[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 687 Referral Instructions Senate (RIS)]

103d CONGRESS
  2d Session
                                 S. 687

                          [Report No. 103-203]

  To regulate interstate commerce by providing for a uniform product 
                 liability law, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               March 31 (legislative day, March 3), 1993

Mr. Rockefeller (for himself, Mr. Gorton, Mr. Lieberman, Mr. Danforth, 
 Mr. Dodd, Mr. Coats, Mr. Chafee, Mr. Wallop, Mr. Pressler, Mr. Lott, 
   Mr. Burns, Mrs. Kassebaum, Mr. Boren, Mr. Exon, Mr. Nickles, Mr. 
Thurmond, Mr. Pell, Mr. Grassley, Mr. Helms, Mr. Hatch, Mr. McConnell, 
Mr. Lugar, Mr. Jeffords, Mr. Faircloth, Mr. Glenn, Mr. Craig, Mr. Dole, 
Mr. Bond, Mr. Brown, Mr. Domenici, Mr. Mack, Mr. McCain, Mr. Murkowski, 
 Mr. Smith, Mr. Bennett, Mr. Coverdell, Mr. Gregg, Mr. Kempthorne, Mr. 
Hatfield, Mrs. Hutchison, Mr. Warner, Mr. Durenberger, Mr. Mathews, Mr. 
  Pryor, and Mr. Gramm) introduced the following bill; which was read 
     twice and referred to the Committee on Commerce, Science, and 
                             Transportation

            November 20 (legislative day, November 2), 1993

              Reported by Mr. Hollings, without amendment

              March 1 (legislative day, February 22), 1994

Ordered referred to the Committee on the Judiciary for a period not to 
                      extend beyond April 11, 1994

_______________________________________________________________________

                                 A BILL


 
  To regulate interstate commerce by providing for a uniform product 
                 liability law, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Product Liability Fairness Act''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

                           TABLE OF CONTENTS

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Definitions.
Sec. 4. Applicability; preemption.
Sec. 5. Jurisdiction of Federal courts.
Sec. 6. Effective date.
    TITLE I--EXPEDITED JUDGMENTS AND ALTERNATIVE DISPUTE RESOLUTION 
                               PROCEDURES

Sec. 101. Expedited product liability judgments.
Sec. 102. Alternative dispute resolution procedures.
                 TITLE II--STANDARDS FOR CIVIL ACTIONS

Sec. 201. Civil actions.
Sec. 202. Uniform standards of product seller liability.
Sec. 203. Uniform standards for award of punitive damages.
Sec. 204. Uniform time limitations on liability.
Sec. 205. Workers' compensation subrogation standards.
Sec. 206. Several liability for noneconomic loss.
Sec. 207. Defenses involving intoxicating alcohol or drugs.

SEC. 3. DEFINITIONS.

