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JGR/Testimony Approval (03/21/1986-04/30/1986)
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JGR/Testimony Approval (03/21/1986-04/30/1986)
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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Roberts, John G.: Files
Folder Title: JGR/Testimony Approval
(03/21/1986-04/30/1986)
Box: 54
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
THE WHITE HOUSE
WASHINGTON
March 25, 1986
MEMORANDUM FOR BRANDEN BLUM
LEGISLATIVE ATTORNEY
OFFICE OF MANAGEMENT AND BUDGET
FROM:
JOHN G. ROBERTS
ASSOCIATE COUNSEL TO THE PRESIDENT
SUBJECT:
DOJ Testimony re:
Litigation Abuse Reform
Counsel's Office has reviewed the above-referenced DOJ testimony
and finds no objection to it from a legal perspective.
ID n
CU
WHITE HOUSE
CORRESPONDENCE TRACKING WORKSHEET
o - OUTGOING
M INTERNAL
I - INCOMING
Date Correspondence
Received (YY/MM/DD)
1
Name of Correspondent: Richard willard
MI Mall Report
User Codes: (A)
(B)
(0)
Subject: DOJ testimony se: Litigation abuse
Reform
ROUTE TO:
ACTION
DISPOSITION
Tracking
Type
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Action
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Code
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CUHOU
ORIGINATOR 84000,25
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Referral Note:
cuat 18
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CODE
ACTION CODES:
INSPOSITION CODES:
A Appropriate Action
I vinto Copy Only/No Action Nacessary
-Anawared
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-Completed
Comment/Recome
IR Direct ReplyiedQuey
B NowSpecist Referral
s
<:Suspended
D
Draft Response
IB *Wher Signature
Furnish Fact Sheet
K + anterim Reply
to be weed as Enclosure
FOR OUTGOING CORREDRENDENCE:
RECLION
Type of Response italtials of Bigner
Code - "M".
#Dempletion Date of Outgoing
Comments:
BECORDS WYNVGENEMS ОИГА
Keep this worksheet attached to the original incoming letter.
Send all routing updates to Central Reference (Room 75, OEOB).
Always return completed correspondence record to Central Files.
Refer questions about the correspondence tracking system to Central Reference, ext. 2590.
5/81
DRAFT
STATEMENT
OF
RICHARD K. WILLARD
ASSISTANT ATTORNEY GENERAL
CIVIL DIVISION
U.S. DEPARTMENT OF JUSTICE
BEFORE
THE
SENATE JUDICIARY COMMITTEE
CONCERNING
LITIGATION ABUSE REFORM
ON
MARCH 26, 1986
Mr. Chairman and members of the Committee:
The Department of Justice appreciates the opportunity to
appear before the Senate Committee on the Judiciary to discuss
the liability insurance crisis and the need for meaningful
reforms of our tort civil justice system. Senator McConnell and
others have proposed legislation that attempts to address these
difficult issues. While the Administration is continuing to
study S.2046, many of its provisions propose constructive
answers to our current problems.
In my June 11, 1985 testimony before this Committee on
S.1254, Senator Grassley's contractor indemnification bill, I
identified two clear reasons why government contractors and
other commercial manufacturers were alarmed about products
liability and commercial risk exposure. Those reasons are the
innovative theories of tort liability applied by many courts and
the enormous growth in the size of awards being granted by many
juries and courts. These troubling trends in the tort system
are not confined to government contractors or to products
liability cases, but have generated uncertainty and instability
in almost every facet of the liability insurance marketplace and
have contributed significantly to the current liability crisis.
As this Committee has already heard, and other members of
Congress are undoubtedly becoming aware, liability insurance
premium rates have increased by up to 1000 percent, if not
more. Often, coverage is unavailable at any price, with
devastating results. The liability crisis affects virtually
every segment of American society -- manufacturers,
professionals, small businesses, municipalities and nonprofit
organizations. Many believe that tort reform and insurance
availability are the most important issues facing these groups
today.
