NOW, THE QUESTION HERE GOES TO THE MANNER IN WHICH WE AS A
           COUNTRY SELL PRODUCTS. WE ARE INHERENTLY THE MOST CAPITALIST,
           MARKET-ORIENTED ECONOMY IN THE WORLD. AND AS A RESULT, WEEFTB
           MOST PROSPEROUS SOCIETY IN THE WORLD ECONOMICALLY. AND WHAT
           THIS AMENDMENT IS ABOUT IS MAINTAINING A CAPITALIST,
           MARKETPLACE APPROACH TO THE ISSUE OF A SALE OF A PRODUCT IN OUR

           SOCIETY. WHAT THIS BILL DOES IN ITS PRESENT FORM IS INSTITUTE
           AN ANTIMARKET, ANTICAPITALIST APPROACH INTO THE PROCESS OF
           PRODUCING AND SELLING A PRODUCT IN THIS SOCIETY. IT GIVES AN
           ARTIFICIAL, INAPPROPRIATE LEGISLATIVE PROTECTION TO AN INDUSTRY
           FROM WHAT HAS BEEN THETRADITIONAL WAY IN WHICH CONSUMERS HAVE A
           RIGHT OF REDRESS AGAINST THAT INDUSTRY. REMEMBER, THAT IN OUR
           SOCIETY WHEN A CONSUMER -- WHEN JOHN AND MARY JONES IN EPPY,

           NEW HAMPSHIRE, ARE SOLD A PRODUCT THAT DOESN'T WORK, THEY HAVE
           A VARIETY OF DIFFERENT AVENUES TO ADDRESS THE FAILURE OF THAT
           PRODUCT. SHOULD THAT PRODUCT HARM THEM, ONE OF THEIR MOST
           APPROPRIATE AVENUES IS TO GO TO COURT TO BRING AN ACTION
           AGAINST THE PRODUCER OF THAT PRODUCT AND TO GET A RECOVERY. AND
           THAT HAS BEEN BASICALLY THE -- ONE OF THE ESSENTIAL ELEMENTS
           FOR DISCIPLINING THE MARKETPLACE IN OUR CAPITALIST SOCIETY. WE

           HAVE NOT, AS HAS BEEN PURSUED IN OTHER NATIONS, ESPECIALLY
           THOSE WHICH USE A SOCIALIST FORM OF MANAGEMENT OF THEIR
           MARKETPLACE, WE HAVE NOT HAD THE FEDERAL GOVERNMENT OR ANY
           GOVERNMENT COME IN AND TELL A CONSUMER WHAT THEY CAN AND CAN'T
           BUY EXCEPT IN VERY LIMITED INSTANCES, AND WE HAVE CERTAINLY NOT
           LIMITED THAT CONSUMER'S ABILITY TO RECOVER SHOULD THEY BE SOLD
           A PRODUCT THAT DOESN'T WORK. OR THAT HARMS THEM. THE RIGHT OF
           REDRESS IN THE COURT SYSTEM -- THE RIGHT OF REDRESS FOR A

           CONSUMER IS AT THE ESSENCE OF HAVING A COMPETITIVE MARKETPLACE
           AND A DISCIPLINED MARKETPLACE. AND WHEN YOU ELIMINATE THAT
           RIGHT OF REDRESS, WHICH THIS BILL DOES, WHEN YOU TAKE AWAY THE
           ABILITY OF THE CONSUMER, THE PERSON WHO'S BEEN DAMAGED -- OF
           JOHN AND MARY JONES OF EPPY, NEW HAMPSHIRE, TO GET RECOVERY FOR
           INJURIES WHICH THEY HAVE RECEIVED, YOU HAVE ARTIFICIALLY
           PERVERTED THE MARKETPLACE. BUT, MORE IMPORTANTLY, YOU HAVE
           GIVEN A UNIQUE HISTORIC AND TOTALLY INAPPROPRIATE PROTECTION TO

           AN INDUSTRY. NOW LET'S THINK ABOUT THIS FOR A MINUTE. WHY WOULD
           THE FEDERAL GOVERNMENT AT ANY POINT IN ITS HISTORY WANT TO STEP
           IN AND BAR THE ABILITY OF THE CONSUMER TO USE THE TRADITIONAL
           METHODS OF PROTECTING THEMSELVES IN THE MARKEDT PLACE?
           WELL, THERE MIGHT BE INSTANCES WHERE THAT WOULD HAPPEN.
           NATIONAL DEFENSE ISSUES MIGHT BE AN EXAMPLE. IN FACT, UNDER OUR
           LAW, ONCE WE DID THAT IN THE AREA OF PEOPLE WORKING AT NUCLEAR
           WEAPONS FACTS RIS. THERE WAS A -- THERE WAS A NATIONAL DEFENSE

