[Congressional Record Volume 144, Number 99 (Wednesday, July 22, 1998)]
[House]
[Pages H6119-H6121]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          SECURITIES LITIGATION UNIFORM STANDARDS ACT OF 1997

  The SPEAKER pro tempore (Mr. Pease). The unfinished business is the 
question of suspending the rules and passing the bill, H.R. 1689, as 
amended.
  The Clerk read the title of the bill.
  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, on which the yeas and nays 
are ordered.
  This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 340, 
nays 83, answered ``present'' 1, not voting 11, as follows:

                             [Roll No. 318]

                               YEAS--340

     Ackerman
     Aderholt
     Allen
     Andrews
     Archer
     Armey
     Bachus
     Baesler
     Baker
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Bateman
     Bentsen
     Bereuter
     Berry
     Bilbray
     Bilirakis
     Bishop
     Bliley
     Blumenauer
     Boehlert
     Boehner
     Bonilla
     Bono
     Boswell
     Boucher
     Boyd
     Brady (TX)
     Brown (OH)
     Bryant
     Bunning
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Cardin
     Castle
     Chabot
     Chambliss
     Chenoweth
     Christensen
     Clement
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Cox
     Cramer
     Crane
     Crapo
     Cunningham
     Danner
     Davis (FL)
     Davis (VA)
     Deal
     DeLauro
     DeLay
     Deutsch
     Diaz-Balart
     Dickey
     Dooley
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Ehrlich

[[Page H6120]]


     Emerson
     English
     Ensign
     Eshoo
     Etheridge
     Everett
     Ewing
     Farr
     Fazio
     Foley
     Forbes
     Fossella
     Fowler
     Fox
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Furse
     Gallegly
     Ganske
     Gejdenson
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gingrich
     Goode
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green
     Greenwood
     Gutknecht
     Hamilton
     Hansen
     Harman
     Hastert
     Hastings (FL)
     Hastings (WA)
     Hayworth
     Hefley
     Hefner
     Hill
     Hilleary
     Hinojosa
     Hobson
     Hoekstra
     Holden
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Inglis
     Istook
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson (WI)
     Johnson, Sam
     Jones
     Kasich
     Kelly
     Kennedy (MA)
     Kennedy (RI)
     Kennelly
     Kildee
     Kilpatrick
     Kim
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Klug
     Knollenberg
     Kolbe
     LaFalce
     LaHood
     Lampson
     Lantos
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     Livingston
     LoBiondo
     Lofgren
     Lucas
     Luther
     Maloney (CT)
     Maloney (NY)
     Manton
     Manzullo
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McCrery
     McDade
     McGovern
     McHale
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     Meehan
     Meeks (NY)
     Metcalf
     Mica
     Miller (CA)
     Miller (FL)
     Minge
     Moakley
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Neal
     Nethercutt
     Neumann
     Ney
     Northup
     Norwood
     Nussle
     Ortiz
     Oxley
     Packard
     Pallone
     Pappas
     Parker
     Pascrell
     Paxon
     Pease
     Pelosi
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Poshard
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Rangel
     Redmond
     Regula
     Reyes
     Riggs
     Riley
     Rodriguez
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Royce
     Rush
     Ryun
     Sabo
     Salmon
     Sanchez
     Sandlin
     Sanford
     Sawyer
     Saxton
     Scarborough
     Schaefer, Dan
     Schaffer, Bob
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Shimkus
     Shuster
     Sisisky
     Skeen
     Skelton
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (OR)
     Smith (TX)
     Smith, Adam
     Smith, Linda
     Snowbarger
     Snyder
     Solomon
     Souder
     Spence
     Spratt
     Stabenow
     Stearns
     Stenholm
     Strickland
     Stump
     Sununu
     Talent
     Tanner
     Tauscher
     Tauzin
     Taylor (NC)
     Thomas
     Thornberry
     Thune
     Tiahrt
     Towns
     Traficant
     Turner
     Upton
     Velazquez
     Vento
     Visclosky
     Walsh
     Wamp
     Waters
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Weygand
     White
     Whitfield
     Wicker
     Wilson
     Wolf
     Wynn
     Young (AK)