The Cause of the Problem
While everyone agrees that the high cost or unavailability
of liability insurance is a major crisis facing American
society, not everyone agrees on the cause of the problem.
Some groups have been before Congress -- most notably the
National Insurance Consumer Organization and the trial
lawyers -- to suggest that the current crisis stems from the
insurance industry's own greed and shortsighted underwriting
policies. They would assert that the current price increases
are simply insurance industry efforts to recoup past losses
suffered as a result of insurance industry mismanagement.
Others contend that the problem is cyclical and will
disappear when low interest rates rise. Still others agree with
Ralph Nader, who has testified before Senate and House
committees that the entire crisis or problem is a hoax, a
conspiracy by the insurance industry to use the legislatures to
further defraud the insurance consumer.
- 2 -
Let me start by saying that the history of the insurance
industry has been cyclical. And it is also true that some of
the current increases in liability insurance costs are the
result of past competition for premium income as well as the
recent sharp decline in interest rates. However, while it seems
likely that the insurance industry will be able to work its way
out of its present economic straits, it is very unclear whether
more favorable market conditions and more deliberative
underwriting practices will significantly alleviate the long-
term insurance availablity and affordability problem. Early
indications are that insurers will continue to avoid areas that
present a high risk of tort liability and, in those areas where
insurance is offered, uncertainty about present and future
liability will continue to dictate high premiums. It is
becoming apparent that the insurance availability/affordability
crisis is but one symptom of the dislocations and problems
generated by a malfunctioning tort system. What is called for
is a cure for the disease, not a treatment for the symptom.
The Administration strongly believes that the essence of the
problem is a number of tort decisions of the last few years
in which courts, driven by plaintiff lawyers, have brought about
a vast expansion of civil liability and an enormous increase in
the size of damage awards. Our civil justice system is no
longer seeking to impose liability based upon traditional
- 3 -
doctrines of fault. Rather, the system seeks to compensate
plaintiffs at the expense of those who have the resources to
absorb the costs.
I would like to discuss four specific developments in tort
law that deserve particular attention, and perhaps legislative
redress, whether at the federal or state level.
1. The movement toward no-fault liability
As I have stated in earlier testimony before this Committee,
fault has been the centerpiece of tort law since the days of the
industrial revolution. It assigns liablity based on the
reasonableness of the actor's conduct or activity,
distinguishing socially beneficial, from socially harmful,
conduct. Stated differently, without basing tort law on the
concept of fault, we risk punishing those who do good -- whether
by cleaning up asbestos or by manufacturing a childhood
vaccine. In effect, without fault, tort liability becomes
nothing more than a judicially imposed insurance scheme.
2. Undermining Causation
The gradual undermining of the requirement of causation
through a variety of questionable doctrines and practices, has
been used to shift liability to "deep pocket" defendants even
- 4 -
though their actions did not contribute to the underlying injury
or had only a limited or tangential affect.
While the attack on the requirement of causation cannot be
attributed to any single innovation, one principal vehicle has
been the expanded use of joint and several liability. The
doctrine of joint and several liability allows the plaintiff to
recover the full judgment from any one of several defendants,
rather than collect from each one individually according to his
degree of fault. The practical effect is that "deep pocket"
defendants guarantee the recovery of huge judgments rendered by
sympathetic juries, even in situations where they have been
found only slightly at fault.
This application of the doctrine of joint and several
liability is a radical departure from its originally intended
application in cases where multiple defendants were in "concert
of action" 1 Unfortunately, modern courts have shown an
increasing willingness to apply joint and several liability as a
viable means of securing a financially sound source from which
to recover.
3. The explosive growth in noneconomic and punitive
damages
Another identified problem area is the explosive growth in
the damages awarded in tort lawsuits, particularly with regard
1 See generally Prosser and Keeton on Torts (5th Ed., 1984)
Chapter8.
