[Congressional Record Volume 140, Number 84 (Tuesday, June 28, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 28, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                     PRODUCT LIABILITY FAIRNESS ACT

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will now resume consideration of S. 687, the Product Liability 
Fairness Act, which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 687) to regulate interstate commerce by 
     providing for a uniform product liability law, and for other 
     purposes.

  The Senate resumed consideration of the bill. 
       Pending:
       Kohl/Cohen/Murray amendment No. 1930, to instruct courts to 
     balance the public interest in health and safety against any 
     need for privacy before allowing for secrecy in civil 
     litigation, and bans court orders and agreements that would 
     prohibit parties from sharing litigation information with 
     Federal and State regulators.

  The ACTING PRESIDENT pro tempore. Under the previous order, the time 
until 10 a.m. will be for debate on the Kohl amendment, No. 1930, with 
the time equally divided in the usual form.
  Mr. GORTON. Mr. President, I suggest the absence of a quorum, time to 
be divided evenly between the two sides.
  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. ROCKEFELLER. Mr. 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order for the quorum call be rescinded.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. ROCKEFELLER. Mr. President, I have no particular announcements to 
make but I am very much aware that Senator Herb Kohl from Wisconsin has 
an amendment that he wished to discuss this morning. The time will be 
equally divided and I would just simply say to him or to others who 
might have amendments, it is very important they be here very quickly 
because we are going to vote at 10 o'clock. I ask the time I have just 
used be charged in the appropriate manner.
  I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. ROCKEFELLER. Mr. 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. ROCKEFELLER. Mr. President, in my previous remarks, I should have 
said that the remarks that I have made should be charged equally as to 
both sides, and that is within the quorum call.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. ROCKEFELLER. I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The quorum call will be equally 
charged. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. ROCKEFELLER. Mr. 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. ROCKEFELLER. Mr. President, as I listened to the arguments made 
during the course of yesterday by the opponents of this legislation, I 
think I was most surprised by the adamant view that the product 
liability system is working just fine and just dandy in its current 
form. Those of us who have worked hard on this legislation have tried 
to lay out every possible piece of evidence, testimony, and fact that 
we believe shows clearly and convincingly that the status quo of the 
current system of product liability is in dire need of reform and 
repair.
  Let me share with my colleagues some examples of what West Virginia 
business leaders tell me about the need for product liability reform.
  For these businesses, product liability reform is about jobs--and 
that is crucial for West Virginia. To give you some perspective in May, 
West Virginia's unemployment rate was 8.9 percent--that was a drop of 
three-tenths of 1 percent and good news for my State. But when 
unemployment is at almost 9 percent, protecting every job possible and 
creating new ones is a real priority.
  One business in my State employs 150 people, and has a worldwide 
market. It's a family business, and when the current company owner 
first started to run the business over 25 years ago, the firm's 
liability insurance was $4,000 a year. Now the cost has skyrocketed to 
$500,000 a year. Liability insurance accounts for one-sixth to one-
eighth of all payroll costs. Because this owner is so threatened by 
liability costs, I've been asked not to name the town or products, but 
in the trial outcomes over the history of this firm, the court has yet 
to find any of their products at fault. The products are built to 
safety specification, yet their liability costs still soared.
  Is this a balanced and fair system?
  Another example comes from Princeton, WV. Mr. Don Downard is 
president of Downard Hydraulics. He has been in the hydraulics business 
about 30 years, and has owned his company since 1975. Downard 
Hydraulics employs 85 people to manufacture and rebuild hydraulic and 
mining components for the coal industry.
  Mr. Downard says that his product liability costs are so high that 
equipment remains idle, and he simply cannot afford to expand his 
business or enter new markets with other product because of liability 
concerns--which means he won't be creating new jobs that are 
desperately needed in southern West Virginia.
  Is this a balanced and fair system?
  Let me tell you about J.H. Fletcher & Co. of Huntington, WV. This 
firm manufactures mining equipment, and employs 159 people and has 34 
shareholders. Because J.H. Fletcher & Co. is a profit-sharing company 
and the costs of product liability litigation are withheld from the 
paychecks of each shareholder and employee. So far this year, an 
average of $6,000 has been deducted from each person. The company 
treasurer, Phil Cline says: ``These costs are tremendous and undermine 
the very work ethic that our system has promoted.'' Mr. Cline also 
notes they are required to employ lawyers in almost every State where 
they have sales because of the current patchwork of product liability 
laws.
  Each of these business leaders makes valid points about the need for 
balance and reform of our current product liability system.
  My colleagues need to understand that there are real costs in 
maintaining the status quo--jobs aren't created, new products aren't 
brought to market, and workers ultimately pay the costs.
  Mr. KOHL. Mr. President, we will vote on a bipartisan amendment that 
I introduced yesterday with Senator Cohen and Senator Murray. As a 
supporter of S. 687 who will definitely vote for the bill, let me say 
to my colleagues that this amendment gives balance to--and is 
completely consistent with--the product liability bill. Let me make it 
perfectly clear: Our amendment does not kill S. 687 in anyway; it makes 
S. 687 better.
  The vote on our amendment will determine whether this body takes 
seriously its responsibility to protect public health and safety--by 
addressing the troubling problem of court secrecy.
  The problem is this: Far too often, the court system allows vital 
information that is discovered in litigation--and which directly bears 
on public health and safety--to be covered up: to be shielded from 
families whose lives are potentially at stake, and from the public 
officials we have appointed to protect our health and safety. This 
happens through the excessive use of secrecy orders--which are really 
gag orders--issued by courts. This practice is not just wrong, Mr. 
President, it is unconscionable.
  For example, 1 million women who received silicon breast implants in 
the 1980's were denied crucial information demonstrating the hazards of 
implants. The information was uncovered in a 1984 lawsuit but kept 
secret by court order until 1992.
  What do we say to these women? How do we, as a civilized society, 
justify the secrecy orders that prevented them from making informed 
choices about what they were putting in their bodies?
  And what do we say to the scores of young children injured while 
playing on defective merry-go-rounds that remained on the market for 
over a decade, Mr. President, because many lawsuit settlements 
concerning this sickening product were kept secret from the public and 
from the Consumer Products Safety Commission. These children--most 
under 6 years of age--lost fingers, hands, and feet.
  Yesterday, I listed many more examples. Let me tell you about one 
example I did not mention. It involves a family which we must call the 
Does because they are under a secrecy order and were afraid to use 
their own names when talking to us.
  The Does were the victims of a tragic accident which resulted in 
serious brain damage to their child. A friend of the Does is at similar 
risk, but Mrs. Doe is terrified of saying anything to her for fear of 
violating the secrecy order that governed her lawsuit settlement. 
Simply put, Mrs. Doe is afraid that if she talks, the defendant in her 
case will suspend the ongoing settlement payments that allow her to 
care for her injured child.
  What sort of court system prohibits a woman from telling her friend 
that her child might be in danger? And, Mr. President, the more 
disturbing question is this: What other secrets are currently held 
under lock and key which could be saving lives if they were made 
public?
  Our amendment is simple. It says that before courts allow for secrecy 
in lawsuits affecting public health and safety, they must look 
carefully at the circumstances and apply a balancing test: They may 
permit secrecy only if the need for privacy outweighs the public's need 
to know about potential health or safety hazards.
  Moreover, courts could not, under this amendment, issue protective 
orders that would prevent disclosures to regulatory agencies. Because 
how can the FDA, the Consumer Product Safety Commission, and the 
Transportation Safety Board protect us if secrecy orders prevent them 
from knowing about safety problems?
  Thus, our amendment--which we have modified in an effort to work with 
the business community--merely requires a reasonable balancing.
  It says that because the courts are public institutions they need to 
consider--and only to consider--the public interest while dispensing 
justice. In cases where privacy interests are substantial--like trade 
secrets--confidentiality will still be allowed. So I ask, is this too 
much to ask? I do not think so.
  At this point, let me say that our amendment is backed by the 
Consumer Product Safety Commission. In fact, even Prof. Jack 
Friedenthal, one of the country's leading experts on the courts who 
testified against our original anti-secrecy bill, now supports this 
measure. In response to the changes we made, Dean Friedenthal wrote 
that our amendment quote ``makes a good deal of sense and eliminates my 
criticisms of the original bill.''
  Mr. President, again, this amendment does not--in any way--undermine 
S. 687. It does not modify or restrict the terms of S. 687 at all; that 
is, it would not change anything in the bill. Nor does it conflict with 
the broader aims of tort reform, which I support. It simply says that 
we must protect both the rights and interests of product liability 
defendants, and the interests of all Americans who are subject to 
health and safety hazards.
  Mr. President, I have heard a lot of people tell me that my amendment 
would hurt S. 687. But no one has yet explained why. How can it be said 
that taking reasonable steps to prevent the senseless loss of life, and 
life-shattering injuries, hurts this bill? How can something that is 
good public policy hurt this bill? No one, so far, has argued against 
our amendment on the merits. At the conclusion of my remarks, will 
someone please explain why our amendment hurts S. 687?
  In my view, this amendment most definitely belongs on the product 
liability bill. S. 687 is about product safety and striking the right 
balance between the rights of consumers and manufacturers. And that is 
exactly what our court secrecy amendment is about: product safety and 
striking a balance.
  Our opponents have also repeatedly claimed that changes to the rules 
governing the courts should be made, in the first instance, by judges 
themselves, in the so-called rules enabling process. According to them, 
Congress will have its chance to act when the judges submit to us their 
proposed judicial solution to the court secrecy problem--which, if we 
are lucky, will happen in a year or two or three.
  Well, the Judicial Conference has been studying this issue for at 
least 4 years, and it has not proposed any solution of substance to the 
court secrecy problem.
  So how much longer are we supposed to wait? Sometimes all we ever do 
in this city is study problems. It is time to start dealing with them. 
This fundamental health and safety matter is not the type of technical, 
procedural issue that we should leave for unelected judges and lawyer-
lobbyists to address out of the public eye. Congress--all of us here--
are responsible for health and safety policy. There should be no 
passing the buck.
  Before concluding, let me also respond to the misleading statements 
that have been made regarding the Justice Department position on our 
amendment. First, Janet Reno has told me personally that court secrecy 
is a problem. But in truth, the Justice Department has never taken a 
position on this amendment. They have simply written a letter which, 
consistent with their way of doing business, asks us to go slow.
  In closing, let me say that our courts are among the finest and the 
fairest in the world. But the time has come for us to ask: fair to 
whom? Yes, the courts must be fair to defendants, and S. 687 will move 
us in this direction. We should applaud Senator Rockefeller for his 
efforts thus far. Because the courts are public institutions, however, 
our court system must also do its part to help protect the public.
  Speaking as a strong supporter of S. 687, this is how I see the 
bottom line: A vote to table this amendment is a vote to ignore health 
and safety hazards. A vote for this amendment is a vote for public 
safety and the public's right to know. I believe it is that simple, and 
so I urge my colleagues to support our proposal.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mr. ROCKEFELLER. Mr. President, I do not know how many times I am 
going to have to point out I am not a lawyer, but I am not. But since I 
am the only person in the Chamber at this moment other than my friend 
from Wisconsin, I need to say a couple of things. One is that there are 
many things about his amendment which not only do not give me any 
trouble, but with which I can be quite comfortable.
  The problem is twofold. One is that his amendment has nothing to do--
civil rules of procedure--with product liability reform. It is just not 
a part of what we are discussing. It is not on product liability 
legislation. It does not belong in this bill. If it were to pass, I 
have to tell my colleagues in the strongest possible terms it would 
have a disastrous effect on the overall bill, the underlying bill, S. 
687. I simply have to say that. It would have a disastrous effect on 
the bill. That is often said, incidentally, when people are trying to 
scare colleagues, but this I say in measured tones. It really would end 
S. 687.
  The other part, is that judges do have a problem with this. They like 
to be able to keep certain things private so that they can put more 
pressure on getting litigation to come to closure, to have a 
settlement. And there are also many defendants, plaintiffs, and 
individuals who do not want to have what they are going through exposed 
publicly, perhaps for personal reasons and perhaps also because they do 
not want others to gain information for that and therefore to sue them 
again.
  It is interesting; 41 State legislatures have considered protective 
orders and 39 of them have rejected changes. So that this impression I 
am giving is not one which is unique to this argument.
  But the main point is that it is not a part of this bill. It should 
not be on this bill. As much as I respect--and I cannot say that enough 
times--the Senator from Wisconsin and find many things in his amendment 
to be attractive, it would be disastrous for this bill.
  So those would be my comments, and I yield the floor.
  Mr. KOHL. Mr. President, I thank my colleague.
  Before I yield to my friend from Maine for 10 minutes, I simply want 
to point out that Senator Rockefeller has not said why it would be 
disastrous to S. 687. In fact, courts are public institutions, and I 
think we all agree in the Senate that courts have a primary 
responsibility to protect the public interest, and that is what this 
court secrecy amendment is all about.
  So I do not see why it cannot be made an integral part of the product 
liability bill. I think it is consistent with the aims of the product 
liability bill, which is to have fairness in the system both to 
defendants and to plaintiffs. I believe it is entirely consistent with 
my attempting to attach it to this bill.
  I yield 10 minutes to my friend from Maine, Senator Cohen.
  Mr. COHEN. I thank Senator Kohl for yielding.
  Mr. President, we have often heard it said that sunshine is the best 
disinfectant. This is one of the reasons why Congress changed its rules 
of operation. It used to be the rule that hearings were closed unless 
we voted to open them. We decided some years ago that it was far better 
to open committee hearings unless there was a good reason to close 
them. So we reversed the rule. Now the committee hearings are open 
unless we specifically vote to shut out the public.
  That is precisely what Senator Kohl is attempting to do with this 
amendment, to reverse the presumption of operation. The way the system 
operates now is that once a settlement is agreed to, it has a 
confidentiality covenant contained within it; the courts simply yield 
to that process. They do not open it unless they are compelled to open 
it by overriding reasons. We want to reverse that presumption and say 
that sunshine is the best disinfectant, that sunshine is the best 
deterrent to putting defective products out in the marketplace.
  It is an important issue to the victims of defective products, to the 
potential victims of defective products, and to the public at large. 
People would be shocked to find out that evidence of a defective 
product is often withheld from the public and from Government 
regulators with the sanction of the court. I do not think most people 
understand that we give the court's imprimatur to a confidentiality 
agreement when their public health is at risk.
  The result is that hundreds--perhaps even thousands--of other 
innocent people can be injured or killed by the same defective product 
by virtue of these confidentiality agreements. Why would a manufacturer 
or a seller of a defective product insist on the confidentiality of a 
settlement? It is pretty obvious: to protect his or her or its 
financial interests because exposure of the defect of that product 
might lead to greater lawsuits and perhaps even to the elimination of 
that company or at least to the production of that product.
  How about a plaintiff? Why would a plaintiff agree to a code of 
silence about what he or she has discovered over the defectiveness of a 
particular product? Obviously, to end years of litigation, to pay for 
necessary medical expenses, loss of wages, pain and suffering, and 
maybe even to preserve an element of privacy. Is not that participating 
in a coverup on the part of a plaintiff? The answer is yes. But a 
plaintiff has no legal obligation to do otherwise; maybe a moral 
obligation, but usually in these circumstances economic necessity 
outweighs any moral obligation to alert the general public as to what 
that plaintiff has discovered.
  Congress has a higher duty. The courts have a higher duty than simply 
to cover up a particular defect. That duty is to protect the public 
interest, and the burden is there now but the practice has been to 
protect the confidentiality rather than the public interest.
  So this amendment, as I indicated before, reverses the process. It 
allows the court to rule in favor of confidentiality, but it shifts the 
presumption in favor of disclosure. And as I pointed out just a moment 
ago, we have done precisely the same. Congress has decided to open its 
doors unless we vote to close them.
  I would like to consider several types of cases. Senator Kohl has 
talked about the silicon breast implant case, and how many thousands of 
women had to go without notice of the potential threat to their lives 
for so many years because of a confidentiality agreement. How about a 
case in which a manufacturer of a car produces a gas tank that is made 
of metal so thin it resembles onion skin and puts it behind the rear 
bumper of a car? Every time that car is hit or smacked from behind by a 
car going 5 or 10 miles an hour, it erupts into flames. We have had 
cases like that. The manufacturers have said, ``Look. Let us settle 
this case, and, by the way, I will pay you x millions of dollars if you 
just don't reveal exactly what you discovered about our manufacturing 
process.'' Is that something that we want to endorse?
  Or how about a sticky accelerator case? We had hundreds of cases of 
sticky accelerators, accelerators that go down and lock down while a 
car is in gear and cannot be pulled back. Do you want to sanction 
covering up those kinds of defects with the potential of injuring 
hundreds if not thousands of people? That is what has taken place in 
the past.
  The role of the courts primarily is to resolve private disputes. That 
is clear. But it also is the duty of courts to take into account public 
interest when the public interest so demands. Once private parties 
cross the threshold into the public court system, it seems to me it is 
fair for the courts to consider the public interest. Obviously, the 
litigants lose a measure of confidentiality. The notion that we can 
call upon the public courts supported by millions of tax dollars and 
yet preserve our total private rights seems to me to be inconsistent 
with the public interest.
  Do private litigants have a right to expect confidentiality? Maybe. 
If so, it is not a constitutional right. It is one that has evolved by 
practice rather than under the protection of the Constitution, and we 
have a right to change that practice, which is precisely what Senator 
Kohl is speaking to today.
  The argument has been that this is going to bog down the courts. 
Possibly. I think it is unlikely. We are talking about a fairly small 
percentage in the cases dealing with product liability and defective 
products that are considered each year in the courts. It only applies 
to a small percentage of cases. It will not be a heavy burden for the 
courts to bear. But, even if it required more work on the part of the 
courts, according to Judge Abner Mikva, that is a responsibility the 
courts ought to be eager and willing to assume.
  Perhaps there will be fewer settlements. But I think it is unlikely 
because it is in the economic interest for the parties to settle, 
without regard to whether or not this material is going to be 
disclosed.
  But let me offer a counterview. I think perhaps even more cases will 
be settled without ever going into litigation as a result of this 
legislation. If parties are so concerned that a defect in their 
manufacturing process is going to get out into the public, they will 
probably want to settle without going to the court in the first 
instance. You can make the counterargument that you will have fewer 
cases clogging the courts because the parties will be more eager to 
settle out of court.
  Are we rushing ahead of the Judicial Conference? No. We are not 
rushing ahead of them. We are tired of waiting for them. We are tired 
of waiting for the Judicial Conference. Four years have transpired 
already, and no action. We are not going to wait for Godot, and we are 
not going to wait for the Judicial Conference. This is what Senator 
Kohl is saying. We have had it in terms of waiting for them to resolve 
this issue.
  I would like to conclude with a comment by one of our witnesses, 
Gerry Spence, who says:

