I 111th CONGRESS 2d Session H. R. 6239 IN THE HOUSE OF REPRESENTATIVES September 29, 2010 Mr. Smith of Texas introduced the following bill; which was referred to the Committee on the Judiciary A BILL To provide targeted liability protections for claims based on damages resulting from, or aggravated by, the inclusion of ethanol in certain fuel, and for other purposes.

1.

Short title

This Act may be cited as the Prevention of Frivolous Ethanol Lawsuits Act of 2010.

2.

Findings

The Congress finds as follows: (1)Ethanol is currently widely distributed in commerce for general use in all conventional gasoline-powered onroad and nonroad vehicles and nonroad engines in widespread use. (2)A decision to increase the current blending limit of ethanol into gasoline for motor vehicle and equipment engines requires an agency finding that the increased emission products will not cause or contribute to a failure of any emission control device or system (over the useful life of the motor vehicle, motor vehicle engine, nonroad engine or nonroad vehicle in which such device or system is used). (3)Significant questions and concerns exist as to the effects of increasing the current blending limit of ethanol into gasoline for motor vehicle and equipment engines on the performance of such engines. (4)Effects such as increased engine failures, decreased engine performance, increased consumer complaints, increased litigation, or other unforeseen effects could have a significant impact on interstate commerce. (5)The Federal Trade Commission has proposed labeling requirements for all fuels distributed in commerce that exceed the current blending limit of ethanol into gasoline to disclose to consumers that using such fuels may harm some conventional vehicles. (6)A multifaceted Federal testing regimen is currently underway on newer motor vehicles to determine the effects on motor vehicle engines of increasing the current blending limit of ethanol into gasoline. (7)There is insufficient data on the effects of increasing the current blending limit of ethanol into gasoline on older vehicles and nonroad engines. (8)Nonetheless, the executive branch has— (A)statutory authority to increase the current blending limit of ethanol into gasoline; and (B)is currently undertaking a process to reach a decision on this issue. (9)It is appropriate for Congress to mitigate undue effects on parties engaged in interstate commerce resulting from a Federal decision to allow an increase of the current blending limit of ethanol into gasoline.

3.

Targeted liability protections for claims based on damages resulting from, or aggravated by, the inclusion of ethanol in certain fuel

(a)

Liability protections

(1)

In general

Subject to the other provisions of this section, a covered entity shall be immune from suit and liability under Federal and State law with respect to all claims for loss resulting from, or being aggravated by, the use of any renewable fuel, as defined by section 211(o)(1) of the Clean Air Act, and containing ethanol in concentrations of greater than 10 percent, pursuant to a waiver under section 211(f)(4) of the Clean Air Act, to operate an internal combustion engine. (2)

Scope of claims for loss

For purposes of this section, the term loss means any type of loss, including— (A)death; (B)physical, mental, or emotional injury, illness, disability, or condition; (C)fear of physical, mental, or emotional injury, illness, disability, or condition, including any need for medical monitoring; and (D)loss of or damage to property, including business interruption loss. Each of subparagraphs (A) through (D) applies without regard to the date of the occurrence, presentation, or discovery of the loss described in the subparagraph.(3)

Scope

The immunity under paragraph (1) applies to any claim for loss that has a causal relationship with the use of any renewable fuel, as defined by section 211(o)(1) of the Clean Air Act, and containing ethanol in concentrations of greater than 10 percent, pursuant to a waiver under section 211(f)(4) of the Clean Air Act, to operate an internal combustion engine including a causal relationship with the design, development, testing or investigation, manufacture, labeling, distribution, formulation, packaging, marketing, promotion, sale, purchase, dispensing, administration, licensing, or use of such renewable fuel. (b)

Exception to immunity of covered persons

(1)

In general

Subject to subsection (i), the sole exception to the immunity from suit and liability of covered persons set forth in subsection (a) shall be for an exclusive Federal cause of action against a covered person for death or serious physical injury proximately caused by willful misconduct, as defined pursuant to subsection (c), by such covered person. For purposes of section 2679(b)(2)(B) of title 28, United States Code, such a cause of action is not an action brought for violation of a statute of the United States under which an action against an individual is otherwise authorized. (2)

Persons who can sue

An action under this subsection may be brought for wrongful death or serious physical injury by any person who suffers such injury or by any representative of such a person. (c)

Procedures for suit

(1)

Exclusive federal jurisdiction

Any action under subsection (b) shall be filed and maintained only in the United States District Court for the District of Columbia. (2)

Governing law

The substantive law for decision in an action under subsection (b) shall be derived from the law, including choice of law principles, of the State in which the alleged willful misconduct occurred, unless such law is inconsistent with or preempted by Federal law, including provisions of this section. (3)

Pleading with particularity

In an action under subsection (b), the complaint shall plead with particularity each element of the plaintiff’s claim, including— (A)each act or omission, by each covered person sued, that is alleged to constitute willful misconduct; (B)facts supporting the allegation that such alleged willful misconduct proximately caused the injury claimed; and (C)facts supporting the allegation that the person on whose behalf the complaint was filed suffered death or serious physical injury. (4)

Verification requirement

(A)

In general

The complaint shall include a verification, made by affidavit of the plaintiff under oath, stating that the pleading is true to the knowledge of the deponent, except as to matters specifically identified as being alleged on information and belief, and that as to those matters the plaintiff believes it to be true. (B)

Identification of matters alleged upon information and belief

Any matter that is not specifically identified as being alleged upon the information and belief of the plaintiff, shall be regarded for all purposes, including a criminal prosecution, as having been made upon the knowledge of the plaintiff. (5)

Proof of willful misconduct

In an action under subsection (b), the plaintiff shall have the burden of proving by clear and convincing evidence willful misconduct by each covered person sued. (6)