    As used in this Act, the term--
            (1) ``claimant'' means any person who brings a civil action 
        pursuant to this Act, and any person on whose behalf such an 
        action is brought; if such an action is brought through or on 
        behalf of an estate, the term includes the claimant's decedent, 
        or if it is brought through or on behalf of a minor or 
        incompetent, the term includes the claimant's parent or 
        guardian;
            (2) ``clear and convincing evidence'' is that measure or 
        degree of proof that will produce in the mind of the trier of 
        fact a firm belief or conviction as to the truth of the 
        allegations sought to be established; the level of proof 
        required to satisfy such standard is more than that required 
        under preponderance of the evidence, but less than that 
        required for proof beyond a reasonable doubt;
            (3) ``collateral benefits'' means all benefits and 
        advantages received or entitled to be received (excluding any 
        benefits any other person has or is entitled to assert for 
        recoupment through subrogation, trust agreement, lien, or 
        otherwise) by any claimant harmed by a product or by any other 
        person as reimbursement of loss because of harm to person or 
        property payable or required to be paid to the claimant, 
        under--
                    (A) any Federal law or the laws of any State (other 
                than through a claim for breach of an obligation or 
                duty); or
                    (B) any life, health, or accident insurance or 
                plan, wage or salary continuation plan, or disability 
                income or replacement service insurance, result of 
                participation in any pre-paid medical plan or health 
                maintenance organization;
            (4) ``commerce'' means trade, traffic, commerce, or 
        transportation--
                    (A) between a place in a State and any place 
                outside of that State; or
                    (B) which affects trade, traffic, commerce, or 
                transportation described in subparagraph (A);
            (5) ``commercial loss'' means any loss incurred in the 
        course of an ongoing business enterprise consisting of 
        providing goods or services for compensation;
            (6) ``economic loss'' means any pecuniary loss resulting 
        from harm (including but not limited to medical expense loss, 
        work loss, replacement services loss, loss due to death, burial 
        costs, and loss of business or employment opportunities), to 
        the extent recovery for such loss is allowed under applicable 
        State law;
            (7) ``exercise of reasonable care'' means conduct of a 
        person of ordinary prudence and intelligence using the 
        attention, precaution, and judgment that society expects of its 
        members for the protection of their own interests and the 
        interests of others;
            (8) ``harm'' means any bodily injury to an individual 
        sustained in an accident and any illness, disease, or death of 
        that individual resulting from that injury; the term does not 
        include commercial loss or loss or damage to a product itself;
            (9) ``manufacturer'' means--
                    (A) any person who is engaged in a business to 
                produce, create, make, or construct any product (or 
                component part of a product) and who designs or 
                formulates the product (or component part of the 
                product) or has engaged another person to design or 
                formulate the product (or component part of the 
                product);
                    (B) a product seller, but only with respect to 
                those aspects of a product (or component part of a 
                product) which are created or affected when, before 
                placing the product in the stream of commerce, the 
                product seller produces, creates, makes, or constructs 
                and designs or formulates, or has engaged another 
                person to design or formulate, an aspect of a product 
                (or component part of a product) made by another; or
                    (C) any product seller not described in 
                subparagraph (B) which holds itself out as a 
                manufacturer to the user of a product;
            (10) ``noneconomic loss'' means subjective, nonmonetary 
        loss resulting from harm, including but not limited to pain, 
        suffering, inconvenience, mental suffering, emotional distress, 
        loss of society and companionship, loss of consortium, injury 
        to reputation, and humiliation; the term does not include 
        economic loss;
            (11) ``person'' means any individual, corporation, company, 
        association, firm, partnership, society, joint stock company, 
        or any other entity (including any governmental entity);
            (12) ``preponderance of the evidence'' is that measure or 
        degree of proof which, by the weight, credit, and value of the 
        aggregate evidence on either side, establishes that it is more 
        probable than not that a fact occurred or did not occur;
            (13) ``product'' means any object, substance, mixture, or 
        raw material in a gaseous, liquid, or solid state--
                    (A) which is capable of delivery itself or as an 
                assembled whole, in a mixed or combined state, or as a 
                component part or ingredient;
                    (B) which is produced for introduction into trade 
                or commerce;
                    (C) which has intrinsic economic value; and
                    (D) which is intended for sale or lease to persons 
                for commercial or personal use;
        the term does not include human tissue, blood and blood 
        products, or organs unless specifically recognized as a product 
        pursuant to State law;
            (14) ``product seller'' means a person who, in the course 
        of a business conducted for that purpose, sells, distributes, 
        leases, prepares, blends, packages, labels, or otherwise is 
        involved in placing a product in the stream of commerce, or who 
        installs, repairs, or maintains the harm-causing aspect of a 
        product; the term does not include--
                    (A) a seller or lessor of real property;
                    (B) a provider of professional services in any case 
                in which the sale or use of a product is incidental to 
                the transaction and the essence of the transaction is 
                the furnishing of judgment, skill, or services; or
                    (C) any person who--
                            (i) acts in only a financial capacity with 
                        respect to the sale of a product; and
                            (ii) leases a product under a lease 
                        arrangement in which the selection, possession, 
                        maintenance, and operation of the product are 
                        controlled by a person other than the lessor; 
                        and
            (15) ``State'' means any State of the United States, the 
        District of Columbia, Puerto Rico, the Northern Mariana 
        Islands, the Virgin Islands, Guam, American Samoa, and any 
        other territory or possession of the United States, or any 
        political subdivision thereof.

SEC. 4. APPLICABILITY; PREEMPTION.

