CPSC Reform Act
Floor Speech
CPSC REFORM ACT -- (Senate - March 05, 2008)
BREAK IN TRANSCRIPT
Mr. CORNYN. Madam President, I again congratulate the Senator from Arkansas and the Senator from Alaska for working on an important piece of bipartisan legislation, this reform of the Consumer Product Safety Commission. This is very important to all Americans.
I agree that we ought to be able to move through the amendments that are being offered. I have tried to offer amendments early so we don't backload them and create problems later in the week. I appreciate what the Senator from Arkansas had to say.
I have one amendment pending. In a moment, I intend to offer another amendment, so it will be pending. I have told Senator Pryor that I am more than happy to agree to a short time agreement and a time for a vote after a debate and everybody has had a chance to be heard. These are not complicated amendments, but they are important. I hope we can move through this and vote on the amendments and complete our work shortly.
I told Senator Pryor that I do have another amendment I would like to call up and get pending.
AMENDMENT NO. 4108
Mr. CORNYN. Madam President, at this time, I ask unanimous consent to set aside the pending amendment and call up amendment No. 4108 and ask for its immediate consideration.
The PRESIDING OFFICER. Is there objection?
Mr. PRYOR. Reserving the right to object, once the Senator finishes his presentation, we will go back to the pending amendment.
Mr. CORNYN. I agree.
BREAK IN TRANSCRIPT
The Senator from Texas [Mr. CORNYN] proposes an amendment numbered 4108.
Mr. CORNYN. Madam President, I ask unanimous consent that reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To provide appropriate procedures for individual actions by whistleblowers, to provide for the appropriate assessment of costs and expenses in whistleblower cases, and for other purposes)
On page 63, strike line 6 and all that follows through page 64, line 6, and insert the following:
in an amount not to exceed $15,000 for costs and expenses (including attorneys' and expert witness fees) reasonably incurred, as determined by the Secretary, by the complainant for, or in connection with, the bringing of the complaint upon which the order was issued.
``(C) If the Secretary finds that a complaint under paragraph (1) is frivolous or has been brought in bad faith, the Secretary may award to the prevailing employer a reasonable attorneys' fee, not exceeding $15,000, to be paid by the complainant.
``(4)(A) If the Secretary has not issued a final decision within 210 days after the filing of the complaint, or within 90 days after receiving a written determination, the complainant may bring an action at law or equity for review in the appropriate district court of the United States with jurisdiction, which shall have jurisdiction over such an action without regard to the amount in controversy, and which action shall, at the request of either party to such action, be tried by the court with a jury. The proceedings shall be governed by the same legal burdens of proof specified in paragraph (2)(B).
``(B) In an action brought under subparagraph (A), the court may grant injunctive relief and compensatory damages to the complainant. The court may also grant any other monetary relief to the complainant available at law or equity, not exceeding a total amount of $50,000, including consequential damages, reasonable attorneys and expert witness fees, court costs, and punitive damages.
``(C) If the court finds that an action brought under subparagraph (A) is frivolous or has been brought in bad faith, the court may award to the prevailing employer a reasonable attorneys' fee, not exceeding $15,000, to be paid by the complainant.
Mr. CORNYN. Madam President, I will explain to my colleagues what the amendment does.
Under the bill as offered, it creates, unfortunately, a bounty, so to speak, for alleged whistleblowers up to $250,000 in attorney's fees and penalties, which I think, rather than creating a level playing field and trying to address the legitimate concern that I happen to agree with, that people who disclose or identify illegal conduct need to be protected against arbitrary termination of their jobs when they are just trying to make sure the law is complied with and help contribute to the public safety. I think this bill, as currently written, tilts the playing field too far in favor of whistleblower complainants and has the unintended effect of encouraging frivolous and bad-faith allegations against employers.
So what my amendment would try to do would be to level that playing field while protecting legitimate whistleblowers but not actually encouraging people who have, perhaps, engaged in other misconduct and giving them a bounty, so to speak, to sue for under this statute.