                                NAYS--83

     Abercrombie
     Baldacci
     Becerra
     Berman
     Blagojevich
     Blunt
     Bonior
     Borski
     Brady (PA)
     Brown (CA)
     Brown (FL)
     Carson
     Clay
     Clayton
     Clyburn
     Conyers
     Costello
     Coyne
     Cummings
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     Dicks
     Dingell
     Dixon
     Doggett
     Engel
     Evans
     Fattah
     Filner
     Frost
     Gephardt
     Gutierrez
     Hall (OH)
     Hilliard
     Hinchey
     Jackson (IL)
     Johnson, E. B.
     Kanjorski
     Kaptur
     Klink
     Kucinich
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Markey
     McDermott
     McKinney
     Meek (FL)
     Menendez
     Millender-McDonald
     Mink
     Mollohan
     Nadler
     Oberstar
     Obey
     Olver
     Owens
     Pastor
     Paul
     Payne
     Rahall
     Rivers
     Roybal-Allard
     Sanders
     Schumer
     Scott
     Skaggs
     Stark
     Stokes
     Stupak
     Taylor (MS)
     Thompson
     Thurman
     Tierney
     Torres
     Watt (NC)
     Waxman
     Wise
     Woolsey
     Yates

                        ANSWERED ``PRESENT''--1

       
     Lowey
       

                             NOT VOTING--11

     Cubin
     Fawell
     Ford
     Gonzalez
     Goodlatte
     Hall (TX)
     Herger
     Hooley
     McNulty
     Serrano
     Young (FL)

                              {time}  1615

  Mr. JACKSON of Illinois changed his vote from ``yea'' to ``nay.''
  So (two-thirds having voted in favor thereof) the rules were 
suspended and the bill, as amended, was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.


                          personal explanation

  Mr. GOODLATTE. Mr. Speaker, on rollcall No. 318, I was unavoidably 
detained. Had I been present, I would have voted ``yes.''


                          personal explanation

  Ms. HOOLEY of Oregon. Mr. Speaker, during rollcall vote No. 318, H.R. 
1689--Securities Litigation, I was unavoidably detained. Had I been 
present, I would have voted ``aye.''
  Mr. BLILEY. Mr. Speaker, I ask unanimous consent to take from the 
Speaker's table the Senate bill (S. 1260) to amend the Securities Act 
of 1933 and the Securities Exchange Act of 1934 to limit the conduct of 
securities class actions under State law, and for other purposes, and 
ask for its immediate consideration in the House.
  The Clerk read the title of the Senate bill.
  The SPEAKER pro tempore (Mr. Pease). Is there objection to the 
request of the gentleman from Virginia?
  There was no objection.
  The Clerk read the Senate bill, as follows:

                                S. 1260

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Securities Litigation 
     Uniform Standards Act of 1998''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) the Private Securities Litigation Reform Act of 1995 
     sought to prevent abuses in private securities fraud 
     lawsuits;
       (2) since enactment of that legislation, considerable 
     evidence has been presented to Congress that a number of 
     securities class action lawsuits have shifted from Federal to 
     State courts;
       (3) this shift has prevented that Act from fully achieving 
     its objectives;
       (4) State securities regulation is of continuing 
     importance, together with Federal regulation of securities, 
     to protect investors and promote strong financial markets; 
     and
       (5) in order to prevent certain State private securities 
     class action lawsuits alleging fraud from being used to 
     frustrate the objectives of the Private Securities Litigation 
     Reform Act of 1995, it is appropriate to enact national 
     standards for securities class action lawsuits involving 
     nationally traded securities, while preserving the 
     appropriate enforcement powers of State securities regulators 
     and not changing the current treatment of individual 
     lawsuits.

     SEC. 3. LIMITATION ON REMEDIES.

       (a) Amendments to the Securities Act of 1933.--
       (1) Amendment.--Section 16 of the Securities Act of 1933 
     (15 U.S.C. 77p) is amended to read as follows:

     ``SEC. 16. ADDITIONAL REMEDIES; LIMITATION ON REMEDIES.

