[Congressional Record Volume 145, Number 56 (Thursday, April 22, 1999)]
[Senate]
[Pages S4092-S4099]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       Y2K ACT--MOTION TO PROCEED

  Mr. LOTT. I now move to proceed to S. 96, and send a cloture motion 
to the desk.
  The PRESIDING OFFICER. The cloture motion having been presented under 
rule XXII, the Chair directs the clerk to read the motion.
  The legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of Rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on the motion to 
     proceed to Calendar No. 34, S. 96, the Y2K legislation:
         Trent Lott, John McCain, Rick Santorum, Spencer Abraham, 
           Judd Gregg, Pat Roberts, Wayne Allard, Rod Grams, Jon 
           Kyl, Larry Craig, Bob Smith, Craig Thomas, Paul 
           Coverdell, Pete Domenici, Don Nickles, and Phil Gramm.

  Mr. LOTT addressed the Chair.
  The PRESIDING OFFICER. The majority leader.
  Mr. LOTT. Mr. President, I regret having to file a cloture motion on 
this important piece of legislation. However, we need to have a vote on 
Monday afternoon so that Members will be here. We can have committee 
meetings hopefully Monday and Tuesday.
  We have a number of very important issues that need to be considered 
by committees. We need to move forward on the now two supplemental 
appropriations requests that we have. So we are going to have a vote on 
Monday in any case.
  But also I think this is very important legislation in and of itself. 
It is important that we get up and get started on the discussion. I had 
hoped we could actually work on it today and tomorrow. But because of 
the NATO meeting and the congestion and the concerns about access to 
and from the Capitol, we will not be in session on tomorrow. That gives 
the Members who are working together--Senator McCain I know is working 
with others, Senator Biden, Senator Dodd--time to try to work out some 
of the remaining problems on this legislation.
  We can go forward with this cloture vote on Monday afternoon. Or, if 
something is worked out where it is not necessary, we could still 
vitiate the cloture vote.
  We need to get this done. This is urgent. The clock is ticking. We 
are moving towards 2000. This liability, this problem, is hanging over 
us like a sword. I think it is important that we go forward. I hope 
that next week--Tuesday or Wednesday, certainly--we will be in the 
substance of the bill and we can get to a final conclusion on the 
substance.
  I encourage Members on both sides of the aisle to work together to 
see if we can't resolve this issue and move it on into conference.
  I thank Senator McCain, Senator Hatch, and Senators from both sides 
who have been working on it.
  Having said that, I ask unanimous consent that Friday be considered 
the intervening day under the provisions of rule XXII.
  The PRESIDING OFFICER. Is there objection?
  Mr. KERRY addressed the Chair.
  Mr. LOTT. Mr. President, if I could, if there was not an objection, I 
would be glad to yield to the Senator from Massachusetts for a 
question.
  May I confirm that there is not an objection to that request?
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LOTT. Mr. President, I would be glad to yield to the Senator from 
Massachusetts.
  Mr. KERRY. Mr. President, I thank the majority leader for yielding. I 
simply wanted to inform him, I wasn't on the floor at the moment the 
objection was raised to the Senate proceeding as Senator McCain hoped 
to do.
  I want to say that I had a discussion with Senator McCain, Senator 
Dodd,

[[Page S4093]]

Senator Hollings, and others. A bona fide effort is being made right 
now to work with the technology community as well as with the legal 
community. I think there is the capacity to come together around some 
form of compromise.
  I thank Senator McCain for his leadership on this. I think it may be 
possible within hours to come together around something.
  Mr. LOTT. That is certainly my hope. It is encouraging that the 
Senator from Massachusetts would say that.
  Mr. HOLLINGS. Will the distinguished Senator yield?
  Mr. LOTT. Yes. I am happy to yield to the Senator from South 
Carolina.
  Mr. HOLLINGS. We are trying to work out the matter of the quorum call 
that is required with, of course, the vote on Monday. I would have to 
object to dispensing with that call for a quorum on Monday, and maybe 
we can change it by the end of the afternoon. I am trying to check 
around right now.
  The Senator from Arizona doesn't mind, does he?
  Mr. McCAIN. No. I will always do what the Senator from South Carolina 
says.
  (Laughter.)
  Mr. LOTT. Did the Senator from South Carolina have anything further 
he wanted to say?
  Mr. HOLLINGS. No. That is all.
  Mr. LOTT. Then I will go ahead and ask unanimous consent that the 
cloture vote occur at 5 p.m. on Monday, and that the mandatory quorum 
under rule XXII be waived.
  Mr. HOLLINGS. I object to the mandatory waiver of the quorum call.
  The PRESIDING OFFICER. Objection is heard.
  Mr. LOTT. Of course under the request that has already been agreed to 
and under the rules of the Senate, we will have a vote on Monday 
afternoon. It is just a question of time. I know there is an effort 
here to try to set the schedule at a later time.
  I remind Senators that I wrestle with this all the time. For every 
two Senators you are trying to protect who won't get here until 6, you 
are hurting a couple of Senators who may have to leave at 5:30. This is 
a very delicate dance.
  Mr. HOLLINGS. I understand. That is why we are calling around now 
trying to work it out with the leader. He just hasn't gotten it worked 
out yet.
  Mr. LOTT. I hope the Senator would keep in mind that we are going to 
be squeezed on both ends. We will try to work out a time that benefits 
the maximum number of Senators. But if you go into the night beyond 6 
o'clock, you have all kinds of problems on the other side of the issue.
  With that, I yield the floor. Mr. President, we are ready to proceed 
with the debate on the issue.
  Mr. McCAIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, obviously I am disappointed that we did 
not proceed to S. 96. I am encouraged by the comments of the Senator 
from Massachusetts and others. The Senator from Oregon and I are 
continuing to have a dialog also with the Senator from Connecticut, Mr. 
Dodd, and, of course, with the distinguished Democrat on the committee, 
Senator Hollings.
  So I hope we can come to some agreement. I am given occasionally to 
flights of rhetoric, but the fact is, this is a very, very serious 
issue and one that we really cannot delay too much longer. The clock is 
ticking. We need to move forward. There may be some differences. I 
don't think anybody believes that we need to do something destructive.

