[Congressional Record Volume 140, Number 29 (Wednesday, March 16, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 16, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
              GENERAL AVIATION REVITALIZATION ACT OF 1994

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will now proceed to the consideration of S. 1458, which the 
clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 1458) to amend the Federal Aviation Act of 1958 
     to establish time limitations on certain civil actions 
     against aircraft manufacturers, and for other purposes.

  The Senate proceeded to consider the bill.
  The ACTING PRESIDENT pro tempore. There will be 60 minutes of debate, 
with the time to be equally divided between Senators Kassebaum and 
Metzenbaum.
  Who yields time?
  Mrs. KASSEBAUM addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Senator from Kansas.
  Mrs. KASSEBAUM. Madam President, I first wish to express appreciation 
to some of my colleagues who have been involved in this discussion on 
general aviation product liability for some time. Certainly, there are 
many, and I do not want to leave anyone off the list, but just to 
express appreciation to a few.
  One is certainly the Republican leader and the Senator from Kansas 
[Mr. Dole]. But, also, I express appreciation to a number of Senators 
who, for a number of years, have spoken to this issue with great 
compassion and great concern about it. They are Senators McCain, 
Gorton, Danforth, Hatch, Murkowski, Pressler, Inouye, Glenn, 
Rockefeller, and others who have cared a great deal about this issue. 
But one in particular is a former colleague and pilot extraordinaire, 
Jake Garn. It was his wish that we would pass this before he retired 
from the Senate. Now this will come to fruition, and I hope brighten 
his flying days.
  There were a number of questions asked about this issue, and I wish 
to respond to just a few. One of them is why is this important? General 
aviation is the backbone of our aviation industry. Approximately 80 
percent of all airplanes in the United States are general aviation 
planes, and more than 5,000 airports and communities they serve rely 
exclusively on general aviation for air transportation.
  General aviation aircraft are the small airplanes that are used by 
flight training schools, by local flying clubs, by agricultural pilots, 
and by recreational pilots. In most cases, these users cannot afford 
the substantial price increases that have occurred since the middle 
1980's, largely due to the effects of the product liability costs.
  The National Transportation Safety Board investigates all general 
aviation accidents. Some have asked why we can be so sure that there 
are precautions that are being taken that will ensure safety in the 
industry, and by providing now an 18-year statute of repose are we 
disregarding safety precautions?
  I just would like to go through that a minute, because if the NTSB 
determines that the accident was caused by design or manufacturing 
defects, the NTSB will make an emergency recommendation to the FAA, the 
Federal Aviation Authority, that an airworthiness directive must be 
issued. An airworthiness directive requires that a plane be modified to 
make it safe before it can be flown.
  If a manufacturer discovers a possible problem with any of its planes 
it is required by law to send out a service bulletin to owners, 
explaining what the problem is and how it should be remedied. In 
addition, that information is sent to the FAA, which will determine 
whether or not to issue an airworthiness directive.
  By way of background, a service bulletin is sent by the manufacturer 
to the owner and it states what should voluntarily be done to make the 
plane safe. An airworthiness directive is sent by the FAA to the owner, 
and it states what must be done to make the plane safe. Planes which do 
not charge per flight are required to undergo an annual inspection. 
Maintenance must be done by a FAA-certified mechanic, and then it must 
be inspected by an FAA-certified inspector. Planes which sell tickets 
must be inspected after every 100 hours of use.
  Madam President, this is just to show that there is a precaution 
every step of the way in the manufacture and maintenance of the plane. 
If there is a manufacturing defect, manufacturers should be held 
responsible; if not, we should be able to resolve this in a way that 
will put the light plane industry back on its feet.
  I also express appreciation to the chairman of the Commerce 
Committee, the Senator from South Carolina [Mr. Hollings]. While he has 
not supported this legislation, he has, as well as the Senator from 
Kentucky [Mr. Ford] been responsible for helping us at least report it 
out of the Commerce Committee, and I am appreciative of that.
  I also say to Senator Metzenbaum of Ohio that I appreciated his 
efforts in helping us work out some language that, while he does not 
support it, has made it agreeable on both sides and helped us reach 
this point after almost 10 years of discussion, and I am very 
appreciative.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mr. GORTON. Madam President, will the Senator yield?
  Mrs. KASSEBAUM. I am happy to yield a few minutes to the Senator from 
Washington.