    (a) Applicability to Product Liability Actions.--This Act applies 
to any civil action brought against a manufacturer or product seller, 
on any theory, for harm caused by a product. A civil action brought 
against a manufacturer or product seller for loss or damage to a 
product itself or for commercial loss is not subject to this Act and 
shall be governed by applicable commercial or contract law.
    (b) Scope of Preemption.--(1) Except as provided in paragraph (2), 
this Act supersedes any State law regarding recovery for harm caused by 
a product only to the extent that this Act establishes a rule of law 
applicable to any such recovery. Any issue arising under this Act that 
is not governed by any such rule of law shall be governed by applicable 
State or Federal law.
    (2) The provisions of title I shall not supersede or otherwise 
preempt any provision of applicable State or Federal law.
    (c) Effect on Other Law.--Nothing in this Act shall be construed 
to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any provision of law;
            (2) supersede any Federal law, except chapter 81 of title 
        5, United States Code (relating to Federal employees' 
        compensation for work injuries) and the Longshore and Harbor 
        Workers' Compensation Act (33 U.S.C. 901 et seq.);
            (3) waive or affect any defense of sovereign immunity 
        asserted by the United States;
            (4) affect the applicability of any provision of chapter 97 
        of title 28, United States Code;
            (5) preempt State choice-of-law rules with respect to 
        claims brought by a foreign nation or a citizen of a foreign 
        nation;
            (6) affect the right of any court to transfer venue or to 
        apply the law of a foreign nation or to dismiss a claim of a 
        foreign nation or of a citizen of a foreign nation on the 
        ground of inconvenient forum; or
            (7) supersede any statutory or common law, including an 
        action to abate a nuisance, that authorizes a State or person 
        to institute an action for civil damages or civil penalties, 
        cleanup costs, injunctions, restitution, cost recovery, 
        punitive damages, or any other form of relief resulting from 
        contamination or pollution of the environment (as defined in 
        section 101(8) of the Comprehensive Environmental Response, 
        Compensation, and Liability Act of 1980; 42 U.S.C. 9601(8)), or 
        the threat of such contamination or pollution.
    (d) Construction.--This Act shall be construed and applied after 
consideration of its legislative history to promote uniformity of law 
in the various jurisdictions.
    (e) Effect of Court of Appeals Decisions.--Any decision of a United 
States court of appeals interpreting the provisions of this Act shall 
be considered a controlling precedent and followed by each Federal and 
State court within the geographical boundaries of the circuit in which 
such court of appeals sits, except to the extent that the decision is 
overruled or otherwise modified by the United States Supreme Court.

SEC. 5. JURISDICTION OF FEDERAL COURTS.

    The district courts of the United States shall not have 
jurisdiction over any civil action pursuant to this Act, based on 
section 1331 or 1337 of title 28, United States Code.

SEC. 6. EFFECTIVE DATE.

    This Act shall take effect on the date of its enactment and shall 
apply to all civil actions pursuant to this Act commenced on or after 
such date, including any action in which the harm or the conduct which 
caused the harm occurred before the effective date of this Act.

    TITLE I--EXPEDITED JUDGMENTS AND ALTERNATIVE DISPUTE RESOLUTION 
                               PROCEDURES

SEC. 101. EXPEDITED PRODUCT LIABILITY JUDGMENTS.

