[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 565 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                 S. 565

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 15, 1995

Mr. Rockefeller (for himself, Mr. Gorton, Mr. McConnell, Mr. Lieberman, 
     Mr. Dodd, Mr. Pressler, Mr. Hatch, Mr. Exon, Mr. Inhofe, Mrs. 
  Hutchison, and Mr. Chafee) introduced the following bill; which was 
  read twice and referred to the Committee on Commerce, Science, and 
                             Transportation

_______________________________________________________________________

                                 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 of 
1995''.

SEC. 2. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Claimant.--The term ``claimant'' means any person who 
        brings a product liability action and any person on whose 
        behalf such an action is brought. If an action is brought 
        through or on behalf of--
                    (A) an estate, the term includes the decedent; or
                    (B) a minor or incompetent, the term includes the 
                legal guardian of the minor or incompetent.
            (2) Claimant's benefits.--The term ``claimant's benefits'' 
        means an amount equal to the sum of--
                    (A) the amount paid to an employee as workers' 
                compensation benefits; and
                    (B) the present value of all workers' compensation 
                benefits to which the employee is or would be entitled 
                at the time of the determination of the claimant's 
                benefits, as determined by the appropriate workers' 
                compensation authority for harm caused to an employee 
                by a product.
            (3) Clear and convincing evidence.--
                    (A) In general.--Subject to subparagraph (A), the 
                term ``clear and convincing evidence'' is that measure 
                of 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.
                    (B) Degree of proof.--The degree of proof required 
                to satisfy the standard of clear and convincing 
                evidence shall be--
                            (i) greater than the degree of proof 
                        required to meet the standard of preponderance 
                        of the evidence; and
                            (ii) less than the degree of proof required 
                        to meet the standard of proof beyond a 
                        reasonable doubt.
            (4) Commercial loss.--The term ``commercial loss'' means 
        any loss incurred in the course of an ongoing business 
        enterprise consisting of providing goods or services for 
        compensation.
            (5) Durable good.--The term ``durable good'' means any 
        product, or any component of any such product, which has a 
        normal life expectancy of 3 or more years or is of a character 
        subject to allowance for depreciation under the Internal 
        Revenue Code of 1986, and which is--
                    (A) used in a trade or business;
                    (B) held for the production of income; or
                    (C) sold or donated to a governmental or private 
                entity for the production of goods, training, 
                demonstration, or any other similar purpose.
            (6) Economic loss.--The term ``economic loss'' means any 
        pecuniary loss resulting from harm (including any medical 
        expense loss, work loss, replacement services loss, loss due to 
        death, burial costs, and loss of business or employment 
        opportunities), to the extent that recovery for the loss is 
        permitted under applicable State law.
            (7) Harm.--The term ``harm'' means any physical injury, 
        illness, disease, or death caused by a product. The term does 
        not include commercial loss or loss or damage to a product 
        itself.
            (8) Insurer.--The term ``insurer'' means the employer of a 
        claimant, if the employer is self-insured, or the workers' 
        compensation insurer of an employer.
            (9) Manufacturer.--The term ``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, constructs, 
                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 person; or
                    (C) any product seller that is not described in 
                subparagraph (B) that holds itself out as a 
                manufacturer to the user of the product.
            (10) Noneconomic loss.--The term ``noneconomic loss''--
                    (A) means subjective, nonmonetary loss resulting 
                from harm, including pain, suffering, inconvenience, 
                mental suffering, emotional distress, loss of society 
                and companionship, loss of consortium, injury to 
                reputation, and humiliation; and
                    (B) does not include economic loss.
            (11) Person.--The term ``person'' means any individual, 
        corporation, company, association, firm, partnership, society, 
        joint stock company, or any other entity (including any 
        governmental entity).
            (12) Product.--
                    (A) In general.--The term ``product'' means any 
                object, substance, mixture, or raw material in a 
                gaseous, liquid, or solid state that--
                            (i) is capable of delivery itself or as an 
                        assembled whole, in a mixed or combined state, 
                        or as a component part or ingredient;
                            (ii) is produced for introduction into 
                        trade or commerce;
                            (iii) has intrinsic economic value; and
                            (iv) is intended for sale or lease to 
                        persons for commercial or personal use.
                    (B) Exclusion.--The term ``product'' does not 
                include--
                            (i) tissue, organs, blood, and blood 
                        products used for therapeutic or medical 
                        purposes, except to the extent that such 
                        tissue, organs, blood, and blood products (or 
                        the provision thereof) are subject, under 
                        applicable State law, to a standard of 
                        liability other than negligence; and
                            (ii) electricity, water delivered by a 
                        utility, natural gas, or steam.
            (13) Product liability action.--The term ``product 
        liability action'' means a civil action brought on any theory 
        for harm caused by a product.
            (14) Product seller.--
                    (A) In general.--The term ``product seller'' means 
                a person who--
                            (i) 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
                            (ii) installs, repairs, or maintains the 
                        harm-causing aspect of the product.
                    (B) Exclusion.--The term ``product seller'' does 
                not include--
                            (i) a seller or lessor of real property;
                            (ii) 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
                            (iii) 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.
            (15) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Virgin Islands, Guam, American 
        Samoa, and the Commonwealth of the Northern Mariana Islands, 
        and any other territory or possession of the United States, or 
        any political subdivision thereof.
            (16) Time of delivery.--The term ``time of delivery'' means 
        the time when a product is delivered to the first purchaser or 
        lessee of the product that was not involved in manufacturing or 
        selling the product, or using the product as a component part 
        of another product to be sold.