  The ACTING PRESIDENT pro tempore. The Senator from Washington is 
recognized.
  Mr. GORTON. Madam President, before the morning is out, this 
proposal, S. 1458, will have been adopted by the Senate by a vote which 
this Senator suspects will be overwhelming. It will be a first and 
dramatic step toward reforming the product liability laws of the United 
States.
  The specific subject of this legislation offers perhaps the most 
dramatic single illustration of the adverse impact of product liability 
litigation on a particular and important American business and set of 
manufacturing entities, any of which are covered by product liability 
legislation. The general aviation industry in the United States has 
effectively been destroyed over the course of the last two decades by 
product liability litigation.
  In the case of the Beech Aircraft Co., which kept a tally for 3 or 4 
years of litigation involving its products, it found itself involved in 
203 lawsuits, in every one of which the National Transportation Safety 
Board found that the cause of the accident was something other than a 
design or manufacturing error. But the average of those 203 cases cost 
that company over a half a million dollars to defend.
  This crushing burden has driven at least one major general aviation 
manufacturer out of the piston aircraft business entirely and has 
literally decimated the business of others. It is to the good of no 
one. It has cost jobs. It has cost American competitiveness. It has 
cost those who wish to purchase new aircraft the degree of choice which 
they have had in the past.
  Finally, after more than 10 years of effort, the Senate of the United 
States is about to do something to restore that industry in a manner 
which is fair, not only to the manufacturers and to their employees, 
not only to the pilots who will fly these new aircraft, but to the 
entire population of the United States.
  The distinguished junior Senator from Kansas has a high degree of 
hope that this bill will then pass the House of Representatives and 
become law. It will, if it becomes law, become a striking testament to 
the ability of the Congress of United States to do something finally 
for American manufacturing and American competitiveness.
  But its passage will be a tribute most particularly to the 
persistence of my friend and colleague, the junior Senator from Kansas 
[Mrs. Kassebaum] who has had this as a cause which has motivated and 
driven her for longer than this Senator has been a Member of the U.S. 
Senate. That persistence, that drive, that devotion to her cause is 
about to be rewarded, and I think the Nation will owe a great debt of 
gratitude to the junior Senator from Kansas when S. 1458 becomes the 
law of the land.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mrs. KASSEBAUM. Madam President, I yield 5 minutes, or whatever time 
he would like, to the Senator from Arizona.
  The ACTING PRESIDENT pro tempore. The Senator from Arizona is 
recognized.
  Mr. McCAIN. Thank you, Madam President.
  I would also like to begin by adding my words of praise to the 
Senator from Kansas [Mrs. Kassebaum] who has fought this issue for 10 
years. Time after time, she has attempted to get a vote on this issue. 
It was clear to all of us that, if we could have gotten it for a vote 
on the floor of the Senate, it would have been overwhelmingly 
supported, as it will a short time from now.
  I remind my colleagues that we still have a major hurdle to overcome 
in the form of getting this legislation up for a vote in the other 
body. I am told that there are 255 cosponsors of legislation which is 
almost exactly this in the other body. So we have reason to have some 
confidence, but at the same time we must see it through and hopefully 
that will happen in the next few weeks.
  I do not think there is any doubt that without the tenacity and hard 
work of Senator Kassebaum, we would not be where we are today. I want 
to thank her not only on behalf of her colleagues here in the Senate, 
but for providing the opportunity for thousands of young men and women 
who will, as a result of this legislation, be able to find jobs in the 
industry, thousands of young men and women throughout the Nation who 
will have the opportunity again to learn to fly at reasonable costs, 
because the cost of general aviation has literally gone out of sight in 
the past 15 to 20 years as a result of product liability costs; and, 
frankly, for the ability to restore jobs.
  I would like to thank Mrs. Kassebaum for restoring an industry to the 
United States of America which generally overwhelmingly had fled 
overseas. All of these will be very beneficial and nearly immediate 
results of the passage of this legislation.
  As we know, an estimated 100,000 jobs have been lost. While demand 
for these products remains high, most production has moved overseas to 
foreign competitors.
  Madam President, I think it is well to review that 93 percent of all 
light aircraft accidents are pilot error, 99 percent of aircraft 
accidents have nothing to do with manufacturing defects, and less than 
one-half of 1 percent of the accidents are related to manufacturers' 
design or poor repairs. In every case, plaintiff's attorney claimed 
that a crash was the fault of the manufacturer.

