[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2236 Placed on Calendar Senate (PCS)]





                                                       Calendar No. 441

105th CONGRESS

  2d Session

                                S. 2236

_______________________________________________________________________

                                 A BILL

   To establish legal standards and procedures for product liability 
                  litigation, and for other purposes.

_______________________________________________________________________

                             June 26, 1998

            Read the second time and placed on the calendar





                                                       Calendar No. 441
105th CONGRESS
  2d Session
                                S. 2236

   To establish legal standards and procedures for product liability 
                  litigation, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 25, 1998

Mr. Gorton (for himself, Mr. Rockefeller, and Mr. Lieberman) introduced 
           the following bill; which was read the first time

                             June 26, 1998

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
   To establish legal standards and procedures for product liability 
                  litigation, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Product Liability 
Reform Act of 1998''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings; purposes.
                   TITLE I--PRODUCT LIABILITY REFORM

Sec. 101. Definitions.
Sec. 102. Applicability; preemption.
Sec. 103. Liability rules applicable to product sellers, renters, and 
                            lessors.
Sec. 104. Defense based on claimant's use of alcohol or drugs.
Sec. 105. Reduction in damages for misuse or alteration.
Sec. 106. Statute of limitations.
Sec. 107. Statute of repose for durable goods used in a trade or 
                            business.
Sec. 108. Transitional provision relating to extension of period for 
                            bringing certain actions.
Sec. 109. Alternative dispute resolution procedures.
Sec. 110. Punitive damages reforms.
Sec. 111. Liability for certain claims relating to death.
Sec. 112. Workers' compensation subrogation.
                TITLE II--BIOMATERIALS ACCESS ASSURANCE

Sec. 201. Short title.
Sec. 202. Findings.
Sec. 203. Definitions.
Sec. 204. General requirements; applicability; preemption.
Sec. 205. Liability of biomaterials suppliers.
Sec. 206. Procedures for dismissal of civil actions against 
                            biomaterials suppliers.
Sec. 207. Subsequent impleader of dismissed defendant.
        TITLE III--LIMITATIONS ON APPLICABILITY; EFFECTIVE DATE

Sec. 301. Federal cause of action precluded.
Sec. 302. Effective date.

SEC. 2. FINDINGS; PURPOSES.

    (a) Findings.--Congress finds that--
            (1) although damage awards in product liability actions can 
        encourage the production of safer products, they also can have 
        a direct effect on interstate commerce and our Nation's 
        consumers by, among other things, increasing the cost and 
        decreasing the availability of products;
            (2) some of the rules of law governing product liability 
        actions are inconsistent within and among the States, resulting 
        in differences in State laws that can be inequitable to both 
        plaintiffs and defendants and can impose burdens on interstate 
        commerce;
            (3) product liability awards can jeopardize the financial 
        well-being of individuals and industries, particularly the 
        Nation's small businesses;
            (4) because the product liability laws of one State can 
        have adverse effects on consumers and businesses in many other 
        States, it is appropriate for the Federal Government to enact 
        national, uniform product liability laws that preempt State 
        laws; and
            (5) it is the constitutional role of the Federal Government 
        to remove barriers to interstate commerce.
    (b) Purposes.--Based on the powers under clause 3 of section 8 of 
article I of the United States Constitution, the purposes of this Act 
are to promote the free flow of goods and services and to lessen 
burdens on interstate commerce by--
            (1) establishing certain uniform legal principles of 
        product liability that provide a fair balance among the 
        interests of product users, manufacturers, and product sellers;
            (2) providing for reasonable standards concerning, and 
        limits on, punitive damages over and above the actual damages 
        suffered by a claimant;
            (3) ensuring the fair allocation of liability in product 
        liability actions;
            (4) reducing the unacceptable costs and delays in product 
        liability actions caused by excessive litigation that harm both 
        plaintiffs and defendants;
            (5) establishing greater fairness, rationality, and 
        predictability in product liability actions; and
            (6) providing fair and expeditious judicial procedures that 
        are necessary to complement and effectuate the legal principles 
        established by this Act.

                   TITLE I--PRODUCT LIABILITY REFORM

SEC. 101. DEFINITIONS.

