[Congressional Record Volume 150, Number 109 (Tuesday, September 14, 2004)]
[House]
[Pages H7098-H7120]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  LAWSUIT ABUSE REDUCTION ACT OF 2004

  Mr. SENSENBRENNER. Mr. Speaker, pursuant to House Resolution 766, I 
call up the bill (H.R. 4571) to amend Rule 11 of the Federal Rules of 
Civil Procedure to improve attorney accountability, and for other 
purposes, and ask for its immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 766, the bill 
is considered read for amendment.
  The text of H.R. 4571 is as follows:

                               H.R. 4571

       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 ``Lawsuit Abuse Reduction Act 
     of 2004''.

     SEC. 2. ATTORNEY ACCOUNTABILITY.

       Rule 11 of the Federal Rules of Civil Procedure is 
     amended--
       (1) in subdivision (c)--
       (A) by amending the first sentence to read as follows: ``If 
     a pleading, motion, or other paper is signed in violation of 
     this rule, the court, upon motion or upon its own initiative, 
     shall impose upon the attorney, law firm, or parties that 
     have violated this subdivision or are responsible for the 
     violation, an appropriate sanction, which may include an 
     order to the other party or parties to pay for the reasonable 
     expenses incurred as a direct result of the filing of the 
     pleading, motion, or other paper, that is the subject of the 
     violation, including a reasonable attorney's fee.'';
       (B) in paragraph (1)(A)--
       (i) by striking ``Rule 5'' and all that follows through 
     ``corrected.'' and inserting ``Rule 5.''; and
       (ii) by striking ``the court may award'' and inserting 
     ``the court shall award''; and
       (C) in paragraph (2), by striking ``shall be limited to 
     what is sufficient'' and all that follows through the end of 
     the paragraph (including subparagraphs (A) and (B)) and 
     inserting ``shall be sufficient to deter repetition of such 
     conduct or comparable conduct by others similarly situated, 
     and to compensate the parties that were injured by such 
     conduct. The sanction may consist of an order to pay to the 
     party or parties the amount of the reasonable expenses 
     incurred as a direct result of the filing of the pleading, 
     motion, or other paper that is the subject of the violation, 
     including a reasonable attorney's fee.''; and
       (2) by striking subdivision (d).

[[Page H7099]]

     SEC. 3. APPLICABILITY OF RULE 11 TO STATE CASES AFFECTING 
                   INTERSTATE COMMERCE.

       In any civil action in State court, the court, upon motion, 
     shall determine within 30 days after the filing of such 
     motion whether the action affects interstate commerce. Such 
     court shall make such determination based on an assessment of 
     the costs to the interstate economy, including the loss of 
     jobs, were the relief requested granted. If the court 
     determines such action affects interstate commerce, the 
     provisions of Rule 11 of the Federal Rules of Civil Procedure 
     shall apply to such action.

     SEC. 4. PREVENTION OF FORUM-SHOPPING.

       (a) In General.--Subject to subsection (b), a personal 
     injury claim filed in State or Federal court may be filed 
     only in the State and, within that State, in the county (or 
     Federal district) in which--
       (1) the person bringing the claim, including an estate in 
     the case of a decedent and a parent or guardian in the case 
     of a minor or incompetent--
       (A) resides at the time of filing; or
       (B) resided at the time of the alleged injury; or
       (2) the alleged injury or circumstances giving rise to the 
     personal injury claim allegedly occurred; or
       (3) the defendant's principal place of business is located.
       (b) Determination of Most Appropriate Forum.--If a person 
     alleges that the injury or circumstances giving rise to the 
     personal injury claim occurred in more than one county (or 
     Federal district), the trial court shall determine which 
     State and county (or Federal district) is the most 
     appropriate forum for the claim. If the court determines that 
     another forum would be the most appropriate forum for a 
     claim, the court shall dismiss the claim. Any otherwise 
     applicable statute of limitations shall be tolled beginning 
     on the date the claim was filed and ending on the date the 
     claim is dismissed under this subsection.
       (c) Definitions.--In this section:
       (1) The term ``personal injury claim''--
       (A) means a civil action brought under State law by any 
     person to recover for a person's personal injury, illness, 
     disease, death, mental or emotional injury, risk of disease, 
     or other injury, or the costs of medical monitoring or 
     surveillance (to the extent such claims are recognized under 
     State law), including any derivative action brought on behalf 
     of any person on whose injury or risk of injury the action is 
     based by any representative party, including a spouse, 
     parent, child, or other relative of such person, a guardian, 
     or an estate; and
       (B) does not include a claim brought as a class action.
       (2) The term ``person'' means any individual, corporation, 
     company, association, firm, partnership, society, joint stock 
     company, or any other entity, but not any governmental 
     entity.
       (3) The term ``State'' includes the District of Columbia, 
     the Commonwealth of Puerto Rico, the United States Virgin 
     Islands, Guam, and any other territory or possession of the 
     United States.
       (d) Applicability.--This section applies to any personal 
     injury claim filed in Federal or State court on or after the 
     date of the enactment of this Act.

     SEC. 5. RULE OF CONSTRUCTION.

       Nothing in section 3 or in the amendments made by section 2 
     shall be construed to bar or impede the assertion or 
     development of new claims or remedies under Federal, State, 
     or local civil rights law.
  The SPEAKER pro tempore. The amendment printed in the bill is 
adopted.
  The text of the amendment in the nature of a substitute is as 
follows:

                               H.R. 4571

       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 ``Lawsuit Abuse Reduction Act 
     of 2004''.

     SEC. 2. ATTORNEY ACCOUNTABILITY.

       Rule 11 of the Federal Rules of Civil Procedure is 
     amended--
       (1) in subdivision (c)--
       (A) by amending the first sentence to read as follows: ``If 
     a pleading, motion, or other paper is signed in violation of 
     this rule, the court, upon motion or upon its own initiative, 
     shall impose upon the attorney, law firm, or parties that 
     have violated this subdivision or are responsible for the 
     violation, an appropriate sanction, which may include an 
     order to the other party or parties to pay for the reasonable 
     expenses incurred as a direct result of the filing of the 
     pleading, motion, or other paper, that is the subject of the 
     violation, including a reasonable attorney's fee.'';
       (B) in paragraph (1)(A)--
       (i) by striking ``Rule 5'' and all that follows through 
     ``corrected.'' and inserting ``Rule 5.''; and
       (ii) by striking ``the court may award'' and inserting 
     ``the court shall award''; and
       (C) in paragraph (2), by striking ``shall be limited to 
     what is sufficient'' and all that follows through the end of 
     the paragraph (including subparagraphs (A) and (B)) and 
     inserting ``shall be sufficient to deter repetition of such 
     conduct or comparable conduct by others similarly situated, 
     and to compensate the parties that were injured by such 
     conduct. The sanction may consist of an order to pay to the 
     party or parties the amount of the reasonable expenses 
     incurred as a direct result of the filing of the pleading, 
     motion, or other paper that is the subject of the violation, 
     including a reasonable attorney's fee.''; and
       (2) by striking subdivision (d).

     SEC. 3. APPLICABILITY OF RULE 11 TO STATE CASES AFFECTING 
                   INTERSTATE COMMERCE.

       In any civil action in State court, the court, upon motion, 
     shall determine within 30 days after the filing of such 
     motion whether the action affects interstate commerce. Such 
     court shall make such determination based on an assessment of 
     the costs to the interstate economy, including the loss of 
     jobs, were the relief requested granted. If the court 
     determines such action affects interstate commerce, the 
     provisions of Rule 11 of the Federal Rules of Civil Procedure 
     shall apply to such action.

     SEC. 4. PREVENTION OF FORUM-SHOPPING.

       (a) In General.--Subject to subsection (b), a personal 
     injury claim filed in State or Federal court may be filed 
     only in the State and, within that State, in the county (or 
     Federal district) in which--
       (1) the person bringing the claim, including an estate in 
     the case of a decedent and a parent or guardian in the case 
     of a minor or incompetent--
       (A) resides at the time of filing; or
       (B) resided at the time of the alleged injury; or
       (2) the alleged injury or circumstances giving rise to the 
     personal injury claim allegedly occurred; or
       (3) the defendant's principal place of business is located.
       (b) Determination of Most Appropriate Forum.--If a person 
     alleges that the injury or circumstances giving rise to the 
     personal injury claim occurred in more than one county (or 
     Federal district), the trial court shall determine which 
     State and county (or Federal district) is the most 
     appropriate forum for the claim. If the court determines that 
     another forum would be the most appropriate forum for a 
     claim, the court shall dismiss the claim. Any otherwise 
     applicable statute of limitations shall be tolled beginning 
     on the date the claim was filed and ending on the date the 
     claim is dismissed under this subsection.
       (c) Definitions.--In this section:
       (1) The term ``personal injury claim''--
       (A) means a civil action brought under State law by any 
     person to recover for a person's personal injury, illness, 
     disease, death, mental or emotional injury, risk of disease, 
     or other injury, or the costs of medical monitoring or 
     surveillance (to the extent such claims are recognized under 
     State law), including any derivative action brought on behalf 
     of any person on whose injury or risk of injury the action is 
     based by any representative party, including a spouse, 
     parent, child, or other relative of such person, a guardian, 
     or an estate; and
       (B) does not include a claim brought as a class action.
       (2) The term ``person'' means any individual, corporation, 
     company, association, firm, partnership, society, joint stock 
     company, or any other entity, but not any governmental 
     entity.
       (3) The term ``State'' includes the District of Columbia, 
     the Commonwealth of Puerto Rico, the United States Virgin 
     Islands, Guam, and any other territory or possession of the 
     United States.
       (d) Applicability.--This section applies to any personal 
     injury claim filed in Federal or State court on or after the 
     date of the enactment of this Act.

     SEC. 5. RULE OF CONSTRUCTION.

       Nothing in section 3 or in the amendments made by section 2 
     shall be construed to bar or impede the assertion or 
     development of new claims or remedies under Federal, State, 
     or local civil rights law.

     SEC. 6. THREE-STRIKES RULE FOR SUSPENDING ATTORNEYS WHO 
                   COMMIT MULTIPLE RULE 11 VIOLATIONS.

       (a) Mandatory Suspension.--Whenever a Federal district 
     court determines that an attorney has violated Rule 11 of the 
     Federal Rules of Civil Procedure, the court shall determine 
     the number of times that the attorney has violated that rule 
     in that Federal district court during that attorney's career. 
     If the court determines that the number is 3 or more, the 
     Federal district court--
       (1) shall suspend that attorney from the practice of law in 
     that Federal district court for 1 year; and
       (2) may suspend that attorney from the practice of law in 
     that Federal district court for any additional period that 
     the court considers appropriate.
       (b) Appeal; Stay.--An attorney has the right to appeal a 
     suspension under subsection (a). While such an appeal is 
     pending, the suspension shall be stayed.
       (c) Reinstatement.--To be reinstated to the practice of law 
     in a Federal district court after completion of a suspension 
     under subsection (a), the attorney must first petition the 
     court for reinstatement under such procedures and conditions 
     as the court may prescribe.

     SEC. 7. ENHANCED SANCTIONS FOR DOCUMENT DESTRUCTION.

       (a) In General.--Whoever willfully and intentionally 
     influences, obstructs, or impedes, or attempts to influence, 
     obstruct, or impede, a pending court proceeding through the 
     willful and intentional destruction of documents sought in, 
     and highly relevant to, that proceeding shall be punished 
     with mandatory civil sanctions of a degree commensurate with 
     the civil sanctions available under Rule 37 of the Federal 
     Rules of Civil Procedure, in addition to any other civil 
     sanctions that otherwise apply.
       (b) Applicability.--This section applies to any court 
     proceeding in any Federal or State court.

  The SPEAKER pro tempore. After one hour of debate on the bill, as

[[Page H7100]]

amended, it shall be in order to consider the further amendment printed 
in House Report 108-684, if offered by the gentleman from Texas (Mr. 
Turner), or his designee, which shall be considered read, and shall be 
debatable for 40 minutes, equally divided and controlled by the 
proponent and an opponent.

                              {time}  1245

  The gentleman from Wisconsin (Mr. Sensenbrenner) and the gentleman 
from Virginia (Mr. Scott) each will control 30 minutes of debate on the 
bill.
  The Chair recognizes the gentleman from Wisconsin (Mr. 
Sensenbrenner).
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, recently President Bush said, ``We must protect small 
business owners and workers from the explosion of frivolous lawsuits 
that threaten jobs across America.'' Even Senator Kerry claims to 
support national legislation in which ``lawyers who file frivolous 
cases would face tough, mandatory sanctions, including a `three strikes 
and you're out' provision that forbids lawyers who file three frivolous 
cases from bringing another suit for the next 10 years.'' Well, help is 
on the way.
  H.R. 4571, the Lawsuit Abuse Reduction Act, would restore mandatory 
sanctions and monetary penalties under Federal rule 11 of the Federal 
Rules of Civil Procedure for filing frivolous lawsuits and abusing the 
litigation process. It would also extend these same protections to 
cover State cases that a State judge determines to have interstate 
effects, and it would prevent forum shopping by requiring personal 
injury cases to be brought only where the plaintiff lives or was 
allegedly injured, or where the defendant's principal place of business 
is located.
  H.R. 4571 will also apply a ``three strikes and you're out'' rule to 
attorneys who commit multiple rule 11 violations in Federal district 
court and impose mandatory civil sanctions for willful and intentional 
document destruction intended to obstruct the pending court proceeding. 
The bill would apply to lawsuits brought by individuals as well as 
businesses, and it expressly precludes the application of the bill to 
civil rights cases if applying the bill to such cases would bar or 
impede the assertion or development of new claims or remedies under 
Federal, State, or local civil rights law.
  Today, frivolous lawsuits are legalized extortion. Without the threat 
of certain punishment for filing frivolous lawsuits, innocent people 
and small businesses will continue to face the harsh economic reality 
that simply paying off frivolous claims through monetary settlements is 
always cheaper than litigating the case until no fault is found.
  No part of American society rests easy in a legal culture of fear. 
Churches are discouraging counseling by ministers. Children have 
learned to threaten teachers with lawsuits. Youth sports are shutting 
down in the face of lawsuits for injury or even hurt feelings. Monkey 
bars and other once-common equipment are now endangered species at 
playgrounds. As a result, children stay at home and get fat, and their 
parents sue the restaurants that serve them. The Girl Scouts in metro 
Detroit alone have to sell 36,000 boxes of cookies each year just to 
pay for liability insurance, 36,000 boxes of cookies.
  Good Samaritans are told to hit the road. When one man routinely 
cleared a trail after snowstorms, the county had to ask him to stop. 
The supervisor of district operations wrote, ``If a person falls, you 
are more liable than if you had never plowed at all. Crazy world. 
Unfortunately, the times we are in allow for a much more litigious 
environment than common sense would dictate.''
  Because existing rules against frivolous lawsuits are ineffective, 
the right to sue has not only been exploited by lawyers; it has been 
turned into one of the most destructive business models in the American 
economy. Today, personal injury lawyers can gamble on taking cases on a 
contingency-fee basis because they only need to win one in 10 to score 
the big judgment that would make up for the losses in other cases. We 
all live with the consequences, including higher taxes and insurance 
rates; chaos in our schools; doctors going out of business, limiting 
Americans' access to health care.
  Small businesses and workers may suffer the most. The Nation's oldest 
ladder manufacturer, the family-owned John S. Tilley Ladders Company 
near Albany, New York, recently filed for bankruptcy protection and 
sold off most of its assets due to litigation costs. Founded in 1855, 
the Tilley firm could not handle the cost of liability insurance, which 
had risen from 6 percent of sales a decade ago to 29 percent, even 
though the company had never lost an actual court judgment.

  Sadly, the Federal rule designed to deter frivolous lawsuits was 
gutted over 10 years ago; and today, we live with the results. 
Shockingly, rule 11 of the Federal Rules of Civil Procedure does not 
require sanctions or even allow monetary penalties against parties who 
bring frivolous lawsuits. Without certain punishment for those who 
bring frivolous lawsuits, and the threat of monetary penalties to 
compensate the victims of frivolous lawsuits, there is little incentive 
for lawsuit victims to spend time and money seeking sanctions for 
lawsuit abuse.
  Rule 11 also does not allow sanctions for the abuses of the discovery 
process. Rule 11 as currently written even allows lawyers to avoid 
sanctions entirely from making frivolous claims by withdrawing them 
within 3 weeks. Such a rule actually encourages frivolous lawsuits 
because personal injury attorneys can file harassing pleadings, secure 
in the knowledge that they have nothing to lose. If someone objects, 
they can simply retreat without penalty. H.R. 4571 closes all of these 
loopholes.
  Forum shopping further encourages frivolous litigation. Lax rules 
regarding where a lawsuit can be brought have turned certain parts of 
the country into lawsuit factories, the only factories that lose jobs 
rather than creating them. One of the Nation's wealthiest personal 
injury attorneys described what he calls ``magic jurisdictions'' as 
follows: ``What I call the `magic jurisdiction' is where the judiciary 
is elected with verdict money. The trial lawyers have established 
relationships with the judges that are elected. It's almost impossible 
to get a fair trial if you're a defendant in some of these places. Any 
lawyer fresh out of law school can walk in there and win the case, so 
it doesn't matter what the evidence or law is.'' H.R. 4571 would 
prevent the unfair practice of forum shopping that currently allows 
personal injury lawyers to sue wherever the most favorable court is.
  Congress cannot sit back and allow the personal injury lawyers to 
bankrupt the very concept of personal responsibility that has made 
America great. I urge my colleagues to support this bipartisan 
legislation that will protect both America's values and its vital small 
businesses.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield myself such time as I may 
consume, and I rise to speak against the bill
  Mr. Speaker, I do not support the legislation because it will have a 
significant adverse effect on the ability of unpopular plaintiffs to 
seek recourse in our courts, and it will operate to benefit foreign 
corporate defendants at the expense of domestic counterparts and will 
skew the playing field against injured victims.
  Now, a lot of organizations oppose the bill, and I would like to read 
from a letter from the Judicial Conference of the United States, the 
Chief Justice of the United States presiding, in a letter to the 
committee chairman.
  It says that ``section 2 of the bill would reinstitute a rule 
eliminated in 1993 upon the recommendation of the Judicial Conference, 
approved by the Supreme Court, and after review by Congress, because of 
the serious problems it engendered during a 10-year period of 
operation. Section 2 also would amend rule 11 of the Federal Rules of 
Civil Procedure in a manner consistent with the longstanding Judicial 
Conference policy opposing direct amendment of the Federal rules by 
legislation.''
  The letter goes on to say that the bill ``would directly amend civil 
rule 11 to remove a court's discretion to impose sanctions on a 
frivolous filing and eliminate the rule's `safe-harbor' provisions. The 
bill undoes amendments to rule 11 that took effect on December 1, 1993, 
and would bring back the provisions that were first introduced in 1983

[[Page H7101]]

and removed from the rule in 1993, after a decade of signally bad 
experiences with the operation and effects of the 1983 rule.''
  The Judicial Conference of the United States goes on to state: ``Like 
H.R. 4571, the 1983 version of rule 11 required sanctions for every 
violation of the rule. It spawned thousands of court decisions and 
generated widespread criticism. The rule was abused by resourceful 
lawyers, and an entire `cottage industry' developed that churned 
tremendously wasteful satellite litigation that had everything to do 
with strategic gamesmanship and little to do with underlying claims. 
Rule 11 motions came to be met with countermotions that sought rule 11 
sanctions for making the original rule 11 motion.
  ``Some of the serious problems caused by the 1983 amendments to rule 
11 included:
  ``Creating a significant incentive to file unmeritorious rule 11 
motions by providing a possibility of monetary penalty.''
  It goes on to cite other problems that occurred that were cured in 
1993. The letter goes on: ``The 1993 amendments to rule 11 were 
designed to strike a fair and equitable balance between competing 
interests, remedy the major problems with the rule, and allow courts to 
focus on the merits of the underlying cases rather than on rule 11 
motions.''
  It goes on to say that the ``experience with the amended rule since 
1993 has demonstrated a marked decline in rule 11 satellite litigation 
without any noticeable increase in the number of frivolous filings. In 
June 1995, the Federal Judicial Center conducted a survey of 1,130 
lawyers and 148 judges on the effects of the 1993 rule 11 amendments . 
. . The Center found general satisfaction with the amended rule. It 
also found that more than 75 percent of the judges and lawyers would 
oppose a provision that would require a court to impose a sanction when 
the rule is violated. A majority of the judges and lawyers, both 
plaintiffs' and defendants' lawyers, believed that groundless 
litigation was handled effectively by judges.
  ``Undoing the 1993 rule 11 amendments, even though no serious problem 
has been brought to the Judicial Conference rules committee's 
attention, would frustrate the purpose and intent of the Rules Enabling 
Act.''
  It goes on to criticize the provisions in section 3, the mandatory 
application to State laws, and section 4, the provision on forum 
shopping.
  Mr. Speaker, in addition to the Judicial Conference, other 
organizations oppose the legislation. The NAACP, the Public Citizen, 
the Alliance for Justice, People for the American Way, the American 
Association of People with Disabilities, the Lawyers' Committee for 
Civil Rights Under Law, the American Bar Association, the National 
Conference of State Legislatures, National Partnership for Women, 
National Women's Law Center, the Center for Justice and Democracy, 
Consumers Union, National Association of Consumer Advocates, USAction, 
U.S. PIRG, and the NAACP Legal Defense Fund all oppose the legislation.
  Mr. Speaker, one of the additional problems with the bill is the 
chilling effect it may have on bringing important, legitimate, 
unpopular actions. This is due to the fact that much of the impetus of 
the 1993 changes stemmed from abuses by defendants in civil rights 
cases, namely, that civil rights defendants were choosing to harass 
civil rights plaintiffs by filing a series of rule 11 motions intended 
to slow down and impede meritorious cases.
  Although the bill states that the proposed rule 11 changes shall not 
be construed to ``bar or impede the assertion of new claims or remedies 
under Federal, State or local civil rights law,'' the language does not 
clearly and simply exempt civil rights and discrimination cases under 
current law, as should be the case. Determining what a new claim or 
remedy might be would just add to the litigation.
  Certainly, it does not cover the fact that this bill and rule 11 do 
not offer an attorney the ability to appeal a rule 11 sanction. History 
has demonstrated that civil rights lawsuits are often extremely 
unpopular, particularly in certain parts of the country where some 
judges almost automatically consider civil rights cases as frivolous. 
In such courts, plaintiffs' attorneys could be unreasonably subject to 
sanctions, even suspensions, without appeal contrary to the purpose of 
rule 11.