SEC. 3. APPLICABILITY; PREEMPTION.

    (a) Applicability.--
            (1) Actions covered.--Subject to paragraph (2), this Act 
        applies to any product liability action commenced on or after 
        the date of enactment of this Act, without regard to whether 
        the harm that is the subject of the action or the conduct that 
        caused the harm occurred before such date of enactment.
            (2) Actions excluded.--
                    (A) Actions for damage to product or commercial 
                loss.--A civil action brought for loss or damage to a 
                product itself or for commercial loss, shall not be 
                subject to the provisions of this Act governing product 
                liability actions, but shall be subject to any 
                applicable commercial or contract law.
                    (B) Actions for negligent entrustment.--A civil 
                action for negligent entrustment shall not be subject 
                to the provisions of this Act governing product 
                liability actions, but shall be subject to any 
                applicable State law.
    (b) Scope of Preemption.--
            (1) In general.--This Act supersedes a State law only to 
        the extent that State law applies to an issue covered under 
        this Act.
            (2) Issues not covered under this act.--Any issue that is 
        not covered under this Act, including any standard of liability 
        applicable to a manufacturer, shall not be subject to this Act, 
        but shall be subject to applicable Federal or State law.
    (c) Statutory Construction.--Nothing in this Act may be construed 
to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any law;
            (2) supersede any Federal law, except the Act of April 22, 
        1908 (35 Stat. 65 et seq., chapter 149; 45 U.S.C. 51 et seq.) 
        (commonly known as the ``Federal Employers' Liability Act'') 
        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 any 
        law providing for 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 relating to 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.--To promote uniformity of law in the various 
jurisdictions, this Act shall be construed and applied after 
consideration of its legislative history.
    (e) Effect of Court of Appeals Decisions.--Notwithstanding any 
other provision of law, any decision of a circuit court of appeals 
interpreting a provision of this Act (except to the extent that the 
decision is overruled or otherwise modified by the Supreme Court) shall 
be considered a controlling precedent with respect to any subsequent 
decision made concerning the interpretation of such provision by any 
Federal or State court within the geographical boundaries of the area 
under the jurisdiction of the circuit court of appeals.

SEC. 4. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES.