  This problem is critically important. The potential for litigation to 
overwhelm the judicial system for the most egregious cases involving 
Y2K problems is very real. Litigation costs have been estimated as high 
as $1 trillion. Certainly the burden of paying for litigation will be 
distributed to the public in the form of increased costs in 
technological goods and services.
  The potential drain on the Nation's economy and the world's economy 
from fixing computer systems and responding to litigation is 
staggering. While the estimates being circulated are speculative, the 
costs of making the corrections in all the computer systems in the 
country are astronomical. Chase Manhattan Bank has been quoted as 
spending $250 million to fix problems with its 200 million lines of 
affected computer codes. The estimated costs of fixing the problem in 
the United States ranges from $200 billion to $1 trillion. The 
resources which would be directed to litigation are resources that 
would not be available for continued improvements in technology-
producing new products and maintaining the economy that supports the 
United States position as a world leader.
  Time is of the essence. If the bill is going to have the intended 
effect of encouraging proactive prevention and remediation of Y2K 
problems, it has to be passed quickly. This bill will have limited 
value if it is to be passed after the August recess. I urge my 
colleagues to vote for cloture on Monday when we move forward with 
that.
  I have a number of letters, studies, and a lot of information I will 
present when we move to the bill. I will be very clear. From the 
technology network, we have letters of support from Cisco Systems, 
Intel, Microsoft, American Online, Merrill Lynch, Novell, Adobe 
Systems, Alexander Ogilvy Public Relations Worldwide, Platinum 
Software, American Electronics Association, Marimba, Inc., NVCA, 
Kleiner Perkins Caulfield & Byers, LSI Logic--the list goes on and on.
  This is an important issue to the high-tech industry in America. It 
is very important. It is of critical importance as to how these 
corporations that are leading the American economy are able to proceed 
with the business of business rather than the business of litigation.
  I hope all of my colleagues will support this legislation and that we 
can move forward. As the Senator from Connecticut will state, we still 
have differences but we are working hard on working those out with the 
Senator from Oregon, the Senator from Massachusetts, and of course, the 
much esteemed Senator from South Carolina, Mr. Hollings.
  I see my other colleagues would like to make comments on this very 
important issue. I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, I'll be brief because I know my colleagues 
from Oregon and South Carolina and others may want to speak on this. I 
think there is a need to try to come up with some legislation to 
minimize what could be runaway litigation in this Nation. There have 
already been some 80 lawsuits, many of them class action lawsuits, 
filed on the Y2K issue.
  I think all of my colleagues are aware that the leaders asked Senator 
Bennett of Utah and myself to chair this Special Committee of the 
Senate to examine the Y2K problem. We have been working for well over a 
year. We have had some 17 hearings in which we have invited various 
sectors of our economy --both private and public--to give their 
assessment of how the remediation efforts are progressing and the 
condition of our institutions. Both of us, I think, feel confident that 
things are progressing well, that we are not going to have as much of a 
problem as we thought a few months ago, but that there still could be 
difficulties. Y2K issues internationally may be a much greater problem 
than those here at home.
  There is a report out which has been sent to each and every Senate 
office, which I encourage our colleagues to take a look at to get a 
sense of how the issue is progressing. It is an open-ended question 
whether we are going to have a whole new area of litigation here--
unwarranted litigation--which could destroy some small companies that 
lack the capacity to take on the kind of predatory lawsuits that too 
often do more damage than good.
  Simultaneously, I adamantly oppose any legislation to try to use this 
issue as a way of rewriting the tort laws of the country. This ought 
not to be that kind of vehicle. There is a legitimacy to the Y2K 
problem, but no one should think it possible to take advantage of the 
Y2K problem to achieve tort reform beyond the scope of the actual 
problem. I don't think our colleagues would support it--at least not a 
majority, and the legislation, if it managed to get through Congress, 
would be vetoed. As the Senator from Arizona pointed out, we would have 
failed in our obligation to try to do something in an intelligent, 
thoughtful, common-sense way

[[Page S4094]]

that legitimately deals with the issue presented by the Y2K problem 
without going overboard and doing, as some have suggested, a lot more 
damage than good.
  I am hopeful we can work something out here. Senator Wyden has been 
working on it. I know the Senator from South Carolina has strong 
interests in this issue, as he has on so many other issues. We can find 
some common language here. My hope is that we will enjoy broad-based 
support in the Congress, achieve the desired effects, and provide some 
real assistance in the face of this potential problem that lurks 253 
days from today, which begins the new millennium.
  Senator Bennett and I have spent the last year serving on a Senate 
committee totally devoted to the Y2K issue. We've held 18 hearings 
exploring every sector of our economy that might be affected by the Y2K 
problem, including financial institutions, utilities, healthcare, 
telecommunications, and business. Throughout this year one thing has 
been made abundantly clear. Wherever the Y2K problem exists next year, 
litigation will follow.
  Americans have become accustomed to living in a litigious society. 
The occasional abuses of the legal system that come along arise from 
problems that are limited in scope. As a result, the numbers of 
lawsuits related to those problems are limited, and our legal system 
and economy continue to function notwithstanding these occasional 
abuses. But the Y2K problem is not limited in scope. Potentially, any 
business in the country might be swept into the Y2K problem, either 
because it is itself not prepared or because a firm it depends upon is 
not prepared. Just six weeks ago the committee reported that as many as 
15 percent of the businesses in this country will suffer Y2K-related 
failures of some kind. Even now we read that small and medium-sized 
businesses across the globe are not taking the necessary steps to 
become Y2K-compliant, and many think they don't have a Y2K problem. 
Since businesses are interconnected these days, just one failure in one 
business may generate cascading failures that may then generate 
numerous lawsuits.
  It has been suggested that as a result of Y2K, the United States 
could easily find itself witnessing a huge surge in litigation. This 
potential litigious bloodletting could have long-term consequences on 
the economic well-being of our country. Various experts, including the 
Gartner Group from my own state of Connecticut, have estimated that the 
costs of litigation may rise to $1 trillion, a phenomenal figure. Such 
a massive amount of litigation has the potential to overwhelm the court 
system, disrupting already-crowded dockets for years into the next 
millennium. We must be careful that an avalanche of lawsuits does not 
smother American corporations and bury their competitive edge. A 
maelstrom of class action lawsuits could have long-term consequences on 
the American economy and the American people. The rush to file lawsuits 
might curb the future economic development in a number of different 
sectors. Moreover, all of the money that would be set aside this year 
by businesses for legal expenses associated with the Y2K problem, both 
as defendants and as plaintiffs, cannot be spent on fixing the Y2K 
problem. As we heard in our hearing on this issue, both large and small 
businesses are concerned that the fear of litigation later is 
preventing them from solving problems now.
  For this reason, I have long believed that the Congress could perform 
an essential service to the nation's economy by developing legislation 
that would encourage companies, in the first instance, to solve their 
own Y2K problems instead of going to court right away, and to curtail 
the inevitable frivolous litigation that accompanies any national 
problem. We should not force businesses to choose between spending 
money on remediation or spending money on preparing for litigation. An 
alternative to this choice is reasonable litigation reform.
  Within the Banking Committee, I am on record for supporting 
significant securities litigation reform. Our 1995 bill, which was 
passed, despite veto by the White House, spoke to definitive and 
repetitive litigation abuse. At that time the legal system was no 
longer an avenue for aggrieved investors seeking justice and 
restitution. Instead, it had become a pathway for a few enterprising 
attorneys to manipulate legal procedures for their own profit. This 
profit came at the expense and the detriment of legitimate companies 
and investors across the nation. The crucial factor driving securities 
reform legislation was a specific, clear-cut pattern of abusive 
litigation. In the case of Y2K, however, we don't yet know what abuses 
might arise.
  In other words, I have strongly supported litigation reform efforts 
in the past. But clearly we need a bipartisan, narrowly crafted, well-
structured, and easily understandable bill. As with securities 
litigation reform, the need for Y2K litigation reform arises from a 
national problem amenable to a narrow, tailored solution, such as the 
bill I introduced.