                              {time}  1300

  Mr. Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 6 minutes to the gentleman 
from Texas (Mr. Smith).
  Mr. SMITH of Texas. Mr. Speaker, I thank the gentleman from Wisconsin 
(Mr. Sensenbrenner), the chairman of the Committee on the Judiciary, 
for yielding me this time.
  Mr. Speaker, frivolous lawsuits bankrupt individuals, ruin 
reputations, drive up insurance premiums, increase health care costs, 
and put a drag on the economy. Frivolous lawsuits are brought, for 
example, where there is no evidence that shows negligence on the part 
of the defendant. These nuisance lawsuits make a mockery of our legal 
system.
  Of course, many Americans have legitimate legal grievances, from 
someone wrongly disfigured during an operation to a company responsible 
for contaminating a community's water supply. No one who deserves 
justice should be denied justice. However, gaming of a system by a few 
lawyers drives up the cost of doing business and drives down the 
integrity of the judicial system.
  Let me give some examples. The Chief Executive Officer of San 
Antonio's Methodist Children's Hospital was sued after he stepped into 
a patient's hospital room and asked how he was doing. Of course, a jury 
cleared him of any wrongdoing.
  A Pennsylvania man sued the Frito-Lay company, claiming that Doritos 
chips were ``inherently dangerous'' after one stuck in his throat. 
After 8 years of costly litigation, the Pennsylvania Supreme Court 
threw out the case, writing that there is ``a common sense notion that 
it is necessary to properly chew hard foodstuffs prior to swallowing.''
  In a New Jersey Little League game, a player lost sight of a fly ball 
because of the sun. He was injured when the ball struck him in the eye. 
The coach was forced to hire a lawyer after the boy's parents sued. The 
coach settled the case for $25,000.
  Today, almost any party can bring any suit in almost any 
jurisdiction. That is because plaintiffs and their attorneys simply 
have nothing to lose. All they want is for the defendant to settle. 
This is legalized extortion. It is lawsuit lottery.
  Some lawyers file lawsuits for reasons that can only be described as 
absurd. They sue a theme park because its haunted houses are too scary. 
They sue the Weather Channel for an inaccurate forecast. And they sue 
McDonald's, claiming a hot pickle dropped from a hamburger caused a 
burn and mental jury.
  Defendants, on the other hand, can unfairly lose their careers, their 
businesses and their reputations. In short, they can lose everything. 
This is not justice, and there is a remedy. The Lawsuit Abuse Reduction 
Act.
  Mr. Speaker, this applies to both plaintiffs who file frivolous 
lawsuits merely to extort financial settlements and to defendants who 
unnecessarily prolong the legal process. If the judge determines a 
claim is frivolous, then they can order that person to pay the 
attorney's fees of the party who is the victim of their frivolous 
claim. This will make a lawyer think twice before he or she brings a 
lawsuit.
  In addition, this legislation prevents forum shopping. It requires 
that personal injury claims be filed only where the plaintiff resides, 
where the injury occurred, or where the defendant's principal place of 
business is located. This provision addresses the growing problem of 
attorneys who shop around the country for judges who routinely award 
excessive amounts.
  One of the Nation's wealthiest trial lawyers, Dickie Scruggs, has 
told us exactly how this abuse occurs, and the chairman of the 
Committee on the Judiciary used this example a while ago, but, quite 
frankly, it is just too good not to repeat.
  Here is what one of the king of torts says about forum shopping: 
``What I call `the magic jurisdiction.' It's where the judiciary is 
elected with verdict money, the trial lawyers have established 
relationships with the judges that are elected; they've got large 
populations of voters who are in on the

[[Page H7102]]

deal, they're getting their piece in many cases. It's almost impossible 
to get a fair trial if you're a defendant in some of these places. Any 
lawyer fresh out of law school can walk in there and win the case, so 
it doesn't matter what the evidence or law is.''
  Mr. Speaker, I do not know how anyone can justify the continuation of 
this kind of abuse. One of these magic jurisdictions where trial 
lawyers flock is in my home State of Texas in Jefferson County. The 
Austin American Statesman noted that trial lawyers claim this is where 
``juries pass down sizable judgments.'' Soaring medical liability 
insurance rates have followed, which has caused doctors to flee the 
area.
  Mr. Speaker, forum shopping is a part of lawsuit abuses and we must 
pass legislation to stop it from occurring. The following organizations 
support H.R. 4571: American Tort Reform Association, National 
Association of Home Builders, National Association of Manufacturers, 
National Restaurant Association, National Federation of Independent 
Business, American Insurance Association, and the U.S. Chamber of 
Commerce.
  Also, I might add, both Republican and Democratic presidential and 
vice presidential candidates are on record as wanting to stop frivolous 
lawsuits. So the Lawsuit Abuse Reduction Act is sensible reform that 
will help restore confidence to America's justice system.
  Mr. Speaker, I want to add one point and address a concern that was 
raised by my friend from Virginia and that had to do with a letter he 
raised from the Judicial Conference. Well, the Judicial Conference does 
not exactly enhance their credibility when they take a position 
contrary to the judges that they purport to represent. And, in fact, in 
surveys taken by the Judicial Conference before the rule was changed in 
1993, it found that 80 percent of the judges favored the rule that we 
seek to go back to. After the rule was changed and weakened, which we 
opposed, they took another survey and found a majority of judges, in 
fact almost a majority of trial lawyers, liked the original rule that 
we seek to go back to in this legislation.
  So, Mr. Speaker, I urge my colleagues to support this bill.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield myself such time as I may 
consume to comment that the letter from the Judicial Conference of the 
United States outlining the survey results, showed a majority of 
judges, lawyers, both plaintiffs and defense lawyers, believed that 
groundless litigation was handled effectively by the judges and 
preferred the 1993 amendment.
  Mr. Speaker, I submit herewith the letter from the Judicial 
Conference for the Record.

                                            Judicial Conference of


                                            the United States,

                                     Washington, DC, July 9, 2004.
     Hon. F. James Sensenbrenner, Jr.,
     Chairman, Committee on the Judiciary, House of 
         Representatives, 2138 Rayburn House Office Building, 
         Washington, DC.
       Dear Mr. Chairman: On behalf of the Judicial Conference, I 
     write to urge you to reconsider your position on the 
     ``Lawsuit Abuse Reduction Act of 2004'' (H.R. 4571). [Section 
     2 of the bill would reinstitute a rule eliminated in 1993 
     upon the recommendation of the Judicial Conference, approval 
     by the Supreme Court, and after review by Congress, because 
     of the serious problems it engendered during a ten-year 
     period of operation. Section 2 also would amend Rule 11 of 
     the Federal Rules of Civil Procedure in a manner inconsistent 
     with the longstanding Judicial Conference [policy opposing 
     direct amendment of the federal rules by legislation.] 
     Section 3 of H.R. 4571 would apply the revised federal Rule 
     11 to certain state court actions, while section 4 would 
     amend the venue standards governing the filing of tort 
     actions in both the federal and state courts: Sections 3 and 
     4 implicate federal-state comity interests and raise 
     important policy and practical concerns.


                               section 2

       [Section 2 would directly amend Civil Rule 11 to remove a 
     court's discretion to impose sanctions on a frivolous filing 
     and eliminate the rule's ``safe-harbor'' provisions. The bill 
     undoes amendments to Rule 11 that took effect on December 1, 
     1993, and would bring back the provisions that were first 
     introduced in 1983 and removed from the rule in 1993, after a 
     decade of signally bad experiences with the operation and 
     effects of the 1983 rule.
       Like H.R. 4571, the 1983 version of Rule 11 required 
     sanctions for every violation of the rule. It spawned 
     thousands of court decisions and generated widespread 
     criticism. The rule was abused by resourceful lawyers, and an 
     entire ``cottage industry'' developed that churned 
     tremendously wasteful satellite litigation that had 
     everything to do with strategic gamesmanship and little to do 
     with underlying claims. Rule 11 motions came to be met with 
     counter motions that sought Rule 11 sanctions for making the 
     original Rule 11 motion.
       [Some of the other serious problems caused by the 1983 
     amendments to Rule 11 included:

       (1) Creating a significant incentive to file unmeritorious 
     Rule 11 motions by providing a possibility of monetary 
     penalty;
       (2) engendering potential conflict of interest between 
     clients and their lawyers, who advised withdrawal of 
     particular claims despite the clients' preference;
       (3) exacerbating tensions between lawyers; and
       (4) providing little incentive, and perhaps a distinctive 
     disincentive, to abandon or withdraw a pleading or claim--and 
     thereby admit error--that lacked merit after determining that 
     it no longer was supportable in law or fact.

       The 1993 amendments to Rule 11 were designed to strike a 
     fair and equitable balance between competing interests, 
     remedy the major problems with the rule, and allow courts to 
     focus on the merits of the underlying cases rather than on 
     Rule 11 motions. The rule establishes a safe harbor, 
     providing a party 21 days within which to withdraw a 
     particular claim or defense before sanctions can be imposed. 
     If the party fails to withdraw an allegedly frivolous claim 
     or defense within the 21 days, a court may impose sanctions, 
     including assessing reasonable attorney fees.] The 1983 Rule 
     11 authorized a court to sanction discovery-related abuse 
     under Rule 11, Rule 26(g), or Rule 37, which created 
     confusion. Under the 1993 amendments to Rule 11, sanctioning 
     of discovery-related abuse was limited to Rules 26 and 37, 
     which provide for sanctions that include awards for 
     reasonable attorney fees.
       The 1993 amendments to Rule 11 culminated a long, critical 
     examination of the rule begun four years earlier. The 
     Advisory Committee on Civil Rules (Advisory Committee) 
     reviewed a significant number of empirical examinations of 
     the 1983 Rule 11, including three separate studies conducted 
     by the Federal Judicial Center in 1985, 1988, and 1991, a 
     Third Circuit Task Force report on Rule 11 in 1989, and a New 
     York State Bar Committee report in 1987. The Advisory 
     Committee took note of several book-length analyses of Rule 
     11 case law.
       The 1991 Federal Judicial Center survey noted that most 
     federal judges believed that the 1983 version of Rule 11 had 
     positive effects. But the study also noted that most judges 
     found several other methods more effective than Rule 11 in 
     handling such litigation and, most significantly, that about 
     one-half of the judges reported that Rule 11 exacerbates 
     behavior between counsel. After reviewing the literature and 
     empirical studies of problems caused by the 1983 amendments 
     to Rule 11, the Advisory Committee issued in 1990 a 
     preliminary call for general comment on the operation and 
     effect of the rule. The response was substantial, calling for 
     a change in the rule.
       The Advisory Committee concluded that the cost-shifting in 
     Rule 11 created an incentive for too many unnecessary Rule 11 
     motions. Amendments to Rule 11 were drafted. The Supreme 
     Court promulgated and transmitted the amendments to Congress 
     in May 1993 after extensive scrutiny and debate by the bench, 
     bar, and public in accordance with the Rules Enabling Act 
     process (28 U.S.C. Sec. Sec. 2071-2077).
       [Experience with the amended rule since 1993 has 
     demonstrated a marked decline in Rule 11 satellite litigation 
     without any noticeable increase in the number of frivolous 
     filings. In June 1995, the Federal Judicial Center conducted 
     a survey of 1,130 lawyers and 148 judges on the effects of 
     the 1993 Rule 11 amendments. About 580 attorneys and 120 
     judges responded to the survey. The Center found general 
     satisfaction with the amended rule. It also found that more 
     than 75 percent of the judges and lawyers would oppose a 
     provision that would require a court to impose a sanction 
     when the rule is violated. A majority of the judges and 
     lawyers, both plaintiffs' and defendants' lawyers, believed 
     that groundless litigation was handled effectively by judges.
       Undoing the 1993 Rule 11 amendments, even though no serious 
     problem has been brought to the Judicial Conference rules 
     committees' attention, would frustrate the purpose and intent 
     of the Rules Enabling Act. Section 2 of H.R. 4571 would 
     effectively reinstate the 1983 version of Rule 11 that proved 
     so contentious and wasted so much time and energy of the bar 
     and bench. Section 2, indeed, in some ways seems to go beyond 
     the provisions that created serious problems with the 1983 
     rule. It may cause even greater mischief. Rule 11 in its 
     present form has proven effective and should not be revised.]


                            sections 3 and 4

       [Section 3 would extend the new requirements of a mandatory 
     Rule 11 to all state court litigation that the state court 
     deems, on motion, to affect interstate commerce.] Two 
     features of this provision stand out. First, it would 
     directly regulate the practice and procedure of state courts, 
     mandating a federal standard for the imposition of sanctions 
     for the filing of frivolous or

[[Page H7103]]

     ungrounded complaints and other papers in state court. At 
     present, states have been free to adopt their own rules of 
     practice, including a version of Rule 11, if a state so 
     chooses. Second, section 3 does not specify the actions to 
     which it would apply. Rather, it imposes on state judges a 
     broad generalized test to determine whether or not federal 
     Rule 11 would apply in a given case. If enacted, this section 
     could affect the cost and duration of a very large number of 
     civil actions in state courts.
       [Section 4 seeks to prevent forum shopping by specifying 
     the places where a plaintiff may bring a ``personal injury'' 
     claim by imposing a federal standard for determining the 
     venue of state law personal injury claims, in both state and 
     federal court. Such a federal standard would displace 
     existing state venue rules or statutes.] It would also 
     significantly alter the statutes in title 28, United States 
     Code, that now govern venue (section 1391) and transfer of 
     venue (section 1404) in the federal courts.
       The Judicial Conference opposes the enactment of H.R. 4571 
     for the reasons stated above as to section 2. Sections 3 and 
     4 would make important changes in the administration of civil 
     justice in both federal and state courts. The Judicial 
     Conference has not had the opportunity to formally assess the 
     advisability or impact of these sections, but notes that they 
     may substantially affect federal-state comity interests and 
     raise important policy and practical concerns.
       The Judicial Conference greatly appreciates your 
     consideration of its views: If you or your staff have any 
     questions, please contact Michael W. Blommer, Assistant 
     Director, Office of Legislative Affairs, Administrative 
     Office of the U.S. Courts, at (202) 502-1700.
           Sincerely,
                                            Leonidas Ralph Mecham,
                                                        Secretary.

  Mr. SCOTT of Virginia. Mr. Speaker, I yield 4 minutes to the 
gentleman from California (Mr. BERMAN).
  (Mr. BERMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. BERMAN. Mr. Speaker, I wonder if the majority ever steps back for 
a second and looks at the situation that they are in. They run around 
asking the Committee on the Judiciary in the House to pass legislation 
stripping Federal courts of jurisdiction, including the U.S. Supreme 
Court of jurisdiction, to decide fundamental constitutional questions 
presented under the U.S. Constitution, and at the same time they run 
around asking the Committee on the Judiciary of the House and the House 
of Representatives to pass bills writing the venue laws for personal 
injury actions brought in State court.
  This is Federal intrusion in areas traditionally reserved for the 
States and an effort to reverse everything that Marbury v. Madison and 
all of its subsequent cases have said with respect to the Federal 
Judiciary's role in dealing with questions arising under the 
Constitution.
  My friend, the very able chairman of the Committee on the Judiciary, 
says on the question of frivolous lawsuits, help is on the way. But the 
truth is, help is not on the way for those who are looking for it. The 
germ of a good idea, mandatory sanctions for filing of frivolous 
pleadings or frivolous motions, improved by an amendment by the 
gentleman from Florida (Mr. Keller), to say that where an attorney is 
responsible for three such frivolous filings he is subject to 
suspension, that to be reviewed by an appellate court so that there are 
real teeth and deterrence to the filing of frivolous lawsuits, is 
combined with an overreaching, egregious effort to exchange the venue 
laws of 50 State legislatures and the courts of those States with 
respect to personal injury actions, any of which could be corrected by 
those State legislatures on their own in matters having no serious 
Federal interest.
  Once again, the Republican majority, as it has done consistently for 
the past 10 years in the area of tort reform, overreaches. It takes a 
good idea, adds so many outrageous and overreaching provisions to that 
good idea that the other House ignores it.
  Let us go back and look at a little history. In 1994, the Republicans 
came down with their Contract For America, and one of them was tort 
reform. I will give a classic example. In the committee they eliminate 
joint and several liability. There are arguments for it and there are 
arguments against it. Either the plaintiff who is not able to recover 
and made whole is hurt, or some defendant is potentially liable for the 
entire judgment, even though he is only partially responsible.
  In the Committee on Rules two amendments are offered; one to take 
care of the minor tort feasers, the people who are involved in a 
relatively small amount of the negligent conduct that produced the 
injury; and the other one to wipe out that rule. The Republican 
majority, fearful that the compromise proposal might pass the House, 
does not allow the rule for that amendment to go through and, instead, 
allows the one to simply reinstate the existing law.
  In that bill, which of course never passed the Senate, in the medical 
malpractice legislation, where they resisted any effort to make the 
caps on pain and suffering relevant to today's costs and today's times 
and the current situation, whether it is on class action lawsuits, 
where they sought to suck up all State actions without any balance, 
they have consistently overreached. And the result, as they are doing 
with this bill, of overreaching is that we lose a chance to make some 
improvement in the present system to deal effectively, in this case 
with frivolous lawsuits, because they want everything or they want the 
issue, and end up with nothing.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 2 minutes to the gentleman 
from Ohio (Mr. Chabot).
  Mr. CHABOT. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Over the past decade, our Nation has witnessed an explosion of civil 
lawsuits. Large jury awards and settlements have produced an ever-
growing number of actions in Federal and State courts, costing the 
American people more than $200 billion each year and really drastically 
reshaping our civil justice system.
  Tort liability was developed to hold responsible those parties who 
injure or harm others through actions determined to be negligent or 
reckless or careless. However, civil actions are increasingly being 
used to harass and threaten and manipulate innocent parties, 
undermining the credibility and traditional notions of justice in this 
country.
  In 1993, Rule 11 of the Federal Rules of Civil Procedure, the Federal 
safeguard against Federal lawsuits, was weakened, thereby making 
frivolous claims easier to file. Those changes to Rule 11 provided 
judges with more leeway to avoid sanctioning attorneys who filed 
meritless claims.
  For example, the rule changes allowed trial attorneys a 21-day 
``safe-harbor period'' to correct or withdraw meritless claims without 
fear of penalty, often at the expense of innocent defendants.
  While a number of initiatives have been introduced in Congress to 
reform specific aspects of the tort system, such as medical malpractice 
reform, small business reform, and product liability reform, or the 18-
year Statute of Repose, the legislation that is being offered on the 
floor today seeks to reduce frivolous lawsuits on a broader scale.
  Restoring Rule 11, with its intended authority and expanding its 
applicability, the Lawsuit Abuse Reduction Act will put teeth back into 
the safeguard against frivolous claims. This legislation will remove 
the safe-harbor provision I mentioned before, it would authorize judges 
to impose sanctions, including monetary, against attorneys and parties 
who file meritless claims, it would extend sanctions to discovery, and 
it would extend Rule 11 claims that affect interstate commerce.
  Mr. Speaker, I would strongly urge my colleagues to support this 
legislation.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield 4 minutes to the 
gentleman from North Carolina (Mr. Watt).
  Mr. WATT. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Let me first agree with my colleagues on both sides of the aisle that 
I do not think anybody really likes frivolous litigation, and this bill 
provides an opportunity for people to get up and say that. I think if 
we were to ask either the Republican or the Democratic nominees for 
President and Vice President that are out there running, all of them 
will say, no, I do not like frivolous litigation.
  The problem here is that my colleagues just do not want to be 
confused by the facts, because this bill is going to do more to 
encourage frivolous litigation, potentially, than it is going to do to 
discourage frivolous litigation. The Judicial Conference of the United 
States has made that clear in the letter that has been introduced into 
the

[[Page H7104]]

Record in which they say that the provisions of this bill, which go 
back to the rules that were in effect prior to 1983, those rules were 
changed because they spawned a whole cottage industry of litigation 
related to frivolous lawsuits.

