Amendment Text: H.Amdt.605 — 109th Congress (2005-2006)

There is one version of the amendment.

Shown Here:
Amendment as Offered (10/27/2005)

This Amendment appears on page H9319-9320 in the following article from the Congressional Record.



[Pages H9312-H9329]
                  LAWSUIT ABUSE REDUCTION ACT OF 2005

  The SPEAKER pro tempore (Mr. Putnam). Pursuant to House Resolution 
508 and rule XVIII, the Chair declares the House in the Committee of 
the Whole House on the State of the Union for the consideration of the 
bill, H.R. 420.

                              {time}  1345


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 420) to amend Rule 11 of the Federal Rules of Civil Procedure to 
improve attorney accountability, and for other purposes, with Mr. 
Latham in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered read the 
first time.
  The gentleman from Texas (Mr. Smith) and the gentleman from New York 
(Mr. Nadler) each will control 30 minutes.
  The Chair recognizes the gentleman from Texas (Mr. Smith).
  Mr. SMITH of Texas. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I support H.R. 420, the Lawsuit Abuse Reduction Act of 
2005.
  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, when 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 the 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 plaintiff's hospital room and asked how the patient 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 commonsense notion that 
it is necessary to properly chew hard foodstuffs prior to swallowing.'' 
But, of course, the defendants had to absorb hundreds of thousands of 
dollars in legal fees.
  In a New Jersey Little League game, a player lost sight of a fly ball 
hit because of the sun. He was injured when the ball struck him in the 
eye. The coach, who was forced to hire a lawyer after the boy's parents 
sued, had to settle the case for $25,000.
  Today almost any party can bring any suit in almost any jurisdiction. 
That is because plaintiffs and their attorneys have nothing to lose. 
All they

[[Page H9313]]

want is for the defendant to settle. This is legalized extortion. It is 
lawsuit lottery.
  Defendants, on the other hand, can unfairly lose their lifetime 
savings, their careers, their businesses, and their reputations. This 
is simply not justice.
  There is a remedy: the Lawsuit Abuse Reduction Act. It passed the 
House last year by a margin of almost 60 votes. The bill applies to 
both plaintiffs who file frivolous lawsuits to extort financial 
settlements and to defendants who unnecessarily prolong the legal 
process. If a judge determines that a claim is frivolous, they can 
order the plaintiff to pay the attorneys' fees of the defendant who was 
victim of their frivolous claim. This will make a lawyer think twice 
before filing a frivolous lawsuit.
  It is a problem that even the American Trial Lawyers Association has 
tried to address in its own code of conduct by declaring, ``No American 
Trial Lawyers Association member shall file or maintain a frivolous 
suit, issue, or position.'' However, ATLA has not disciplined a single 
attorney for violation of this code of conduct in the last 2 years.
  This legislation also prevents forum shopping. It requires that 
personal injury claims be filed only where the plaintiff resides, where 
the injury occurred, or 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. Here is what he says about forum 
shopping:
  ``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; they're State Court 
judges; they're populists. They've got large populations of voters who 
are in on the deal. They're getting their piece in many cases. And so 
it's a political force in their jurisdiction, and it's almost 
impossible to get a fair trial if you're a defendant in some of these 
places. The plaintiff lawyer walks in there and writes the number on 
the blackboard, and the first juror meets the last one coming out the 
door with that amount of money . . . 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.''
  Forum shopping is a part of lawsuit abuse, and we must pass 
legislation to stop it from occurring. Even several largely recognized 
Democrats have acknowledged the need to end frivolous lawsuits. For 
instance, the John Kerry for President campaign endorsed national 
legislation in which ``lawyers who file frivolous cases would face 
tough mandatory sanctions.'' And former Vice Presidential candidate 
Senator Edwards stated, ``Lawyers who bring frivolous cases should face 
tough, mandatory sanctions.''
  The Lawsuit Abuse Reduction Act is sensible reform that will help 
restore confidence to America's justice system.
  Mr. Chairman, the following organizations support H.R. 420: American 
Tort Reform Association, National Association of Home Builders, 
National Association of Manufacturers, National Restaurant Association, 
American Insurance Association, and the United States Chamber of 
Commerce. And this legislation is the top legislative priority of the 
National Federation of Independent Businesses.
  Mr. Chairman, I reserve the balance of my time.
  Mr. NADLER. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I oppose this bill because it will not reduce frivolous 
lawsuits, but will instead increase the cost of litigation at the State 
and Federal level, set back the fairness of civil rights litigation, 
and favor foreign corporate defendants at the expense of their domestic 
competitors. As a result of this misguided legislation, satellite 
litigation, costs and delays will result, and litigation abuses will 
not be reduced.
  H.R. 420 makes significant changes to Rule 11 sanctions without 
following the statutory rulemaking process. The Association of Chief 
Justices of the States and the Federal Judicial Council have both 
criticized skipping the statutory rulemaking process. This bill would 
revert Rule 11 back to the 1983 version and unduly affects plaintiffs 
in civil rights cases. The current Rule 11 was adopted in 1993 
specifically to correct abuses by defendants in civil rights cases. By 
rolling back this rule and requiring a mandatory sanctions system to 
civil rights cases, H.R. 420 will chill many legitimate and important 
civil rights actions.
  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 it should. 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.
  The Honorable Robert Carter, United States District Court Judge for 
the Southern District of New York, who was one of the pioneers in civil 
rights legislation and worked on the Brown v. Board of Education case, 
stated, ``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.'' This is a good example of the 
dreadfully detrimental effect of this rule on civil rights cases.
  Furthermore, this bill will operate to benefit foreign corporate 
defendants at the expense of their domestic counterparts. 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 permits the suit to 
be brought only 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 
manufactured by a foreign competitor, under this bill the injured U.S. 
citizen would have no recourse against a foreign corporation, whereas 
he or she would have recourse against the comparable U.S. corporation. 
This is unfair to both the U.S. citizen with no recourse and to all 
U.S. companies that must compete against the foreign firm. Consequently 
American employers and employees would be put at an unfair disadvantage 
vis-a-vis their foreign counterparts, not exactly what we would want to 
be doing not only from a standpoint of fairness, but from a standpoint 
of our economy.
  Mr. Chairman, this bill has another deleterious effect. Because it 
provides for reasonable attorneys' fees in the case of a sanction, 
because many Rule 11 sanctions are minor, and in any complex case there 
are almost invariably going to be some, the current law, first of all, 
permits the judge discretion whether to impose sanctions or not. This 
makes it mandatory for even the most picayune infractions.
  Second of all, the current law says that if it is pointed out to an 
attorney that he has done something that would fall under Rule 11, he 
has 21 days to correct it. If he does not correct it, he is subject to 
sanctions. This would say they have no time to correct it. They get 
automatic sanctions. That is unfair.
  Thirdly, because under those circumstances this bill provides for 
attorneys' fees, they had better have their head examined if they want 
to sue a large corporation, because if they are the little guy, and 
they have one attorney, and he is paid a reasonable fee, and they can 
afford the litigation, they hope; but if they are suing the big 
company, and General Motors has 32 attorneys lined up over there, and 
they are all charging $800 an hour, then reasonable attorneys' fees are 
going to be a lot of money, and they have to anticipate, if they file 
that suit, that because of the mandatory nature of the Rule 11 
sanctions that this bill would impose, because of the lack of an 
ability to correct it, because of the automatic sanctions and mandatory 
sanctions, they have to assume that they are going to have to pay those 
sanctions, and they are going to have to pay the mandatory attorneys' 
fees, so they had better not sue the big boys.

[[Page H9314]]

  What this bill is really saying is big corporations shall be exempt 
from lawsuits by people who cannot afford to pay huge attorneys' fees 
of the big corporations, because we have to assume that will happen, 
and because this bill leaves no discretion to the judge.
  It is no surprise that the United States Judicial Conference, the 
National Association for the Advancement of Colored People, the 
Alliance for Justice, Public Citizen, People for the American Way, the 
American Association of People with Disabilities, the Lawyers Committee 
for Civil Rights in 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, the National Association of Consumer Advocates, and 
the NAACP Legal Defense Fund all oppose the bill.
  In other words, if Members care about civil rights, if they care 
about the ability of the consumer to have justice with a large 
corporation, if they care about civil liberties, if they care about 
people being able to use the Federal or State courts, they must vote 
against this bill.
  I urge my colleagues to vote against this poorly drafted and unfair 
legislation.
  Mr. Chairman, I reserve the balance of my time.


                      Announcement by the Chairman

  The CHAIRMAN. Visitors in the gallery will refrain from showing 
approval or disapproval of proceedings.
  Mr. SMITH of Texas. Mr. Chairman, I yield 5 minutes to the gentleman 
from Florida (Mr. Keller), a member of the Judiciary Committee.
  Mr. KELLER. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  Mr. Chairman, I rise today as a cosponsor and strong supporter of the 
Lawsuit Abuse Reduction Act. I am going to tell the Members why I 
support this legislation and what the key components of this 
legislation is.
  First, why do we need this legislation? We need tough mandatory 
sanctions to crack down on frivolous lawsuits. We need to care about 
each other more and sue each other less. We need to get back to the 
old-fashioned principles of personal responsibility and get away from 
this new culture where people play the victim and blame others for 
their problems. Most importantly, we need to protect those small 
business people who are out there creating 70 percent of all new jobs 
in America. These small business people work hard and play by the 
rules, but they cannot afford to defend themselves from meritless 
litigation.
  For example, if they have a suit brought against them, to take it to 
trial to successfully win the suit, they often have to pay over 
$100,000 to a defense attorney. So what do they do? They have to pay 
about 10 grand to settle the case to get rid of it for strictly 
business reasons even though they did nothing wrong.
  This bill will help crack down on these frivolous suits by doing 
three key things. First, it provides tough mandatory sanctions, not 
discretionary sanctions, if a judge finds that we have a violation of 
Rule 11, which may include the payment of the other side's attorneys' 
fees. Second, this bill has teeth in it by having a three-strikes-and-
you're-out penalty. Three strikes and you're out means if a judge finds 
that they have violated Rule 11 bringing a frivolous claim on three 
separate occasions, they will be suspended from practicing law in that 
particular Federal court for 1 year and will have to reapply for 
practice there. That is a tough sanction. I happen to be the author of 
it. But it is key for Members to know that there is a bipartisan idea, 
three strikes and you're out.

