[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 Senate continued with the consideration of the bill.
  The ACTING PRESIDENT pro tempore. Who yields time?
  The Senator from Ohio. The Senator controls 27 minutes.
  Mr. METZENBAUM. Madam President, although I still have fundamental 
problems with the bill offered by the Senator from Kansas, we have 
indeed reached an agreement--in the form of a modification to the 
original bill, S. 1458--that addresses some of the concerns with the 
statute of repose bill.
  For example, I and many of my colleagues feel that the arbitrary cut 
off of 15 years in Senator Kassebaum's original bill is too short. This 
modified bill would extend the statute of repose to 18 years. In my 
view, that is still inadequate because the average age of general 
aviation aircraft is 26 years.
  In addition, I believe that many dangerous, possibly unintended, 
consequences could result from a flat immunity from liability in all 
cases. As the bill of the Senator from Kansas was drafted, the statute 
of repose provision would provide an incentive for aircraft or parts 
manufacturers to misrepresent to the FAA or conceal or withhold from 
the FAA critical information about known defects.
  Because there would be complete immunity from private suits after the 
statutory period, if a manufacturer learned of a defect or other 
problem, it could simply sit on the information and hope that an 
accident does not occur within the timeframe.
  Frankly, in my view, that is not enough. It is not enough that if a 
manufacturer were to engage in such unscrupulous conduct, it would be 
subject to regulatory penalties. History shows that while regulatory 
penalties help, they are quite inadequate as far as deterring 
fraudulent conduct. Private actions are necessary to create truly 
strong incentives for manufacturers to be forthcoming about safety 
information.
  We are talking about the lives of individuals. When you have airplane 
crashes, people lose their lives. Regulatory agencies simply lack the 
resources to ferret out all cases of concealed fraud.
  If private suits are barred, manufacturers would be tempted to 
conceal information concerning defects in the hope that such defects 
would not manifest themselves within the statutory period and 
regulatory agencies usually would have no way of independently 
uncovering concealed information.
  It is unfair to allow manufacturers of general aviation aircraft or 
parts to escape liability for a defect if that manufacturer had 
knowledge or information of the defect that caused the accident in 
advance, yet failed to come forward with the information. I do not 
believe we should grant total immunity to manufacturers for such highly 
egregious conduct, regardless of the age of the aircraft.
  I do not think we should leave victims uncompensated and insulate 
manufacturers where the manufacturer engaged in any kind of intentional 
or truly outrageous fraudulent conduct. The only real form of 
protection that consumers currently have against dangerous aircraft is 
the ability to file a lawsuit against the manufacturer. The threat of a 
product liability suit plays a crucial role in deterring manufacturers 
from marketing defective aircraft. Take away this protection for 
consumers and there will be little incentive for manufacturers to think 
about protecting consumers instead of protecting their balance sheets.
  Now, the modified bill that I have worked out with the distinguished 
Senator from Kansas does not completely address this concern, but I am 
frank to say that we have worked cooperatively and she has made a very 
strong effort, as have I, to bring about the result that we have before 
us today. That result addresses the problem in part by creating a 
limited exception to the statute of repose in some cases in which the 
manufacturer knowingly misrepresented to the Government, or concealed 
or withheld from the Government, information concerning the 
performance, maintenance, or operation of an aircraft.
  This exception contains certain procedural and substantive hurdles 
that will be difficult for victims to overcome in many, if not most, 
cases.
  So this modified bill is a compromise on the issue of fraud. The 
modified bill also partially addresses a concern that innocent victims 
who, unlike pilots, know nothing about the age or condition of the 
aircraft they happen to fly in should not be deprived of just 
compensation for damages suffered as a result of defective aircraft. 
Unfortunately, the bill only addresses this concern with respect to one 
limited category of passengers: Passengers who must be airlifted to 
receive treatment for a medical or other emergency.