- 5 -
to noneconomic awards, such as pain and suffering or punitive
damages.
A recent report by Jury Verdict Research, Inc. indicates
that the average medical malpractice jury verdict increased from
$220,018 in 1975 to $1,017,716 in 1985 -- an increase of 363%.
Average product liabilty jury verdicts during this same period
increased from $393,580 to $1,850,452, an increase of 470%.
Interestingly, much of this increase can be attributed to a
remarkable growth in verdicts above $1 million. The same study
notes that in 1975, there were three million-dollar medical
malpractice verdicts and nine million-dollar product liability
verdicts; by 1984, the number of medical malpractice million-
dollar verdicts had grown to 71 and the number of products
liability million-dollar verdicts to 86. This is an increase of
over 1200% in the number of such verdicts.
While it is not possible to quantify precisely how much of
these awards are for nonecomonic damages, it appears that
noneconomic damages, such as awards for pain and suffering and
punitive damages, are a substantial factor. These types of
damages are inherently unconstrained and subjective, and,
therefore, are subject to dramatic inflation and wide
variation. That is, in two cases involving similarly injured
plaintiffs, because of the existence of these types of
subjective damages, there is little chance that the two will
receive comparable awards. The outcome and size of a particular
- 6 -
award or settlement is becoming based more on the defendant's
perceived ability to pay rather than the extent of the injury to
the plaintiff.
4. Excessive Transaction Costs
Finally, another serious problem of the tort system that
should be noted is its extraordinarily high transaction costs.
It appears increasingly difficult to afford justice in this
country. In fact, some would argue that the system, intended to
benefit the injured and to do justice for all, only benefits the
lawyers and is reserved for those who can afford it.
A study of liability cases from asbestos-related injuries by
the Rand Corporation's Institute for Civil Justice indicates
that out of every dollar paid out by the asbestos manufacturers
and their insurers, an average of 62 cents is lost to
attorneys' fees and litigation expenses. 2 Rand found that a
2 J. Kakalik, P. Ebener, W. Felstiner, G. Haggstrom & M.
Shanley, Variations in Asbestos Litigation Compensation and
Expenses xviii (1984). These costs, of course, include both
plaintiffs' and defendants' litigation expenses. In comparing
the costs attributable to plaintiffs' litigation expenses it is
useful to remember that defendants incur such costs whether or
not they prevail, and, indeed may incur substantial costs
defeating even clearly frivolous claims.
typical asbestos court case results in a cost of $380,000. Of
this, $125,000 is for legal defense fees, $114,000 is for legal
fees paid by the plaintiff. It is difficult to justify such
exorbitant costs, particularly when these costs are usually
borne by the seriously injured or the innocent consumer through
higher prices for goods and services.
These are four major areas in tort law where reform is
necessary. Meaningful tort reform, however, will require the
Federal Government to work closely with the states. In products
liability law, for example, the Administration has for many
years supported federal legislation which addresses the excesses
of current law. In other areas, there are questions which must
be carefully considered of how the Federal Government can
appropriately promote sensible tort reform within the framework
of federalism.
Senator McConnell and others in the Congress have
demonstrated a willingness to address the problem. We, at the
Justice Department, look forward to working with this Committee
on appropriate legislation.
That concludes my testimony, I will be pleased to answer any
questions you might have.
- 8 -
THE WHITE HOUSE
file
WASHINGTON
March 26, 1986
TO:
John
FROM:
FRED F. FIELDING
COUNSEL TO THE PRESIDENT
FOR YOUR INFORMATION:
This was received after
the testimony was given,
3/26/86 at 11:24 am.
\
Department of Justice
DRAFT
STATEMENT
OF
RICHARD NORTON
ASSOCIATE COMMISSIONER
EXAMINATIONS
U.S. DEPARTMENT OF JUSTICE
IMMIGRATION AND NATURALIZATION SERVICE
CONCERNING
H.R. 23
ON
MARCH 25, 1986
9:00 AM
Mr. Chairman, Members of the Subcommittee:
Thank you for the opportunity to offer the views of the Department of Justice
on H.R. 23.