  I have great concerns that the bill before us today does not 
represent the narrow, tailored solution to the Y2K problem that I 
believe is necessary. It contains broad provisions tantamount to 
massive tort reform, which should be saved for another day. The Y2K 
problem should not be used as an excuse to pile on these broad 
measures. I think we can all agree on what we'd like a bill to do; 
indeed, the bill before us today and the Hatch-Feinstein bill contain 
many of the same provisions as are in my bill. I take issue, however, 
with a few provisions in both of these bills that I veiw as unnecessary 
window dressing for interests unrelated to the Y2K problem.
  First, the bill before us places caps on punitive damages except 
where the defendant acted intentionally. Nothing inherent in the Y2K 
problem requires that this be done. No state allows for the award of 
punitive damages unless the defendant has acted in some egregious 
manner. Defendants who have behaved responsibly will not be assessed 
punitive damages, and defendants who have behaved egregiously should 
not be rewarded by limiting the amount of punitive damages which they 
might be required to pay. My bill does not cap punitive damages because 
it is not necessary to do so.
  Second, the bill before us places caps on the personal liability of 
officers and directors, those individuals with the ultimate 
responsibility for the management of their firms. For years now Senator 
Bennett and I have done everything possible to get upper management, 
including officers and directors, not only to pay attention to the Y2K 
efforts of their firms but to become directly involved and responsible 
for those efforts. After a lot of hard work in this area, our efforts 
have finally paid off and most upper management of major firms have 
appropriately shouldered these responsibilities. To come in now and 
place caps on the personal liability of officers and directors would 
set back our efforts to get management's attention on this issue. 
Passing such caps gives these ultimate decision-makers less incentive 
to maintain their active involvement in Y2K remediation efforts. A 
related provision in the bill that raises the standard of proof for 
such individuals for many tort actions gives them the same excuse. My 
bill does not contain such provisions because I believe they are an 
excessive solution to an uncertain problem.
  What my bill does do is provide the narrow, tailored provisions I 
think necessary to address the problem presented by the spectre of Y2K 
litigation. Just as the other two Y2K liability bills introduced in the 
Senate do, my bill provides for a 90-day cooling off period to allow 
businesses to work out their Y2K problems together before they are 
forced to go to court. Just as the other bills do, my bill places a 
duty to mitigate damages on all parties which gives them an incentive 
to seek out solutions to their own Y2K problems. Just as the other 
bills do, my bill discourages frivolous litigation by including 
specific pleading requirements and a requirement that defects alleged 
in class action lawsuits by material. Just as the other bills do, my 
bill rewards companies that have taken steps to become Y2K compliant by 
allowing for a reasonable balance between proportionate liability and 
joint and several liability.
  While I strongly believe that a Y2K liability bill is necessary, I 
have great concerns about this Y2K liability bill in its present form. 
No one wants to see a solution to this problem more

[[Page S4095]]

than I do, but I am not willing to compromise efforts to solve the Y2K 
problem to satisfy unrelated interests, nor am I willing to trade in 
the Y2K problem only to get a litigation problem down the road. While 
we are rushing to solve the Y2K problem and the policy issues therein, 
we should above all strive to enter the next century with a sense of 
vision, and this vision should include a prudent analysis of the 
looming challenges of potential Y2K litigation. I assure you that no 
one wants to begin the next millennium by trading a vision of the 
future for a subpoena.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Mr. President, I will be very brief. I know the Senator 
from South Carolina has important remarks to make this morning.
  I have joined with Senator McCain in cosponsoring this legislation 
that comes before the Senate, after voting against the bill that came 
out of the Senate Commerce Committee. I have done so because there have 
been at least seven major changes made in the legislation after it came 
out of committee so that now when it comes before the Senate it is a 
balanced bill. It is a bill, in my view, that will ensure that innocent 
consumers are fully protected while at the same time helping to prevent 
the kind of chaos we could have in our economy if we have scores and 
scores of unwarranted lawsuits as a result of the Y2K problem.
  As we all know, the Y2K issue is not a partisan issue. It affects 
every computer system that uses date information, every piece of 
hardware, every piece of an operating support system and all software 
that uses date-related information. Our goal ought to be to try to 
bring about Y2K compliance. That is our principal focus. The Senate is 
already on record in that regard. At the same time, we ought to put in 
place a safety net to ensure that innocent consumers, particularly 
small businesses, will have a remedy and will not see their businesses 
devastated.
  I wrap up my brief remarks this morning by outlining a few of the 
changes that Senator McCain and I worked on with Senator Dodd, Senator 
Feinstein, Senator Lieberman, and others, so that the Senate has a 
sense of the many changes that have been made to ensure consumers get a 
fair shake and that are in the bill before the Senate today.
  The first that I think is particularly important is we will make sure 
there is a sunset provision in this legislation. The original bill 
contained no sunset provision. There were some who said this is just 
opening up brand new areas of tort law that are going to exist forever, 
this is just a backdoor effort to hot wire the legal system and ensure 
that we are restricting liability suits in the future. That is not the 
future. There is a sunset date to ensure that we are addressing just 
legitimate problems that have come about as a result of the Y2K 
failures.

