[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 5 Introduced in Senate (IS)]


105th CONGRESS
  1st Session
                                  S. 5

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 21, 1997

   Mr. Ashcroft (for himself, Mr. McCain, Mr. Lott, Mr. Abraham, Mr. 
   Allard, Mr. Brownback, Mr. Chafee, Mr. Coverdell, Mr. Craig, Mr. 
 DeWine, Mr. Domenici, Mr. Enzi, Mr. Faircloth, Mr. Grams, Mr. Hagel, 
  Mr. Hatch, Mr. Helms, Mrs. Hutchison, Mr. Hutchinson, Mr. Kyl, Mr. 
 Murkowski, Mr. Nickles, Mr. Roberts, Mr. Santorum, Mr. Sessions, Mr. 
   Smith of New Hampshire, Mr. Thomas, Mr. Thurmond, Mr. Warner, Mr. 
    Coats, Mr. Lugar, Mr. Gramm, and Mr. Kempthorne) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Commerce, Science, and Transportation

_______________________________________________________________________

                                 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 AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Product Liability 
Reform Act of 1997''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings and 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 intoxicating alcohol or 
                            drugs.
Sec. 105. Misuse or alteration.
Sec. 106. Uniform time limitations on liability.
Sec. 107. Alternative dispute resolution procedures.
Sec. 108. Uniform standards for award of punitive damages.
Sec. 109. Liability for certain claims relating to death.
Sec. 110. Several liability for noneconomic loss.
Sec. 111. 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.
        TITLE III--LIMITATIONS ON APPLICABILITY; EFFECTIVE DATE

Sec. 301. Effect of court of appeals decisions.
Sec. 302. Federal cause of action precluded.
Sec. 303. Effective date.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) our Nation is overly litigious, the civil justice 
        system is overcrowded, sluggish, and excessively costly and the 
        costs of lawsuits, both direct and indirect, are inflicting 
        serious and unnecessary injury on the national economy;
            (2) excessive, unpredictable, and often arbitrary damage 
        awards and unfair allocations of liability have a direct and 
        undesirable effect on interstate commerce by increasing the 
        cost and decreasing the availability of goods and services;
            (3) the rules of law governing product liability actions, 
        damage awards, and allocations of liability have evolved 
        inconsistently within and among the States, resulting in a 
        complex, contradictory, and uncertain regime that is 
        inequitable to both plaintiffs and defendants and unduly 
        burdens interstate commerce;
            (4) as a result of excessive, unpredictable, and often 
        arbitrary damage awards and unfair allocations of liability, 
        consumers have been adversely affected through the withdrawal 
        of products, producers, services, and service providers from 
        the marketplace, and from excessive liability costs passed on 
        to them through higher prices;
            (5) excessive, unpredictable, and often arbitrary damage 
        awards and unfair allocations of liability jeopardize the 
        financial well-being of many individuals as well as entire 
        industries, particularly the Nation's small businesses and 
        adversely affects government and taxpayers;
            (6) the excessive costs of the civil justice system 
        undermine the ability of American companies to compete 
        internationally, and serve to decrease the number of jobs and 
        the amount of productive capital in the national economy;
            (7) the unpredictability of damage awards is inequitable to 
        both plaintiffs and defendants and has added considerably to 
        the high cost of liability insurance, making it difficult for 
        producers, consumers, volunteers, and nonprofit organizations 
        to protect themselves from liability with any degree of 
        confidence and at a reasonable cost;
            (8) because of the national scope of the problems created 
        by the defects in the civil justice system, it is not possible 
        for the States to enact laws that fully and effectively respond 
        to those problems;
            (9) it is the constitutional role of the national 
        government to remove barriers to interstate commerce and to 
        protect due process rights; and
            (10) there is a need to restore rationality, certainty, and 
        fairness to the civil justice system in order to protect 
        against excessive, arbitrary, and uncertain damage awards and 
        to reduce the volume, costs, and delay of litigation.
    (b) Purposes.--Based upon the powers contained in Article I, 
Section 8, Clause 3 and the Fourteenth Amendment 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 and to 
uphold constitutionally protected due process rights by--
            (1) establishing certain uniform legal principles of 
        product liability which provide a fair balance among the 
        interests of product users, manufacturers, and product sellers;
            (2) placing reasonable limits on damages over and above the 
        actual damages suffered by a claimant;
            (3) ensuring the fair allocation of liability in civil 
        actions;
            (4) reducing the unacceptable costs and delays of our civil 
        justice system caused by excessive litigation which harm both 
        plaintiffs and defendants; and
            (5) establishing greater fairness, rationality, and 
        predictability in the civil justice system.