The bill is designed to permit certain Cuban and Haitian nationals to adjust
their immigration status to permanent resident aliens.
The Department of Justice concurs with the members of the subcommittee in the
belief that there should be parity in the treatment of those designated
Cuban/Haitian Entrants. The Department further believes that immigration
reform and relief for specific nationality groups should not be accomplished
piecemeal by nationality specific legislation. While we support the intent of
H.R. 23, we again take the position that the preferable response rests with
enactment of the immigration reform legislation. Until the outcome of the
reform legislation is decided, we believe it is premature to take a position on
H.R. 23.
We will continue in our support of a similar provision for legalization of this
group contained in the reform legislation currently pending.
The Department does have some technical concerns with the language of H.R. 23.
In part, the bill calls for the adjustment of status of Cuban nationals who
have been designated "Cuban/Haitian Entrants (Status Pending)". These
nationals, who entered during the Mariel time period, are eligible for the
provisions of P.L. 89-732, the Cuban Refugee Adjustment Act of 1966. Since
April 1, 1985, the Service has accepted applications for adjustment of status
from over 53,000 Mariel Cubans, and has completed processing and adjusted the
status of approximately 23,000 applicants. As H.R. 23 does not repeal the
Cuban Refugee Adjustment Act and specifically provides in section (f) that
nothing shall preclude an alien from seeking permanent resident status under
any other provision of law for which he or she may be eligible, we shall
continue to enforce the provisions of the Cuban Adjustment Act. This will have
the effect of treating nationals from Cuba differently from nationals of Haiti.
We therefore recommend that repeal of PL 89-732 be included in this proposal.
We also continue to be concerned with section (b) (2) of HR 23. This section
provides permanent residence for an alien who "is a national of Cuba or Haiti,
who arrived in the United States before January 1, 1982, with respect to whom
any record was established by the Immigration and Naturalization Service before
January 1, 1982 " It is unclear what the subcommittee intends by the
term "any record," as the term is not defined under the present law or in this
legislation.
We are also concerned with the proposed cutoff date of January 1, 1982. It
should be noted that the Executive Order and Presidential Proclamation
authorizing the interdiction of illegal aliens on the high seas were both
signed on September 29, 1981, and the first interdictions occurred some fifteen
days later. We do not feel it appropriate to reward those individuals who
successfully evaded this interdiction, which the present proposal would do. We
therefore recommend that the cutoff date be established at October 1, 1981.
Similarly, we would not oppose a roll-back date for adjustment of status to
that same date.
This completes my prepared testimony. I would be glad to respond to any
questions which you may have.
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
ROUTE SLIP
TO John Roberts 106
Take necessary action
Approval or signature
Comment
Prepare reply
Discuss with me
For your information
6nJ
See remarks below
FROM Greg X3454 Jones 4/9
DATE
REMARKS
When I circulated this earlier this week,
I neglected to include you. (You had signed
off on Justice testimony on this bill
some time ago.)
Do you have any objection?
There is a subcommittee markup of this
bill tomorrow; I amtrying to clear this
this afternoon.
Thanks.
JANET -
CALL GJ+ X
TELL Itlm NO
OBJECTION.
]
OMB FORM 4
Rev Aug 70
DRAFT
Kastenmeier
noJ report
Dear Mr. Chairman:
This letter is designed to augment the Department of
Justice's March 5, 1986, testimony before the Subcommittee on
Courts, Civil Liberties and the Administration of Justice with
regard to H.R. 3378, the Electronic Communications Privacy Act.