    (a) Claimant's Offer of Judgment.--Any claimant may, in addition to 
any claim for relief made in accordance with State law, include in the 
complaint an offer of judgment to be entered against a defendant for a 
specific dollar amount as complete satisfaction of the claim.
    (b) Defendant's Offer.--A defendant may serve an offer to allow 
judgment to be entered against that defendant for a specific dollar 
amount as complete satisfaction of the claim, within sixty days after 
service of the claimant's complaint or within the time permitted 
pursuant to State law for a responsive pleading, whichever is longer, 
except that if such pleading includes a motion to dismiss in accordance 
with applicable law, the defendant may serve such offer within 10 days 
after the court's determination regarding such motion.
    (c) Extension of Response Period.--In any case in which an offer of 
judgment is served pursuant to subsection (a) or (b), the court may, 
upon motion by the offeree made prior to the expiration of the 
applicable period for response, enter an order extending such period. 
Any such order shall contain a schedule for discovery of evidence 
material to the issue of the appropriate amount of relief, and shall 
not extend such period for more than sixty days. Any such motion shall 
be accompanied by a supporting affidavit of the moving party setting 
forth the reasons why such extension is necessary to promote the 
interests of justice and stating that the information likely to be 
discovered is material and is not, after reasonable inquiry, otherwise 
available to the moving party.
    (d) Defendant's Penalty for Rejection of Offer.--If a defendant, as 
offeree, does not serve on a claimant a written notification of 
acceptance of an offer of judgment served by a claimant in accordance 
with subsection (a) within the time permitted pursuant to State law for 
a responsive pleading or, if such pleading includes a motion to dismiss 
in accordance with applicable law, within thirty days after the court's 
determination regarding such motion, and a final judgment is entered in 
such action in an amount greater than the specific dollar amount of 
such offer of judgment, the court shall modify the judgment against 
that defendant by including in the judgment an amount for the 
claimant's reasonable attorney's fees and costs, not to exceed $50,000. 
Such fees shall be offset against any fees owed by the claimant to the 
claimant's attorney by reason of the final judgment.
    (e) Claimant's Penalty for Rejection of Offer.--If the claimant, as 
offeree, does not serve on the defendant a written notice of acceptance 
of an offer of judgment served by a defendant in accordance with 
subsection (b) within thirty days after such service and a final 
judgment is entered in such action in an amount less than the specific 
dollar amount of such offer of judgment, the court shall reduce the 
amount of the final judgment in such action by that portion of the 
judgment which is allocable to economic loss for which the claimant has 
received or is entitled to receive collateral benefits. If the claimant 
is not the prevailing party in such action, the claimant's refusal to 
accept an offer of judgment shall not result in the payment of any 
penalty under this subsection.
    (f) Reasonable Attorney's Fee.--For purposes of this section, a 
reasonable attorney's fee shall be calculated on the basis of an hourly 
rate which shall not exceed that which is considered acceptable in the 
community in which the attorney practices, considering the attorney's 
qualifications and experience and the complexity of the case.
    (g) Evidence of Offer.--An offer not accepted shall be deemed 
withdrawn and evidence thereof is not admissible except in a proceeding 
to determine attorney's fees and costs.

SEC. 102. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES.

    (a) In General.--A claimant or defendant in a civil action subject 
to this Act may, within the time permitted for making an offer of 
judgment under section 101, serve upon an adverse party an offer to 
proceed pursuant to any voluntary, nonbinding alternative dispute 
resolution procedure established or recognized under the law of the 
State in which the civil action is brought or under the rules of the 
court in which such action is maintained. An offeree shall, within ten 
days of such service, file a written notice of acceptance or rejection 
of the offer; except that the court may, upon motion by the offeree 
make prior to the expiration of such ten-day period, extend the period 
for response for up to sixty days, during which discovery may be 
permitted.
    (b) Defendant's Penalty for Unreasonable Refusal.--The court shall 
assess reasonable attorney's fees (calculated in the manner described 
in section 101(f)) and costs against the offeree, if--
            (1) a defendant as offeree refuses to proceed pursuant to 
        such alternative dispute resolution procedure;
            (2) final judgment is entered against the defendant for 
        harm caused by a product; and
            (3) the defendant's refusal to proceed pursuant to such 
        alternative dispute resolution procedure was unreasonable or 
        not in good faith.
    (c) Good Faith Refusal.--In determining whether an offeree's 
refusal to proceed pursuant to such alternative dispute resolution 
procedure was unreasonable or not in good faith, the court shall 
consider such factors as the court deems appropriate.

                 TITLE II--STANDARDS FOR CIVIL ACTIONS

SEC. 201. CIVIL ACTIONS.

    A person seeking to recover for harm caused by a product may bring 
a civil action against the product's manufacturer or product seller 
pursuant to applicable State or Federal law, except to the extent such 
law is inconsistent with any provision of this Act.

SEC. 202. UNIFORM STANDARDS OF PRODUCT SELLER LIABILITY.