  In my view, this is not enough. All passengers who have no basis to 
know or evaluate the condition of the aircraft they ride in--those who 
cannot be presumed to make an informed decision on whether an aircraft 
is safe to fly, or who have no choice but to travel on a particular 
aircraft--these passengers should not be deprived of their legal 
rights.
  Another concern I had with the original bill was that it ignored 
innocent victims on the ground who are injured or killed when a 
defective aircraft crashes, when the plane drops out of the sky, an 
innocent victim is on the ground, not a party to any action at all, and 
suddenly that individual is very seriously injured or loses his or her 
life.
  What if a plane crashes into a school or a residential area? Innocent 
bystanders should not be left uncompensated when they are injured or 
killed by defective aircraft that just fall out of the sky.
  This modified bill remedies that inequity and preserves the legal 
rights of innocent bystanders.
  So this modified bill fills in some of the gaps concerning unintended 
and unfair consequences that would result from Senator Kassebaum's 
original bill.
  This modified bill still is far from being an ideal piece of 
legislation in my view, but it would be an improvement on the original 
Kassebaum bill. I appreciate the Senator from Kansas' responsiveness to 
my concerns and her willingness to make a few modifications to her 
legislation.
  But all things considered, I believe it to be bad legislation and 
hope the House will see fit to make needed changes.
  As a matter of fact, I pose a question to the Chair. Has a rollcall 
been ordered in connection with passage of this measure?
  The ACTING PRESIDENT pro tempore. The yeas and nays have not been 
ordered.
  Mr. METZENBAUM. It is my understanding that the Senator from Kansas 
intends to ask for a rollcall.
  Mrs. KASSEBAUM. Madam President, the Senator from Ohio is correct. 
Perhaps now is the time to ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. METZENBAUM. Under those circumstances, Madam President, I am 
going to vote for it, not because I think it is the right bill, but 
because I think it is just as well to pass it, I assume unanimously, in 
this body, send it over to the House where they can give it more 
attention and look at it more fully than we have on the floor of the 
Senate.
  I still do not believe it to be good legislation. I do indeed hope 
that the House will see fit to provide the necessary protection for 
those who might be adversely affected by the impact of this 
legislation. But notwithstanding that, by reason of the understanding 
and cooperation of the Senator from Kansas, I will not stand in the way 
of its passage and will vote for it with tongue in cheek and with the 
strong hope that the House will do that which the Senate should have 
done.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mr. METZENBAUM. Madam President, how much time does the Senator from 
Ohio have left?
  The ACTING PRESIDENT pro tempore. Eighteen minutes 16 seconds.
  Mr. METZENBAUM. And the Senator from Kansas?
  The ACTING PRESIDENT pro tempore. Seven minutes 30 seconds.
  Mr. METZENBAUM. I yield 10 minutes to the Senator from North Dakota.
  The ACTING PRESIDENT pro tempore. I have recognized Mrs. Kassebaum, 
the Senator from Kansas. Could you perhaps withhold for a moment?
  The Senator from Kansas.
  Mrs. KASSEBAUM. I will be happy to yield. I was going to yield time 
to the Senator from Texas [Mrs. Hutchison] but she is happy to wait. We 
will proceed.
  The ACTING PRESIDENT pro tempore. The Senator from Ohio?
  Mr. METZENBAUM. Madam President, it is my understanding that the 
Senator from North Dakota does not intend to address himself to the 
issues of this bill. So I suggest that the Senator from Kansas proceed, 
and we will conclude our remarks on the bill, and then the Senator from 
North Dakota could proceed.
  The ACTING PRESIDENT pro tempore. The Senator from Kansas.
  Mrs. KASSEBAUM. I yield 3 minutes to the Senator from Texas [Mrs. 
Hutchison], but also to add that Mrs. Hutchison, while being the junior 
Senator from Texas now, was once a very important member of the 
National Transportation Safety Board and knows well the issues 
affecting aviation and the importance of safety.
  The ACTING PRESIDENT pro tempore. The Senator from Texas is 
recognized.
  Mrs. HUTCHISON. Thank you, Madam President. I thank the Senator from 
Ohio and the Senator from North Dakota, and most especially I thank the 
Senator from Kansas for working very hard for this important 
legislation.