  Second, and another area I feel so strongly about, is we ensure, when 
there are really egregious, outrageous offensive instances of conduct 
in the private marketplace, fraudulent conduct, that punitive damages 
will still be available. It is important to us that there not be new 
preemptive Federal standards in that area. That has been done.
  Next, we have made changes with respect to the principle of joint 
liability. This is especially important where you have defendants who 
are involved, again, in committing these outrageous acts, essentially 
fraudulent acts. That is kept in place as well.
  So I do believe this is a bill that is targeted specifically at the 
kinds of problems that are going to be seen if we do not pass a 
balanced, responsible piece of legislation. This involves business-to-
business activity. I suggest to some of our colleagues this has nothing 
to do with personal injury issues. If someone is injured, for example, 
as a result of an elevator accident because computers have broken down, 
and is maimed or killed, all of those personal remedies will lie.
  So those are briefly some of the changes since the bill came from 
committee. We have seen, again, the Senate wants to work in a collegial 
way on this. My good friend from South Carolina and I have had several 
spirited discussions on this issue in recent days. He feels very 
strongly about it. My part of the country has looked at technology as a 
big part of our economic future. We want to come up with a responsible, 
balanced bill.
  The Senator from Connecticut and I have put on the desks of all 
Democratic Members of the Senate today a letter which outlines a number 
of the changes that have been made. We heard earlier Senator Kerry is 
pursuing some discussions as well. So I am hopeful between now and next 
week we can have a bipartisan bill that is balanced, that comes before 
the Senate and builds on the work Senator McCain and I have tried to do 
since the partisan vote in committee. I look forward to working with my 
colleagues towards that end, and I yield the floor.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, with respect to the Y2K problem, it is 
very interesting to note, the problem has been prepared for 
technologically, by the very groups they say the bill is to protect, 
for 30 years. They have the technology. There is no hocus-pocus about 
that.
  I wish everyone would look back about 4 weeks ago and pull out of an 
edition of Business Week an extensive article to the effect that the 
market force is working. Large businesses, the GEs, the Ford Motors, 
the Xeroxes, the IBMs and everybody else, working with their suppliers 
down the line, have long since put them on notice. I do not have my 
file with me, but the drop dead date is the end of this particular 
month, April 1999, where you still have several more months to comply. 
But the market, knowing the technology is there, knowing of course you 
are going to be facing this, is trying to, like a Paul Revere, wake the 
town and tell the people. And they have been doing it. We did it last 
year, on a bipartisan basis, when we said: ``Wait a minute, if we 
cannot work these problems out, we will be slammed with antitrust.'' We 
got together quickly, the Senator from Connecticut and others, and on a 
bipartisan basis we passed that measure. Everything has been working 
fine.
  I spoke earlier this year--I do not want to mislead--I spoke with my 
friend, Mr. Andy Grove of Intel, who is very much concerned about 
proportionality. But other than that, we spent a good hour in my office 
talking about large computerization and everything else. That community 
knows. They are way ahead of lawyers and lawsuits, I can tell you that, 
as the business leaders.
  William Gates--Bill Gates, out at Davos, Switzerland, at the 
conference, said there was no problem. And this past week the New York 
Times wrote a summary article on the Y2K problem.
  Mind you me, this is the middle of April 1999, months ahead, of 
course, of January 2000. They said people are moving along and 
everything else. You see, it is a practical problem. There is a bunch 
of old equipment on hand. Every automobile dealer faces this every year 
because they are going to bring out another model. So they all know 
about bringing out new models and everything else like that. Of course 
the new model needed for 2000 is the Year 2000-compliant model.
  But what happens is that a side group has come in, upon this 
particular concern and interest, not at all interested in the Y2K. We 
could win this debate hands down on Y2K. But they are interested in 
distorting the tort liability laws of America. They have been about it 
and I have been with them for 20 years. There is a wonderful gentleman 
named Victor Schwartz with the National Association of Manufacturers, 
and he sends me a wonderful Christmas greeting, thanking me for the 
wonderful year he has had, because I keep his clients current as long 
as we can continue to defeat product liability.
  But now we have another gentleman who has come over to the Chamber of 
Commerce named Tom Donohue, and I know him well. I worked with him in 
the Truckers'. He is coordinating this conspiracy. There is a great 
problem. ``We have legitimate business folks in the computerization 
business who are going to front for us. We don't want to argue about 
taking away the rights of trial by jury that we have beat upon.'' They 
don't want to have to take on the Association of State Supreme Court 
Justices and everything else of that kind. ``We want to talk about Y2K, 
Y2K, Y2K, crisis, crisis, crisis.'' And they even act like there is 
one, 7 months ahead of time.

[[Page S4096]]