Under the bill, an alleged whistleblower may file a complaint with the Secretary of Labor, and if the Secretary of Labor fails to act, then with the Federal district court. If the complainant prevails at a hearing or action, he or she can receive an unlimited amount of costs and expenses, including attorney's fees and expert witness fees. If the Secretary finds that the complaint is frivolous or brought in bad faith, the amount the employer can recover is limited to $1,000.
Let me make sure my colleagues understand that. If the employee prevails in the action, they can recover unlimited damages and costs, including attorney's fees and expert witness fees. If the Secretary of Labor finds at the administrative level that it is frivolous or brought in bad faith, the employer can only recover $1,000--obviously an unequal playing field and one that will have the unintended impact of encouraging bad conduct. If the case goes to district court, the employer cannot recover attorney's fees at all.
I submit that the rules ought to be fair for both parties and that $1,000 is not a significant deterrent to frivolous and bad-faith suits. If the complaint process is going to have any integrity, there have to be consequences for abusing the process with frivolous and bad-faith complaints.
What is more, the $1,000 limit on attorney's fees in the bill is inadequate to compensate an employer for the cost of defending against a frivolous or bad-faith complaint. An employer who is a target of such a suit will almost certainly incur more than $1,000 in fees just to have a lawyer review the file, file a brief, and attend a hearing. If the case goes to district court, the attorney's fees will be even greater but will not be recoverable at all under the bill as written.
This amendment levels the playing field by capping the costs and fees recoverable for both parties.
I might just add that I have to raise the question of whether a whistleblower provision is necessary. We are still researching the matter. Under most State laws, including the law in the State of Texas, an employer cannot fire an employee for reporting unlawful conduct. There are already remedies in place under State law, and I have to question whether it is necessary to create an additional remedy under Federal law. Assuming there is, I think we should, I hope, agree that there ought to be a level playing field.
My amendment strikes a reasonable balance between the interests of punishing retributive employer conduct and of discouraging frivolous and bad-faith claims. The amendment punishes wrongdoers and makes victims whole without creating incentives for employees to sue employers for frivolous or harassing reasons.
The amendment is fair to complainants, who can recover costs and fees whenever they prevail, as opposed to employers, who can recover only when the whistleblower complaint is shown to be frivolous or brought in bad faith. My amendment fully compensates complainants who prevail. Complainants can still get unlimited injunctive and compensatory relief. In other words, they can get their job back and recover backpay to be made whole. In addition, complainants can receive consequential and punitive damage that are not available to the employer, which is why the amendment allows complainants to recover up to $50,000 in total costs and fees and consequential and punitive damages, while employers can receive only $15,000 in attorney's fees.
I believe this is a reasonable amendment offered in the spirit of compromise, and I hope the other side will take a look at it and agree to accept the amendment. If not, I am willing, as I said earlier, to agree to some reasonable time agreement so we can debate it further and then have a vote on it.
I thank the Presiding Officer, and I yield the floor.
BREAK IN TRANSCRIPT
AMENDMENT NO. 4094
Mr. CORNYN. Mr. President, the managers of this legislation, Senator Pryor and Senator Stevens, have introduced what I think is, by and large, a very good bill designed to protect consumers.
As a matter of fact, I support the expansion of enforcement authority not only to include the Department of Justice, Federal law enforcement authorities, but also to deputize State attorneys general to seek injunctions for violations of the act. That comes from my experience as serving as the attorney general of my State for 4 years.
I think the State attorneys general can provide additional resources in their capacity as the chief consumer protection officer of their State to make sure that consumers are protected. Although in talking to my colleagues, the question was raised, well, if there is only an injunction sought, then why do we need a prohibition against contingency fees that might be paid to outside lawyers to whom this job would be outsourced? And the answer to that is, lawyers can get pretty creative sometimes and figure out a way to pay an outside lawyer a contingency fee even when all the relief that is granted is an injunction.
I want to be clear about what this amendment is and what this amendment is not. This amendment has no bearing whatsoever on the right of an individual if they can't afford any other way to hire a lawyer than based on a contingency fee arrangement. Historically, since the days of England, or Anglo-American jurisprudence, we have recognized the contingency fee as the poor person's key to the courthouse; being able to sign a piece of their recovery, whether it is a settlement or a judgment of a court, as a way to get into court, to sort of level the playing field.