  Indeed, I do understand this industry, and I do understand how very 
important it is to America that we have a strong general aviation 
manufacturing base. In fact, the average piston engine aircraft made in 
America is over 28 years old, and one-third of our fleet is 33 years 
old. Yet, U.S. airplane manufacturers still face exorbitant design and 
manufacture product liability costs for these planes. So these 
manufacturers are, in effect, being penalized for having a durable 
product.
  Madam President, I would like to add my support to the General 
Aviation Revitalization Act offered by my distinguished colleague from 
Kansas, Senator Kassebaum. This bill has 50 cosponsors, and I am proud 
to be one of them.
  The concept of this legislation is quite simple: rescue the U.S. 
general aviation industry from the escalating product liability costs--
which are killing what used to be one of the most thriving industries 
in America.
  The average piston-engine aircraft is over 28 years old and one-third 
of the fleet is over 33 years old. Yet U.S. airplane manufacturers 
still face exorbitant design and manufacture product liability costs 
for these planes. In effect, these manufacturers have been penalized 
for the durability of their product.
  A brief review of the statistical history of this industry is 
startling. In 1978, 6,000 American workers were involved in the 
manufacture of 18,000 general aviation airplanes. In 1992, the industry 
manufactured only 900 general aviation aircraft and employed only 1,000 
workers. Over this same period of time, thousands of jobs in aircraft 
sales and service have been lost.
  What happened? the application of strict liability doctrine in 
product liability cases arising out of aircraft accidents. The cost of 
legal claims and defense for light aircraft airframe and component 
manufacturers went from about $24 million in the 1970's to over $200 
million during the 1980's--a seven-fold increase. This cost is directly 
reflected in the price of the product; Beech Aircraft estimates that 
the costs of litigation added $70,000 to the cost of each new aircraft. 
That is more than the market will bear, and the three largest 
manufacturers of piston-engine aircraft virtually have abandoned that 
line of business.
  That is hard on the general aviation manufacturers and their 
employees, but it is also a disaster for the U.S. balance of trade. In 
1978, the light aircraft industry ran a trade surplus of $340 million. 
In 1981, the industry experienced a balance of trade deficit of $200 
million, in 1992 this industry's trade deficit is $800 million. 
American-made general aviation aircraft are of the highest quality in 
the world and the most in-demand, but our manufacturers cannot afford 
to stay in this business to satisfy this demand at home or abroad. So, 
foreign competitors now have the business.
  By enacting the 15 year statute of repose contained in Senator 
Kassebaum's bill, we level the playing field for U.S. manufacturers of 
light airplanes versus their foreign competition--without changing the 
product liability laws related to the rules of evidence, punitive 
damages, standards of care, or comparative fault.
  Let me say, however, that I strongly support pending product 
liability legislation that does address these issues, and I look 
forward to debating that measure on the floor of the Senate at another 
time in the very near future. I have talked to leaders of major 
American corporations which do business all over the world--and they 
say litigation costs are many times higher for the American operations 
than their foreign operations--and this is one more incentive for them 
to move jobs overseas. Senator Kassebaum's bill gives me and the many 
other supporters of broad product liability reform in the Senate much 
hope for restoring rationality to free-wheeling product liability 
litigation.
  Senator Kassebaum's bill will create thousands of new high-paying 
private sector jobs in general aviation, the kind of jobs for which the 
members of our armed services who are transitioning out of active duty 
are highly qualified. These jobs do not come with a Federal price tag, 
and they do not require the involvement of a Federal agency. They are 
generated by giving this important industry only what it needs--relief 
from litigation.
  In its recent report, the National Commission to Ensure a Strong 
Competitive Airline Industry strongly supported this measure, and 
called it an important jobs and international competitiveness issue. 