    In this title:
            (1) Alcoholic product.--The term ``alcoholic product'' 
        includes any product that contains not less than \1/2\ of 1 
        percent of alcohol by volume and is intended for human 
        consumption.
            (2) Claimant.--The term ``claimant'' means any person who 
        brings an action covered by this title 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. If such an action is brought through or on 
        behalf of a minor or incompetent, the term includes the 
        claimant's legal guardian.
            (3) Claimant's benefits.--The term ``claimant's benefits'' 
        means the amount paid to an employee as workers' compensation 
        benefits.
            (4) Clear and convincing evidence.--The term ``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 that 
        standard is more than that required under a preponderance of 
        the evidence, but less than that required for proof beyond a 
        reasonable doubt.
            (5) Commercial loss.--The term ``commercial loss'' means--
                    (A) any loss or damage solely to a product itself;
                    (B) loss relating to a dispute over the value of a 
                product; or
                    (C) consequential economic loss.
            (6) Compensatory damages.--The term ``compensatory 
        damages'' means damages awarded for economic and noneconomic 
        loss.
            (7) Dram-shop.--The term ``dram-shop'' means a drinking 
        establishment where alcoholic products are sold to be consumed 
        on the premises.
            (8) Durable good.--The term ``durable good'' means any 
        product, or any component of any such product, which--
                    (A)(i) has a normal life expectancy of 3 or more 
                years; or
                    (ii) is of a character subject to allowance for 
                depreciation under the Internal Revenue Code of 1986; 
                and
                    (B) is--
                            (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, 
                        training, demonstration, or any other similar 
                        purpose.
            (9) Economic loss.--The term ``economic loss'' means any 
        pecuniary loss resulting from harm (including the loss of 
        earnings or other benefits related to employment, medical 
        expense loss, replacement services loss, loss due to death, 
        burial costs, and loss of business or employment opportunities) 
        to the extent recovery for that loss is allowed under 
applicable State law.
            (10) Harm.--The term ``harm''--
                    (A) means any physical injury, illness, disease, or 
                death, or damage to property caused by a product; and
                    (B) does not include commercial loss.
            (11) Insurer.--The term ``insurer'' means the employer of a 
        claimant if the employer is self-insured or if the employer is 
        not self-insured, the workers' compensation insurer of the 
        employer.
            (12) 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--
                            (i) designs or formulates the product (or 
                        component part of the product); or
                            (ii) 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--
                            (i) produces, creates, makes, constructs 
                        and designs, or formulates an aspect of the 
                        product (or component part of the product) made 
                        by another person; or
                            (ii) has engaged another person to design 
                        or formulate an aspect of the product (or 
                        component part of the product) made by another 
                        person; or
                    (C) any product seller not described in 
                subparagraph (B) which holds itself out as a 
                manufacturer to the user of the product.
            (13) Noneconomic loss.--The term ``noneconomic loss'' 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.
            (14) Person.--The term ``person'' means any individual, 
        corporation, company, association, firm, partnership, society, 
        joint stock company, or any other entity (including any 
        governmental entity).
            (15) 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; or
                            (ii) electricity, water delivered by a 
                        utility, natural gas, or steam.
            (16) Product liability action.--The term ``product 
        liability action'' means a civil action brought on any theory 
        for harm caused by a product.
            (17) Product seller.--
                    (A) In general.--The term ``product seller'' means 
                a person who in the course of a business conducted for 
                that purpose--
                            (i) sells, distributes, rents, leases, 
                        prepares, blends, packages, labels, or 
                        otherwise is involved in placing a product in 
                        the stream of commerce; or
                            (ii) installs, repairs, refurbishes, 
                        reconditions, 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; or
                                    (II) leases a product under a lease 
                                arrangement in which the lessor does 
                                not initially select the leased product 
                                and does not during the lease term 
                                ordinarily control the daily operations 
                                and maintenance of the product.
            (18) Punitive damages.--The term ``punitive damages'' means 
        damages awarded against any person or entity to punish or deter 
        that person or entity, or others, from engaging in similar 
        behavior in the future.
            (19) State.--The term ``State'' means any State of the 
        United States, the District of Columbia, the Commonwealth of 
        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 of any of the 
        foregoing.
            (20) Tobacco product.--The term ``tobacco product'' means--
                    (A) a cigarette, as defined in section 3 of the 
                Federal Cigarette Labeling and Advertising Act (15 
                U.S.C. 1332);
                    (B) a little cigar, as defined in section 3 of the 
                Federal Cigarette Labeling and Advertising Act (15 
                U.S.C. 1332);
                    (C) a cigar, as defined in section 5702(a) of the 
                Internal Revenue Code of 1986;
                    (D) pipe tobacco;
                    (E) loose rolling tobacco and papers used to 
                contain that tobacco;
                    (F) a product referred to as smokeless tobacco, as 
                defined in section 9 of the Comprehensive Smokeless 
                Tobacco Health Education Act of 1986 (15 U.S.C. 4408); 
                and
                    (G) any other form of tobacco intended for human 
                consumption.

SEC. 102. APPLICABILITY; PREEMPTION.

    (a) Preemption.--
            (1) In general.--Except as provided in paragraph (2) and 
        title II, this title governs any product liability action 
        brought in any Federal or State court on any theory for harm 
        caused by a product.
            (2) Actions excluded.--
                    (A) Actions for commercial loss.--A civil action 
                brought for commercial loss shall be governed only by 
                applicable commercial law, including applicable State 
                law based on the Uniform Commercial Code.
                    (B) Actions for negligent entrustment; negligence 
                per se concerning firearms and ammunition; dram-shop.--
                            (i) Negligent entrustment.--A civil action 
                        for negligent entrustment shall not be subject 
                        to the provisions of this title governing 
                        product liability actions, but shall be subject 
                        to any applicable Federal or State law.
                            (ii) Negligence per se concerning firearms 
                        and ammunition.--A civil action brought under a 
                        theory of negligence per se concerning the use 
                        of a firearm or ammunition shall not be subject 
                        to the provisions of this title governing 
                        product liability actions, but shall be subject 
                        to any applicable Federal or State law.
                            (iii) Dram-shop.--A civil action brought 
                        under a theory of dram-shop or third-party 
                        liability arising out of the sale or providing 
                        of an alcoholic product to an intoxicated 
                        person or minor shall not be subject to the 
                        provisions of this title, but shall be subject 
                        to any applicable Federal or State law.
                    (C) Actions involving harm caused by a tobacco 
                product.--A civil action brought for harm caused by a 
                tobacco product shall not be subject to the provisions 
                of this title governing product liability actions, but 
                shall be subject to any applicable Federal or State 
                law.
                    (D) Actions involving harm caused by a breast 
                implant.--A civil action brought for harm caused by 
                either the silicone gel or the silicone envelope 
                utilized in a breast implant containing silicone gel 
                shall not be subject to the provisions of this title 
                governing product liability actions, but shall be 
                subject to any applicable Federal or State law.
    (b) Relationship to State Law.--This title supersedes a State law 
only to the extent that the State law applies to a matter covered by 
this title. Any matter that is not governed by this title, including 
any standard of liability applicable to a manufacturer, shall be 
governed by any applicable Federal or State law.
    (c) Effect on Other Law.--Nothing in this title shall be construed 
to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any law;
            (2) supersede or alter any Federal law;
            (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 or modify any statutory or common law, 
        including any law providing for an action to abate a nuisance, 
        that authorizes a 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, for remediation 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)).

SEC. 103. LIABILITY RULES APPLICABLE TO PRODUCT SELLERS, RENTERS, AND 
              LESSORS.

    (a) General Rule.--
            (1) In general.--In any product liability action that is 
        subject to this title, a product seller other than a 
        manufacturer shall be liable to a claimant only if the claimant 
        establishes that--
                    (A)(i) the product that allegedly caused the harm 
                that is the subject of the complaint was sold, rented, 
                or leased 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 the harm to the claimant;
                    (B)(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 the harm to the claimant; or
                    (C)(i) the product seller engaged in intentional 
                wrongdoing, as determined under applicable State law; 
                and
                    (ii) the intentional wrongdoing caused 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 the product, 
        if--
                    (A) the failure occurred because there was no 
                reasonable opportunity to inspect the product; or
                    (B) the inspection, in the exercise of reasonable 
                care, would not have revealed the aspect of the product 
                that allegedly caused the claimant's harm.
    (b) Special Rule.--
            (1) In general.--A product seller shall be deemed to be 
        liable as a manufacturer of a product for harm caused by the 
        product, if--
                    (A) the manufacturer is not subject to service of 
                process under the laws of any State in which the action 
                may be brought; or
                    (B) the court determines that the claimant is or 
                would be unable to enforce a judgment against the 
                manufacturer.
            (2) Statute of limitations.--For purposes of this 
        subsection only, the statute of limitations applicable to 
        claims asserting liability of a product seller as a 
        manufacturer shall be tolled from the date of the filing of a 
        complaint against the manufacturer to the date that judgment is 
        entered against the manufacturer.
    (c) Rented or Leased Products.--
            (1) Definition.--For purposes of paragraph (2), and for 
        determining the applicability of this title to any person 
        subject to that paragraph, the term ``product liability 
        action'' means a civil action brought on any theory for harm 
        caused by a product or product use.
            (2) Liability.--Notwithstanding any other provision of law, 
        any person engaged in the business of renting or leasing a 
        product (other than a person excluded from the definition of 
        product seller under section 101(17)(B)) shall be subject to 
        liability in a product liability action under subsection (a), 
        but any person engaged in the business of renting or leasing a 
        product shall not be liable to a claimant for the tortious act 
        of another solely by reason of ownership of that product.

