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Second, this legislation ensures basic fairness for individual citizens. Under established principles of tort law, private plaintiffs are often barred from recovering damages based on a failure to prove direct causation. For example, if a person is injured in an automobile accident, but cannot prove that his or her injuries were caused by a defect of the
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In short: Government plaintiffs should not have rights superior to those rights of private plaintiffs.
Third, the Litigation Fairness Act is necessary to prevent taxation through litigation. The power to tax is a legislative function and those who raise taxes should be directly accountable to the voters. Fortunately, it is getting more and more difficult to raise taxes in the Congress and the State legislatures--so money-hungry trial lawyers and big-government public officials are bypassing legislatures to engage in taxation and regulation through litigation. The Litigation Fairness Act will discourage lawyer-driven tax increases being dressed up and passed off as government lawsuits.
In closing, I want to point out some things that the Litigation Fairness Act does not do: it does not prohibit government lawsuits; it does not close the courthouse door to injured parties; it does not place caps on recoveries or limits on lawyer fees. Further, the Litigation Fairness Act cannot be construed to create or authorize any cause of action for any governmental entity.
In fact, the Litigation Fairness Act does not even prohibit the unholy marriage between plaintiffs' lawyers and government officials--although it admittedly makes such a marriage of money and convenience a bit less desirable. My legislation will simply ensure that the government plays by the same rules as its citizens.
This bill has broad support. I ask unanimous consent that the RECORD include statements in support of the bill from the United States Chamber of Commerce, the American Tort Reform Association, and Citizens for a Sound Economy.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
U.S. Chamber Endorses McConnell Bill to Stop Governments From Undermining Business Legal Defenses
WASHINGTON, D.C.--The U.S. Chamber of Commerce today endorsed legislation that would stop the growing trend of governments stripping legitimate industries of their legal defenses and rights and then suing them to raise revenue outside the constraints of the political process.
The ``Litigation Fairness Act,'' sponsored by Senator Mitch McConnell (R-KY), would prevent governments at any level from changing laws to retroactively strip businesses of their traditional legal rights and defenses in order to sue them.
``The U.S. Chamber is greatly concerned this dangerous trend of governments changing the laws to facilitate their revenue-grabbing lawsuits,'' said Chamber Executive Vice President Bruce Josten. ``This practice began in the state lawsuits against the tobacco industry to recover Medicaid funds and, just as the Chamber predicted, has now spread to other industries. President Clinton's plan to use the Justice Department to sue the tobacco industry is a prime example of this problem.
``Unfortunately, these lawsuits are becoming all too common,'' Josten added. ``If this trend continues, economic and social decisions affecting all Americans will be made not by the democratically elected legislatures, but instead by trial lawyers.
``McConnell's legislation would help curtail this abusive situation,'' Josten said, noting that the legislation does not affect any individual's rights or ability to sue a company that has caused them harm.
The bill simply says that a government entity filing suite to directly recover funds expended by that government on behalf of a third-party (such as a Medicare or Medicaid patient) would only be entitled to the same rights as an individual suing that defendant. In addition, such a government plaintiff would be subject to the same substantive and procedural rules and defenses as any other individual plaintiff. The legislation recognizes that an indirectly injured party should not have any greater rights than a directly injured person.
``This legislation will stop the erosion of the two hundred years of tort law, while fairly protecting the rights of American industries from the litigious trial lawyers collaborating with federal, state and local governments,'' Josten concluded.
Josten's comments followed a day-long conference, ``The New Business of Government Sponsored Litigation: State Attorneys General and Big City Lawsuits,'' sponsored by the Institute for Legal Reform, the Chamber's legal policy arm, The Federalist Society and The Manhattan Institute. The conference featured Oklahoma Gov. Frank Keating, Alabama Gov. Don Siegelman, attorneys general from New York, Alabama, Delaware and Texas, and noted plaintiff's lawyers such as Richard Scruggs and John Coale. The event can still be viewed on the Chamber's website, at www.uschamber.org.
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Senator McConnell's Litigation Fairness Act Would Help End `Taxation Through Litigation'
WASHINGTON.--J.V. Schwan, Deputy Director and Counsel for Civil Justice Reform at Citizens for a Sound Economy (CSE), made the following statement in support of Senator Mitch McConnell's bill, The Litigation Fairness Act.
``Taxation through litigation is the latest scheme in Washington. When the Administration can't accomplish their goals through legislation, they sue. This is not what our Founding Fathers intended. `The Litigation Fairness Act' would help stop their `taxation through litigation scheme.'
``Specifically, the bill would assure that when governments file lawsuits for economic losses allegedly incurred as a result of harm to citizens, the government's legal rights will not be greater than those injured citizens. The bill would preserve and in some instances restore that equitable rule of law.