                              {time}  1315

  So even if this were going to discourage frivolous lawsuits, which 
they say it would not, you are going to engender a whole new set of 
problems because what they say happened was Rule 11 motions came to be 
met with countermotions that sought Rule 11 sanctions for making the 
original Rule 11 motion. What sense does that make that we would set up 
a system to encourage people to file countermotions against each other 
claiming that the other side was frivolous in what they were doing in 
the lawsuit?
  The Judicial Conference is clear that this bill would provide 
incentives to encourage litigants to keep a frivolous claim in court 
because if they ever withdrew the frivolous claim, it in effect would 
be a concession that it was frivolous. So somebody files a lawsuit, 
realizes they have a bad claim, then has no way of getting out of it 
because they are afraid to withdraw the claim because somebody is going 
to hit them with sanctions, and the fact that they withdrew the claim 
is an admission that it was a frivolous claim. It is going to set up 
situations where lawyers are put in conflicts of interest with their 
clients because the client wants to pursue a claim that may be 
frivolous, the lawyer does not want to pursue it, realizes that the 
claim is frivolous and cannot back out of it without getting into a 
conflict of interest with their client. All of that is outlined in the 
letter from the Judicial Conference.
  This is not really about doing something that is going to discourage 
frivolous lawsuits, this bill is going to encourage frivolous lawsuits 
and encourage pursuit of frivolous lawsuits in a way that the Judicial 
Conference has outlined clearly.
  There seems to be this mentality, I hate frivolous lawsuits and do 
not confuse me with the facts because that is not what I am interested 
in. We should vote this bill down and keep the rules in place that are 
there that allow judges to make reasonable decisions in their courts.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself 1 minute.
  Mr. Speaker, the Judicial Conference has amnesia and they did not 
look back into the history of what happened between 1983 and 1993 when 
the rules that this bill proposes were in place.
  In 1991, the Judicial Conference Advisory Committee on Civil Rule did 
a survey and reviewed Rule 11. At that time 751 Federal judges found 
that an overwhelming majority of them, 95 percent, believed Rule 11 did 
not impede development of the law; 72 percent believed that the 
benefits of the rule outweighed any additional requirement of judicial 
time; 81 percent believed that the 1983 version of Rule 11 had a 
positive effect on litigation in the Federal courts; and 80 percent 
believed that the rule should be retained in its then-current form. 
That is what the judges who were on the bench at the time this rule was 
in effect said.
  The Judicial Conference ought to spend their time looking back at 
their own records and their own surveys rather than sending these types 
of letters advising us that what we are doing here is no good.
  Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Florida 
(Mr. Keller).
  Mr. KELLER. Mr. Speaker, I rise today in strong support of the 
Lawsuit Abuse Reduction Act of 2004. The overriding central purpose of 
this legislation is to prevent frivolous lawsuits from being filed in 
the first place. To achieve this, we provide for tough, mandatory 
sanctions, including a three strikes and you are out penalty, which I 
authored.
  Now should Members vote for this legislation? To determine that 
answer, may I suggest that Members consider three questions:
  First, do Members believe frivolous lawsuits waste good people's time 
and money?
  Second, should lawyers who bring frivolous lawsuits face tough 
mandatory sanctions?
  Third, when a court has determined that an attorney has brought at 
least three frivolous lawsuits under Rule 11, should there be a three 
strikes and you are out penalty?
  If the answers to those questions are yes, Members should vote in 
favor of this legislation. In fact, I will take it a step further and 
tell Members flat out that the answers to those questions are yes, at 
least according to Senator John Edwards, a Democrat from North 
Carolina, who was a plaintiff's personal injury attorney.
  On December 15, 2003, Newsweek magazine published an article written 
by Senator John Edwards where he said, ``Frivolous lawsuits waste good 
people's time and hurt the real victims. Lawyers who bringing frivolous 
cases should face tough, mandatory sanctions, with a `three strikes' 
penalty.''
  Mr. Speaker, I agree, and that is precisely what this legislation 
does. Congress should act today in a bipartisan manner to prevent and 
punish frivolous lawsuits. We should care about each more and sue each 
other less. I urge my colleagues to vote yes on the Lawsuit Abuse 
Reduction Act of 2004.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield 4 minutes to the 
gentlewoman from California (Ms. Waters).
  Ms. WATERS. Mr. Speaker, I rise in strong opposition both to this 
bill and to the process which produced it. H.R. 4571 would make 
fundamental changes to the Rule 11 sanctions process without our even 
receiving the benefit of input from either the Judicial Conference or 
the Supreme Court.
  Mr. Speaker, it is obvious that the proponents of this legislation do 
not want to hear from our judges because they know that the vast 
majority of our judges do not agree with this bill. As a matter of 
fact, I think that this bill could appropriately be named big business 
versus the people.
  Mr. Speaker, big businesses pay expensive lawyers by the hour to 
protect their interests. Trial lawyers handling many of these cases 
that are being termed frivolous are paid only if they win.
  I would like to quote John Q. Quinn, a veteran trial lawyer from 
Houston, who sees this as a make-or-break election issue in an article 
that appeared in the Los Angeles Times. ``Corporate America is in 
charge these days. They control the White House, the Congress and the 
Supreme Court. But so far they do not control the right to trial by 
jury. That is the only place where ordinary citizens can go and have 
their complaints heard,'' Quinn said. I further quote him when he said 
``Ordinary people cannot hire lobbyists in Washington, but in the 
courtroom they get an equal chance to stand up against a corporation.''
  Now the Chamber of Commerce and big corporate America, spending 
millions of dollars in public relations campaigns, would have Members 
believe that the number of civil cases have risen and thus the number 
of frivolous lawsuits, but that is simply not the case. I would like to 
further quote this Los Angeles Times article which said, ``The Justice 
Department's Bureau of Justice Statistics and the National Center for 
State Courts track civil trials and verdicts in the Nation's 75 largest 
counties. In April, the bureau reported in the last decade the number 
of cases have gone down, not up.''
  The number of general civil cases disposed of by trial in the 
Nation's largest counties declined from 22,451 in 1992 to 11,908 in 
2001. That is a 47 percent decline. The plaintiffs won about half the 
time, and the overall median award was $37,000 in 2001, down from 
$65,000 in 1992.
  These cases included automobile accidents, medical malpractice and 
product liability claims. About one-third of the cases involved 
contract claims which typically involve one business against each 
other. Mr. Speaker, we are talking about ordinary people. We are 
talking about people who get up every day and go to work, common folk 
who just earn sometimes entry-level wages. We are talking about people 
who could be harmed in an automobile accident or on the job working at 
a company that does not care about their safety, where they can lose a 
limb, their eyes, they could be killed. They could lose their lives.
  Are we going to prevent the ability of these people to be heard and 
have their day in court? Big business may not want to accept liability, 
but it must; and we cannot live in a country where we have big 
business, because they

[[Page H7105]]

have money, come to the Congress of the United States and produce 
legislation that would prevent the average, little person from having 
their day in court and being heard by a jury.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 3 minutes to the gentlewoman 
from Pennsylvania (Ms. Hart).
  Ms. HART. Mr. Speaker, I thank the gentleman from Wisconsin (Chairman 
Sensenbrenner) for bringing this bill up today, and I rise in support 
of the legislation.
  Interestingly enough, every Member who has spoken in support of the 
legislation today is an attorney, me included. In my private practice, 
I represented small businesses, businesses which employed four or five 
people on the average.
  I recall very clearly their concerns when they came to see me and my 
colleagues. It was, unfortunately, the fear of lawsuits. Retail 
businesses today are not opening at the rate they probably should be 
because of fear of lawsuits. Our economic recovery has begun, but it 
would be moving along much more quickly but for fear of lawsuits.
  We have the opportunity today to prevent many of those lawsuits, 
lawsuits that are frivolous. This bill will in no way effect anyone who 
has a legitimate lawsuit. It will only affect those who do not; those 
who waste money and resources, those who cause a lot of job loss. The 
Lawsuit Abuse Reduction Act of 2004 will provide for appropriate 
sanctions against frivolous lawsuits. That means it will provide for 
fewer frivolous lawsuits.
  This bill applies to cases brought by individuals as well as by 
businesses both big and small, including business claims filed to 
harass competitors and gain market share. The bill applies to both 
plaintiffs and defendants if what they are filing is a frivolous 
action. Polls show that Americans overwhelmingly support legislation 
barring frivolous lawsuits.
  A recent poll showed that 83 percent of likely voters believe there 
are too many lawsuits in America; 76 percent believe lawsuit abuse 
results in increased prices for goods and services; and 73 percent of 
Americans support requiring sanctions against attorneys who file 
frivolous lawsuits, and that is what this legislation does.
  Frivolous lawsuits make businesses and workers suffer. This year the 
Nation's older ladder manufacturer, a family-owned company in New York, 
filed for bankruptcy protection and sold off most of its assets due to 
litigation costs. The company was founded in 1855, but it could not 
handle the cost of liability insurance which had risen from 6 percent 
of their sales to nearly 30 percent today, even though the company 
never actually lost a court judgment. The company owner said, ``We 
could see the handwriting on the wall, and just want to end this whole 
thing.''
  Let us pass this legislation and make sure that our U.S. 
manufacturing sector stays strong.

                              {time}  1330

  It is our error if we fail to protect them today. Our manufacturing 
sector, which has been the envy of the world, finds itself mired in a 
slow recovery due to the cost of many lawsuits.
  I encourage my colleagues to support this legislation. It has been 
costly to our business sector and especially costly to jobs.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield 4 minutes to the 
gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. I thank the distinguished gentleman for his 
leadership on this issue and a number of Members who have come to the 
floor to express their opposition to this legislation.
  Mr. Speaker, the prime place for the answer to the question of 
frivolous lawsuits has to be in our judicial system. I am not sure why 
Congress considers it necessary to interfere on a regular basis with 
the normal process of the court system. They have done that throughout 
the years of the leadership of the Republican agenda, particularly as 
relates to closing the door to the injured, to plaintiffs, with the 
representation that there are too many frivolous lawsuits.
  They did it in product liability, so a child injured on the Nation's 
playground, their parents could not find their way into the courthouses 
and have the judges or juries make the decisions that are necessary on 
the facts that are presented.
  In the bankruptcy setting, they attempted to alter the bankruptcy 
code so that those in the middle class would never be able to go in and 
file Chapter 11 as our large corporations have been able to do over the 
years. Why do we feel the necessity to think that we are the arbiter on 
frivolous lawsuits when we do not have the facts before us?
  The legislation we have would reverse the changes to rule 11 of the 
Federal Rules of Civil Procedure that were made by the Judicial 
Conference in 1993 such that, one, sanctions against an attorney whose 
litigation tactics are determined to harass or cause unnecessary delay 
or cost or who has been determined to have made frivolous legal 
arguments or unwarranted factual assertions would become mandatory 
rather than discretionary to the court; two, discovery-related activity 
would be included within the scope of the rule; and, three, the rule 
would be extended to State cases affecting interstate commerce so that 
if a State judge decides that a case affects interstate commerce, he or 
she must apply rule 11 if violations are found.
  This legislation strips State and Federal judges of their discretion 
in the area of applying rule 11 sanctions. Furthermore, it infringes on 
States' rights by forcing State courts to apply the rule if interstate 
commerce is affected. Why is the discretion of the judge not sufficient 
in discerning whether rule 11 sanctions should be assessed rather than 
having a must-apply rule implemented on them by eliminating from them 
the ability to review the facts?
  Part of the legal justice system is the eye on the facts, the 
presence in the courtroom, the lawyers, plaintiffs, defendants, 
prosecutors, defense lawyers, fact finders in the jury, the judge; not 
an oversight body way up here in Washington that has no knowledge of 
what is going on in individual courthouses.
  If this legislation moves forward in this body, it will be important 
for us to find out its effect on indigent plaintiffs or those who must 
hire an attorney strictly on a contingent-fee basis. Because the 
application of rule 11 would be mandatory, attorneys will have to 
enhance their legal fees to account for the additional risk that they 
will have to incur in filing lawsuits and the fact that they will have 
no opportunity to withdraw the suit due to a mistake. Mistakes do 
happen.
  Overall, this legislation will deter indigent plaintiffs from seeking 
counsel to file meritorious claims given the potential of high legal 
fees. This goes right in the face, if you will, of contingent fees that 
have been so important to those that have been injured on their job, 
injured in catastrophic disasters, such as issues dealing with 
mobility. All of those questions, individuals will now be deterred 
because lawyers will have this enhanced, if you will, burden that could 
have been handled in the courthouse.
  I have not seen a dearth of judges who have had the ability and the 
responsibility to throw out frivolous lawsuits, fear doing so. Yet we 
want to sit on the high and look down the mountain and interject into 
the courts in Texas, Louisiana, New York, Wisconsin, Georgia and States 
all around the Nation and legislate what judges already do--create a 
fair justice system.
  The ``Benedict Arnold corporation'' refers to a company that in bad 
faith takes advantage of loopholes in our Tax Code to establish bank 
accounts or to ship jobs abroad for the main purpose of tax avoidance, 
I will support this provision in the motion to recommit.
  Let me simply say, in closing, Mr. Speaker, this is a bad legislative 
initiative. I would ask my colleagues to oppose it. Give all the 
decisions back to the courthouse and let us have a fair judicial system 
for all.
  Mr. Speaker, I rise in opposition to the base bill before the 
Committee of the Whole, H.R. 4571, the Lawsuit Abuse Reduction Act of 
2004 and state my support for the substitute as offered by the 
gentleman from Texas, Mr. Turner.
  As I mentioned during the Committee on the Judiciary's oversight 
hearing on this legislation and reiterated in my statement for the 
markup, one of the main functions of that body's oversight is to 
analyze potentially negative impact against the benefits that a legal 
process or piece of legislation will have on those affected. The base 
bill before the House today does not represent the product of careful 
analysis.

[[Page H7106]]

  In the case of H.R. 4571, the Lawsuit Abuse Reduction Act, this 
legislation requires an overhaul in order to make it less of a 
misnomer--to reduce abuse rather than encourage it.
  The goal of the tort reform legislation is to allow businesses to 
externalize, or shift, some of the cost of the injuries they cause to 
others. Tort law always assigns liability to the party in the best 
position to prevent an injury in the most reasonable and fair manner. 
In looking at the disparate impact that the new tort reform laws will 
have on ethnic minority groups, it is unconscionable that the burden 
will be placed on these groups--that are in the worst position to bear 
the liability costs.
  When Congress considers pre-empting state laws, it must strike the 
appropriate balance between two competing values--local control and 
national uniformity. Local control is extremely important because we 
all believe, as did the Founders two centuries ago, that state 
governments are closer to the people and better able to assess needs 
and desires. National uniformity is also an important consideration, in 
federalism--Congress' exclusive jurisdiction over interstate commerce 
has allowed our economy to grow dramatically over the past 200 years.
  This legislation would reverse the changes to Rule 11 of the Federal 
Rules of Civil Procedure (FRCP) that were made by the Judicial 
Conference in 1993 such that (1) sanctions against an attorney whose 
litigation tactics are determined to harass or cause unnecessary delay 
or cost or who has been determined to have made frivolous legal 
arguments or unwarranted factual assertions would become mandatory 
rather than discretionary to the court, (2) discovery-related activity 
would be included within the scope of the Rule, and (3) the Rule would 
be extended to state cases affecting interstate commerce so that if a 
state judge decides that a case affects interstate commerce, he or she 
must apply Rule 11 if violations are found.

  This legislation strips state and federal judges of their discretion 
in the area of applying Rule 11 sanctions. Furthermore, it infringes 
States' rights by forcing state courts to apply the rule if interstate 
commerce is affected. Why is the discretion of the judge not sufficient 
in discerning whether Rule 11 sanctions should be assessed?
  If this legislation moves forward in this body, it will be important 
for us to fund out its effect on indigent plaintiffs or those who must 
hire an attorney strictly on a contingent-fee basis. Because the 
application of Rule 11 would be mandatory, attorneys will pad their 
legal fees to account for the additional risk that they will have to 
incur in filing lawsuits and the fact that they will have no 
opportunity to withdraw the suit due to a mistake. Overall, this 
legislation will deter indigent plaintiffs from seeking counsel to file 
meritorious claims given the extremely high legal fees.
  Furthermore, H.R. 4571, as drafted, would allow corporations that 
perform sham and non-economic transactions in order to enjoy economic 
benefits in this country. Therefore, I planned to offer an amendment 
that would preclude these entities from so benefiting.
  The text of the amendment defined the term ``Benedict Arnold 
Corporation'' and proposed to prevent such companies from benefiting 
from the legal remedies that H.R. 4571 purports to offer.
  The ``Benedict Arnold Corporation'' refers to a company that, in bad 
faith, takes advantage loopholes in our tax code to establish bank 
accounts or to ship jobs abroad for the main purpose of tax avoidance. 
A tax-exempt group that monitors corporate influence called ``Citizen 
Works'' has compiled a list of 25 Fortune 500 Corporations that have 
the most offshore tax-haven subsidiaries. The percentage of increase in 
the number of tax havens held by these corporations since 1997 ranges 
between 85.7 percent and 9,650 percent.
  This significant increase in the number of corporate tax havens is no 
coincidence when we look at the benefits that can be found in doing 
sham business transactions. Some of these corporations are ``Benedict 
Arnolds'' because they have given up their American citizenship; 
however, they still conduct a substantial amount of their business in 
the United States and enjoy tax deductions of domestic corporations.
  Such an amendment would preclude these corporations from enjoying the 
benefit of mandatory attorney sanctions for a Rule 11 violation. By 
forcing these corporate entities to fully litigate matters brought 
helps to put their true corporate identity into light and discourages 
them from performing as many domestic transactions that may be 
actionable for a claimant.
  In the context of the Judiciary's consideration of the Terrorist 
Penalties Enhancement Act, H.R. 2934, my colleagues accepted an 
amendment that I offered that ensured that corporate felons were 
included in the list of individuals eligible for prosecution for 
committing terrorist offenses. The amendment that I would have offered 
for this bill has the same intent--to increase corporate accountability 
and to encourage corporate activity with integrity.
  I ask that my colleagues support the substitute offered by Mr. Turner 
and defeat the base bill. We must carefully consider the long-term 
implications that this bill, as drafted, will have on indigent 
claimants, the trial attorney community, and facilitation or corporate 
fraud.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 2 minutes to the gentleman 
from Georgia (Mr. Gingrey).
  Mr. GINGREY. I thank the gentleman for yielding me this time.
  Mr. Speaker, I rise in very strong support of LARA, the Lawsuit Abuse 
Reduction Act of 2004.
  Mr. Speaker, as many of my colleagues know, during this recent August 
recess, I spent about 10 days in court defending myself against an 
alleged medical malpractice suit. I am not sure whether this fits the 
definition, this particular suit, of a frivolous lawsuit, but after the 
plaintiff's attorneys presented their evidence, over 8 days, to the 
jury, the trial judge ruled in favor of me and my two partners in my 
OB/GYN group on a directed verdict. Her decision was based on the fact 
that there was no evidence whatsoever presented of proximate causation.
  I was willing to defend myself in that lawsuit, but a lot of 
physicians are not. Many times they are faced with what truly are 
frivolous lawsuits, and they are sometimes encouraged by their 
malpractice carrier, if it is determined by the carrier that the cost 
of defending a lawsuit even though it is frivolous is more than what 
the settlement amount would be, then they are encouraged and oftentimes 
do settle. It makes the problem that much worse.
  Obviously, this problem and what this law addresses is not just 
unique to the medical profession. There are 600,000 small business men 
and women in this country who are literally being put out of business 
because of frivolous lawsuits and, yes, further loss of jobs, which the 
other side wants to talk about so often and we are concerned about as 
well. It is time to end this nonsense of frivolous lawsuits.
  As the gentlewoman from Pennsylvania said a few minutes ago, 80 
percent of the American public agree with us on this issue. Let us get 
together, both sides of the aisle, and pass this good, commonsense 
legislation.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield 4\1/2\ minutes to the 
gentleman from Massachusetts (Mr. Markey).
  Mr. MARKEY. I thank the gentleman for yielding me this time.
  Mr. Speaker, just think for a second what is going on in the world 
this week.
  The assault weapons ban expired yesterday, freeing the way for an 
assault weapons buying frenzy. The Republican Congress refuses to allow 
a vote on extending the ban on the sale of assault weapons.
  Companies all over America continue to offshore American jobs to 
foreign countries with tax breaks as incentives that the Republicans 
refuse to take off the books.
  Oil prices remain sky high, with analysts expecting them to stay sky 
high for the foreseeable future, but the Republicans have no plan to 
protect American consumers from being tipped upside down as they pay 
gasoline prices and home heating oil prices.
  The 9/11 Commission has come back with recommendations that they 
insist that Congress pass to make sure there is not a repetition of 9/
11. The Republican Party refuses to bring those bills out here on the 
floor.
  Osama bin Laden is still at large, and just last week, we had a 
videotape from his top deputy threatening further attacks on the United 
States.
  We have 1,000 troops who have died in Iraq. We have suffered 5,000 
wounded in Iraq, and no end in sight.
  North Korea may have exploded a nuclear bomb this week. South Korea 
is now enriching uranium and plutonium.
  So what has the Republican United States Congress decided to do this 
week? What important issue are we debating? Will it be Iraq? Will it be 
terrorism? Will it be oil prices? Will it be a stagnant economy? No.
  The Republicans have decided that this week, 3 weeks before we 
adjourn, is lawsuit abuse week, so that we can deny families in our 
country that have been injured by large corporations from being able to 
sue those corporations for the damage they did to the children, to the 
families. And the centerpiece is this Lawsuit Abuse Reduction Act that 
really should be called the Legislative Abuse Expansion Act.