SEC. 104. DEFENSE BASED ON CLAIMANT'S USE OF ALCOHOL OR DRUGS.

    (a) General Rule.--In any product liability action that is subject 
to this title, it shall be a complete defense to a claim made by a 
claimant, if the defendant proves that the claimant--
            (1) was intoxicated or was under the influence of alcohol 
        or any drug when the accident or other event which resulted in 
        that claimant's harm occurred; and
            (2) as a result of the influence of the alcohol or drug, 
        was more than 50 percent responsible for that harm.
    (b) Construction.--For purposes of subsection (a)--
            (1) the determination of whether a person was intoxicated 
        or was under the influence of alcohol or any drug shall be made 
        pursuant to applicable State law; and
            (2) the term ``drug'' means any controlled substance as 
        defined in the Controlled Substances Act (21 U.S.C. 802(6)) 
        that was not legally prescribed for use by the claimant or that 
        was taken by the claimant other than in accordance with the 
        terms of a lawfully issued prescription.

SEC. 105. REDUCTION IN DAMAGES FOR MISUSE OR ALTERATION.

    (a) General Rule.--
            (1) In general.--In any product liability action that is 
        subject to this title, the damages for which a defendant is 
        otherwise liable under Federal or State law shall be reduced by 
        the percentage of responsibility for the claimant's harm 
        attributable to misuse or alteration of a product by any person 
        if the defendant establishes that such percentage of the 
        claimant's harm was proximately caused by a use or alteration 
        of a product--
                    (A) in violation of, or contrary to, a defendant's 
                express warnings or instructions if the warnings or 
                instructions are adequate as determined pursuant to 
                applicable Federal or 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 purposes of this title, 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) Workplace Injury.--Notwithstanding subsection (a), and except 
as otherwise provided in section 112, the damages for which a defendant 
is otherwise liable under State law shall not be reduced by the 
percentage of responsibility for the claimant's harm attributable to 
misuse or alteration of the product by the claimant's employer who is 
immune from suit by the claimant pursuant to the State law applicable 
to workplace injuries.

SEC. 106. STATUTE OF LIMITATIONS.

    (a) In General.--Except as provided in subsection (b) and subject 
to section 107, a product liability action that is subject to this 
title 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.
    (b) Exceptions.--
            (1) 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 title not 
        later than 2 years after the date on which the person ceases to 
        have the legal disability.
            (2) Effect of stay or injunction.--If the commencement of a 
        civil action that is subject to this title 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.

SEC. 107. STATUTE OF REPOSE FOR DURABLE GOODS USED IN A TRADE OR 
              BUSINESS.

    (a) In General.--Except as provided in subsections (b) and (c), no 
product liability action that is subject to this title concerning a 
durable good alleged to have caused harm (other than toxic harm) for 
which the claimant has received or is eligible to receive workers' 
compensation may be filed after the 18-year period beginning at the 
time of delivery of the durable good to its first purchaser or lessee.
    (b) Extension of Statute of Repose.--Notwithstanding any other 
provision of this section and except as provided in section 106(b), a 
product liability action may be commenced within 2 years after the date 
of discovery or date on which discovery should have occurred, if the 
harm, and the cause of the harm, leading to a product liability action 
described in subsection (a) are discovered or, in the exercise of 
reasonable care, should have been discovered, before the expiration of 
the 18-year period under this section.
    (c) Exceptions.--
            (1) In general.--A motor vehicle, vessel, aircraft, or 
        train, that is used primarily to transport passengers for hire, 
        shall not be subject to this section.
            (2) Certain express warranties.--Subsection (a) does not 
        bar a product liability action against a defendant who made an 
        express warranty in writing as to the safety or life expectancy 
        of the specific product involved which was longer than 18 
        years, except that such subsection shall apply at the 
        expiration of that warranty.
            (3) Aviation limitations period.--Subsection (a) does not 
        affect the limitations period established by the General 
        Aviation Revitalization Act of 1994 (49 U.S.C. 40101 note).

SEC. 108. TRANSITIONAL PROVISION RELATING TO EXTENSION OF PERIOD FOR 
              BRINGING CERTAIN ACTIONS.

    If any provision of section 106 or 107 shortens the period during 
which a product liability action could be otherwise brought pursuant to 
another provision of law, the claimant may, notwithstanding sections 
106 and 107, bring the product liability action not later than 1 year 
after the date of enactment of this Act.

SEC. 109. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES.

    (a) Service of Offer.--A claimant or a defendant in a product 
liability action that is subject to this title may 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 that action is 
maintained, not later than 60 days after the later of--
            (1) service of the initial complaint; or
            (2) the expiration of the applicable period for a 
        responsive pleading.
    (b) Written Notice of Acceptance or Rejection.--
            (1) In general.--Except as provided in subsection (c), not 
        later than 20 days after the service of an offer to proceed 
        under subsection (a), an offeree shall file a written notice of 
        acceptance or rejection of the offer.
            (2) Effect of notice.--The filing of a written notice under 
        paragraph (1) shall not constitute a waiver of any objection or 
        defense in the action, including any objection on the grounds 
        of jurisdiction.
    (c) Extension.--
            (1) In general.--The court may, upon motion by an offeree 
        made before the expiration of the 20-day period specified in 
        subsection (b), extend the period for filing a written notice 
        under such subsection for a period of not more than 60 days 
        after the date of expiration of the period specified in 
        subsection (b).
            (2) Permitted discovery.--Discovery may be permitted during 
        the period described in paragraph (1).

SEC. 110. PUNITIVE DAMAGES REFORMS.