  Beech Aircraft analyzed more than 200 crashes that had occurred in 
the mid-1980's. In every case, Federal investigators blamed weather, 
faulty maintenance, and air-control errors. In not a single case was 
Beech's design or manufacturing identified as the cause of the crash--
however, suits cost Beech an average of $550,000 apiece.
  From 1978 to 1992, American general aviation manufacturers spent as 
much to defend product liability suits as they had spent for the prior 
30 years in developing new aircraft.
  Some have suggested that product liability laws are the reason for 
general aviation's improving safety record. I do not believe that is an 
adequate representation of the facts. The facts are aircraft operations 
and pilot training are federally regulated, and pilot training 
practices and standards have been continually improved for over 40 
years; many general aviation airports were paved and lighted for the 
first time; many airports have added instrument approach procedures; 
and a record proportion of active pilots hold instrument ratings. 
Because of these factors, I believe general aviation attained a record 
low number of accidents in 1993.
  I would just like to also pay tribute in this process to the 
President's National Airline Commission to Ensure a Strong Competitive 
Airline Industry, which played, I believe, a key and vital role in 
bringing greater visibility to this issue.
  As we all know, this Commission strongly recommended this kind of 
legislation. They believed that it was a principal way to revitalize 
our ailing aviation industry and create jobs immediately. This 26-
member, bipartisan Commission consisted of appointees of the President 
and leadership of the House and Senate. They made a number of 
recommendations. The chairman, Gov. Gerald Baliles, told me that no 
other recommendation received stronger support from the Commission than 
the emphatic unanimous decision to reform aviation product liability.
  This recommendation was supported by numerous labor groups, most 
notably by the International Association of Machinists.
  However, this legislation is strongly supported by the aircraft 
manufacturers, and they will back their words with actions.
  Madam President, I think we are at a watershed point here in the 
future of general aviation in America. I believe that we can look 
forward with some optimism to the restoration of 100,000 jobs, 
recapturing the market for general aviation, which has been taken 
overseas, and to a more fair and level playing field for those 
Americans who need to bring suit in case of product liability.
  Again, I thank the Senator from Kansas [Mrs. Kassebaum] for her long 
dedicated effort on what now appears to be the dawning of a new day for 
general aviation.
  I yield back the remainder of my time.
  Mrs. KASSEBAUM. Madam President, I would just like to express my 
appreciation to the Senator from Arizona [Mr. McCain] who has been 
stalwart in his efforts on this issue. It has meant a great deal to 
him. He has been a distinguished pilot and he knows very well how 
important this is to aviation in general and to certainly pilots in 
particular. I am very appreciative.
  Madam President, I could talk further, but I do not want to use up 
more time because I know there are others who wish to speak.
  I suggest the absence of a quorum, and ask unanimous consent that the 
time be equally divided against both sides.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The absence of a quorum has been suggested. The clerk will call the 
roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. PRESSLER. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered. Who yields time?
  Mrs. KASSEBAUM. Madam President, I yield the Senator from South 
Dakota 3 minutes.
  The ACTING PRESIDENT pro tempore. Without objection, the Senator from 
South Dakota is recognized for 3 minutes.
  Mr. PRESSLER. Madam President, I rise today in strong support of 
Senator Kassebaum's general aviation reform bill, as modified. Senator 
Kassebaum has long been a champion of this necessary liability reform 
and I commend her for her tenacious efforts.
  I believe this will be the first piece of tort reform legislation to 
pass the Senate since I was elected to serve in this body in 1979, even 
though this issue has been debated for many years. I want to 
congratulate Senator Kassebaum. It has been a long fight.
  Yesterday, in the Judiciary Committee, we held a hearing on the 
general issue of product liability reform. This is a very tricky issue. 
We must protect the ability of the little guy to be able to hire a law 
firm on a contingency basis and sue the big guy, otherwise the little 
guy will not have a chance. At the same time, we must ensure that all 
of our products and services are not being priced out of the market.
  The point is, under this piece of legislation the little guy can 
still sue when it is appropriate. We must always protect the right of 
people to receive justice under our legal system. On the other hand, I 
believe things have gone too far in one direction. Today, products and 
goods have become prohibitively expensive as a result of the high cost 
of liability insurance.