[[Page H7107]]

  This bill contains unconstitutional provisions that would force every 
State court to implement entirely new court rules and procedures. The 
bill contains unfunded mandates that would force States to conduct an 
inquiry about what the outcome of the case will be before discovery and 
trial have even taken place. How is the court supposed to know that? If 
a case is not lucky enough to be brought before Judge Carnac, the court 
may have to subpoena witnesses, hold evidentiary hearings and ask the 
individuals involved to the litigation proceeding to spend time and 
money on the new ``pretrial trial'' mandated by this bill to block 
individuals from suing corporations who have hurt American families.
  The simple fact is that the amount of civil litigation in this 
country is not expanding. The Justice Department's Bureau of Justice 
Statistics and National Center for State Courts track civil cases and 
verdicts in the Nation's 75 largest counties. They reported in April 
that, in the last decade, the number of cases has gone down, not up. 
The bureau reported that the number of general civil cases disposed of 
by trial in the Nation's largest counties declined from 22,000 in 1992 
to 11,000 in 2001, a 47 percent decline.
  There is no urgency on this issue. There has been a 47 percent 
decline in these kind of cases. The plaintiffs won about half the time. 
And the overall median award was $37,000 in 2001, down from $65,000 in 
1992.
  Why are we taking these bills up when there is no litigation 
explosion? Why are we running roughshod over the rights of the States 
to set rules? Why are we restricting the flexibility of judges to 
protect ordinary families in our country?
  There is only one reason why, because the Republican Party wants to 
shut down the access that every citizen currently has to our legal 
system to seek justice and compensation when they have been harmed by 
the actions of a wealthy corporation. That is what this is all about. 
Vote ``no'' on this legislation.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself 2 minutes.
  Mr. Speaker, I respect greatly the gentleman from Massachusetts (Mr. 
Markey), but when he armed his cannon, he pointed it at the wrong 
target. This bill has nothing to do with assault weapons or tax breaks 
or oil prices or the 9/11 Commission or catching Osama bin Laden or 
casualties in Iraq or whether the North Koreans have a nuclear weapon 
or not; nor does it deal with legitimate meritorious lawsuits.
  What it does deal with is frivolous lawsuits, frivolous lawsuits as 
defined by the same Federal Rule of Civil Procedure that was on the 
books for 10 years, between 1983 and 1993, that 80 percent of the 
Federal judges when they were surveyed believed should be retained in 
its then current form. This bill does not restrict the access to the 
courts to anybody who has got a meritorious claim.
  But what it does do is that it sanctions those lawyers who file 
frivolous lawsuits and deter them from filing frivolous lawsuits again. 
If we did not have sanctions against people, people would ignore the 
law. If there were no sanctions for driving 50 miles an hour over the 
speed limit or running a red light, I think it would be pretty 
dangerous for all of us when we went home. Because the sanctions that 
are currently in rule 11 have no deterrent effect against filing 
frivolous lawsuits, there are too many of them. We have heard about 
them in this debate.
  What this bill does is simply go back to what happened prior to 1993, 
prevents forum shopping and says that, if a lawyer files repeated 
frivolous filings in the court three times, they are out. We have got 
to do that if we want to have our courts be used for the administration 
of justice rather than being a cover for those who wish to file 
frivolous papers.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield 2 minutes to the 
gentleman from Washington (Mr. Inslee).
  (Mr. INSLEE asked and was given permission to revise and extend his 
remarks.)
  Mr. INSLEE. Mr. Speaker, there is a fatal defect in this bill, and 
that fatal defect is that it would essentially refuse to give American 
citizens relief if they were injured by a foreign corporation's clear 
and palpable negligence. The defect in this bill is that, if you live 
in Seattle, you are hurt in Portland by a failure of a Tokyo 
corporation, this bill says you cannot bring a claim anywhere in the 
United States against a Japanese corporation that injured you unless 
that corporation happens to have a retail outlet in the State where you 
live or where the accident happened.

                              {time}  1345

  And this is a very serious matter. If one lives in Seattle, if they 
are injured in Portland, and the product that injures them is made in 
Germany or Japan or England, they are out of luck. They are now 
shielding out-of-U.S. corporations.
  I understand the Republican Party's infatuation with outsourcing, but 
I do not understand why they would expose Americans and say they cannot 
bring a claim against somebody that makes a foreign car or foreign 
construction equipment that injures them.
  If my colleagues think I am just sort of blowing smoke here, I want 
to read from the Congressional Research Service memo on this subject. 
It says: ``However, if a defendant's principal place of business was 
not in the United States, then this option,'' meaning suing here, 
``could not be exercised in the United States court. Consequently, it 
would appear that in certain circumstances, the United States citizen 
or resident injured in this country would not have a judicial forum in 
the United States in which to seek relief.''
  What this bill is, is the Foreign Corporation Protection Act. And for 
the life of me, I cannot figure out why they would want on the 
Republican side of the aisle to deny American citizens an avenue in an 
American court under the American judicial system some right of 
protection when a foreign corporation hurts them. What is the possible 
rationale for that?
  We need to fix this or reject it.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 3 minutes to the gentleman 
from Texas (Mr. Smith).
  Mr. SMITH of Texas. Mr. Speaker, I thank the gentleman from Wisconsin 
for yielding me this time.
  Mr. Speaker, let me respond to some of the concerns voiced by some of 
those who think they might oppose this bill. First of all, if a foreign 
corporation is involved, that does not prevent someone from having 
their day in court. The bill clearly says that it is where the 
plaintiff lives, and if one is a U.S. citizen, most likely they are 
going to live in the United States, or where the injury occurred, and 
the injury would have occurred in this country. So that takes care of 
their concerns there.
  Another previous speaker from Massachusetts started off by talking 
about the ban on assault weapons. This bill has nothing to do with 
that, but we do attempt to ban frivolous lawsuits, and in that we are 
successful. But the gentleman from Massachusetts did make a good point, 
and I will embrace it entirely, and that is he acknowledged, which I 
thought was quite an admission, that today there are, in fact, even by 
his own standards, 11,000 frivolous lawsuits a year. He said they have 
come down. That is because of the asbestos lawsuits working their way 
through the various courts. Eleven thousand frivolous lawsuits filed 
today. I guarantee my colleagues that 99 percent of the American people 
think 11,000 frivolous lawsuits a year today is 11,000 frivolous 
lawsuits too many.
  Another point I want to respond to, Mr. Speaker, was made by a 
gentleman who was concerned about the effect of this legislation on 
civil rights cases that might be filed. I want to assure him and others 
who might have that similar concern that if they look at section 5 of 
this bill, it reads: ``Nothing in this bill shall be construed to bar 
or impede the assertion or development of new claims or remedies under 
Federal, State, or local civil rights law.'' The reason it says ``new 
claims'' is because claims that already exist under current law 
obviously are not frivolous. There is a basis in law for filing those 
lawsuits. So we protect anybody who might file a civil rights lawsuit 
in this legislation. Furthermore, if there was some concern about that, 
one would think that it would have been raised in the full Committee on 
the Judiciary consideration of this bill. It was not mentioned and no 
amendments were offered on that point.
  Lastly, Mr. Speaker, I also want to reassure not only my colleagues 
but those who might be listening to this debate that this is not a bill 
trying to

[[Page H7108]]

impugn the motives of all trial lawyers. In fact, the great majority of 
trial lawyers serve their profession and serve Americans honorably. We 
are talking about a very few attorneys who, quite frankly, abuse the 
system, who engage in legalized extortion, who file lawsuits for no 
other reason than they think someone can settle out of court and they 
are trying to extract money from them. That is the type of abuse we 
seek to stop in this bill, and that is the kind of abuse we intend to.
  Finally, there are many pieces of legislation considered by this body 
where we can see where half of the American people might benefit, half 
might not benefit. But in this case we have at least 99 percent of the 
American people on one side and just a few lawyers on the other side. 
And it is very rare, I think, that we would have the vast majority of 
the American people so clearly favoring one cause, and that is the 
cause of trying to reduce frivolous lawsuits.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield myself the balance of my 
time.
  The SPEAKER pro tempore (Mr. LaHood). The gentleman from Virginia 
(Mr. Scott) has 1 minute remaining.
  Mr. SCOTT of Virginia. Mr. Speaker, as it has been indicated, there 
is a serious question in some cases of whether or not the forum 
shopping is limited, one, to a situation where they cannot file 
anywhere. But I want to quote from a letter from several civil rights 
organizations. It states: ``More than a decade ago civil rights 
organizations, including several of the undersigned organizations, 
worked to amend Rule 11 because the old rule unfairly discouraged 
meritorious civil rights claims. Nationwide surveys about the former 
rule found that motions for sanctions were most frequently sought and 
granted in civil rights cases.'' This bill ``seeks to take us back to 
the changes made in 1993 to Rule 11 and force litigants to operate 
under the terms that we fear, like the former rule we worked so hard to 
amend, will be used to punish and deter valid claims of discrimination. 
But'' this bill ``goes even further. Not content with changing rules 
for Federal courts, the bill extends its reach to State courts,'' where 
the problem of biased judges would even be more acute.
  I would point out again that there is no appeal to these cases and 
this does not apply to cases under existing law that many judges feel 
are frivolous.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself the balance of my 
time.
  The SPEAKER pro tempore. The gentleman from Wisconsin (Mr. 
Sensenbrenner) has 1 minute remaining.
  Mr. SENSENBRENNER. Mr. Speaker, the gentleman from Texas (Mr. Smith) 
clearly stated that there is an exemption in this bill on civil rights 
law and this bill does not apply to the development of new civil rights 
laws. Further, the survey of the judges that I have referred to in the 
past, 95 percent of the 751 federal judges believe that the old Rule 
11, which the gentleman from Virginia complains of, did not impede the 
development of the law. That is, 19 judges out of 20 said that the 
assertion that the gentleman from Virginia made was not correct in 
their opinion. That is why this bill is a good one and it ought to be 
passed.
  Mr. WEXLER. Mr. Speaker, a vote for this bill is a vote for a rule--
rule 11--that it had become an impediment to practicing law, not an 
impediment to frivolous suits as its proponents would have you think.
  The bill before us today seeks to turn back the clock. Eleven years 
ago, Congress rewrote rule 11 to get rid of mandatory sanctions for 
frivolous filings because mandatory sanctions had not helped stop 
frivolous filings and in some cases made them worse. Why then are we 
going backward today? And if we are going to turn back the clock, why 
can't we turn back the clock to the unprecedented economic prosperity 
of the Clinton administration--where we had a balanced budget and a 
budget surplus, where we had reduced welfare roles and respect on the 
international stage, and where we had 100,000 new cops on the street 
and the lowest crime rate in decades.
  If we are dead-set on turning back the clock, why must we turn it 
back to a system that was proven not to work? We tried mandatory 
sanctions for 10 years. After 10 years with mandatory sanctions, 
Federal courts recommended against them because they were widely abused 
and actually added to the wasteful litigating they were intended to 
prevent.
  Our court system is not perfect by any stretch of the imagination. We 
need to meaningfully address the burden that frivolous lawsuits are 
placing on our courts and on our society. However, this bill does not 
provide any new answers; instead it takes us backward to a solution we 
know doesn't work.
  Mr. BISHOP of Georgia. Mr. Speaker, I rise today in opposition to 
H.R. 4571, the misnamed ``Frivolous Lawsuit Reduction Act,'' and in 
support of the Turner substitute.
  Mr. Speaker, the 11,000 frivolous lawsuits filed yearly are a burden 
on our court system, which interfere with the administration of 
justice, and cost U.S. taxpayers millions of dollars each year. I fully 
support commonsense reform.
  H.R. 4571 was drafted by and for large corporations and special 
interests with unlimited legal resources. It denies justice to injured 
Americans by limiting them from getting their day in court. That's 
wrong, Mr. Speaker. It does nothing to help consumers, Mr. Speaker, and 
targets innocent victims instead of holding responsible those who 
recklessly or negligently harm others.
  The bill also unfairly benefits foreign corporations because it only 
permits a lawsuit to be filed where the corporation's principal place 
of business is located, making it more difficult to pursue a personal 
injury or product liability action against a foreign corporation in the 
United States. That's also wrong, Mr. Speaker, and it's not the kind of 
reform that America needs.
  The Turner substitute is measured and tough on abuse of the system, 
while also protecting the rights of injured victims to receive the 
compensation they deserve. In fact, the substitute's ``three-strikes-
and-you're-out'' provisions forbid frivolous filing attorneys from 
bringing another suit for 10 years. For a first violation the 
substitute would hold the attorney in contempt. For the second 
violation the substitute imposes a mandatory fine. And for a third and 
final violation, a ``third strike,'' you're out. That's tough, Mr. 
Speaker, and a commonsense approach to frivolous litigation that 
everyone should support.
  The substitute also contains a civil rights carve-out, so that 
citizens who want to bring new civil rights cases can do so. It 
contains expedited disposition provisions to weed out junk lawsuits, 
enhances sanctions for document destruction, and protects injured 
parties and consumers. Finally, it eliminates the provision in the 
underlying bill that provides a windfall to foreign or ``Benedict 
Arnold'' corporations to the disadvantage of their U.S. competitors.
  The Turner substitute is tough, Mr. Speaker, it's fair, and it 
provides real reform while preserving access to the courts for millions 
of Americans. I urge my colleagues to support it.
  Mr. PAYNE. Mr. Speaker, I am pleased to support the Lawsuit Abuse 
Reduction Act, H.R. 4571, that addresses the problem of frivolous 
lawsuits in a constitutional manner. As an OB-GYN, I am very aware of 
the damage frivolous litigation is causing small businesses and medical 
practitioners. Frivolous lawsuits filed by unscrupulous trial lawyers 
can drive small businesses into bankruptcy and force doctors to abandon 
their medical practice. These lawsuits inflict the greatest danger on 
consumers who must pay more for goods and services and medical patients 
who cannot find needed medical services in their communities.
  H.R. 4571 reduces frivolous lawsuits by exercising Congress's 
constitutional authority to establish rule of civil procedure for 
federal courts. Specifically, H.R. 4571 restores mandatory sanctions 
for attorneys who file frivolous lawsuits. Among other sanctions, 
attorneys who file frivolous lawsuits may be required to pay the other 
side's attorneys fees. The possibility of having to pay attorneys fees 
is an important factor in discouraging ``nuisance'' suits--lawsuits 
filed in the hopes of extorting cash settlements from defendants who 
have decided it is better to settle quickly than face the possibility 
of a lengthy and costly legal proceedings. This form of legal blackmail 
is one of the most abhorrent practices plaguing our legal system today. 
I am pleased to see Congress taking action to address it.
  H.R. 4571 also ends the practice of forum shopping. Forum shopping is 
an abuse of Federal ``diversity jurisdiction'' that allows a trial 
attorney to pick a venue known for awarding large cash awards for 
spurious claims. All too often, a plaintiff's attorney will choose a 
forum that has a very tenuous or insignificant relation to the main 
case, but has a reputation for awarding huge victories to the 
plaintiff's bar. Forum shopping is especially a problem in class action 
suits. H.R. 4571 addresses this problem by requiring cases be filed in 
the Federal district or State where the plaintiff resides, the State or 
Federal district where the plaintiff was injured or the State or 
Federal district where the defendant's principal place of business is 
located.
  Mr. Speaker, frivolous lawsuits endanger small business across the 
country. I am pleased to see Congress today addressing the

[[Page H7109]]

litigation crisis, not by attempting to nationalize tort law, but by 
exercising our constitutional authority over the rules of Federal civil 
procedure and diversity jurisdiction. I, therefore, urge all my 
colleagues to support H.R. 4571, the Lawsuit Abuse Reduction Act.
  Mr. STARK. Mr. Speaker, I rise in opposition to the so-called Lawsuit 
Abuse Reduction Act, Nonprofit Athletic Organization Protection Act, 
and Volunteer Pilot Organization Protection Act. The Republicans are 
now so desperate to run against trial lawyers in this election that 
they have turned against our judicial system, student athletes, and 
countless other Americans.
  Almost all volunteers, including coaches, are already protected from 
frivolous lawsuits by the Volunteer Protection Act of 1997, but the 
Republicans want to go beyond the better judgment and bipartisan 
consensus of 1997 in order to create an election-year issue.
  Under the athletic organization act, an organization like the NCAA 
could violate title IX by failing to provide equal opportunities for 
female athletes, or court violate civil rights, anti-trust, or labor 
laws, and not be held accountable in court.
  The 1997 Volunteer Protection Act rightly excluded volunteers who 
operate ``a motor vehicle, vessel [or] aircraft'' from legal immunity 
for negligence because volunteerism has to be encouraged without 
sacrificing the rights of injured parties. The pilot organization 
protection act destroys this balance by holding most pilots to one 
standard but allowing volunteer pilots to escape liability for 
negligence.
  The Lawsuit Abuse Protection Act hurts all Americans by exposing them 
and their attorneys to motions intended to harass them and slow down 
the legal process, a tactic often used by wealthy defendants in civil 
rights trials. This is one of many reasons why the U.S. Judicial 
Conference, headed by Chief Justice William Rehnquist, opposes this 
bill. H.R. 4571 is also unconstitutional, because it forces every state 
court to implement new court rules and procedures, even though Congress 
has no jurisdiction over state courts.
  Mr. Speaker, I am happy to stand up for our Constitution, judicial 
system, athletes, and all Americans by voting ``no'' on these three 
bills. If that makes me a friend of the trial lawyers, then I proudly 
stand with Thurgood Marshall, William Jennings Bryan, and Abraham 
Lincoln over Tom DeLay and George W. Bush.
  Mr. BLUMENAUER. Mr. Speaker, H.R. 4571 is a thinly veiled attack on 
the trial lawyers at the expense of injured plaintiffs. By requiring 
mandatory sanctions that would apply to civil rights cases, H.R. 4571 
will prohibit many legitimate and important civil rights actions from 
being filed.
  No one wants frivolous abuses of our court system. There is no need 
to sacrifice the rights of individuals to do so. I vote in support of a 
substitute amendment offered by Congressman Turner that will protect 
the civil rights of individuals and against H.R. 4571.
  Mr. CONYERS. Mr. Speaker, I do not support this legislation because 
it will have a significant, adverse impact on the ability of civil 
rights plaintiffs to seek recourse in our courts, it will operate to 
benefit foreign corporate defendants at the expense of their domestic 
counterparts, and it will massively skew the playing field against 
injured victims.
  This bill must be bad given the number of organizations that are 
opposed to it. This list includes the United States Judicial 
Conference, the NAACP, Public Citizen, the Alliance for Justice, People 
for the American Way, the American Association of People with 
Disabilities, the Lawyers' Committee for Civil Rights Under Law, the 
American Bar Association, the National Conference on State 
Legislatures, National Partnership for Women, National Women's Law 
Center, the Center for Justice & Democracy, Consumers Union, National 
Association of Consumer Advocates, USAction, U.S. PIRG, and the NAACP 
Legal Defense Fund.
  By requiring a mandatory sanctions regime that would apply to civil 
rights cases, H.R. 4571 will chill many legitimate and important civil 
rights actions. This is due to the fact that much if not most of the 
impetus for the 1993 changes stemmed from abuses by defendants in civil 
rights cases--namely that civil rights defendants were choosing to 
harass civil rights plaintiffs by filing a series of rule 11 motions 
intended to slow down and impede meritorious cases.
  Although the bill states that the proposed rule 11 changes shall not 
be construed to ``bar or impede the assertion or development of new 
claims or remedies under Federal, State, or local civil rights law,'' 
the language does not clearly and simply exempt civil rights and 
discrimination cases, as should be the case. Determining what a ``new 
claim or remedy'' is will be a daunting and complex issue for most 
courts and clearly does not cover all civil rights cases in any event.
  Section 4, the ``forum shopping'' provision, would operate to provide 
a litigation and financial windfall to foreign corporations at the 
expense of their domestic competitors. This is because, instead of 
permitting claims to be filed wherever a corporation does business or 
has minimum contacts, as most state long-arm statutes provide, the bill 
only permits the suit to be brought where the defendant's principal 
place of business is located--in the case of a foreign corporation, 
that does not exist in the United States.
  If a U.S. citizen is harmed by a product produced or manufactured by 
a foreign competitor, under H.R. 4571 the harmed U.S. citizen could 
have no recourse against a foreign corporation, whereas he or she would 
have recourse against a comparable U.S. corporation. This is unfair to 
both the U.S. citizen and all U.S. companies that compete against the 
foreign firm.
  I urge you to vote ``no'' to this poorly drafted and unfair piece of 
legislation.