       Everywhere nowadays we hear it argued that the public has a 
     duty to protect itself. But none of us can protect ourselves 
     without the necessary information with which to do so * * *. 
     The state of the law, as practiced today, is much like a trap 
     set along the trail. The hole in the ground is covered with 
     branches and leaves. The unsuspecting falls in. Now, instead 
     of sounding the alarm that a trap has been laid, we permit 
     the trapper to quietly reset his trap in order to catch the 
     next passer-by. This cannot be permitted in a civilized 
     society.
  This amendment should be adopted overwhelmingly because we cannot 
permit the current system to continue in a civilized society.
  Mr. President, I yield the floor.
  Mr. GORTON. Mr. President, will the Senator from West Virginia yield 
time to me?
  Mr. ROCKEFELLER. Mr. President, how much time do the opponents have?
  The ACTING PRESIDENT pro tempore. Sixteen minutes and 5 seconds.
  Mr. ROCKEFELLER. I yield such time as the distinguished Senator may 
use.
  The ACTING PRESIDENT pro tempore. The Senator from Washington.
  Mr. GORTON. Mr. President, the Senator from Maine has made an 
eloquent and persuasive argument in favor of at least the principles of 
disclosure which are contained in the bill. I believe it is important 
for not only the Senator from Maine but for all of the Members of the 
Senate to understand that in the last 4 years almost all of the public 
policies for which the Senator from Maine pleads are, in fact, the law. 
There is, of course, a Federal agency that is delegated the 
responsibility of dealing with product safety: the Consumer Product 
Safety Commission. In 1990, when the Consumer Product Safety Act was 
amended to require the manufacturers of products to report to the CPSC 
if a specific product model is the subject of three or more product 
liability suits alleging death or grievous body injury within a 2-year 
period.
  In other words, the kind of information which the proponents here 
feel should be generally available in the case of dangerous products is 
in fact generally available through the very Federal agency which is 
designed to deal with product safety today. And it is made available in 
a way that does not undercut the private nature of litigation.
  The Senator from Maine has made two points. Congress has now opened 
up its processes. Therefore, the courts ought to open up their 
processes. Congress is a public body elected by the people of the 
various States of the United States. The courts are opened by 
definition to private litigants. The Senator from Maine said once you 
go to court, you give up that right of privacy. But you go to court 
then at least in exactly 50 percent of the cases, Mr. President, 
because you were forced to do so, not because you wish to do so. The 
plaintiff in each case has gone to the courts because he, she, or it, 
wishes to do so. The defendant, by definition, does not wish to do so.