    (a) General Rule.--
            (1) Uniform standard for award of punitive damages.--To the 
        extent punitive damages are permitted by applicable State law, 
        punitive damages may be awarded against a defendant in any 
        product liability action that is subject to this title if the 
        claimant establishes by clear and convincing evidence that the 
        harm that is the subject of the action was the result of 
        conduct carried out by the defendant with a conscious, flagrant 
        indifference to the rights or safety of others.
            (2) Bifurcation at request of any party.--
                    (A) In general.--At the request of any party, the 
                trier of fact in any action that is subject to this 
                section shall consider in a separate proceeding, held 
                subsequent to the determination of the amount of 
                compensatory damages, whether punitive damages are to 
                be awarded for the harm that is the subject of the 
                action and the amount of the award.
                    (B) Inadmissibility of evidence relative only to a 
                claim of punitive damages in a proceeding concerning 
                compensatory damages.--If any party requests a separate 
                proceeding under paragraph (1), in a proceeding to 
                determine whether the claimant may be awarded 
                compensatory damages, any evidence, argument, or 
                contention that is relevant only to the claim of 
                punitive damages, as determined by applicable State 
                law, shall be inadmissible.
    (b) Special Rule for Certain Persons and Entities.--
            (1) In general.--In any action described in subsection (a) 
        against a person or entity described in paragraph (2), an award 
        of punitive damages shall not exceed the lesser of--
                    (A) 2 times the amount of compensatory damages 
                awarded; or
                    (B) $250,000.
            (2) Persons and entities described.--
                    (A) In general.--A person or entity described in 
                this paragraph is--
                            (i) an individual whose net worth does not 
                        exceed $500,000; or
                            (ii) an owner of an unincorporated 
                        business, or any partnership, corporation, 
                        association, unit of local government, or 
                        organization that has--
                                    (I) annual revenues of less than or 
                                equal to $5,000,000; and
                                    (II) fewer than 25 full-time 
                                employees.
                    (B) Annual revenues and employees.--For the purpose 
                of determining the applicability of this subsection to 
                a corporation, the calculation of--
                            (i) the annual revenues of that corporation 
                        shall include the annual revenues of any parent 
                        corporation (or other subsidiary of the parent 
                        corporation), subsidiary, branch, division, 
                        department, or unit of that corporation; and
                            (ii) the number of employees of that 
                        corporation shall include the number of 
                        employees of any parent corporation (or other 
                        subsidiary of the parent corporation), 
                        subsidiary, branch, division, department, or 
                        unit of that corporation.
                    (C) Reference point for determining 
                applicability.--In determining the applicability of 
                this subsection, the standards in subparagraphs (A) and 
                (B) shall be applied as of the date of commencement of 
                any action that is subject to this title. The defendant 
                shall have the burden of proving the applicability of 
                this subsection.

SEC. 111. LIABILITY FOR CERTAIN CLAIMS RELATING TO DEATH.

    (a) In General.--Subject to subsection (b), a defendant may be 
liable for damages that are only punitive in nature without regard to 
section 110 in any product liability action that is subject to this 
title--
            (1) in which the alleged harm to the claimant is death; and
            (2) that is subject to an applicable State law that, as of 
        the date of enactment of this Act, provides, or is construed to 
        provide, for damages that are only punitive in nature.
    (b) Limitation.--Subsection (a) shall apply to an action that meets 
the requirements of paragraphs (1) and (2) of that subsection only 
during such period as the State law provides, or is construed to 
provide, for damages that are only punitive in nature.
    (c) Sunset.--This section shall cease to be effective on September 
1, 1999.

SEC. 112. WORKERS' COMPENSATION SUBROGATION.

    (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 title.
                    (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 title, 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 that 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 notification.--Except as provided in 
                subparagraph (C), an employee shall not make any 
                settlement with or accept any payment from the 
                manufacturer or product seller without written 
                notification to 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.--
                    (A) In general.--If, with respect to a product 
                liability action that is subject to this title, the 
                manufacturer or product seller chooses to raise to the 
                trier of fact pursuant to the provisions of this 
                section that the harm to the claimant was caused in 
                whole or in part by the claimant's employer, the issue 
                of employer fault shall be submitted to the trier of 
                fact, but only after the manufacturer or product seller 
                has provided timely written notice to the insurer that 
it is proceeding pursuant to the provisions of this section.
                    (B) Rights of insurer.--Notwithstanding any other 
                provision of law, with respect to an issue of fault 
                submitted to a trier of fact pursuant to subparagraph 
                (A), an insurer shall, in the same manner as any party 
                in the action (even though the insurer 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.
                    (C) Reduction of damages.--If the trier of fact 
                finds by clear and convincing evidence that the fault 
                of the employer was a substantial factor in causing the 
                harm to the claimant that is the subject of the product 
                liability action--
                            (i) the court shall reduce by the amount of 
                        the claimant's benefits and amounts for which 
                        payment, prior to the date of final judgment in 
                        the product liability action, has not yet been 
                        made for workers' compensation benefits 
                        received prior to such date or is otherwise due 
                        pursuant to State workers' compensation law--
                                    (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 not affected.--Notwithstanding a 
                finding by the trier of fact described in subparagraph 
                (C), the insurer shall not lose--
                            (i) 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; or
                            (ii) any rights to credits against future 
                        liability established pursuant to applicable 
                        State workers' compensation law.
    (b) Attorney's Fees.--If, in a product liability action that is 
subject to this section, the manufacturer or product seller raises the 
issue of employer fault pursuant to this section and the trier of fact 
finds that the fault of the employer was not a substantial factor in 
causing the harm to the claimant, the court shall require the 
manufacturer or product seller to reimburse the insurer for reasonable 
attorney's fees and court costs, as determined by the court, incurred 
by the insurer in litigating the issue of employer fault, unless the 
court finds that the position of the manufacturer or product seller was 
substantially justified or that special circumstances make such a 
reimbursement unjust.

                TITLE II--BIOMATERIALS ACCESS ASSURANCE

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Biomaterials Access Assurance Act 
of 1998''.

SEC. 202. FINDINGS.