    (a) Standards of Liability.--In any civil action for harm caused by 
a product, a product seller other than a manufacturer is liable to a 
claimant, only if the claimant establishes by a preponderance of the 
evidence that--
            (1)(A) the individual product unit which allegedly caused 
        the harm complained of was sold by the defendant; (B) the 
        product seller failed to exercise reasonable care with respect 
        to the product; and (C) such failure to exercise reasonable 
        care was a proximate cause of the claimant's harm; or
            (2)(A) the product seller made an express warranty, 
        independent of any express warranty made by a manufacturer as 
        to the same product; (B) the product failed to conform to the 
        product seller's warranty; and (C) the failure of the product 
        to conform to the product seller's warranty caused the 
        claimant's harm.
    (b) Conduct of Product Seller.--(1) In determining whether a 
product seller is subject to liability under subsection (a)(1), the 
trier of fact may consider the effect of the conduct of the product 
seller with respect to the construction, inspection, or condition of 
the product, and any failure of the product seller to pass on adequate 
warnings or instructions from the product's manufacturer about the 
dangers and proper use of the product.
    (2) A product seller shall not be liable in a civil action subject 
to this Act based upon an alleged failure to provide warnings or 
instructions unless the claimant establishes that, when the product 
left the possession and control of the product seller, the product 
seller failed--
            (A) to provide to the person to whom the product seller 
        relinquished possession and control of the product any 
        pamphlets, booklets, labels, inserts, or other written warnings 
        or instructions received while the product was in the product 
        seller's possession and control; or
            (B) to make reasonable efforts to provide users with the 
        warnings and instructions with it received after the product 
        left its possession and control.
    (3) A product seller shall not be liable in a civil action subject 
to this Act except for breach of express warranty where there was no 
reasonable opportunity to inspect the product in a manner which would 
or should, in the exercise of reasonable care, have revealed the aspect 
of the product which allegedly caused the claimant's harm.
    (c) Treatment as Manufacturer.--A product seller shall be deemed to 
be the manufacturer of a product and shall be liable for harm to the 
claimant caused by a product as if it were the manufacturer of the 
product if--
            (1) the manufacturer is not subject to service of process 
        under the laws of any State in which the action might have been 
        brought; or
            (2) the court determines that the claimant would be unable 
        to enforce a judgment against the manufacturer.

SEC. 203. UNIFORM STANDARDS FOR AWARD OF PUNITIVE DAMAGES.

