you about a couple of specific
amendments to the tobacco bill. Please tell me which of the
following positions you agree with most.

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
Some in Congress want to amend the bill to use 22 22
money intended for tobacco prevention to reduce
the so-called marriage tax for couples with
incomes under $50,000 because these couples
currently pay somewhat more in income taxes than
two individuals who are not married.............
Others say the marriage tax should not be 69 69
addressed in the tobacco bill and that it takes
too much of the money intended for programs to
reduce tobacco use among kids...................
DK/Refused....................................... 9 9
------------------------------------------------------------------------

Question: Which of the following positions do you agree
with most?

------------------------------------------------------------------------
All
Registered adults
voters (percent)
----------------------------------------------------(percent)-----------
Some in Congress want to take much of the revenue 21 22
generated by tobacco price increases that is
intended for programs to reduce tobacco use
among kids and use it instead to add to the
funds the government has for fighting illegal
drugs...........................................
Others say the money raised by the tobacco bill 75 74
should be used first and foremost to address the
tobacco problem, and that if more money is
needed to fight illegal drugs, it should come
from other source...............................

[[Page S6369]]

DK/Refused....................................... 4 4
------------------------------------------------------------------------

Question: Please tell me whether you favor or oppose
spending the revenues from the McCain tobacco bill for each
of the following.
Do you (strongly/somewhat) favor or oppose spending the
revenues from the McCain tobacco bill for?

------------------------------------------------------------------------
Registered All
Randomized voters adults
(percent) (percent)
------------------------------------------------------------------------
Reimbursing the states for the money they have 43 43
spent treating sick smokers (favor (Net)).......
Funding health and medical research (favor (Net)) 78 78
Funding programs designed to reduce tobacco use 84 85
among kids like public education campaigns,
school-based programs, and enforcement of laws
prohibiting tobacco sales to minors (favor
(Net))..........................................
Providing money and other assistance to tobacco 62 62
farmers to help them in the transition to other
ways of making a living (favor (Net))...........
Reducing the marriage tax for couples making 34 35
under $50,000 (favor (Net)).....................
Adding funding to the government's budget for 46 46
fighting illegal drugs (favor (Net))............
Funding for states to provide expanded child care 46 48
services (favor (Net))..........................
------------------------------------------------------------------------

Question: And which of those uses of the McCain tobacco
bill's revenues is the most important in your mind?

------------------------------------------------------------------------
Registered All
Randomized voters adults
(percent) (percent)
------------------------------------------------------------------------
Reimbursing the states for the money they have 6 6
spent treating sick smokers.....................
Funding health and medical research.............. 16 15
Funding programs designed to reduce tobacco use 48 48
among kids like public education campaigns,
school-based programs, and enforcement of laws
prohibiting tobacco sales to minors.............
Providing money and other assistance to tobacco 7 8
farmers to help them in the transition to other
ways of making a living.........................
Reducing the marriage tax for couples making 5 5
under $50,000 (favor (Net)).....................
Adding funding to the government's budget for 8 8
fighting illegal drugs (favor (Net))............
Funding for states to provide expanded child care 7 7
services (favor (Net))..........................
------------------------------------------------------------------------

Question: Amendments passed so far to the McCain tobacco
bill have removed virtually all funds dedicated to tobacco
prevention programs, Funds remain in the bill for medical
research, tobacco farmers, child care, reimbursement of state
medical costs, the marriage tax reduction, and additional
funds to fight illegal drugs.
Do you favor or oppose restoring the money in the bill for
tobacco prevention efforts even if it means reducing the
funds available for these other purposes?