But this is not a case of a person who cannot afford to hire a lawyer unless they hire them using a contingency fee. We are talking about the Federal Government. We are talking about the State governments. And I think there are important reasons to make sure the people who represent the sovereign State of Texas and the other 49 States or the U.S. Government are accountable to the public and are not only in it as bounty hunters seeking to maximize their recovery without any sort of political accountability. That lack of political accountability happens when lawyers for the Government outsource their responsibilities, or at least the job of suing, to private lawyers but without any political accountability associated with it.
I would point out there are tragic examples of what I am talking about. It is not a hypothetical. Before I was elected as attorney general of my State in 1998, my predecessor hired outside lawyers to pursue tobacco companies in the much ballyhooed tobacco litigation. The justification for that was supposed to be that the money was going to be used to stop underage smoking and to try to make sure the public was well educated about the dangers of tobacco. Well, I am sorry to say, as a result of that litigation, the private lawyers hired by the then-attorney general of Texas received more than $3 billion--billion dollars--in attorney's fees that I believe should have gone to the State of Texas to help in those targeted sorts of programs.
There is no accountability. There is no reason the State or the Federal Government should have to outsource its responsibilities to private lawyers. And my amendment is designed to make sure that does not happen under the context of consumer protection.
We found out, though, what is being circulated by an organization that used to be called the American Trial Lawyers Association, now called the American Association for Justice--interesting selection of names--that is opposed to my amendment. It makes clear the concerns I had that ultimately this bill, which would provide only for the attorneys general to seek injunctions, is perhaps to be used as a vehicle to expand that to allow private lawyers, acting under the authority of the State attorneys general, to seek money judgments against any business they are big enough and bad enough to sue.
As you can see, in the fourth paragraph of this document, it says:
Proponents of the Cornyn amendment are desperate to prevent an even playing field for consumers. Prohibiting the use of contingency fees will result--as the proponents of the amendment know it will result--in State attorneys general being wholly unable to utilize private attorneys in those very cases where litigation expenses and complexity make the assistance of private attorneys essential.
It is ironic, that it is the very outside lawyers--the trial lawyers--who hope to be hired by the State attorneys general to pursue that litigation who are opposing this amendment, even though they know that under the consumer product safety laws that are currently on the books it provides for the computation of a reasonable attorney's fee in the recovery and pursuit of a claim. As a matter of fact, it provides an attorney's fee based on actual time expended by the attorney in providing the advice and other legal services in connection with representing a person in an action brought under this law, such reasonable expenses as may be incurred by the attorney in the provision of such services, which is computed at the rate prevailing for the provision of similar services with respect to actions brought in the court which is awarding such fee.
So it is, unfortunately, clear this provision, in this otherwise good piece of legislation, is being used as a Trojan horse not just to protect consumers but to benefit outside lawyers and to have a lack of political accountability that is, I believe, required to make sure the lawyers who represent the United States of America in the Department of Justice or the State attorneys general conduct themselves in an appropriate and accountable sort of fashion.
I mentioned this before, and I will mention it again, that there are examples where this very arrangement has resulted in corrupt bargains. My predecessor's attorney general has just recently left a Federal penitentiary, having served time in prison because he used this outside fee arrangement basically to funnel money to a friend. So this is a very real and present problem.
It is clear the provisions that have been negotiated between the distinguished Senator from Arkansas and the distinguished Senator from Alaska, which would limit it to just seeking injunctions, that perhaps there is a design or plan or the possibility that this will be expanded in conference to include authorizing private lawyers to then sue small businesses and large businesses across the country and authorize the delegation or outsourcing of those responsibilities that the Department of Justice or these attorneys general have to outside counsel, with no accountability, and the very real prospect that there will be abuse and, in some cases perhaps, even corruption.
So I hope my colleagues will learn from the experience of the past, the sad experience of the past, where these sorts of arrangements have been entered into in a way that has resulted in not only not accomplishing the goals sought by the legislation but also outright corruption.