                                               September 13, 2004.
       Dear Representative: We, the undersigned civil rights 
     groups, urge you to vote against H.R. 4571 and H.R. 3369. If 
     enacted, these bills will embolden some to unlawfully 
     discriminate without fear of being held accountable. This 
     legislation will turn back the progress civil rights 
     organizations have made to achieve equal rights under the law 
     these past decades.
       Currently, Rule 11 of the Federal Rules of Civil Procedure 
     gives judges discretion to determine whether a claim or 
     defense is frivolous and if so, the appropriate sanctions for 
     such a filing. H.R. 4571 would take away the judge's 
     discretion to impose sanctions and changes Rule 11 of the 
     Federal Rules of Civil Procedure in significant ways that 
     will harm victims of discrimination. By removing the ``safe 
     harbor'' provision that allows a party to withdraw or amend 
     the claim or defense that an opponent argues violates Rule 11 
     and making sanctions more severe and mandatory, the bill will 
     trigger additional, contentious judicial proceedings that 
     have little to do with the merits of the claims. Thus even 
     civil rights plaintiffs who pursue their legitimate claims 
     with the heightened risk of severe sanctions, may give up at 
     the hands of litigious defendants who employ a rope-a-dope 
     technique to simply wear out their opponents.
       Our concerns about the threat to civil rights cases posted 
     by H.R. 4571 are well founded and based on real life 
     experience. More than a decade ago, civil rights 
     organizations--including several of the undersigned 
     organizations--worked to amend Rule 11 because the old rule 
     unfairly discouraged meritorious civil rights claims. 
     Nationwide surveys about the former rule found that motions 
     for sanctions were most frequently sought and granted in 
     civil rights cases. Expressing his concern about the former 
     Rule 11, the Honorable Robert L. Carter, United States 
     District Court Judge for the Southern District of New York, 
     noted, ``I have no doubt that the Supreme Court's opportunity 
     to pronounce separate schools inherently unequal [in Brown v. 
     Board of Education] would have been delayed for a decade had 
     my colleagues and I been required, upon pain of potential 
     sanctions to plead our legal theory explicitly from the 
     start.''
       H.R. 4571 seeks to take back the changes made in 1993 to 
     Rule 11 and force litigants to operate under the terms that 
     we fear, like the former rule we worked so hard to amend, 
     will be used to punish and deter valid claims of 
     discrimination. But H.R. 4571 goes even further. Not content 
     with changing the rules for federal courts, the bill extends 
     its reach to State court cases. Upon motion, the court is 
     required to assess the costs of the action ``to the 
     interstate economy.'' If the court determines that the state 
     court action ``affects interstate commerce,'' Rule 11 of the 
     Federal Rules of Civil Procedure ``shall apply to such 
     action.'' Imagining the proceedings necessary to determine 
     whether a particular state court action ``affects interstate 
     commerce'' is mind-boggling. Moreover, the total disregard 
     for federalism is astounding.
       We also oppose H.R. 3369, the ``Nonprofit Athletic 
     Organization Protection Act.'' This bill gives immunity to 
     nonprofit athletic organizations. The scope of the 
     legislation could protect an organization that violates 
     federal or state law by discriminating against an athlete on 
     the basis of race, gender, disability or other protections 
     given under federal or state law. No evidence has been 
     presented that nonprofit athletic organizations need such 
     protection. Coaches and other volunteers are already 
     protected from liability under the 1997 Volunteer Protection 
     Act.
       We understand that members of Congress who oppose H.R. 3369 
     risk being accused of siding with ``trial lawyers'' over 
     ``Little Leagues,'' particularly this election season. But it 
     is not the ``trial lawyers'' that need your protection; it is 
     the players themselves and others who may be discriminated 
     against and may have no recourse under this bill who need 
     your protection. Therefore, we respectfully ask you to oppose 
     the bill.
       If you have any questions or need more information, please 
     contact Hilary O. Shelton, Director, NAACP Washington Bureau, 
     202.463.2940 or Sandy Brantley, Legislative Counsel, Alliance 
     for Justice, 202.822.6070.
           Sincerely,
         Alliance for Justice, American Association of People with 
           Disabilities (AAPD), Lawyers' Committee for Civil 
           Rights Under Law, National Association for the 
           Advancement of Colored People (NAACP), National 
           Partnership for Women, National Women's Law

[[Page H7110]]

           Center, People For the American Way, USAction, U.S. 
           Public Interest Research Group (U.S. PIRG).
                                  ____

                                               Judicial Conference


                                         of the United States,

                                     Washington, DC, July 9, 2004.
     Hon. F. James Sensenbrenner, Jr.,
     Chairman, Committee on the Judiciary, House of 
         Representatives, Rayburn House Office Building, 
         Washington, DC.
       Dear Mr. Chairman: On behalf of the Judicial Conference, I 
     write to urge you to reconsider your position on the 
     ``Lawsuit Abuse Reduction Act of 2004'' (H.R. 4571). Section 
     2 of the bill would reinstitute a rule eliminated in 1993 
     upon the recommendation of the Judicial Conference, approval 
     by the Supreme Court, and after review by Congress, because 
     of the serious problems it engendered during a ten-year 
     period of operation. Section 2 also would amend Rule 11 of 
     the Federal Rules of Civil Procedure in a manner inconsistent 
     with the longstanding Judicial Conference policy opposing 
     direct amendment of the federal rules by legislation. Section 
     3 of H.R 4571 would apply the revised federal Rule 11 to 
     certain state court actions, while section 4 would amend the 
     venue standards governing the filing of tort actions in both 
     the federal and state courts: Sections 3 and 4 implicate 
     federal-state comity interests and raise important policy and 
     practical concerns.


                               section 2

       Section 2 would directly amend Civil Rule 11 to remove a 
     court's discretion to impose sanctions on a frivolous filing 
     and eliminate the rule's ``safe-harbor'' provisions. The bill 
     undoes amendments to Rule 11 that took effect on December 1, 
     1993, and would bring back the provisions that were first 
     introduced in 1983 and removed from the rule in 1993, after a 
     decade of signally bad experiences with the operation and 
     effects of the 1983 rule.
       Like H.R. 4571, the 1983 version of Rule 11 required 
     sanctions for every violation of the rule. It spawned 
     thousands of court decisions and generated widespread 
     criticism. The rule was abused by resourceful lawyers, and an 
     entire ``cottage industry'' developed that churned 
     tremendously wasteful satellite litigation that had 
     everything to do with strategic gamesmanship and little to do 
     with underlying claims. Rule 11 motions came to be met 
     with counter motions that sought Rule 11 sanctions for 
     making the original Rule 11 motion.
       Some of the other serious problems caused by the 1983 
     amendments to Rule 11 included:
       (1) creating a significant incentive to file unmeritorious 
     Rule 11 motions by providing a possibility of monetary 
     penalty;
       (2) engendering potential conflict of interest between 
     clients and their lawyers, who advised withdrawal of 
     particular claims despite the clients' preference;
       (3) exacerbating tensions between lawyers; and
       (4) providing little incentive, and perhaps a distinct 
     disincentive, to abandon or withdraw a pleading or claim--and 
     thereby admit error--that lacked merit after determining that 
     it no longer was supportable in law or fact.
       The 1993 amendments to Rule 11 were designed to strike a 
     fair and equitable balance between competing interests, 
     remedy the major problems with the rule, and allow courts to 
     focus on the merits of the underlying cases rather than on 
     Rule 11 motions. The rule establishes a safe harbor, 
     providing a party 21 days within which to withdraw a 
     particular claim or defense before sanctions can be imposed. 
     If the party fails to withdraw an allegedly frivolous claim 
     or defense within the 21 days, a court may impose sanctions, 
     including assessing reasonable attorney fees. The 1983 Rule 
     11 authorized a court to sanction discovery-related abuse 
     under Rule 11, Rule 26(g), or Rule 37, which created 
     confusion. Under the 1993 amendments to Rule 11, sanctioning 
     of discovery-related abuse was limited to Rules 26 and 37, 
     which provide for sanctions that include awards of reasonable 
     attorney fees.
       The 1993 amendments to Rule 11 culminated a long, critical 
     examination of the rule begun four years earlier. The 
     Advisory Committee on Civil Rules (Advisory Committee) 
     reviewed a significant number of empirical examinations of 
     the 1983 Rule 11, including three separate studies conducted 
     by the Federal Judicial Center in 1985, 1988, and 1991, a 
     Third Circuit Task Force report on Rule 11 in 1989, and a New 
     York State Bar Committee report in 1987. The Advisory 
     Committee took note of several book-length analyses of Rule 
     11 case law.
       The 1991 Federal Judicial Center survey noted that most 
     federal judges believed that the 1983 version of Rule 11 had 
     positive effects. But the study also noted that most judges 
     found several other methods more effective than Rule 11 in 
     handling such litigation and, most significantly, that about 
     one-half of the judges reported that Rule 11 exacerbates 
     behavior between counsel. After reviewing the literature and 
     empirical studies of problems caused by the 1983 amendments 
     to Rule 11, the Advisory Committee issued in 1990 a 
     preliminary call for general comment on the operation and 
     effect of the rule. The response was substantial, calling for 
     a change in the rule.
       The Advisory Committee concluded that the cost-shifting in 
     Rule 11 created an incentive for too many unnecessary Rule 11 
     motions. Amendments to Rule 11 were drafted. The Supreme 
     Court promulgated and transmitted the amendments to Congress 
     in May 1993 after extensive scrutiny and debate by the bench, 
     bar, and public in accordance with the Rules Enabling Act 
     process (28 U.S.C. Sec. Sec. 2071-2077).
       Experience with the amended rule since 1993 has 
     demonstrated a marked decline in Rule 11 satellite litigation 
     without any noticeable increase in the number of frivolous 
     filings. In June 1995, the Federal Judicial Center conducted 
     a survey of 1,130 lawyers and 148 judges on the effects of 
     the 1993 Rule 11 amendments. About 580 attorneys and 120 
     judges responded to the survey. The Center found general 
     satisfaction with the amended rule. It also found that more 
     than 75% of the judges and lawyers would oppose a provision 
     that would require a court to impose a sanction when the rule 
     is violated. A majority of the judges and lawyers, both 
     plaintiffs' and defendants' lawyers, believed that groundless 
     litigation was handled effectively by judges.
       Undoing the 1993 Rule 11 amendments, even though no serious 
     problem has been brought to the Judicial Conference rules 
     committees' attention, would frustrate the purpose and intent 
     of the Rules Enabling Act. Section 2 of H.R. 4571 would 
     effectively reinstate the 1983 version of Rule 11 that proved 
     so contentious and wasted so much time and energy of the bar 
     and bench. Section 2, indeed, in some ways seems to go beyond 
     the provisions that created serious problems with the 1983 
     rule. It may cause even greater mischief. Rule 11 in its 
     present form has proven effective and should not be revised.


                            Sections 3 and 4

       Section 3 would extend the new requirements of a mandatory 
     Rule 11 to all state court litigation that the state court 
     deems, on motion, to affect interstate commerce. Two features 
     of this provision stand out. First, it would directly 
     regulate the practice and procedure of state courts, 
     mandating a federal standard for the imposition of sanctions 
     for the filing of frivolous or ungrounded complaints and 
     other papers in state court. At present, states have been 
     free to adopt their own rules of practice, including a 
     version of Rule 11, if a state so chooses. Second, section 3 
     does not specify the actions to which it would apply. Rather, 
     it imposes on state judges a broad generalized test to 
     determine whether or not federal Rule 11 would apply in a 
     given case. If enacted, this section could affect the cost 
     and duration of a very large number of civil actions in state 
     courts.
       Section 4 seeks to prevent forum shopping by specifying the 
     places where a plaintiff may bring a ``personal injury'' 
     claim by imposing a federal standard for determining the 
     venue of state law personal injury claims, in both state and 
     federal court. Such a federal standard would displace 
     existing state venue rules or statutes. It would also 
     significantly alter the statutes in title 28, United States 
     Code, that now govern venue (section 1391) and transfer of 
     venue (section 1404) in the federal courts.
       The Judicial Conference opposes the enactment of H.R. 4571 
     for the reasons stated above as to section 2. Sections 3 and 
     4 would make important changes in the administration of civil 
     justice in both federal and state courts. The Judicial 
     Conference has not had the opportunity to formally assess the 
     advisability or impact of these sections, but notes that they 
     may substantially affect federal-state comity interests and 
     raise important policy and practical concerns.
       The Judicial Conference greatly appreciates your 
     consideration of its views. If you or your staff have any 
     questions, please contact Michael W. Blommer, Assistant 
     Director, Office of Legislative Affairs, Administrative 
     Office of the U.S. Courts, at (202) 502-1700.
           Sincerely,
                                            Leonidas Ralph Mecham,
     Secretary.
                                  ____

                                      National Association for the


                                Advancement of Colored People,

                               Washington, DC, September 14, 2004.

     Re NAACP opposition to H.R. 4571, the so-called ``Frivolous 
         Lawsuit Reduction Act''.

     Members,
     House of Representatives,
     Washington, DC.
       Dear Member of Congress: On behalf of the National 
     Association for the Advancement of Colored People (NAACP), 
     our nation's oldest, largest and most widely-recognized grass 
     roots civil rights organization, I am writing to urge you, in 
     the strongest terms possible, to oppose H.R. 4571, the so-
     called ``Frivolous Lawsuit Reduction Act.'' Specifically, the 
     NAACP is convinced that should this misguided legislation 
     become law, it will have a serious and adverse impact on the 
     ability to bring civil rights cases.
       While the NAACP is actively opposed to strategic lawsuits 
     against public participation (SLAPP suits), a careful review 
     of H.R. 4571 shows clearly that this particular legislation 
     does not address our concerns. In fact, if enacted, H.R. 4571 
     would embolden some to unlawfully discriminate without fear 
     of being held accountable. H.R. 4571 would dramatically alter 
     the operation of Rule 11 of the Federal Rules of Civil 
     Procedure and apply the new rule to state as well as federal 
     courts. Rule 11 prohibits attorneys from engaging in 
     litigation tactics that harass or cause unnecessary delay or 
     cost, or from making frivolous legal arguments or unwanted 
     factual assertions. The current Rule

[[Page H7111]]

     11 was adopted in 1993 in an effort to correct numerous 
     problems resulting from amendments that had been made in 
     1983. Rather than curbing the problem of frivolous lawsuits, 
     as it was intended to do, the 1983 revisions spawned 
     thousands of court decisions and generated widespread 
     criticism. It was abused by resourceful attorneys and 
     resulted in wasteful satellite litigation and rising 
     incivility of the bar.
       Furthermore, much of the impetus for the 1993 changes 
     stemmed from abuses by defendants in civil rights cases; 
     civil rights defendants were choosing to harass civil rights 
     plaintiffs by filing a series of Rule 11 motions intended to 
     slow down or impeded meritorious cases or intimidate the 
     defendants or their attorneys. In fact, several studies 
     determined that prior to the 1993 changes Rule 11 motions 
     were used more frequently in civil rights cases than any 
     other types of lawsuits.
       While language nominally intended to mitigate the damage 
     that this bill will cause to civil rights cases has been 
     added, it is vague and simply insufficient in addressing our 
     concerns. Even with this weak and ineffective provision, H.R. 
     4571 would be extremely detrimental to those of us who are 
     forced to seek legal recourse to address discrimination in 
     our country. Thus, I urge you again, in the strongest terms 
     possible, to oppose H.R. 4571 and to see that it is defeated. 
     Should you have any questions about this legislation or the 
     NAACP opposition to it, please feel free to contact either me 
     or Carol Kaplan on my staff at (202) 463-2940. Thank you in 
     advance for your consideration of the NAACP position.
           Sincerely,
                                                Hilary O. Shelton,
     Director.
                                  ____

                                         American Bar Association,


                                  Governmental Affairs Office,

                                    Washington, DC, June 29, 2004.

     Hon. F. James Sensenbrenner, Jr.,
     Chairman, Committee on the Judiciary, House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman: I am writing to you regarding the 
     hearing your Committee held June 22, 2004 on H.R. 4571, 
     legislation to make changes in Rule 11 of the Federal Rules 
     of Civil Procedure; make an amended Rule 11 of the Federal 
     Rules of Civil Procedure applicable to cases filed in state 
     courts if such cases affect interstate commerce; and make 
     changes relating to jurisdiction and venue for personal 
     injury cases filed in state and federal courts.
       The ABA opposes the provisions in the legislation that 
     would change the Federal Rules of Civil Procedure without 
     going through the process set forth in the Rules Enabling 
     Act. The ABA fully supports the Rules Enabling Act process, 
     which is based on three fundamental concepts: (1) the central 
     role of the judiciary in initiating judicial rulemaking, (2) 
     procedures that permit full public participation, including 
     by the members of the legal profession, and (3) recognition 
     of a congressional review period. We view the proposed rules 
     changes to the Federal Rules in H.R. 4571 as a retreat from 
     the Rules Enabling Act.
       In 28 U.S.C. Sec. Sec. 2072-74, Congress prescribed the 
     appropriate procedure for the formulation and adoption of 
     rules of evidence, practice and procedure for the federal 
     courts. This well-settled, Congressionally-specified 
     procedure contemplates that evidentiary and procedural rules 
     will in the first instance be considered and drafted by 
     committees of the United States Judicial Conference, will 
     thereafter be subject to thorough public comment and 
     reconsideration, will then be submitted to the United States 
     Supreme Court for consideration and promulgation, and will 
     finally be transmitted to Congress, which retains the 
     ultimate power to veto any rule before it takes effect.
       This time-proven process proceeds from separation-of-powers 
     concerns and is driven by the practical recognition that, 
     among other things:
       (1) Rules of evidence and procedure are inherently a matter 
     of intimate concern to the judiciary, which must apply them 
     on a daily basis;
       (2) Each rule forms just one part of a complicated, 
     interlocking whole, rendering due deliberation and public 
     comment essential to avoid unintended consequences; and
       (3) The Judicial Conference is in a unique position to 
     draft rules with care in a setting isolated from pressures 
     that may interfere with painstaking consideration and due 
     deliberation.
       We do not question congressional power to regulate the 
     practice and procedure of federal courts. Congress exercised 
     this power by delegating its rulemaking authority to the 
     judiciary through the enactment of the Rules Enabling Act, 
     while retaining the authority to review and amend rules prior 
     to their taking effect. We do, however, question the wisdom 
     of circumventing the Rules Enabling Act, as H.R. 4571 would.
       We also have serious concerns about the provisions in H.R. 
     4571 that would impose the Federal Rules on the state courts 
     and would impose the changes relating to jurisdiction and 
     venue for personal injury cases filed in state and federal 
     courts. We hope your Committee will not move on legislation 
     containing such departures from current law until we and 
     others have sufficient time to analyze the impact they would 
     have on the state courts and so we will be able to present 
     our views to you on these very important matters.
       We respectfully request that this letter be made part of 
     the permanent hearing record of June 22, 2004.
           Sincerely,
                                                  Robert D. Evans.