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
Favor (Net)...................................... 61 61
Strongly Favor............................. 37 36
Somewhat Favor............................... 24 25
Oppose (Net)..................................... 33 33
Strongly Oppose.............................. 17 17
Somewhat Oppose.............................. 16 16
DK/Refused....................................... 6 6
------------------------------------------------------------------------

Question: Other things equal, if one candidate for Congress
supported restoring the money for tobacco prevention programs
in the McCain bill and the other candidate opposed restoring
the money, would you be:

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
More Likely to Support The Candidate Who 54 53
Supported Restoring The Tobacco Prevention Money
(Net)...........................................
Much More Likely............................. 30 29
Somewhat More Likely......................... 25 23
More Likely To Support The Candidate Who Opposed 14 14
Restoring The Tobacco Prevention Money (Net)....
Much More Likely............................. 4 3
Somewhat More Likely......................... 10 11
No Effect On Vote................................ 26 26
DK/Refused....................................... 7 7
------------------------------------------------------------------------

Question: How much do you trust each of the following to do
the right thing on national tobacco policy?
How much do you trust Democrats in Congress to do the right
thing on national tobacco policy? Do you:

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
Trust (Net)...................................... 47 47
Trust a lot.................................. 11 11
Trust somewhat............................... 36 37
Distrust (Net)................................... 49 49
Distrust a lot............................... 23 23
Distrust somewhat............................ 27 26
DK/Refused....................................... 3 4
------------------------------------------------------------------------

How much do you trust Republicans in Congress to do the
right thing on national tobacco plicy? Do you:

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
Trust (Net)...................................... 46 45
Trust a lot.................................. 9 8
Trust somewhat............................... 37 37
Distrust (Net)................................... 51 51
Distrust a lot............................... 25 25
Distrust somewhat............................ 25 26
DK/Refused....................................... 4 4
------------------------------------------------------------------------

How much do you trust President Clinton to do the right
thing on national tobacco policy?

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
Trust (Net)...................................... 51 52
Trust a lot.................................. 21 19
Trust somewhat............................... 31 32
Distrust (Net)................................... 48 47
Distrust a lot............................... 32 31
Distrust somewhat............................ 16 16
DK/Refused....................................... 1 2
------------------------------------------------------------------------

Question: If the McCain bill to reduce tobacco use among
kids is not passed by the Congress, who will be most
responsible for it not passing?

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
Democrats in Congress............................ 16 16
Republicans in Congress.......................... 40 37
President Clinton................................ 13 14
All of the above................................. 11 12
None of the above................................ 4 4
DK/Refused....................................... 16 17
------------------------------------------------------------------------

Question: Which of the following describes your use of
tobacco products?

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
Current regular smoker or regular smokeless 25 26
tobacco user....................................
Former regular smoker or regular smokeless 25 25
tobacco user, or................................
Never smoked cigarettes regularly or used 49 48
smokeless tobacco regularly.....................
------------------------------------------------------------------------

Question: Do you generally consider yourself a Republican
or a Democrat?

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
Republican....................................... 37 35
Democrat......................................... 39 39
Independent...................................... 17 17
Other............................................ 5 6
DK/Refused....................................... 2 3
------------------------------------------------------------------------

Question: Are you currently registered to vote in the state
where you live?

------------------------------------------------------------------------
Registered All
voters adults
(percent) (percent)
------------------------------------------------------------------------
Yes.............................................. 100 86
No............................................... .......... 14
DK/Refused....................................... .......... 1
------------------------------------------------------------------------

Mr. McCAIN. Mr. President, as we do battle of the polls, there is one
today that I think in many ways supports the argument that the American
people want to do something about the issue. The other argument that I
hear quite often is the American people do not care, that they care
more about illegal drugs, that they care more about crime, that they
care more about education. I agree with that. But they also care about
tobacco.
After this issue is taken up, I understand there will be efforts to
take up the issue of patients' rights under the present health
management regime in America. I haven't seen that in any polls. That is
one of the most important issues. Yet, I think Members of this body
think that it is of great importance. We are going to take up the
defense bill, of which there will be several controversial issues, such
as ballistic missile defense, our sanctions on China, et cetera.
I haven't seen those in any polls either. But yet I think the
American people care about our Nation's security, especially our
ability to defend the Nation.
Should we do something about illegal drugs? Yes. I hope we will. I
believe that this bill has been improved by that.
Should we do something about education? I believe that we have had
significant and substantial debate on the floor of the Senate regarding
that issue. The very excellent bill of Senator Coverdell was passed
after a very difficult process.
Should we do things about crime? Yes.
But, Mr. President, I think we should also do something about this
issue as well.
As I began my comments, I believe that we are in an important period
of time. I say the best way to proceed is to have a cloture vote
proposed by the majority leader, which is the way we do business around
here. If the Senate, in its wisdom, decides by 40 votes, and we don't
have enough votes to conclude debate after being here in this fourth
week, then we should go on to other issues. If there are sufficient
votes, 60 votes to invoke cloture, I urge both proponents and opponents
of the legislation to try to complete action on this legislation this
week.