    (a) In General.--
            (1) Service of offer.--A claimant or a defendant in a 
        product liability action that is subject to this Act may, not 
        later than 60 days after the service of the initial complaint 
        of the claimant or the applicable deadline for a responsive 
        pleading (whichever is later), 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 product 
        liability action is brought or under the rules of the court in 
        which such action is maintained.
            (2) Written notice of acceptance or rejection.--Except as 
        provided in paragraph (3), not later than 10 days after the 
        service of an offer to proceed under paragraph (1), an offeree 
        shall file a written notice of acceptance or rejection of the 
        offer.
            (3) Extension.--The court may, upon motion by an offeree 
        made prior to the expiration of the 10-day period specified in 
        paragraph (2), extend the period for filing a written notice 
        under such paragraph for a period of not more than 60 days 
        after the date of expiration of the period specified in 
        paragraph (2). Discovery may be permitted during such period.
    (b) Defendant's Penalty for Unreasonable Refusal.--
            (1) In general.--The court shall assess reasonable 
        attorney's fees (calculated in accordance with paragraph (2)) 
        and costs against the offeree, if--
                    (A) a defendant as an offeree refuses to proceed 
                pursuant to the alternative dispute resolution 
                procedure referred to subsection (a)(1);
                    (B) final judgment is entered against the defendant 
                for harm caused by the product that is the subject of 
                the action; and
                    (C) the refusal by the defendant to proceed 
                pursuant to such alternative dispute resolution was 
                unreasonable or not made in good faith.
            (2) Reasonable attorney's fees.--For purposes of this 
        subsection, a reasonable attorney's fee shall be calculated on 
        the basis of an hourly rate, which shall not exceed the hourly 
        rate that is considered acceptable in the community in which 
        the attorney practices law, taking into consideration the 
        qualifications and experience of the attorney and the 
        complexity of the case.
    (c) Good Faith Refusal.--In determining whether the refusal of an 
offeree to proceed pursuant to the alternative dispute procedure 
referred to in subsection (a)(1) was unreasonable or not made in good 
faith, the court shall consider such factors as the court considers 
appropriate.

SEC. 5. LIABILITY RULES APPLICABLE TO PRODUCT SELLERS.

    (a) General Rule.--
            (1) In general.--In any product liability action that is 
        subject to this Act filed by a claimant for harm caused by a 
        product, a product seller other than a manufacturer shall be 
        liable to a claimant, only if the claimant establishes--
                    (A) that--
                            (i) the product that allegedly caused the 
                        harm that is the subject of the complaint was 
                        sold by the product seller;
                            (ii) the product seller failed to exercise 
                        reasonable care with respect to the product; 
                        and
                            (iii) the failure to exercise reasonable 
                        care was a proximate cause of harm to the 
                        claimant;
                    (B) that--
                            (i) the product seller made an express 
                        warranty applicable to the product that 
                        allegedly caused the harm that is the subject 
                        of the complaint, independent of any express 
                        warranty made by a manufacturer as to the same 
                        product;
                            (ii) the product failed to conform to the 
                        warranty; and
                            (iii) the failure of the product to conform 
                        to the warranty caused harm to the claimant; or
                    (C) that--
                            (i) the product seller engaged in 
                        intentional wrongdoing, as determined under 
                        applicable State law; and
                            (ii) such intentional wrongdoing was a 
                        proximate cause of the harm that is the subject 
                        of the complaint.
            (2) Reasonable opportunity for inspection.--For purposes of 
        paragraph (1)(A)(ii), a product seller shall not be considered 
        to have failed to exercise reasonable care with respect to a 
        product based upon an alleged failure to inspect a product if 
        the product seller had no reasonable opportunity to inspect the 
        product that allegedly caused harm to the claimant.
    (b) Special Rule.--A product seller shall be deemed to be liable as 
a manufacturer of a product for harm caused by the product if--
            (1) the manufacturer is not subject to service of process 
        under the laws of any State in which the action may be brought; 
        or
            (2) the court determines that the claimant would be unable 
        to enforce a judgment against the manufacturer.