                              {time}  1400

  To my left here, you see a quote from Senator John Edwards, himself a 
lifelong well-known personal injury lawyer, a former Senator from North 
Carolina and former Vice Presidential candidate. He said in Newsweek 
magazine, December 15, 2003, ``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.''
  Senator Edwards is not the only one who holds that view. You will see 
that Senator Edwards' running mate, Senator John Kerry, told the 
Associated Press on October 10, 2004, ``Lawyers who file frivolous 
cases would face tough mandatory sanctions, including a three-strikes-
and-you're-out provision that forbids lawyers who file frivolous cases 
from bringing another suit for the next 10 years.''
  President George W. Bush, back when he was a candidate, February 9, 
2000 said, ``As President, I will bring common sense to our courts and 
curb frivolous lawsuits. If a lawyer files three junk lawsuits, he will 
lose the right to appear in Federal Court for 3 years. Three strikes 
and you're out.''
  The Austin American Statesman summarized President Bush's plan as 
saying, ``Bush's plan includes stiffer penalties for lawsuits 
determined by judges to be frivolous, including a three-strikes-and-
you're-out rule for lawyers who repeatedly file such claims.''
  On the day before we marked up this bill in the Judiciary Committee, 
May 24, 2005, I visited with President Bush in his personal residence 
and asked him, Mr. President, do you still stand by this policy that we 
need three strikes and you're out to crack down on frivolous lawsuits? 
He said, I absolutely do. That is the policy of the White House.
  So we have the Democrat Presidential candidate, Mr. Kerry; the 
Democrat Vice Presidential candidate, Mr. Edwards; the President of the 
United States; and the Judiciary Committee on a voice vote adopted this 
three-strikes-and-you're-out provision.
  The third key element of this Lawsuit Abuse Reduction Act is language 
to avoid forum shopping. It is the same language that we had in the 
class action legislation, which was approved on a bipartisan basis by 
both the House and the Senate and signed into law. Essentially, if 
there is an accident, the claim will be brought where the accident is 
or where the plaintiff resides or where the defendant resides.
  For example, if you lived in Orlando, Florida, like I do, and you 
went to your local McDonald's and you slipped on a puddle of water, you 
could bring your suit in Orlando, where it should be. What you could 
not do is say, well, I know that Madison County, Illinois is a judicial 
hellhole, and there are lots of plaintiff-friendly judges, and 
McDonald's does business up in Madison County, Illinois. We are going 
to go file our suit there and do a little forum shopping. That is the 
kind of thing that is not going to be allowed here.
  In short, this is a commonsense bill that provides tough mandatory 
sanctions to crack down on frivolous suits and includes provisions that 
enjoy bipartisan support. This bill has already passed the House. I 
urge my colleagues to vote ``yes'' on this important legislation.
  Mr. NADLER. Mr. Chairman, I observe the gentleman tells us that 
President Bush assures us of the problem of frivolous lawsuits. 
President Bush assured us there were weapons of mass destruction in 
Iraq and a lot of other nonsense. So I do not give that too much 
credence.
  Mr. Chairman, I yield 5 minutes to the distinguished gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the ranking member, 
and I thank my good friend and colleague from Texas (Mr. Smith). There 
are many opportunities that we have to agree. I believe in his 
unabiding commitment to the integrity to the judicial system. That is 
why I rise to quote him when he says that there is a premise that we 
all deserve justice and that justice, in essence, should not be denied. 
He agrees with that, and I agree with that. Frankly, however, this 
legislation is not merely a denial of justice. It is an obliteration, a 
complete destruction of justice.
  It is interesting in the backdrop of the United States promoting 
democratization in Iraq, challenging Iran, and now with the proceedings 
against Saddam Hussein and the very basis of our dependence upon a fair 
and impartial judicial system that will allow lawyers to be able to 
petition for their client or defend their client, that we would stand 
here on the floor of the House today and in essence create the lawsuit 
elimination legislation rather than the suggestion that we are 
preventing abuse.
  Let me tell you what this legislation intends to do. This legislation 
intends

[[Page H9315]]

to ride roughshod over States' rights, forcing State courts to enact 
burdensome procedures and even stripping their jurisdiction over 
certain cases. That means that, in essence, it forces State judges 
within 30 days of a case being filed to conduct an extensive and 
lengthy pretrial hearing to determine whether Federal Rule 10 must be 
imposed. We already know that Federal Rule 11 has given the court 
system an effective tool to ensure, if you will, that if there is 
frivolous activity in the courthouse, or a lawyer files a frivolous 
case, that lawyer can be sanctioned.
  This now protects foreign corporations at the expense of consumers. 
Why? Because you may be able to sue in a State court, but the State 
court may not have jurisdiction over that foreign corporation, leaving 
the victim of products liability, the victim of a terrible heinous 
accident left without remedy in a State court.
  It makes sanctions mandatory rather than discretionary. It undermines 
the Federal judiciary system and the court system. It says to our 
judges that although you have gone to the highest litmus test, 
confirmation on the Federal bench, elections and bar scrutiny, we are 
telling you that we are going to pierce your courtroom and we are going 
to take away the rights of Rule 11 where you have discretion and we are 
going to simply tell you to throw a lawyer out.
  Then for myself as an African American and someone whose very 
existence is based upon the privileges that Thurgood Marshall had, and 
many other lawyers, to go into the courthouse, and at that time and era 
in the early 1940s and 1950s, speak language that could have been 
considered frivolous, I would suggest that just in a general sense, 
whether or not this particular legislation speaks particularly to that 
issue, there are many times in our history where lawyers may be 
considered frivolous because they are speaking a language that opposes 
society.
  The question of an equal education under Brown v. Topeka might have 
been frivolous. I do not want to have a Federal law that suggests that 
you cannot go into the courthouse. This bill allows judges to order 
individuals to reimburse litigation costs, including attorneys' fees, 
by specifically stating that reasonable attorneys' fees should be taken 
into account when assessing the amount of the sanction. That means that 
the poorer client is going to be thrown out.
  This is supposed to help small businesses. At the same time, it may 
be the small business that is a petitioner. They may think their case 
is legitimate.
  For example, what about this lawsuit for one business against 
another. That is frivolous lawsuits, when you had Enterprise, a very 
big company, filed a lawsuit against Rent-A-Wreck of America, a tiny 
rental company, and Hertz Corporation and threatened to file lawsuits 
against several other rental car companies that used the phrase, ``pick 
you up,'' claiming that ``We'll pick you up'' is Enterprise's slogan. 
Then there was a whole bunch of other lawsuits around who will pick you 
up, and who is not picking you up and why you are being picked up.
  We could label frivolous lawsuits across the board. It should be left 
to the judges in Rule 11. This legislation removes the safe harbor 
provision of the rule which allows an attorney a period of 21 days to 
withdraw an objectionable pleading. That undermines justice. Maybe the 
lawyer made a mistake and therefore we do not have that opportunity.
  Mr. Chairman, I would simply say this is a bill that has no basis in 
need, and we should unanimously defeat it.
  Mr. Chairman, I rise in opposition to the base bill before the 
Committee of the Whole H.R. 4571, the Lawsuit Abuse Reduction Act of 
2005 and state my support for the substitute offered by the Gentleman 
from as California, Mr. Schiff.
  As I mentioned during the Committee on the Judiciary's oversight 
hearing on this legislation during its iteration in the 108th Congress 
and reiterated in my statement for the markup, one of the main 
functions of the Congress before it passes legislation is to analyze 
potentially negative impact against the benefits that it might have on 
those affected. The base bill before the House today does not represent 
the product of careful analysis.
  In the case of H.R. 4571, the Lawsuit Abuse Reduction Act, the 
oversight functions of the Judiciary Committee allowed us to craft a 
bill that will protect those affected from negative impacts of the 
shield from liability that it proposes. This legislation required 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 local 
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 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 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 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 fund 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

[[Page H9316]]

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. Schiff 
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 of corporate 
fraud.
  Mr. SMITH of Texas. Mr. Chairman, I yield 4 minutes to the gentleman 
from Ohio (Mr. Chabot), the chairman of the Constitutional Law 
Subcommittee of the Judiciary Committee.
  Mr. CHABOT. Mr. Chairman, I want to first of all commend the 
gentleman from Texas for his leadership in this area. This is a very 
important piece of legislation. I think he does us all proud by pushing 
for this and ultimately, I believe, being successful in its passage.
  I am pleased to be a cosponsor of H.R. 420, legislation that will 
help curtail frivolous lawsuits. It is reassuring to once again see 
that the Congress is taking measures to help rid our court system of 
lawsuits that are costly and hurt both consumers and businesses in our 
country. The legislation is aimed at enforcing the laws that govern 
attorneys in relation to filing frivolous lawsuits. The actual standard 
of what constitutes a frivolous lawsuit will not change. But 
consequences for such actions will.
  In 1993, the Civil Rules advisory committee, an unelected body, 
decided that sanctions against attorneys who file frivolous lawsuits 
should be optional. Justice David Brewer once wrote: ``America is the 
paradise of lawyers.''
  In my opinion, this ``paradise'' has resulted in increased prices for 
consumer goods and higher insurance premiums and a decrease in domestic 
manufacturing, which has been one of the things that we have heard more 
and more discussion about in this country, the loss of manufacturing 
jobs.
  H.R. 420 seeks to rein in lawsuit-happy litigators by restoring 
mandatory sanctions for filing frivolous lawsuits, a violation of Rule 
11 of the Federal Rules of Civil Procedure. This bill also prevents 
forum shopping by requiring that personal injury cases be brought only 
where the plaintiff resides, where the plaintiff was allegedly injured, 
or where the defendant's principal place of business is located.
  Finally, the bill would apply a three-strikes-and-you-are-out rule, 
as we have heard, to attorneys who commit three or more Rule 11 
violations in Federal district court. As a member of the House 
Judiciary Committee, as well as a member of the Small Business 
Committee, I have heard endless accounts of family-owned small 
businesses being led to financial ruin by the exorbitant cost of 
frivolous lawsuits.
  According to the NFIB, the National Federation of Independent 
Businesses, small business owners ranked the cost and availability of 
liability insurance as the second most important problem facing small 
business owners today. Small business owners know that if they are 
sued, they are likely to have to choose between a long and costly trial 
or an expensive settlement. Either choice significantly impacts the 
operations of a business and the livelihood of its employees. This 
hurts the little guy because of these lawsuits.
  Most business decisions today are made with this new reality in mind. 
This bill will help make American small businesses more competitive by 
lowering their unnecessary legal expenses, allowing business owners to 
focus on hiring new employees and expanding available products.
  This bill will help make American businesses more competitive. It 
will allow business owners to focus on hiring new employees, which is 
really critical in this economy that we are faced with, and expanding 
the availability of products and services and improving the American 
economy.
  Mr. Chairman, I again want to thank the gentleman from Texas for his 
leadership in introducing this important piece of legislation. It is 
time that we put an end to these frivolous lawsuits that are impacting 
the economy, that are hurting, especially, small businesses and are 
resulting in the loss of jobs of many, many Americans in this country.
  Mr. NADLER. Mr. Chairman, I yield 3 minutes to the gentlewoman from 
Ohio (Mrs. Jones).
  Mrs. JONES of Ohio. Mr. Chairman, I thank my good friend from New 
York for yielding me the time.
  Mr. Chairman, I rise in opposition to H.R. 420, legislation that 
would have a chilling effect on a plaintiff's ability to seek recourse 
in court. As I have listened to my colleagues on the floor talk about 
three-strikes-and-you-are-out with regard to a counsel, you would think 
this was a criminal situation. They took discretion away from judges 
with mandatory sentencing. They said, Judge, no matter what the facts 
are of the case, if this is the penalty, then you impose such penalty.
  What is very interesting is, even though my colleague cited John 
Kerry, John Edwards, President Bush, and the Judiciary Committee, not 
one of them have sat as a judge in a case, making decisions about Rule 
11 cases.