[[Page S6370]]

We all know we have 13 appropriations bills; perhaps product
liability reform; perhaps other issues that are important to the
American people as well.
I don't mind staying here all summer, if I may borrow a phrase from
another leader of a different magnitude than I. But I believe that we
have discussed and debated this issue at great length, and it is now
time for us to make a decision as to whether we move forward on this
bill or not, or throw the issue back to the States. Thirty-six
attorneys general voted for it. Larger and larger settlements, and
larger and larger legal fees will occur. But most importantly, as I
have said on a number of occasions on the floor, today 3,000 kids will
start to smoke, and tomorrow, and the next day, and the next day.
Mr. President, I yield the floor.
Several Senators addressed the Chair.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, I thank my colleague, Senator McCain, for
his remarks and putting some of this argument back in perspective.
I want to address briefly the amendment of the Senator from
Washington, Senator Gorton. I know there are other colleagues waiting
to speak on this question.
Mr. President, I understand the strong feeling that we want to limit
lawyers' fees. I don't think there is a Member of this body that isn't
concerned about seeing lawyers get windfall results for themselves as a
result of this litigation.
We have in the McCain legislation, the bill that came out of the
Commerce Committee on a 19-to-1 vote, a strong bipartisan vote, a means
of addressing that problem.
What is in the bill is a provision for arbitration panels to
determine what are the appropriate legal fees.
I think probably that is the best answer, as imperfect as it is.
The problem with the our taking action is, What action do you take? I
think Senator Gorton has probably the best chance of prevailing. But it
has problems. I think his is probably the most thoughtful provision
before us.
But I say to my colleague from Washington, I think there are real
problems with what he has proposed. Under Senator Gorton's proposal,
fees would be limited to $4,000 an hour for actions filed before 12-31
of 1994. The problem is that may be way too much. It is even
conceivable in certain circumstances that it is too little, but I think
it is more likely that it is too much.
He also provides $2,000 an hour for actions filed between 12-31 1994
and 4-1 1997.
I tell you, my own view is that may well be too much. It is hard to
say because it is an arbitrary cap. That is the problem with what the
Senator from Washington is offering. In many cases, it may be way too
much.
He says it establishes a cap, not a floor. But I think we all
understand what happens in these cases. Very often what is intended is
a cap which then becomes a floor. What we may find out is that people
being compensated at $4,000 an hour do not deserve a fraction of that.
Or we may find that we have attorneys who file actions between 12-31
1994 and 4-1 1997 who are capped at $2,000 an hour. That may be far in
excess of what they should receive.
He also provides for $1,000 an hour for actions filed between 4-1
1979, and 6-15 of 1998; $1,000 an hour.
Again, because this is arbitrary, it can wind up being too much in
one case when it goes down to $500 for actions filed after 6-15 of
1998. Those would be new cases.
That may be appropriate for those who have just gone out and made a
copy of the previous actions filed by others, but if it is a new
action, taking on the tobacco industry on a new theory where a law firm
has to put up substantial resources of its own to bring an action, $500
may not be enough.
The point is we don't know. Sitting here in this Chamber, how do we
make a decision about what is an appropriate legal fee for literally
thousands of cases across this country. I don't think it is possible
for us to make this judgment. That is why some of us believe an
arbitration panel is the appropriate resolution. Let's leave it up to
the parties at issue. They each name somebody on their behalf, and
those two name a third, and they reach a conclusion on what the
appropriate fees are in a particular case. But to have us sit in
Washington and try to decide what a contract ought to be in the State
of Minnesota is really pretty far-fetched. We often say we are engaged
in too much micromanagement from here in Washington. In fact, our
friends on the other side of the aisle say that frequently, and
frequently they are right. If there was ever a case of micromanagement,
this is it. We are deciding what legal fees should be in the State of
Washington, the State of Minnesota, the State of North Dakota. I don't
think so. I tell you what an appropriate legal fee in North Dakota is
and what an appropriate legal fee in New York is are probably not the
same. For us just to put in an arbitrary amount that applies across the
country is meddling at a level that I think is counterproductive.