  Mr. GOODLATTE. Mr. Speaker, I rise today in support of H.R. 4571, the 
Lawsuit Abuse Reduction Act.
  Last year, I introduced legislation to address the escalating 
problems that accompany frivolous lawsuits, the Class Action Fairness 
Act. This legislation would reform the Federal rules that govern class 
actions so that truly interstate lawsuits would be heard in Federal 
courts, like the Framers envisioned. The current class action rules 
provide an opportunity for opportunistic lawyers to game the system and 
extort money from legitimate businesses.
  The abuse of the class action process is just one example of how the 
current litigious atmosphere in our country threatens to undermine the 
growth and innovation that has characterized our great Nation since its 
founding. Frivolous lawsuits force businesses to waste time and 
resources that could otherwise be spent on new products, new services, 
or innovative procedures that could reduce the costs of goods and 
services for consumers.
  Small businesses rank the cost and availability of liability 
insurance second only to the costs of health care as their top 
priority. Not coincidentally, both of these problems are fueled by 
frivolous lawsuits.
  H.R. 4571 is another commonsense approach to combat frivolous 
lawsuits. It would restore mandatory sanctions for filing frivolous 
lawsuits and allow monetary sanctions, including attorney's fees and 
compensatory costs, against any party making a frivolous claim. H.R. 
4571 would also allow sanctions for abuse of the discovery process, and 
would abolish the current ``free pass'' provision that allows lawyers 
to avoid sanctions if they withdraw the frivolous claim within 21 days 
after a motion for sanctions has been filed.
  By restoring strong penalties against those that file frivolous 
claims, the Lawsuit Abuse Reduction Act will give businesses the 
freedom to devote their resources to doing business, rather than 
wasting their resources defending frivolous litigation.
  I urge my colleagues to support this important legislation.
  Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.


 Amendment In The Nature Of A Substitute Offered By Mr. Turner of Texas

  Mr. TURNER of Texas. Mr. Speaker, I offer an amendment in the nature 
of a substitute.
  The SPEAKER pro tempore. The Clerk will designate the amendment in 
the nature of a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Amendment in the nature of a substitute offered by Mr. 
     Turner of Texas:
       Strike all after the enacting clause and insert the 
     following:

     SEC. 1. ``THREE STRIKES AND YOU'RE OUT'' FOR FRIVOLOUS 
                   PLEADINGS.

       (a) Signature Required.--Every pleading, written motion, 
     and other paper in any action shall be signed by at least 1 
     attorney of record in the attorney's individual name, or, if 
     the party is not represented by an attorney, shall be signed 
     by the party. Each paper shall state the signer's address and 
     telephone number, if any. An unsigned paper shall be stricken 
     unless omission of the signature is corrected promptly after 
     being called to the attention of the attorney or party.
       (b) Certificate of Merit.--By presenting to the court 
     (whether by signing, filing, submitting, or later advocating) 
     a pleading, written motion, or other paper, an attorney or 
     unrepresented party is certifying that to the best of the 
     person's knowledge, information and belief, formed after an 
     inquiry reasonable under the circumstances--
       (1) it is not being presented for any improper purpose, 
     such as to harass or to cause unnecessary delay or needless 
     increase in the cost of litigation;
       (2) the claims, defenses, and other legal contentions 
     therein are warranted by existing law or by a non frivolous 
     argument for the extension, modification, or reversal of 
     existing law or the establishment of new law; and
       (3) the allegations and other factual contentions have 
     evidentiary support or, if specifically so identified, are 
     reasonable based on a lack of information or belief.
       (c) Mandatory Sanctions.--
       (1) First violation.--If, after notice and a reasonable 
     opportunity to respond, a court, upon motion or upon its own 
     initiative, determines that subsection (b) has been violated, 
     the court shall find each attorney or party in violation in 
     contempt of court and shall require the payment of costs and 
     attorneys fees. The court may also impose additional 
     appropriate sanctions, such as striking the pleadings, 
     dismissing the suit, and sanctions plus interest, upon the 
     person in violation, or upon both such person and such 
     person's attorney or client (as the case may be).
       (2) Second violation.--If, after notice and a reasonable 
     opportunity to respond, a court, upon motion or upon its own 
     initiative, determines that subsection (b) has been violated 
     and that the attorney or party with respect to which the 
     determination was made

[[Page H7112]]

     has committed one previous violation of subsection (b) before 
     this or any other court, the court shall find each such 
     attorney or party in contempt of court and shall require the 
     payment of costs and attorneys fees, and require such person 
     in violation (or both such person and such person's attorney 
     or client (as the case may be)) to pay a monetary fine. The 
     court may also impose additional appropriate sanctions, such 
     as striking the pleadings, dismissing the suit and sanctions 
     plus interest, upon such person in violation, or upon both 
     such person and such person's attorney or client (as the case 
     may be).
       (3) Third and subsequent violations.--If, after notice and 
     a reasonable opportunity to respond, a court, upon motion or 
     upon its own initiative, determines that subsection (b) has 
     been violated and that the attorney or party with respect to 
     which the determination was made has committed more than one 
     previous violation of subsection (b) before this or any other 
     court, the court shall find each such attorney or party in 
     contempt of court, refer each such attorney to one or more 
     appropriate State bar associations for disciplinary 
     proceedings, require the payment of costs and attorneys fees, 
     and require such person in violation (or both such person and 
     such person's attorney, or client (as the case may be)) to 
     pay a monetary fine. The court may also impose additional 
     appropriate sanctions, such as striking the pleadings, 
     dismissing the suit, and sanctions plus interest, upon such 
     person in violation, or upon both such person and such 
     person's attorney or client (as the case may be).
       (4) Appeal; stay.--An attorney has the right to appeal a 
     sanction under this subsection. While such an appeal is 
     pending, the sanction shall be stayed.
       (5) Not applicable to civil rights claims.--Notwithstanding 
     subsection (d), this subsection does not apply to an action 
     or claim arising out of Federal, State, or local civil rights 
     law or any other Federal, State, or local law providing 
     protection from discrimination.
       (d) Applicability.--Except as provided in subsection 
     (c)(5), this section applies to any paper filed on or after 
     the date of the enactment of this Act in--
       (1) any action in Federal court; and
       (2) any action in State court, if the court, upon motion or 
     upon its own initiative, determines that the action affects 
     interstate commerce.

     SEC. 2. ``THREE STRIKES AND YOU'RE OUT'' FOR FRIVOLOUS 
                   CONDUCT DURING DISCOVERY.

       (a) Signatures Required on Disclosures.--Every disclosure 
     made pursuant to subdivision (a)(1) or subdivision (a)(3) of 
     Rule 26 of the Federal Rules of Civil Procedure or any 
     comparable State rule shall be signed by at least one 
     attorney of record in the attorney's individual name, whose 
     address shall be stated. An unrepresented party shall sign 
     the disclosure and state the party's address. The signature 
     of the attorney or party constitutes a certification that to 
     the best of the signer's knowledge, information, and belief, 
     formed after a reasonable inquiry, the disclosure is complete 
     and correct as of the time it is made.
       (b) Signatures Required on Discovery.--
       (1) In general.--Every discovery request, response, or 
     objection made by a party represented by an attorney shall be 
     signed by at least one attorney of record in the attorney's 
     individual name, whose address shall be stated. An 
     unrepresented party shall sign the request, response, or 
     objection and state the party's address. The signature of the 
     attorney or party constitutes a certification that to the 
     best of the signer's knowledge, information, and belief, 
     formed after a reasonable inquiry, the request, response, or 
     objection is:
       (A) consistent with the applicable rules of civil procedure 
     and warranted by existing law or a good faith argument for 
     the extension, modification, or reversal of existing law;
       (B) not interposed for any improper purpose, such as to 
     harass or to cause unnecessary delay or needless increase in 
     the cost of litigation; and
       (C) not unreasonable or unduly burdensome or expensive, 
     given the needs of the case, the discovery already had in the 
     case, the amount in controversy, and the importance of the 
     issues at stake in the litigation.
       (2) Stricken.--If a request, response, or objection is not 
     signed, it shall be stricken unless it is signed promptly 
     after the omission is called to the attention of the party 
     making the request, response, or objection, and a party shall 
     not be obligated to take any action with respect to it until 
     it is signed.
       (c) Mandatory Sanctions.--
       (1) First violation.--If without substantial justification 
     a certification is made in violation of this section, the 
     court, upon motion or upon its own initiative, shall find 
     each attorney or party in contempt of court and shall require 
     the payment of costs and attorneys fees. The court may also 
     impose additional sanctions, such as imposing sanctions plus 
     interest or imposing a fine upon the person in violation, or 
     upon such person and such person's attorney or client (as the 
     case may be).
       (2) Second violation.--If without substantial justification 
     a certification is made in violation of this section and that 
     the attorney or party with respect to which the determination 
     is made has committed one previous violation of this section 
     before this or any other court, the court, upon motion or 
     upon its own initiative, shall find each attorney or party in 
     contempt of court and shall require the payment of costs and 
     attorneys fees, and require such person in violation (or both 
     such person and such person's attorney or client (as the case 
     may be)) to pay a monetary fine. The court may also impose 
     additional sanctions upon such person in violation, or upon 
     both such person and such person's attorney or client (as the 
     case may be).
       (3) Third and subsequent violations.--If without 
     substantial justification a certification is made in 
     violation of this section and that the attorney or party with 
     respect to which the determination is made has committed more 
     than one previous violation of this section before this or 
     any other court, the court, upon motion or upon its own 
     initiative, shall find each attorney or party in contempt of 
     court, shall require the payment of costs and attorneys fees, 
     require such person in violation (or both such person and 
     such person's attorney or client (as the case may be)) to pay 
     a monetary fine, and refer such attorney to one or more 
     appropriate State bar associations for disciplinary 
     proceedings. The court may also impose additional sanctions 
     upon such person in violation, or upon both such person and 
     such person's attorney or client (as the case may be).
       (4) Appeal; stay.--An attorney has the right to appeal a 
     sanction under this subsection. While such an appeal is 
     pending, the sanction shall be stayed.
       (d) Applicability.--This section applies to any paper filed 
     on or after the date of the enactment of this Act in--
       (1) any action in Federal court; and
       (2) any action in State court, if the court, upon motion or 
     upon its own initiative, determines that the action affects 
     interstate commerce.

     SEC. 3. BAN ON CONCEALMENT OF UNLAWFUL CONDUCT.

       (a) In General.--A court may not order that a court record 
     be sealed or subjected to a protective order, or that access 
     to that record be otherwise restricted, unless the court 
     makes a finding of fact in writing that identifies the 
     interest that justifies the order and that determines that 
     the order is no broader than necessary to protect that 
     interest.
       (b) Applicability.--This section applies to any court 
     record, including a record obtained through discovery, 
     whether or not formally filed with the court.

     SEC. 4. ENHANCED SANCTIONS FOR DOCUMENT DESTRUCTION.

       (a) In General.--Whoever influences, obstructs, or impedes, 
     or endeavors to influence, obstruct, or impede, a pending 
     court proceeding through the intentional destruction of 
     documents sought in, and highly relevant to, that 
     proceeding--
       (1) shall be punished with mandatory civil sanctions of a 
     degree commensurate with the civil sanctions available under 
     Rule 37 of the Federal Rules of Civil Procedure, in addition 
     to any other civil sanctions that otherwise apply; and
       (2) shall be held in contempt of court and, if an attorney, 
     referred to one or more appropriate State bar associations 
     for disciplinary proceedings.
       (b) Applicability.--This section applies to any court 
     proceeding in any Federal or State court.

     SEC. 5. EXPEDITED DISPOSITION OF FRIVOLOUS AND OTHER 
                   LAWSUITS.

       (a) In General.--For each State, each judicial district in 
     the State shall, within 2 years of the date of the enactment 
     of this Act, develop and implement a civil justice expense 
     and delay reduction plan and submit it to the appropriate 
     governing body of the State. The governing body shall make 
     the plan available to the public.
       (b) Principles.--Each plan required by subsection (a) shall 
     apply to actions in State court that affect interstate 
     commerce and any other actions that the governing body 
     considers appropriate. The plan shall be developed and 
     implemented with regard to the following principles:
       (1) Systematic, differential treatment of civil cases that 
     tailors the level of individualized and case specific 
     management to such criteria as case complexity, the amount of 
     time reasonably needed to prepare the case for trial, and the 
     judicial and other resources required and available for the 
     preparation and disposition of the case.
       (2) Early and ongoing control of the pretrial process 
     through involvement of a judicial officer in--
       (A) assessing and planning the progress of a case;
       (B) setting early, firm trial dates, such that the trial is 
     scheduled to occur within eighteen months after the filing of 
     the complaint, unless a judicial officer certifies that--
       (i) the demands of the case and its complexity make such a 
     trial date incompatible with serving the ends of justice; or
       (ii) the trial cannot reasonably be held within such time 
     because of the complexity of the case or the number or 
     complexity of pending criminal cases;
       (C) controlling the extent of discovery and the time for 
     completion of discovery, and ensuring compliance with 
     appropriate requested discovery in a timely fashion; and
       (D) setting, at the earliest practicable time, deadlines 
     for filing motions and a time framework for their 
     disposition.
       (3) For all cases that the court or an individual judicial 
     officer determines are complex and any other appropriate 
     cases, careful

[[Page H7113]]

     and deliberate monitoring through a discovery-case management 
     conference or a series of such conferences at which the 
     presiding judicial officer--
       (A) explores the parties' receptivity to, and the propriety 
     of, settlement or proceeding with the litigation;
       (B) identifies or formulates the principal issues in 
     contention and, in appropriate cases, provides for the staged 
     resolution or bifurcation of issues for trial consistent with 
     Rule 42(b) of the Federal Rules of Civil Procedure;
       (C) prepares a discovery schedule and plan consistent with 
     any presumptive time limits that a district court may set for 
     the completion of discovery and with any procedures a 
     district court may develop to--
       (i) identify and limit the volume of discovery available to 
     avoid unnecessary or unduly burdensome or expensive 
     discovery; and
       (ii) phase discovery into two or more stages; and
       (D) sets, at the earliest practicable time, deadlines for 
     filing motions and a time framework for their disposition.
       (4) Encouragement of cost-effective discovery through 
     voluntary exchange of information among litigants and their 
     attorneys and through the use of cooperative discovery 
     devices.
       (5) Conservation of judicial resources by prohibiting the 
     consideration of discovery motions unless accompanied by a 
     certification that the moving party has made a reasonable and 
     good faith effort to reach agreement with opposing counsel on 
     the matters set forth in the motion.
       (6) Authorization to refer appropriate cases to alternative 
     dispute resolution programs that--
       (A) have been designated for use in a district court; or
       (B) the court may make available, including mediation, 
     minitrial, and summary jury trial.
       (c) Techniques.--In developing the plan required by 
     subsection (a), a judicial district shall consider and may 
     include the following techniques:
       (1) A requirement that counsel for each party to a case 
     jointly present a discovery-case management plan for the case 
     at the initial pretrial conference, or explain the reasons 
     for their failure to do so.
       (2) A requirement that each party be represented at each 
     pretrial conference by an attorney who has the authority to 
     bind that party regarding all matters previously identified 
     by the court for discussion at the conference and all 
     reasonably related matters.
       (3) A requirement that all requests for extensions of 
     deadlines for completion of discovery or for postponement of 
     the trial be signed by the attorney and the party making the 
     request.
       (4) A neutral evaluation program for the presentation of 
     the legal and factual basis of a case to a neutral court 
     representative selected by the court at a nonbinding 
     conference conducted early in the litigation.
       (5) A requirement that, upon notice by the court, 
     representatives of the parties with authority to bind them in 
     settlement discussions be present or available by telephone 
     during any settlement conference.
       (6) Such other features as the judicial district considers 
     appropriate.

  The SPEAKER pro tempore. Pursuant to House Resolution 766, the 
gentleman from Texas (Mr. Turner) and the gentleman from Wisconsin (Mr. 
Sensenbrenner) each will control 20 minutes.
  Mr. TURNER of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  I offered a substitute, which I believe is much stronger in 
preventing frivolous lawsuits than the bill offered to the House. In 
addition, it preserves the right that was mentioned earlier to sue a 
foreign corporation, which is jeopardized in the bill offered before 
us.
  The Republican bill also weakens our civil rights laws by having a 
chilling effect upon suits relating to civil rights, and our substitute 
carves out an exception for civil rights litigation. But, most 
importantly, it does not eliminate the possibility that one may be 
unable to sue a foreign corporation in the United States.
  First of all, our bill strengthens the provisions against frivolous 
lawsuits. Members on both sides of the aisle uniformly, unanimously 
agree that our laws and our rules of procedure must prohibit frivolous 
lawsuits. Our bill imposes a mandatory ``three strikes and you're out'' 
provision on frivolous pleadings and discovery violations. Thus, it is 
far more stringent than the Republican bill, which merely subjects 
these violations to mandatory payment of cost and fees. More 
importantly, our bill includes clear and specific civil rights carve 
outs so there will not be a chilling effect on these actions. We also 
amend the United States Code so that the change is not subject to 
future changes and modifications by the courts as the Republican bill 
would be.
  Second, our bill limits the ability of corporate wrongdoers to 
conceal any conduct harmful to the public welfare by requiring that 
court records may not be sealed unless the court first enters a finding 
that such sealing is justified. This provision will help ensure that 
information on dangerous products and actions is made available to the 
public. A nearly identical provision passed by voice vote in the 107th 
Congress with the support of the gentleman from Wisconsin (Chairman 
Sensenbrenner). The Republican bill does not contain this very 
important protection.
  Third, we provide that parties which destroy documents in connections 
with civil proceedings shall be punished with mandatory civil 
sanctions, held in contempt of court, and referred to the State bar for 
disciplinary proceedings. Again, this is far tougher than the 
Republican bill, which does not provide for contempt of court and 
disciplinary proceedings.
  And, fourth, we specify that the Civil Justice Reform Act, which has 
been so successful in the Federal courts, be applied to all courts in 
order to speed up the pretrial process and to weed out junk lawsuits.
  And, finally, unlike the Republican bill, our substitute does not 
have this new rule of jurisdiction that operates to make it impossible 
to sue a foreign corporation in this country and, further, by the 
absence of such provision, promotes corporations in our own country 
continuing this despicable process of relocating their headquarters 
overseas in order to avoid U.S. taxes, and now they will do so to avoid 
being sued. There is no reason to give these companies a windfall 
profit, windfall gain, at the expense of corporations who do the right 
thing and stay here at home.
  This is a common sense substitute. It cracks down on frivolous 
lawsuits even more forcefully than the Republican bill. It preserves 
our antitrust laws and our ability to obtain justice against foreign 
corporations. It is a better bill, a stronger bill, and one that we 
would urge this House to substitute for the bill offered by our 
Republican colleagues.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in strong opposition to this substitute amendment 
which guts the bill.
  Where to begin? I will begin with the title of the first section of 
the substitute. It is entitled ``Three Strikes and You're Out.'' But it 
is not true when we read the substitute. In fact, the substitute 
provides that following three violations of this provision, the court 
``shall refer each such attorney to one or more appropriate State bar 
associations for disciplinary proceedings.'' Three strikes and you are 
still in.
  The Democratic substitute does not say that the attorney shall be 
suspended from the practice of law. That is what the base bill says. 
The bill says that after three strikes ``The Federal District court 
shall suspend that attorney from the practice of law in that Federal 
District Court.''
  The base bill follows through on its ``three strikes and you're out'' 
promise. The Democratic substitute says ``three strikes and you have a 
foul ball.''
  But it gets worse. Not only are the filers of frivolous lawsuits not 
out after three strikes under the Democratic substitute, but the 
Democratic substitute even changes what a strike is under existing law. 
Currently Rule 11 contains four criteria that can lead to a Rule 11 
violation. The Democratic substitute references only three, kind of 
like shrinking the strike zone.
  Currently, Rule 11 allows sanctions against frivolous filers whose 
denials of factual contentions are not ``warranted on the evidence'' or 
are not ``reasonably based on the lack of information and belief.'' The 
Democratic substitute removes this protection from the victims of 
frivolous lawsuits under existing law. The Democratic substitute for 
the first time without penalty allows defendants to file papers with 
the court that include factual denials of allegations against them that 
are not warranted by the evidence and not reasonably based. In other 
words, misleading and unfactual filings end up getting a get-out-of-
jail-free card under the Democratic substitute.