       ``(a) Remedies Additional.--Except as provided in 
     subsection (b), the rights and remedies provided by this 
     title shall be in addition to any and all other rights and 
     remedies that may exist at law or in equity.
       ``(b) Class Action Limitations.--No class action based upon 
     the statutory or common law of any State or subdivision 
     thereof may be maintained in any State or Federal court by 
     any private party alleging--
       ``(1) an untrue statement or omission of a material fact in 
     connection with the purchase or sale of a covered security; 
     or
       ``(2) that the defendant used or employed any manipulative 
     or deceptive device or contrivance in connection with the 
     purchase or sale of a covered security.
       ``(c) Removal of Class Actions.--Any class action brought 
     in any State court involving a covered security, as set forth 
     in subsection (b), shall be removable to the Federal district 
     court for the district in which the action is pending, and 
     shall be subject to subsection (b).
       ``(d) Preservation of Certain Actions.--
       ``(1) In general.--Notwithstanding subsection (b), a class 
     action described in paragraph (2) of this subsection that is 
     based upon the statutory or common law of the State in which 
     the issuer is incorporated (in the case of a corporation) or 
     organized (in the case of any other entity) may be maintained 
     in a State or Federal court by a private party.
       ``(2) Permissible actions.--A class action is described in 
     this paragraph if it involves--
       ``(A) the purchase or sale of securities by the issuer or 
     an affiliate of the issuer exclusively from or to holders of 
     equity securities of the issuer; or
       ``(B) any recommendation, position, or other communication 
     with respect to the sale of securities of the issuer that--
       ``(i) is made by or on behalf of the issuer or an affiliate 
     of the issuer to holders of equity securities of the issuer; 
     and
       ``(ii) concerns decisions of those equity holders with 
     respect to voting their securities, acting in response to a 
     tender or exchange offer, or exercising dissenters' or 
     appraisal rights.
       ``(e) Preservation of State Jurisdiction.--The securities 
     commission (or any agency or office performing like 
     functions) of any State shall retain jurisdiction under the 
     laws of such State to investigate and bring enforcement 
     actions.
       ``(f) State Actions.--
       ``(1) In general.--Notwithstanding any other provision of 
     this section, nothing in this section may be construed to 
     preclude a State or political subdivision thereof or a State 
     pension plan from bringing an action involving a covered 
     security on its own behalf, or as a member of a class 
     comprised solely of other States, political subdivisions, or 
     State pension plans similarly situated.
       ``(2) State pension plan defined.--For purposes of this 
     paragraph, the term `State

[[Page H6121]]

     pension plan' means a pension plan established and maintained 
     for its employees by the government of the State or political 
     subdivision thereof, or by any agency or instrumentality 
     thereof.
       ``(g) Definitions.--For purposes of this section the 
     following definitions shall apply:
       ``(1) Affiliate of the issuer.--The term `affiliate of the 
     issuer' means a person that directly or indirectly, through 1 
     or more intermediaries, controls or is controlled by or is 
     under common control with, the issuer.
       ``(2) Class action.--
       ``(A) In general.--The term `class action' means--
       ``(i) any single lawsuit (other than a derivative action 
     brought by 1 or more shareholders on behalf of a corporation) 
     in which--

       ``(I) damages are sought on behalf of more than 50 persons 
     or prospective class members, and questions of law or fact 
     common to those persons or members of the prospective class, 
     without reference to issues of individualized reliance on an 
     alleged misstatement or omission, predominate over any 
     questions affecting only individual persons or members; or
       ``(II) 1 or more named parties seek to recover damages on a 
     representative basis on behalf of themselves and other 
     unnamed parties similarly situated, and questions of law or 
     fact common to those persons or members of the prospective 
     class predominate over any questions affecting only 
     individual persons or members; or

       ``(ii) any group of lawsuits (other than derivative suits 
     brought by 1 or more shareholders on behalf of a corporation) 
     filed in or pending in the same court and involving common 
     questions of law or fact, in which--

       ``(I) damages are sought on behalf of more than 50 persons; 
     and
       ``(II) the lawsuits are joined, consolidated, or otherwise 
     proceed as a single action for any purpose.

       ``(B) Counting of certain class members.--For purposes of 
     this paragraph, a corporation, investment company, pension 
     plan, partnership, or other entity, shall be treated as 1 
     person or prospective class member, but only if the entity is 
     not established for the purpose of participating in the 
     action.
       ``(3) Covered security.--The term `covered security' means 
     a security that satisfies the standards for a covered 
     security specified in paragraph (1) or (2) of section 18(b) 
     at the time during which it is alleged that the 
     misrepresentation, omission, or manipulative or deceptive 
     conduct occurred.''.
       (2) Conforming amendments.--Section 22(a) of the Securities 
     Act of 1933 (15 U.S.C. 77v(a)) is amended--
       (A) by inserting ``except as provided in section 16 with 
     respect to class actions,'' after ``Territorial courts,''; 
     and
       (B) by striking ``No case'' and inserting ``Except as 
     provided in section 16(c), no case''.
       (b) Amendments to the Securities Exchange Act of 1934.--
     Section 28 of the Securities Exchange Act of 1934 (15 U.S.C. 
     78bb) is amended--
       (1) in subsection (a), by striking ``The rights and 
     remedies'' and inserting ``Except as provided in subsection 
     (f), the rights and remedies''; and
       (2) by adding at the end the following new subsection:
       ``(f) Limitations on Remedies.--
       ``(1) Class action limitations.--No class action based upon 
     the statutory or common law of any State or subdivision 
     thereof may be maintained in any State or Federal court by 
     any private party alleging--
       ``(A) a misrepresentation or omission of a material fact in 
     connection with the purchase or sale of a covered security; 
     or
       ``(B) that the defendant used or employed any manipulative 
     or deceptive device or contrivance in connection with the 
     purchase or sale of a covered security.
       ``(2) Removal of class actions.--Any class action brought 
     in any State court involving a covered security, as set forth 
     in paragraph (1), shall be removable to the Federal district 
     court for the district in which the action is pending, and 
     shall be subject to paragraph (1).
       ``(3) Preservation of certain actions.--
       ``(A) In general.--Notwithstanding paragraph (1), a class 
     action described in subparagraph (B) of this paragraph that 
     is based upon the statutory or common law of the State in 
     which the issuer is incorporated (in the case of a 
     corporation) or organized (in the case of any other entity) 
     may be maintained in a State or Federal court by a private 
     party.
       ``(B) Permissible actions.--A class action is described in 
     this subparagraph if it involves--
       ``(i) the purchase or sale of securities by the issuer or 
     an affiliate of the issuer exclusively from or to holders of 
     equity securities of the issuer; or
       ``(ii) any recommendation, position, or other communication 
     with respect to the sale of securities of an issuer that--