``McConnell's bill does not bar suits by governments against private defendants, place a cap on the recoveries that may be obtained, or limit attorney fees. It simply codifies a traditional tort law rule that has existed for over 200 years.''
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Government Litigation Against Industries
Robert Reich recently wrote in USA Today that ``The era of big government may be over, but the era of regulation through litigation has just begun.'' He advocated that courts should be the regulators of society, deciding whether certain products or services should be available and at what price.
Mr. Reich is referring to the new phenomenon of governments entering into partnerships with private contingency fee attorneys to bring lawsuits against entire industries. Manufacturers of tobacco products and firearms have already been targets of litigation at the State and local levels. At the federal level, President Clinton announced in his 1999 State of the Union address that he has directed the Department of Justice to prepare a litigation plan to sue tobacco companies to recover federal funds allegedly paid out under Medicare.
Future targets of federal and/or state or local cost recovery, or ``recoupment,'' litigations could include producers of beer and wine and other adult beverages, and manufacturers of pharmaceuticals, chemicals, and automobiles. Even Internet providers, the gaming industry, the entertainment industry, and fast food restaurants could be targeted.
THE CHANGES TO BLACK-LETTER TORT LAW
Under traditional tort law rules, third party payors (e.g., employers, insurers, and governments) have long enjoyed subrogation rights to recover costs for healthcare and other expenses that they are obligated to pay on behalf of individuals.
For example, if a worker is injured in the workplace as a result of a defective machine tool, tort law permits the worker's employer to recover the cost of worker compensation and other medical expenses paid on behalf of the employee. Through the process of subrogation, the employer can join in the employee's tort claim against the manufacturer of the machine tool or put a lien on the employee's recovery, but the employer cannot bring a direct action on its own.
Governmental cost recovery actions seek to radically change the traditional subrogation rule. In the State tobacco cases, the attorneys general argued that the States could bring an ``independent'' cause of action against the tobacco companies. Furthermore, the attorneys general argued, because the States' claims were ``independent'' of the claims of individual smokers, the States were not subject to the defenses that could be raised against individual plaintiffs, especially with respect to assumption of risk.
Despite the current unpopularity of the tobacco companies, most courts have followed basic principles of law and dismissed cost recovery claims against the tobacco companies. One federal district court, however, bent the rules and partially sustained a healthcare reimbursement suit in Texas based on a unique expansion of the ``quasi-sovereign'' doctrine. Before the Texas federal court's decision, the quasi-sovereign doctrine had been limited to suits for injunctive relief; it did not extend to suits seeking monetary damages. Even the ``pro-plaintiff'' Minnesota Supreme Court recognized this fact in a tobacco case. The Texas decision produced an avalanche of claims that were ultimately settled out of court.
THE ROLE OF OUTSIDE COUNSEL
Another characteristic of the new ``era of regulation through litigation'' is the partnering of governmental entities and private contingency fee attorneys. This new partnership raises a number of serious ethical and ``good government'' issues:
Contingent fee retainers were designed to give less-affluent persons (who could generally ill-afford hourly rates and up-front retainers) access to the courthouse. Governmental entities have their own in-house legal staff; taxpayers should not have to pay
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In the State tobacco litigation, it seemed that many of the cases were awarded to private attorneys who had been former law partners or campaign supporters of the elected official. Furthermore, there appears to have been a lack of competitive bidding in the attorney selection process. As a result, experts estimate that some plaintiffs' attorneys were paid in excess of $100,000 per hour.\1\ \1\ Professor Lester Brickman, ``Want To Be a Billionaire? Sue a Tobacco Company,'' The Wall Street Journal, December 30, 1998.
Should the prosecutorial power of government be brought against lawful, though controversial, industries? ``As the Supreme Court cautioned more than 60 years ago in Berger v. United States, an attorney for the state, `is the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all'.'' \2\ \2\ Robert A. Levy. ``The Great Tobacco Robbery. Hired Guns Corral Contingent Fee Bonanza'' Legal Times, Week of February 1, 1999, 27.
ALL INDUSTRIES COULD BE TARGETS OF LITIGATION
To date, recoupment lawsuits have been filed against politically disfavored industries because plaintiff attorneys know that if courts bend the rules for controversial products, those precedents will apply equally to other industries.
In fact, some contingency fee lawyers have already publicly stated that tobacco and firearms are just the first of many industries likely to be sued in the new era of regulation by litigation. As stated, future targets of litigation could include producers of beer and wine and other adult beverages, manufacturers of pharmaceuticals, chemicals, and automobiles, Internet providers, the gaming industry, the entertainment industry, and fast food restaurants.
SEPARATION OF POWERS VIOLATED
Legislating public policy in the courtroom violates the ``separation of powers doctrine''--the fundamental rule upon which this country's entire system of government is based. The job of legislatures is to legislate; the job of courts is to interpret the law. This bedrock principle of government should not be eroded for the sake of political expediency and political theater.