  Under the proposal set out by this amendment, the only way to avoid 
this publicity is to settle before a lawsuit has even been brought, 
which means that you have to pay off every case whether it is well-
founded or ill-founded.
  The courts as a venue for private litigation between private parties 
who, in at least the case of the defendants, do not seek to be in that 
venue in the first place is profoundly different from the situation in 
any public venue. And when we have a law today which requires dangerous 
products--not even those that have been proven to have caused death or 
grievous bodily harm but just subject to three or more lawsuits in any 
given year to be made public, whatever the public policy for disclosing 
these defects, and maybe that public policy has already been debated 
and adopted--it is exactly for that reason, I suspect, that those who 
spend much of their careers studying in issue in the judicial council 
have taken a great deal of time to discuss what is obviously a very 
complicated issue with some good arguments on both sides of it. They 
have far more at stake and knowledge than we do.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mr. KOHL addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Senator from Wisconsin is 
recognized.
  Mr. KOHL. We have 7\1/2\ minutes.
  Mr. President, I do not think Senator Gorton or Senator Rockefeller 
would disagree that when we have the imperfect products on the market 
that have the capacity to injure thousands, if not hundreds of 
thousands of people, they should be off the market. That is what this 
bill attempts to do only, as Senator Cohen pointed out, when these 
cases reach the courts. This will not prevent these agreements from 
being reached outside the court. We are only talking about when cases 
like this reach the courts, and we are suggesting where you have 
imperfect products on the market and the cases reach the courts, the 
courts are public institutions that have a public responsibility to 
step in and do what is right for the American public. That is what this 
amendment is all about.
  I yield the floor.
  Mr. HEFLIN addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Senator from Alabama is 
recognized.
  Mr. KOHL. Mr. President, I yield 2 minutes to the Senator from 
Alabama.
  Mr. HEFLIN. Mr. President, I rise somewhat with mixed feelings on 
this issue. I have always believed that the courts enabling act should 
be followed. But there is a bigger issue here involved, particularly 
because of certain language that is in this bill. That language deals 
with the Food and Drug Administration approval, and it gives a complete 
defense against punitive damages.
  The language in the bill gives a drug or medical device manufacturer 
a complete defense against punitive damages, if it has Food and Drug 
Administration approval. Many pharmaceutical drugs come together to 
coalesce to either form a danger or a benefit. If court secrecy goes to 
the extent that it can affect matters relating to a proposed new drug 
to be approved, and there is found through discovery various elements 
that would cause great concern and would therefore probably cause FDA 
not to approve, or the Federal Aviation Administration not to approve 
in the case of aircraft, and that is kept secret because of a court 
protective order, then I think there is a major public policy issue 
that must be addressed.
  I think the Kohl amendment has been crafted in a manner to take care 
of situations that should be addressed. Therefore, I think because of 
the language relating to the FDA and FAA, and the complete defense for 
certain industries--which, in my judgment, are wrong--we fail to 
realize that according to a GAO study, 51.2 percent of all FDA-approved 
drugs will have to have a recall after having received approval.
  So I think that we should be cautious, and I think the Kohl amendment 
in this instance should be adopted.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mr. ROCKEFELLER. Mr. President, how much time does the opposition 
have?
  The ACTING PRESIDENT pro tempore. They have 12 minutes.
  Mr. ROCKEFELLER. I yield 5 minutes to the Senator from Connecticut.
  Mr. LIEBERMAN. I thank the Chair and my colleague.
  Mr. President, I rise to oppose the amendment offered by my friend 
from Wisconsin, Senator Kohl, and I do so reluctantly because I think 
he may be onto something here. And I do so reluctantly because he has 
done this in his normal thoughtful fashion. But there are reasons both 
of substance and procedure that lead me to oppose this amendment at 
this time, although it is possible at a later time that I would support 
such an amendment.
  Let me talk very directly about the impact that this amendment might 
have on the underlying bill. It has been more than a decade that 
efforts have been made here in Congress to reform the product liability 
laws because of the costs they take out of our society, the impact they 
have on our economy, and the impact they have on people and consumers.
  This bill before us, the underlying bill, S. 687, is a carefully 
crafted and balanced bill. It is a long way from the original bill 
proposed 10 or 12 years ago which, in many ways, was a defendant's wish 
list. It is not that now. One of the things that the sponsors of this 
bill, and this Senator as one of them, have tried to do is not take on 
every issue in the area of tort reform.
  Unfortunately, this amendment offered by the Senator from Wisconsin 
threatens that carefully crafted compromise. I know that is not the 
intention of the Senator. I know he is specifically interested in this 
proposal that is the subject of the amendment. But the fact is that 
there are those who are opposed to the underlying bill who would like 
to see this amendment pass, not so much because they support the 
amendment, but because of the effect it will have on passage of the 
underlying bill. In fact, one of the lobbyist lobbying against product 
liability has described this amendment in a local legal newspaper as 
one that would create a tactical advantage for those opposing the 
underlying bill.
  For that reason, I support the underlying bill because we have worked 
so hard on it, and I reluctantly oppose the amendment. There are other 
reasons, as well.
  First--and this has been referred to before--Attorney General Reno's 
Department of Justice urged Congress not to enact protective order 
legislation immediately, such as in the amendment of the Senator from 
Wisconsin. We should not act immediately. We should step back and allow 
the process we in Congress have created to work its will. That is to 
stay, we should let the judicial rulemaking process of the Judicial 
Conference of the United States, which is considering this very 
subject, run its course.
  That process is exactly what we contemplated would occur when we in 
Congress enacted the Rules Enabling Act, and we should let that process 
finish, then come back and evaluate its recommendations on this subject 
matter.
  Mr. President, second, in reviewing the language of the amendment, 
this Senator feels that I would benefit by having more time to review 
the subject matter of the amendment on a complicated area of 
litigation.
  For example, the amendment appears to be drafted so as to protect 
only information that encroaches upon a privacy interest. But what 
about proprietary business information? Is it the intent of this 
amendment to say that the courts cannot protect confidential business 
information or trade secrets? If this is true, the amendment will 
substantially chill the development of new, innovative products.
  Another question is, what is the scope of information which is 
relevant to the protection of public health and safety--that is the 
language from the amendment--information relevant to the protection of 
public health and safety? Does that include, for instance, the formula 
for a new drug or synthesis process? Does it include detailed 
schematics on exactly how to build a cutting-edge product? Does it 
include the formula or manufacturing process for new materials?
  So while the interest in public disclosure--which I support and I 
believe is commendable--is part of this amendment, the amendment raises 
questions about what would prevent competitors from mining these 
filings for what would otherwise be trade secrets.
  I am also concerned this amendment can multiply litigation on 
collateral issues and, in that sense, expand litigation and costs 
related to litigation that this underlying bill is attempting to limit.
  Mr. President, all of the issues need a thorough review. We should be 
extremely concerned about creating additional layers of costs. Product 
liability cases are already the most expensive cases to defend because 
of the defense costs in product liability cases.
  Defense costs in product liability cases specifically are 70 cents 
for every dollar paid in claims, which is twice the level in defense 
costs in medical malpractice cases and seven times the defense costs in 
personal injury auto cases. I fear that this amendment could drive 
those out-of-control costs even higher.
  For all these reasons, I think we need to be careful and cautious in 
this area. As I said at the outset, in the end I hope I can support the 
initiative that the Senator from Wisconsin has begun with this 
amendment, but I cannot do so today.
  I want to hear from the Judicial Conference. I want to see some of 
the questions I have raised examined further. In the meantime, we need 
to get on with the consideration and passage of S. 687. And for that 
reason, I urge my colleagues to vote to table this amendment.
  I thank the Chair.
  The ACTING PRESIDENT pro tempore. Who yields time?
  The Senator from Wisconsin is recognized.
  Mr. KOHL. Mr. President, I ask unanimous consent for 10 minutes 
equally divided on this bill if it is OK with Senator Rockefeller.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Mr. ROCKEFELLER. Mr. President, there is no objection on both sides. 
We will be happy to do that.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. KOHL. I thank the Senator.
  I yield 3 minutes to Senator Specter and 3 minutes to Senator 
Metzenbaum, and then I will conclude.
  The ACTING PRESIDENT pro tempore. The Senator from Pennsylvania is 
recognized.
  Mr. SPECTER. Mr. President, I understand the controversial nature of 
the amendment by the distinguished Senator from Wisconsin, but I 
believe it is a good amendment.
  In the course of litigation there are frequently settlements made 
which do contain underlying facts which are very important for public 
disclosure in the public interest.
  With respect to the interest of the litigants, it is obviously of a 
much narrower scope. A plaintiff, understandably, through counsel is 
concerned about getting what he or she considers to be an appropriate 
sum of money, and the defendant is concerned about the amount of the 
award in that case or the amount of the settlement but is also 
concerned about the ramifications of the facts which may be disclosed 
on other matters which may be in litigation or potentially in 
litigation or might bring other lawsuits.
  On questions of public safety concerning defective products, it is my 
view that very frequently the interest of society in having the facts 
subject to disclosure outweighs the interest of the private litigants 
to bring an end to their particular lawsuit and definitely outweighs 
the interest of the defendant in having that information shielded from 
public disclosure.
  This amendment vests in the court the discretion to balance what is 
in the public interest against what the private concerns are. I believe 
that there can be realistic and reasonable confidence in the discretion 
of the Federal courts on this matter.
  We have seen with disclosures about what is happening in the tobacco 
industry, evidence which should have been in the public domain a long 
time ago, and there are items which come to public attention on product 
safety which go far beyond the import of the specific case. So the 
public interest in knowing what defects are with particular products is 
very, very important.
  We have had the examples of all-terrain vehicles which are causing 
tremendous injury, and if more information were available, that could 
be cut back upon. The judicial system has a broader range of concern 
than the interest of the specific litigants involved.
  Although there is a great deal more to be said, I just asked for 2 
minutes from my colleague from Wisconsin. This statement briefly 
constitutes why I think this is a sound amendment. So I intend to 
support it.
  I thank the Chair and yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from West Virginia is 
recognized.
  Mr. ROCKEFELLER. Mr. President, I yield 5 minutes to the Senator from 
Utah.
  The ACTING PRESIDENT pro tempore. The Senator from Utah is 
recognized.
  Mr. HATCH. Mr. President, I rise to voice my strong objection to 
Senator Kohl's amendment on protective orders and confidentiality 
agreements.
  While I respect Senator Kohl's efforts to address this issue, his 
amendment is procedurally premature. In fact, both the Department of 
Justice and the Administrative Conference have raised the same 
procedural concerns that form the basis of my objection to this 
amendment.
  Under the Rules Enabling Act's rulemaking procedures, any proposed 
changes to the Federal rules must be circulated to the bench, bar, and 
public for comments and suggestions. These rules were designed to bring 
about a more open and public debate on potential Federal rule changes. 
Moreover, it ensures the rule changes are based on thoroughly debated 
and studied recommendations.
  Procedurally, the Judicial Conference's committee of rules and 
practice is currently studying the issue of protective orders and 
confidentiality agreements. As we speak, the Federal Judicial Center, 
at the request of the Administrative Conference, is conducting 
empirical studies of selected Federal district courts to verify a 
preliminary determination by the conference that there is no need to 
modify the Federal rules.
  In my view, we should defer our judgment of the proposed rule change 
until the Administrative Conference completes its study and makes an 
informed policy recommendation.
  In his recent statement before the Subcommittee on the Courts, Judge 
Higginbotham, chair of the advisory committee, asked Congress not to 
undermine the integrity of the Rules Enabling Act and to respect the 
partnership established between the courts and Congress. More 
specifically, in his testimony, Judge Higginbotham asked Congress to 
withhold legislative action until the conference has completed its 
study and made appropriate recommendations based on thorough research 
and completed study.
  I concur with Judge Higginbotham's views. Congress should respect the 
Courts and protect the sound working arrangement established between 
Congress and the courts. There is simply no urgency to act on this 
proposed amendment, and prudence dictates that we delay consideration 
of this issue until we are more fully informed.
  The Judicial Conference's advisory committee on civil rules has taken 
the necessary steps to amend rule 26(c). The advisory committee, acting 
by the authority delegated to it by Congress in the Rules Enabling Act 
(28 U.S.C. 2072), has undertaken empirical studies, held public 
hearings, and drafted a proposed amendment to rule 26(c).
  Their recommendations have been circulated to over 10,000 individuals 
and organizations for comment and criticism. Members of the bench, the 
bar, and the public have provided their insight to the committee. 
Further, the advisory committee is expected to complete its study and 
dispose of the proposed amendment to rule 26(c) in only three short 
months.
  In my view, the preferred process for amending the Federal rules, a 
process we sanctioned and established, is functioning well and should 
be allowed to run its course. Ultimately, if Congress disagrees with 
the rule changes proposed by the Administrative Conference, then the 
rule can be returned to the advisory committee for further review or we 
may offer legislation to remedy the perceived deficiencies. In any 
case, we should give strong deference to the insights and judgments of 
the Administrative Conference, the advisory committee, the bench, the 
bar, and the public, all of whom participated in the process 
established by the Rules Enabling Act.
  Legislative action by the Senate to correct the perceived 
deficiencies of rule 26(c), before the advisory committee's completes 
it's study of the rule, offends the spirit of the Rules Enabling Act. 
The Rules Enabling Act should not be undermined by direct legislative 
action that ignores and bypasses the Judicial Conference, the bar, and 
the public.
  The Department of Justice has also requested that Congress defer 
action on protective order legislation until the Department has 
completed its pending study of and makes a recommendation concerning 
protective orders in the context of a comprehensive civil justice 
reform study, which includes an investigation into the deficiencies of 
rule 26(c). In addition, the Department has requested that the Senate 
allow the advisory committee to complete its study of protective orders 
and confidentiality agreements. I support the Department's 
recommendations in this matter.
  I also have several substantive concerns with Senator Kohl's 
amendment which I am compelled to outline. I am concerned with a 
provision in the Kohl amendment that requires a Federal judge to make a 
``particularized findings of fact'' before a protective order to 
restrict the disclosure of information obtained through discovery or to 
restrict access to court records can be entered by the court. Likewise, 
I am concerned that after the entry of a final judgment, a separate 
order must be entered by the judge which finds that sealing records 
would not restrict the disclosure of information that is relevant to 
the protection of the public's health and safety. While laudable in its 
aims, the Kohl amendment is fundamentally flawed.

  Currently, under Federal Rules of Civil Procedure 26(c), protective 
orders are permitted for ``good cause shown'' and do not require a 
particularized finding. Current law also permits the entry of a 
``consent order'' on the basis of the parties' agreement, with the 
courts approval. Furthermore, courts are free to modify or dissolve 
protective orders. The Kohl amendment represents a misguided effort to 
correct alleged deficiencies in rule 26(c) of the Federal Rules of 
Civil Procedure.
  Rule 26(c) currently permits a court to enter protective orders and 
to seal documents to protect trade secrets, privileged communications, 
and other classes of information from public disclosure following 
discovery. These protective orders allow the court and parties to 
concentrate on settling their real differences, rather than wasting 
time and money on ancillary discovery issues.
  The Kohl amendment also adversely and substantially affects a private 
citizen's right of privacy. Under our Federal rules, litigants are 
allowed broad discovery of extremely private and personal information, 
including financial records or diaries. Intimate information one would 
never believe could reach the public domain. While this private 
information may be necessary for the defense or prosecution of a 
particular civil case, your confidential secrets will now all become 
public information. And this is true even if you prevail in the 
underlying case.
  Supporters of the Kohl amendment offer anecdotal evidence to support 
their argument that rule 26(c) operates to conceal information 
affecting public health and safety. In response, the Kohl amendment 
seeks rigidly to prohibit courts from entering into any rule 26(c) 
protective orders, unless they first make ``particularized findings of 
fact that such an order would not restrict the disclosure of 
information which is relevant to the protection of ``public health.''

  As such, the Kohl amendment is overly broad and is certainly not 
limited to ``a discrete subset of lawsuits filed in Federal court,'' as 
characterized by some supporters. Cases involving discovered 
information sweep the continuum of lawsuits filed in Federal court.
  Relevant information will surface not only in products liability and 
medical malpractice lawsuits, but in every conceivable situation--for 
example, suits involving energy, natural resources, land use, hostile 
environment, toxic torts environmental contamination, contracts, 
intellectual property, shareholder derivative, and complex commercial 
claims. Such potentially broad application requires that we be 
extremely cautious in our approach, something the advisory committee 
was purposefully designed to accomplish.
  Moreover, the Kohl amendment affects not only the procedural concerns 
of the Federal rules, but also substantive rights and remedies arising 
under privilege law, copyright law, and trade secret law. The full 
substantive effect of the Kohl amendment is still unknown. The 
amendment may also needlessly undermine multidistrict litigation 
policies which currently permit ``blanket'' protective orders in the 
interest of efficient case management.
  This amendment will also further burden judges with discovery 
hearings and aggravate the congestion of our courts. Under the 
provisions in this amendment, every protective order will require a 
particularized finding of nonrelevance to public health and safety. If 
this standard were applied, litigation will multiply at great cost to 
our scarce judicial resources. To complicate matters, a second hearing 
and findings is required by the court after the entry of a final 
judgment.
  It is unthinkable for this body to impose a new obligation on our 
already overburdened Federal judges. Litigants already wait too long 
for their day in court. The cost to taxpayers for these additional 
hearings and related activities would be staggering and cannot be 
justified.
  I am not opposed to correcting deficiencies in rule 26(c), if they 
exist. I, too, want to protect the public interest by encouraging 
disclosure of information essential to our public's health and safety. 
I disagree, however, with the Senator Kohl's approach and timing.
  In sum, the proposed Kohl standard is simply premature and 
unworkable. It will require judges to conduct complicated factual 
inquiries, straining our limited and precious judicial resources, with 
little or no change to existing standards. Our current approach offers 
the courts wide discretion to determine whether good cause is shown for 
the entry of a protective order. Our current system has fairly balanced 
the broader public interest in health and safety against the legitimate 
need of litigants and our citizens for confidentiality.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mr. KOHL. Mr. President, how much time do we have remaining?
  The ACTING PRESIDENT pro tempore. Five minutes.
  Mr. KOHL. I yield 3 minutes to Senator Metzenbaum.
  The ACTING PRESIDENT pro tempore. The Senator is recognized.
  Mr. METZENBAUM. I thank the Senator from Wisconsin.
  Mr. President, I have heard some absurd arguments in my time in the 
U.S. Senate, but some I have heard this morning are really pretty hard 
to accept and understand.
  We should not accept the amendment, the argument is made, because it 
is a good amendment but we ought to take some more time to study it or 
maybe the Judicial Conference ought to have an opportunity to take a 
look at it.
  We are talking about an amendment that has to do with life and death 
of the people of this country. What the manufacturers are asking is to 
keep those records closed, sealed, so that nobody can know what their 
perfidy was, what their negligence was, what their intentional acts 
were, and they want that information sealed in a case that they have 
lost.
  This amendment is about preventing information in lawsuits that 
affects public health and safety from being concealed, shielded from 
public scrutiny by court-sanctioned secrecy agreements or gag orders.
  How can we possibly vote against this amendment? These secrecy 
arrangements prevent the public and regulatory agencies from learning 
about hazardous products and action to avoid further deaths and 
injuries from those products.