SEC. 6. DEFENSES INVOLVING INTOXICATING ALCOHOL OR DRUGS.

    (a) General Rule.--Notwithstanding any other provision of law, a 
defendant in a product liability action that is subject to this Act 
shall have a complete defense in the action if the defendant proves 
that--
            (1) the claimant was under the influence of intoxicating 
        alcohol or any drug that may not lawfully be sold over-the-
        counter without a prescription, and was not prescribed by a 
        physician for use by the claimant; and
            (2) the claimant, as a result of the influence of the 
        alcohol or drug, was more than 50 percent responsible for the 
        accident or event which resulted in the harm to the claimant.
    (b) Construction.--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.

SEC. 7. REDUCTION FOR MISUSE OR ALTERATION OF PRODUCT.

    (a) General Rule.--
            (1) In general.--Except as provided in subsection (c), in a 
        product liability action that is subject to this Act, the 
        damages for which a defendant is otherwise liable under 
        applicable State law shall be reduced by the percentage of 
        responsibility for the harm to the claimant attributable to 
        misuse or alteration of a product by any person if the 
        defendant establishes that such percentage of the harm was 
        proximately caused by a use or alteration of a product--
                    (A) in violation of, or contrary to, the express 
                warnings or instructions of the defendant if the 
                warnings or instructions are determined to be adequate 
                pursuant to applicable State law; or
                    (B) involving a risk of harm which was known or 
                should have been known by the ordinary person who uses 
                or consumes the product with the knowledge common to 
                the class of persons who used or would be reasonably 
                anticipated to use the product.
            (2) Use intended by a manufacturer is not misuse or 
        alteration.--For the purposes of this Act, a use of a product 
        that is intended by the manufacturer of the product does not 
        constitute a misuse or alteration of the product.
    (b) State Law.--Notwithstanding section 3(b), subsection (a) of 
this section shall supersede State law concerning misuse or alteration 
of a product only to the extent that State law is inconsistent with 
such subsection.
    (c) Workplace Injury.--Notwithstanding subsection (a), the amount 
of damages for which a defendant is otherwise liable under State law 
shall not be reduced by the application of this section with respect to 
the conduct of any employer or coemployee of the plaintiff who is, 
under applicable State law concerning workplace injuries, immune from 
being subject to an action by the claimant.

SEC. 8. UNIFORM STANDARDS FOR AWARD OF PUNITIVE DAMAGES.

    (a) General Rule.--Punitive damages may, to the extent permitted by 
applicable State law, be awarded against a defendant in a product 
liability action that is subject to this Act if the claimant 
establishes by clear and convincing evidence that the harm that is the 
subject of the action was the result of conduct that was carried out by 
the defendant with a conscious, flagrant indifference to the safety of 
others.
    (b) Limitation on Amount.--The amount of punitive damages that may 
be awarded for a claim in any product liability action that is subject 
to this Act shall not exceed 3 times the amount awarded to the claimant 
for the economic injury on which the claim is based, or $250,000, 
whichever is greater. This subsection shall be applied by the court and 
the application of this subsection shall not be disclosed to the jury.
    (c) Bifurcation at Request of Either Party.--
            (1) In general.--At the request of either party, the trier 
        of fact in a product liability action that is subject to this 
        Act shall consider in a separate proceeding whether punitive 
        damages are to be awarded for the harm that is the subject of 
        the action and the amount of the award. 
            (2) Admissible evidence.--
                    (A) Inadmissibility of evidence relative only to a 
                claim of punitive damages in a proceeding concerning 
                compensatory damages.--If either party requests a 
                separate proceeding under paragraph (1), in any 
                proceeding to determine whether the claimant may be 
                awarded compensatory damages, any evidence that is 
                relevant only to the claim of punitive damages, as 
                determined by applicable State law, shall be 
                inadmissible.
                    (B) Proceeding with respect to punitive damages.--
                Evidence that is admissible in the separate proceeding 
                under paragraph (1)--
                            (i) may include evidence of the profits of 
                        the defendant, if any, from the alleged 
                        wrongdoing; and
                            (ii) shall not include evidence of the 
                        overall assets of the defendant.