  My little State of South Carolina just reported they would be 
compliant in July of this particular year, 1999. If South Carolina can 
get ready, everybody and anybody can get ready by the year 2000, I can 
tell you that. But they come in under the auspices of a crisis, to try 
to change punitive damages, try to change trial by jury, try to change 
joint and several liability--they are trying to change it all. Anywhere 
they can get a foot in the door for this particular precedent by this 
particular Congress under the general phraseology ``tort reform,'' they 
think they are home free. And I am afraid they would be.
  The truth of the matter is, under the present legal system of the 
States', we are having the finest, most booming economy you have ever 
seen. The stock market has gone over 10,000, the interest rates are 
low, the unemployment rate is about the lowest it has ever been in 30 
years, and right on down the list. So what you are finding out, right 
to the point, is that there is not a problem. Business is doing well.
  In fact, the analysis done in this particular debate over 20 years 
has found it has not been greedy trial lawyers bringing fanciful suits 
with no substance whatsoever, just harassing. Mr. President, the good 
trial lawyer has no time for that nonsense. He does not get paid until 
he wins. He has to prevail. He has to come to court, he has to prove 
his case by the greater preponderance of evidence. He has to get not 
just 5 or 6 votes, he has to get all 12 votes. Then he has to go 
through the obstacle course of an appeal to the Supreme Court. Why? 
Because corporate America continues to get paid as long as the clock 
runs.
  It is a tragic thing that has been occurring in the system of 
jurisprudence in America, because I practiced law for 20 years and I 
practiced representing businesses, incorporated and otherwise, but 
predominantly on the trial side with poor clients. I did not get a 
recovery unless the client got a recovery.
  I was against continuances, against motions, against more 
depositions, against more discoveries. You see that mahogany-wall, 
oriental-rug crowd down here. There are 60,000 registered to practice 
in the District of Columbia trying to fix your vote and my vote, just 
fixing juries. They will never get to the courtroom. They sit around 
and tell the clients: Come on, computer industry, we can change the 
tort system so we can take away the rights of the very group, Mr. 
President, that it is supposed to protect--mainly small business.
  They have the National Federation of Independent Businesses. That is 
the small business group that the law now protects. Instead, under the 
bill as proposed, a small business owner will have to wait 90 days 
before he or she could bring proceedings in court to recover damages. 
They know at the very beginning what is contracted for and what is 
wrong, but this requirement is going to delay them, increasing the time 
and costs of the suit. Then you have to prove various other measures by 
one of the highest standards of proof, almost like in a civil case. In 
cases where a party generally is required to prove by a preponderance, 
they seek to have the standard to be clear and convincing.
  I say that advisedly because with this particular system, as it has 
worked out over the years--come to South Carolina. We had tort reform, 
but I have, they say, the competitive businesses. I am bringing in the 
Hondas, the BMWs, as well as the expansion of the GEs and other 
industries from all over the United States and the world coming into 
South Carolina where we have a civil statewide tort system.
  Actually, these contracts are under the Uniform Commercial Code and 
ought to be tried on a contract basis. But, no, they do not want to 
even talk about the defect in the entire measure. The measure is not 
needed. The measure is misguided. The measure is an adulteration of the 
system, and bringing it to the Federal level, trying to tell the 
States--and that is what I hear from the other side of the aisle, that 
the people back home know best, they keep quoting Jefferson to me, less 
Government, let the States operate and everything else of that kind. 
They do that until they get something for big business. Now they want 
to come in and make sure they can have that clock run, that they can 
make a fortune, and the little man cannot even afford to bring his 
particular action.
  I have every objection in the world to this measure. I do not mind 
compromising. I have always dealt with that particular approach for the 
almost 50 years now that I have been in public service. But I can tell 
you what this is. This is not Y2K. They have everybody running all 
around. Look at the morning Washington Post and you will see the 
different people. It is like: ``Sooey, pig, you come, we got them, 
we're going to get you to do this, get them to do that,'' and take the 
person who has made the contract--and right now they can look at their 
contract and see what is what in April 1999, months ahead of January 1.
  They know whether they have the bad model or the right contract, and 
they know what is going to be required. This really allows an industry 
to offload all the old stuff and then come in with an adaptation next 
year that is going to cost over and above the particular computer.
  It is bad business. It really distorts the jury system and the tried-
and-true system of American jurisprudence. That is why I had to object, 
because I have been busy on this other farce, this so-called lockbox 
that allows everybody to have the key but the poor Social Security 
crowd that is bringing about the surplus. There is not any question 
about that farce that is going on. They are just trying to make for a 
TV short in next year's campaign. We are going to make TV spots and 
show the inaccuracy of it. That is exactly what we have been doing, 
paying down public debt with Social Security money, thereby running up, 
up, up and away the Social Security debt. When you pay down someone 
else's debt with your money, you incur an indebtedness increase in your 
own program, namely Social Security.

  There we are. They are trying their best to ram it through on Y2K, 
and they are all going around oozing and goozing how reasonable we are 
and we are trying to work this out. It ought to be killed dead in its 
tracks. Anybody who is looking out for the individual rights of the 
small businessman, the little doctor, the little law firm--any little 
business person who does not keep a lawyer on retainer and they have an 
instrumentality, namely a computer, that they say is ready to comply, 
and then they find out it does not comply, that is a breach of contract 
under the Uniform Contract Code. They can bring that action. Mr. 
President, unless there is a fraudulent breach, it does not come under 
tort law, it comes under the contract law.
  Incidentally, it is businesses suing businesses. That is the big 
logjam. Any study, any research done with respect to the actual 
increase in the volume of lawsuits in America will find businesses 
suing businesses. I am exhibit 1 on this particular issue, for the main 
and simple reason, we worked for 4 years to get through the 1996 
Telecommunications Act. Once we got it through, rather than businesses 
doing what they said, namely competing, they all started with their 
lawyers: It was unconstitutional, take it up to this court--they have 
all been in court. Why? The ratepayers are paying for the lawyers. It 
does not cost them any money, and they are going around buying up each 
other, combining rather than competing.
  They have a legal game going, which is in some measure the same thing 
they had going with AT&T that caused Judge Greene to break it up. It 
seems to me that we are going to have to break it up again. That is 
what we are looking at now with the FCC: getting a drop-dead date for 
them to comply with the law that they wrote.
  They do not want to comply. They want to combine. They want to use 
their monopolistic powers with their lawyers in business. But it is not 
the poor little injured party in court with a jury trial that is at 
issue, generally speaking, with respect to Y2K. It is the downtown 
crowd that is scaring up clients and scaring up fees and scaring up 
activity against the States.
  The States have their own laws. The State of Illinois is well 
regarded as a place of high jurisprudence, and they do not need the 
Federal Government coming in and telling them how to protect the little 
man. Here, under the auspices of protecting the little man, we are 
going to take away his rights and drag him out, as if he had a lawyer

[[Page S4097]]

waiting. It is to discourage the little man's day in court. That is why 
we will be watching it very closely.
  I don't know that this one will be worked out. In all reality, I 
think we can get the votes--not necessarily on the matter of 
proceeding. We do not mind proceeding, we are just trying to get the 
time. We can get the votes on the cloture to kill this measure.
  If the computer industry is really serious about it, there may be 
some compromise, but for this particular Senator, I have no plans at 
all of compromising on the fundamental constitutional rights of a trial 
by jury and what the States have developed over many, many years, which 
is the finest business environment that exists in the world today. 
Nothing is hurting them. I do not have any of these foreign industries 
coming in and saying, ``But, Senator, we're worried about product 
liability, we are worried about joint and several, we are worried about 
trial by jury, we are worried about all these other punitive 
damages.'' You do not hear that until you can get politicians running 
for national office, and then they put it in the polls.