  I suspect that many of my colleagues were unaware and perhaps shocked 
to learn of this widespread practice in the courts. As Gerry Spence, a 
renowned courtroom attorney, testified:

       In the course of over forty years in the courtroom I have 
     never been able to settle a case unless the terms of the 
     settlement and the facts surrounding it were kept secret.

  Kept secret from whom? Kept secret from the American people so they 
may not learn about the kinds of faults and the kinds of actions that 
have been taken by manufacturers that have caused tremendous injury or 
death itself.
  Whenever plaintiffs get access to damaging documents, the defense 
strategy is to close up the record, to seal the record. It is like a 
noose around the plaintiff's head--they cannot afford to pass up the 
premium settlement offer for secrecy and bear the expense and risk of 
trial, so they settle and agree to close the record.
  Secrecy agreements and gag orders have prevented the public from 
gaining access to vital information about threats from defective heart 
valves, pharmaceuticals, breast implants, and automobiles. This has led 
to needless deaths, injuries, and illnesses.
  I ask every one of my colleagues to imagine how they would feel about 
court secrecy if they had a family member killed or severely injured by 
a defective product, only to learn afterward that other victims had 
come before, that disclosure of the defect had been prevented by 
secrecy orders and secrecy agreements, and that the tragedy could have 
been avoided had you only known the facts ant the information that had 
been covered up.
  Mr. President, this should be a no-brainer for us. Every one of us in 
this body ought to vote for it.
  The only argument I hear against it is in some way it may jeopardize 
passage of the underlying bill. That is not a sufficient reason to vote 
against a quality amendment of this type.
  How can we allow companies to pursue litigation strategies that 
permit heart valves to continue being implanted in patients while their 
life-threatening defects are kept secret?
  Many of these secrecy agreements even prohibit plaintiffs from 
disclosing critical health and safety information to Federal and State 
regulators charged with ensuring the safety of the particular products. 
That is absured.
  Mr. President, court secrecy keeps critical information from the 
public and from regulators charged with ensuring the public's safety. 
The upshot is that consumers cannot make wise choices, regulators 
cannot do their job, respect for the judiciary is undermined, and lives 
are senselessly lost. If we change anything in our legal system, it 
should be this insidious practice of keeping vital health and safety 
information out of the public's reach.
  I would like to ask my colleagues to ask themselves why it is that 
the industries that support the product liability bill are claiming 
that passage of this amendment would kill the bill. Why would an 
amendment whose sole purpose is to prevent senseless injuries and 
deaths be so unpalatable to proponents of this bill?
  Why would the industry groups pushing this bill object to this?
  It is because if they could not keep evidence of their defective 
products secret, they will have to spend more money taking defective 
products off the market and compensating consumers injured by those 
products. It is that simple. But the manufacturers would not dare tell 
Senators the truth about why they oppose the Kohl amendment, because 
they would look like cold--blooded profit maximizers. Instead, they say 
the amendment would kill the bill. Just remember: That is their 
pocketbook talking.
  I urge my colleagues to support the Kohl amendment to eliminate 
secrecy arrangements that undermine public health and safety.
  The PRESIDING OFFICER (Ms. MOSELEY-BRAUN). Who yields time?
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. How much time is remaining to the opponents?
  The PRESIDING OFFICER. Four minutes and fifty seconds.
  Mr. ROCKEFELLER. Madam President, I yield to the Senator from 
Washington.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Madam President, during his remarks on this amendment, 
the distinguished senior Senator from Alabama, I believe, covered at 
least some of the reasons for a number of the supporters of the 
amendment, not including its primary sponsor, for being for the 
amendment. He spoke not so much to the merits of this particular 
proposal but of this proposal as a way to see to it that the overall 
bill did not pass. He spoke most particularly about the impact of 
punitive damages in cases of this nature. He spoke to the FDA and he 
spoke to the Federal Aviation Administration defending the present 
system.
  We have already had an extensive debate in this body on the impact of 
product liability litigation and, for that matter, punitive damages on 
the private aviation manufacturing industry in this country. Nothing 
could be more clear than the fact that that enterprise has, for all 
practical purposes, been destroyed. In a 10-year period, the production 
of piston-driven private aircraft declined by some 90 percent; 
employment in the field declined by the same amount; several of the 
companies engaged in that business have gone out of business entirely; 
others have reported that the defense of this kind of litigation costs 
an average of $500,000 per case. Even in connection with one of the 
manufacturers when the manufacturer had never lost a product liability 
case, those costs were imposed upon him.
  And the Senator from Ohio says, quoting a trial lawyer, that that 
trial lawyer would never be able to settle a case without an order of 
privacy, an order withholding the results of discovery in such a case.
  Well, what does that mean? Does that mean that there will be less 
litigation or more? Does that mean that more cases will be settled or 
fewer?
  Obviously, it means that fewer cases will be settled. If, in fact, 
all of the evidence is going to become public in any event, the 
defendant may just as well carry the case on as far as the defendant 
possibly can, adding to the costs to plaintiffs, adding to the amount 
of most contingent fee arrangements. So that where now we have 70 or 75 
percent of all of the costs of product liability litigation going to 
other than the plaintiff, other than the victim, perhaps we can drive 
that up to 80 or 85 percent by making every one of these cases go to 
trial.
  That would be the result of the adoption of this amendment--fewer 
settlements, more expenses, both to defendants and to plaintiffs, and 
less money getting through to victims of actual negligence or actual 
misconduct on the part of manufacturers.
  It seems to me that the arguments of the Senators from Ohio and 
Alabama have been the best reason to turn down this amendment, as well 
as valid reasons to pass the bill overall. What they are asking us to 
do is to spend more money on litigation to discourage the settlement of 
lawsuits, rather than the opposite, which is clearly the goal of the 
overwhelming majority of the American people.
  Madam President, I am finished and I suspect we are prepared to yield 
back the remainder of our time.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. Madam President, I yield back the remainder of our 
time.
  The PRESIDING OFFICER. The Senator from Wisconsin has 1\1/2\ minutes.
  Mr. KOHL. Madam President, in closing, I want to point out that the 
Consumer Product Safety Commission is supportive of this amendment. It 
has been indicated that they are not supportive. They are supportive of 
this amendment.
  I think it is very clear from our discussion this morning that there 
is a very serious problem with court secrecy. The opponents, for the 
most part, have said let us put it off; let us not decide it now; let 
us wait. There is no reason to wait.
  I support S. 687, and to support S. 687 is consistent with supporting 
the intent of this amendment. This is an amendment that is in the 
public interest, and that will be met with approval by the great, great 
majority of all the American people.
  We have a responsibility to them to put the public interest here 
where it belongs, not only first, but along with private interests. And 
that is what this balancing requirement of the amendment will do. It 
requires judges to balance the public interest with private interests 
before they allow a court secrecy arrangement to be put through.
  So I think this is a very good amendment, and I urge the Senate to 
adopt this amendment.
  Mr. ROCKEFELLER. Has all time expired on both sides?
  The PRESIDING OFFICER. All time has almost expired. There are 16 
seconds left--20 seconds left.
  Mr. KOHL. I yield the remainder of my time.
  The PRESIDING OFFICER. All time has expired.
  Mr. ROCKEFELLER. On behalf of the Senator from Washington, Senator 
Gorton, and myself, I move to table the Kohl amendment. Madam 
President, I 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.
  The PRESIDING OFFICER. The question is on agreeing to the motion to 
table the Kohl amendment. The yeas and nays have been ordered. The 
clerk will call the roll.
  The legislative clerk called the roll.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
who desire to vote?
  The result was announced--yeas 51, nays 49, as follows:

                      [Rollcall Vote No. 168 Leg.]

                                YEAS--51

     Bennett
     Bond
     Boren
     Brown
     Burns
     Byrd
     Chafee
     Coats
     Cochran
     Coverdell
     Craig
     Danforth
     Dodd
     Dole
     Domenici
     Dorgan
     Durenberger
     Faircloth
     Glenn
     Gorton
     Gramm
     Grassley
     Gregg
     Hatch
     Helms
     Hutchison
     Jeffords
     Kassebaum
     Kempthorne
     Lieberman
     Lott
     Lugar
     Mack
     Mathews
     McCain
     McConnell
     Murkowski
     Nickles
     Nunn
     Pell
     Pressler
     Pryor
     Robb
     Rockefeller
     Roth
     Sasser
     Smith
     Stevens
     Thurmond
     Wallop
     Warner

                                NAYS--49

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Campbell
     Cohen
     Conrad
     D'Amato
     Daschle
     DeConcini
     Exon
     Feingold
     Feinstein
     Ford
     Graham
     Harkin
     Hatfield
     Heflin
     Hollings
     Inouye
     Johnston
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Metzenbaum
     Mikulski
     Mitchell
     Moseley-Braun
     Moynihan
     Murray
     Packwood
     Reid
     Riegle
     Sarbanes
     Shelby
     Simon
     Simpson
     Specter
     Wellstone
     Wofford
  So the motion to lay on the table the amendment (No. 1930) was agreed 
to.
  Mr. DODD. Madam President, I move to reconsider the vote.
  Mr. GORTON. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Madam President, I would yield to the distinguished manager 
of the legislation, the Senator from West Virginia.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. I thank the Presiding Officer.
  Madam President, I think what has happened in this vote is that the 
Senate has expressed itself with great sincerity and intensity that 
they want to see secrecy in the judicial process begin to disappear, 
and whereas the opponents of the amendment won, I think the argument of 
the proponents may have won. I congratulate Senator Herb Kohl. I would 
ask that the judiciary hear what the Senate has today said, that 
secrecy and the judicial process are not comfortably intertwined.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Madam President, I am just going to take a few minutes, if 
I could, to share some general thoughts on the legislation before us.
  Let me at the outset commend our colleague from West Virginia for his 
leadership on this issue, along with my colleague from Connecticut, 
Senator Lieberman and Senators Danforth and Gorton who have also been 
instrumental in crafting this legislation.
  Madam President, I rise in strong support of the Product Liability 
Fairness Act. The balanced reforms in this measure would help restore 
fairness to the product liability system in our country. It would help 
injured people get the help that they need when they need it and put an 
end to the game of Russian roulette that our product liability system 
has become.
  Madam President, it is very clear that our current product liability 
system does not work. People can argue about how to fix it, but it is 
broken and it needs to be fixed. If you ask the American people, they 
will put their fingers on the core of the problem. The results you 
obtain in a product liability case depend primarily on your ability to 
pay for a good lawyer. That is how the system works today. That is true 
whether you are a consumer, injured by an unsafe product, or a business 
person trying to defend yourself against an unjustified lawsuit.
  The statistics confirm what our constituents are telling us. Under 
the present system injured citizens must wait years for compensation. 
For example, a recent study by the General Accounting Office found that 
it takes 5 years for victims with the average dollar loss to receive 
compensation.
  The delays in the present system can and do lead to inadequate 
compensation. Many seriously injured victims who lack the resources to 
pay for their medical bills and support their families cannot afford to 
wait the 5 years for payment; they have no choice but to settle, and in 
many cases to settle for inadequate amounts.
  The problem, Madam President, of inadequate compensation is well 
documented. This is not speculation. One study found that people with 
economic losses between $100,000 and $200,000 recovered an average of 
150 percent of their losses, while those with losses of more than $1 
million, arguably the more serious claims, recovered only 39 percent of 
their losses. Other studies confirm that victims with less severe 
injuries are vastly overcompensated while victims with major injuries 
are significantly undercompensated. If that is not a system that is 
broken, I do not know what is.
  It is clear, Madam President, that the present system is not serving 
the needs of our injured citizens. At the same time, it is not serving 
the needs of American businesses.
  Many businesses are reluctant to introduce new products because when 
they look at their potential liability what they see staring back at 
them are the different and distinct laws of 55 States and territories. 
This uncertainty is particularly difficult for small businesses which 
cannot afford the huge legal costs of the present system. And these are 
not legal costs that fall only on unscrupulous manufacturers. Many 
companies have run up enormous legal bills only to be vindicated by the 
courts.
  If an American business is afraid to innovate or is forced to defer 
investment on research and development, is that business the only one 
to suffer? Of course not, Madam President. If American businesses are 
unable to bring innovative products to the marketplace or forced to 
take helpful products off the market, we all lose.
  The search for an AIDS vaccine is a very good example of what we are 
talking about. At least one company, Biogen from Massachusetts, 
terminated its investment in an AIDS vaccine because of product 
liability fears.
  Madam President, this is not just one company complaining. Dr. Jonas 
Salk has stated that, if he develops an AIDS vaccine, he doubts that an 
American manufacturer would actually market it.
  But this problem is not limited to particular products. The current 
product liability system threatens entire industries. The contraceptive 
industry is one example. A 1990 report issued by the National Research 
Council and the Institute of Medicine concluded that ``Product 
liability litigation has contributed significantly to the climate of 
disincentives for the development of contraceptive products.''
  The American Medical Association has documented this problem:

       In the early 1970s, there were 13 pharmaceutical companies 
     actively pursuing research in contraception and fertility. 
     Now, only one U.S. company conducts contraceptive and 
     fertility research.

  Is our country well-served by a system that prevents contraceptives, 
and other critical medical products, from coming to the market? Who 
benefits from that result? I would suggest then no one benefits, and 
that is why we can and must do better.