           ISSUE THERE. OR IT MIGHT OCCUR IF A PRODUCT WAS DEEMED SO
           BENEFICIAL THAT IT WAS IMPORTANT TO PROTECT IT IT. IN THOSE
           INSTANCES, OF COURSE, WE HAVE THE SITUATION WHERE THE
           GOVERNMENT RAISES THE VISIBILITY OF THE NEED TO PROTECT THE
           SOCIETY AS A WHOLE OVER THE INDIVIDUAL. THAT HAS NEVER
           HAPPENED. WE'VE NEVER FOUND A PRODUCT THAT WAS SO BENEFICIAL.

           OR IF WE HAVE, IT'S ONLY OCCURRED IN THE RAREEST OF INSTANCES.
           SO BENEFICIAL THAT WE GIVE THAT SORT OF PROTECTION. SO THAT'S A
           VERY UNUSUAL SITUATION, TO SAY THE LEAST. BUT WHAT WE HAVE HERE
           IS THE GRANTING OF A SIGNIFICANT, UNUSUAL PROTECTION OF
           IMMUNITY TO AN INDUSTRY THAT PRODUCES TOBACCO. WHICH, AS I
           MENTIONEDED IN MY OPENING STATEMENT, IS A PRODUCT THAT KILLS
           PEOPLE, THAT ADDICTS KIDS -- THAT ADDICTS PEOPLE AND IS
           TARGETED TO KIDS. VERY STRANGE THAT WE SHOULD PICK THAT

           INDUSTRY IN WHICH TO -- FOR WHICH TO GIVE THIS SORT OF
           PROTECTION TO. NOW I'VE BEEN ASKED -- BREAK INTO MY STATEMENT
           HERE AT THIS POINT AND YIELD TOHE LEADER. I WOULD BE HAPPY TO
           DO SO. I ASK UNANIMOUS CONSENT THAT I RETAIN THE FLOOR AFTER
           THE LEADER HAS COMPLETED HIS REMARKS.
           

           MR. LOTT: MR. PRESIDENT, I ASK CONSENT --
           

           THE PRESIDING OFFICER: WITHOUT OBJECTION, SO ORDERED.
           

           MR. LOTT: -- MY REQUEST APPEAR AT THE END OF THE SENATOR'S
           STATEMENT SO THE STATEMENT WILL NOT APPEAR TO BE INTERRUPTED.
           

           THE PRESIDING OFFICER: WITHOUT OBJECTION. THE MAJORITY LEADER
           IS RECOGNIZED.
           

           MR. LOTT: MR. PRESIDENT, WE HAVE CLEARED THIS WITH ALL THE
           CONCERNED PARTIES, INCLUDING THE DEMOCRATIC LEADERSHIP. I ASK
           UNANIMOUS CONSENT THAT THE VETO MESSAGE TO ACCOMPANY S. 1502 BE
           CONSIDERED AS READ, SUBMITTED IN THE RECORD AND SPREAD IN FULL
           UPON THE JOURNAL AND BE SET ASIDE TO BE CALLED UP BY THE
           MAJORITY LEADER AFTER CONSULTATION WITH THE DEMOCRATIC LEADER.
           

           THE PRESIDING OFFICER: WITHOUT OBJECTION, SO ORDERED. THE
           SENATOR FROM NEW HAMPSHIRE IS RECOGNIZED.
           

           MR. GREGG: MR. PRESIDENT, I'D ASK FOR THE YEAS AND NAYS ON MY
           AMENDMENT.
           

           THE PRESIDING OFFICER: IS THERE A SUFFICIENT SECOND?

           THERE APPEARS TO BE. MR. GREGG: MR. PRESIDENT?
           
           

           THE PRESIDING OFFICER: THE SENATOR FROM NEW HAMPSHIRE.
           

           MR. GREGG: I SEND AN AMENDMENT TO THE DESK.
           

           THE PRESIDING OFFICER: THE CLERK WILL REPORT THE AMENDMENT.
           

           THE CLERK: THE SENATOR FROM NEW HAMPSHIRE, MR. GREGG, PROPOSES
           AN AMENDMENT NUMBERED 2434 TO AMENDMENT 2433.
           

           MR. GREGG: I ASK UNANIMS CONSENT THAT FURTHER READING OF THE
           AMENDMENT BE SET ASIDE.
           

