[Congressional Record Volume 146, Number 6 (Tuesday, February 1, 2000)]
[Senate]
[Pages S187-S188]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                BANKRUPTCY REFORM ACT OF 1999--Continued

  Mr. SCHUMER. Mr. President, before I get into the substance of my 
remarks, every time some of us on this floor bring up gun issues--not 
to eliminate them, but to make sure those who should not have them do 
not get them--we hear from those who are opposed to us that we are 
being political.
  I do not understand that remark other than it being a defensive 
remark. First, I believe my views as strongly, say, as the Senator from 
Idaho believes his. I do not think I am being any more or any less 
political than he is by defending that viewpoint. That is what the 
Senate is all about.
  Second, if one wants to argue about politics, a vast majority of 
Americans support the position I support. That is what democracy is all 
about, and politics is a good thing if you are representing people's 
views and trying to do good for your country, your State, and your 
communities. So I do not quite get the political nature of the comment.
  Third, we are not saying that all gun manufacturers are subject to 
suit or subject to successful suit. I heard the Senator from Idaho 
mention Wal-Mart. This is not a suit aimed at Wal-Mart. This is a suit 
aimed at dealers, often a handful of dealers, who are reckless, or 
worse, in the way they distribute guns.
  About 6 months ago, my office issued a report which showed that 1 
percent of the dealers issued close to 50 percent of the guns traceable 
in crimes. These were not the 1 percent who had the greatest 
volume. These were obviously the 1 percent who, for some reason, were 
not living up to their responsibilities under the Brady law, which is 
the law of the land. That kind of fact is what brought these suits 
about.

  The suit, for instance, brought forward by the City of Chicago claims 
that some manufacturers and some dealers are completely reckless in how 
they distribute guns. If each dealer were careful, if each dealer and 
manufacturer did what the law says, the number of people killed with 
guns by criminals and the number of children who get guns would 
decline. These lawsuits are a very legitimate part of American life.
  I wish we didn't need lawsuits, but since this Senate has stymied 
every single measure to bring rationality to our laws about guns, not 
to take people's guns away, as some of the opponents argue in terms of 
setting up a straw man, but to say that the same responsibilities that 
someone who drives a car or practices free speech has, because none of 
those rights is absolute, should be visited upon gun manufacturers, gun 
dealers and, yes, gun owners. If this Chamber had moved forward in 
accordance with the will of the American people, we wouldn't have these 
lawsuits. But that is not the case. One can speculate as to why.
  We have a Senate totally deadlocked, a Congress unable to even pass 
something as minute as closing the gun show loophole. So we have these 
suits. They are legitimate lawsuits. They are tried by a jury in 
accordance with American law.
  Mr. President, I ask the Senator from Michigan to yield me 3 
additional minutes.
  Mr. LEVIN. I yield my friend from New York 3 additional minutes.
  The PRESIDING OFFICER. We have approached the time for the recess.
  Mr. SCHUMER. I thank the Chair for his courtesy.
  It is not the major gun dealers who are seeking the shield of 
bankruptcy; it is the companies, sometimes small, often nasty, that 
have sought this. Look at the so-called ring of fire, gun manufacturers 
around the city of Los Angeles that manufacture cheap handguns, who 
know darn well that those handguns are often ending up in the hands of 
young people who shouldn't have them. They are the people against whom 
the Senator from Michigan so wisely is seeking to allow the court 
process to continue. It would be the height of special interest folly 
if we allowed dealers to escape the punishment meted out by a civil 
court through a bankruptcy loophole that was never intended to allow 
people to evade justice.
  This amendment is about justice, pure and simple. It doesn't 
preordain what the courts will decide, but it clearly states that if 
the court should decide a gun manufacturer or a gun dealer was 
reckless, was negligent, then they can be held accountable. If we don't 
pass it, it is another in a long line of sops to the gun lobby in which 
this Chamber has unfortunately participated over the last several 
years. I hope this body has the courage to stand tall and pass an 
amendment that we all know is right.
  I thank the Chair for his courtesy.
  Mr. LIEBERMAN. Mr. President, I rise to express my opposition to 
Senator Levin's amendment, which would deny bankruptcy protection to 
gun companies, and to explain the reasons for my position. I intend to 
vote against Senator Levin's amendment despite the fact that I have 
consistently supported gun control legislation.
  I know my colleague's intentions are good, but this amendment is not 
the right way to address the serious problem of gun violence in our 
nation. It would establish a dangerous new precedent in our Bankruptcy 
Code, and it would unfairly discriminate against an entire category of 
companies, regardless of whether a given company is behaving 
responsibly. In Connecticut, for example, Colt's Manufacturing, which 
has been at the forefront of developing new technologies to make guns 
safer, teeters at the edge of bankruptcy because it has been caught up 
in the tide of lawsuits against gun companies. Would it be fair to deny 
Colt the normal protections afforded to any company trying to 
reorganize? My colleague from Michigan refers to the irresponsible 
practices of a few gun companies, but his amendment could cripple 
reputable companies such as Colt's.
  Senator Levin seeks to amend the Bankruptcy Code so that firearm 
manufacturers filing for reorganization would not be entitled to the 
ordinary protections from product liability lawsuits. He argues that a 
loophole in the bankruptcy system allows gun companies to stay lawsuits 
and discharge their debts. In fact, the stay of lawsuits and discharge 
of debts to which Senator Levin refers is no loophole, but is essential 
to the proper operation of Chapter 11 of the Bankruptcy Code. On more 
than one occasion, otherwise healthy companies have been hit with huge 
numbers of product liability cases simultaneously, and had to file for 
protection under Chapter 11. One recent example is Dow Corning, which 
filed for reorganization in response to the thousands of lawsuits over 
silicone breast implants, and which is now paying out claims in an 
orderly and expeditious process. If the lawsuits are not stayed by the 
bankruptcy court, then