                              {time}  1415

  I am proud to say that I served as a judge for 10 years in the trial 
court in the State of Ohio and have had the ability to review 
complaints, review discovery decisions, review pleadings. And judges 
should be vested with the same discretion they are vested with in other 
situations and not be subjected to this Rule 11 sanctions piece that is 
being proposed by this legislation.
  It is unconscionable that the claim that businesses get on with more 
business or they can hire more employees, to use that to play against 
the ability of a plaintiff to bring a lawsuit. What is going to make 
business do better in the United States of America is this country 
having a policy that encourages business. What is going to make people 
work better in the United States of America is having greater 
opportunity for business, and you cannot blame business not doing well 
on lawsuits, just as you cannot blame doctors running all over creation 
because of medical malpractice.
  I encourage all of my colleagues to take a close look at what this 
legislation will do, to take a close look and listen to the arguments 
that are being made by my colleagues with regard to this legislation, 
and vote in opposition to H.R. 420.
  Mr. SMITH of Texas. Mr. Chairman, I reserve the balance of my time.
  Mr. NADLER. Mr. Chairman, I yield myself such time as I may consume.
  I will summarize in a few words what we are really talking about. 
There are frivolous lawsuits. There are also novel legal claims which 
some may consider frivolous, but which, in the fullness of time, yield 
legal progress. The claims against Plessy v. Ferguson were considered 
frivolous at first, but eventually the courts accepted them, and so 
with many other arguments.
  The courts have Rule 11 sanctions available at their discretion. Any 
judge who thinks an attorney is being frivolous, is wasting the court's 
time, is wasting his adversary's time, can impose the sanctions today. 
The courts have not asked for further power. The courts have certainly 
not asked us to tie their hands and to mandate that they impose 
sanctions whenever they are requested and a technicality may have been 
violated. That is not justice, to enforce technicalities against the 
discretion of the judge.
  The Association of State Chief Justices are not in favor of this. The 
Judicial Council of the United States is not in favor of this.
  To mandate that attorneys be sanctioned on any technicality, to say 
that an attorney may not correct his own mistake, you must sanction 
him; to say that three sanctions on three technicalities means he 
cannot practice anymore is to tell attorneys, do not try novel legal 
arguments, do not argue new claims. To say that attorneys' fees, 
reasonable attorneys' fees, will be assessed mandatorily, whatever the 
judge thinks, whether he thinks or she thinks it is reasonable or not, 
is to say that you better not sue the big boys, that you better not sue 
General Motors, and a small business, a supplier cannot sue Wal-Mart 
lest the attorney violate some technicality and the attorneys' fees of 
Wal-Mart, with their 45 attorneys sitting there, be assessed against 
the small supplier.
  This is not justice. What this bill is, Mr. Chairman, is another 
attempt, another in a series of attempts, the class action bills, the 
various other bills we have had here, to close the courts, to close the 
courts to anyone who would try to hold giant corporations accountable. 
That is what this is. This is a bill

[[Page H9317]]

that says, do not try to use the courts for civil rights, do not try to 
use the courts to sue large corporations. We are going to make sure you 
do not. We are going to punish you if you do, and we are going to make 
sure you cannot find an attorney who will take the case because they 
are worried about draconian imposition of draconian attorneys' fees.
  So I urge my colleagues to reject this bill. It should be rejected, 
because the courts ought to be opened to all people who need to use 
them. Otherwise there is no justice.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, will the gentleman yield?
  Mr. NADLER. I yield to the gentlewoman from Texas.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I was listening to the 
gentleman framing the question, and the gentleman framed the question I 
think in the way that we should ask our colleagues for them to give us 
an answer. I think what the gentleman has suggested in his very 
detailed and eloquent presentation, there is a judicial system in place 
that is functioning and functional. We should take the Boy Scouts' 
oath, make your camp better than you found it. Therefore, if there are 
issues that we can improve in the judiciary, let us do it.
  But I am just looking at some information here that tells me that 
Federal litigation is, in fact, decreasing. A 2005 report issued by the 
U.S. Department of Justice says that the U.S. district courts in some 
areas, of course, fell 79 percent, fell 79 percent, the cases, the tort 
cases, between 1985 and 2003. According to the Administrative Office of 
the U.S. Courts, tort actions in the U.S. district courts went down 
from 29 percent from 2002 to 2003, so it fell 28 percent. In addition, 
over the last 5 years, Federal civil filings have not only decreased 8 
percent, but the prefilings that are personal injury cases has also 
declined. State litigation is decreasing. The numbers show they are 
decreasing. Lawsuit filings are decreasing. As I said, tort filings 
have declined 5 percent since 1993. Contract filings have declined.
  I do not particularly consider that a good omen. I would like people 
to legitimately feel they can go into the courts for their remedies. 
But the question is, it is not broken, and here we are putting heavier 
burdens on the court system that literally shuts the door closed to a 
number of individuals, and I think that is completely unacceptable for 
the responsibility of this Congress.
  Mr. NADLER. Mr. Chairman, reclaiming my time, I thank the 
gentlewoman.
  I think the gentlewoman has established not only that the system is 
not broken, but that any claim of an avalanche of frivolous litigation 
is absurd for these kinds of statistics of declining use of the courts, 
of declining caseloads, of declining filings. Again, the courts have 
not requested this, they have not said that there is any problem, there 
is any problem existing. This is an attempt again to shut the 
courthouse doors to people who need access to the courts, and on the 
most fundamental grounds of justice, this bill ought to be soundly 
rejected.
  Mr. Chairman, I yield back the balance of my time.
  Mr. SMITH of Texas. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, the scourge of frivolous litigation mars the fabric of 
our legal system and undermines the vitality of our economy. As 
President Bush has stated, ``We have a responsibility to confront 
frivolous litigation head on.'' H.R. 420 would do exactly that.
  Frivolous lawsuits have become a form of legalized extortion. Without 
the serious threat of certain punishment for filing frivolous claims, 
innocent people and small businesses will continue to confront the 
stark economic reality that simply paying off frivolous claims through 
monetary settlements is always cheaper than litigating the case until 
no fault is found. Frivolous lawsuits subvert the proper role of the 
tort system and affront fundamental notions of fairness that are 
central to our system of justice.
  The effects of frivolous litigation are both clear and widespread. 
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 injuries and even hurt feelings. 
Common playground equipment is now an endangered species. The Girl 
Scouts in the metro Detroit area alone have to sell 36,000 boxes of 
cookies each year just to pay for their liability insurance. Good 
Samaritans are discouraged. 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.''
  Unfortunately, the times we are in allow for a much more litigious 
environment than common sense would dictate. A Federal lawsuit has even 
been filed against U.S. weather forecasters after the South Asian 
tsunami disaster.
  Today results of frivolous lawsuits are written on all manner of 
product warnings that aim to prevent obvious misuse. A warning label on 
a baby stroller cautions, ``Remove child before folding.'' A five-inch 
brass fishing lure with three hooks is labeled, ``Harmful if 
swallowed.'' And household irons warn, ``Never iron clothes while they 
are being worn.''
  Small businesses and workers suffer the most. The Nation's oldest 
ladder manufacturer, 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, while never losing 
an actual court judgment. The workers of John S. Tilley Ladders never 
faced a competitor they could not beat in the marketplace, but they 
were no match for frivolous lawsuits.
  When Business Week published an extensive article on what the most 
effective legal reforms would be, it stated that what is needed are 
``Penalties That Sting.'' As Business Week recommends, ``Give judges 
stronger tools to punish renegade lawyers.''
  Before 1993, it was mandatory for judges to impose sanctions such as 
public censures, fines, or orders to pay for the other side's legal 
expenses. Then the Civil Rules Advisory Committee, an obscure branch of 
the courts, made penalties optional. This needs to be reversed by 
Congress. Today, H.R. 420 would do exactly that.
  Rule 11 of the Federal Rules of Civil Procedure presently does not 
require sanctions against parties who bring frivolous lawsuits. Without 
certain punishment for those who bring these suits and the threat of 
serious 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. In fact, as currently 
written, Rule 11 allows lawyers to entirely avoid sanctions for filing 
frivolous claims by withdrawing them within 3 weeks. Such a rule 
actually encourages frivolous claims because personal injury attorneys 
can file harassing pleadings secure in the knowledge that they have 
nothing to lose. If someone objects, they can always retreat without 
penalty.
  H.R. 420 would restore mandatory sanctions and monetary penalties 
under Federal Rule 11 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 have interstate 
implications and close the loopholes of a tort system that often 
resembles a tort lottery.
  The legislation applies to frivolous lawsuits brought by businesses 
as well as individuals, and it expressly precludes 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. The Class Action Fairness 
Act, which was recently signed into law after receiving broad support 
in both Houses, prohibits the unfair practice of forum shopping for 
favorable courts when the case is styled as a class action. The same 
policy should apply to individual lawsuits as well.
  One of the Nation's wealthiest personal injury attorneys, Richard 
``Dickie'' Scruggs, and I quoted him at length a while ago, but I will 
quote him a little bit shorter right now, described what he calls 
``magic jurisdictions'' as ``What I call the `magic jurisdictions' is 
where it is almost impossible to get

[[Page H9318]]

a fair trial if you are a defendant. Any lawyer fresh out of law school 
can walk in there and win the case, so it does not matter what the 
evidence or the law is.''
  America's system of justice deserves better, much better. H.R. 420 
prevents the unfair practice of forum shopping by requiring that 
personal injury cases be brought only where there is some reasonable 
connection to the case; namely, where the plaintiff lives or was 
allegedly injured, where the defendant's principal place of business is 
located, or where the defendant resides.
  The time for congressional action to close the loopholes that create 
incentives for frivolous lawsuits is now. Too many jobs have been lost 
and more will not be created if this legislation is not enacted into 
law.
  I urge my colleagues to return a measure of fairness to America's 
legal system by passing the Lawsuit Abuse Reduction Act.
  Mr. TERRY. Mr. Chairman, I rise in opposition of H.R. 420, the 
Lawsuit Abuse Reduction Act of 2005. This legislation runs roughshod 
over States' rights, forcing State courts to enact onerous procedures 
and stripping States' jurisdiction in certain cases. This bill would 
also force restrictive venue provisions on all State courts, which 
essentially tells State courts they do not have jurisdiction over 
certain claims brought by its own citizens. Let State legislatures and 
State judiciaries set their own Rules. And, by the way, a frivolous, 
meritless lawsuit is damaging to the system and the offending parties 
should be punished.
  This bill also protects foreign corporations at the expense of 
consumers in that it unfairly dictates to States where their citizens 
can enforce legal right against a corporation based outside of the 
United States. While H.R. 420 allows a victim to file a claim in a 
court in his or her home State, because of existing jurisdictional 
rules that State may be unable to exercise power over the foreign 
corporation.
  For example, a corporation in Mexico sells cribs in the United States 
and those cribs are shipped to Kansas and sold in Nebraska. The cribs 
turn out to be defective and one collapses on a baby in Nebraska, 
killing it. It may be impossible, under this proposed bill, for that 
Nebraska family to file a lawsuit in Nebraska. The family may have to 
file the suit in Kansas but would have to take the case to Mexico under 
H.R. 420. I cannot in good conscience support a bill preventing a 
family in this situation from filing a lawsuit in its own State.
  Mr. STARK. Mr. Chairman, I rise in opposition to the so-called 
Lawsuit Abuse Reduction Act because it would hurt 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.
  Prior to 1993, defendants in civil rights cases would file a crushing 
number of motions alleging frivolous actions on the part of the 
plaintiff in a blatant attempt to delay the case. In 1993, the rules 
were changed and judges were empowered to determine sanctions for 
frivolous lawsuits on a case-by-case basis, removing this delay tactic 
from wealthy defendants. However, since the Republican Party doesn't 
think judges have any business deciding how to run their courts, they 
want to repeal this change and revert back to the days of delayed 
justice.
  This is one of many reasons why the U.S. Judicial Conference, headed 
by Chief Justice John Roberts, opposes this bill. Further, H.R. 420 is 
unconstitutional because it forces every State court to implement new 
court rules and procedures, even though Congress has no jurisdiction 
over State courts.
  Justice delayed is justice denied and I am proud to stand up for our 
Constitution, judicial system, and all Americans by voting no on this 
bill. If that makes me a friend of the trial lawyers, then I proudly 
stand with the brilliant litigators Thurgood Marshall and Abraham 
Lincoln in opposition to political hacks like Karl Rove and George W. 
Bush.
  Mr. UDALL of Colorado. Mr. Chairman, I am not opposed to changing 
Federal court rules to try to make it less likely that small business 
owners or other Americans will be forced to defend themselves against 
frivolous lawsuits. So, I could support many of the provisions of this 
bill. However, the bill has such serious flaws that I cannot support it 
in its current form.
  Part of the bill would change Rule 11 of the Federal Rules of Civil 
Procedure in ways that would basically restore that rule as it was in 
1992. As a result, lawyers filing frivolous lawsuits in Federal courts 
would face mandatory sanctions in the form of payments to those who 
were victimized by those lawsuits. I think that could be an effective 
deterrent, and can support it.
  I also can support strong provisions to deter--and, if necessary 
punish--repeated violations of the rules against misuse of the courts 
through frivolous lawsuits. However, I am not enthusiastic about the 
idea of Congress's attempting to micro-manage the State courts or to 
take over the job of regulating the practice of law in State courts in 
the way that this bill would do.
  And I am definitely opposed to changing the rules in ways that could 
make it impossible for people with valid claims to receive proper 
consideration of their cases.
  For that reason, I must object to the provisions of the bill which, 
as the non-partisan Congressional Research Service explains, ``would 
preclude litigation in United States courts that would be authorized 
under current law. For instance, [under current law] . . . if a 
corporation has stores, factories, offices, or property anywhere in the 
United States . . . a Federal suit might be brought against it in one 
of the judicial districts where . . . [an objectionable] activity 
occurs or property [is located. But] . . . enactment of H.R. 420 
apparently could result in a plaintiffs being left without a judicial 
forum in the United States for his or her tort claim.''
  Leaving some Americans with no recourse to the courts even for valid 
claims would be bad enough. But I find it even more unacceptable that 
prime beneficiaries of these provisions could be American companies who 
have chosen to fly a foreign flag in order to escape paying their 
Federal taxes.
  I voted for the Schiff-Kind amendment because I favor strong measures 
against frivolous lawsuits but oppose giving those fugitive 
corporations such an unfair advantage over truly American companies. 
Unfortunately, however, that amendment was not adopted--and as a result 
I must vote against this bill as it stands.
  Mr. HONDA. Mr. Chairman, I rise in opposition to H.R. 420, a measure 
that purports to reduce frivolous lawsuits. While no one likes to see 
unnecessary, merit-less lawsuits clogging our court system, this bill 
only serves as an unneeded intrusion of Federal authority into State 
matters.
  H.R. 420 substantially changes State court procedure by forcing State 
judges, within 30 days of a case being filed, to conduct an extensive 
and lengthy pre-trial hearing to determine whether Federal sanctions 
must be imposed in a State proceeding. This would require a judge to 
examine evidence in detail and even to make a pre-trial judgment as to 
what the outcome of a case might be. These requirements will only serve 
to add time and expense to the proceedings. Federal judges 
overwhelmingly agree that the Federal court rules operate more 
efficiently and fairly when they are discretionary rather than 
mandatory.
  Mr. Chairman, States already have some version of the rule that is 
exactly or substantially similar to the federally available sanction. 
State courts should not be forced to spend scarce taxpayer money to 
conduct an expensive hearing in order to apply a Federal rule that 
mirrors a mechanism they already have in place.
  Mr. MORAN of Virginia. Mr. Chairman, I rise in reluctant opposition 
to the Lawsuit Abuse Reduction Act. As an advocate for reasoned and 
balanced reform to our American judicial system, I am afraid that 
today's bill overreaches and sets a dangerous precedent for future 
legislation. H.R. 420 treads unnecessarily on judicial independence and 
makes litigation overly burdensome for legitimate cases to have their 
fair day in court.
  Primarily, this legislation encroaches on the judicial rulemaking 
process by changing the Federal Rules of Civil Procedure, over which 
Congress has no rightful jurisdiction. This rulemaking process is the 
responsibility of the Judicial Conference and the Supreme Court. 
Furthermore, the requirement that State courts apply these new Federal 
rules is an intrusion on State judicial authority.
  I strongly believe that the integrity of the judiciary is in question 
if we impose our own set of rules on this independent body, 
particularly as Congress continues to limit judicial discretion. This 
action is wrong, and one of the reason that judges from across the 
Nation overwhelmingly oppose this legislation.
  Furthermore, I believe this bill inhibits legitimate cases from 
having their day in court. Plaintiffs that have just cause for action, 
particularly in cases dealing with civil rights, may reconsider because 
of the threat of mandated sanctions and the elimination of the 21-day 
``safe harbor'' rule. This chilling effect on meritorious legal claims 
does not offer honest Americans justice.
  I also have concern that this bill will not deter frivolous lawsuits. 
Despite the anecdotes my colleagues have offered, there is no empirical 
evidence that Rule 11, which this bill seeks to change, is not working. 
In fact, recent studies indicate that frivolous litigation is 
declining.
  Mr. Chairman, I will continue to approach tort reform with the 
objective of ensuring that any legitimate cases have their day in 
court. I don't believe the bill before us today meets this standard.
  Mr. SHAYS. Mr. Chairman, I rise in support of H.R. 420, the Lawsuit 
Abuse Reduction Act.