           THE PRESIDING OFFICER: WITHOUT OBJECTION.
           

           MR. GREGG: MR. PRESIDENT, THE AMENDMENT I SENT TO THE DESK IS A
           SECOND-DEGREE AMENDMENT AMENDMENT WHICH PERFECTS THE AMENDMENT
           I AUTHORED, THE UNDERLYING AMENDMENT, THE CHANGES OF WHICH I
           WILL GIVE A COPY TO THE OTHER SIDE BUT I DON'T THINK THEY WILL
           FIND THAT THEY IN ANY WAY CHANGE THE BASIC THRUST OF THE
           ORIGINAL AMENDMENT, WHICH, AS I WAS DISCUSSING, GOES TO THE
           QUESTION OF IMMUNITY AND WHY WE WOULD CHOOSE FOR THE FIRST TIME
           IN THE HISTORY OF THIS COUNTRY THAT WE GRANT IMMUNITY TO AN
           INDUSTRY, IMMUNITY FROM LAWSUITS WHICH BASICALLY CHANGES THE

           WHOLE CONCEPT OF THE MARKETPLACE SYSTEM IN OUR COUNTRY, WHY WE
           WOULD CHOOSE THE TOBACCO INDUSTRY TO GIVE THAT IMMUNITY TO. I
           MEAN, IT IS JUST BEYOND COMPREHENSION THAT AN INDUSTRY WHICH
           PRODUCES A PRODUCT WHICH KILLS PEOPLE, WHICH THEY DESIGNED TO
           ADDICT KIDS WOULD BE CHOSEN AS THE INDUSTRY WHICH WE'RE GOING
           TO GIVE IMMUNITY PROTECTION TO. IT MAKES ABSOLUTELY NO SENSE.
           IT EXCUSE THE MARKETPLACE. AND I WOULD SIM -- IT SKEWS THE

           MARKETPLACE. I WOULD SIMPLY POINT OUT THAT TO HAVE DONE THIS IS
           AN ABSOLUTE AFFRONT TO THE CONCEPT OF CAPITALISM AND FREE
           MARKET SOCIETY. NOW, THERE IS IN THE BILL AN ATTEMPT TO ADDRESS
           THE LIABILITY THAT TOBACCO COMPANIES GENERATE AS A RESULT OF
           THEIR ACTION. AN $8 BILLION CAP. AND SOME WILL TELL US THAT
           THAT'S A LOT OF MONEY AND THAT THAT SHOULD SATISFY EVERYONE AS

           A MANNER IN WHICH TO REDRESS THE CONCERNS OF THE CONSUMER, OF
           THE INDIVIDUALS, OF THE KIDS, OF THE PARENTS, OF THE MOM AND
           POPS WHO HAVE BEEN DAMAGED BY THE TOBACCO COMPANIES. $8 BILLION
           IS A HUGE AMOUNT OF MONEY ON AN ANNUAL CAP FOR RECOVERY UNDER
           LAWSUITS. BUT IT OBVIOUSLY ISN'T WHAT THE MARKET SEES AS THE
           POTENTIAL LIABILITY HERE. OTHERWISE, THERE WOULDN'T BE A CAP IN
           THE FIRST PLACE. SO, BY -- IT'S -- BY IT'S VERY DEFINITION IT

           IS A FRONT TO THE CONCEPT OF A MARKET-TYPE OF APPROACH TO THE
           SELLING OF A PRODUCT IN THIS COUNTRY. EQUALLY IMPORTANT, THE WA
           THIS CAP WORKS, IT GIVES A DISPROPORTIONATE AMOUNT OF POWER TO
           THE TOBACCO COMPANIES TO DECIDE WHO THE WINNERS AND LOSERS ARE
           BECAUSE IT'S ESSENTIALLY A RACE -- IT'S ESSENTIALLY A RACE TO
           THE COURTHOUSE. AND THE TOBACCO COMPANIES, UNDER THIS PROPOSAL,

           UNDER THIS BILL, WOULD CONTROL WHO GETS THE -- TO THE
           COURTHOUSE FIRST. IF THEY DECIDED THE X, Y, Z LAWSUIT WAS MORE
           AMENABLE TO THEM TO SETTLE THAN THE A, B, C LAWSUIT OR MARY
           SMITH'S LAWSUIT WAS LESS DESIRABLE TO THEM FOR SOME REASON,
           WHATEVER, THAN HANK JONES'S LAWSUIT, THEY CAN SETTLE THE A, B,
           C LAUT SUIT, THEY CAN SETTLE THE X, Y, Z, LAWSUIT, THEY CAN
           SETTLE THE MARY JONES LAWSUIT. THEY CANNOT SETTLE THE HANK

