[Congressional Record Volume 140, Number 6 (Tuesday, February 1, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: February 1, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
    PRODUCT LIABILITY REFORM SHOULD NOT INCLUDE FDA AND FAA DEFENSE

   Mr. DORGAN. Mr. President, last fall the Senate Committee on 
Commerce, Science, and Transportation reported legislation that would 
reform tort laws on the Federal level and make rule changes that relate 
to product liability cases. I voted to report this legislation, S. 687, 
the Product Liability Fairness Act, out of the Commerce Committee. 
However, I did so with serious reservations about two provisions in 
it's current form.
  I believe that some kind of reform with respect to product liability 
cases is necessary and I am willing to support Federal action in this 
area. I share the concerns that many small businesses have with the 
current system. Small businesses are asking for some sort of attention 
to product liability issues and I want to respond to those concerns. I 
am sympathetic to those who say that fear of liability inhibits their 
ability to conduct their business and create jobs and I hope the 
Congress will pass legislation to address these concerns.
  However, I have very serious reservations about provisions in S. 687 
which would provide certain manufacturers with a defense against any 
punitive damages if their product has received Food and Drug 
Administration [FDA] approval or Federal Aviation Administration [FAA] 
certification. It seems to me that the Congress would be making a grave 
error if we gave large pharmaceutical companies and aircraft 
manufacturers a clear defense against punitive damages and expect that 
the FDA and the FAA can provide absolute and perfect protection to 
consumers. It is unacceptable to consumers, especially to those 
concerned with women's health and the safety of aircraft, to seriously 
weaken their rights to challenge manufacturers who market defective 
products. Punitive damages serve as a necessary check when Federal 
agencies fail. My conscience cannot accept this provision in the bill 
and I cannot support this legislation if this provision remains in the 
bill.
  Although punitive damages are rare, they are very necessary when 
imposed. The bill in its present form would protect manufacturers from 
punitive damage exposure if their product is approved by the FDA or the 
FAA. The fact is that punitive damages are not a problem in the present 
tort system. The problem that needs to be addressed is that there are 
too many frivolous cases filed and settled simply to avoid a nuisance 
rather than resolve whether or not there was fault on the part of a 
manufacturer. The nuisance problem is draining resources and burdening 
small businesses. I want to address this problem and I believe other 
provisions in the bill address this issue. But the FDA and FAA 
provisions have no relation to the product liability that need to be 
addressed. Rather, they raise serious concerns about the ability of 
consumers to rectify unjustifiable behavior by a manufacturer.
  Punitive damages are imposed in cases where there is a need to punish 
and deter manufacturers whose fault is conscious or reckless. Punitive 
damages are necessary to impose a threat on manufacturers whose 
negligence or disregard for safety are almost criminal. These awards 
are intended to force dangerous products either off the market or 
require manufacturers to redesign bad products. By eliminating the 
exposure to punitive damages for certain classes of products as the 
bill provides, a critical regulating device which has been used to get 
bad products off the market would be diminished.
  At issue with this provision is not a matter of individual 
compensation for simple negligence. Rather, a broader social objective 
is at stake where the tort system plays a necessary role to hold 
manufacturers and Federal agencies in check. The FDA and FAA provisions 
in S. 687 provide protection to manufacturers in the kinds of cases 
where it is in the best interest of the public to fight for consumer 
protection. Examples of where the FDA and the FAA have failed to remove 
dangerous products are legion. If companies are given a defense from 
punitive damages because a Federal agency provides marketing approval, 
we are throwing public health concerns with respect to drugs, medical 
products, and aircraft manufacturing to the wind.
  It would be naive of the Congress to believe that any government 
regulatory agency or system could prevent, stop, or control, the 
marketing of harmful products. As best, Government safety standards 
establish minimum levels of protection for the public. The FDA and the 
FAA have been slow to act in the face of evidence of harm and have 
failed to catch dangers in the marketplace in the past. Certainly, 
similar failures will happen in the future, especially if these 
agencies are not given increased resources and enhanced authority to 
monitor product safety. Even if the FDA and the FAA were dramatically 
improved, there will be cases where harmful products are approved and 
negligent behavior on the part of manufacturers will be the cause.
  Examples of cases where the FDA has permitted a manufacturer to 
knowingly market a dangerous drug or medical device are many. Between 
1981 and 1986 the FDA permitted the sale of the Bjork-Shiley heart 
valve even though both the FDA and the manufacturer of the valve had 
evidence of strut fractures that led to the death of many patients. An 
estimated 6 million women took DES, with FDA approval, despite evidence 
that it caused serious reproductive harm in the offspring of women who 
had taken it. Most of us are aware of the problems caused by the 
Copper-7 IUD's, silicone breast implants, and Accutaine--all FDA 
sanctioned products which were not only harmful to the public but are 
cases in which the FDA had knowledge of the products dangers.
  The FAA certification protection for manufacturers raises similar 
concerns. A recent study by the General Accounting Office was very 
critical of the FAA's certification process and found that the FAA has 
delegated so much of its responsibilities for certification that it has 
``lost its ability to effectively oversee or add value to the 
certification process as well as understand new technologies.'' If the 
FAA has such serious weaknesses with its certification process, why 
should it be used as a protection by a manufacturer?
  I understand that the FDA and FAA defense provisions include a clause 
which would eliminate the defense if the manufacturer received product 
approval through fraud or has not complied with information sharing 
requirements to the appropriate agency. However, this ``escape clause'' 
is far from adequate and does not change the fact that the actual 
impact of these provisions will mean simply that negligent 
manufacturers will have more protection in the lawsuit and in turn a 
substantially larger burden will be placed on the consumer. The burden 
is placed on the injured individual to prove what is required to be 
submitted to the agency, and what information is relevant and material. 
The FDA and the FAA are not adequately equipped to take on the 
additional and judicial functions of determining when corporations will 
be liable for punitive damages. In the last analysis, the consumer will 
bear the burden and responsibility to prove that a company defrauded a 
Federal agency with a product before they even have the opportunity to 
pursue punitive damages. Why is it that in cases where a company may be 
guilty of near criminal behavior with respect to showing blatant 
disregard for public safety, we would want to favor tort rules to 
benefit the manufacturer and make it substantially more difficult for 
the consumer.
  If the FDA and FAA provisions remain in S. 687, I cannot support the 
bill. As I mentioned above, I want to support some sort of product 
liability reform. That is why I voted favorably to report this 
legislation from the Commerce Committee. But the FDA and FAA provisions 
in the bill do not address the liability concerns of small businesses. 
The major beneficiary of these provisions is the large pharmaceutical 
companies that want to be protected from liability if they show 
disregard for public health. It is my hope that the bill sponsors will 
realize the danger these provisions cause to public health and remove 
them from the legislation. If that is done, I believe that S. 687 will 
be a bill that those of us who want to support product liability reform 
which benefits small businesses will be able to support.
  I urge my colleagues to fight for a product liability bill that helps 
small businesses and is not hostile to consumer interests. Such 
legislation can be crafted and I hope to work with the sponsors of S. 
687 to achieve this goal.

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