[[Page H7114]]

                              {time}  1400

  Instead, the substitute provides additional protection for defendants 
filing frivolous defenses that are not warranted by the evidence and 
not reasonably based. This is a step backward for victims of frivolous 
lawsuits under both State and Federal law.
  Further, the base bill provides that those who file frivolous 
lawsuits can be made to pay all of the costs and attorneys' fees that 
are ``incurred as a direct result of filing of the pleading, motion, or 
other paper, that is the subject of the violation.'' The Democratic 
substitute does not include that critical language, which is necessary 
to make clear that those filing frivolous lawsuits must be made to pay 
the full costs imposed on their victim by the frivolous lawsuit.
  The Democrat substitute also imposes complicated mandates on each 
State's judicial districts, requiring them to ``develop and implement a 
civil justice expense and delay reduction plan.'' The Democratic 
substitute requires States to implement these mandates under 
exceedingly complex requirements that span all the way from pages 10 to 
page 15 of the Democratic substitute and requires things like 
``systematic, differential treatment of civil cases that tailors the 
level of individualized and case specific management,'' whatever that 
means. At a minimum, this is overly burdensome, and may be 
unconstitutional.
  The Democratic substitute requires that States ``develop and 
implement'' these plans when the Supreme Court has held that ``Congress 
may not simply commandeer the States by directly compelling them to 
enact and enforce a Federal regulatory program.'' That is in New York 
v. The United States 1992. That is exactly what the Democratic 
substitute does without any justification under the Commerce Clause of 
the Constitution.
  The Democratic substitute also completely overrides State laws 
regarding the sealing of records in all cases, including proceedings in 
which State laws protect the privacy of sexual abuse victims, including 
children. And let me repeat this: if the Democratic substitute passes 
and becomes law, State laws relative to the sealing of court records on 
sexual abuse cases, including those against minors, can be open to 
public scrutiny. Shame on you. This blunderbuss provision in the 
Democratic substitute covers State divorce proceedings, and even all 
criminal cases, without a showing of why State procedures are 
inadequate.
  The Democratic substitute also retains rule 11's current ``free 
pass'' provision, which allows lawyers to avoid sanctions for making 
frivolous claims simply by withdrawing those claims within 21 days 
after a motion for sanctions has been filed.
  Now, let us look at that. A frivolous claim or frivolous filing has 
been made. You have 21 days after you make it to withdraw it. But 
meantime, the opposite party has got to go to the legal expense to make 
the motion to the court to show that the claim is frivolous. And who 
ends up paying the bill on that? Not the lawyer who filed the frivolous 
claim, but the defendant and the defendant's lawyers; and that 
provision actually encourages frivolous lawsuits by allowing unlimited 
numbers of frivolous pleadings to be filed without penalty. Talk about 
a loophole big enough to drive the Queen Mary through, that is it.
  The Democratic substitute also does not include the bill's essential 
provisions to prevent the unfair practice of forum shopping.
  In short, the Democratic substitute does not provide for three 
strikes and you are out. It provides for three strikes and you get 
referred to the State Bar Association that can continue to let the 
offending attorney practice law. The Democratic substitute even weakens 
existing law that protects plaintiffs from defendants that file 
frivolous denials that are not warranted by the evidence and are not 
reasonably based. The substitute also fails to provide that attorneys' 
fees be awarded to cover the full costs of responding to a frivolous 
lawsuit, and the substitute also burdens the States by directly 
compelling them to enact and enforce a Federal regulatory program. It 
overrides State procedures governing the confidentiality of documents 
in the course of legal proceedings. That is more than three strikes 
against the Democratic substitute, and it should be soundly defeated.
  Mr. Speaker, I reserve the balance of my time.
  Mr. TURNER of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  I would remind the distinguished chairman that careful reading of our 
bill would reveal to him there is no safe harbor allowing any period of 
days, 21 or otherwise, to withdraw pleadings that may be frivolous. 
What we have done in our bill is we have amended the statute. We have 
provided a new statute against frivolous lawsuits; we do not disturb 
rule 11. We urge him to take a closer look at the bill and what we 
propose.
  I would also suggest to the distinguished chairman that the provision 
in our bill to protect the public against automatic sealing of certain 
court records which may be important and contain important information 
that should be available to the public to protect the public against 
things like defective products and other things, the decision to seal 
is one that is in the hands of the court and the sealing must be 
justified clearly. In the cases of sexual abuse, that sealing is 
justified. I do not know any judge in the land that would not 
understand that. And, certainly, I do not see any judge taking the 
language that we have offered and overturning any State law or issuing 
any ruling contrary to State law that would not result in the sealing 
of sexual abuse cases.
  The major principal defect in the Republican bill relates to the fact 
that you are unable to sue a foreign corporation because they attempt 
to change the law as it presently exists and to make the provision 
require that you file against a corporation where their principal place 
of business is. There are many foreign corporations that may be in the 
United States that do not have their principal place of business here; 
it is overseas. So the language that has been offered has the effect of 
denying a plaintiff with a genuine injury, not a frivolous lawsuit, but 
a genuine, valid lawsuit from being able to sue a foreign corporation.
  That provision, perhaps the Republican drafters of their bill did not 
understand what they were doing with the language they offered, but 
that is the effect of it; and I think anyone who votes for the 
Republican bill and says that we are denying an American citizen the 
opportunity with a legitimate claim to file a suit in the United States 
against a foreign corporation is casting a vote they will regret.
  I also think it is important to point out that the sanctions that are 
provided in the Democratic substitute are stronger than the provisions 
in the Republican bill. It is also, I think, important to point out 
that our sanctions apply to State courts where interstate commerce is 
involved. Your ``three strikes and you are out'' provision does not 
apply in State courts, perhaps, again, by drafting error; but it does 
not apply.
  So we think it is very critical that this bill be the one the House 
adopts.
  Mr. Speaker, I yield 5 minutes to the distinguished gentleman from 
New York (Mr. Weiner).
  Mr. WEINER. Mr. Speaker, I thank the gentleman for yielding me this 
time. It frequently falls upon me as a nonlawyer on the Committee on 
the Judiciary to try to sort through the facts of these things and try 
to reduce them into small words that those of us who are nonlawyers can 
understand. But I was taken by one fact that was articulated by one of 
my colleagues on the other side that according to a recent survey, 80 
percent of the American people are against frivolous lawsuits. I would 
love to know who the 20 percent are that like frivolous lawsuits so 
that we can have a focus group with them. They are probably lawyers of 
some sort, I would imagine.
  First, let me just say we rarely have an opportunity to take a look 
at a proposal before us today and look at almost an identical proposal 
that was the law of the land between 1983 and 1993. Then, too, there 
was an effort to unclog the courts of frivolous lawsuits; then, too, 
the Judicial Conference, not this body, the Judicial Conference said we 
have to try to come up with some rules.
  What was the effect? The effect was not reducing the amount of 
frivolous lawsuits; it was adding a whole new level of litigation 
around frivolous lawsuits. Rather than simply having a

[[Page H7115]]

judge say, that is frivolous, it is out of here, let us move on with 
the case, you then had suits and countersuits over whether or not 
something was frivolous, because it was elevated with the changes that 
were made in that decade.
  We also found that an unintended consequence, and I think even my 
colleagues acknowledge that it was unintended by their effort, albeit 
insubstantial, to carve out civil rights suits, we found that when you 
were bringing a novel, new kind of suit, you found yourself being 
charged with making a frivolous lawsuit. Civil rights cases is just one 
of them. We also saw the same thing could have or did happen when you 
sued tobacco companies to recover for States.
  And today, I would dare say that someone who brought a case that is 
being brought in New York today, suing the country of Saudi Arabia for 
their culpability in the September 11 attacks, someone could come 
before a judge and say this is a frivolous lawsuit because it 
represents no precedent, it has never been tried before and, therefore, 
should be dismissed.
  Obviously, it did not have that effect in that 10 years of clearing 
out the docket of frivolous lawsuits. If anything, it increased them.
  Secondly, we have heard frequently the matrix drawn between frivolous 
lawsuits, increase of litigation, and insurance rates. I looked at the 
bill fairly carefully. Nowhere does it require that insurance rates go 
down, so I will have to assume the same thing will happen upon passage 
of this bill, although the passage will not happen, because the other 
body will never take up such a bill, that you will put in the 
restrictions of average Americans getting into court and then, lo and 
behold, insurance rates keep going up and up and up, because that is 
what happened in California, and that is what happened in Florida. So 
if my colleagues think that by voting for this bill they will be 
reducing insurance rates, nothing could be further from the truth.
  There has been some back-and-forth about this notion of venue 
shopping: you can only bring an action in the defendant's, not the 
person who is bringing the case, the defendant's principal place of 
business. Well, again, I have very talented lawyers on both sides of 
this, but the Congressional Research Service, the American Law 
Division, hardly a pantheon of partisanship, hardly the place to go to 
get the talking points for Fox News or for whoever guys think lies, 
they write, ``If a defendant's principal place of business was not the 
United States, then this option could not be exercised in a United 
States court. Consequently, it would appear that in certain 
circumstances, a United States citizen or resident injured in this 
country would not have a judicial forum in the United States in which 
to seek relief.''
  That is what a relatively unbiased analysis of this thing looks like; 
but even if it is not, what problem are you trying to solve? You should 
allow Americans to take their cases where they are most appropriate, 
not where you believe it should be.
  Now, let me conclude with this thought. I heard a couple of times on 
the campaign trail President Bush talked about not having a Washington-
based, one-size-fits-all solution for our Nation's problems. There is 
another way to do this. There is another way. There is a way to look at 
cases that have individual facts, have individual people, take them 
before an individual, say a judge; or take those cases before a group 
of individuals, say six or nine or 12 individual Americans from their 
community, and allow them to vet the different sides of the argument 
and allow that to be the decision-making process. It is called the 
American justice system, and as contemptuous as my colleagues on the 
other side of the aisle are that you could actually have a judge that 
has the common sense to make a decision or a jury that has the common 
sense to make a decision, or whether you can possibly have two lawyers 
in the adversarial proceeding get the truth out, we here in Washington 
have to say, this one size fits all.
  Well, fortunately, this one size will only be in this one House and 
will never be the law of this one land.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 3 minutes to the gentleman 
from Texas (Mr. Smith).
  Mr. SMITH of Texas. Mr. Speaker, I thank the chairman for yielding me 
this time.
  Mr. Speaker, anyone who is worried about what frivolous lawsuits will 
do to them, their family, their friends, or their businesses ought to 
rush to oppose this Democratic substitute amendment. That is because it 
is an amendment that will do very little to prevent frivolous lawsuits.
  The underlying bill makes several key changes that will deter lawyers 
from filing frivolous lawsuits. The substitute amendment before us 
strips all these away.
  First, this legislation, the underlying legislation, allows the court 
to require an individual who files a frivolous lawsuit to pay 
attorneys' fees incurred as a result of the frivolous lawsuit. This 
provision obviously makes attorneys think twice before they file such a 
frivolous lawsuit. However, the Democratic substitute amendment does 
not include this key provision. In other words, there is no 
disincentive to file a frivolous lawsuit.
  This also means that under the Democratic substitute, small business 
owners would still suffer from the cost of frivolous lawsuits. 
Individuals would still suffer because they would see their insurance 
premiums go up. They would see their health care costs rise. They would 
still see their reputations damaged, all because of wrongfully filed, 
frivolous lawsuits.
  In other words, Mr. Speaker, this substitute amendment does not 
provide any relief to those who would get unfairly slapped with a 
frivolous lawsuit. Those victims would still have to pay their own 
legal fees.
  Next, this substitute claims to have a ``three strikes and you are 
out'' provision. But if you look at it closely, as the chairman 
mentioned a while ago, there are no real consequences for the attorney 
who repeatedly files frivolous lawsuits.

                              {time}  1415

  Instead, the substitute merely requires a court to refer the 
offending attorney to his State bar association; and you can imagine 
that means that nothing is going to happen.
  By contrast, the base bill requires that attorneys who fill frivolous 
claims face real consequence. Those attorneys can be barred from 
practicing in that Federal court for a year. That is a real 
disincentive to file frivolous lawsuits.
  Also, the Democratic substitute we are considering now places heavy 
mandates on States. It requires a new regulatory scheme to deal with 
``civil justice expense and delay'' issues. Mr. Speaker, I think that 
is a very nice but meaningless euphemism for frivolous lawsuits. The 
requirements would create a new bureaucratic nightmare instead of 
dealing with the real problem, which is of course frivolous lawsuits.
  Finally, Mr. Speaker, the substitute amendment does nothing to 
address the problem of forum shopping and that is at least half the 
problem. We simply cannot continue to allow trial attorneys to flock to 
counties that will award unreasonably high verdicts to any plaintiff 
who walks in the door. This does too much damage to many Americans and 
it is, quite frankly, time to put a stop to this type of abuse.
  Mr. Speaker, I urge my colleagues to oppose to substitute amendment 
and vote yes on the underlying bill which would deter lawsuit abuse.
  Mr. TURNER of Texas. Mr. Speaker, I yield 2 minutes to the gentleman 
from Virginia (Mr. Scott).
  Mr. SCOTT of Virginia. Mr. Speaker, I thank the gentleman for 
yielding me time.
  Mr. Speaker, there is a significant difference in the civil rights 
exemption in the underlying bill and this amendment. This amendment is 
vastly superior because it exempts all civil rights cases, not just 
those cases that are based on new or evolving law. Many of the cases 
brought under present laws are treated with hostility. Civil rights 
cases are often unpopular and some judges do not like to see them.
  In fact, the Alliance For Justice had a report on Judge Pickering's 
hearing and said, ``At his hearing, Judge Pickering was asked about his 
record of strongly favoring defendants in employment cases. Incredibly, 
Judge Pickering defended his record by opining that almost no 
employment discrimination cases that come before the Federal courts 
have merit.''

[[Page H7116]]

  Obviously, the problem is made worse when you expand the possibility 
to State courts, where local judges in some areas may have a civil 
bias. That is why the civil rights lawyers oppose the underlying bill 
because they do not want those kind of judges empowered to essentially 
allow mandatory sanctions to prevent those kind of cases from being 
brought in the first place.
  I would hope that we would adopt the language in the substitute, but 
we should defeat the bill.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 3 minutes to the gentleman 
from Florida (Mr. Keller).
  Mr. KELLER. Mr. Speaker, I thank the gentleman from Wisconsin (Mr. 
Sensenbrenner) for yielding me time.
  I rise today in opposition to the Democratic substitute and I will 
address the three or four strikes and you are out provision of the 
Democratic substitute. I would like to begin by pointing out what the 
Democratic White House hopefuls have said about this issue.
  Senator John Edwards published an article in Newsweek Magazine on 
December 15, 2003, where he says, ``Frivolous lawsuits waste good 
people's time and hurt the real victims. Lawyers who bring frivolous 
cases should face tough mandatory sanctions with a three strikes 
penalty.''
  He also told the Washington Post on May 20, 2003, ``We need to 
prevent and punish frivolous lawsuits. Lawyers who file frivolous 
lawsuits should face tough mandatory sanctions. Lawyers who file three 
frivolous cases should be forbidden to bring another suit for the next 
10 years. In other words, three strikes and you are out.''
  That is not what the Democratic substitute says. The Democratic 
substitute only provides that on three strikes the offending attorney 
will be referred to a bar association and no action need be taken by 
the bar to discipline the attorney under the substitute. That is not 
what Senator Edwards said. Senator Edwards did not say, three strikes 
and we are going to put a letter in your personnel file. He did not 
say, three strikes and we will send a diplomat from the U.N. to talk to 
you. He did not say, three strikes and we will refer this matter to a 
State bar association where they will not be required to take any 
disciplinary action.
  Could it be that when it comes to cracking down on frivolous lawsuits 
with a tough three strikes and you are out penalty that the White House 
presidential candidate were for it before they were against it? Could 
this be an example of flip-flopping? Do we really have, in fact, two 
Americas, one America where we see very tough campaign rhetoric about 
cracking down with mandatory sanctions and a three strikes and you are 
out penalty and another America where we see watered-down liberal 
legislation on the floor of Congress?
  I think there should be one America, one America where we prevent and 
punish frivolous lawsuits, not just with words but with actions. I urge 
my colleagues to vote no on this Democrat substitute.
  Mr. TURNER of Texas. Mr. Speaker, how much time remains on each side?
  The SPEAKER pro tempore (Mr. LaHood). The gentleman from Texas (Mr. 
Turner) has 6 minutes remaining. The gentleman from Wisconsin (Mr. 
Sensenbrenner) has 7\1/2\ minutes remaining.
  Mr. TURNER of Texas. Mr. Speaker, I yield 3 minutes to the gentleman 
from Washington (Mr. Inslee).
  (Mr. INSLEE asked and was given permission to revise and extend his 
remarks.)
  Mr. INSLEE. Mr. Speaker, we do have an honest debate and an honest 
difference of opinion between the two parties here and it is rather 
stark.
  Democrats believe that if a Japanese car manufactured in Japan, the 
brakes fail and injured you or your family and it is through negligence 
of the manufacturer, you ought to be able to have redress in an 
American court.
  The Republicans want to outsource that to the Japanese courts and 
make you fly to Tokyo to file your lawsuit.
  If a German car blows up and burns you and your family to a crisp, 
Democrats believe you ought to be able to go to the American judicial 
system and have relief. Republicans believe you should outsource your 
claims to the German courts. But it gets worse than that.
  If a French car fails and injures your family, Democrats believe you 
should go to an American court and get American justice. Republicans 
believe you can outsource that even to the French. We do not even have 
french fries in our cafeteria any more, but you would be happy to send 
Americans to the French judicial system.
  Now, the gentleman from Texas (Mr. Smith) took issue with what I was 
saying about this claim, and I want to explain to you why this is.
  First, I want to tell you that the Congressional Research Service, 
the bipartisan, nonpartisan referee of these matters, agrees with 
exactly what I have said when they said, ``Consequently it would appear 
that in certain circumstances a United States citizen or resident 
injured in this country would not have a judicial forum in the United 
States in which to seek relief.''
  The jury is closed and out. The verdict is in. Your policies have 
outsourced a lot of jobs, but we do not understand why you want to 
outsource judicial activity for American citizens. Now, why is that?
  It is because there is an error apparently in drafting. I do not know 
if you really intended this but this is what you accomplished, and the 
reason is even though the statute, and excuse me if I am technical for 
a moment but this is an important issue. It is Americans' judicial 
rights. Even where the statute suggests on its face that it would allow 
an American to sue in any one of three places, where you live or where 
you are hurt or where the principal place of the business is that hurt 
you, there is a constitutional principle that says if that corporation 
does not have a minimal contact where you live or where the injury 
occurs you cannot sue under the United States Constitution in either 
one of those circumstances.
  That is why the Congressional Research Service, the bipartisan or 
nonpartisan Congressional Research Service, has concluded that the 
Republican bill wants to outsource our judicial system to the German, 
French and Japanese judicial systems. That makes no sense whatsoever, 
and, frankly, I would invite a response to this as to why you would 
want to do that.
  The Japanese, they build some okay cars, not as good as American cars 
of course, but their judicial system is not one that we should have to 
be exposed to in America. Americans should have access to the American 
judicial system. We should pass this substitute.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself 2 minutes.
  Mr. Speaker, we have debated this issue extensively and the venue for 
these types of personal injury cases are, one, the district where the 
plaintiff resides; two, the district where the injury occurred; or 
three, where the principal place of business of the defendant is 
located. Any one of these three criteria would trigger the venue.
  Now, it is elemental under the corporation law of all 50 States that 
if a corporation that is incorporated elsewhere and that includes in 
any one of the other 49 States or in a foreign country, wants to do 
business in a State, it has to get a certificate of authority and 
appoint an agent for the service of process. And that is what is done 
with practically every multinational corporation or interstate 
corporation that does bills in the United States.
  If they do not do that, then they do not have limited liability 
protection of the corporation law that applies. So the entire argument 
that is made by the gentleman from Washington (Mr. Inslee) and the 
gentleman from Texas (Mr. Turner) is a complete red herring.
  Now, the two gentlemen have quoted extensively from a Congressional 
Research Service memorandum that was dated today. And it begins, ``This 
rushed memorandum discusses this issue.'' Well, the CRS is wrong upon 
occasion. And in yesterday's extension of remarks in the Congressional 
Record, I inserted into the Record correspondence that indicated that a 
similar rushed memorandum of the Congressional Research Service on the 
Marriage Protection Act was erroneous in nature. Wrong once, maybe 
wrong again.
  Mr. Speaker, I reserve the balance of my time.
  Mr. TURNER of Texas. Mr. Speaker, I yield 30 seconds to the gentleman 
from Washington (Mr. Inslee).
  Mr. INSLEE. Mr. Speaker, I have tremendous respect for the chairman 
but