[[Page S188]]

resolved in one tribunal, the company would be more likely to fail 
before all claimants can litigate their cases. Chapter 11 does not 
allow a company to evade lawsuits, but rather to pay out claims 
proportionately and fairly to all claimants, hopefully in a way that 
keeps the company afloat.
  This rationale for Chapter 11 bankruptcy applies to the gun industry 
as well. I understand why my colleague criticizes the practices of 
companies such as Lorcin, which churn out the ``Saturday Night 
Specials'' favored by criminals. But his amendment to the Bankruptcy 
Code is not narrowly drafted to target those companies. Many 
municipalities and gun control groups have adopted a strategy of filing 
multiple, simultaneous product liability lawsuits, in which all gun 
companies are named as defendants irrespective of their particular 
practices. The lawsuits have not succeeded on the merits thus far, but 
the costs of litigation are threatening the financial viability of many 
of the smaller companies.
  Colt's Manufacturing, which is among the most progressive firearms 
manufacturers in the country, has been drawn into the same lawsuits. 
Seventy percent of Colt's sales are to law enforcement and defense 
agencies, and the company does not produce ``Saturday Night Specials.'' 
Although Colt's has limited assets, it has been working to develop 
``smart gun'' technology and other innovations that will reduce handgun 
violence. Nevertheless, Colt's has been named as a defendant in all 29 
lawsuits filed so far. Despite the fact that Colt's has won four 
decisions and lost no final judgments, insurance companies are pulling 
their coverage and investors have been reluctant to provide new 
capital. In one year, the company has gone from 1200 to 400 employees. 
Colt's reports that it is in financial jeopardy as a result of the 
lawsuits, and may soon have to file for reorganization under Chapter 
11, as it did several years ago. The amendment we are considering today 
would be devastating to Colt's. Rather then being given a chance to 
reorganize, the company would slowly be bled dry. Along with lost jobs 
in my state, the nation would lose a responsible company with a history 
of great craftsmanship which has been looking for solutions to the 
epidemic of handgun violence.
  No industry has ever been singled out in the Bankruptcy Code for this 
sort of discriminatory treatment. The case has not been made for why 
Chapter 11 should not apply equally to all sectors of the economy. 
There are many possible legislative approaches for addressing the 
appalling rates of gun violence in the United States, but this is not 
one of them. I urge my colleagues to oppose the amendment.
  Mr. ASHCROFT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. ASHCROFT. I ask unanimous consent to speak as in morning business 
for up to 10 minutes, at the conclusion of which time I will propound a 
unanimous consent request regarding Senate Resolution 250 related to 
the Super Bowl champions, the St. Louis Rams.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Missouri.

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