    Congress find that--
            (1) each year millions of citizens of the United States 
        depend on the availability of lifesaving or life-enhancing 
        medical devices, many of which are permanently implantable 
        within the human body;
            (2) a continued supply of raw materials and component parts 
        is necessary for the invention, development, improvement, and 
        maintenance of the supply of the devices;
            (3) most of the medical devices are made with raw materials 
        and component parts that--
                    (A) move in interstate commerce;
                    (B) are not designed or manufactured specifically 
                for use in medical devices; and
                    (C) come in contact with internal human tissue;
            (4) the raw materials and component parts also are used in 
        a variety of nonmedical products;
            (5) because small quantities of the raw materials and 
        component parts are used for medical devices, sales of raw 
        materials and component parts for medical devices constitute an 
        extremely small portion of the overall market for the raw 
        materials and component parts;
            (6) under the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 301 et seq.), manufacturers of medical devices are 
        required to demonstrate that the medical devices are safe and 
        effective, including demonstrating that the products are 
        properly designed and have adequate warnings or instructions;
            (7) notwithstanding the fact that raw materials and 
        component parts suppliers do not design, produce, or test a 
        final medical device, the suppliers have been the subject of 
        actions alleging inadequate--
                    (A) design and testing of medical devices 
                manufactured with materials or parts supplied by the 
                suppliers; or
                    (B) warnings related to the use of such medical 
                devices;
            (8) even though suppliers of raw materials and component 
        parts have very rarely been held liable in such actions, such 
        suppliers have ceased supplying certain raw materials and 
        component parts for use in medical devices for a number of 
        reasons, including concerns about the costs of such litigation;
            (9) unless alternate sources of supply can be found, the 
        unavailability of raw materials and component parts for medical 
        devices will lead to unavailability of lifesaving and life-
        enhancing medical devices;
            (10) because other suppliers of the raw materials and 
        component parts in foreign nations are refusing to sell raw 
        materials or component parts for use in manufacturing certain 
        medical devices in the United States, the prospects for 
        development of new sources of supply for the full range of 
        threatened raw materials and component parts for medical 
        devices are remote;
            (11) it is unlikely that the small market for such raw 
        materials and component parts in the United States could 
        support the large investment needed to develop new suppliers of 
        such raw materials and component parts;
            (12) attempts to develop such new suppliers would raise the 
        cost of medical devices;
            (13) courts that have considered the duties of the 
        suppliers of the raw materials and component parts have 
        generally found that the suppliers do not have a duty--
                    (A) to evaluate the safety and efficacy of the use 
                of a raw material or component part in a medical 
                device; and
                    (B) to warn consumers concerning the safety and 
                effectiveness of a medical device;
            (14) because medical devices and the raw materials and 
        component parts used in their manufacture move in interstate 
        commerce, a shortage of such raw materials and component parts 
        affects interstate commerce;
            (15) in order to safeguard the availability of a wide 
        variety of lifesaving and life-enhancing medical devices, 
        immediate action is needed--
                    (A) to clarify the permissible bases of liability 
                for suppliers of raw materials and component parts for 
                medical devices; and
                    (B) to provide expeditious procedures to dispose of 
                unwarranted suits against the suppliers in such manner 
                as to minimize litigation costs;
            (16) the several States and their courts are the primary 
        architects and regulators of our tort system; Congress, 
        however, must, in certain circumstances involving the national 
        interest, address tort issues, and a threatened shortage of raw 
        materials and component parts for life-saving medical devices 
        is one such circumstance; and
            (17) the protections set forth in this title are needed to 
        assure the continued supply of materials for life-saving 
        medical devices; however, negligent suppliers should not be 
        protected.

SEC. 203. DEFINITIONS.

    As used in this title:
            (1) Biomaterials supplier.--
                    (A) In general.--The term ``biomaterials supplier'' 
                means an entity that directly or indirectly supplies a 
                component part or raw material for use in the 
                manufacture of an implant.
                    (B) Persons included.--Such term includes any 
                person who--
                            (i) has submitted master files to the 
                        Secretary for purposes of premarket approval of 
                        a medical device; or
                            (ii) licenses a biomaterials supplier to 
                        produce component parts or raw materials.
            (2) Claimant.--
                    (A) In general.--The term ``claimant'' means any 
                person who brings a civil action, or on whose behalf a 
                civil action is brought, arising from harm allegedly 
                caused directly or indirectly by an implant, including 
                a person other than the individual into whose body, or 
                in contact with whose blood or tissue, the implant is 
                placed, who claims to have suffered harm as a result of 
                the implant.
                    (B) Action brought on behalf of an estate.--With 
                respect to an action brought on behalf of or through 
                the estate of an individual into whose body, or in 
                contact with whose blood or tissue the implant is 
                placed, such term includes the decedent that is the 
                subject of the action.
                    (C) Action brought on behalf of a minor or 
                incompetent.--With respect to an action brought on 
                behalf of or through a minor or incompetent, such term 
                includes the parent or guardian of the minor or 
                incompetent.
                    (D) Exclusions.--Such term does not include--
                            (i) a provider of professional health care 
                        services, in any case in which--
                                    (I) the sale or use of an implant 
                                is incidental to the transaction; and
                                    (II) the essence of the transaction 
                                is the furnishing of judgment, skill, 
                                or services;
                            (ii) a person acting in the capacity of a 
                        manufacturer, seller, or biomaterials supplier;
                            (iii) a person alleging harm caused by 
                        either the silicone gel or the silicone 
                        envelope utilized in a breast implant 
                        containing silicone gel, except that--
                                    (I) neither the exclusion provided 
                                by this clause nor any other provision 
                                of this title may be construed as a 
                                finding that silicone gel (or any other 
                                form of silicone) may or may not cause 
                                harm; and
                                    (II) the existence of the exclusion 
                                under this clause may not--
                                             (aa) be disclosed to a 
                                        jury in any civil action or 
                                        other proceeding; and
                                             (bb) except as necessary 
                                        to establish the applicability 
                                        of this title, otherwise be 
                                        presented in any civil action 
                                        or other proceeding.
            (3) Component part.--
                    (A) In general.--The term ``component part'' means 
                a manufactured piece of an implant.
                    (B) Certain components.--Such term includes a 
                manufactured piece of an implant that--
                            (i) has significant nonimplant 
                        applications; and
                            (ii) alone, has no implant value or 
                        purpose, but when combined with other component 
                        parts and materials, constitutes an implant.
            (4) Harm.--
                    (A) In general.--The term ``harm'' means--
                            (i) any injury to or damage suffered by an 
                        individual;
                            (ii) any illness, disease, or death of that 
                        individual resulting from that injury or 
                        damage; and
                            (iii) any loss to that individual or any 
                        other individual resulting from that injury or 
                        damage.
                    (B) Exclusion.--The term does not include any 
                commercial loss or loss of or damage to an implant.
            (5) Implant.--The term ``implant'' means--
                    (A) a medical device that is intended by the 
                manufacturer of the device--
                            (i) to be placed into a surgically or 
                        naturally formed or existing cavity of the body 
                        for a period of at least 30 days; or
                            (ii) to remain in contact with bodily 
                        fluids or internal human tissue through a 
                        surgically produced opening for a period of 
                        less than 30 days; and
                    (B) suture materials used in implant procedures.
            (6) Manufacturer.--The term ``manufacturer'' means any 
        person who, with respect to an implant--
                    (A) is engaged in the manufacture, preparation, 
                propagation, compounding, or processing (as defined in 
                section 510(a)(1)) of the Federal Food, Drug, and 
                Cosmetic Act (21 U.S.C. 360(a)(1)) of the implant; and
                    (B) is required--
                            (i) to register with the Secretary pursuant 
                        to section 510 of the Federal Food, Drug, and 
                        Cosmetic Act (21 U.S.C. 360) and the 
                        regulations issued under such section; and
                            (ii) to include the implant on a list of 
                        devices filed with the Secretary pursuant to 
                        section 510(j) of such Act (21 U.S.C. 360(j)) 
                        and the regulations issued under such section.
            (7) Medical device.--The term ``medical device'' means a 
        device, as defined in section 201(h) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 321(h)) and includes any device 
        component of any combination product as that term is used in 
        section 503(g) of such Act (21 U.S.C. 353(g)).
            (8) Raw material.--The term ``raw material'' means a 
        substance or product that--
                    (A) has a generic use; and
                    (B) may be used in an application other than an 
                implant.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (10) Seller.--
                    (A) In general.--The term ``seller'' means a person 
                who, in the course of a business conducted for that 
                purpose, sells, distributes, leases, packages, labels, 
                or otherwise places an implant in the stream of 
                commerce.
                    (B) Exclusions.--The term 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 an 
                        implant is incidental to the transaction and 
                        the essence of the transaction is the 
                        furnishing of judgment, skill, or services; or
                            (iii) any person who acts in only a 
                        financial capacity with respect to the sale of 
                        an implant.