 SEC. 9. UNIFORM TIME LIMITATIONS ON LIABILITY.

    (a) Statute of Limitations.--
            (1) In general.--Except as provided in paragraph (2) and 
        subsection (b), a product liability action that is subject to 
        this Act may be filed not later than 2 years after the date on 
        which the claimant discovered or, in the exercise of reasonable 
        care, should have discovered, the harm that is the subject of 
        the action and the cause of the harm.
            (2) Exceptions.--
                    (A) Person with a legal disability.--A person with 
                a legal disability (as determined under applicable law) 
                may file a product liability action that is subject to 
                this Act not later than 2 years after the date on which 
                the person ceases to have the legal disability.
                    (B) Effect of stay or injunction.--If the 
                commencement of a civil action that is subject to this 
                Act is stayed or enjoined, the running of the statute 
                of limitations under this section shall be suspended 
                until the end of the period that the stay or injunction 
                is in effect.
    (b) Statute of Repose.--
            (1) In general.--Subject to paragraphs (2) and (3), no 
        product liability action that is subject to this Act concerning 
        a product that is a durable good alleged to have caused harm 
        (other than toxic harm) may be filed after the 20-year period 
        beginning at the time of delivery of the product.
            (2) State law.--Notwithstanding paragraph (1), if pursuant 
        to an applicable State law, an action described in such 
        paragraph is required to be filed during a period that is 
        shorter than the 20-year period specified in such paragraph, 
        the State law shall apply with respect to such period.
            (3) Exception.--A motor vehicle, vessel, aircraft, or train 
        that is used primarily to transport passengers for hire shall 
        not be subject to this subsection.
    (c) Transitional Provision Relating to Extension of Period for 
Bringing Certain Actions.--If any provision of subsection (a) or (b) 
shortens the period during which a product liability action that could 
be otherwise brought pursuant to another provision of law, the claimant 
may, notwithstanding subsections (a) and (b), bring the product 
liability action pursuant to this Act not later than 1 year after the 
date of enactment of this Act.

SEC. 10. SEVERAL LIABILITY FOR NONECONOMIC LOSS.

    (a) General Rule.--In a product liability action that is subject to 
this Act, the liability of each defendant for noneconomic loss shall be 
several only and shall not be joint.
    (b) Amount of Liability.--
            (1) In general.--Each defendant shall be liable only for 
        the amount of noneconomic loss allocated to the defendant in 
        direct proportion to the percentage of responsibility of the 
        defendant (determined in accordance with paragraph (2)) for the 
        harm to the claimant with respect to which the defendant is 
        liable. The court shall render a separate judgment against each 
        defendant in an amount determined pursuant to the preceding 
        sentence.
            (2) Percentage of responsibility.--For purposes of 
        determining the amount of noneconomic loss allocated to a 
        defendant under this section, the trier of fact shall determine 
        the percentage of responsibility of each person responsible for 
        the amount of noneconomic loss caused to the claimant, whether 
        or not such person is a party to the action.

 SEC. 11. WORKERS' COMPENSATION SUBROGATION STANDARDS.