Senator Kassebaum's amendment also has the support of labor and every 
aviation consumer group. I join my colleagues, the aviation industry, 
its workers, and consumers in calling for passage of this important 
measure--and I commend my colleague for working very hard to keep this 
bill alive and pushing for its passage. It has been a struggle and she 
has done a commendable job.
  Thank you, Madam President.
  Madam President, let me reiterate that in 1978, 6,000 American 
workers were involved in the manufacture of 18,000 general aviation 
airplanes. In 1992, however, Madam President, this industry only made 
900 general aviation aircraft and employed only 1,000 workers. What 
happened? The strict liability doctrine in product liability cases that 
can go on for years and years and years has crippled this very 
important industry for America. In fact, Beech Aircraft estimates that 
the cost of litigation has added $700,000 to the cost of each new 
aircraft. This bill will help that situation.
  We have seen the U.S. balance of trade from 1978, when the light 
aircraft industry ran a trade surplus of $340 million for our country, 
to 1981 when the industry experienced a balance of trade deficit of 
$200 million, and in 1992, Madam President, this industry's trade 
deficit was $800 million.
  By enacting this 15-year statute of repose that Senator Kassebaum has 
put forward, we are going to level the playing field between U.S. 
manufacturers of light aircraft planes versus our foreign competition. 
Senator Kassebaum's bill will create thousands of new private sector 
jobs, not with Government programs, not with taxpayer dollars, but by 
relief from litigation.
  Madam President, I have talked to several leaders of companies that 
do worldwide business. They tell me that litigation is so much more a 
problem in America than anywhere else they do business. It is an issue 
we are going to have to address in all industries. But today we are 
going to be able to take one very small step toward helping the general 
aviation manufacturing business, and I hope it is a step that we can 
take toward really reforming all of the product liability laws for the 
future of our country.
  I want to commend the Senator from Kansas for working very hard in 
keeping this bill alive.
  I yield the floor, Madam President.
  Thank you very much.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mr. METZENBAUM. Madam President, I yield the remainder of time the 
Senator from Ohio has but not to go beyond 10 o'clock, it being my 
understanding that there is a general agreement that there will be a 
vote at 10 o'clock. In fact, I ask unanimous consent that the vote be 
ordered at 10 o'clock.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Mrs. KASSEBAUM. Madam President, reserving the right to object, I 
will not, but just to clarify, we have 7 more minutes on this side. I 
have a few more minutes that I would like to use, and there are others 
who would like to speak or said they would like to speak. How will this 
interact with supposedly a vote at 10?
  The ACTING PRESIDENT pro tempore. The Senator still has 4 minutes of 
her time, if she wishes to use those minutes.
  Mrs. KASSEBAUM. If we go back to morning business time, will we have 
time past 10 o'clock? That is my question.
  Mr. METZENBAUM. Madam President, I withdraw my request and would like 
to suggest that the Senator from Kansas go forward and use her 4 
minutes, and then we yield the remainder of the time to Senator Dorgan, 
who wishes to speak on another subject.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Mrs. KASSEBAUM. I thank the Senator from Ohio, Madam President.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The Senator from Kansas.
  Mrs. KASSEBAUM. Madam President, I would like to make a few 
additional comments, one being in response to the Senator from Ohio 
[Mr. Metzenbaum] saying he hopes that when this comes to the House of 
Representatives more attention could be focused on the general aviation 
product liability bill and ways that perhaps it could be further 
amended.
  I would just like to suggest that the 15-year statute of repose which 
was introduced last fall represented only about 20 percent of the 
general aviation product liability legislation that I originally 
introduced in 1986.
  We have already compromised and moved along. We have gone through a 
number of changes, and I have been very appreciative of Senator 
Metzenbaum's efforts to help work out some compromises. But we had 
numerous hearings in the Commerce Committee, and it has been reported 
out three times over the years. It has also been reported out of the 
Judiciary Committee.
  So it is my hope that this latest compromise will be the last and 
that the bill will pass in the House of Representatives. I have great 
confidence that it will since there are 275 cosponsors now over in the 
House of Representatives. If further modifications are made, we will 
remove all the teeth that we have believed were important to revitalize 
the general aviation industry.