[[Page H9319]]

  The simple fact is, we have too many junk lawsuits being filed. It is 
imperative we reform our tort system, and it seems to me this 
legislation is an important step in this direction.
  The House has passed several common sense bills that will help make 
our court system less prone to abuse and more fair for victims, such as 
medical malpractice reform and class action reform.
  Today's legislation would restore mandatory sanctions on lawyers and 
law firms filing frivolous lawsuits and eliminate the current safe 
harbor provision that allows lawyers to avoid sanctions by quickly 
withdrawing meritless claims. The legislation also prevents forum 
shopping by requiring suits to be filed where a plaintiff resides, 
where an injury occurred, or where the defendant's principal place of 
business is located.
  Tort reform will make American businesses more competitive and lower 
costs to consumers while ensuring true victims' rights to sue for 
damages. Frivolous lawsuits have discouraged product development, 
stifled innovative research and cost millions in insurance and legal 
fees--costs that often get passed on to consumers. Making the system 
less costly will increase job creation, benefiting businesses and 
consumers alike.
  I support this legislation and encourage my colleagues to do so as 
well.
  Mr. SMITH of Texas. Mr. Chairman, I yield back the balance of my 
time.

                              {time}  1430

  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the amendment in the nature of a substitute 
printed in the bill shall be considered as an original bill for the 
purpose of amendment under the 5-minute rule and shall be considered 
read.
  The text of the amendment in the nature of a substitute is as 
follows:

                                H.R. 420

       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 2005''.

     SEC. 2. ATTORNEY ACCOUNTABILITY.

       Rule 11(c) of the Federal Rules of Civil Procedure is 
     amended--
       (1) 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 pay the other party or parties 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.'';
       (2) in paragraph (1)(A)--
       (A) by striking ``Rule 5'' and all that follows through 
     ``corrected.'' and inserting ``Rule 5.''; and
       (B) by striking ``the court may award'' and inserting ``the 
     court shall award''; and
       (3) 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.''.

     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 substantially 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 substantially 
     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;
       (2) the alleged injury or circumstances giving rise to the 
     personal injury claim allegedly occurred;
       (3) the defendant's principal place of business is located, 
     if the defendant is a corporation; or
       (4) the defendant resides, if the defendant is an 
     individual.
       (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. PRESUMPTION OF RULE 11 VIOLATION FOR REPEATEDLY 
                   RELITIGATING SAME ISSUE.

       Whenever a party attempts to litigate, in any forum, an 
     issue that the party has already litigated and lost on the 
     merits on 3 consecutive prior occasions, there shall be a 
     rebuttable presumption that the attempt is in violation of 
     Rule 11 of the Federal Rules of Civil Procedure.

     SEC. 8. 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 11 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 that substantially 
     affects interstate commerce.

  The CHAIRMAN. No amendment to the committee amendment is in order 
except those printed in House Report 109-253. Each amendment may be 
offered only in the order printed in the report, by a Member designated 
in the report, shall be considered read, shall be debatable for the 
time specified in the report, equally divided and controlled by the 
proponent and an opponent, shall not be subject to amendment, and shall 
not be subject to a demand for division of the question.


             Amendment No. 1 Offered by Mr. Smith of Texas

  Mr. SMITH of Texas. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 printed in House Report 109-253 offered by 
     Mr. Smith of Texas:

[[Page H9320]]

       Page 4, strike lines 8 through 11 and insert the following:
       (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 
     if there is no State court in the county, the nearest county 
     where a court of general jurisdiction is located) or Federal 
     district in which--
       Page 5, line 23, strike ``and''.
       Page 5, line 25, strike the period at the end and insert 
     ``; and''.
       Page 5, after line 25, insert the following:
       (C) does not include a claim against a debtor in a case 
     pending under title 11 of the United States Code that is a 
     personal injury tort or wrongful death claim within the 
     meaning of section 157(b)(5) of title 28, United States Code.
       Page, 7, strike line 16 and all that follows through the 
     end of the bill and insert the following new sections:

     SEC. 7. PRESUMPTION OF RULE 11 VIOLATION FOR REPEATEDLY 
                   RELITIGATING SAME ISSUE.

       Whenever a party presents to a Federal court a pleading, 
     written motion, or other paper, that includes a claim or 
     defense that the party has already litigated and lost on the 
     merits in any forum in final decisions not subject to appeal 
     on 3 consecutive occasions, and the claim or defense involves 
     the same plaintiff and the same defendant, there shall be a 
     rebuttable presumption that the presentation of such paper is 
     in violation of Rule 11 of the Federal Rules of Civil 
     Procedure.

     SEC. 8. ENHANCED SANCTIONS FOR DOCUMENT DESTRUCTION IN 
                   PENDING FEDERAL COURT PROCEEDINGS.

       Whoever willfully and intentionally influences, obstructs, 
     or impedes, or attempts to influence, or obstruct, or impede, 
     a pending Federal court proceeding through the willful and 
     intentional destruction of documents sought pursuant to the 
     rules of such Federal court proceeding 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 11 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.

     SEC. 9. BAN ON CONCEALMENT OF UNLAWFUL CONDUCT.

       (a) In General.--In any Rule 11 of the Federal Rules of 
     Civil Procedure proceeding, a court may not order that a 
     court record not be disclosed unless the court makes a 
     finding of fact that identifies the interest that justifies 
     the order and determines that that interest outweighs any 
     interest in the public health and safety that the court 
     determines would be served by disclosing the court record.
       (b) Applicability.--This section applies to any record 
     formally filed with the court, but shall not include any 
     records subject to--
       (1) the attorney-client privilege or any other privilege 
     recognized under Federal or State law that grants the right 
     to prevent disclosure of certain information unless the 
     privilege has been waived; or
       (2) applicable State or Federal laws that protect the 
     confidentiality of crime victims, including victims of sexual 
     abuse.

  The CHAIRMAN. Pursuant to House Resolution 508, the gentleman from 
Texas (Mr. Smith) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Texas (Mr. Smith).
  Mr. SMITH of Texas. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, the bipartisan manager's amendment I am offering today 
reflects the important contributions of the gentleman from New York 
(Mr. Nadler) and the gentleman from Virginia (Mr. Scott). It 
incorporates into the base bill provisions imposing sanctions for the 
destruction of relevant documents in a pending Federal court 
proceeding, an amendment setting standards for a court's determination 
that certain court records should be sealed, and an amendment providing 
for a presumption on a Rule 11 violation when the same issue is 
repeatedly relitigated.
  This manager's amendment also makes clear that in the antiforum-
shopping provisions, if there is no State court in the county in which 
the injury occurred, the case can be brought in the nearest adjacent 
county where a court of general jurisdiction is located.
  Finally, the manager's amendment makes clear that the legislation 
does not affect personal injury claims that Federal bankruptcy law 
requires to be heard in a Federal bankruptcy court. This reasonable 
request was made by the National Bankruptcy Conference Committee on 
Legislation.
  I urge my colleagues to join me in supporting this bipartisan 
manager's amendment.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. Does any Member seek recognition in opposition?
  Mr. NADLER. Mr. Chairman, I do not seek recognition in opposition to 
the amendment.
  The CHAIRMAN. Without objection, the gentleman from New York is 
recognized for 5 minutes.
  There was no objection.
  Mr. NADLER. Mr. Chairman, I am pleased that Chairman Sensenbrenner 
has included in the manager's amendment two provisions that I offered 
in the Judiciary Committee markup of the bill, and I thank the chairman 
for his support.
  The first amendment included in the manager's amendment provides for 
mandatory sanctions for destroying documents relating to a court 
proceeding. Delays during litigation provide ample opportunities for 
wrongdoers to destroy incriminating documents. Because this can result 
in the complete inability to hold these defendants accountable for 
their wrongful acts, parties who knowingly destroy relevant and 
incriminating documents should be severely sanctioned.
  Secondly, the second amendment bans the concealment of unlawful 
conduct when the interests of public health and safety outweigh the 
interest of litigating parties in concealment. Very often in civil 
litigation, a company producing an unsafe product or an unsafe 
procedure will settle with the plaintiff.
  The settlement will include a payment of a sum to the defendant, but 
will also often include an agreement that the records will be sealed 
and no one will ever talk about it. That is the condition that the 
defendant company puts on it.
  So the defendant pays the money, the plaintiff gets the settlement, 
everybody keeps quiet. But meanwhile, hundreds of thousands of people 
may continue to be injured by that product in the future.
  The defendant company forces the plaintiffs never to discuss the 
problems with anyone else, no one knows about it, and more people keep 
getting hurt because the product remains on the market.
  When it comes to public health and safety, people must have access to 
information about an unsafe product, not only to protect themselves but 
also to serve as a deterrent against companies that may continue to 
place the public in harm's way.
  Secrecy agreements should not be enforced unless they meet stringent 
standards to protect the public interest and the public health. This 
amendment prevents this harmful practice. The amendment says that an 
agreement to keep a settlement secret, the terms and conditions of 
settlement secret, cannot be approved by the court unless the court 
determines that the interests of the parties in secrecy, perhaps 
legitimate interests outweigh the interests of the public in knowledge 
of whatever it is.
  If the court so determines, the court can order the secrecy upheld. 
But if the court determines that the interest and the public knowledge 
outweigh the secrecy, then the court must say that and disapprove the 
concealment agreement.
  I support the manager's amendment because it includes these two 
amendments and other good ideas. But these changes are not enough for 
me to support final passage of what is still an egregious bill.
  Again, I would like to thank Chairman Sensenbrenner for working 
together in addressing these issues. I believe the manager's amendment 
provides some positive changes in what is otherwise an egregious bill.
  I urge my colleagues to vote for the manager's amendment, but against 
the final bill.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Texas (Mr. Smith).
  The amendment was agreed to.