    (a) General Rule.--
            (1) Right of subrogation.--
                    (A) In general.--An insurer shall have a right of 
                subrogation against a manufacturer or product seller to 
                recover any claimant's benefits relating to harm that 
                is the subject of a product liability action that is 
                subject to this Act.
                    (B) Written notification.--To assert a right of 
                subrogation under subparagraph (A), the insurer shall 
                provide written notice to the court in which the 
                product liability action is brought.
                    (C) Insurer not required to be a party.--An insurer 
                shall not be required to be a necessary and proper 
                party in a product liability action covered under 
                subparagraph (A).
            (2) Settlements and other legal proceedings.--
                    (A) In general.--In any proceeding relating to harm 
                or settlement with the manufacturer or product seller 
                by a claimant who files a product liability action that 
                is subject to this Act, an insurer may participate to 
                assert a right of subrogation for claimant's benefits 
                with respect to any payment made by the manufacturer or 
                product seller by reason of such harm, without regard 
                to whether the payment is made--
                            (i) as part of a settlement;
                            (ii) in satisfaction of judgment;
                            (iii) as consideration for a covenant not 
                        to sue; or
                            (iv) in another manner.
                    (B) Written consent.--Except as provided in 
                subparagraph (C)--
                            (i) an employee shall not make any 
                        settlement with or accept any payment from the 
                        manufacturer or product seller without the 
                        written consent of the insurer; and
                            (ii) no release to or agreement with the 
                        manufacturer or product seller described in 
                        clauses (i) through (iv) of subparagraph (A) 
                        shall be valid or enforceable for any purpose 
                        without the consent of the insurer.
                    (C) Exemption.--Subparagraph (B) shall not apply in 
                any case in which the insurer has been compensated for 
                the full amount of the claimant's benefits.
            (3) Harm resulting from action of employer or coemployee.--
                    (A) In general.--If, with respect to a product 
                liability action that is subject to this Act, the 
                manufacturer or product seller attempts to persuade the 
                trier of fact that the harm to the claimant was caused 
                by the fault of the employer of the claimant or any 
                coemployee of the claimant, the issue of that fault 
                shall be submitted to the trier of fact, but only after 
                the manufacturer or product seller has provided timely 
                written notice to the employer.
                    (B) Rights of employer.--
                            (i) In general.--Notwithstanding any other 
                        provision of law, with respect to an issue of 
                        fault submitted to a trier of fact pursuant to 
                        subparagraph (A), an employer shall, in the 
                        same manner as any party in the action (even if 
                        the employer is not a named party in the 
                        action), have the right to--
                                    (I) appear;
                                    (II) be represented;
                                    (III) introduce evidence;
                                    (IV) cross-examine adverse 
                                witnesses; and
                                    (V) present arguments to the trier 
                                of fact.
                            (ii) Last issue.--The issue of harm 
                        resulting from an action of an employer or 
                        coemployee shall be the last issue that is 
                        presented to the trier of fact.
                    (C) Reduction of damages.--If the trier of fact 
                finds by clear and convincing evidence that the harm to 
                the claimant that is the subject of the product 
                liability action was caused by the fault of the 
                employer or a coemployee of the claimant--
                            (i) the court shall reduce by the amount of 
                        the claimant's benefits--
                                    (I) the damages awarded against the 
                                manufacturer or product seller; and
                                    (II) any corresponding insurer's 
                                subrogation lien; and
                            (ii) the manufacturer or product seller 
                        shall have no further right by way of 
                        contribution or otherwise against the employer.
                    (D) Certain rights of subrogation not affected.--
                Notwithstanding a finding by the trier of fact 
                described in subparagraph (C), the insurer shall not 
                lose any right of subrogation related to any--
                            (i) intentional tort committed against the 
                        claimant by a coemployee; or
                            (ii) act committed by a coemployee outside 
                        the scope of normal work practices.
    (b) Attorney's Fees.--If, in a product liability action that is 
subject to this section, the court finds that harm to a claimant was 
not caused by the fault of the employer or a coemployee of the 
claimant, the manufacturer or product seller shall reimburse the 
insurer for reasonable attorney's fees and court costs incurred by the 
insurer in the action, as determined by the court.

SEC. 12. FEDERAL CAUSE OF ACTION PRECLUDED.

    The district courts of the United States shall not have 
jurisdiction under section 1331 or 1337 of title 28, United States 
Code, over any product liability action covered under this Act.
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