    (a) In General.--Punitive damages may, if otherwise permitted by 
applicable law, be awarded in any civil action subject to this Act to 
any claimant who establishes by clear and convincing evidence that the 
harm suffered by the claimant was the result of conduct manifesting a 
manufacturer's or product seller's conscious, flagrant indifference to 
the safety of those persons who might be harmed by the product. A 
failure to exercise reasonable care in choosing among alternative 
product designs, formulations, instructions, or warnings is not of 
itself such conduct. Punitive damages may not be awarded in the absence 
of an award of compensatory damages.
    (b) Limitation Concerning Certain Drugs and Medical Devices.--(1) 
Punitive damages shall not be awarded pursuant to this section against 
a manufacturer or product seller of a drug (as defined in section 
201(g)(1) of the Federal Food, Drug, and Cosmetic Act; 21 U.S.C. 
321(g)(1)) or medical device (as defined under section 201(h) of the 
Federal Food, Drug, and Cosmetic Act; 21 U.S.C. 321(h)) which caused 
the claimant's harm where--
            (A) such drug or device was subject to pre-market approval 
        by the Food and Drug Administration with respect to the safety 
        of the formulation or performance of the aspect of such drug or 
        device which caused the claimant's harm or the adequacy of the 
        packaging or labeling of such drug or device, and such drug or 
        device was approved by the Food and Drug Administration; or
            (B) the drug or device is generally recognized as safe and 
        effective pursuant to conditions established by the Food and 
        Drug Administration and applicable regulations, including 
        packaging and labeling regulations.
    (2) The provisions of paragraph (1) shall not apply in any case in 
which--
            (A) the defendant, before or after pre-market approval of a 
        drug or device, withheld from or misrepresented to the Food and 
        Drug Administration or any other agency or official of the 
        Federal Government required information that is material and 
        relevant to the performance of such drug or device and is 
        causally related to the harm which the claimant allegedly 
        suffered; or
            (B) the defendant made an illegal payment to an official of 
        the Food and Drug Administration for the purpose of either 
        securing or maintaining approval of such drug or device.
    (c) Limitation Concerning Certain Aircraft and Components.--(1) 
Punitive damages shall not be awarded pursuant to this section against 
a manufacturer of an aircraft or aircraft component which caused the 
claimant's harm where--
            (A) such aircraft or component was subject to pre-market 
        certification by the Federal Aviation Administration with 
        respect to the safety of the design or performance of the 
        aspect of such aircraft or component which caused the 
        claimant's harm or the adequacy of the warnings regarding the 
        operation or maintenance of such aircraft or component;
            (B) the aircraft or component was certified by the Federal 
        Aviation Administration under the Federal Aviation Act of 1958 
        (49 App. U.S.C. 1301 et seq.); and
            (C) the manufacturer of the aircraft or component complied, 
        after delivery of the aircraft or component to a user, with 
        Federal Aviation Administration requirements and obligations 
        with respect to continuing airworthiness, including the 
        requirement to provide maintenance and service information 
        related to airworthiness whether or not such information is 
        used by the Federal Aviation Administration in the preparation 
        of mandatory maintenance, inspection, or repair directives.
    (2) The provisions of paragraph (1) shall not apply in any case in 
which--
            (A) the defendant, before or after pre-market certification 
        of an aircraft or aircraft component, withheld from or 
        misrepresented to the Federal Aviation Administration required 
        information that is material and relevant to the performance or 
        the maintenance or operation of such aircraft or component or 
        is causally related to the harm which the claimant allegedly 
        suffered; or
            (B) the defendant made an illegal payment to an official of 
        the Federal Aviation Administration for the purpose of either 
        securing or maintaining certification of such aircraft or 
        component.
    (d) Separate Proceeding.--At the request of the manufacturer or 
product seller, the trier of fact shall consider in a separate 
proceeding (1) whether punitive damages are to be awarded and the 
amount of such award, or (2) the amount of punitive damages following a 
determination of punitive liability. If a separate proceeding is 
requested, evidence relevant only to the claim of punitive damages, as 
determined by applicable State law, shall be inadmissible in any 
proceeding to determine whether compensatory damages are to be awarded.
    (e) Determining Amount of Punitive Damages.--In determining the 
amount of punitive damages, the trier of fact shall consider all 
relevant evidence, including--
            (1) the financial condition of the manufacturer or product 
        seller;
            (2) the severity of the harm caused by the conduct of the 
        manufacturer or product seller;
            (3) the duration of the conduct or any concealment of it by 
        the manufacturer or product seller;
            (4) the profitability of the conduct to the manufacturer or 
        product seller;
            (5) the number of products sold by the manufacturer or 
        product seller of the kind causing the harm complained of by 
        the claimant;
            (6) awards of punitive or exemplary damages to persons 
        similarly situated to the claimant;
            (7) prospective awards of compensatory damages to persons 
        similarly situated to the claimant;
            (8) any criminal penalties imposed on the manufacturer or 
        product seller as a result of the conduct complained of by the 
        claimant; and
            (9) the amount of any civil fines assessed against the 
        defendant as a result of the conduct complained of by the 
        claimant.

SEC. 204. UNIFORM TIME LIMITATIONS ON LIABILITY.

    (a) Statute of Limitations.--Any civil action subject to this Act 
shall be barred unless the complaint is filed within two years of the 
time the claimant discovered or, in the exercise of reasonable care, 
should have discovered the harm and its cause, except that any such 
action of a person under legal disability may be filed within two years 
after the disability ceases. If the commencement of such an action is 
stayed or enjoined, the running of the statute of limitations under 
this section shall be suspended for the period of the stay or 
injunction.
    (b) Statute of Repose for Capital Goods.--(1) Any civil action 
subject to this Act shall be barred if a product which is a capital 
good is alleged to have caused harm which is not a toxic harm unless 
the complaint is served and filed within twenty-five years after the 
time of delivery of the product. This subsection shall apply only if 
the court determines that the claimant has received or would be 
eligible to receive compensation under any State or Federal workers' 
compensation law for harm caused by the product.
    (2) A motor vehicle, vessel, aircraft, or train, used primarily to 
transport passengers for hire, shall not be subject to this subsection.
    (3) As used in this subsection, the term--
            (A) ``capital good'' means any product, or any component of 
        any such product, which is of a character subject to allowance 
        for depreciation under the Internal Revenue Code of 1986, and 
        which was--
                    (i) used in a trade or business;
                    (ii) held for the production of income; or
                    (iii) sold or donated to a governmental or private 
                entity for the production of goods, for training, for 
                demonstration, or for other similar purposes; and
            (B) ``time of delivery'' means the time when a product is 
        delivered to its first purchaser or lessee who was not involved 
        in the business of manufacturing or selling such product or 
        using it as a component part of another product to be sold.
    (c) Extension of Period for Bringing Certain Actions.--If any 
provision of this section would shorten the period during which a civil 
action could be brought under otherwise applicable law, the claimant 
may, notwithstanding such provision of this section, bring the civil 
action pursuant to this Act within one year after the effective date of 
this Act.
    (d) Effect on Right to Contribution or Indemnity.--Nothing in this 
section shall affect the right of any person who is subject to 
liability for harm under this Act to seek and obtain contribution or 
indemnity from any other person who is responsible for such harm.