  Amendment in the Nature of a Substitute No. 2 Offered by Mr. Schiff

  Mr. SCHIFF. Mr. Chairman, I offer an amendment in the nature of a 
substitute.
  The CHAIRMAN. 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:


[[Page H9321]]


       Amendment in the nature of a substitute No. 2 printed in 
     House Report 109-253 offered by Mr. Schiff:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. ``THREE STRIKES AND YOU'RE OUT'' FOR ATTORNEYS WHO 
                   FILE FRIVOLOUS LAWSUITS.

       (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 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 (including suspension of that attorney from the 
     practice of law for one year or disbarment), 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 ATTORNEYS WHO 
                   ENGAGE IN 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 (including the suspension of that attorney from 
     the practice of law for one year or disbarment). 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.--In any Rule 11 of the Federal Rules of 
     Civil Procedure proceeding, a court may not order that a 
     court record not be disclosed unless the court makes a 
     finding of fact that identifies the interest that justifies 
     the order and determines that the interest outweighs any 
     interest in the public health and safety that the court 
     determines would be served by disclosing the court record.
       (b) Applicability.--This section applies to any record 
     formally filed with the court, but shall not include any 
     records subject to--
       (1) the attorney-client privilege or any other privilege 
     recognized under Federal or State law that grants the right 
     to prevent disclosure of certain information unless the 
     privilege has been waived; or
       (2) applicable State or Federal laws that protect the 
     confidentiality of crime victims, including victims of sexual 
     abuse.

[[Page H9322]]

     SEC. 4. ENHANCED SANCTIONS FOR DOCUMENT DESTRUCTION.

        Whoever willfully and intentionally influences, obstructs, 
     or impedes, or attempts to influence, or obstruct, or impede, 
     a pending Federal court proceeding through the willful and 
     intentional destruction of documents sought pursuant to the 
     rules of such Federal court proceeding 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 11 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.

     SEC. 5. ABILITY TO SUE CORPORATE FINANCIAL TRAITORS AND 
                   FOREIGN CORPORATIONS.

       (a) General Rule.--In any civil action for injury that was 
     sustained in the United States and that relates to the acts 
     of a foreign business, the Federal court or State court in 
     which such action is brought shall have jurisdiction over the 
     foreign business if--
       (1) the business purposefully availed itself of the 
     privilege of doing business in the United States or that 
     State;
       (2) the cause of action arises from the business's 
     activities in the United States or that State; and
       (3) the exercise of jurisdiction would be fair and 
     reasonable.
       (b) Admission.--If in any civil action a foreign business 
     involved in such action fails to furnish any testimony, 
     document, or other thing upon a duly issued discovery order 
     by the court in such action, such failure shall be deemed an 
     admission of any fact with respect to which the discovery 
     order relates.
       (c) Process.--Process in an action described in subsection 
     (a) may be served wherever the foreign business is located, 
     has an agent, or transacts business.
       (d) Definition.--In this section, the term ``foreign 
     business'' means a business that has its principal place of 
     business, and substantial business operations, outside the 
     United States and its Territories.

     SEC. 6. PRESUMPTION OF RULE 11 VIOLATION FOR REPEATEDLY 
                   RELITIGATING SAME ISSUE.

       (a) In General.--Whenever a party presents to a Federal 
     court a pleading, written motion, or other paper, that 
     includes a claim or defense that the party has already 
     litigated and lost on the merits in any forum in final 
     decisions not subject to appeal on 3 consecutive occasions, 
     and the claim or defense involves the same plaintiff and the 
     same defendant, there shall be a rebuttable presumption that 
     the presentation of such paper is in violation of Rule 11 of 
     the Federal Rules of Civil Procedure.
       (b) Exception.--Subsection (a) does not apply to a claim 
     arising under the Constitution of the United States.

  The CHAIRMAN. Pursuant to House Resolution 508, the gentleman from 
California (Mr. Schiff) and the gentleman from Texas (Mr. Smith) each 
will control 20 minutes.
  The Chair recognizes the gentleman from California (Mr. Schiff).
  Mr. SCHIFF. Mr. Chairman, I yield myself such time as I may consume.
  I rise today to offer an amendment in the nature of a substitute to 
H.R. 420, the Lawsuit Abuse Reduction Act of 2005, with the gentleman 
from Wisconsin (Mr. Kind).
  I thank the Rules Committee for affording us this opportunity to 
offer and debate our substitute amendment on the floor today.
  Mr. Chairman, the base bill certainly has an important and worthy 
stated goal of cracking down on the filing of frivolous lawsuits. As a 
former Federal prosecutor and a member of the bar, I strongly support 
this meritorious goal, as any responsible attorney should.
  However, I am forced to oppose the legislation in its current form as 
it contains a number of serious deficiencies which I believe the 
substitute amendment will remedy. First, the legislation would revert 
to a failed regime that has been soundly criticized by those best 
equipped to comment on the proposed changes, the Federal judiciary.
  Second, the legislation would inappropriately involve the States in 
the application of the Federal Rules of Civil Procedure. And, third, 
the legislation's forum-shopping provisions drastically change State 
venue laws to benefit foreign corporations over domestic corporations 
and victims, to say nothing of doing a great deal to damage States' 
rights.
  Finally, the legislation would harm those seeking relief from civil 
rights violations. Instead, I ask my colleagues to support the Schiff-
Kind substitute amendment, a proposal that would crack down vigorously 
on frivolous lawsuits. Members on both sides of the aisle agree that 
our laws and rules of procedure must prohibit frivolous litigation.
  Our substitute amendment has a strong three-strikes-and-you-are-out 
provision for attorneys who file frivolous lawsuits. Unlike the base 
bill, these frivolous proceedings and pleadings could have been filed 
in any court. The mandatory sanctions begin after the very first 
violation; but after the third, the attorney shall be found in contempt 
of court and referred to the appropriate State bar associations for 
disciplinary proceedings, including suspension.
  Unlike the base bill, the third sanction can also include disbarment.
  Our substitute amendment also has strong three-strikes-and-you-are-
out provisions for attorneys who engage in frivolous conduct during 
discovery, including causing unnecessary delay or needless increases in 
the costs of litigation. Again, mandatory sanctions begin after the 
first violation, and a third violation in any Federal court can include 
suspension and even disbarment.
  Our substitute also limits the ability of wrongdoers to conceal any 
conduct harmful to the public welfare by requiring that such court 
records not be sealed unless the court finds that a sealing is 
justified. This important provision will help ensure that information 
on dangerous products and actions is made available to the public.
  The Schiff-Kind substitute also includes tough enhanced sanctions for 
document destruction by parties punishable by mandatory sanctions under 
Rule 11 and referral to the appropriate State bars for disciplinary 
proceedings, including disbarment. We also include strong language to 
provide a presumption of a Rule 11 violation for repeatedly 
relitigating the same issue.
  I am pleased that some of these important provisions have recently 
been added to the base bill. The venue provisions, however, in section 
4 of the base bill would recast State and Federal court jurisdiction 
and venue in personal injury cases.
  This section would actually operate to provide a litigation and 
financial windfall to foreign corporations at the expense of their 
domestic competitors. Instead of permitting claims to be filed wherever 
a corporation does business or has minimum contacts, as most State 
long-arm jurisdiction statutes provide, section 4 only permits the suit 
to be brought where the defendant's principal place of business is 
located.
  This means that it would be far more difficult to pursue a personal 
injury or product liability action against a foreign corporation in the 
United States. In fact, this section could operate to make it 
impossible to sue a foreign corporation in this country, only further 
promoting the disturbing process of corporations in our country 
relocating their headquarters overseas to avoid U.S. taxes.
  This is bad policy. And our substitute amendment includes language to 
ensure that jurisdiction for such legal actions is not limited in this 
manner.
  Finally, by requiring a mandatory sanctions regime that would apply 
to civil rights cases, the base bill 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, the 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 civil 
rights cases.
  A 1991 Federal judicial study found that the incidence of Rule 11 
sanctions or sua sponte orders is higher in civil rights cases than in 
some other types of cases. Another study found that there is ample 
evidence to suggest that plaintiffs in civil rights cases, plaintiffs 
in particular, were far more likely than defendants to be the target of 
Rule 11 motions and the recipient of sanctions.
  While the base bill purports to encourage that the provisions not be 
applied to civil rights cases, the fact of the matter is it does not 
explicitly exempt civil rights cases as our substitute does.
  Mr. Chairman, this is a commonsense substitute. It cracks down on 
frivolous lawsuits in a tough fashion, but without jeopardizing civil 
rights claims or providing unnecessary shields to foreign corporations. 
It is a better bill,

[[Page H9323]]

and I urge the House to adopt the substitute rather than the base 
proposal.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SMITH of Texas. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I rise in opposition to this substitute amendment. And 
I have to point out that this same substitute amendment was defeated in 
the last Congress. Mr. Chairman, 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 the title of section 1 does not reflect 
the text it contains.
  In fact, the substitute provides that following three violations of 
its provisions: ``The court shall refer each such attorney to one or 
more appropriate State bar associations for disciplinary proceedings.''
  The substitute does not say the attorney shall be suspended from the 
practice of law. However, the base bill explicitly provides for such a 
sanction. Specifically, the base bill states 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 contains a substantive three-strikes-and-you-are-out 
provision that will prevent attorneys who file frivolous lawsuits from 
getting into the courtroom. The substitute merely requires that repeat 
offenders be reported to State bar associations.
  But it gets worse. Not only are filers of frivolous lawsuits not out 
after three strikes under the substitute, but the substitute even 
changes what constitutes a strike under existing law. Currently, Rule 
11 contains four criteria that can lead to a Rule 11 violation.
  The substitute references only three. 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 a lack 
of information or belief.
  The substitute removes this protection for victims of frivolous 
pleadings under existing law. In addition, the substitute for the first 
time without penalty allows defendants to file papers with the court 
that include factual denials of the allegations against them that are 
not warranted by the evidence and not reasonably based.
  Instead, the substitute provides additional protection for defendants 
filing frivolous defenses that are not warranted by the evidence and 
not reasonably based.