SEC. 204. GENERAL REQUIREMENTS; APPLICABILITY; PREEMPTION.

    (a) General Requirements.--
            (1) In general.--In any civil action covered by this title, 
        a biomaterials supplier may raise as a defense the exclusion 
        from liability set forth in section 205(a).
            (2) Procedures.--Notwithstanding any other provision of 
        law, the Federal or State court in which a civil action covered 
        by this title is pending shall, in connection with a motion for 
        dismissal or judgment based on a defense described in paragraph 
        (1), use the procedures set forth in section 206.
    (b) Applicability.--
            (1) In general.--Except as provided in paragraph (2), 
        notwithstanding any other provision of law, this title applies 
        to any civil action brought by a claimant, whether in a Federal 
        or State court, against a manufacturer, seller, or biomaterials 
        supplier, on the basis of any legal theory, for harm allegedly 
        caused by an implant.
            (2) Exclusion.--A civil action brought by a purchaser of a 
        medical device for use in providing professional services 
        against a manufacturer, seller, or biomaterials supplier for 
        loss or damage to an implant or for commercial loss to the 
        purchaser--
                    (A) shall not be considered an action that is 
                subject to this title; and
                    (B) shall be governed by applicable commercial or 
                contract law.
    (c) Scope of Preemption.--
            (1) In general.--This title supersedes any State law 
        regarding recovery for harm caused by an implant and any rule 
        of procedure applicable to a civil action to recover damages 
        for such harm only to the extent that this title establishes a 
        rule of law applicable to the recovery of such damages.
            (2) Applicability of other laws.--Any issue that arises 
        under this title and that is not governed by a rule of law 
        applicable to the recovery of damages described in paragraph 
        (1) shall be governed by applicable Federal or State law.
    (d) Statutory Construction.--Nothing in this title may be 
construed--
            (1) to affect any defense available to a defendant under 
        any other provisions of Federal or State law in an action 
        alleging harm caused by an implant; or
            (2) to create a cause of action or Federal court 
        jurisdiction pursuant to sections 1331 or 1337 of title 28, 
        United States Code, that otherwise would not exist under 
        applicable Federal or State law.

SEC. 205. LIABILITY OF BIOMATERIALS SUPPLIERS.