                   TITLE I--PRODUCT LIABILITY REFORM

SEC. 101. DEFINITIONS.

    For purposes of this title--
            (1) Actual malice.--The term ``actual malice'' means 
        specific intent to cause serious physical injury, illness, 
        disease, death, or damage to property.
            (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 such 
        standard is more than that required under preponderance of the 
        evidence, but less than that required for proof beyond a 
        reasonable doubt.
            (5) Commercial loss.--The term ``commercial loss'' means 
        any loss or damage solely to a product itself, loss relating to 
        a dispute over its value, or consequential economic loss, the 
        recovery of which is governed by the Uniform Commercial Code or 
        analogous State commercial or contract law.
            (6) Compensatory damages.--The term ``compensatory 
        damages'' means damages awarded for economic and noneconomic 
        loss.
            (7) 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.
            (8) 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 such loss is allowed under 
        applicable State law.
            (9) Harm.--The term ``harm'' means any physical injury, 
        illness, disease, or death or damage to property caused by a 
        product. The term does not include commercial loss.
            (10) 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.
            (11) 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 produces, creates, makes or constructs 
                and designs, or formulates, or 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.
            (12) 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.
            (13) Person.--The term ``person'' means any individual, 
        corporation, company, association, firm, partnership, society, 
        joint stock company, or any other entity (including any 
        governmental entity).
            (14) Product.--
                    (A) In general.--The term ``product'' means any 
                object, substance, mixture, or raw material in a 
                gaseous, liquid, or solid state which--
                            (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 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 except to the 
                        extent that electricity, water delivered by a 
                        utility, natural gas, or steam, is subject, 
                        under applicable State law, to a standard of 
                        liability other than negligence.
            (15) Product liability action.--The term ``product 
        liability action'' means a civil action brought on any theory 
        for harm caused by a product.
            (16) 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.
            (17) Punitive damages.--The term ``punitive damages'' means 
        damages awarded against any person or entity to punish or deter 
        such person or entity, or others, from engaging in similar 
        behavior in the future.
            (18) State.--The term ``State'' means any State of the 
        United States, the District of Columbia, 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.

SEC. 102. APPLICABILITY; PREEMPTION.

    (a) Preemption.--
            (1) In general.--This Act governs any product liability 
        action brought in any State or Federal court on any theory for 
        harm caused by a product.
            (2) Actions excluded.--A civil action brought for 
        commercial loss shall be governed only by applicable commercial 
        or contract law.
    (b) Relationship to State Law.--This title supersedes State law 
only to the extent that State law applies to an issue covered by this 
title. Any issue that is not governed by this title, including any 
standard of liability applicable to a manufacturer, shall be governed 
by otherwise applicable State or Federal law.
    (c) Effect on Other Law.--Nothing in this Act shall be construed 
to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any 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 
        grounds 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, 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, 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 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 the product--
                    (A) if the failure occurred because there was no 
                reasonable opportunity to inspect the product; or
                    (B) if the inspection, in the exercise of 
                reasonable care, would not have revealed the aspect of 
                the product which 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 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) 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(16)(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 such product.
            (2) For purposes of paragraph (1), and for determining the 
        applicability of this title to any person subject to paragraph 
        (1), the term ``product liability action'' means a civil action 
        brought on any theory for harm caused by a product or product 
        use.
    (d) Actions for Negligent Entrustment.--A civil action for 
negligent entrustment shall not be subject to the provisions of this 
section, but shall be subject to any applicable State law.

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

    (a) General Rule.--In any product liability action, it shall be a 
complete defense to such action if--
            (1) the claimant was intoxicated or was under the influence 
        of intoxicating alcohol or any drug when the accident or other 
        event which resulted in such claimant's harm occurred; and
            (2) the claimant, as a result of the influence of the 
        alcohol or drug, was more than 50 percent responsible for such 
        accident or other event.
    (b) Construction.--For purposes of subsection (a)--
            (1) 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; 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. MISUSE OR ALTERATION.

    (a) General Rule.--
            (1) In general.--In a product liability action, 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 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) Workplace Injury.--Notwithstanding subsection (a), and except 
as otherwise provided in section 111, 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 or any 
coemployee who is immune from suit by the claimant pursuant to the 
State law applicable to workplace injuries.

