CPSC Reform Act

Floor Speech

CPSC REFORM ACT -- (Senate - March 04, 2008)

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Mr. CORNYN. I ask unanimous consent that reading of the amendment be dispensed with.

The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.

The amendment is as follows:
(Purpose: To prohibit State attorneys general from entering into contingency fee agreements for legal or expert witness services in certain civil actions relating to Federal consumer product safety rules, regulations, standards, certification or labeling requirements, or orders)

On page 58, strike lines 4 through 7 and insert the following:

``(g)(1) An attorney general of a State may not enter into a contingency fee agreement for legal or expert witness services relating to a civil action under this section.

``(2) For purposes of this subsection, the term `contingency fee agreement' means a contract or other agreement to provide services under which the amount or the payment of the fee for the services is contingent in whole or in part on the outcome of the matter for which the services were obtained.''.

Mr. CORNYN. Mr. President, I congratulate my friends, Senator Pryor and Senator Stevens, the principal cosponsors of this legislation. I had the great pleasure of working with Senator Pryor when he and I both were State attorneys general. As such, we were the chief consumer protection officers for our States and our citizens. I believe strongly in the importance of strong consumer protection laws. I believe this bill actually does something positive by adding to the resources available to the Federal Government by authorizing the State attorneys general under some circumstances to help make sure consumers are protected and the laws are enforced.

There is also a concern I have. That has to do with the use of outside counsel when it comes to filing legislation on behalf of a sovereign State such as the State of Texas, the State of Arkansas, or the like. We have seen examples of abuses in the past where State attorneys general have essentially transferred their authority to outside lawyers and paid them a contingency fee based on whatever the value is of what they were able to recover by way of a judgment or settlement. This, unfortunately, has created an anomaly under our system of government where we have nonelected, nonaccountable private sector lawyers who are essentially making decisions on behalf of a sovereign State. If the people of my State, for example, don't agree with what they are doing, they essentially have no right nor ability to hold them accountable or to demonstrate their displeasure with what these outside counsel have done.

There is also a tremendous--and, frankly, tragic from a historical perspective--abuse of this contingency fee arrangement when it comes to outside lawyers. In my own State, my predecessor, as attorney general, got caught up in one of these tragedies--there is no other word to describe it--and actually served time in the Federal penitentiary for directing some of the proceeds in the tobacco litigation to a friend, an outside lawyer in the case, something that, obviously, he should not have done and for which he has paid a high price. But it demonstrates the type of temptation and, indeed, the potential for corruption that exists when an elected official abdicates their responsibility and essentially hands it over to a private individual who is not accountable in a way that elected officials and public stewards of the public trust are.

What this amendment does is say the State attorneys general who are authorized under this legislation to seek an injunction in Federal court to enforce Federal law--something I support--should play by the same rules regarding the recovery of costs and attorney's fees. Section 20(g) of the bill awards costs and attorney's fees whenever the attorney general of the State prevails in any civil action under Federal consumer protection laws. But the word ``prevails'' is not defined. Under the Consumer Product Safety Act and the Flammable Fabrics Act, the Federal Government can go to court to seek an interim or preliminary injunction against a company pending a determination by the Consumer Product Safety Commission whether a product violates either act. State attorneys general would be granted the same authority under section 20 of the bill.

I support that because I think the additional resources over and above what the Department of Justice and the Federal Government currently have will help us be more vigilant when it comes to protecting consumer safety. But to charge costs and attorney's fees against a defendant based on a court's preliminary finding and before the Consumer Product Safety Commission determines whether any law was violated would be clearly unjust.

The Consumer Product Safety Act already has standards governing when the Consumer Product Safety Commission can be awarded costs and attorney's fees. So my amendment would make sure these same standards would apply to State attorneys general who would be authorized to seek an injunction under the act, that they would be no better off and no worse off but actually in the same shoes as the current standard for the Consumer Product Safety Commission.

My amendment also requires State attorneys general to play by the same rules with regard to contingency fees. We want attorneys general to bring civil cases to protect the public interest not to create a windfall for private sector lawyers. I believe this also is consistent with Executive order No. 13433 of May 16, 2007, that prohibits the Consumer Product Safety Commission and other Federal agencies from entering into contingency fee arrangements with private lawyers, and the same standard should apply to State attorneys general under this bill's new enforcement authorities.

I have talked to my friend, Senator Pryor, former attorney general of the State of Arkansas. We have had a lawyerly discussion about why would we want to ban contingency fee arrangements when the only authority given to them under the statute is to seek an injunction and not recover money damages or fines. The fact is, creative lawyers can come up with ways to create a fee arrangement, even where only injunctive relief is sought. There is a case that he and I talked about where basically what happened is the contingency fee was calculated following an injunction based on what complying with that injunction would cost the defendant. Some percentage of that cost was then calculated as a contingency fee. Ironically, in that case it wasn't the defendant who paid that fee, it was the taxpayers of the State, in a further sort of ironic twist. There is a way for contingency fees to be calculated, even where the only authority granted is to seek an injunction.

Finally, it is important that the Senate send a strong message about contingency fee arrangements with outside counsel under these circumstances for the purposes of this act because we know the Senate will not be the final word on this--there will be a conference committee--a strong statement by the Senate that while we believe that State attorneys general can perform a useful function in seeking injunctive relief, that we should not put them in a better position than the Consumer Product Safety Commission, nor should we see the kind of abuses that can occur with hiring outside counsel under contingency fee arrangements.

I thank the distinguished Senator from Arkansas. I congratulate him on his good work.

I yield the floor.

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