AMENDMENT NO. 4094, AS MODIFIED
Mr. President, I ask unanimous consent that my amendment be modified, with the changes at the desk, and I reserve the remainder of my time.
The PRESIDING OFFICER. The amendment is modified under the order.
The amendment, as modified, is as follows:
On page 58, strike lines 4 through 7 and insert the following:
``(g) If the attorney general of a State obtains a permanent injunction in any civil action under this section, that State can recover reasonable costs and a reasonable attorney's fees from the manufacturer, distributor, or retailer, in accordance with section 11(f).
``(h)(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.''.
The PRESIDING OFFICER. Who yields time?
Mr. PRYOR. Mr. President, I suggest the absence of a quorum, and I ask unanimous consent that the time run equally.
The PRESIDING OFFICER. Is there objection?
Mr. CORNYN. Reserving the right to object, I did not hear the request.
Mr. PRYOR. I suggested the absence of a quorum and that the time run equally on both sides.
Mr. CORNYN. Mr. President, if I may, I will object only for the purpose of asking unanimous consent that the document that was depicted in the chart be made a part of the record following my remarks.
There being no objection, the material was ordered to be printed in the Record, as follows:
BREAK IN TRANSCRIPT
AMENDMENT NO. 4094, AS FURTHER MODIFIED
Mr. CORNYN. Mr. President, I ask that my amendment be modified with the changes at the desk. My modification makes clear that the expert witness fees are part of the recoverable costs and fees that the State attorneys general can recover. I appreciate Senator Stevens for raising this concern to me and hope my modification is responsive to his concerns.
The ACTING PRESIDENT pro tempore. The amendment of the Senator from Texas has already been authorized.
The amendment, as further modified, is as follows:
On page 58, strike lines 4 through 7 and insert the following:
``(g) If the attorney general of a State obtains a permanent injunction in any civil action under this section, that State can recover reasonable costs, expert witness fees, and reasonable attorney fees from the manufacturer, distributor, or retailer, in accordance with section 11(f).
``(h)(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, first we are told that the reason why State attorneys general need to be explicitly authorized under this statute to pursue these consumer complaints is so there is no risk of runaway lawsuits, because they will be confined to seeking an injunction in Federal court. I actually support that provision of the bill.
Then we are told there is an objection to my amendment, which would prohibit State attorneys general from entering into contingency fee arrangements in order to pursue authorized activities under this bill, that there is no reason for the amendment. Next thing I know, there is a document circulated by the American Trial Lawyers Association arguing the only way consumers can get access to the court is by allowing the outsourcing of the responsibility of the State attorneys general under a contingency fee arrangement which makes me mighty suspicious whether this is, in fact, a Trojan horse to allow trial lawyers basically to do the work elected State attorneys general should be doing and that currently the Department of Justice is doing. All my amendment is designed to do is to make sure the purpose for which the State attorneys general are authorized--that is, to seek an injunction only--is maintained and that it not be allowed to serve as a Trojan horse to outsource these responsibilities. There are some very important public policy reasons for that. No. 1, trial lawyers hired by State attorneys general are not accountable to the public.
We have seen examples. I mentioned some in the tobacco litigation, where there were serious abuses that could not be rectified by the electorate when it came to holding public officials accountable. Those public officials in some cases left office; some, such as my predecessor, as attorney general in Texas, went to Federal prison because of misconduct associated with those kinds of arrangements. This amendment is prophylactic in nature. But I will tell you I am concerned it has been mischaracterized. It will not prohibit State attorneys general from contracting with outside lawyers on an hourly rate arrangement under the same circumstances under which lawyers can be reimbursed now. But it will prevent the sort of trophy hunting and the outlandish attorney's fees that were awarded in the tobacco litigation through these contingency fee arrangements. It is something that is within the power of this body to correct. I hope my colleagues will join me in passing this commonsense amendment which is entirely consistent with the underlying purposes of the bill. I worry this is being used as a Trojan horse for other purposes. But if my amendment is passed, I think we can all lay this matter to rest and realize consumers will be protected, but it will not be used as a pretext for enriching private lawyers and political constituencies.
Source