Now, we have heard, gee, some of these cases that are settled are
going to lead to a windfall for the attorneys at issue. I tell you, I
am very concerned about that. That is why I have supported arbitration,
because where there is a difference between those who hired the lawyers
and those who have been hired, there ought to be a way of resolving it
so lawyers do not enjoy windfall returns.
We have heard a lot of discussion about Florida. There has been the
suggestion that law firms down there are going to get $2 billion. I
tell you, that is outrageous, absolutely outrageous --$2 billion for a
case in Florida. But I am not the only one who thinks it is outrageous.
The State court in Florida thinks it is outrageous. In fact, they have
said it is unconscionable in the State of Florida, and they have not
approved it.
So why are we substituting our judgment for the judgment of courts in
the individual States and the judgment of the attorneys general in the
various States who are the ones who have hired lawyers on a contingency
basis? Because that is why we have the problem. We have the problem
because individual attorneys general did not, by themselves, have the
resources to go take on the tobacco industry. They did not have the
resources to do that. We all understand, before this series of cases,
the tobacco industry had never lost a case and they had the best legal
talent in the country.
By the way, as I understand it, the proposal of the Senator from
Washington only applies to plaintiffs' attorneys. It does not apply to
the tobacco industry's attorneys. So you have kind of an uneven fight
here: The tobacco industry has no limitation, and the plaintiffs'
lawyers, those who sue on behalf of the victims, are capped. And the
caps that apply under the amendment of the Senator from Washington may
be way too much. In fact, I think in virtually every case $4,000 an
hour is way too much; $2,000 an hour for a different set of classes
based on the time that they were filed may be way too much; $500 an
hour for new cases may be too little if the law firm has to put up
substantial resources of its own in order to bring the action and
successfully take on the multibillion-dollar tobacco industry,
especially given the tobacco industry's rate of success.
Mr. President, in the task force that I headed for our side, the
conclusion we came to as the appropriate resolution is not to have us
try to determine appropriate legal fees. The Senate of the United
States is not equipped, frankly, to reach into the facts, the different
fact patterns of hundreds of different cases, even thousands of
different cases across this country, and determine what are the
appropriate legal fees.
I think that is a profound mistake, and it sets a precedent. Are we
going to start to determine the legal fees in cases that involve the
automobile industry? Are we going to start to get involved in what the
legal fees should be in the medical industry?
Boy, I tell you, I do not think that is a road we want to go down,
because I do not think this body is equipped to determine the legal
fees. I think we may make very serious mistakes, and I can easily see
under the amendment offered by the Senator from Washington that we
could wind up with a scheme in which lawyers were compensated far more
than they should be.

Now, if we look at what has happened around the country, I think we
will see that, in fact, the individual States are responding to these
challenges. We are

[[Page S6371]]