SEC. 106. 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 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--
                    (A) the harm that is the subject of the action; and
                    (B) the cause of the harm.
            (2) Exception.--A person with a legal disability (as 
        determined under applicable law) may file a product liability 
        action not later than 2 years after the date on which the 
        person ceases to have the legal disability.
    (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 15-year period 
        beginning at the time of delivery of the product to the first 
        purchaser or lessee.
            (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 15-year period specified in such paragraph, 
        the State law shall apply with respect to such period.
            (3) Exceptions.--
                    (A) A motor vehicle, vessel, aircraft, or train, 
                that is used primarily to transport passengers for 
                hire, shall not be subject to this subsection.
                    (B) Paragraph (1) 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 15 
                years, but it will apply at the expiration of that 
                warranty.
                    (C) Paragraph (1) does not affect the limitations 
                period established by the General Aviation 
                Revitalization Act of 1994 (49 U.S.C. 40101 note).
    (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 could be 
otherwise brought pursuant to another provision of law, the claimant 
may, notwithstanding subsections (a) and (b), bring the product 
liability action not later than 1 year after the date of enactment of 
this Act.

SEC. 107. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES.

    (a) Service of Offer.--A claimant or a defendant in a product 
liability action may, not later than 60 days after the service of--
            (1) the initial complaint; or
            (2) 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.
    (b) Written Notice of Acceptance or Rejection.--Except as provided 
in subsection (c), not later than 10 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.
    (c) Extension.--The court may, upon motion by an offeree made prior 
to the expiration of the 10-day period specified in subsection (b), 
extend the period for filling 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). Discovery may be permitted 
during such period.

SEC. 108. 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 if the claimant 
establishes by clear and convincing evidence that conduct carried out 
by the defendant with a conscious, flagrant indifference to the rights 
or safety of others was the proximate cause of the harm that is the 
subject of the action in any product liability action.
    (b) Limitation on Amount.--
            (1) In general.--The amount of punitive damages that may be 
        awarded in an action described in subsection (a) may not exceed 
        the greater of--
                    (A) 2 times the sum of the amount awarded to the 
                claimant for economic loss and noneconomic loss; or
                    (B) $250,000.
            (2) Special rule.--Notwithstanding paragraph (1), in any 
        action described in subsection (a) against an individual whose 
        net worth does not exceed $500,000 or against an owner of an 
        unincorporated business, or any partnership, corporation, 
        association, unit of local government, or organization which 
        has fewer than 25 full-time employees, the punitive damages 
        shall not exceed the lesser of--
                    (A) 2 times the sum of the amount awarded to the 
                claimant for economic loss and noneconomic loss; or
                    (B) $250,000.
        For the purpose of determining the applicability of this 
        paragraph to a corporation, the number of employees of a 
        subsidiary or wholly-owned corporation shall include all 
        employees of a parent or sister corporation.
            (3) Exception for insufficient award in cases of egregious 
        conduct.--
                    (A) Determination by court.--If the court makes a 
                determination, after considering each of the factors in 
                subparagraph (B), that the application of paragraph (1) 
                would result in an award of punitive damages that is 
                insufficient to punish the egregious conduct of the 
                defendant against whom the punitive damages are to be 
                awarded or to deter such conduct in the future, the 
                court shall determine the additional amount of punitive 
                damages (referred to in this paragraph as the 
                ``additional amount'') in excess of the amount 
                determined in accordance with paragraph (1) to be 
                awarded against the defendant in a separate proceeding 
                in accordance with this paragraph.
                    (B) Factors for consideration.--In any proceeding 
                under paragraph (A), the court shall consider--
                            (i) the extent to which the defendant acted 
                        with actual malice;
                            (ii) the likelihood that serious harm would 
                        arise from the conduct of the defendant;
                            (iii) the degree of the awareness of the 
                        defendant of that likelihood;
                            (iv) the profitability of the misconduct to 
                        the defendant;
                            (v) the duration of the misconduct and any 
                        concurrent or subsequent concealment of the 
                        conduct by the defendant;
                            (vi) the attitude and conduct of the 
                        defendant upon the discovery of the misconduct 
                        and whether the misconduct has terminated;
                            (vii) the financial condition of the 
                        defendant; and
                            (viii) the cumulative deterrent effect of 
                        other losses, damages, and punishment suffered 
                        by the defendant as a result of the misconduct, 
                        reducing the amount of punitive damages on the 
                        basis of the economic impact and severity of 
                        all measures to which the defendant has been or 
                        may be subjected, including--
                                    (I) compensatory and punitive 
                                damage awards to similarly situated 
                                claimants;
                                    (II) the adverse economic effect of 
                                stigma or loss of reputation;
                                    (III) civil fines and criminal and 
                                administrative penalties; and
                                    (IV) stop sale, cease and desist, 
                                and other remedial or enforcement 
                                orders.
                    (C) Requirements for awarding additional amount.--
                If the court awards an additional amount pursuant to 
                this subsection, the court shall state its reasons for 
                setting the amount of the additional amount in findings 
                of fact and conclusions of law.
                    (D) Preemption.--This section does not create a 
                cause of action for punitive damages and does not 
                preempt or supersede any State or Federal law to the 
                extent that such law would further limit the award of 
                punitive damages. Nothing in this subsection shall 
                modify or reduce the ability of courts to order 
                remittiturs.
            (4) Application by court.--This subsection shall be applied 
        by the court and application of this subsection shall not be 
        disclosed to the jury. Nothing in this subsection shall 
        authorize the court to enter an award of punitive damages in 
        excess of the jury's initial award of punitive damages.
    (c) Bifurcation at Request of Any Party.--
            (1) 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.
            (2) 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.