Three-judge court

Any action under subsection (b) shall be assigned initially to a panel of three judges. Such panel shall have jurisdiction over such action for purposes of considering motions to dismiss, motions for summary judgment, and matters related thereto. If such panel has denied such motions, or if the time for filing such motions has expired, such panel shall refer the action to the chief judge for assignment for further proceedings, including any trial. Section 1253 of title 28, United States Code, and paragraph (3) of subsection (b) of section 2284 of title 28, United States Code, shall not apply to actions under subsection (b). (7)

Civil discovery

In an action under subsection (b), no discovery shall be allowed— (A)before each covered person sued has had a reasonable opportunity to file a motion to dismiss; (B)in the event such a motion is filed, before the court has ruled on such motion; and (C)in the event a covered person files an interlocutory appeal from the denial of such a motion, before the Court of Appeals has ruled on such appeal. (d)

Standard

Notwithstanding any other provision of law, the court in an action under subsection (b) shall permit discovery only with respect to matters directly related to material issues contested in such action, and the court shall compel a response to a discovery request (including a request for admission, an interrogatory, a request for production of documents, or any other form of discovery request) under rule 37, Federal Rules of Civil Procedure, only if the court finds that the requesting party needs the information sought to prove or defend as to a material issue contested in such action and that the likely benefits of a response to such request equal or exceed the burden or cost for the responding party of providing such response. (e)

Reduction in award of damages for collateral source benefits

(1)

In general

In an action under subsection (b), the amount of an award of damages that would otherwise be made to a plaintiff shall be reduced by the amount of collateral source benefits to such plaintiff. (2)

Noneconomic damages

In an action under subsection (b), any noneconomic damages may be awarded only in an amount directly proportional to the percentage of responsibility of a defendant for the harm to the plaintiff. For purposes of this paragraph, the term noneconomic damages means damages for losses for physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium, hedonic damages, injury to reputation, and any other nonpecuniary losses. (f)

Rule 11 sanctions

Whenever a district court of the United States determines that there has been a violation of rule 11 of the Federal Rules of Civil Procedure in an action under subsection (b), the court shall impose upon the attorney, law firm, or parties that have violated rule 11 or are responsible for the violation, an appropriate sanction, which may include an order to pay the other party or parties for the reasonable expenses incurred as a direct result of the filing of the pleading, motion, or other paper that is the subject of the violation, including a reasonable attorney’s fee. Such sanction shall be sufficient to deter repetition of such conduct or comparable conduct by others similarly situated, and to compensate the party or parties injured by such conduct. (g)

Interlocutory appeal

The United States Court of Appeals for the District of Columbia Circuit shall have jurisdiction of an interlocutory appeal by a covered person taken within 30 days of an order denying a motion to dismiss or a motion for summary judgment based on an assertion of the immunity from suit conferred by subsection (a) or based on an assertion of the exclusion under subsection (h)(1). (h)

Exclusion for regulated activity of manufacturer or distributor

(1)

In general

If an act or omission by a manufacturer or distributor with respect to a covered countermeasure, which act or omission is alleged under subsection (b)(1) to constitute willful misconduct, is subject to regulation by the Clean Air Act, such act or omission shall not constitute willful misconduct for purposes of subsection (b) if— (A)neither the Administrator of the Environmental Protection Agency nor the Attorney General has initiated an enforcement action with respect to such act or omission; or (B)such an enforcement action has been initiated and the action has been terminated or finally resolved without a covered remedy. Any action or proceeding under subsection (b) shall be stayed during the pendency of such an enforcement action.(i)

Actions by and against the United States

Nothing in this section shall be construed to abrogate or limit any right, remedy, or authority that the United States or any agency thereof may possess under any other provision of law or to waive sovereign immunity or to abrogate or limit any defense or protection available to the United States or its agencies, instrumentalities, officers, or employees under any other law, including any provision of chapter 171 of title 28, United States Code (relating to tort claims procedure). (j)

Definitions

In this section, the following definitions apply: (1)

Covered entity

The term covered entity means an entity engaged in the manufacture, sale or distribution of fuel or products which use renewable fuel, as defined by section 211(o)(1) of the Clean Air Act. (2)

Enforcement action

The term enforcement action means a criminal prosecution, an action seeking an injunction, a seizure action, a civil monetary proceeding based on willful misconduct, a mandatory recall of a product because voluntary recall was refused, a proceeding to compel repair or replacement of a product, a debarment proceeding, an investigator disqualification proceeding where an investigator is an employee or agent of the manufacturer. (3)

Covered remedy

The term covered remedy means an outcome— (A)that is a criminal conviction, an injunction, or a condemnation, a civil monetary payment, a debarment; and (B)that results from a final determination by a court or from a final agency action. (4)

Final

The terms final and finally— (A)with respect to a court determination, or to a final resolution of an enforcement action that is a court determination, mean a judgment from which an appeal of right cannot be taken or a voluntary or stipulated dismissal; and (B)with respect to an agency action, or to a final resolution of an enforcement action that is an agency action, mean an order that is not subject to further review within the agency and that has not been reversed, vacated, enjoined, or otherwise nullified by a final court determination or a voluntary or stipulated dismissal. (5)

Willful misconduct

The term willful misconduct— (A)shall not, for purposes of subsection (b), denote an act or omission that is taken pursuant to regulations or guidance promulgated in response to a full or partial waiver of the requirements of the Clean Air Act with respect to ethanol-gasoline blends of more than 10 percent by volume ethanol; but (B)shall, for purposes of subsection (b), denote an act or omission that is taken— (i)intentionally to achieve a wrongful purpose; (ii)knowingly without legal or factual justification; and (iii)in disregard of a known or obvious risk that is so great as to make it highly probable that the harm will outweigh the benefit.