                              {time}  1445

  This is a step backward for victims of frivolous lawsuits under both 
State and Federal law. So the substitute not only undermines the 
clarity of the three strikes and you're out rule, it purports to 
establish, it dramatically expands the potential for even more 
frivolous lawsuits.
  Furthermore, the base bill provides that those who file frivolous 
lawsuits can be made to pay all costs and attorneys' fees that are 
``incurred as a direct result of the filing of the pleading, motion, or 
other paper that is the subject of the violation.'' The 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 proponent of this amendment claims that the anti-forum shopping 
standards in H.R. 420 regarding where a personal injury lawsuit can be 
brought are somehow unfair, even though they are the very same 
standards contained in the vast majority of State venue laws. In fact, 
the gentleman from California's own State venue law provides as 
follows: ``If the action is for injury to person or personal property 
or for death from wrongful act or negligence, the superior court in 
either the county where the injury occurs or the injury causing death 
occurs or the county where the defendants, or some of them reside at 
the commencement of the action, is the proper court for the trial of 
the action.''
  Insofar as foreign corporations cannot be sued in some limited 
circumstances in this country, that is not the fault of H.R. 420, nor 
is it the fault of California's venue law. It is a result of the 
Supreme Court's interpretation of the Due Process Clause.
  Mr. Chairman, the substitute does not provide for three strikes and 
you're out. It provides for three strikes and you get referred to a 
State bar association that can continue to let the offending attorney 
practice law.
  The Democratic substitute weakens existing law that protects 
plaintiffs from defendants that file frivolous denials that are not 
warranted by the evidence and not reasonably based. This substitute 
amendment includes provisions that are unconstitutional and penalizes 
those who would challenge those unconstitutional rules. That is more 
than three strikes against the substitute, Mr. Chairman, and I urge my 
colleagues to return it to the bench and vote yes for the job-
protecting and job-creating Lawsuit Abuse Reduction Act when it gets to 
final passage.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SCHIFF. Mr. Chairman, I yield 4 minutes to the gentleman from 
Wisconsin (Mr. Kind).
  Mr. KIND. Mr. Chairman, I thank the gentleman from California for 
yielding me this time and for the leadership that he has shown on the 
issue. I also commend the gentleman from New York (Mr. Nadler) for the 
important issues that he has raised in regards to this important 
legislation.
  Mr. Chairman, I think we can all concede or stipulate that no one is 
in favor of frivolous lawsuits in this country. As a former special 
prosecutor, State prosecutor in Wisconsin, and as a young lawyer who 
used to handle corporate litigation in a large law firm, I saw 
firsthand some of the abuses that take place in the judicial process. 
But I believe that there is a right and a wrong way of moving forward 
in dealing with the frivolous lawsuit situation in the country.
  Unfortunately, the majority base bill today, I think, is the wrong 
approach, whereas the substitute that we are offering here cures a lot 
of defects that the majority is offering and would put some substance 
behind cracking down on the filing of frivolous lawsuits. But first let 
us correct some of the facts.
  There has been a lot of rhetoric from some of our colleagues here 
claiming that the real bane of the judicial system today are a bunch of 
trial attorneys running around chasing ambulances, filing needless 
personal injury cases, clogging the court system, driving up litigation 
costs, increasing the expenses of corporations, and that is what is to 
be blamed in regards to dealing with frivolous lawsuits, when, in fact, 
the facts indicate just the opposite.
  A recent comprehensive study by Public Citizen has shown that the 
explosion in the filing of lawsuits has really rested with the 
corporations of this country, who have been filing four to five times 
more claims and lawsuits than individual plaintiffs in this country. 
Furthermore, when Rule 11 sanctions have been applied, they have been 
applied in 69 percent of the cases against corporations that are 
abusing the discovery process or filing needless lawsuits. So it is not 
these money-grubbing trial attorneys that so many want to believe that 
exist out there that are causing a lot of the problem in the judicial 
system; it is rather corporations that are increasing it. It is those 
who are most eager to support the majority base bill who are most 
likely to take advantages of the opportunities of filing lawsuits in 
our country. I find that a bit ironic.
  But we are also today, and both of us, the majority and the 
substitute, is really usurping the Rules Enabling Act. When Congress 
passed that, it was a recognition that we here really do not have a lot 
of good expertise, and we are not in the trenches dealing with these 
rules every day. That is why the Judicial Conference looks at rules 
changes. They submit it to the Supreme Court for approval, who then 
finally submits it to Congress for our consideration to adopt or to 
revise at the end of the day. That whole process is being usurped.
  Finally, and as the gentleman from California indicated, we have a 
short-term memory problem in this Congress. This has been tried between 
1983 and 1993, and the rules were changed because it was not working, 
because we were taking away too much discretion from the judges in the 
application of Rule 11. It had a disproportionate impact on the filing 
of civil rights actions in this country. Our substitute bill

[[Page H9324]]

cures that by exempting the filing of civil rights under this 
legislation.
  This is significant, because as the gentleman from California pointed 
out that when there were attempts to stifle meritorious claims from 
going forward or increasing the litigation costs in lawsuits, it was 
usually in the civil rights actions that were taken during this period 
which led to the change and the reform of mandatory sanctions back to a 
discretionary system, allowing the judges to decide the application of 
the appropriate penalties based on the facts and circumstances of the 
case.
  What is this debate about today? I would commend a recently released 
movie called ``North Country'' to all of my colleagues before they 
consider the final passage of this legislation. It is about a young 
mother of two who took a job in the Taconite Mining Company in northern 
Minnesota and entered an atmosphere and environment of pervasive sexual 
harassment that not only applied to her, but all the women that were 
working in that company. She was the first to file a class action suit 
on behalf of herself and the other women in the country and the Nation. 
Because she was meritorious, she prevailed in that lawsuit that lead to 
incredible changes in regards to the treatment of women in the modern 
workplace.
  That is what is at stake in allowing the civil rights actions to at 
least go through. We allow that in the substitute, and I ask adoption 
of the substitute.
  Mr. SMITH of Texas. Mr. Chairman, I yield myself 30 seconds.
  Mr. Chairman, I want to point out to the gentleman from Wisconsin who 
just spoke that I could have saved him a lot of time. And I would like 
to remind him that he might want to take a look at the language of H.R. 
420, that it applies just as much to businesses as it does individuals, 
despite statements to the contrary.
  Mr. Chairman, I yield 3 minutes to the gentleman from Utah (Mr. 
Cannon), the chairman of the Administrative Law Subcommittee of the 
Judiciary Committee.
  Mr. CANNON. Mr. Chairman, I rise in support of H.R. 420, the Lawsuit 
Abuse and Reduction Act, LARA, and I oppose the substitute amendment.
  This bill, the underlying bill, continues the commitment of the House 
Republicans to grow our economy, help small businesses, and put a stop 
to abusive lawsuits. This bill does that and will help millions of 
small businesses combat some of the worst abuses by frivolous lawsuits.
  In particular, LARA would make mandatory the sanctions and monetary 
penalties under Federal Rule 11 of the Federal Rules of Civil Procedure 
for filing frivolous lawsuits and abusing the litigation process. Or it 
would also abolish the free pass provisions that allow parties and 
their attorneys to avoid sanctions by withdrawing a suit within 21 days 
after a motion for sanctions has been filed.
  It would also permit monetary sanctions including reimbursement of 
reasonable attorneys' fees and litigation costs in connection with 
frivolous lawsuits.
  It would extends Rule 11's provisions to include State cases in which 
the State judge finds the case substantially affects interstate 
commerce.
  Frivolous lawsuits have discouraged and stifled American businesses 
long enough. The more we control lawsuit abuse, the stronger our 
businesses will be, and the more jobs will be created.
  This legislation protects the integrity of the judicial system by 
penalizing the bad actors in litigation, both plaintiffs and 
defendants, I might say.
  Civil litigation was once a last-resort remedy to settle limited 
disputes and quarrels, but recent years have brought a litigation 
explosion. The number of civil lawsuits has tripled since the 1960s and 
has gripped the American citizens and small businesses with a fear of 
costly and unwarranted lawsuits.
  The threat of abusive litigation forces businesses to settle 
frivolous claims, rather than to go through the expensive and time-
consuming process of defending lawsuits from the discovery process all 
the way to trial. This is, in essence, legal blackmail and needs to be 
ended.
  While it costs the plaintiff only a little more than a small filing 
fee to begin a lawsuit, it costs much more for a small business to 
defend against it, jeopardizing its ability to survive. LARA tells 
those attorneys who are intent on filing a lawsuit to take the 
responsibility to review the case and make sure it is legitimate before 
filing, or be ready for sanctions.
  I would like to thank the gentleman from Texas, the chairman of the 
Subcommittee on Courts, the Internet, and Intellectual Property, for 
having prepared this legislation and moved it forward as he has. I urge 
my colleagues to support this legislation and oppose the substitute 
amendment.
  Mr. SCHIFF. Mr. Chairman, before I recognize my colleague from Texas, 
I want to respond to a couple of points made by my other colleague from 
Texas; that is, comparing the strength of the three strikes and you're 
out provisions in the substitute and base bill. The three strikes 
language in the Democratic substitute would apply to frivolous 
proceedings that are filed in any court. The base bill, on the other 
hand, would apply the three strikes provision only to the specific 
court in which the violation occurred. That is a narrower provision of 
the base bill.
  Similarly, my substitute provides for the referral to the appropriate 
State bars for disciplinary proceedings, including disbarment after the 
third strike. With the first violation there is the required payment of 
costs and attorneys' fees. With the second, the attorney is held in 
contempt with a monetary fine. And then the third provision of referral 
to the State bar for possible disbarment, compared to the base bill 
which calls for a 1-year suspension only in the specific court where 
the three violations occurred. The violations have to occur in the same 
court. If you move from one court where you are sanctioned to another 
to another, the base bill seems to have far less strength and 
applicability than the substitute.
  Second, I wanted to rebut the claim that the substitute will somehow 
promote litigation more than the base bill. In fact, when you ask the 
judges who have operated under both systems, the one that is proposed 
by the base bill and the one that is proposed by the substitute, the 
courts were quite clear that the earlier form of Rule 11, which we 
would go back to in the base bill, spawned a cottage industry where 
someone would file a Rule 11 motion, the opposing counsel would file a 
Rule 11 motion on the Rule 11 motion, and then you would have 
litigation over whose Rule 11 motion should succeed.
  In fact, in 1993, the Judicial Conference remarked that the 
experience with the amended rule since 1993, since we got away from 
what the base bill would take us back to, has demonstrated a marked 
decline to Rule 11 satellite litigation without any noticeable increase 
in the number of frivolous filings.
  Mr. Chairman, I yield 2 minutes to the gentleman from Texas (Mr. Gene 
Green).
  Mr. GENE GREEN of Texas. Mr. Chairman, I thank my colleague from 
California for yielding me time.
  I rise in opposition of H.R. 420 and in support of the substitute.
  This bill would not do anything to reduce frivolous lawsuits. In 
fact, my concern about it is it is unnecessary, and it will infringe on 
States being able to manage their own court systems.
  Rule 11 of the Federal Rules of Civil Procedure was amended in 1993 
to its current state because it was being abused by defendants in civil 
rights cases who filed a series of Rule 11 motions to harass the men 
and women who challenged discrimination.
  Until now there has been no demonstrated problems with the current 
version of the rule. Usually this type of change in civil procedure 
goes through a process of the Rules Enabling Act. But in this instance 
we have decided to circumvent the United States Judicial Conference and 
the United States Supreme Court. We have taken it upon ourselves to 
decide what is best for the judicial system.
  The Lawsuit Reduction Act would amend Rule 11 of the Federal Rules of 
Civil Procedure and revert back to that pre-1993 status. By doing this, 
again, we take away States' discretion to impose sanctions on improper 
and frivolous pleadings.
  This would eliminate the current safe harbor provision, permitting 
the attorneys to withdraw improper frivolous

[[Page H9325]]

motions within 21 days after they have been challenged by an opposing 
counsel. Additionally, this bill dictates where plaintiffs can file a 
personal injury lawsuit against a corporation in a State court. Do we 
really want to get into the jurisdictional battles in our States?
  Reverting back to the previous Rule 11 would make people less likely 
to challenge unjust laws because they are putting themselves at risk 
for being harassed. At the time some people thought Brown v. Board of 
Education was a frivolous lawsuit, but it did not look like it had a 
chance until the Supreme Court recognized that separate was not equal.