           JONES LAWSUIT. THEY CAN MITIGATE. BY THE TIME THEY HAVE
           FINISHED MITIGATING, THEY CAN SETTLE THE OTHER ONES AND POOF,
           THE LAWSUIT IS GONE. NOT ONLY DOES IT HAVE THE IRONY OF
           PERVERTING THE MARKETPLACE, IT HAS THE IRONY OF GIVING THE
           TOBACCO INDUSTRY THE CAPACITY TO CHOOSE WHO THE WINNERS AND
           LOSERS ARE IN THE PROCESS OF DETERMINING PEOPLE WHO ARE SUING
           THEM FOR BEING CAUSED PHYSICAL DAMAGE BY THEM. I MEAN, CAN YOU
           THINK OF ANYTHING MORE IRONIC?
           YOU HAVE BEEN DAMAGED. YOUR HEALTH HAS BEEN DESTROYED. MAYBE
           YOU'RE SOMEONE -- MAYBE SOMEONE IN YOUR FAMILY DIED AS A RESULT

           OF THE TOBACCO INDUSTRY'S ACTIONS. SOME CHILD WAS ADDICTED, AND
           THAT CHILD DIES AND THE TOBACCO COMPANY GETS TO CHOOSE WHETHER
           OR NOT THAT PERSON IS GOING TO BE A WINNER UNDER THE LAWSUIT'S
           PROCESS. I MEAN, HOW UNBELIEVABLY IRONIC AND ABSURD THAT IS.
           BUT THAT'S THE WAY THIS CAP WORKS. THAT'S JUST ONE OF THE MANY,
           MANY, MANY TECHNICAL PROBLEMS WITH THE CONCEPT OF A CAP.
           BECAUSE -- BUT WHAT I THINK IT REFLECTS IS THE IDEA THAT WHEN
           YOU PUT AN ARTIFICIAL CAP INTO A HUGE DYNAMIC ECONOMY LIKE THE

           UNITED STATES, YOU ARE BASICALLY CREATING ALL SORTS OF
           UNINTENDED CONSEQUENCES THAT DON'T FLOW NATURALLY IN A
           CAPITALIST SYSTEM. MUCH MORE APPROPRIATE IS THAT YOU ALLOW THE
           CAPITALIST SYSTEM TO PROCEED IN ITS USUAL AND ORDERLY COURSE.
           NOW, OTHERS WILL SAY, WELL, IF YOU DON'T HAVE IMMUNITY, THEN
           YOU INEVITABLY DRIVE THESE COMPANIES INTO BANKRUPTCY. TO BEGIN
           WITH, WE DON'T HAVE ANY IDEA THAT THAT'S TRUE. WHAT WE KNOW IS
           THAT THE INDUSTRIES ARE EXTRAORDINARILY PROFITABLE. WHAT WE

           KNOW IS THAT RIGHT NOW THEY ARE PURSUING MAJOR BUY-BACKS --
           PHILIP MORRIS, $8 MILLION BUY-BACK. WHEN YOU START BUYING BACK
           YOUR STOCK AS A CORPORATE LEADER, YOU'RE SAYING YOUR STOCK IS
           UNDERVALUED. IF YOUR STOCK IS UNDERVALUED, IT'S THE ULTIMATE
           TEST THAT IN THE FUTURE YOU'VE GOT A BETTER CHANCE OF
           PROGRESSIVE SALES AND OF A STRONG MARKET FORCE FOR YOUR
           INDUSTRY. SO, THE CONCEPT THAT THIS IMMUNITY -- IF THEY DON'T

           HAVE IMMUNITY, THEY'RE GOING TO END UP GOING BANKRUPT, I THINK
           THE MARKETPLACE HAS DISCOUNTED THAT. IT'S REJECTED THAT. IT'S
           SAID THAT'S NOT GOING TO HAPPEN. THAT IN FACT THERE'S A
           TREMENDOUS EARNING CAPACITY OUT THERE, AND WE ALREADY KNOW THAT
           THERE'S A TREMENDOUS CAPACITY TO PASS ON TO THE CONSUMER,
           BECAUSE THAT'S THE THEME OF THIS WHOLE BILL, TO PASS ON TO THE
           CONSUMER A SIGNIFICANT PART OF THE COST. AND AS LONG AS THEY
           CAN PASS THROUGH THAT COST, IT DOESN'T IMPACT THEM AT ALL. IT