  Under ``Henry V,'' Shakespeare said, ``Kill all the lawyers.'' Of 
course, it was the biggest compliment. The only way that individual 
rights and freedom could not be sustained is to kill off the crowd that 
was going to protect individual rights and freedom. So it really was 
the greatest of all compliments. It was not that they were against 
lawyers, but they knew how to start anarchy. So that is what they told 
Dick the Butcher when they shouted, ``Kill all the lawyers.''
  That is what you have on Monday when we get to the regular debate. We 
will see which lawyer crowd we are going to kill off.
  I yield the floor.
  Mr. LEAHY. Mr. President, the sweeping terms of the bill before us 
are not justified. Senator McCain's substitute, like the underlying 
bill, unfortunately, remains a wish list for special interests that are 
or might become involved in Y2K litigation. The broad liability 
limitations in the legislation risk rewarding irresponsible parties at 
the expense of the responsible and the innocent. That is not fair or 
responsible.
  I cannot support such one-sided legislation that restricts the rights 
of American consumers, small business owners and family farmers who 
seek redress for harms caused by Year 2000 computer problems.
  I remain open to continuing to work with interested members of the 
Senate on bipartisan, consensus legislation that would deter frivolous 
Y2K lawsuits and encourage responsible Y2K compliance. In my judgment, 
today's bill would more likely have the opposite effect. It proposes 
sweeping liability protection that will encourage more Y2K litigation 
and discourage curing Y2K problems.
  The right approach is to fix as many of these problems ahead of time 
as we can. Ultimately, the best defense against any Y2K-based lawsuit 
is to be Y2K compliant.
  Let me offer a few examples how this bill would restructure the laws 
of the 50 states and cause great harm to the nationwide effort to fix 
our Y2K computer problems in 1999.
  First, this bill provides special liability protection to directors 
and officers of companies involved in Y2K disputes. Why are we doing 
this? Directors and officers are already protected by the business 
judgment rule, which has been adopted by each of the 50 states. How 
will this special legal protection for corporate directors and officers 
affect the well-established precedents interpreting the business 
judgment rule in our states?
  Moreover, every director and officer of a corporation has standard 
insurance coverage to protect him or her from personal liability in the 
course of their duties. Will insurance companies reap windfall profits 
from this special legal protection for corporate directors and 
officers? Or should insurance companies rebate the premiums they have 
charged for existing insurance coverage for corporate directors or 
officers because it might be superfluous now? Who knows? But these 
questions will be hot spots for future litigation if this bill becomes 
law.
  Providing special Y2K liability protection to the key decision makers 
in a company at this juncture sends the wrong message to the business 
community.
  We want to encourage these key decision makers to be overseeing 
aggressive year 2000 compliance measures. Instead, this bill says to 
corporate officers and directors: ``Don't worry, be happy.''
  I want those corporate officers motivated to fix their company's Y2K 
problems now. After their corporation is Y2K compliant and they have 
worked with their suppliers and customers and business partners and we 
have avoided Y2K problems is the time to be happy.
  Second, this bill caps punitive damages to 3 times the amount of 
compensatory damages or $250,000, whichever is greater. If the 
defendant is a small business, then $250,000 is the ceiling for any 
punitive damage award.
  These punitive damages caps again send the wrong message to the 
business community by protecting the bad actor, instead of rewarding 
the responsible business owner.
  The bill contains an exception to these punitive damages caps if a 
plaintiff can prove by clear and convincing evidence that the defendant 
intentionally defrauded the plaintiff. This exception will prove 
meaningless in the real world because no one will be able to meet this 
high and specific standard for proving the injury was specifically 
intended. How in the world is a plaintiff going to prove some 
intentionally tried to injury him or her in a Y2K case? Get real.
  Punitive damages are awarded only in cases of outrageous conduct. If 
a business takes responsible steps to become Y2K compliant, it will not 
be subject to punitive damages. These caps on punitive damages, like 
many other parts of the bill, discourage responsible Y2K remediation 
efforts.
  Indeed, by limiting punitive damage to a dollar figure, $250,000, 
these special legal protections may encourage some companies to analyze 
the costs and potential risks of Y2K noncompliance and make the 
calculated business decision not to make the investment needed to come 
into compliance. The same type of calculation, for example, apparently 
made by Ford in the exploding Pinto gas tank case.
  A cost-benefit approach does not fix a corporation's Y2K problems, 
but only leads to more litigation. Litigation with punitive damages 
caps may, in the judgment of the company's accountants, be worth 
enduring if it costs less than Y2K compliance.
  Third, the bill severely restricts the amount of damages that an 
innocent plaintiff can recover from a guilty defendant by abolishing 
joint and several liability in most cases. The exceptions to this 
proportionate liability are so complex that they invited more 
litigation, not less.
  This proportionate liability may unfairly penalize innocent consumers 
and small businesses and reward irresponsible companies.
  For example, a small business forced to shut down temporarily because 
of a Y2K computer malfunction may not be able to recoup all of its 
losses under proportionate liability if it fails to identify all the 
responsible parties that caused that Y2K problem. As a result, that 
small business may be forced to file for bankruptcy because of its 
limited resources. Why is the innocent small business owner, who may 
not know and should not know all the responsible parties in the 
manufacturing chain of a non Y2K compliant product, forced to go out of 
business?
  Moreover, this bill's many federal preemptions of state contract and 
tort law are all one-sided. The bill's provisions benefit only 
defendants, not plaintiffs, in Y2K disputes.
  The bill raises the standards of proof from a preponderance test to a 
clear and convincing test for plaintiffs to prove negligence and other 
torts claims without any corresponding responsibility on defendants. 
The bill adds new state of mind requirements on plaintiffs to prove 
tort claims without any corresponding responsibility on defendants.
  The bill also greatly expands the jurisdiction of the federal courts 
to consider Y2K cases under its class action provisions--an approach 
soundly rejected last month by Chief Justice Rehnquist and the Judicial 
Conference. The Judicial Conference found that shifting Y2K cases from 
state courts ``holds the potential for overwhelming the federal courts, 
resulting in substantial costs and delays.''