    (a) In General.--
            (1) Exclusion from liability.--Except as provided in 
        paragraph (2) or section 207, a biomaterials supplier shall not 
        be liable for harm to a claimant caused by an implant.
            (2) Liability.--A biomaterials supplier that--
                    (A) is a manufacturer may be liable for harm to a 
                claimant described in subsection (b);
                    (B) is a seller may be liable for harm to a 
                claimant described in subsection (c); and
                    (C) furnishes raw materials or component parts that 
                fail to meet applicable contractual requirements or 
                specifications may be liable for harm to a claimant 
                described in subsection (d).
    (b) Liability as Manufacturer.--
            (1) In general.--A biomaterials supplier may, to the extent 
        required and permitted by any other applicable law, be liable 
        for harm to a claimant caused by an implant if the biomaterials 
        supplier is the manufacturer of the implant.
            (2) Grounds for liability.--The biomaterials supplier may 
        be considered the manufacturer of the implant that allegedly 
        caused harm to a claimant only if the biomaterials supplier--
                    (A)(i) has or should have registered with the 
                Secretary pursuant to section 510 of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 360) and the 
                regulations issued under such section; and
                    (ii) included or should have included the implant 
                on a list of devices filed with the Secretary pursuant 
                to section 510(j) of such Act (21 U.S.C. 360(j)) and 
                the regulations issued under such section;
                    (B) is the subject of a declaration issued by the 
                Secretary pursuant to paragraph (3) that states that 
                the supplier, with respect to the implant that 
                allegedly caused harm to the claimant, was required 
                to--
                            (i) register with the Secretary under 
                        section 510 of such Act (21 U.S.C. 360), and 
                        the regulations issued under such section, but 
                        failed to do so; or
                            (ii) include the implant on a list of 
                        devices filed with the Secretary pursuant to 
                        section 510(j) of such Act (21 U.S.C. 360(j)) 
                        and the regulations issued under such section, 
                        but failed to do so; or
                    (C) is related by common ownership or control to a 
                person meeting all the requirements described in 
                subparagraph (A) or (B), if the court deciding a motion 
                to dismiss in accordance with section 206(c)(3)(B)(i) 
                finds, on the basis of affidavits submitted in 
                accordance with section 206, that it is necessary to 
                impose liability on the biomaterials supplier as a 
                manufacturer because the related manufacturer meeting 
                the requirements of subparagraph (A) or (B) lacks 
                sufficient financial resources to satisfy any judgment 
                that the court feels it is likely to enter should the 
                claimant prevail.
            (3) Administrative procedures.--
                    (A) In general.--The Secretary may issue a 
                declaration described in paragraph (2)(B) on the motion 
                of the Secretary or on petition by any person, after 
                providing--
                            (i) notice to the affected persons; and
                            (ii) an opportunity for an informal 
                        hearing.
                    (B) Docketing and final decision.--Immediately upon 
                receipt of a petition filed pursuant to this paragraph, 
                the Secretary shall docket the petition. Not later than 
                120 days after the petition is filed, the Secretary 
                shall issue a final decision on the petition.
                    (C) Applicability of statute of limitations.--Any 
                applicable statute of limitations shall toll during the 
                period during which a claimant has filed a petition 
                with the Secretary under this paragraph.
    (c) Liability as Seller.--A biomaterials supplier may, to the 
extent required and permitted by any other applicable law, be liable as 
a seller for harm to a claimant caused by an implant only if--
            (1) the biomaterials supplier--
                    (A) held title to the implant that allegedly caused 
                harm to the claimant as a result of purchasing the 
                implant after--
                            (i) the manufacture of the implant; and
                            (ii) the entrance of the implant in the 
                        stream of commerce; and
                    (B) subsequently resold the implant; or
            (2) the biomaterials supplier is related by common 
        ownership or control to a person meeting all the requirements 
        described in paragraph (1), if a court deciding a motion to 
        dismiss in accordance with section 206(c)(3)(B)(ii) finds, on 
        the basis of affidavits submitted in accordance with section 
        206, that it is necessary to impose liability on the 
        biomaterials supplier as a seller because the related seller 
        meeting the requirements of paragraph (1) lacks sufficient 
        financial resources to satisfy any judgment that the court 
        feels it is likely to enter should the claimant prevail.
    (d) Liability for Violating Contractual Requirements or 
Specifications.--A biomaterials supplier may, to the extent required 
and permitted by any other applicable law, be liable for harm to a 
claimant caused by an implant, if the claimant in an action shows, by a 
preponderance of the evidence, that--
            (1) the raw materials or component parts delivered by the 
        biomaterials supplier either--
                    (A) did not constitute the product described in the 
                contract between the biomaterials supplier and the 
                person who contracted for delivery of the product; or
                    (B) failed to meet any specifications that were--
                            (i) accepted, pursuant to applicable law, 
                        by the biomaterials supplier;
                            (ii)(I) published by the biomaterials 
                        supplier;
                            (II) provided to the manufacturer by the 
                        biomaterials supplier; or
                            (III) contained in a master file that was 
                        submitted by the biomaterials supplier to the 
                        Secretary and that is currently maintained by 
                        the biomaterials supplier for purposes of 
                        premarket approval of medical devices; or
                            (iii) included in the submissions for 
                        purposes of premarket approval or review by the 
                        Secretary under section 510, 513, 515, or 520 
                        of the Federal Food, Drug, and Cosmetic Act (21 
                        U.S.C. 360, 360c, 360e, or 360j), and received 
                        clearance from the Secretary if such 
                        specifications were accepted, pursuant to 
                        applicable law, by the biomaterials supplier; 
                        and
            (2) such conduct was an actual and proximate cause of the 
        harm to the claimant.

SEC. 206. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS AGAINST 
              BIOMATERIALS SUPPLIERS.