  Today, we are building only a very limited number of general aviation 
aircraft in this country because of our product liability rules and 
laws. As a result, our foreign competitors are reaping the benefits.
  For example, recently I rode from Denver, CO, to Rapid City, SD, in a 
plane produced in Brazil called the Brasilia. The owners told me they 
can buy smaller aircraft such as the Brasilia at a less costly price 
abroad than similar aircraft could be purchased from our own 
manufacturers here in the United States. We can no longer ignore the 
liability laws that are forcing our general aviation industry into 
extinction.
  As ranking member of the Senate Aviation Subcommittee, I am well 
aware of the important role the general aviation industry plays in our 
Nation's air transportation system. General aviation aircraft allows 
smaller cities and rural areas across the Nation to receive needed air 
service. For example, in rural States like South Dakota, many of us 
rely on general aviation aircraft to travel from one city or town to 
another. In short, our general aviation industry enables more isolated 
areas to be linked to the rest of the world.
  Despite the continuing demand for general aviation aircraft, a once 
prosperous domestic industry has experienced a dramatic decline in 
production since 1978 when 17,000 piston-engine aircraft were produced. 
Last year, only 555 of these aircraft were manufactured. Why?
  This drastic decrease in production is due largely to our laws which 
allow the doctrine of strict liability to be applied in product 
liability cases. Current product liability law allows manufacturers to 
be held liable for defective design or manufacture decades after the 
aircraft is produced. Given the fact that the average piston-engine 
airplane is over 28 years old and that one-third of the fleet is over 
33 years old, manufacturers continue to be susceptible to a lawsuit for 
an inordinate amount of time.
  This long tail of current liability law allows manufacturers to be 
sued for defective design or manufacture decades after the aircraft was 
built. Such liability exposure has imposed prohibitively high insurance 
and legal costs, regardless of fault. As a result, general aviation 
companies have stopped making all but a few twin engine and virtually 
no single engine aircraft.
  The problem of legal liability cannot be solved by simply 
discontinuing production of light aircraft. In my judgment, legislation 
to bring under control the legal burden on aviation manufacturers must 
be enacted. We have the opportunity to approve such legislation today.
  As the primary sponsor of the legislation explained, this is a 
modified bill. It would limit the liability of general aviation 
manufacturers to 18 years from the date of manufacture, except on those 
parts of the plane that are replaced. In addition, provisions have been 
incorporated that would provide exemptions to the statute's application 
under certain limited conditions, such as failure by the manufacturer 
to be forthright with the FAA during the certification process. I 
believe even with the exemptions, the overall goal of this liability 
reform initiative is reached. That is, to give those negligently 
injured by an airplane manufacturer legal recourse commensurate with a 
level more appropriate to the industry.
  This issue, quite simply, is about jobs. In fact, Russ Meyer, 
President of Cessna Aircraft, testified before the Senate Aviation 
Subcommittee on October 27, 1993, that his company will immediately 
restart production of piston-engine aircraft should this legislation 
become law. Furthermore, he stated that ``within 5 years, more than 
25,000 jobs would be created at no cost to the Government.'' In 
addition, the International Association of Machinists strongly supports 
this legislation.
  Some believe that we should wait for the Clinton administration's 
promised review of tort reform before acting on this initiative. I 
disagree. In fact, the President's own Airline Commission strongly 
supports general aviation liability reform. In response to the 
administration's proposal to study the issue, the Commission stated in 
a November 2, 1993 letter to Department of Transportation Secretary 
Federico Pena, the following:

       It is clear that this once competitive sector of our 
     manufacturing industry cannot be revived unless this step is 
     taken. This is one of the most important jobs and 
     international competitiveness issues in our report. It is a 
     limited and targeted response to a demonstrated problem.

  The Commission added, ``This time is right, right now.''
  I urge my colleagues to take this opportunity to breathe new life 
into a once strong, vibrant industry. This is an industry that has lost 
100,000 jobs in little over a decade and whose product, while produced 
in the thousands by foreign competitors, has ceased to be made in the 
country which is the birthplace of flight and the stronghold of the 
international aviation industry.
  I urge my colleagues to support the bill.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mrs. KASSEBAUM. Madam President, I suggest the absence of a quorum, 
the time to be equally divided.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. PRESSLER. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. PRESSLER. Madam President, I ask unanimous consent to proceed as 
if in morning business until any Senator arrives who wishes to speak on 
the general aviation liability reform bill.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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