                             a step forward

  And with passage of the Product Liability Fairness Act, we will do 
better. This legislation may not solve all of the problems in the 
product liability system, but it will improve that system for 
everyone--for the injured people who need fast and fair compensation, 
for consumers who need quality products to choose from, for those 
American businesses who are at the cutting edge of international 
competition, and for workers who depend on a strong economy to support 
their families.
  The moderate reforms in this measure will reduce the abuses in the 
current system without eliminating solid protections for those who are 
victimized by defective or dangerous products.


                             uniform system

  Let me highlight some of the key provisions of this legislation. 
First, this measure will provide a more uniform system of product 
liability. By adding more certainty to the system, the excessive costs 
in the present system will come down.
  This improvement is one of the reasons why the National Governors 
Association testified in support of product liability reform. The 
association has said:

       The United States needs a single, predictable set of 
     product liability rules. The adoption of a Federal uniform 
     product liability code would eliminate unnecessary cost, 
     delay, and confusion in resolving product liability cases.

                     alternative dispute resolution

  The provisions in the bill that encourage fair settlements and the 
use of alternative dispute resolution will also help reduce the 
excessive costs in the current system. Currently, too much money goes 
to transaction costs--primarily lawyers fees--and not enough goes to 
victims.
  A 1993 survey of the Association of Manufacturing Technology found 
that every 100 claims filed against its members cost a total of $10.2 
million. Out of that total, the victims received only $2.3 million, 
with the rest of the money going to legal fees and other costs. 
Clearly, we need to implement a better system in which the money goes 
to those who need it--injured people.


                           balanced approach

  Most importantly, and I cannot emphasize this enough, the moderate 
reforms in this bill offer a balanced approach to the needs of both 
consumers and businesses. Consumers will benefit, for example, from a 
statute of limitations provision that preserves a claim until 2 years 
after the consumer should have discovered the harm and the cause, not 
when the harm occurred, which is the law in some States, but when they 
should have discovered it. That is a great advantage to consumers.
  In many cases, injured people are not sure what caused their 
injuries, and by the time they figure it out, they have often lost 
their ability to sue. This legislation will provide relief for people 
in such situations and allow them adequate time to bring a lawsuit.
  Businesses will also benefit from this legislation. For example, in 
order to recover punitive damages, the plaintiff will have to prove, by 
clear and convincing evidence, that the harm was caused by the 
defendant's ``conscious, flagrant indifference to the safety of those 
persons who might be harmed by a product.'' This provision will allow 
defendants to have a clear understanding of when they may be subject to 
this quasicriminal penalty. At the same time, the bill does not 
institute arbitrary caps or limits that would restrict the rights of 
plaintiffs.
  Many States have caps on punitive damages, but this bill does not.
  Under this measure, defendants will have an absolute defense if the 
plaintiff was under the influence of intoxicating alcohol or illegal 
drugs and the condition was more than 50 percent responsible for the 
plaintiff's injuries. This provision, it seems to me, is nothing more 
than common sense.


                            product sellers

  Furthermore, product sellers would only be liable for their own 
negligence or failure to comply with an express warranty. This 
provision would help product sellers who are not at fault get out of 
cases before running up huge legal bills. But as an added protection 
for injured people, this rule would not apply if the manufacturer could 
not be brought into court or if the claimant would be unable to enforce 
a judgment against the manufacturer.
  The provisions I have outlined demonstrate the balance this 
legislation strikes between consumers and businesses. In the final 
analysis, the reforms in the bill should strengthen the product 
liability system for everyone.
  Of course, some of my colleagues are opposed to this measure. While I 
hope to respond to some of their arguments more extensively during 
debate, let me briefly address some of their claims.


               a national solution for a national problem

  First, some of my colleagues argue that this bill would undermine 
long-established principles of federalism and interfere with State 
liability standards. But I see an important rationale for Federal 
standards in this area: More than 70 percent of all products are sold 
beyond the borders of the State in which they are manufactured.
  There was a time when the products that were sold were sold only or 
almost exclusively within the State that they were manufactured. Today, 
that is no longer the case.
  Inconsistent State laws are a real burden for manufacturers, who are 
sometimes required to meet different standards in each different State 
and territory. Additionally, these inconsistent State laws encourage 
forum-shopping.
  Because of the different laws, some people shop all over the country 
as to where to bring their lawsuit. That is not intelligent. That is 
not wise. That undermines the system. At the same time, Federal 
intervention into a specific area of liability is certainly nothing 
new.
  For example, Congress has adopted Federal tort plans under the Jones 
Act for certain maritime accidents, and under the Federal Employers 
Liability Act which relates to railroad accidents.
  Opponents of this legislation, Madam President, have also argued that 
there is no litigation explosion and that, therefore, there is no need 
for this legislation at all. There are conflicting statistics about how 
many product liability cases are filed each year and the amount of 
money involved. But there is no doubt, Madam President, whatsoever, 
that there are thousands of product liability cases involving billions 
of dollars filed annually in this country.
  Clearly, there are enough cases and dollars to warrant making the 
system more fair and efficient. But to debate whether there has been a 
litigation explosion I think misses the critical question of whether 
injured people are being treated fairly under the present system. As I 
suggested previously, they are not being treated fairly, and this act 
would improve the system immeasurably.
  Although there are disagreements about this legislation, I find it 
tremendously encouraging that we are at least having the opportunity to 
debate this bill. This is one of the first opportunities we have had to 
debate litigation reform. Senator Danforth and I, going back almost 10 
years ago, offered legislation in this area. It never moved beyond 
committee. We never had the chance to deal with it. I point out that 
one of those involved in helping us draft the legislation was the dean 
of Yale Law School, Guido Calabresi, one of the great experts on tort 
law. Unfortunately, we were not able to get much done then.
  At least today we are debating and discussing this issue. I am 
hopeful that this evening we will vote to invoke cloture and move 
forward on this measure.
  With this bill, we can implement much-needed reform. The only 
question is whether or not a minority--and that is what it is in this 
body--will prevent us from completing action on this legislation. This 
is a critically important issue involving the rights and 
responsibilities of injured people, of workers, of American business 
and industry, and we ought to treat it with the seriousness it 
deserves.
  I urge my colleagues to allow this debate to go forward and to give 
this body the opportunity to vote up or down on whether or not they 
think that product liability reform is necessary.
  In closing, I encourage my colleagues to offer constructive 
amendments that will improve the bill. Let us debate the real issues 
and find solutions to the real problems in our product liability 
system. In my view, this legislation, with its balanced approach to 
reform, will improve the product liability system for everyone. I urge 
my colleagues to support it.
  Mrs. BOXER addressed the Chair.
  The PRESIDING OFFICER. The Senator from California [Mrs. Boxer] is 
recognized.
  Mrs. BOXER. Madam President, I want to add my voice to those who 
oppose this bill, the Product Liability Fairness Act. I do not think it 
is fair. I do think it is about product liability. I want to point out 
why I not only think it is unfair, but also it is dangerous. I think it 
is dangerous for people in this country, particularly the women, in its 
present form. I also have to say the bill could have been improved by 
the Kohl amendment. But this Senate voted to keep settlement agreements 
secret--unbelievably, the Senate voted to keep settlement agreements 
secret.
  I happen to know of some cases where there have been terrible 
products on the market. There were toys, for example, where a child was 
injured or paralyzed using them. But the agreement could never come to 
light, and that product stayed on the market, and who knows if other 
children are becoming paralyzed. But this body could not even vote for 
that amendment. They do not want to endanger the Product Liability 
Fairness Act.
  I will tell you that it is bad medicine for the people of this 
country; it is bad for the women of this Nation. I agree that we must 
help our businesses keep costs down. I work with the businesses of 
California to make sure that they can compete, to make sure that they 
have incentives to win in this new global economy. But I do not believe 
we should pass a law that looks at the corporate bottom line only, and 
not at the bottom line of the people of this country who could be 
harmed.
  I do not think we should ever sell off the rights of victims, who are 
too often women, whose lives have been torn apart by dangerous drugs 
and medical devices. I can tell you--and I will in this speech, I hope, 
effectively--that we are not just talking about theoretical issues 
here; we are talking about living, breathing people--Americans who have 
been harmed.
  For the victims, the price tag on this legislation is far too high. 
Make no mistake about it. This bill, in my opinion, is not about 
reform; it is about putting the women of this country in a powerless 
position, powerless to fight against the horrible outcomes that have 
resulted from misrepresentations and broken promises.
  I certainly do not accuse any of those colleagues who support this 
bill of doing this intentionally. But that is what this bill does. It 
is about making women and their offspring the guinea pigs of our future 
by giving a legal shield to those who should be held responsible for 
mistakes. This bill would do this by shielding manufacturers of 
dangerous drugs and medical devices from punitive damages, even in 
cases of recklessness and indifference to society. All these companies 
need to do to make them immune from these kinds of damages is get an 
FDA approval.
  Madam President, this is a terrible mistake. In our society, the 
threat of punitive damages helps keep dangerous products off the 
market. If we turn around and shield these health product wrongdoers 
from liability for punitive damages, we will be helping to tear down 
our system's safeguards against danger of the most frightening kind.
  Madam President, we are going to hear a lot of talk on both sides of 
this issue. But I think history speaks for itself. Let us remember DES, 
Copper-7 IUD's, and high-estrogen contraceptives. Maybe the men in this 
body do not remember them as well as the women do, but I think we ought 
to focus on those particular products which have wreaked havoc on the 
women of this Nation. They all had something in common: The FDA let 
those products onto the market.
  There are those who will argue that, well, in those days, the FDA 
really did not approve the way they approve today. I agree that the 
approval process has gotten better. But let me tell you, mistakes have 
happened in the past when we thought there was a good approval process, 
and they will happen in the future.
  In fact, Madam President, a GAO report examined data about drugs 
approved by the FDA between 1976 and 1985 and found that over 50 
percent of them had serious postapproval risks that could lead to 
hospitalization, severe or permanent disability, or even death.
  I do not think you need a law degree to know that 10 or 20 years from 
now, we will look back and think that our system was not perfect even 
today.
  And in 50 years people will look back and say, gee, we thought we had 
it down right, but we did not. We will continue to see faces on the 
wall of history of people tragically, often fatally harmed by a whole 
list of drugs and medical devices that we incorrectly believed were 
safe.
  Just yesterday Hazel O'Leary, the head of the Department of Energy, 
released documents that showed what this Government did to these people 
of this country without them knowing they were exposed to radiation. 
They thought everything was fine. Oh, it was the Department of Energy. 
It was the Federal Government. And pregnant women were exposed to 
radiation.
  What is the connection I am making? The connection is that in this 
bill we give companies an FDA excuse. And the point I am making is this 
is government of, by, and for the people, but it is not perfect. This 
Government lied to its own people in order to do experiments. Who is to 
say there will not be a bureaucrat somewhere in the FDA who could be 
bought someday now or in the future and that approval is given to a 
product that maims? Oh, it is an FDA excuse, the company says.
  Now most manufacturers try to do the right thing. We have some 
wonderful lifesaving products in our country. I support these 
companies. I support their research. I think the thing we need to do is 
expand research. But when it comes to safety, let us not leave the 
women of this country exposed.
  Let me talk about my experience. For 10 years I was over in the House 
of Representatives, and the last few I was the chairman of the 
subcommittee that oversaw the FAA. Now in this bill there is an FAA 
exemption, also, a Federal Aviation Administration exemption given.
  I have to tell you there were many times in my research that I 
accused the FAA of being a little too cozy with the industry. And when 
it came to safety that was true. If you look at the configuration of 
where exit doors are on planes in this country, you will see in 
comparison to foreign countries we do not do enough for safety. We do 
not leave enough room for people to escape a plane.
  I will be darned if I am going to give a company an FAA excuse so 
that in case of a crash or a problem they can say, well, we did this 
the right way.
  (Mr. CAMPBELL assumed the chair.)
  Mrs. BOXER. I do not think that our Government is infallible, Mr. 
President, and I do not think it ever will be infallible. What I find 
amazing is a lot of my colleagues here who are always critical of the 
Government, particularly my friends on the other side of the aisle, are 
willing to trust the FDA and the FAA in this fashion and let companies 
hide behind that shield. I find that rather amazing.
  In 1993, a GAO study found the FAA is not equipped to keep pace with 
new technologies and that its engineers are undertrained. If we allow 
an imperfect FDA and FAA process to serve as an absolute shield for 
manufacturers, what governmental entity will be next that we will put 
up as a shield?
  I have a list here, Mr. President, of all the agencies in the Federal 
Government that have regulatory functions. I will not read them all.
  Mr. President, one of them is the Nuclear Regulatory Commission. 
Maybe we ought to give a shield for that. Another is the Occupational 
Safety and Health Administration. That would probably come next. And 
pretty soon I will tell you we are going to be setting up the situation 
where all the companies have to do is cozy up to these bureaucrats, get 
a signoff on their product or plant, and duck behind that shield if 
there is a problem in the future. This to me is a slippery slope that 
we should not step onto.
  When lives are at stake, we need to look for ways to increase, not 
decrease, our safeguards against flagrant misconduct. We cannot allow 
ever, in my opinion, the FDA to be a substitute for our jury system, or 
the FAA, or any other regulatory agency.
  I think women will be disproportionately harmed by this bill, also 
because it has a provision barring joint liability for noneconomic 
damages. The doctrine of joint and several liability says that when 
more than one defendant is responsible for an injury but they all 
cannot contribute to the award, the plaintiff, the injured party, is 
allowed to recover fully from the remaining wrongdoers.
  We are not talking about defendants who played a small or 
insignificant role in the damage. We are talking about companies whose 
actions alone were, at the very least, an essential factor in causing 
the injury.
  The remaining responsible companies do not want to pick up the tab 
for the others who have either fled the country or declared bankruptcy 
or are in some other way judgment-proof. I ask my colleagues: Why 
should it be the injured party, the victim, who is forced to subsidize 
the wrongdoer?
  Noneconomic damages help reimburse victims for the pain and suffering 
they experience when they are disfigured or lose their fertility. We 
have learned from our past tragic experiences that these damages are 
particularly important to women. And let me explain why I view this 
bill as harmful to women.
  We all know that the economic status of women is not as high as men. 
According to 1993 data from the U.S. Department of Labor, a women still 
earns only 77 cents for every dollar earned by a man. Women make up 52 
percent of the population, but there are 10 million more men working in 
this country than women.
  By eliminating punitive damages in certain cases, we are increasing 
the vulnerability of women to dangerous products. We must always work 
to ensure equal justice under the law, regardless of earning capacity, 
professional status or gender.
  Let us think for a minute about real people right here. Think about 
what happened to the women who trusted products like DES, silicone 
breast implants, Dalkon shield, and Copper-7 IUD's. This is what 
happened to them: Infertility, miscarriage, cancer, and disfigurement. 
Now you will hear a lot of talk on the Senate floor about legal theory. 
Let us talk about miscarriage, infertility, cancer, disfigurement. 
These injuries may not always carry a quantifiable economic price tag 
in a lawyer's mind or in the court.