           DOESN'T IMPACT THEIR CAPACITY AS ALL. SO, FROM A SUBSTANTIVE
           STANDPOINT, BANKRUPTCY DOESN'T MAKE ANY SENSE. AS A DEFENSIVE
           ARGUMENT TO THIS. BUT JUST FROM A PURELY LOGICAL STANDPOINT, IT
           EVEN MAKES LESS SENSE. THINK ABOUT IT THIS WAY. WE'RE SAYING
           THAT TO SAVE THE INDUSTRY FROM BANKRUPTCY, WE HAVE TO PUT THIS
           CAP ON IT. BUT AT THE SAME TIME WE HAVE TO TAX IT. AND THE

           REASON WE'RE TAXING IT IS TO DISCOURAGE PEOPLE FROM CONSUMING
           THE PRODUCT AND THE LOGICAL EXTENSION OF THAT IS THAT IF YOU'RE
           SUCCESSFUL IN TAXING PEOPLE AND MANAGING TO DISCOURAGE THEM
           FROM USING THE PRODUCT, YOU ARE GOING TO REDUCE UTILIZATION
           WHICH ONE PRESUMES WOULD INEVITABLY LEAD TO A COLLAPSE OF THE
           INDUSTRY AND POTENTIALLY BANKRUPTCY. SO, THE BILL BY ITS VERY
           NATURE IS INHERENTLY SAYING THAT THE OPTIONS OF BANKRUPTCY ARE
           THERE, BUT THEY'RE GOING TO DO IT ON A DIFFERENT SYSTEM.

           THEY'RE GOING TO DO IT THROUGH THE TAX SYSTEM. AND, YET, THEY
           WON'T ALLOW THE MARKETPLACE TO MAKE THAT DECISION. THEY WON'T
           ALLOW THE MARKETPLACE TO DECIDE WHETHER OR NOT THIS INDUSTRY
           SURVIVES. WHICH IS THE WAY TRADITIONALLY WE HAVE DONE IT IN
           THIS COUNTRY. WE DON'T TRADITIONALLY SAY TO AN INDUSTRY, WELL,
           YOU'RE ABOUT TO GO BANKRUPT, WHICH IS SOMETHING THAT THIS
           INDUSTRY CAN'T SAY, CERTAINLY IN LIGHT OF WHAT IT'S DOING WITH
           ITS STOCK VALUES. YOU'RE ABOUT TO GO BANKRUPT, SO WE, THE
           FEDERAL GOVERNMENT, ARE GOING TO STEP IN AND GIVE YOU UNIQUE
           PROTECTION OF WE'RE GOING TO GIVE YOU LIABILITY PROTECTION. AND

           WE CERTAINLY DON'T SAY IT TO AN INDUSTRY WHICH HAS PRODUCED A
           PRODUCT THAT KILLS PEOPLE AND WHICH IS ADDICTIVE. AND THOSE
           PEOPLE WHO DON'T BELIEVE THAT THIS INDUSTRY KNEW THAT THEIR
           PRODUCT WAS ADDICTIVE, I WOULD SIMPLY CITE A FEW QUOTES. WE
           HAVE HERE QUOTES FROM THE BROWN AND WILLIAMSON DOCUMENTS THAT
           WERE DISCLOSED, I BELIEVE, AS A RESULT OF THE MINNESOTA CASE.
           AND FROM THE DOCUMENTS OF R.J.R. BROWN AND WILLIAMSON, 1978 --
           THAT'S A LONG TIME AGO, SO THIS WASN'T YESTERDAY THAT THIS

           DIDN'T FIGURE OUT THIS STUFF WAS ADDICTIVE. "VERY FEW CONSUMERS
           ARE AWARE OF THE EFFECTS OF NICOTINE, I.E., ITS ADDICTIVE
           NATURE AND THAT NICOTINE IS A POISON." THESE FOLKS KNEW A LONG
           TIME AGO THAT THEY WERE SELLING AN ADDICTIVE PRODUCT THAT
           KILLED PEOPLE. TOBACCO COMPANIES -- AGAIN QUOTING FROM R.J.R.
           DOCUMENTS. "TOBACCO COMPANIES ARE BASICALLY IN THE NICOTINE
           BUSINESS. EFFECTIVE CONTROL OF NICOTINE IN OUR PRODUCTS SHOULD

           EQUATE TO A SIGNIFICANT PRODUCT
{END: 1998/05/20 TIME: 17-00 , Wed.  105TH SENATE, SECOND SESSION}