seeing in State after State that they are not accepting these
outrageous contingency agreements that were entered into. They are not
accepting 25 percent contingency agreements. In State after State they
have changed what was proposed.
In Minnesota, outside counsel agreed to accept 7.5 percent instead of
the 25 percent fee as called for in the original contract. In
Mississippi, both the State and their counsel have agreed to submit a
decision on fees and expenses to an arbitration panel. In both Texas
and Florida, where there is a dispute over fees, the attorneys' fees
and expenses will be decided either through agreement, arbitration, or
court order. In each case, mechanisms are now in place to determine the
amount of the attorneys' fees.
In Texas, a State court ruled that a 15 percent contingency fee
called for in the contract between the State attorney general and the
attorneys was reasonable but refused to award a specific dollar amount.
In that State, the Governor has now petitioned the court to reconsider
its decision and has asked for an evidentiary hearing. The decision is
not expected until later this year.
In Florida, as I indicated, the State court rejected as
unconscionable the fee request of the attorneys. Well, good for the
court in Florida; they should have rejected it as unconscionable. But
that is where the decision ought to be made. It should not be made here
in this Chamber where we are not privy to the facts in each of these
cases and not in the position to determine what are the appropriate
legal fees.
Let me say further that the Gorton amendment would interfere in
private contracts. That is a very serious matter. Where a State
attorney general has entered into an agreement with an outside law
firm, I think it is highly questionable for the Senate to reach behind
that contract and say we know better, we know what the appropriate
legal fees should be, and we divide it on this arbitrary basis as is
called for in the Gorton amendment. I do not think I have ever heard
our colleagues on the other side of the aisle call for interference in
private contracts. I do not think that is a precedent that stands much
scrutiny.
I am going to have more to say about this amendment as we go forward.
I would say that Senator Gorton, I think, has done the most serious job
of trying to address this vexing question, to try to prevent windfalls
to attorneys, but I am afraid it fails at least the test that I would
apply for something that can meet the very different standards one sees
all across the country in the literally thousands of different cases
where legal fees apply.
I yield the floor.
The PRESIDING OFFICER (Mr. Sessions). The Senator from Washington.
Mr. GORTON. Mr. President, the Senator from North Dakota finds
himself on the horns of a delicious dilemma. He feels there may be
cases in which the amendment I propose would result in attorneys' fees
being awarded that are too great, and so his answer is to reject the
amendment and allow attorneys' fees in any amount. Attorneys' fees in
one case, in Texas, I believe, have already been approved by the court
in an amount more than 10 times higher than the highest amount in this
amendment. I am afraid the Senator from North Dakota misreads the
amendment.
The heart and soul of the amendment is a set of criteria for
determining reasonable attorneys' fees, listing a wide range of
factors, some of which we have discussed here, but leaving the matter
to the discretion of the court. There is a limitation imposed on the
discretion of the court by the amendment in the amounts that we have
stated and debated. This is a cap and by no means a floor.
The Senator from North Dakota says that the better system is the
system that is included in this bill, a system of arbitration. But, and
the current Presiding Officer has read this very carefully, this is
some kind of arbitration. This arbitration is to be decided under the
bill by three arbitrators --one appointed by the plaintiff's trial
lawyer himself, one appointed by the plaintiff, and a third appointed
by the first two. The plaintiff has already signed an agreement--the
plaintiff in most of these major cases is the State--they have signed
an agreement, in some cases, for a 25-percent contingency fee on
billions of dollars' worth of recoveries. Who is going to represent the
public interest in this arbitration? No, Mr. President, there isn't
anyone there to do that.
Mr. CONRAD. Will the Senator yield for a quick point?
Mr. GORTON. Sure.
(Mr. COATS assumed the Chair.)
Mr. CONRAD. I think the Senator misspoke himself. The Senator
indicated in the arbitration panel one would be appointed by the
plaintiff, one by the plaintiff's lawyer, and then one by the two. I am
sure the Senator will acknowledge it is one by the defendant, one by
the plaintiff, and the two of them determine the third member. Section
1413 provides how the arbitration panel will work. Obviously, the two
sides at issue each pick one, and the two of them pick the third. That
is the standard means of establishing an arbitration panel.
Mr. GORTON. I am reading section 1413. It says:

. . .In any such arbitration, the arbitration panel shall
consist of 3 persons, one of whom shall be chosen by the
plaintiff, one of whom shall be chosen by the attorney, and
one of whom shall be chosen jointly by those 2 arbitrators.

That is not plaintiff and defendant. That is a fixed deal. In any
event, to say that because it is possible that this sets a ceiling,
that a $4,000 fee or a $2,000 fee might be too great a ceiling, we
should, therefore, have no ceiling at all, we should, therefore, allow
attorneys' fees that have already been approved in far larger amounts,
is, I think, a difficult argument to make.
The Senator from North Dakota makes it very well. But, in fact, the
Congress of the United States has set attorneys' fees in all kinds of
cases. They were discussed a few days ago by the Senator from Alabama
and by others. There are many forms of litigation against the
government itself in which we have set attorneys' fees that now, I
think, are rather modest with the passage of time.
This is not unprecedented by any stretch of the imagination. What is
unprecedented is the generosity of the proposal that I have put before
the Senate. It is not unprecedented from the point of view of whether
or not we have done it. No, we either have to say that because the
States of these attorneys have come to us and have asked us to regulate
tobacco in every conceivable, possible fashion, because they have asked
us for a bill--this bill that makes it almost impossible for them to
lose a case in the future because it totally changes the burden of
proof--that we can say there is a certain level beyond which the
conscience just simply doesn't allow attorneys' fees to go, or you have
to take the position that we can regulate everything with respect to
tobacco to the minutest degree, but we dare not touch attorneys' fees,
personally, I think that is a very, very difficult argument to make.