  They may not even result in any lost wages if the individual, say, 
works part time and is able to continue with that work. But that does 
not mean that they do not take a tremendous toll on the women, on the 
quality of their lives and the lives of the people around them.
  We value families in this country--we certainly say we do. Imagine 
the pain and loss to a woman or a man who, because of a company's 
mistake, can never experience the joy of a child.
  Mr. President, it is estimated that 5.3 million American men and 
women in this country are infertile--a full 10 percent of the 
population. Some of them became infertile because of dangerous 
products. I know if we asked them, they would tell us just how 
devastating it is. Maybe it is not considered an economic loss but it 
is, nonetheless, a devastating loss.
  So as we debate this bill, I believe that we must listen to the real 
casualities of this bill: The victims--real people with lives worth 
protecting.
  Mr. President, I do have about 4 more minutes I see my colleagues are 
standing and I just want to inform them 4 more minutes to wind down my 
conclusion.
  Mr. President, I think the supporters of this bill should meet the 
real victims behind this issue.
  They should meet Martha Cody of Santa Barbara, CA. At age 34, Martha 
was forced to have a hysterectomy. In Los Angeles, CA, Sherry Weinman 
lives with the knowledge that she is infertile. Then there's Patti 
Negri, of Hollywood, CA. Not only will this 37-year-old woman never 
have children, but she developed osteoporosis at the young age of 30.
  Their injuries were caused by DES--DES, a drug that was placed on the 
market with the approval of the FDA. This bill will tell DES victims 
across America that the FDA premarket approval process, however 
inadequate, should excuse the manufacturers of drugs like DES from 
paying punitive damages.
  I think the supporters of this bill should meet Sybil Goldrich of Los 
Angeles, CA. She now has chronic illness, tumors in her uterus and 
ovaries, and has lost her reproductive capacity. And all of this 
because, after having bilateral mastectomies for breast cancer, she 
received a silicone-gel breast implant.
  Or Peggy Oglosby, a California resident who also had breast cancer 
and after receiving silicone implants, her life and her health has been 
dramatically altered. She has lupus, problems with her motor and 
sensory nerves, arthritis and she ultimately had to have major 
reconstructive spinal surgery. She wrote to me:

       Every day I am in extreme pain. My muscles form large 
     painful knots, my joints are stiff, swollen and painful. I 
     have debilitating headaches, severe back and neck aches. I 
     have rashes all over my body. I get so hot I feel like my 
     body will catch on fire. I cannot begin to tell you how 
     difficult it is for me to try and prepare a simple meal, do a 
     little laundry or any other normal everyday thing * * * My 
     lifestyle and my husband's have been dramatically altered.

  And then there's Brenda McLaughlin, a silicone breast implant victim 
from San Francisco, CA, who wrote to me and asked me to do the 
following. She said: ``Please look at the human side of this issue.''
  ``Look at the human side of this issue,'' she says.
  If we pass this bill in its current form, we are turning away from 
the human side of this issue.
  I ask my colleagues to honor these victims and do the right thing.
  For too long the women of America have not been paid attention to. 
They do blood pressure experiments, but not on our blood pressure. They 
look into heart disease, but not at our hearts. Finally, we are paying 
attention to women's issues.
  This bill would take us back in the other direction. I think the time 
has come to stand up for the women of this country and say that we 
count, too.
  Because, if we do not, I will tell you, my colleagues, somewhere down 
the road at a community meeting when you meet one of these women, or in 
a hospital when you meet one of these women, or even a classroom when 
you meet one of the kids of one of these women, you will regret--you 
will regret--that you put into law an FDA shield. It is wrong and I 
hope we will beat this bill back.
  I yield the floor.
  Mr. HEFLIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.
  Mr. HEFLIN. Mr. President, I would like you to give some thought 
about the facts of a case that could come under this bill.
  Two planes collide in the air, both of them built within the last 
year. Plane A is not defective. Plane B is clearly defective, clearly 
at fault. Some of the parts from plane B fall on Yankee Stadium, injure 
people, and destroy a section of the stands.
  Plane A does not come under this bill in the suit. The owner of 
Yankee Stadium, which loses 500 or 600 seats and cannot have spectators 
in it, does not come under this bill.
  This bill has a specific exclusion for businesses. It has an 
exclusion that the provisions do not apply to businesses.
  Section 4:

       A civil action brought against a manufacturer or product 
     seller for loss of damage to a product itself or for 
     commercial loss is not subject to this Act and shall be 
     governed by applicable commercial or contract law.

  Pennzoil-Texaco, one of the largest verdicts ever rendered, $11 
billion, was not a personal injury suit. It was a suit for commercial 
loss.
  Commercial loss extends to replacement of the aircraft, replacement 
of the parts of the aircraft, loss of business of plane A, and loss of 
profits. It applies to the owner of the Yankee Stadium that loses a 
section of its grandstands where spectators cannot come. This law does 
not control relative to that.
  Now that is not fair. What is good for the goose is good for the 
gander and what is good for the gander is good for the goose.
  Well, one of the people in plane B has bought a life insurance 
policy, paid for it for 30 years, and has a health insurance policy on 
which he has paid the premiums for 30 years. He is injured and goes to 
the hospital, stays a month, and incurs a $100,000 hospital bill. His 
life insurance policy, which he had paid for all of the time, is 
$200,000.
  He ends up with a verdict of $500,000. Under this bill, under certain 
circumstances, his $500,000 verdict is reduced by the $200,000 life 
insurance that he has paid for over the years. It is further reduced by 
the $100,000 hospital bill that was paid from his health insurer 
because he lived 4 weeks before he died.
  Now, somebody says, ``How in the world could that happen?'' The 
language in this bill provides for that.
  The definition of collateral benefits includes any life insurance, 
any health insurance, any accident insurance or plan, wage or salary 
continuation plan, or disability income or replacement service 
insurance, result of participating in any prepaid medical plan or 
health maintenance organization.
  There is a provision in the bill that says that if the defendant 
makes an offer of settlement and the claimant receives less, then any 
collateral benefit--which includes that life insurance policy and that 
health insurance policy--is deducted from the award.
  And so it could well be that, instead of the $500,000 judgment that 
he gets, he finds it reduced by $200,000 of his own personal life 
insurance and $100,000 that had been paid out from his own health 
insurance company.
  And the court has to do this, not the jury. It is after the verdict 
that the court makes this reduction under the language that is in this 
bill. And the injured party ends up with $200,000.
  Now, with language like that in S. 687, how in the world did somebody 
have the audacity to call this the Product Liability Fairness Act?
  Let us look at the fairness issue. We mentioned two things already. 
Is it fair that under this bill a seller of a product can impliedly 
warrant that product for an improper and dangerous use and not be found 
liable?
  For example, if a consumer asked to purchase a product for use that 
the seller knows is improper and dangerous, unless the seller expressly 
verbalizes or says orally that the product is in fact safe for that 
use, the seller cannot be held liable. That is the issue of implied 
warranty. The product seller has to expressly say it. The law is that 
products are supposed to be put on the market in a fit and proper 
condition for the use for which they are intended.
  Let us look at some of the other aspects of this bill. The proponents 
changed the law in regards to punitive damages, which has been standard 
over the years, from willful or wanton. They changed the standard and 
put in language for a superheightened standard of ``conscious, flagrant 
indifference'' to safety. Conscious and flagrant--far more than what 
has been the standard. Had Exxon been confronted by the big business 
protections of S. 687--that is this bill--they would have faced no 
punitive damages in the Exxon Valdez case where the punitive damages 
were awarded for reckless conduct.
  Is it fair that a big drug company that markets a product that is 
horribly dangerous and injures many, many people should be granted 
immunity from punitive damages simply because the product was approved 
by a Federal bureaucracy? That immunity applies if the defendant has 
information or knowledge that the product was dangerous but the 
information was not required under some technical regulations drawn up 
by a bureaucrat who never dreamed such rules would lead to immunity for 
a drug company.
  Let me point out the GAO study relative to the FDA approval. GAO 
recently issued a report on this issue which contains some alarming 
statistics:

       Of the 198 drugs approved by the FDA between 1976 and 1985 
     for which data was available, 102, or 51.5 percent, had 
     serious postapproval risk as evidenced by label changing or 
     withdrawal from the market. The serious postapproval risks 
     are adverse reactions that could lead to hospitalization, 
     increasing the length of hospitalization, and very possibly 
     severe or permanent disability, or death.

  I quote from the GAO study at page 3, which was issued, ``FDA Drug 
Review, Postapproval Risk, 1976 to 1985,'' in April 1990.
  Let us look, also, in regards to the FAA approval that is required. 
It also gives a complete defense. Additionally, there are real 
questions about the effectiveness of FAA safety inspection procedures. 
GAO, in a report released on November 13, 1989, is extremely critical 
of this system, noting that ``inadequate oversight of the inspection 
program resulted from, one, FAA headquarters management being unaware 
that its inspection policies were not always followed by local FAA 
staff; and, second, inaccurate reporting to Congress of FAA's 
achievement.''
  The effects of this inadequate inspection system on the defects in 
the aircraft were recently recognized by the chairman of Cesna 
Aircraft, who stated that, ``With tougher airworthiness requirements 
implemented aggressively by FAA, and with type-specific flight 
standards, I believe it is realistic to reduce the level of accidents 
by at least 50 percent.''
  If even the aircraft manufacturers believe there is room for a 50 
percent improvement from FAA, it would not be appropriate to leave FAA 
as the only line of defense for the safety of the flying public.
  On machines, we get into this issue of the statute of repose. Howard 
Falk, a member of the board of directors of the National Machine Tool 
Builders Association, testified that over 50 percent of the claims 
filed against machine tool builders involved machines over 25 years of 
age.
  As we review each and every provision of this bill, it is clearly 
written for an advantage for certain manufacturers and not for the 
advantage of an injured person.
  There is another provision in this bill that causes me a great deal 
of concern and raises the fairness issue. On page 26 of the bill, there 
is this statement:

       The employee shall not make any settlement with or accept 
     any payment from the manufacturer or product seller without 
     the written consent of the employer, and no release to or 
     agreement with the manufacturer or the product seller shall 
     be valid or enforceable for any purpose without such consent.

  This provision deals with workers' compensation.

       However, the preceding sentence shall not apply if the 
     employer, the workers' compensation insurer of the employer, 
     is made whole from all benefits paid in workers' compensation 
     benefits.

  ``Made whole'' is 100 percent. Suppose a claimant feels there is a 
chance he will lose. And there are figures that have come out recently 
in a study that show that just slightly over 50 percent of all 
plaintiffs in lawsuits that are tried are victorious. So, therefore, he 
says, ``I want to settle my case. I am willing to settle for 50 cents 
on the dollar.'' But an injured worker has to get his employer's 
consent, which is really his insurance company and the workers' 
compensation insurance company. And they say, ``No, we are not going to 
take 50 cents on the dollar. Under this law, under this products 
liability fairness law, we are entitled to 100 percent.''
  Sometimes the insurance company who represents the defendant and the 
insurance company who represents the plaintiff can be the same, and 
they could use this language about failure to give consent in such a 
manner as to present hurdles and obstacles for plaintiff to go over. 
That is a very dangerous and very unfair provision that is in this 
particular bill.
  There are other provisions which relate to the question of fairness. 
In my judgment, the provision dealing with the joint and several 
liability on noneconomic issues is very unfair. I thought Senator Boxer 
hit it very good. Her speech was very much to the point on it. But just 
say ``disfigurement.'' Disfigurement is a noneconomic loss. In a clear 
case of liability, why is it that a severely disfigured claimant has to 
figure out which of several defendants is supposed to be recovered 
against? The defendants themselves ought to have the responsibility to 
determine and apportion damages among themselves, and contributions 
among joint tort feasors are recognized in a number of States, and this 
can be worked out, rather than putting the burden on the woman who is 
disfigured or the woman who is deprived of being able to have a 
child. That responsibility, when there is clear liability, ought not to 
require that the injured party has to figure out the proportion of 
liability between four, five, or six defendants. The defendants 
themselves can apportion that. They have understandings and agreements 
relative to these matters. But this puts an awful burden on the woman 
who is in a situation where she cannot bear a child in the future as a 
result of injury for which she bears no responsibility.