SEC. 205. WORKERS' COMPENSATION SUBROGATION STANDARDS.

    (a) In General.--(1) An employer or workers' compensation insurer 
of an employer shall have a right of subrogation against a manufacturer 
or product seller to recover the sum of the amount paid as workers' 
compensation benefits and the present value of all workers' 
compensation benefits to which the employee is or would be entitled as 
determined by the appropriate workers' compensation authority for harm 
caused to an employee by a product if the harm is one for which a civil 
action has been brought pursuant to this Act. To assert a right of 
subrogation an employer or workers' compensation insurer of an employer 
shall provide written notice that it is asserting a right of 
subrogation to the court in which the claimant has filed a complaint. 
The employer or workers' compensation insurer of the employer shall not 
be required to be a necessary and proper party to the proceeding 
instituted by the employee.
    (2) In any proceeding against or settlement with the manufacturer 
or product seller, the employer or the workers' compensation insurer of 
the employer shall have an opportunity to participate and to assert a 
right of subrogation upon any payment and to assert a right of 
subrogation upon any payment made by the manufacturer or product seller 
by reason of such harm, whether paid in settlement, in satisfaction of 
judgment, as consideration for covenant not to sue, or otherwise. The 
employee shall not make any settlement with or accept any payment from 
the manufacturer or product seller without the written consent of the 
employer and no release to or agreement with the manufacturer or 
product seller shall be valid or enforceable for any purpose without 
such consent. However, the preceding sentence shall not apply if the 
employer or workers' compensation insurer of the employer is made whole 
for all benefits paid in workers' compensation benefits.
    (3) If the manufacturer or product seller attempts to persuade the 
trier of fact that the claimant's harm was caused by the fault of the 
claimant's employer or coemployees, then the issue whether the 
claimant's harm was caused by the claimant's employer or coemployees 
shall be submitted to the trier of fact. If the manufacturer or product 
seller so attempts to persuade the trier of fact, it shall provide 
written notice to the employer. The employer shall have the right to 
appear, to be represented, to introduce evidence, to cross-examine 
adverse witnesses, and to argue to the trier of fact as to this issue 
as fully as though the employer were a party although not named or 
joined as a party to the proceeding. Such issue shall be the last issue 
submitted to the trier of fact. If the trier of fact finds by clear and 
convincing evidence that the claimant's harm was caused by the fault of 
the claimant's employer or coemployees, then the court shall reduce the 
damages awarded by the trier of fact against the manufacturer or 
product seller (and correspondingly the subrogation lien of the 
employer) by the sum of the amount paid as workers' compensation 
benefits and the present value of all workers' compensation benefits to 
which the employee is or would be entitled for such harm as determined 
by the appropriate workers' compensation authority. The manufacturer or 
product seller shall have no further right by way of contribution or 
otherwise against the employer. However, the employer shall not lose 
its right of subrogation because of an intentional tort committee 
against the claimant by the claimant's coemployees or for acts 
committed by coemployees outside the scope of normal work practices.
    (4) If the verdict shall be that the claimant's harm was not caused 
by the fault of the claimant's employer or coemployees, then the 
manufacturer or product seller shall reimburse the employer or workers' 
compensation insurer of the employer for reasonable attorney's fees and 
court costs incurred in the resolution of the subrogation claim, as 
determined by the court.
    (b) Effect on Certain Civil Actions.--(1) In any civil action 
subject to this Act in which damages are sought for harm for which the 
person injured is or would have been entitled to receive compensation 
under any State or Federal workers' compensation law, no third party 
tortfeasor may maintain any action for implied indemnity or 
contribution against the employer, any coemployee, or the exclusive 
representative of the person who was injured.
    (2) Nothing in this Act shall be construed to affect any provision 
of a State or Federal workers' compensation law which prohibits a 
person who is or would have been entitled to receive compensation under 
any such law, or any other person whose claim is or would have been 
derivative from such a claim, from recovering for harm caused by a 
product in any action other than a workers' compensation claim against 
a present or former employer or workers' compensation insurer of the 
employer, any coemployee, or the exclusive representative of the person 
who was injured.
    (3) Nothing in this Act shall be construed to affect any State or 
Federal workers' compensation law which permits recovery based on a 
claim of an intentional tort by the employer or coemployee, where the 
claimant's harm was caused by such an intentional tort.
    (c) Stay Pending Compensation Determination.--In any civil action 
subject to this Act in which damages are sought for harm for which the 
person injured is entitled to receive compensation under any State or 
Federal workers' compensation law, the action shall, on application of 
the claimant made at the claimant's sole election, be stayed until such 
time as the full amount payable as workers' compensation benefits has 
been finally determined under such workers' compensation law. Should 
the claimant elect to bring a civil action under this Act and not stay 
his or her action until the full amount payable as workers' 
compensation benefits has been finally determined by the appropriate 
workers' compensation authority, then the court shall determine the 
amount of worker's compensation that has been or would be payable if 
the issue had been determined by the appropriate worker's compensation 
authority. The verdict as determined by the trier of fact pursuant to 
this title shall have no binding effect on and shall not be used as 
evidence in any other proceeding.
    (d) Written Notice.--A claimant in a civil action subject to this 
Act who is or may be eligible to receive compensation under any State 
or Federal workers' compensation law must provide written notice of the 
filing of the civil action to the claimant's employer within thirty 
days of the filing. The written notice shall include information 
regarding the date and court in which the civil action was filed, the 
names and addresses of all plaintiffs and defendants appearing on the 
complaint, the court docket number if available, and a copy of the 
complaint which was filed in the civil action.