  I also want to express my particular appreciation to Ed Bolen of my 
staff; Guy Clough, Tiger Joyce, and Alan Maness with the Commerce 
Committee; Chris Paul and Brad Belt with Senator McCain; Gene Kimmelman 
with Senator Metzenbaum, Brett Francis with Senator Hatch; and Greg 
Schacke with Senator Dole.
  I yield the floor, and I yield my remaining time to the Senator from 
Montana.
  Mr. BURNS. I thank my friend from Kansas.
  Madam President, I rise today to voice my support for one of the most 
important issues facing our aviation industry, product liability 
reform. The general aviation community in the United States is 
struggling, and for years Washington has ignored the needs of this 
vital link in our Nation's transportation infrastructure.
  Just over a decade ago, U.S. manufacturers were the world leaders in 
general aviation--selling an average of 13,000 light airplanes per 
year. Today, annual sales have decreased to barely 500, and tens of 
thousands of workers have lost their jobs. This decline is the result 
of laws which hold manufacturers liable for planes that were built 
years, even decades ago.
  Even though the industry's safety record has improved steadily for 
four decades and all aircraft must meet the certification standards of 
the Federal Aviation Administration, product liability costs for 
airplane builders have soared in recent years--jumping from $24 million 
in 1977 to $210 million in less than a decade.
  Today, the typical domestic plane manufacturer faces product 
liability costs that are 20 to 50 times higher than its foreign 
competitors. This additional cost demands that the manufacturers 
increase their prices, and consequently, manufacturers lose market 
shares to foreign competition and lay off American workers. This is a 
competitiveness issue and a jobs issue.
  I support Senator Kassebaum in her efforts to revitalize the all-but-
dead general aviation industry in the United States, and I am an 
original cosponsor of her legislation to amend the Federal Aviation Act 
of 1958 to impose an 18-year statute of repose to block product 
liability suits in cases involving most existing general aviation 
aircraft. Such suits would be prohibited if an accident occurred more 
than 18 years after the aircraft was manufactured.
  U.S. airplane manufacturers should not be held responsible, 
indefinitely, for products that are operated, repaired, serviced, and 
modified by others. The absence of reform in this area is just another 
glaring example of who is running the show in Washington: lawyers. 
They, and the frivolous lawsuits that have made them rich, are hurting 
people like you and me. I want changes in these laws that are good for 
those of us who have to travel across long distances to conduct our 
business. The aviation industry needs our help, and I am pleased to see 
the time has come for these important changes.
  Madam President, I want to congratulate the Senator from Kansas, who 
has been on this issue ever since I came to the U.S. Senate. She is a 
great champion of it. When you look at where our aircraft manufacturing 
industry has gone in the last 10 years, it does not take a rocket 
scientist to figure out that we have a problem and this is one of the 
problem areas.
  Domestic plane manufacturers face product liability costs that are 20 
to 50 times higher than our foreign competitors'. If you want to call 
this bill, S. 4, that we have been talking about, a competitiveness 
issue, this really is. The additional cost demands that manufacturers 
increase their prices, and consequently, manufacturers lose market 
shares to foreign competition and lay off American workers; this is 
really a competitiveness and jobs issue.
  I want to remind the American people how important this is. We can 
draw two conclusions about not only airplane liability and 
manufacturers' liability, but also the quality of work of the American 
worker, because we have lost some awfully good friends to foreign 
aircraft in the last 2 years--and I mean close friends. One is a very 
close friend to the Senator from Kansas. So this is how important this 
issue really is when you boil it down to: Can we make airplanes, and do 
we have the ability to market those airplanes in a world that is very 
competitive?
  I thank the Chair, and I yield the floor.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mr. DORGAN. Madam President, it is my understanding that the Senator 
from Ohio had indicated to the Chair, previous to recognizing the 
Senator from Kansas, that I was allowed to speak as in morning 
business.
  The ACTING PRESIDENT pro tempore. The Senator is recognized.

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