                              {time}  1500

  If we had this strict version of Rule 11 back then, maybe Brown v. 
Board of Education would have never made it to the Supreme Court.
  This bill is another example of Congress intruding on States' rights. 
Our system of government is designed to keep our judicial system 
separate, particularly our State judicial system.
  We simply do not have the right to tell State and county courthouses 
across the Nation how to enforce sanctions in their courtrooms or where 
the plaintiff may file a lawsuit in the State courts.
  Mr. SCHIFF. Mr. Chairman, it gives me great pleasure to yield such 
time as she may consume to the gentlewoman from California (Ms. 
Pelosi), our minority leader.
  Ms. PELOSI. Mr. Chairman, I thank the gentleman for yielding me time, 
and I congratulate him and the gentleman from Wisconsin (Mr. Kind) for 
their leadership in proposing this good Democratic substitute.
  Mr. Chairman, here we go again. The madness continues. Once again, 
the Republicans must prove that they are the handmaidens of the special 
interests by putting this bill on the floor today. Just when we should 
be talking about creating good jobs for the American people, expanding 
access to quality health care, broadening opportunity in education, 
having a strong national defense and doing it all in a fiscally sound 
way, the Republicans are wasting the time of this Congress and testing 
the patience of the American people with legislation that is frivolous. 
It is something that is, again, another reflection of the culture of 
cronyism that exists under the Republican leadership in Washington, DC.
  This legislation before us again seeks to protect their friends. The 
outrageous venue provisions in the Republican bill give defendant 
corporations special advantages by overriding State minimum-contact 
provisions and limiting the locations in which a suit can be brought 
and could render foreign corporations out of reach of the American 
justice system.
  Today, we will take the opportunity to address the Republican culture 
of cronyism. The gentleman from Georgia (Mr. Barrow) will be offering a 
motion to recommit to make sure that politically connected cronies and 
no-bid contractors that defraud and cheat the government in providing 
goods and service after a natural disaster will never again be able to 
use these special bids. They should never be used by government 
contractors that specifically intend to profit excessively from the 
disaster.
  Mr. Chairman, I really want to congratulate the gentleman from 
Wisconsin (Mr. Kind) and the gentleman from California (Mr. Schiff) for 
putting together a really excellent substitute to get rid of loopholes 
in the Republican bill that favors big corporate interests and foreign 
corporations and to protect civil rights claims.
  We all agree that if there are frivolous lawsuits, those who bring 
them should pay a price. That we will have three-strikes-you-are-out 
for doing that is a very important provision in the substitute. The 
substitute seeks to stop the madness that exists on the floor of this 
House when it is used as a venue to promote the special interests in 
our country.
  We must stand up for the American people, not for the politically 
connected cronies who are getting a no-bid contract. Let us take a 
stand to end this culture of cronyism and corruption. Let us get back 
to the real issues that are affecting the American people.
  We must vote for this substitute and send this bill back to ensure 
that no one who defrauds the American people during natural disasters 
is ever permitted to take undue advantage of our legal system.
  We must, again, stop the madness by voting for the substitute that 
the gentleman from Wisconsin (Mr. Kind) and the gentleman from 
California (Mr. Schiff) have proposed. It has very excellent provisions 
and is worthy of the support of our colleagues.
  Mr. SCHIFF. Mr. Chairman, I have no further speakers, and I reserve 
the balance of my time.
  Mr. SMITH of Texas. Mr. Chairman, I believe I have the right to 
close, and I am the remaining speaker on this side, so I will reserve 
the balance of my time.
  Mr. SCHIFF. Mr. Chairman, I just have a parliamentary inquiry. Does 
my colleague have the opportunity to close or does the offerer of the 
amendment?
  The CHAIRMAN. The gentleman from Texas (Mr. Smith) has the right to 
close the debate.
  Mr. SCHIFF. Mr. Chairman, I know my colleague will close very well. 
How much time do I have remaining?
  The CHAIRMAN. The gentleman from California (Mr. Schiff) has 3 
minutes remaining, and the gentleman from Texas (Mr. Smith) has 12 
minutes remaining.
  Mr. SCHIFF. Mr. Chairman, I yield myself such time as I may consume.
  In my concluding comments I want to reiterate some of the points that 
have been made with respect to the civil rights provisions and quote 
from the testimony of Professor Theodore Eisenberg, who testified 
before the House Committee on the Judiciary in the 108th Congress and 
said: ``A Congress considering reinstating the fee-shifting aspect of 
Rule 11 in the name of tort reform should understand what it will be 
doing. It will be discouraging the civil rights cases 
disproportionately affected by the old Rule 11 in the name of 
addressing purported abuse in an area of law, personal injury tort, 
found to have less abuse than other areas.''
  I would also like to cite the testimony of the Honorable Robert L. 
Carter, U.S. District Judge for the Southern District of New York when 
he stated: ``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.''
  We do not want to put off a Brown v. Board of Education civil rights 
case like that for a decade because of a Rule 11 that has been rejected 
by the Federal courts already.
  The language in the substitute makes it clear that neither the 
sanctions approach we have taken in the substitute nor the sanctions 
approach taken in the base bill would apply in civil rights cases; and 
while there is some language of suggestion in the base bill, it is not 
definitive.
  In fact, the NAACP wrote in respect to the language in the base bill: 
``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.''
  So on the basis of a need not to chill civil rights legislation, 
which I think we have only seen the greater importance with, as Katrina 
ripped off the veneer of poverty and inequality in the country once 
again for all to see, as we consider that the base bill would implement 
a change that the courts themselves have rejected and found spawned a 
cottage industry in meritless Rule 11 litigation, and as the base bill 
has a stronger and I think more sensible three-strikes-and-you-are-out 
provision, I would urge my colleagues to support the Democratic 
substitute in preference to the flawed base bill.
  Mr. Chairman, I yield back the balance of my time.
  Mr. SMITH of Texas. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, the gentlewoman from California who spoke previously to 
the gentleman from California who just finished used a couple of words 
that I would like to return to and clarify. She used the word 
``madness,'' but anyone listening to this debate or anyone having a 
firsthand knowledge of frivolous

[[Page H9326]]

lawsuits knows that the real madness is the filing of thousands of 
frivolous lawsuits across this country that unfairly tarnish the 
reputations of innocent citizens, that unfairly destroy the businesses 
of small business owners across the country. That is the type of 
madness that this bill addresses.
  She also used the phrase ``special interests,'' but again, I think 
anyone listening to this debate today and anyone knowing firsthand the 
agony and the losses and the destruction caused by frivolous lawsuits 
realizes that the special interests that this bill hopes to protect are 
really the special interests of the American people who have stuttered 
and staggered and been burdened by frivolous lawsuits too many times 
and much too often in our history.
  The special interests, if there are any, involved in this legislation 
again are obvious to those who listened to the debate, the trial 
lawyers of America; and, Mr. Chairman, let me take a minute here just 
to dwell on that subject because I happen to believe the vast majority 
of trial lawyers or personal injury lawyers are honorable people and 
they are members of an honorable profession.
  I think one of the aspects of the debate that most troubles me is, in 
fact, the lack of sanctioning lawyers who engage in frivolous lawsuits 
by the Trial Lawyers of America. Their own code of conduct reads as 
follows: ``No ATLA member shall file or maintain a frivolous suit, 
issue or position.'' We checked and not a single member of the Trial 
Lawyers Association, not a single lawyer, had been sanctioned in the 
last 2 years; and, in fact, no one can even tell us when the last time 
any attorney was sanctioned for filing a frivolous lawsuit.
  I think the trial lawyers would have a lot more credibility on this 
subject if, in fact, they had monitored their own ranks and, in fact, 
had sanctioned just a single trial lawyer for filing one of those tens 
of thousands of frivolous lawsuits that have been filed.
  That, as I say, is discouraging; and I hope the Trial Lawyers of 
America will see fit in the future to sanction some attorney somewhere, 
somehow who has filed a frivolous lawsuit.
  Mr. Chairman, anyone who is worried about what frivolous lawsuits 
will do to them, their family, their friends or their businesses ought 
to oppose this substitute amendment. It is an amendment that would do 
very little to prevent frivolous lawsuits. The underlying bill, 
however, will deter lawyers from filing those frivolous lawsuits.
  Let me give some examples of actual suits that are frivolous, but 
that would be allowed under the Democratic substitute amendment.
  A New Jersey man filed suit against Galloway Township School District 
claiming that assigned seating in a school lunchroom violated his 12-
year-old daughter's right to free speech.
  A Florida high school senior filed suit after her picture was left 
out of the school's yearbook.
  An Arizona man filed suit against his hometown after he broke his leg 
sliding into third base during a softball tournament.
  An Alabama person sued the school district after his daughter did not 
make the cheerleading squad, claiming that the rejection caused her 
humiliation and mental anguish.
  The families of two North Haven, Connecticut, sophomores filed suit 
because of the school's decision to drop the students from the drum 
majorette squad.
  A Pennsylvania teenager sued her former softball coach, claiming that 
the coach's incorrect teaching style ruined her chances for an athletic 
scholarship.
  After a wreck in which an Indiana man collided with a woman who was 
talking on her cell phone, the man sued the cell phone manufacturer.
  A Knoxville, Tennessee, woman sued McDonald's, alleging that a hot 
pickle dropped from a hamburger burned her chin and caused her mental 
injury.
  A Michigan man filed suit claiming that television ads that showed 
Bud Light as the source of fantasies involving tropical settings and 
beautiful women misled him and caused him physical and mental injury, 
emotional distress, and financial loss.
  A woman sued Universal Studios trying to get damages because the 
theme park's haunted house was too scary.
  In every one of these instances and in thousands of others, the 
individuals sued were forced to spend considerable amounts of money, 
time and effort to defend themselves. This is a travesty of justice, 
and it is simply wrong.
  H.R. 420 will end the filing of frivolous lawsuits. Unfortunately, 
the substitute amendment will still allow small businesses, churches, 
schools, hospitals, sports leagues, cities and others to be burdened 
with these meritless and frivolous claims.
  This substitute amendment provides no disincentive to file a 
frivolous lawsuit. It would still subject small business owners to the 
cost of frivolous lawsuits and subject individuals to the cost of 
rising insurance premiums and health care costs that result from 
frivolous lawsuits.
  In other words, Mr. Chairman, this substitute amendment does not 
provide any relief to those who would be unfairly targeted by frivolous 
lawsuits. The underlying bill would.
  The substitute includes no real consequences for the attorney who 
repeatedly files frivolous lawsuits. The underlying bill does.
  The substitute includes nothing to address the problem of forum 
shopping which is also a large part of the problem. The underlying bill 
does.
  Mr. Chairman, I urge my colleagues to oppose the substitute amendment 
and vote ``yes'' on the underlying bill, which, in fact, would deter 
lawsuit abuse.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment in the nature of 
substitute offered by the gentleman from California (Mr. Schiff).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.