SEC. 206. SEVERAL LIABILITY FOR NONECONOMIC LOSS.

    (a) In General.--In any civil action subject to this Act, the 
liability of each defendant for noneconomic loss shall be several only 
and shall not be joint. Each defendant shall be liable only for the 
amount of noneconomic loss allocated to such defendant in direct 
proportion to such defendant's percentage of responsibility as 
determined under subsection (b). A separate judgment shall be rendered 
against such defendant for that amount.
    (b) Proportion of Responsibility.--For purposes of this section, 
the trier of fact shall determine the proportion of responsibility of 
each party for the claimant's harm.

SEC. 207. DEFENSES INVOLVING INTOXICATING ALCOHOL OR DRUGS.

    (a) Civil Actions in Which All Defendants Are Manufacturers or 
Product Sellers.--In any civil action subject to this Act in which all 
defendants are manufacturers or product sellers, it shall be a complete 
defense to such action that the claimant was intoxicated or was under 
the influence of intoxicating alcohol or any drug and that as a result 
of such intoxication or the influence of the alcohol or drug the 
claimant was more than 50 percent responsible for the accident or event 
which resulted in such claimant's harm.
    (b) Other Civil Actions.--In any civil action subject to this Act 
in which not all defendants are manufacturers or product sellers and 
the trier of fact determines that no liability exists against those 
defendants who are not manufacturers or product sellers, the court 
shall enter a judgment notwithstanding the verdict in favor of any 
defendant which is a manufacturer or product seller if it is proved 
that the claimant was intoxicated or was under the influence of 
intoxicating alcohol or any drug and that as a result of such 
intoxication or the influence of the alcohol or drug the claimant was 
more than 50 percent responsible for the accident or event which 
resulted in such claimant's harm.
    (c) Intoxication Determination to be Made Under State Law.--For 
purposes of this section, the determination of whether a person was 
intoxicated or was under the influence of intoxicating alcohol or any 
drug shall be made pursuant to applicable State law.
    (d) Definition.--As used in this section, the term ``drug'' means 
any non-over-the-counter drug which has not been prescribed by a 
physician for use by the claimant.
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