[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 966 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 966

    To provide legal standards and procedures for suppliers of raw 
   materials and component parts for medical devices, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 26, 1997

  Mr. Breaux introduced the following bill; which was read twice and 
   referred to the Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
    To provide legal standards and procedures for suppliers of raw 
   materials and component parts for medical devices, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

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

SEC. 2. 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 adequate--
                    (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. 3. DEFINITIONS.

    As used in this Act:
            (1) Biomaterials supplier.--
                    (A) In general.--The term ``biomaterials supplier'' 
                means an entity that directly or indirectly supplies 
                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 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; 
                        or
                            (iii) a person alleging harm caused by a 
                        breast implant.
            (3) 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) Commercial loss.--The term includes any 
                commercial loss or loss of or damage to an implant.
            (4) 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.
            (5) 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.
            (6) Medical device.--The term ``medical device'' means a 
        device, as defined in section 1(a) 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)).
            (7) 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.
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (9) 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. 4. GENERAL REQUIREMENTS: APPLICABILITY; PREEMPTION.

    (a) General Requirements.--
            (1) In general.--In any civil action covered by this Act, a 
        biomaterials supplier may raise any defense set forth in 
        section 5.
                    (A) Procedures.--Notwithstanding any other 
                provision of law, the Federal or State court in which a 
                civil action covered by this Act is pending shall, in 
                connection with a motion for dismissal or judgment 
                based on the defense described in paragraph (1), use 
                the procedures set forth in section 6.
    (b) Applicability.--
            (1) In general.--Except as provided in paragraph (2), 
        notwithstanding any other provision of law, this Act 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 Act; 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 Act establishes a 
        rule of law applicable to the recovery of such damages.
            (2) Applicability of other laws.--Any issue that arises 
        under this Act 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 Act may be construed 
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. 5. 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);
                    (C) furnishes raw materials that fail to meet 
                applicable contractual requirements or specifications 
                may be liable for a harm to a claimant described in 
                subsection (d);
                    (D) knows, or through reasonable inquiry could have 
                known;
                            (i) of the application to which the raw 
                        material is to be put;
                            (ii) of the risks attendant to such use; 
                        and
                            (iii) that the buyer or user of the raw 
                        material is ignorant of such risks, but failed 
                        to warn such buyer or user of such risks, may 
                        be liable for harm to a claimant described in 
                        subsection (e); and
                    (E) furnishes raw materials that are defective may 
                be liable for harm to a claimant as described in 
                subsection (f).
    (b) Liability 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.--
                    (A) The biomaterials supplier may be considered the 
                manufacturer of the implant that allegedly caused harm 
                to a claimant only if the biomaterials supplier--
                            (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(f) of such Act (21 U.S.C. 360(f)) 
                        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 6(c)(3)(B)(i) 
                finds, on the basis of affidavits submitted in 
                accordance with section 6, that it is necessary to 
                impose liability on the biomaterials supplier as a 
                manufacturer because the related manufacturer meeting 
                the requirements of a 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 
seller for harm to a claimant caused by an implant if--
            (1) the biomaterials supplier--
                    (A) held little 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 6(c)(3)(B)(ii) finds on the 
        basis of affidavits submitted in accordance with section 6 that 
        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) published by the biomaterials 
                        supplier;
                            (iii) provided to the manufacturer by the 
                        biomaterials supplier;
                            (iv) 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
                            (v) 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.
    (e) Liability for Failure To Warn.--A biomaterials supplier may, to 
the extent required or permitted by any other applicable law, be liable 
for harm caused by an implant if the biomaterials supplier--
            (1) knew, or through reasonable inquiry could have known--
                    (A) of the application to which the raw material 
                was to be put;
                    (B) of the risks attendant to such use;
                    (C) that the buyer or user of the raw material was 
                ignorant of such risks; and
            (2) failed to warn such buyer or user of such risks.
    (f) Liability for Defective Material.--A biomaterials supplier may, 
to the extent permitted by any other applicable law, be liable for harm 
caused by an implant if the harm was in whole or in part caused by a 
defect in the raw material supplied by the biomaterials supplier.

SEC. 6. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS AGAINST BIOMATERIALS 
              SUPPLIERS.

    (a) Motion to Dismiss.--In any action that is subject to this Act, 
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 5(b), be considered to be a 
                manufacturer of the implant that is subject to such 
                section; or
                    (ii) section 5(c), be considered to be a seller of 
                the implant that allegedly caused harm to the claimant;
                    (iii) section 5(e), be found to have failed to warn 
                the buyer or user of the raw material of its known 
                risks;
                    (iv) section 5(f), be found to have supplied 
                defective material; or
            (B)(i) the claimant has failed to establish pursuant to 
        section 5(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) 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 
                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 5(b)(2)(B); or
                            (ii) the defendant who filed the motion to 
                        dismiss is a seller of the implant who is 
                        liable under section 5(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 connection to the 
                action that is 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 the parties in accordance with 
                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 states 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 5 on the grounds that the defendant is not a 
                manufacturer subject to such section 5(b) of seller 
                subject to section 5(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 
                        5(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 5(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 affivadits 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 (c).
    (c) 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 
                5(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 the 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 (92) of 
section 5(9)(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 5(d) or the 
        failure to establish the applicable elements of section 5(d) 
        solely to the extent permitted by the applicable Federal or 
        State rules for discovery against nonparties.
    (d) Stay Pending Petition for Declaration.--If a claimant has filed 
a petition for a declaration pursuant to section 5(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.
    (e) Attorney Fees.--The court shall require the claimant to 
compensate the biomaterials supplier for 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 was clearly without merit and frivolous at the time 
        the claim was brought.
                                 <all>