[Congressional Record Volume 144, Number 98 (Tuesday, July 21, 1998)]
[House]
[Page H6064]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]





                        Parliamentary Inquiries

  Mr. DINGELL. Mr. Speaker, I have a parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state it.
  Mr. DINGELL. Mr. Speaker, the gentleman from California (Mr. Cox) is 
for the bill and the gentlewoman from California (Ms. Eshoo) is for the 
bill. They are going to share the time equally, half the time over 
there and half the time to the supporters on this side? I am curious, 
is that a fair ruling?
  The SPEAKER pro tempore. The Chair heard no objection to the 
unanimous consent request.
  Mr. STUPAK. Mr. Speaker, I have a parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state it.
  Mr. STUPAK. Mr. Speaker, it is my understanding that the proponents 
of the bill would like to insert a statement to put in as an addition 
to the debate. Instead of taking up 2 minutes, can we just do it by 
unanimous consent? That way we do not have to worry about division of 
time.
  The SPEAKER pro tempore. Colloquy must be spoken and not inserted in 
the record.
  Mr. DINGELL. Mr. Speaker, I withdraw my reservation of objection.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from California?
  There was no objection.
  The SPEAKER pro tempore. The gentlewoman from California (Ms. Eshoo) 
is recognized for 1 minute.
  Ms. ESHOO. Mr. Speaker, I yield myself 1 minute, and would ask the 
gentleman from California (Mr. Cox) to begin the colloquy.
  Mr. COX of California. Mr. Speaker, will the gentlewoman yield?
  Ms. ESHOO. I yield to the gentleman from California.
  Mr. COX of California. Mr. Speaker, I thank my colleague from 
California, the coauthor of the bill, for yielding.
  Mr. Speaker, earlier on the floor we had discussed our understanding, 
our clear understanding, that Congress did not, in adopting the Reform 
Act, intend to alter standards of liability under the Exchange Act. I 
would add, and I believe the gentlewoman is in agreement, that in Ernst 
and Ernst v. Hochfelder, the Supreme Court left open the question of 
whether conduct that was not intentional was sufficient for liability 
under the Federal securities laws. The Supreme Court has never answered 
that question. The court expressly reserved the question of whether 
reckless behavior is sufficient for civil liability under section 10(b) 
and Rule 10b-5 in a subsequent case, Herman & Maclean v. Huddleston, 
where it stated, ``We have explicitly left open the question of whether 
recklessness satisfies of the scienter requirement.''
  The Reform Act did not alter the standard for liability under the 
Exchange Act. The question was expressly left open by the Reform Act 
for resolution by the Supreme Court on the basis of the statutory 
language of the Exchange Act.
  The SPEAKER pro tempore. The time of the gentlewoman from California 
(Ms. Eshoo) has expired.
  The gentleman from California (Mr. Cox) is recognized for 1 minute.
  Mr. COX of California. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, Mr. Speaker, I will just ask the gentlewoman from 
California (Ms. Eshoo), if that is her understanding as well?
  Ms. ESHOO. Mr. Speaker, will the gentleman yield?
  Mr. COX of California. I yield to the gentlewoman from California.
  Ms. ESHOO. Mr. Speaker, that is my understanding. I thank everyone 
concerned for the additional time in the debate. This is important 
language supported by certainly the Chairman of the Securities and 
Exchange Commission, and I think it will serve the House well.
  Mr. DAVIS of Florida. Mr. Speaker, as a cosponsor of this 
legislation, I rise in strong support of H.R. 1689, the Securities 
Litigation Uniform Standards Act. This bipartisan initiative is 
narrowly tailored to address a problem which has arisen since enactment 
of the 1995 Private Securities Litigation Reform Act. While the 1995 
Act was designed to help end abuses in Federal securities class 
actions, these reforms have been subverted through the use of State 
courts, undermining the potential benefits to investors, consumers, 
workers, and the overall economy.
  This bill prevents plaintiffs from circumventing the reforms enacted 
in 1995 by creating a uniform standard for class action lawsuits 
involving nationally traded securities. The principle behind this 
legislation is simple. Nationally traded securities, which are 
primarily regulated by the Federal Government, should be subject to 
Federal securities law. By establishing fair and consistent rules, 
Congress not only will protect companies from abuses in class action 
lawsuits but also will improve the climate for greater forward-looking 
disclosures for investors.
  Mr. Speaker, I urge all of my colleagues to support this common-sense 
legislation and reinforce the reforms that Congress passed by an 
overwhelming majority in 1995.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Virginia (Mr. Bliley) that the House suspend the rules 
and pass the bill, H.R. 1689, as amended.
  The question was taken.
  Mr. STUPAK. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 5, rule I, and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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