    (a) Motion To Dismiss.--In any action that is subject to this 
title, a biomaterials supplier who is a defendant in such action may, 
at any time during which a motion to dismiss may be filed under an 
applicable law, move to dismiss the action against it on the grounds 
that--
            (1) the defendant is a biomaterials supplier; and
            (2)(A) the defendant should not, for the purposes of--
                    (i) section 205(b), be considered to be a 
                manufacturer of the implant that is subject to such 
                section; or
                    (ii) section 205(c), be considered to be a seller 
                of the implant that allegedly caused harm to the 
                claimant; or
            (B)(i) the claimant has failed to establish, pursuant to 
        section 205(d), that the supplier furnished raw materials or 
        component parts in violation of contractual requirements or 
        specifications; or
            (ii) the claimant has failed to comply with the procedural 
        requirements of subsection (b).
    (b) Manufacturer of Implant Shall Be Named a Party.--The claimant 
shall be required to name the manufacturer of the implant as a party to 
the action, unless--
            (1) the manufacturer is subject to service of process 
        solely in a jurisdiction in which the biomaterials supplier is 
        not domiciled or subject to a service of process; or
            (2) an action against the manufacturer is barred by 
        applicable law or rule of practice.
    (c) Proceeding on Motion To Dismiss.--The following rules shall 
apply to any proceeding on a motion to dismiss filed under this 
section:
            (1) Affidavits relating to listing and declarations.--
                    (A) In general.--The defendant in the action may 
                submit an affidavit demonstrating that the defendant 
                has not included the implant on a list, if any, filed 
                with the Secretary pursuant to section 510(j) of the 
                Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                360(j)).
                    (B) Response to motion to dismiss.--In response to 
                the motion to dismiss, the claimant may submit an 
                affidavit demonstrating that--
                            (i) the Secretary has, with respect to the 
                        defendant and the implant that allegedly caused 
                        harm to the claimant, issued a declaration 
                        pursuant to section 205(b)(2)(B); or
                            (ii) the defendant who filed the motion to 
                        dismiss is a seller of the implant who is 
                        liable under section 205(c).
            (2) Effect of motion to dismiss on discovery.--
                    (A) In general.--If a defendant files a motion to 
                dismiss under paragraph (1) or (2) of subsection (a), 
                no discovery shall be permitted in connection to the 
action that is the subject of the motion, other than discovery 
necessary to determine a motion to dismiss for lack of jurisdiction, 
until such time as the court rules on the motion to dismiss in 
accordance with the affidavits submitted by the parties in accordance 
with this section.
                    (B) Discovery.--If a defendant files a motion to 
                dismiss under subsection (a)(2)(B)(i) on the grounds 
                that the biomaterials supplier did not furnish raw 
                materials or component parts in violation of 
                contractual requirements or specifications, the court 
                may permit discovery, as ordered by the court. The 
                discovery conducted pursuant to this subparagraph shall 
                be limited to issues that are directly relevant to--
                            (i) the pending motion to dismiss; or
                            (ii) the jurisdiction of the court.
            (3) Affidavits relating status of defendant.--
                    (A) In general.--Except as provided in clauses (i) 
                and (ii) of subparagraph (B), the court shall consider 
                a defendant to be a bio-materials supplier who is not 
                subject to an action for harm to a claimant caused by 
                an implant, other than an action relating to liability 
                for a violation of contractual requirements or 
                specifications described in section 205(d).
                    (B) Responses to motion to dismiss.--The court 
                shall grant a motion to dismiss any action that asserts 
                liability of the defendant under subsection (b) or (c) 
                of section 205 on the grounds that the defendant is not 
                a manufacturer subject to such section 205(b) or seller 
                subject to section 205(c), unless the claimant submits 
                a valid affidavit that demonstrates that--
                            (i) with respect to a motion to dismiss 
                        contending the defendant is not a manufacturer, 
                        the defendant meets the applicable requirements 
                        for liability as a manufacturer under section 
                        205(b); or
                            (ii) with respect to a motion to dismiss 
                        contending that the defendant is not a seller, 
                        the defendant meets the applicable requirements 
                        for liability as a seller under section 205(c).
            (4) Basis of ruling on motion to dismiss.--
                    (A) In general.--The court shall rule on a motion 
                to dismiss filed under subsection (a) solely on the 
                basis of the pleadings of the parties made pursuant to 
                this section and any affidavits submitted by the 
                parties pursuant to this section.
                    (B) Motion for summary judgment.-- Notwithstanding 
                any other provision of law, if the court determines 
                that the pleadings and affidavits made by parties 
                pursuant to this section raise genuine issues 
                concerning material facts with respect to a motion 
                concerning contractual requirements and specifications, 
                the court may deem the motion to dismiss to be a motion 
                for summary judgment made pursuant to subsection (d).
    (d) Summary Judgment.--
            (1) In general.--
                    (A) Basis for entry of judgment.--A biomaterials 
                supplier shall be entitled to entry of judgment without 
                trial if the court finds there is no genuine issue 
                concerning any material fact for each applicable 
                element set forth in paragraphs (1) and (2) of section 
                205(d).
                    (B) Issues of material fact.--With respect to a 
                finding made under subparagraph (A), the court shall 
                consider a genuine issue of material fact to exist only 
                if the evidence submitted by claimant would be 
                sufficient to allow a reasonable jury to reach a 
                verdict for the claimant if the jury found the evidence 
                to be credible.
            (2) Discovery made prior to a ruling on a motion for 
        summary judgment.--If, under applicable rules, the court 
        permits discovery prior to a ruling on a motion for summary 
        judgment made pursuant to this subsection, such discovery shall 
        be limited solely to establishing whether a genuine issue of 
        material fact exists as to the applicable elements set forth in 
        paragraphs (1) and (2) of section 205(d).
            (3) Discovery with respect to a biomaterials supplier.--A 
        biomaterials supplier shall be subject to discovery in 
        connection with a motion seeking dismissal or summary judgment 
        on the basis of the inapplicability of section 205(d) or the 
        failure to establish the applicable elements of section 205(d) 
        solely to the extent permitted by the applicable Federal or 
        State rules for discovery against nonparties.
    (e) Stay Pending Petition for Declaration.--If a claimant has filed 
a petition for a declaration pursuant to section 205(b)(3)(A) with 
respect to a defendant, and the Secretary has not issued a final 
decision on the petition, the court shall stay all proceedings with 
respect to that defendant until such time as the Secretary has issued a 
final decision on the petition.
    (f) Dismissal With Prejudice.--An order granting a motion to 
dismiss or for summary judgment pursuant to this section shall be 
entered with prejudice, except insofar as the moving defendant may be 
rejoined to the action as provided in section 207.
    (g) Manufacturer Conduct of Litigation.--The manufacturer of an 
implant that is the subject of an action covered under this title shall 
be permitted to conduct litigation on any motion for summary judgment 
or dismissal filed by a biomaterials supplier who is a defendant under 
this section on behalf of such supplier if the manufacturer and any 
other defendant in such action enter into a valid and applicable 
contractual agreement under which the manufacturer agrees to bear the 
cost of such litigation or to conduct such litigation.

SEC. 207. SUBSEQUENT IMPLEADER OF DISMISSED DEFENDANT.

    (a) Impleading of Dismissed Defendant.--A court, upon motion by a 
manufacturer or a claimant within 90 days after entry of a final 
judgment in an action by the claimant against a manufacturer, and 
notwithstanding any otherwise applicable statute of limitations, may 
implead a biomaterials supplier who has been dismissed from the action 
pursuant to this title if--
            (1) the manufacturer has made an assertion, either in a 
        motion or other pleading filed with the court or in an opening 
        or closing statement at trial, or as part of a claim for 
        contribution or indemnification, and the court makes a finding 
        based on the court's independent review of the evidence 
        contained in the record of the action, that under applicable 
        law--
                    (A) the negligence or intentionally tortious 
                conduct of the dismissed supplier was an actual and 
                proximate cause of the harm to the claimant; and
                    (B) the manufacturer's liability for damages should 
                be reduced in whole or in part because of such 
                negligence or intentionally tortious conduct; or
            (2) the claimant has moved to implead the supplier and the 
        court makes a finding based on the court's independent review 
        of the evidence contained in the record of the action, that 
        under applicable law--
                    (A) the negligence or intentionally tortious 
                conduct of the dismissed supplier was an actual and 
                proximate cause of the harm to the claimant; and
                    (B) the claimant is unlikely to be able to recover 
                the full amount of its damages from the remaining 
                defendants.
    (b) Standard of Liability.--Notwithstanding any preliminary finding 
under subsection (a), a biomaterials supplier who has been impleaded 
into an action subject to this title, as provided for in this section--
            (1) may, prior to entry of judgment on the claim against 
        it, supplement the record of the proceeding that was developed 
        prior to the grant of the motion for impleader under subsection 
        (a); and
            (2) may be found liable to a manufacturer or a claimant 
        only to the extent required and permitted by any applicable 
        Federal or State law other than this title in an action 
        alleging harm caused by an implant.
    (c) Discovery.--Nothing in this section shall give a claimant or 
any other party the right to obtain discovery from a biomaterials 
supplier defendant at any time prior to grant of a motion for impleader 
beyond that allowed under section 206.

        TITLE III--LIMITATIONS ON APPLICABILITY; EFFECTIVE DATE

SEC. 301. FEDERAL CAUSE OF ACTION PRECLUDED.

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

SEC. 302. EFFECTIVE DATE.

    This Act shall apply with respect to any 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 that date of enactment.