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Statement by Victor E. Schwartz, Counsel, American Tort Reform Association, June 23, 1999
THE PRINCIPLE OF EQUAL JUSTICE UNDER LAW IS PRESERVED BY THE LITIGATION FAIRNESS ACT
The Litigation Fairness Act helps assure equal justice under law; that is why the American Tort Reform Association supports it. Liability law should be neutral. Its principles should apply in the same way to all defendants. A basic principle of system of justice is equal justice under law.
Unfortunately, legal principles developed in a few tobacco cases did not apply neutral principles. They gave power to state governments under a fiction called the ``quasi-sovereign doctrine,'' greater power in the law than was possessed by an injured individual. New cases filed by cities against gun manufacturers also may create new principles of law that give those cities greater rights than injured persons. There is little doubt that an engine behind these new principles is the unpopularity of those defendants.
These principles may be limited to so-called ``outlaw defendants''--people who make guns, tobacco, liquor, or other products that significant segments of our society do not like. On the other hand, the principles may apply equally to others. If that is true, those principles can apply against people who make fast foods, automobiles that can go over 100 mph, motorcycles, hunting knives, and even the entertainment industry.
The Litigation Fairness Act preserves the principle that an injured person's right to sue is paramount over government rights, where the government has suffered some indirect economic loss because of that person's harm. It restores equal justice under law and neutrality within our tort system.
For those reasons, the Americans Tort Reform Association supports the Litigation Fairness Act.
By Mr. FRIST:
S. 1270. A bill to establish a partnership for education progress; to the Committee on Health, Education, Labor, and Pensions.
THE EDUCATION EXPRESS ACT
Mr. FRIST. Mr. President, I ask unanimous consent that a summary of the Education Express Act be printed in the RECORD.
There being no objection, the summary was ordered to be printed in the RECORD, as follows:
The Education Express Act (Ed-Express)
OBJECTIVE
Funds would reaffirm our national commitment to state and local control of education. The purpose of this Act is to infuse significant new dollars into the hands of parents, communities, and state and local governments to improve the education achievement of students. This legislation unties the burdensome and expensive federal strings on education dollars by sending more money straight back to the states and classrooms.
States may elect to receive elementary and secondary education funding by ``Direct Check.'' Most importantly, it requires that 98 percent of the funding be used directly at the local level. Incentives such as replacing existing burdensome federal categorical programs are provided to encourage states to choose the Direct Check. However, states may choose to remain in the categorical system.
The legislation creates three local/state programs to enhance educational excellence: Challenge Fund, Teacher Quality Fund, and Academic Opportunity Fund. These programs will result in a substantial increase in federal education assistance--$36.5 billion over five years.
HOW IT WORKS
Those states that opt for the ``Direct Check'' flexibility will receive their educational funding upon the adoption of a state plan written by the governor or the governor's designee that outlines the goals and objectives for the funds--how the state will improve student achievement and teacher quality, and the criteria used to determine and measure achievement.
Decisons on how funds will be used to meet state goals and objectives will be made at the local level.
PROGRAMS
Challenge Fund ($17 billion over five years) to improve education achievement. Direct Check states will receive an additional 10% of their allotment.
Teacher Quality Fund ($14 billion over five years) to improve education achievement. Direct Check states will receive an additional 10%.
Academic Opportunity Fund ($6 billion over 5 years) to reward student achievement, implement statewide reforms, and reward schools and school districts meeting state goals and objectives. Only Direct Check states will be eligible to receive these funds. States may receive an additional 10% of their allotment if they (1) devote 25% or more of their Challenge Fund allotment for Special Education; (2) demonstrate improved education performance among certain disadvantaged populations; or (3) adopt or show improved performance on state-level National Assessment of Education Progress tests (NAEP).
By Mr. GRASSLEY:
S. 1271. A bill improve the drug certification procedures under section 490 of the Foreign Assistance Act of 1961, and for other purposes; to the Committee on Foreign Relations.
MOST FAVORED ROGUE STATES ACT OF 1999
Mr. GRASSLEY. Mr. President, today I am introducing legislation to help clarify for the administration certain aspects of drug policy that seem to have caused confusion. The confusion seems to lie in how to think about our friends and enemies when it comes to drug policy. There seems to be a willingness to overlook the actions and activities of certain rogue states when it comes to their involvement in drug production and trafficking.
The purpose of our international drug policy is to establish a framework for achieving results that sustain the national interest. As part of that, the goal is to identify countries that are major producers or transit zones for drugs. It is also to determine whether those countries are committed to cooperate with the United States, with other countries, or are taking steps on their own to stop illegal drug production and transit. This goal is clearly in the national interest.
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