[[Page S4098]]

  In addition, the Judicial Conference concluded ``the proposed Y2K 
amendments are inconsistent with the objective of preserving the 
federal courts as tribunals of limited jurisdiction.'' I ask unanimous 
consent that a letter from the Judicial Conference opposing this 
expanded federal court jurisdiction be printed in the Record.
  Finally, the bill adds a sunset date of January 1, 2016, according to 
the latest public draft. A bill that stays effective for the next 17 
years is not narrow in scope. This sunset date is not reasonable. Is 
this bill intended to cover year 2015 computer problems?
  I agree with Assistant Attorney General Eleanor Acheson who testified 
at the Judiciary Committee hearing a few weeks ago on similar Y2K 
liability legislation that ``this bill would be by far the most 
sweeping litigation reform measure ever enacted.''
  So why do we need these sweeping litigation reforms to address year 
2000 computer problems? I don't know. The proponents of this 
legislation have offered no solid evidence to justify these sweeping 
provisions.
  There is no reasonable justification for the sweeping liability 
protections in this bill because these protections are not reasonable. 
This bill overreaches again and again. It is not close to being 
balanced.
  Worst of all, this bill as presently drafted would preempt the 
consumer protection laws of each of the 50 states and restrict the 
legal rights of consumers who are harmed by Y2K computer failures. Why 
is this bill taking away existing protections for the ordinary citizen?
  We all know that individual consumers do not have the same knowledge 
or bargaining power in the marketplace as businesses with more 
resources. Many consumers may not be aware of potential Y2K problems in 
the products that they buy for personal, family or household purposes.
  Consumers just go to the local store downtown or at the mall to buy a 
home computer or the latest software package. They expect their new 
purchase to work. But what if it does not work because of a Y2K 
problem?
  Then the average consumer should be able to use his or her home 
state's consumer protection laws to get a refund, replacement part or 
other justice. During the Judiciary Committee consideration of similar 
legislation, I offered an amendment to allow consumers to do just that. 
I may offer a similar amendment on this bill.
  Those of us in Congress who have been active on technology-related 
issues have struggled mightily, and successfully, to act in a 
bipartisan way. It would be unfortunate, and it would be harmful to the 
technology industry, technology users and to all consumers, if that 
pattern is broken over this bill.
  I sense that some may be seeking to use fear of the Y2K millennium 
bug to revive failed liability limitation legislation of the past. 
These controversial proposals may be good politics in some circles, but 
they are not true solutions to the Y2K problem. Instead, we should be 
looking to the future and creating incentives in this country and 
around the world for accelerating our efforts to resolve potential Y2K 
problems before they cause harm.
  Last year, I joined with Senator Hatch to pass into law a consensus 
bill known as ``The Year 2000 Information and Readiness Disclosure 
Act.'' We worked on a bipartisan basis with Senator Bennett, Senator 
Dodd, the Administration, industry representatives and others to reach 
agreement on a bill to facilitate information sharing to encourage Y2K 
compliance.
  The new law, enacted six months ago, is working to encourage 
companies to work together and share Y2K solutions and test results. It 
promotes company-to-company information sharing while not limiting 
rights of consumers. That is the model we should use to enact balanced 
and narrow legislation to deter any frivolous Y2K litigation while 
encouraging responsible Y2K compliance.
  I am continuing to work with Senators from both sides of the aisle to 
negotiate a narrow and balanced bill.
  Unfortunately, this special interest legislation before us today is 
not narrow and it is not balanced.
  I must oppose it.
  Mr. President, I ask Unanimous Consent that a letter received by the 
Judiciary Committee from the Judicial Conference of the United States 
be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                            Judicial Conference of


                                            the United States,

                                   Washington, DC, March 24, 1999.
     Hon. Orrin G. Hatch,
     Committee on the Judiciary, U.S. Senate, Dirksen Senate 
         Office Building, Washington, DC.
       Dear Mr. Chairman: On behalf of the Judicial Conference of 
     the United States, I write to transmit views with respect to 
     pending year 2000 (``Y2K'') legislation. S. 461, as well as 
     S. 96 and H.R. 775, seeks to promote the resolution of 
     potentially large numbers of Y2K disputes. The federal 
     judiciary recognizes the commendable efforts of Congress to 
     resolve Y2K disputes short of full-scale litigation so as to 
     alleviate the burden of such litigation on private parties as 
     well as on federal and state courts. These are clearly 
     laudable public policy objectives.
       Some of the provisions, however, will affect the 
     administration of justice in the federal courts. The Judicial 
     Conference, at its March 16th session, determined to oppose 
     the provisions expanding federal court jurisdiction over Y2K 
     class actions in bills (S. 461, S. 96, and H.R. 775) 
     currently under consideration by the 106th Congress. In 
     addition, because the Y2K pleading requirements included in 
     these bills circumvent the Rules Enabling Act, the Conference 
     also opposes these provisions.


                             class actions

       These bills create no federal cause of action. Instead, 
     they assume that plaintiffs will rely on typical state causes 
     of action to provide relief in Y2K disputes. Under the bills, 
     individual plaintiffs, as opposed to class action plaintiffs, 
     can bring their tort, contract, and fraud suits in a state 
     court where they will remain until resolved. While federal 
     defenses and liability limitations established in the 
     legislation may be raised in such litigation, the bills 
     recognize that state courts are fully capable of applying 
     these provisions and carrying out federal policy. This 
     reliance on state courts, which today handle 95 percent of 
     the nation's judicial business, follows the traditional 
     allocation of work between the state and federal courts.
       The provisions of these Y2K bills take a radically 
     different approach to Y2K class actions--one that would 
     effect a major reallocation of class action workloads. These 
     bills create original federal court jurisdiction over any Y2K 
     class action based on state law, regardless of the amount in 
     controversy, where there is minimal diversity of 
     citizenship--that is, where any single member of the proposed 
     plaintiff class and any defendant are from different states. 
     They also provide for the removal of any such Y2K class 
     action to federal court by any single defendant or any single 
     member of the plaintiff class who is not a representative 
     party. While these bills do identify limited circumstances in 
     which a federal district court may abstain from hearing a Y2K 
     class action, it is unlikely that many actions will meet the 
     specified criteria. The net result of these provisions will 
     be that most Y2K class action cases will be litigated in the 
     federal courts.
       This assignment of the class action workload to the federal 
     courts is particularly troubling because the Y2K problem may 
     result in a very large number of class actions. While no one 
     knows how many cases will be filed, Senator Robert Bennett, 
     Chair of the Special Committee on the Year 2000 Technology 
     Problem, has predicted that there could be a ``tidal wave'' 
     of litigation resulting from Y2K problems. Given the nature 
     of the Y2K problem, it is reasonable to expect that similar 
     claims will often arise in favor of multiple plaintiffs 
     against the same defendant or defendants. Thus, it can be 
     expected that a substantial portion of these cases will be 
     brought as class actions. Responding to class actions, 
     regardless of where they are filed, will likely be a 
     monumental task. If the current class action provisions 
     remain in these bills, however, the important contribution 
     the state courts would otherwise make to meeting this 
     challenge will be lost, and the burden of the federal system 
     will be correspondingly increased. The transfer of this 
     burden of the federal courts holds the potential of 
     overwhelming federal judicial resources and the capacity of 
     the federal courts to resolve not only Y2K cases, but other 
     causes of action as well.
       Federal administration of these state-law class actions 
     will impose other substantial burdens. By shifting state-
     created claims into federal court, the bills confront the 
     federal courts with the responsibility to engage in difficult 
     and time-consuming choice-of-law decisions. The Erie doctrine 
     requires that federal district courts, sitting in diversity, 
     apply the law of the forum state of determine which body of 
     state law controls the existence of a right of action. The 
     wholesale shift of state-law class actions into federal court 
     makes this choice-of-law obligation all the more daunting as 
     the sheer number of possible subclasses and relevant bodies 
     of state law multiples. Some federal courts have taken the 
     position that such multiplicity of law itself stands as a 
     barrier to the certification of a nationwide class action. 
     Even where a district court agreed to certify a class, it 
     would have to make choice of law