At that hearing, Congressman Moorhead asked the Department's
representative, Deputy Assistant Attorney General James Knapp, to
reconsider the position set forth in the Department's written
Statement with respect to the private interception of cellular
telephone communications. As you may recall, the Statement
indicated that, although the Department was prepared to "accept
legislation that ... would require Title III authorization for
law enforcement officers to intercept either the wire or radio
transmission portion of cellular communications", citizen
scanning for recreational purposes should not incur liability for
interception alone but rather -- by analogy to the Communications
Act of 1934 -- only where the citizen "both intercepts and
divulges the communication under circumstances in which the
interception and divulgence are illegal, tortious, or for com-
mercial gain." Mr. Knapp stated at the hearing that this aspect
of the Department's written submission would be reconsidered and
that the Department would make a final recommendation to the
Subcommittee after meeting with various interested parties over
the next few weeks.
This letter will serve to advise the Subcommittee of the
results of our reconsideration of the cellular private
- 2 -
interception issue, as well as to suggest some additional ideas
relating to the legislation before the Subcommittee.
As promised, the Department of Justice since March 5 has
held a series of discussions with representatives of the cellular
telephone industry as well as the manufacturers of scanners and
other interested persons or groups. These meetings were frank
and probing and contributed significantly to our understanding of
the issues. The question at issue with regard to whether the
unauthorized private interception of cellular telephone commu-
nications should be criminalized is a difficult one for the
Department inasmuch as it involves problems both of assessing the
extent of privacy intrusion inherent in such interception as well
as problems of enforcement of any prohibition. In this latter
regard, Congress should be under no illusion, if offenses in this
area are created, that the Department, under present budgetary
constraints, will be able to devote substantial resources to the
investigation of such offenses, or, because of the inherent
difficulty of such investigations, that a substantial number of
successful prosecutions would be brought.
Nevertheless, with those caveats, the Department has
concluded that its originally stated position with regard to the
private interception of cellular telephone conversations should
be modified. Because we believe that persons' conversations over
cellular telephones should enjoy the protections of federal law,
as they do today if carried in part over wire, we are prepared to
support legislation that would amend Title III's definitional
provisions as to specifically cover the radio component of
cellular communications. This would clearly bring communications
over cellular telephones within the ambit of Title III.
However, our consideration of this issue has also led us to
reevaluate the present penalty structure of Title III, which as
you know in section 2511 (1) (a) makes any willful interception of
a wire or oral communication a five-year felony. In our
judgment, this penalty, for a first and unaggravated offense of
simple interception, is too severe. 1 We think fairness and
enforcement would be enhanced if a first offense of simple
interception were to be a misdemeanor or petty offense. The
existing felony penalties would continue to apply for
interception accompanied by divulgence or use for a tortious,
illegal, or commercial purpose, as well as for a second or
subsequent simple interception offense. In our view, criminal-
ization of the private interception of cellular communications
(which would require proof that the defendant was aware that the
communication being intercepted was of a protected kind and not,
for example, a conversation over a cordless telephone), coupled
with the above- suggested refinements in the penalty structure
for Title III interception violations, represents the most
appropriate balancing of the competing interests in this complex
field.
1 Our comment is confined to subsection (1) (a) and is not
intended to suggest changing the applicable penalties for
offenses under subsections (1) (b), (c), or (d).
- 4 -
We also recommend consideration by the Subcommittee of an
injunction provision as an additional form of remedy for prospec-
tive or ongoing breaches of Title III. As part of the Comprehen-
sive Crime Control Act of 1984, Congress enacted 18 U.S.C. 1345,
which for the first time permits the United States to obtain an
injunction against fraudulent practices under the wire, mail, and
bank fraud statutes. In our view, a similar injunction provision
in the context of Title III would be useful, either pending
prosecution or in a suitable instance as an alternative thereto,
as a mechanism for curtailing ongoing practices that threaten the
privacy interests protected by that statute.
The Department appreciates the opportunity to provide you
with our views on this important matter and we look forward to
working with you and the Subcommittee staff in the development of
appropriate legislation.
Sincerely,
Bolton
OMB has and used Ta NO object
etc