Mr. WELLSTONE addressed the Chair.
The PRESIDING OFFICER. The Senator from Minnesota.
Mr. CONRAD. Will the Senator from Minnesota yield for just one
moment?
Mr. WELLSTONE. I will be pleased to yield if I can have the floor.
The PRESIDING OFFICER. The Senator is entitled to yield for a
question in order to regain the floor.
Mr. CONRAD. I ask unanimous consent, so I can get recognition, that
the Senator from Minnesota be recognized right after I finish. I will
take 1 minute.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
Mr. CONRAD. Mr. President, I want to clear up this confusion about
the arbitration panel. On page 438 of the bill it says:

* * * the arbitration panel shall consist of 3 persons, one
of whom shall be chosen by the plaintiff--

In this case, the State, who has hired the attorney--

one of whom shall be chosen by the attorney--

That would be the claimant for the fees--

and one of whom shall be chosen jointly by those 2
arbitrators.

That is the standard method of setting up an arbitration panel.
Nothing new, nothing unusual here. That is the way of setting up an
arbitration panel

[[Page S6372]]

to get a result that is fair to both parties.
I say to my colleague from Washington, for us to decide we have
better judgment than the State courts that administer the cases that
are before them, I think, is a huge mistake. We talk about
micromanagement. When we start deciding legal fees in this Senate
Chamber, we are making a mistake. We do need to be worried about
windfalls to attorneys; absolutely we do. That is why arbitration
panels were included in the legislation that came out of the Commerce
Committee on a 19-to-1 bipartisan vote. I yield the floor.
Mr. WELLSTONE addressed the Chair.
The PRESIDING OFFICER. The Senator from Minnesota.
Mr. WELLSTONE. I thank the Chair.
Mr. President, my colleague from North Dakota has spoken to the
arbitration provision in the legislation. I shall not do so. I just
want to present a Minnesota perspective for just a moment.
I come from a State where we just went through a very important
trial. The lawyers in my State, working with the attorney general, were
able to unearth 33 million pages of documents--33 million pages of
documents. This was during a discovery process that went from August
1994 to the end of 1997. Many of those documents have had an enormous
impact, not just on the settlement in Minnesota, which was a very
important settlement, but also directly on the debate in the U.S.
Congress. Thirty-nine thousand pages of those documents were ordered
produced by the Minnesota judge and were ultimately subpoenaed by the
House of Representatives and made public on the Internet.
What I want to do is speak to the part of this amendment that
concerns me the most. I have had some discussion with my colleague from
Alabama, and I have said to him, ``Why don't you, in fact, not make
this retroactive,'' when he had his similar amendments on the floor,
because I don't think we should be taking action here that reaches back
to the Minnesota settlement, which has already been entered into and
has been declared final by the court. We already have an arrangement
between the State and the Attorney General and the lawyers who
represented our State. Congress should not disturb that.
I think the amendment of my colleague from the State of Washington
has a different weakness and that is its lack of evenhandedness. What I
want to see at a bare minimum is to have the same kind of caps or
limits put on those attorneys representing the tobacco companies. I say
to colleagues, when you vote on this amendment, the thing you ought to
fasten your attention on is that we don't have the same kind of
ceiling, the same kind of caps put on fees that go to lawyers
representing the tobacco companies. I see nothing here that does that,
in which case I would argue that we are hardly talking about a level
playing field.

I think the problem with the amendment is that it just simply lacks
balance. I cannot support an amendment that puts caps on the fees of
plaintiffs' attorneys representing consumers and representing the
attorney general from a State, but at the same time puts no cap at all
on the fees of attorneys hired by tobacco companies or other big
corporations with their corporate lawyers working with these companies,
but there is no cap on the fees. That just simply makes no sense to me
from a kind of elementary standard of fairness, and that is why I think
the amendment is fatally flawed.

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