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.

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.