                             Recorded Vote

  Mr. SCHIFF. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 184, 
noes 226, not voting 23, as follows:

                             [Roll No. 551]

                               AYES--184

     Abercrombie
     Ackerman
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boren
     Boucher
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Case
     Chandler
     Clay
     Cleaver
     Conyers
     Cooper
     Costa
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     DeFazio
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (IL)
     Johnson, E. B.
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lowey
     Lynch
     Maloney
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Melancon
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murtha
     Napolitano
     Neal (MA)
     Oberstar
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Ross
     Rothman
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (GA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Woolsey
     Wu
     Wynn

                               NOES--226

     Aderholt
     Akin
     Alexander
     Allen
     Andrews
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boustany
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble

[[Page H9327]]


     Cole (OK)
     Conaway
     Costello
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis (KY)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeGette
     DeLay
     Dent
     Doggett
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Everett
     Feeney
     Ferguson
     Fitzpatrick (PA)
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jenkins
     Jindal
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kucinich
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lofgren, Zoe
     Lucas
     Lungren, Daniel E.
     Manzullo
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nadler
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schmidt
     Schwarz (MI)
     Sessions
     Shadegg
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Smith (NJ)
     Smith (TX)
     Snyder
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--23

     Blunt
     Boswell
     Brown-Waite, Ginny
     Clyburn
     Diaz-Balart, L.
     Diaz-Balart, M.
     Foley
     Gingrey
     Hall
     Harris
     Hastings (FL)
     Mack
     Marchant
     Meeks (NY)
     Obey
     Reyes
     Ros-Lehtinen
     Roybal-Allard
     Sensenbrenner
     Shaw
     Simmons
     Tauscher
     Wexler


                      Announcement by the Chairman

  The CHAIRMAN (during the vote). Members are advised there are 2 
minutes remaining in this vote.

                              {time}  1536

  Mr. SOUDER, Ms. ZOE LOFGREN of California, Ms. DeGETTE, and Mr. 
NUSSLE changed their vote from ``aye'' to ``no.''
  Mr. MURTHA changed his vote from ``no'' to ``aye.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  The CHAIRMAN. The question is on the committee amendment in the 
nature of a substitute, as amended.
  The committee amendment in the nature of a substitute, as amended, 
was agreed to.
  The CHAIRMAN. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Hastings of Washington) having assumed the chair, Mr. Latham, Chairman 
of the Committee of the Whole House on the State of the Union, reported 
that that Committee, having had under consideration the bill (H.R. 420) 
to amend Rule 11 of the Federal Rules of Civil Procedure to improve 
attorney accountability, and for other purposes, pursuant to House 
Resolution 508, he reported the bill back to the House with an 
amendment adopted by the Committee of the Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  Is a separate vote demanded on the amendment to the committee 
amendment in the nature of a substitute adopted by the Committee of the 
Whole? If not, the question is on the committee amendment in the nature 
of a substitute.
  The committee amendment in the nature of a substitute was agreed to.
  The SPEAKER pro tempore. 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 Mr. Barrow

  Mr. BARROW. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. BARROW. Yes, Mr. Speaker, in its present form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. Barrow moves to recommit the bill H.R. 420 to the 
     Committee on the Judiciary with instructions to report the 
     same back to the House forthwith with the following 
     amendment:
       At the end of the bill, add the following:

     SEC. __. NOT APPLICABLE TO CLAIMS AGAINST DISASTER 
                   PROFITEERING BUSINESSES.

       (a) In General.--A claim against a disaster profiteering 
     business may be filed in any court that has jurisdiction over 
     the corporation, notwithstanding section 4.
       (b) Definitions.--In this section--
       (1) the term ``business'' includes a corporation, company, 
     association, firm, partnership, society, and joint stock 
     company, as well as an individual; and
       (2) the term ``disaster profiteering business'' means any 
     business engaged in a contract with the Federal Government 
     for the provision of goods or services, directly or 
     indirectly, in connection with relief or reconstruction 
     efforts provided in response to a presidentially declared 
     major disaster or emergency that, knowingly and willfully--
       (A) executes or attempts to execute a scheme or artifice to 
     defraud the United States;
       (B) falsifies, conceals, or covers up by any trick, scheme, 
     or device a material fact;
       (C) makes any materially false, fictitious, or fraudulent 
     statements or representations, or makes or uses any 
     materially false writing or document knowing the same to 
     contain any materially false, fictitious, or fraudulent 
     statement or entry; or
       (D) materially overvalues any good or service with the 
     specific intent to excessively profit from the disaster or 
     emergency.

  Mr. BARROW (during the reading). Mr. Speaker, I ask unanimous consent 
that the motion be considered as read and printed in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Georgia?
  There was no objection.
  The SPEAKER pro tempore. The gentleman from Georgia (Mr. Barrow) is 
recognized for 5 minutes on his motion.
  Mr. BARROW. Mr. Speaker, if bills in this Chamber required names that 
accurately describe their consequences, this bill would best be called 
the Frivolous Litigation Proliferation Act and not the Lawsuit Abuse 
Reduction Act.
  Many of us who oppose the underlying bill do so because it will 
actually increase the volume of frivolous litigation. For example, some 
sort of Rule 11 procedure exists in virtually every State in the 
country. To impose a new Federal law in every State court action will 
make State courts conduct a minilawsuit on Federal validity before 
conducting a minilawsuit on State law validity, before they ever get to 
the merits of the case. A lawsuit within a lawsuit within a lawsuit. 
Mr. Speaker, that is as absurd as it sounds.
  If Members think that there are too many frivolous lawsuits against 
good, honest corporations, and the only way to fix this is to make it 
harder for everyone to sue anyone, and that this bill is the only way 
to do it, then vote for the bill.
  But if there is one area where we do not have a problem with too many 
frivolous lawsuits, it is with lawsuits against price gougers. And if 
there is any area where we want to make it easier to get to the merits 
of the underlying claim, not harder, it is an area of lawsuits against 
Federal contractors who are engaged in defrauding the public.
  Right now the government is awash in government contracts awarded on 
a no-bid basis. Whether it is disaster relief or the war on terror, we 
have never done so much of the public's business on a no-bid basis. 
There has never been more opportunity for waste, fraud, and abuse in 
the conduct of the public's business than right now.
  This motion to recommit gives us one opportunity to protect our 
constituents from price gougers. The motion to recommit is simple. It 
says that Federal contractors, engaged in price gouging in disaster 
relief work can still be sued anyplace where they can be sued now, in 
any State where both the laws of the State and the U.S. Constitution 
says it is okay to sue them.
  The underlying bill gives price gougers extra protections, the same 
benefits that we are extending to honest corporations. One such 
protection, the only one addressed by this motion to

[[Page H9328]]

recommit, is the right to avoid lawsuits in States where the 
Constitution says it is okay to seek justice. Since price gougers do 
not deserve this protection, and since they do not need this 
protection, they should not get this protection.
  This House has voted time and again to protect companies that are 
gouging consumers in the wake of natural disasters and national 
tragedies. If Members vote against this motion to recommit, they are 
voting to give the same special protections that we give to honest 
corporations to Federal contractors who are engaged in price gouging in 
public relief work.
  Mr. Speaker, the folks I represent back home in Georgia want relief 
from price gougers, not relief for price gougers. For that reason I 
urge my colleagues to support this commonsense and limited motion to 
recommit.
  Mr. SMITH of Texas. Mr. Speaker, I rise in opposition to the motion 
to recommit.
  The SPEAKER pro tempore. The gentleman from Texas (Mr. Smith) is 
recognized for 5 minutes.
  Mr. SMITH of Texas. Mr. Speaker, I oppose this completely irrelevant 
motion to recommit. First, nothing in H.R. 420, the Lawsuit Abuse 
Reduction Act, prohibits anyone from being sued for fraud to the full 
extent of Federal law. Second, the motion to recommit relates to 
contract claims when the section of the bill that it modifies relates 
only to personal injury claims.
  There is no flaw in the bill that needs to be corrected, but even if 
there were, the motion to recommit fails to correct it because it 
relates to contract claims rather than personal injury claims.

                              {time}  1545

  Mr. Speaker, I just received a statement of administration policy 
from the executive office of the President which I would like to read, 
because it provides a good summary of H.R. 420, the Lawsuit Abuse 
Reduction Act of 2005. This statement reads as follows:
  ``The administration supports House passage of H.R. 420 in order to 
address the growing problem of frivolous litigation. H.R. 420 would 
rein in the negative impact of frivolous lawsuits on the Nation's 
economy by establishing a strong disincentive to file such suits in 
Federal and State courts. Junk lawsuits are expensive to fight and 
often force innocent small businesses to pay exorbitant costs to make 
these claims go away. These costs hurt the economy, clog our courts, 
and are burdening the American businesses of America. The 
administration believes the bill is a step in the right direction 
toward the goal of ending lawsuit abuse.''
  Mr. Speaker, I urge my colleagues to oppose this absolutely 
irrelevant motion to recommit and support the underlying bill.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Hastings of Washington). 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

  Mr. BARROW. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule 
XX, this 15-minute vote on the motion to recommit will be followed by 
5-minute votes on passage of H.R. 420, if ordered, and the motion to 
instruct on H.R. 3057.
  The vote was taken by electronic device, and there were--ayes 196, 
noes 217, not voting 20, as follows:

                             [Roll No. 552]

                               AYES--196

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boren
     Boucher
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Case
     Chandler
     Clay
     Cleaver
     Conyers
     Cooper
     Costa
     Costello
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (IL)
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Ross
     Rothman
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (GA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Woolsey
     Wu
     Wynn

                               NOES--217

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boustany
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis (KY)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     Dent
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Everett
     Feeney
     Ferguson
     Fitzpatrick (PA)
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jenkins
     Jindal
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Manzullo
     Marchant
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary G.
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schmidt
     Schwarz (MI)
     Sessions
     Shadegg
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Smith (NJ)
     Smith (TX)
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--20

     Blunt
     Boswell
     Brown-Waite, Ginny
     Clyburn
     Diaz-Balart, L.
     Diaz-Balart, M.
     Foley
     Hall
     Harris
     Hastings (FL)
     Mack
     Obey
     Reyes
     Ros-Lehtinen
     Roybal-Allard
     Sensenbrenner
     Shaw
     Simmons
     Tauscher
     Wexler


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Hastings of Washington) (during the 
vote). Members are advised 2 minutes remain in this vote.

                              {time}  1605

  Mr. LINDER changed his vote from ``yea'' to ``nay.''

[[Page H9329]]

  So the motion to recommit 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.


                             Recorded Vote

  Mr. SMITH of Texas. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 228, 
noes 184, not voting 21, as follows:

                             [Roll No. 553]

                               AYES--228

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boustany
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Cardoza
     Carter
     Case
     Castle
     Chabot
     Chocola
     Coble
     Cole (OK)
     Conaway
     Cramer
     Crenshaw
     Cubin
     Cuellar
     Culberson
     Cunningham
     Davis (KY)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     Dent
     Drake
     Dreier
     Duncan
     Edwards
     Ehlers
     Emerson
     English (PA)
     Everett
     Feeney
     Ferguson
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Gordon
     Granger
     Green (WI)
     Gutknecht
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Holden
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Marchant
     Marshall
     Matheson
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schmidt
     Schwarz (MI)
     Scott (GA)
     Sessions
     Shadegg
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Smith (NJ)
     Smith (TX)
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Tanner
     Taylor (MS)
     Taylor (NC)
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NOES--184

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boucher
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Carnahan
     Carson
     Chandler
     Clay
     Cleaver
     Conyers
     Cooper
     Costa
     Costello
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doolittle
     Doyle
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Fitzpatrick (PA)
     Ford
     Frank (MA)
     Gonzalez
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     King (NY)
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Manzullo
     Markey
     Matsui
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Ross
     Rothman
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Terry
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Woolsey
     Wu
     Wynn

                             NOT VOTING--21

     Blunt
     Boswell
     Brown-Waite, Ginny
     Clyburn
     Diaz-Balart, L.
     Diaz-Balart, M.
     Foley
     Graves
     Hall
     Harris
     Hastings (FL)
     Mack
     Obey
     Reyes
     Ros-Lehtinen
     Roybal-Allard
     Sensenbrenner
     Shaw
     Simmons
     Tauscher
     Wexler

                              {time}  1615

  Mrs. LOWEY and Mr. DAVIS of Illinois changed their vote from ``aye'' 
to ``no.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. GRAVES. Mr. Speaker, on rollcall No. 553 I was unavoidably 
detained. Had I been present, I would have voted ``aye.''

                          ____________________