SEC. 109. LIABILITY FOR CERTAIN CLAIMS RELATING TO DEATH.

    In any civil action in which the alleged harm to the claimant is 
death and, as of the effective date of this Act, the applicable State 
law provides, or has been construed to provide, for damages only 
punitive in nature, a defendant may be liable for any such damages 
without regard to section 108, but only during such time as the State 
law so provides. This section shall cease to be effective September 1, 
1997.

SEC. 110. SEVERAL LIABILITY FOR NONECONOMIC LOSS.

    (a) General Rule.--In a product liability action, 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 claimant's harm, whether or not such person is a party to 
        the action.

SEC. 111. 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 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 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 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 insurer.
                    (B) Rights of insurer.--
                            (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 insurer shall, in the same 
                        manner as any party in the action (even if 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.
                            (ii) Last issue.--The issue of harm 
                        resulting from an action of an employer or 
                        coemployee shall be the last issue that is 
                        submitted 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.

                TITLE II--BIOMATERIALS ACCESS ASSURANCE

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Biomaterials Access Assurance Act 
of 1997''.

SEC. 202. FINDINGS.

    Congress finds 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) are not designed or manufactured specifically 
                for use in medical devices; and
                    (B) 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 medical devices;
            (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 because the costs 
        associated with litigation in order to ensure a favorable 
        judgment for the suppliers far exceeds the total potential 
        sales revenues from sales by such suppliers to the medical 
        device industry;
            (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) attempts to impose the duties referred to in 
        subparagraphs (A) and (B) of paragraph (13) on suppliers of the 
        raw materials and component parts would cause more harm than 
        good by driving the suppliers to cease supplying manufacturers 
        of medical devices; and
            (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.

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; or
                            (ii) a person acting in the capacity of a 
                        manufacturer, seller, or biomaterials supplier.
            (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 non-implant 
                        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 any defense set forth in 
        section 205.
            (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 section 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), 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 a 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 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 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 
                180 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 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) provided to the biomaterials supplier 
                        and not expressly repudiated by the 
                        biomaterials supplier prior to acceptance of 
                        delivery of the raw materials or component 
                        parts;
                            (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 provided by the 
                        manufacturer to the biomaterials supplier and 
                        were not expressly repudiated by the 
                        biomaterials supplier prior to the acceptance 
                        by the manufacturer of delivery of the raw 
                        materials or component parts; 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.
    (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 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 biomaterials 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 subsection (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 as 
                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 as 
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) Manufacturer Conduct of Proceeding.--The manufacturer of an 
implant that is the subject of an action covered under this title shall 
be permitted to file and conduct a proceeding on any motion for summary 
judgment or dismissal filed by a biomaterials supplier who is a 
defendant under this section 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 
proceeding or to conduct such proceeding.
    (g) Attorney Fees.--The court shall require the claimant to 
compensate the biomaterials supplier (or a manufacturer appearing in 
lieu of a supplier pursuant to subsection (f)) for attorney fees and 
costs, if--
            (1) the claimant named or joined the biomaterials supplier; 
        and
            (2) the court found the claim against the biomaterials 
        supplier to be without merit and frivolous.

        TITLE III--LIMITATIONS ON APPLICABILITY; EFFECTIVE DATE

SEC. 301. EFFECT OF COURT OF APPEALS DECISIONS.

    A decision by a Federal 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. 302. 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. 303. EFFECTIVE DATE.

    This Act shall apply with respect to any action commenced on or 
after the date of the 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.

                                 <all>