[[Page H7117]]

in this case the Congressional Research Service is right. Here is where 
they are right. It is a constitutional principle that a court in 
Washington, for instance, does not have jurisdiction over a Japanese 
corporation if they do not have minimal contact with Washington; for 
instance, if they do not have a retail outlet in Washington. So if a 
Washington resident is injured by a Japanese car, and they have got an 
enormous retail outlet down in California but their principal place of 
business, which is the language you chose in this statute, is in Tokyo, 
you are out of luck as an American. And I am betting on CRS on this 
one.
  Mr. TURNER of Texas. Mr. Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I am prepared to close if the 
gentleman from Texas will yield back.
  Mr. TURNER of Texas. Mr. Speaker, do I close or does the chairman 
close?
  The SPEAKER pro tempore. The gentleman from Wisconsin (Mr. 
Sensenbrenner) has the right to close.
  Mr. TURNER of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, let me say the language regarding the establishment of 
the forum is very clear in the Republican bill as the gentleman from 
Washington (Mr. Inslee) pointed out. It says the suit should be filed 
where the defendant has its principal place of business.
  Now, the distinguished chairman says, well, the law has established 
that you can sue where somebody is registered to do business and all 
these foreign corporations have to register to do business.
  That is not what the language offered in the Republican bill says. It 
does not say you can sue a foreign corporation in States where it is 
registered to do business. It says where its principal place of 
business is located, and many foreign corporations have no principal 
place.
  I would suggest to the gentleman who offered up the quote of Senator 
Edwards, we agree with Senator Edwards. We should ban frivolous 
lawsuits, and the bill that we have offered does it more forcefully and 
effectively than the Republican bill does. At the end of the third 
strike under the Republican bill you can be barred in practicing law in 
that court. You are suspended. Under our bill, the third strike, you 
are referred to your State bar association for disciplinary 
proceedings, to include possible disbarment.
  Now, under your bill a lawyer from New York can come down to east 
Texas and file a lawsuit and if it is frivolous then he gets barred 
from ever practicing law in the Eastern District of Texas again.
  What good is that going to do for a New York lawyer who may never 
come back to east Texas anyway? What good will it do to say you cannot 
come to east Texas? Even if he has to come back he can send a law 
partner and let him file the frivolous lawsuit again.
  If you want to get a lawyer's attention, you refer them to the State 
disciplinary board that governs their right to practice law in that 
State.

                              {time}  1430

  I practiced law for many years, and anytime a lawyer gets referred to 
the State bar association for disciplinary action, it is a serious 
thing. If a lawyer continues to file frivolous lawsuits, they should be 
disbarred; and then we would not have to worry about them running to 
another court to file another frivolous lawsuit where they had not 
already filed one before. They would not be practicing law.
  So I would suggest, if my colleagues really want to get tough on 
frivolous lawsuits, they will support the Democratic substitute, and if 
they want to be sure that an American citizen who is injured in America 
has the right to sue a foreign corporation that was the perpetrator of 
a tortious act, they better vote against the Republican bill and vote 
for the substitute.
  I know the gentleman from Wisconsin (Mr. Sensenbrenner) did not 
intend for that to be the effect, but that is the effect of the 
language that he has offered up today; and I would suggest that any 
Member on either side of the aisle would be well advised to vote 
against his bill to ensure that that does not occur to an American 
citizen who would be denied the right to file a lawsuit against a 
foreign corporation.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself the balance of the 
time.
  Mr. Speaker, the John Kerry for President campaign has endorsed 
national legislation in which ``lawyers who file frivolous cases would 
face tough, mandatory sanctions, including a `three strikes and you're 
out' provision that forbids lawyers who file three frivolous cases from 
bringing another suit for the next 10 years.''
  Unfortunately, the Democratic substitute did not listen to what the 
Kerry campaign said and does not forbid lawyers who file three or more 
frivolous lawsuits from bringing future lawsuits. The substitute only 
provides that on three strikes the offending attorney will be referred 
to a bar association, and no action need be taken by the bar to 
discipline the lawyer.
  The base bill, H.R. 4571, on the other hand, currently provides that 
an attorney who files frivolous lawsuits will be suspended for at least 
a year and perhaps much longer if the court deems it appropriate.
  I would ask all Members to reject the Democratic substitute. This 
quote that I have given from the Kerry for President campaign and those 
that the gentleman from Florida (Mr. Keller) has quoted of Senator 
Edwards in Newsweek magazine of last December, the Republican bill has 
got the type of bipartisan support that is needed to deal with this 
problem.
  I would urge a ``no'' vote on the substitute and passage of the base 
bill.
  Mr. DELAHUNT. Mr. Speaker, I am profoundly concerned about the 
erosion of the independence and statehood role in our judicial system. 
This bill is just another attack on access to the courts, and the 
latest attempt to override existing State laws. At this rate, we will 
have a justice system available only to corporate America. Litigation 
costs already make the courts unavailable for the average person and 
small business. This bill takes our country further in the wrong 
direction.
  This bill will not ``take back the courts'' for plaintiffs. To the 
contrary, Congress continues to block access to justice. Imagine a 
system that leaves the tobacco industry unchecked. Imagine the number 
of unnecessary deaths if the trial bar could not keep unsafe tires off 
our cars. Or a justice system that fails to uncover contamination of 
public water supplies. We need the private sector. The trial bar plays 
an important role in the protection of American consumers. Yet, I dare 
say, we are going in the wrong direction.
  In another all-too-familiar pattern for this Congress, this bill is 
another court-stripping measure limiting judicial discretion. From 
civil rights claims to constitutional challenges, this Congress strips 
courts of their ability to hear cases. Congress--not a judge sitting in 
a courtroom--wants to decide if a case is meritorious. Congress--not a 
judge--will establish inflexible guidelines and impose mandatory 
sanctions for lawyers. Congress is trying to micromanage the judicial 
system as well as state judiciaries.
  We talk a lot in this Chamber about respecting States' rights. Yet, 
this bill represents an unprecedented invasion into the traditional 
jurisdiction of State courts. This unwarranted intrusion into States' 
rights is wrong. States should be able to set their own rules for the 
game, including those governing the professional conduct of lawyers. 
Let's not waste any more time undermining the principles of federalism 
on a piecemeal basis. Why not simply abolish the 10th Amendment? The 
bill's sponsors claim an agenda of reform--this is not reform. This is 
about reeling in the wrong direction.
  For all these reasons, I urge my colleagues to reject H.R. 4571 and 
support the Democratic substitute offered by my colleague from Texas.
  The SPEAKER pro tempore (Mr. LaHood). All time for debate has 
expired.
  Pursuant to House Resolution 766, the previous question is ordered on 
the bill, as amended, and on the further amendment by the gentleman 
from Texas (Mr. Turner).
  The question is on the amendment in the nature of a substitute 
offered by the gentleman from Texas (Mr. Turner).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. TURNER of Texas. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The vote was taken by electronic device, and there were--yeas 177, 
nays 226, not voting 30, as follows:

[[Page H7118]]

                             [Roll No. 448]

                               YEAS--177

     Abercrombie
     Baca
     Baird
     Baldwin
     Becerra
     Bell
     Berkley
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Case
     Chandler
     Clay
     Clyburn
     Cooper
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Dooley (CA)
     Doyle
     Duncan
     Edwards
     Emanuel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Gordon
     Green (TX)
     Grijalva
     Gutierrez
     Harman
     Herseth
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson (IL)
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kind
     Kucinich
     Lampson
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lowey
     Lynch
     Majette
     Maloney
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Sandlin
     Schakowsky
     Schiff
     Scott (GA)
     Scott (VA)
     Sherman
     Skelton
     Smith (WA)
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Tierney
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Van Hollen
     Visclosky
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NAYS--226

     Aderholt
     Akin
     Alexander
     Allen
     Andrews
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Berman
     Biggert
     Bilirakis
     Bishop (UT)
     Blunt
     Boehner
     Bonilla
     Bono
     Boozman
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Costello
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doggett
     Doolittle
     Dreier
     Dunn
     Ehlers
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Flake
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Jenkins
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lofgren
     Lucas (KY)
     Lucas (OK)
     Manzullo
     Markey
     Matheson
     McCotter
     McCrery
     McHugh
     McKeon
     Mica
     Miller (MI)
     Miller, Gary
     Mollohan
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Snyder
     Souder
     Stearns
     Stenholm
     Sullivan
     Sweeney
     Tancredo
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--30

     Ackerman
     Ballenger
     Blackburn
     Boehlert
     Bonner
     Cannon
     Conyers
     Crowley
     Engel
     Gephardt
     Goss
     Greenwood
     Hastings (FL)
     Istook
     Johnson, E. B.
     Kennedy (RI)
     Kleczka
     Langevin
     Marshall
     McInnis
     Miller (FL)
     Owens
     Radanovich
     Schrock
     Serrano
     Slaughter
     Tauzin
     Towns
     Velazquez
     Whitfield

                              {time}  1457

  Mrs. KELLY, Mr. GINGREY and Mr. GARRETT of New Jersey changed their 
vote from ``yea'' to ``nay.''
  Messrs. CARDOZA, DINGELL and CUMMINGS changed their vote from ``nay'' 
to ``yea.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. LaHood). The question is on the 
engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


               Motion to Recommit Offered by Ms. DeLauro

  Ms. DeLAURO. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentlewoman opposed to the bill?
  Ms. DeLAURO. I am opposed to the bill in its current form, Mr. 
Speaker.
  The SPEAKER pro tempore. The Clerk will report the motion.
  The Clerk read as follows:

       Ms. DeLauro moves to recommit the bill H.R. 4571 to the 
     Committee on the Judiciary with instructions to report the 
     same back to the House forth with with the following 
     amendment:
       Section 4, insert at the end the following new subsection:
       (e) Not Applicable to Benedict Arnold Corporations.--
       (1) In general.--To the extent the defendant is a Benedict 
     Arnold corporation, this section does not apply, 
     notwithstanding subsection (d).
       (2) Definitions.--For purposes of this subsection:
       (A) The term ``Benedict Arnold corporation'' means a 
     foreign corporation that acquires a domestic corporation in a 
     corporate repatriation transaction.
       (B) The term ``corporate repatriation transaction'' means 
     any transaction in which--
       (i) a foreign corporation acquires substantially all of the 
     properties held by a domestic corporation;
       (ii) shareholders of the domestic corporation, upon such 
     acquisition, are the beneficial owners of securities in the 
     foreign corporation that are entitled to 50 percent or more 
     of the votes on any issue requiring shareholder approval; and
       (iii) the foreign corporation does not have substantial 
     business activities (when compared to the total business 
     activities of the corporate affiliated group) in the foreign 
     country in which the foreign corporation is organized.

  Ms. DeLAURO (during the reading). Mr. Speaker, I ask unanimous 
consent that the motion to recommit be considered as read and printed 
in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Connecticut?
  There was no objection.
  The SPEAKER pro tempore. The gentlewoman from Connecticut (Ms. 
DeLauro) is recognized for 5 minutes in support of her motion to 
recommit.
  Ms. DeLAURO. Mr. Speaker, this motion to recommit is designed to help 
address the problem of domestic corporations reincorporating abroad for 
the express purpose of avoiding new U.S. taxes and now new legal 
liability.
  As we fight terrorism at home and abroad, when we have hundreds of 
thousands of troops in harm's way and are trying to find the resources 
to equip our first responders and ensure the safety of our ports and 
air transit, the last thing we should be doing is passing legislation 
that helps what are essentially corporate tax dodgers.
  With increasing frequency, companies are setting up shell 
corporations in places like Bermuda while continuing to be owned by 
U.S. shareholders and doing business in the United States. The only 
difference is that this new so-called foreign company escapes 
substantial tax liability. What these companies have done is a slap in 
the face of every company which has chosen to stay in America and of 
every citizen who faithfully pays their taxes.
  In my State of Connecticut, Stanley Works once considered 
incorporating in Bermuda to keep up with their competitors who had 
already moved overseas. But they changed their mind. They did the right 
thing.
  But the bill before us provides a litigation and financial windfall 
to corporate expatriates at the expense of companies like Stanley 
Works. Instead of permitting claims to be filed wherever a corporation 
does business, or has

[[Page H7119]]

minimum contacts, this bill requires the suit to be brought where the 
defendant's principal place of business is located. Perhaps that makes 
some sort of sense in the abstract, but in the case of a corporate 
expatriate what that means is that in most cases claims could only be 
filed in places like Bermuda under their liability laws.
  It is bad enough that these companies are essentially cheating on 
their taxes by arguing, rather unconvincingly, that they are not 
American companies. But for them to use this rationale to escape 
liability is outrageous. This is unfair to the victims, and unfair to 
the domestic company who would be forced to compete against these 
companies.

                              {time}  1500

  The Congressional Research Service has analyzed this bill and wrote: 
``In certain circumstances a United States citizen injured in this 
country would not have the judicial forum in the United States in which 
to seek relief.'' In other words, in certain cases, American citizens 
would have no judicial recourse whatsoever.
  These are American companies flouting American tax law. They do 
business here in the United States, and they should be subject to our 
laws, period. So my motion to recommit amends the underlying bill to 
say the new limitations on jurisdiction and venue do not apply to a 
corporate expatriate company. This is a modest, commonsense change to 
address the irresponsible actions of a handful of companies. It is time 
for these companies to live up to their obligations as American 
corporate citizens. I urge my colleagues to vote ``yes'' on this motion 
to recommit.
  Mr. Speaker, I yield 1 minute to the gentleman from Washington (Mr. 
Inslee).
  (Mr. INSLEE asked and was given permission to revise and extend his 
remarks.)
  Mr. INSLEE. Mr. Speaker, we have a delicious debate before us because 
we Democrats believe if Stanley Tool tries to avoid taxes by moving to 
Bermuda and their tool blows up and puts out your eye, an American 
ought to have access to the American judicial system in front of an 
American jury.
  The Republicans want to outsource the job to Bermuda. If a 
corporation goes to France and a product blows up and hurts you, we 
Democrats believe Americans ought to have access to the Americans 
judicial system. The Republicans want to outsource the jury system to 
Paris. We do not even have French fries in our cafeteria anymore, and 
the other side is outsourcing our jobs to France. The same applies to 
Germany and every other country. The other side has outsourced enough 
jobs; we are not going to allow the outsourcing of our jury system, 
too. Support this motion.
  Ms. DeLAURO. Mr. Speaker, I urge my colleagues to support this motion 
to recommit, and I want to thank the gentlewoman from Texas (Ms. 
Jackson-Lee), who is a member of the Committee on the Judiciary who was 
going to offer this motion in committee.
  Mr. SENSENBRENNER. Mr. Speaker, I rise in opposition to the motion to 
recommit.
  The SPEAKER pro tempore (Mr. LaHood). The gentleman from Wisconsin 
(Mr. Sensenbrenner) is recognized for 5 minutes.


                             General Leave

  Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous material on H.R. 4571.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  Mr. SENSENBRENNER. Mr. Speaker, the real outsourcing motion is the 
one which has been made by the gentlewoman from Connecticut (Ms. 
DeLauro). If this motion is adopted and this bill is enacted into law, 
it will cost American jobs. Anytime the cost of doing business in the 
United States goes up, the number of Americans with jobs will go down. 
This motion to recommit would increase the cost of doing business in 
this country and in the process lose American jobs.
  I do not want to hear anybody who has argued in favor of this motion 
ever to come back and complain about the outsourcing of American jobs 
to foreign countries if this motion passes because this is the type of 
thing that will absolutely do that.
  The motion to recommit defines the covered entities as those that 
have substantial business activities in this country, and hurting 
substantial business in American substantially hurts American workers. 
Stand up for American workers; vote down this motion to recommit. Stop 
the outsourcing of jobs by last-minute motions made on the floor with 
red herring arguments. Vote ``no'' on the motion to recommit.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Ms. DeLAURO. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair 
will reduce to 5 minutes the minimum period of time for any electronic 
vote on the question of passage of the bill.
  The vote was taken by electronic device, and there were--ayes 196, 
noes 211, not voting 26, as follows:

                             [Roll No. 449]

                               AYES--196

     Abercrombie
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Becerra
     Bell
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Case
     Chandler
     Clay
     Clyburn
     Cooper
     Costello
     Cramer
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley (CA)
     Doyle
     Duncan
     Edwards
     Emanuel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Goode
     Gordon
     Green (TX)
     Grijalva
     Gutierrez
     Harman
     Herseth
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson (IL)
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kind
     Kucinich
     Lampson
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lucas (KY)
     Lynch
     Majette
     Maloney
     Markey
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Northup
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Sandlin
     Schakowsky
     Schiff
     Scott (GA)
     Scott (VA)
     Sherman
     Skelton
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Taylor (NC)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Van Hollen
     Visclosky
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Wilson (NM)
     Woolsey
     Wu
     Wynn

                               NOES--211

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blunt
     Boehner
     Bonilla
     Bono
     Boozman
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cox
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Dreier
     Dunn
     Ehlers
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Flake
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goodlatte
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht

[[Page H7120]]


     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (OK)
     Manzullo
     McCotter
     McCrery
     McHugh
     McKeon
     Mica
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Wicker
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--26

     Ackerman
     Ballenger
     Blackburn
     Boehlert
     Bonner
     Cannon
     Conyers
     Crowley
     Engel
     Gephardt
     Hastings (FL)
     Johnson, E. B.
     Kennedy (RI)
     Kleczka
     Langevin
     Marshall
     McInnis
     Miller (FL)
     Owens
     Schrock
     Serrano
     Slaughter
     Tauzin
     Towns
     Velazquez
     Whitfield


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. LaHood) (during the vote). Members are 
advised that 2 minutes remain to vote.

                              {time}  1525

  Mr. SMITH of New Jersey changed his vote from ``aye'' to ``no.''
  Mr. CARSON of Oklahoma, Mr. TAYLOR of North Carolina and Mrs. NORTHUP 
changed their vote from ``no'' to ``aye.''
  So the motion was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 229, 
nays 174, not voting 30, as follows:

                             [Roll No. 450]

                               YEAS--229

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blunt
     Boehner
     Bonilla
     Bono
     Boozman
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cantor
     Capito
     Cardoza
     Carson (OK)
     Carter
     Case
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, M.
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Flake
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Holden
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     Matheson
     McCotter
     McCrery
     McHugh
     McKeon
     Mica
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Moran (VA)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Scott (GA)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stenholm
     Sullivan
     Sweeney
     Tancredo
     Tanner
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--174

     Abercrombie
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Becerra
     Bell
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boucher
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Carson (IN)
     Chandler
     Clay
     Clyburn
     Cooper
     Costello
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Diaz-Balart, L.
     Dicks
     Dingell
     Doggett
     Dooley (CA)
     Doolittle
     Doyle
     Emanuel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Green (TX)
     Grijalva
     Gutierrez
     Harman
     Herseth
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kind
     King (NY)
     Kucinich
     Lampson
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lynch
     Majette
     Maloney
     Markey
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sandlin
     Schakowsky
     Schiff
     Scott (VA)
     Sherman
     Skelton
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Tierney
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Van Hollen
     Visclosky
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                             NOT VOTING--30

     Ackerman
     Ballenger
     Blackburn
     Boehlert
     Bonner
     Cannon
     Conyers
     Crowley
     Engel
     Frelinghuysen
     Gephardt
     Gordon
     Hastings (FL)
     John
     Johnson, E. B.
     Kennedy (RI)
     Kleczka
     Langevin
     Marshall
     McInnis
     Miller (FL)
     Owens
     Sanders
     Schrock
     Serrano
     Slaughter
     Tauzin
     Towns
     Velazquez
     Whitfield


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised that 2 
minutes remain to vote.

                              {time}  1535

  Mr. SANDLIN and Mr. BISHOP of New York changed their vote from 
``yea'' to ``nay.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________