       ``(I) is made by or on behalf of the issuer or an affiliate 
     of the issuer to holders of equity securities of the issuer; 
     and
       ``(II) concerns decisions of such equity holders with 
     respect to voting their securities, acting in response to a 
     tender or exchange offer, or exercising dissenters' or 
     appraisal rights.

       ``(4) Preservation of state jurisdiction.--The securities 
     commission (or any agency or office performing like 
     functions) of any State shall retain jurisdiction under the 
     laws of such State to investigate and bring enforcement 
     actions.
       ``(5) State actions.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, nothing in this subsection may be construed 
     to preclude a State or political subdivision thereof or a 
     State pension plan from bringing an action involving a 
     covered security on its own behalf, or as a member of a class 
     comprised solely of other States, political subdivisions, or 
     State pension plans similarly situated.
       ``(B) State pension plan defined.--For purposes of this 
     paragraph, the term `State pension plan' means a pension plan 
     established and maintained for its employees by the 
     government of a State or political subdivision thereof, or by 
     any agency or instrumentality thereof.
       ``(6) Definitions.--For purposes of this subsection the 
     following definitions shall apply:
       ``(A) Affiliate of the issuer.--The term `affiliate of the 
     issuer' means a person that directly or indirectly, through 1 
     or more intermediaries, controls or is controlled by or is 
     under common control with, the issuer.
       ``(B) Class action.--The term `class action' means--
       ``(i) any single lawsuit (other than a derivative action 
     brought by 1 or more shareholders on behalf of a corporation) 
     in which--

       ``(I) damages are sought on behalf of more than 50 persons 
     or prospective class members, and questions of law or fact 
     common to those persons or members of the prospective class, 
     without reference to issues of individualized reliance on an 
     alleged misstatement or omission, predominate over any 
     questions affecting only individual persons or members; or
       ``(II) 1 or more named parties seek to recover damages on a 
     representative basis on behalf of themselves and other 
     unnamed parties similarly situated, and questions of law or 
     fact common to those persons or members of the prospective 
     class predominate over any questions affecting only 
     individual persons or members; or

       ``(ii) any group of lawsuits (other than derivative suits 
     brought by 1 or more shareholders on behalf of a corporation) 
     filed in or pending in the same court and involving common 
     questions of law or fact, in which--

       ``(I) damages are sought on behalf of more than 50 persons; 
     and
       ``(II) the lawsuits are joined, consolidated, or otherwise 
     proceed as a single action for any purpose.

       ``(C) Counting of certain class members.--For purposes of 
     this paragraph, a corporation, investment company, pension 
     plan, partnership, or other entity, shall be treated as 1 
     person or prospective class member, but only if the entity is 
     not established for the purpose of participating in the 
     action.
       ``(D) Covered security.--The term `covered security' means 
     a security that satisfies the standards for a covered 
     security specified in paragraph (1) or (2) of section 18(b) 
     of the Securities Act of 1933, at the time during which it is 
     alleged that the misrepresentation, omission, or manipulative 
     or deceptive conduct occurred.''.

     SEC. 4. APPLICABILITY.

       The amendments made by this Act shall not affect or apply 
     to any action commenced before and pending on the date of 
     enactment of this Act.


                      Motion Offered by Mr. Bliley

  Mr. BLILEY. Mr. Speaker, I offer a motion.
  The SPEAKER pro tempore. The Clerk will report the motion.
  The Clerk read as follows:

       Mr. Bliley moves to strike all after the enacting clause of 
     the Senate bill, S. 1260, and insert in lieu thereof the text 
     of H.R. 1689, as passed by the House.

  The motion was agreed to.
  The Senate bill was ordered to be read a third time, was read the 
third time, and passed, and a motion to reconsider was laid on the 
table.
  A similar House bill (H.R. 1689) was laid on the table.

                          ____________________