[[Page S4099]]

     and substantive determinations that would have no binding 
     force in subsequent Y2K litigation in the states in question.
       In addition to the potential adverse docket impact on the 
     federal courts, the proposed bills infringe upon the 
     traditional authority of the states to manage their own 
     judicial business. State legislatures and other rule-making 
     bodies provide rules for the aggregation of state-law 
     claims into class-wide litigation in order to achieve 
     certain litigation economies of scale. By providing for 
     class treatment, state policymakers express the view that 
     the state's own resources can be best deployed not through 
     repetitive and potentially duplicative individual 
     litigation, but through some form of class treatment. The 
     proposed bills could deprive the state courts of the power 
     to hear much of this class litigation and might well 
     create incentives for plaintiffs who prefer a state forum 
     to bring a series of individual claims. Such individual 
     litigation might place a greater burden on the state 
     courts and thwart the states' policies of more efficient 
     disposition.
       Federal jurisdiction over class action litigation is an 
     area where change should be approached with caution and 
     careful consideration of the underlying relationship between 
     state and federal courts. The Judicial Conference Advisory 
     Committee on Civil Rules has recently devoted several years 
     of study to the rules in class action litigation. One 
     outgrowth of that study was the appointment by the Chief 
     Justice of a Mass Torts Working Group. The Working Group 
     undertook a study which revealed the complexities of 
     litigation that aggregates large numbers of claims and 
     illustrates the need for a deliberative review of the issues 
     that must be addressed in attempting to improve the process 
     for resolution of such litigation. Such issues involve not 
     only procedural rules, but also the jurisdiction of federal 
     and state courts and the interaction between federal and 
     state law. Y2K class action litigation implicates the same 
     complex and fundamental issues that the Working Group 
     identified. Even for familiar categories of litigation, these 
     issues can be satisfactorily resolved only by further study. 
     An attempt to address them in isolation, for an unfamiliar 
     category of cases that remains to be developed only in the 
     future, is unwise.
       It may well be that extending minimal diversity to mass 
     torts may be appropriate if accompanied by suitable 
     restrictions. The Judicial Conference, for example, has 
     endorsed in principle the use of minimal diversity 
     jurisdiction in single-event, mass tort situations, like 
     airplane crash litigation, and there may be other situations 
     in which the efficiencies to be gained from consolidating 
     mass tort litigation in federal courts are justified. 
     Expansion of class action jurisdiction over Y2K class actions 
     in the manner provided in the pending bills, however, would 
     be inconsistent with the objective of preserving the federal 
     courts as tribunals of limited jurisdiction and the reality 
     that the federal courts are staffed and supported to function 
     as tribunals of limited jurisdiction.
       Judicial federalism relies on the principle that state and 
     federal courts together comprise an integrated system for the 
     delivery of justice in the United States. There appears to be 
     no substantial justification for the potentially massive 
     transfer of workload under these bills, and such a transfer 
     would seem to be counterproductive. State courts provide most 
     of the nation's judicial capacity, and a decision to limit 
     access to this capacity in the face of the burden that Y2K 
     litigation may impose could have significant consequences for 
     the efficient resolution of Y2K disputes.


                         pleading requirements

       S. 461, as well as S. 96 and H.R. 775, sets forth specific 
     pleading provisions in Y2K litigation that would require a 
     plaintiff to state with particularity certain matters in the 
     complaint regarding the nature and amount of damages, 
     material defects, and the defendant's state of mind. These 
     requirements are inconsistent with the general notice 
     pleading provisions found in the Federal Rules of civil 
     Procedure (i.e., Rule 8), which apply to civil cases. The 
     bills' provisions bypass the rulemaking provisions in the 
     rules Enabling Act (28 U.S.C. Sec. Sec. 2071-77). They have 
     not been subjected to bench, bar, and public scrutiny 
     envisioned under the Rules Enabling Act and are inconsistent 
     with the policies underlying the Act, which the Judicial 
     Conference has long supported.
       Not only do the statutory pleading requirements bypass the 
     Rules Enabling Act, they do so in a particularly 
     objectionable way because they are contained in stand-alone 
     statutory provisions outside the federal rules. This will 
     cause confusion and traps for unwary lawyers who are 
     accustomed to relying on the Federal Rules of civil Procedure 
     for pleading requirements. It also would signal yet another 
     departure from uniform, national procedural rules, following 
     closely in the wake of similar pleading requirements 
     contained in the Private Securities Reform Litigation Act.
       On behalf of the federal judiciary, I appreciate your 
     consideration of these views. If you or your staff have any 
     questions, please contact Mike Blommer, Assistant Director, 
     Office of Legislative Affairs (202-502-1700).
           Sincerely,
                                            Leonidas Ralph Mecham,
     Secretary.

                          ____________________