  Children are also adversely affected by the bill's provision 
regarding noneconomic damages, because there is no standard by which 
you can measure their wages. A 10-year-old child who is made completely 
a vegetable, who does not have the ability to earn in regard to the 
future, how much wages would the person have? That child might have 
been a doctor. Maybe, on the other hand, that child might have been the 
executive of a large company. But there is no standard by which a court 
could measure their compensable damages.
  Now, to me that is very unfair. The elderly, who are entitled to 
spend the last years, the sunset years of their life, in some peace, 
would also be the ones affected by the provisions of this section in 
the bill because their loss would be a noneconomic loss.
  Now, the question is that certainly one ought not to have to bear the 
risk caused by potential bankrupt defendants and to bear the burden of 
apportioning the damages among the various defendants. Let the 
defendant themselves, and their insurance companies, have that 
responsibility.
  This bill is one of the most unfair bills that I have ever seen. As 
it is written, the fine print has so many clauses which are designed to 
save the insurance company money. That is basically what it is. The 
title of S. 687 is certainly a misnomer.
  I go back to the phrase what is good for the goose is good for the 
gander. Why does the bill exclude all commercial loss and all business 
defendants? They do not come under this proposed law. They do not want 
to be saddled with its obstacles and hurdles. They do not want to be 
saddled with the fine print that is contained herein and the provisions 
that are there. Therefore, they exclude themselves.
  What is good for the goose is good for the gander. That lone 
provision convinces me that the word ``fairness'' is a misnomer and it 
ought to be the Product Liability Unfairness Act that the proponents 
are proposing in this case.
  Mr. President, I think if a person reads this bill, or has staff read 
this bill, and sees the unfairness that comes out of all of this, it 
becomes apparent that this bill ought to be defeated, and that cloture 
ought not to be allowed in this case. S. 687 needs to go back to the 
drawing board.
  Now, I think over the years the States have done a pretty good job. 
When I came here in the years of the Carter administration, the 
business community was afraid--and I agreed with them--that there was a 
big movement to have a federalized workmen's compensation law, and 
business interests always told me that anytime you get a Federal cure, 
it turns out to be a Federal plague.
  Well, they come up here with this. I do not know what may happen in 
the future in regard to a plague, but after this bill were to become 
effective they may well come back and seek to liberalize it far more. 
But this area of the law ought to be left to the States, as it has for 
over 200 years. This is a strictly unfair bill. I urge my colleagues, 
when the vote comes up on cloture, to vote against cloture.
  I yield the floor.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington [Mr. Gorton] is 
recognized.
  Mr. GORTON. I thank the Chair.
  Mr. President, the distinguished junior Senator from California might 
well be surprised at the degree of agreement with many of the points 
that she made across party lines and across the line of division over 
this bill.
  Much of what she said about the right of people to make recoveries 
when they are injured by the negligent or purposeful action of others 
is extremely sound policy. Much of it, however, has already been 
anticipated over the course not just of the 2 years of this Congress, 
but the 12 or 14 years during which product liability litigation has 
been discussed in the Commerce Committee. Therefore, many of the 
serious cases and examples which she brought up in her speech would be 
unaffected, for all practical purposes, by this legislation.
  When you get right down to it, legislative provisions on product 
liability, which were extremely expansive in the early years of the 
discussion of this subject, which to a certain extent federalized the 
laws relating to negligence and strict liability, which included many 
additional defenses, have in many cases been removed from this 
proposal, which now covers perhaps three or four major subjects. None 
of the opponents to this legislation, to the best of my knowledge, have 
objected to those provisions in the bill which deal with expedited 
settlements, which attempt to see to it that peaceful and prompt 
resolution of controversies is encouraged rather than discouraged.
  None of the opponents of this bill, to the best of my knowledge, 
object to those elements in the bill which actually extend or preserve 
rights of injured parties, like a statute of limitations which becomes 
national in nature and which is based not on the date of the injury but 
the date on which the injured party should have known in due and 
reasonable course that he or she in fact was injured by the product in 
question.
  Note that the substance of the bill, from the point of view of the 
way in which litigation is conducted and the way in which claims are 
dealt with, really comes down to two matters of considerable substance, 
one having to do with what is called joint and several liability and 
the other having to do with punitive damages.
  It was, of course, to those two basic provisions in this act that 
most of the remarks of the Senator from California were directed. In 
this case, I hope that I can explain both to her and to our colleagues 
once again what we have attempted to explain as sponsors of this bill 
over an extended period of time.
  Obviously, in any society, there are a number of competing interests. 
One vitally important interest is that courts be open to people who 
have claims. I cannot even say in that case legitimate claims, because 
that is what is the function of the Court to determine. Courts have to 
be very widely open to all kinds of claims, the legitimacy of which is 
to be determined during the course of proceedings by an impartial 
tribunal.
  At the same time, of course, we have a wide range of other societal 
goals which we seek, and among those goals, of course, is seeing to it 
that a society is encouraged to change and to develop for the better.
  Perhaps one of the elements in which we can have the greatest degree 
of pride as Americans is the fact that for a century or more we have 
led the world in industrial innovation, in a wide range of fields, with 
great competition from others, perhaps, in a number of those areas, but 
nonetheless remaining always on the cutting edge of technology.
  Perhaps even more significant as we look at American leadership is 
the leadership of American companies in the development of new drugs 
for the treatment of certain kinds of diseases or conditions and the 
development of medical devices. And so the Senator from California has 
attacked particularly those elements in this bill which limit punitive 
damages in cases of items approved for aircraft by the Federal Aviation 
Administration and various kinds of medical devices and drugs which 
have been approved for their safety and effectiveness by the Food and 
Drug Administration.
  It is, however, totally incorrect to say that either one of those 
defenses provides an ``absolute shield''--and in using those two words, 
I am using two words which were presented to us by the Senator from 
California--from liability for negligence, or for that matter for a 
purposeful use of a product which in fact is harmful rather than 
helpful.
  The defense which is presented to manufacturers and to researchers 
and developers under the so-called FDA and FAA defenses is a defense 
against punitive damages. It is a defense against punitive damages. It 
is not a defense and is totally irrelevant to the actual damages which 
an individual has suffered and can prove to the satisfaction of a court 
or the jury.
  It is absolutely no defense whatsoever to noneconomic damages, the 
kind of damages to which the Senator from California mentioned and so 
eloquently testified. Each of those is unaffected by the FDA or the FAA 
defense. Only punitive damages are covered by this bill in that 
connection.
  In that connection, Mr. President, I can speak with a background 
different from most other Senators. I was admitted to the bar, 
practiced law in, and was attorney general of a State which does not 
allow punitive damages at all in the great bulk of civil cases. There 
are four or five such States in the United States as a part of our 
experiment in the law. I do not believe that the citizens of my State 
and that other handful of States are without recourse. They bring 
lawsuits as far as I can tell just as frequently as the citizens of 
other States in connection with these high-profile items to which the 
Senator has testified. They get most cases settled. They win those 
cases before juries and before courts just as often as do others. 
Whatever impact there is on the manufacturers driving them toward 
safety by litigation is as present in the State of Washington as it is 
elsewhere.
  There are very serious questions raised. I suspect that most 
academics in the field of justice and the law have serious reservations 
about the appropriateness of punitive damages in a civil justice system 
because of course one court in one State can impose them, another court 
in another State can impose them. Companies can be subjected for 
exactly the same products in multiple verdicts under our civil justice 
system. There are many, as is the case in many other countries, which 
seriously question whether they play or should play any role in our 
civil justice system at all.
  We do not deal with that question of whether they should be present 
at all. In this bill we simply say that if a developer, if a company, 
has gone through the entire process which is laid out by the Government 
of the United States, in these two instances, matters which come before 
the Food and Drug Administration for its approval on the basis of 
safety and effectiveness, or to the Federal Aviation Administration for 
safety in connection with aircraft, that if the company has revealed 
everything relevant to the particular item for which it seeks approval, 
if it has held nothing back before or after the license--in other 
words, if it has operated within the frame of reference of all of the 
knowledge that it has available to it and has that approval--then it 
ought not to be subject to a single or a multiplicity of punitive 
damage judgments well after the fact, after something else has been 
learned or a jury has been persuaded of some other matter.
  It would seem to me, Mr. President, that is a matter of simple 
justice. If we have a system--of course the system will not be entirely 
perfect. But if we have a system under which we require companies to go 
through the various hoops before they can market something, and if they 
do it and if they do it honestly, ought they not at least be preserved 
from punitive damage settlements? Just as a matter of abstract justice, 
it would seem to me that should be the case.
  The Senator from California said, ``Oh, you know, we don't trust 
Government. Government can make mistakes.'' Of course it can. Someone 
could pay off someone in the FDA. Well, there is a specific section 
here which takes that out of the exemption from punitive damages for 
bribery or payoff which seems highly unlikely in any event. But the 
company does not need to have gone so far as to have bribed someone to 
pull itself out of this prohibition against punitive damages. It simply 
needs to have withheld something. It simply needs to have acted in any 
way that was not appropriate at the time. It simply needs to have 
withheld knowledge that it had before or after that licensing.
  This exemption from punitive damages falls, whatever law of a 
particular State at the present time. But there is a more important 
matter than even this narrow question of abstract justice. That has to 
do with the impact on people as investors, on research and development, 
divisions of our major companies or of our small startup companies and 
the like. What do we want to do? We say in our tax laws that research 
and development is important and is absolutely vital. We want people to 
engage in it. We have not conquered quite obviously all of the 
physical, mental, and otherwise ills of human beings in this world. We 
want the kind of research and development and product promotion that 
will in fact help people.
  In instance after instance, for all practical purposes to a hundred 
percent of the instances, we are told by the companies which are 
engaged in this business that they are stopping research into certain 
fields. They are stopping the development of items that they researched 
and thought might work and could even get licensed because they simply 
are not willing to risk the entire future of their companies on a new 
product, even after it has been licensed by the Food and Drug 
Administration--risk in the case of a small company, absolute 
bankruptcy from count one of these judgments, and in the case of larger 
companies, grave and serious risks to their own future. Many large 
companies have found after the fact that they have been seriously 
penalized by the kind of litigation system that we have at the present 
time.
  So this is not free, Mr. President. Obviously, if there were no other 
impact on society, I suppose we ought to allow unlimited damages in 
litigation. But when we have a situation in which many people who are 
suffering from incurable conditions today might very well be helped in 
the future were we to encourage companies to work in this area, to come 
up with some kind of pure or ameliorative situation for people in 
trouble, are we going to say because 99 out of 100 people would be 
helped that 1 out of 100 would be hurt; or 9 to 1 that we are going to 
allow not only all of the profits coming out of this research and 
development to be wiped out but more, and a company wiped out because a 
jury dealing with one individual in one instance after the fact 
determines that a huge punitive damage award is appropriate?
  We at least have to recognize the fact that one idea is being laid up 
against another, and we do not simply have to take the word of people 
that we are not going to engage in this kind of research and 
development in the future. It has happened, and it is happening today. 
There are groups that have told us that we have stopped looking into a 
cure for AIDS because the risks under the present system are simply too 
great. No one will invest in that kind of research, because the risks 
are too great. This is the price that will be paid; this is the price 
that is being paid today by the unlimited nature of the present system, 
particularly in regard to punitive damages. That is a very high price, 
a price being paid by the very people whom the Senator from California 
says she is defending in this case.
  If you look at an individual situation, you must also--I think more 
importantly--look at the situation of our entire society. Do we want to 
continue to tie the hands of those people who will invest in this, 
those physicians and researchers who will work toward cures of our 
multiplicity of ills in this world in order to protect the right for 
very, very good and skilled lawyers to persuade a particular jury in a 
particular case to award a huge punitive damages award? I think not. 
The proponents of this bill think not.
  The proponents of this bill think society will be benefited by 
encouraging this kind of research and development. We think we defend 
the very people for whom the Senator from California purports this to 
be better than the present system of law does. We do have this weighing 
process in which we must engage if we are not simply to choke off and 
to bring to an end the kind of research and development we wish.
  Perhaps to an even greater extent, we can see this in connection with 
the Federal Aviation Administration. Here we know what happened. We do 
not have to talk about any kind of theory; we know what has happened. 
We know that the present product liability laws in this country--the 
litigation in this country--have, for all practical purposes, destroyed 
that portion of our industry which builds propeller-driven other small 
aircraft for the private market. It has simply destroyed it. There has 
been a 90-percent reduction in the number of aircraft produced, and up 
to half of the cost of the handful of aircraft still being produced is 
going to the cost of product liability. Lawsuits are being brought 20 
and 30 years after the production of a particular item.
  I gave an example, outside this approval area, of a manufacturer of 
logging and timber equipment in my own State in a very depressed area, 
which is defending lawsuits for equipment produced and installed 30 
years ago, and in which the cost of defending product liability 
litigation, without ever having a verdict entered against it, are 
infinitely greater than the taxes that it pays for public purposes in 
the United States. Well, they are now out of business. This is just a 
huge cost of doing business.
  In the case of the private aircraft companies, they are out of 
business in large measure because of the present system of litigation. 
Is that desirable? No. One of them reported to us that it has never 
lost a product liability case; yet, they keep coming up against them, 
and they cost $500,000 each to defend. That company says, ``why should 
we be in this business anymore? We ought to go into something where you 
do not get sued all the time.'' Is that desirable that we should have 
no industry for building small aircraft in the United States? Of 
course, it is not desirable. Yet, it is what the Senator from Alabama 
wants to continue, and it is what the Senator from South Carolina wants 
to continue, and it is what the Senator from California wishes to 
continue. That is punitive damages, or it slopped over a little bit in 
the joint and several liability.
  In the case of joint and several liability, the general common law 
rule has been that when more than one person or entity is at fault, the 
winner, the plaintiff, the victim, can collect the entire verdict 
against any one of them, rather than to have to divide it in proportion 
to the fault. That may have worked 30 or 40 years ago when I first 
became a lawyer when we had a doctrine called contributory negligence. 
That means if you and I were in an accident and I was 90 percent 
responsible and you were 10 percent responsible, you could not recover 
anything from me because some small fault was attributed to you. But 
that doctrine has long since disappeared. We now, through our juries 
and court systems, distribute the amount of fault in any particular 
connection and distribute the liability accordingly--except that we do 
not distribute the final money liability accordingly. Even the one 
which is 10 percent at fault in that connection, if he, she, or it were 
the only one who were financially responsible, would have to pay 100 
percent of the damages.
  Again, is that just? It seems very unlikely to be just. Obviously, 
justice would require a contribution related proportionately to the 
degree of fault to those who caused the injury in the first place.
  Again, the Senator from California brings up, principally in this 
joint and several liability argument, a number of medical devices and 
the adverse impact they have caused, in reality, against many women. 
She omits to say that we have taken this proposal directly from the 
laws of the State of California, laws of her own State. This was a law 
not passed by a male-dominated legislature. This was a law passed by 
the people of California in a referendum or an initiative because of 
what the entire population of that State saw to be the tremendously 
damaging impact of the previous law on employment, on justice, and on 
the entire administration of law in the State of California.
  But the real point is that this change in joint and several liability 
would, for all practical purposes, be totally unrelated to the cases 
about which the Senator from California speaks, because the fault was 
in the manufacture of the item. It is the manufacturer who is the 
defendant, and it is the manufacturer, for all practical purposes, who 
is 100 percent at fault; and the manufacturer, of course, in these 
cases will not be judgment proof. If you sue the manufacturer of the 
Dalkon shield, a termination and abolition of joint and several 
liability for noneconomic damages is not going to affect the liability 
of that manufacturer one whit. It has far more to do with items other 
than those. They were not good examples, because the recovery for 
noneconomic damages will not be significantly affected by the change of 
the joint and several liability rule. But where there are a multitude 
of people or organizations that are responsible, a change will take 
place. What is the change? The change just says: You are responsible 
for the share of damages you actually caused. What is wrong with that? 
That seems to me to be clear and obvious justice.
  It is this joint and several liability rule, at the present time, 
which inhibits the development of new products totally outside of the 
FDA and the FAA provisions. In fact, it is the joint and several 
liability rule which is most significant to most manufacturers, who 
obviously do not come under either of those excesses for punitive 
damages. They are frustrated, and rightly frustrated, with the fact 
that they will be found 10 percent responsible or 1 percent 
responsible, but are the only deep pocket, so therefore they will be 
held to a very, very substantial verdict.
  The present system hurts jobs in the United States, hurts research 
and development in the United States, and hurts product promotion and 
development in the United States. In the machine tool industry, where 
seven times as much money is spent on defending product liability 
litigation as on research and development, we see graphically what 
happens to the American economy by the present system.
  This bill itself is only going to change that figure slightly. It 
will make it better and will leave a little bit more to research and 
development and will do better. But this is not a radical change in the 
law. It is not what the great bulk of the business community would like 
to have in this field by any stretch of the imagination. But over a 
period of a dozen years or more, it has been worked and stretched and 
has reached the point where it seems to be what is important, where it 
is balanced, and where it does do some things.
  This Senator himself, as part of earlier bills, at least on one 
occasion voted against a products liability bill because he felt it was 
unbalanced. In this case, however, I feel that we do have an 
appropriate balance here. I think that all of the examples that were 
brought up by the Senator from California will be essentially 
unaffected by the bill, but that, by prohibiting the use of punitive 
damages only in cases where a company has done everything it can to 
assure safety and has gotten a Federal license for it, to say to 
companies that they are only responsible for the amount of damages they 
did will be encouraging to our economy and encouraging to the 
administration of justice.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. Mr. President, I am only going to take 2 or 3 minutes to 
respond.
  I talked about this bill making women and their offspring the guinea 
pigs of our future by giving a legal shield to those who should be held 
responsible for their mistakes.
  I further said that this bill would do this by shielding 
manufacturers of dangerous drugs and medical devices from punitive 
damages, even in cases of conscious or flagrant recklessness and 
indifference to society. All these companies need to do to make them 
immune from these kinds of damages is get an FDA approval.
  I stand by those comments. That is what this bill does. It creates an 
FDA excuse. And I would like to tell the Senator from Washington that 
the legislature in California rejected very firmly the FDA kind of 
excuse. It is making women guinea pigs. And if the Senator from 
Washington believes that we have to weigh between the company and the 
victims, I will tell you where this Senator from California comes out, 
because I think our most sacred obligation is to all the people--all 
the people--the people who could get hurt, because I have seen them in 
hospitals, I have seen them in my community meetings, and I see what 
happens to their families and to their lives. I have seen the DES 
victims. I have seen women who are infertile because of products that 
won FDA approval.
  I further say to the Senator who says, ``Well, the Senator from 
California,'' meaning me, ``said that if there was bribery and it was 
proven, then in fact you could go and get punitive damages.'' Fine. I 
am very happy it is in the bill, although the Senator from Washington 
says, well, he cannot imagine it would happen. Then why is it in the 
bill? You put it in the bill. I assume some of you think it could 
happen.
  But the fact is you do not always have a chance to prove bribery. And 
what is bribery? Has the Senator from Washington ever heard of the 
revolving door? I call that bribery.
  I sat on the Armed Services Committee. I cannot tell you how many 
procurement officials work with companies in behalf of the Government 
and, boom, they were over working for those very same companies. 
Payoff. Payoff. Could you prove it? Could you put them in jail? Maybe. 
Maybe not. Probably not most of the time. When you are sitting across 
from a company man or woman and you have the power to regulate them and 
there is a wink and a nod of, gee, when are you retiring, Mr. Smith? 
Maybe you cannot prove bribery. I am saying it is the human condition. 
And I at least am not going to stand by quietly and see us give a legal 
shield to companies who in fact could be guilty but with a wink and a 
nod got an approval from some bureaucrat.
  And that is just what this does, and it makes me sick, considering 
what I have seen of the victims. And I read about some of those victims 
in my prepared statement.
  I also would like to print in the Record at this time a letter from 
Martin Delaney, founding director of Project Inform, one of the leading 
AIDS organizations, and I quote from the letter:

       Last week as a member of the NIAID AIDS Research Advisory 
     Committee, I voted against initiating widescale human testing 
     of two proposed vaccines for AIDS products * * *. Liability 
     issues never once entered the discussion.

  Let me repeat. ``Liability issues never once entered the 
discussion.'' That is not the reason that the AIDS vaccine is being 
held up.
  At the end of the letter, he says:

       Product liability concerns are not presently an obstacle to 
     such [AIDS] testing.

  Mr. President, I ask unanimous consent that this letter be printed in 
the Record as well as an article from the Washington Post headlined, 
``NIH Delays Full-Scale Testing of Potential AIDS Vaccine.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       To whom it may concern: Some groups have suggested that 
     product liability laws are the principal reason we don't yet 
     have a vaccine for AIDS. In response, they suggest that 
     greatly relaxing such laws would result in quick or immediate 
     marketing approval of a such a vaccine. This is simply not 
     the case. The principal reason that we don't yet have an 
     approved AIDS vaccine is that no such vaccine has 
     demonstrated the ability to protect humans against the normal 
     routes of infection by HIV, the virus which causes AIDS, and 
     no vaccine has yet been proven to be completely safe. No 
     vaccine has yet reached the stage of testing where product 
     liability issues are even a significant concern.
       Last week, as a member of the NIAID AIDS Research Advisory 
     Committee, I voted against initiating widescale human testing 
     of two proposed vaccines for AIDS, products of Genentech and 
     Biocene, a division of Chiron Corporation. Liability issues 
     never once entered the discussion. Instead, the committee 
     voted against approval of wide scale testing primarily 
     because the vaccines hadn't shown sufficient evidence of 
     efficacy in initial trials, and secondarily because some 
     safety questions remain, principally the question of whether 
     such a vaccine might accelerate the course of disease in 
     someone who became infected despite vaccination. Because 
     these concerns remain unanswered, and because of the 
     financial and human resources costs of the proposed trials, 
     it was felt that the public interest would be best served by 
     waiting for the availability of additional promising vaccine 
     candidates which might be tested comparatively. These two 
     vaccines, despite their weaknesses, are the products in the 
     most advanced stage of testing and development for AIDS. 
     Questions of safety and efficacy are thus larger still for 
     any other vaccine candidates, which have not yet had even the 
     level of human testing of these two.
       There are many possible ways to build a vaccine for AIDs 
     and I am in no position to argue that one approach is 
     inherently better than another. Only a graduated, step-by-
     step testing process can determine which is the safest and 
     most effective approach. Product liability concerns are not 
     presently an obstacle to such testing, which must precede any 
     marketing approval of a vaccine. Regardless of product 
     liability concerns, the availability of a vaccine for AIDS is 
     many years away.
                                                   Martin Delaney,
                                Founding Director, Project Inform.
                                  ____


               [From the Washington Post, June 18, 1994]

        NIH Delays Full-Scale Testing of Potential AIDS Vaccine

                            (By David Brown)

       The National Institutes of Health yesterday decided to put 
     off sponsoring a full-scale AIDS vaccine trial until more 
     promising vaccines are developed or the two versions now 
     ready for testing show more laboratory evidence that they are 
     likely to work.
       As a result, vaccine testing in thousands of high-risk 
     people almost certainly will not occur for at least two 
     years. By then, entirely different strategies for 
     immunization could compete head-to-head, something that would 
     not be possible if the nearly identical ``candidate'' vaccine 
     were tested now.
       The advisory committee of the National Institute of Allergy 
     and Infectious Diseases (NIAID) reached the decision after an 
     eight-hour public meeting yesterday. The recommendation was 
     passed on to Anthony S. Fauci, the institute's director, who 
     immediately accepted it. NIAID oversees virtually all of 
     NIH's clinical studies of AIDS.
       The decision will erode the lead that two biotechnology 
     companies, Genentech and Biocine, have in the race to be the 
     first to develop an effective vaccine to prevent infection by 
     the human immunodeficiency virus (HIV). The 28-member 
     advisory panel concluded there was neither compelling 
     scientific evidence nor sufficient enthusiasm in high-risk 
     communities where volunteers would be recruited, to justify a 
     trial now.
       In a sea change from their familiar role of urging early 
     testing of AIDS drugs, several AIDS activists advised against 
     starting a large vaccine trial until there is greater 
     scientific consensus that the candidates are very strong.
       ``Once we go down this road with a mediocre product . . . 
     we may never have the chance to recruit a large number of 
     people again,'' said Martin E. Delaney of Project Inform in 
     San Francisco, a member of the advisory committee. He said 
     much of the AIDS-ravaged gay community is discouraged by poor 
     results of AIDS treatment drugs, and is much less likely to 
     volunteer for clinical experimentation now than in the past.
       ``We have only one chance to test a vaccine in a large 
     randomized trial, and this is not that chance,'' he said.
       At a news conference after the meeting, however, Fauci 
     emphasized the decision was essentially to delay testing the 
     two vaccines, not to reject them as worthless.
       ``It is clear that the recommendation of the [advisory] 
     group is not that there should be an abandonment of this 
     concept [of immune protection that Genentech and Biocine have 
     developed],'' he said.
       Both vaccines employ a protein from the virus's shell, or 
     ``envelope,'' to stimulate an uninfected person's immune 
     defenses against HIV. Those defenses are antibodies--
     biochemicals that specifically target the virus--and a class 
     of white blood cells that attacks and kills cells the virus 
     invades immediately after infection.
       The protein in the vaccine, called gp120, is made by 
     genetic engineering techniques and is incapable of causing 
     HIV infection itself. It is like the crystal of a watch. The 
     watch's works--in this case, the reproductive machinery of 
     the virus--form no part of the vaccine.
       Numerous other vaccines are now in development. Some 
     involve splicing HIV genes into another carrier (``vector'') 
     virus, such as vaccinia, which is the one used for smallpox 
     vaccination. Replication of the vector then releases large 
     amounts of harmless HIV protein into the body. Some 
     scientists believe this strategy more closely resembles the 
     real mechanism of HIV invasion, and will elicit a more robust 
     defense.
       Several panel members said they felt that a large trial 
     testing a vector vaccine against an envelope vaccine would be 
     a better use of time and money than a large trial testing 
     only two envelope vaccines.
       The two gp120 products have been used in small studies that 
     allowed researchers to test their safety and to run numerous 
     blood tests on volunteers to determine immune-system effects.
       Those studies have shown that gp120 can stimulate a person 
     to make antibodies and can cause proliferation of certain 
     types of white blood cells. In laboratory experiments, 
     however, those antibodies have not been able to prevent 
     infection of cells by ``wild'' HIV virus.
       Seven chimpanzees who were given the vaccines subsequently 
     resisted infection when HIV was injected into their 
     bloodstreams. Company representatives pointed to these 
     experiments as proof of their products' promise. Many panel 
     members, however, were unsure how much could be extrapolated 
     from such a small sample of animals--and from a species known 
     to respond very differently from human beings.
       The largest of the gp120 studies done so far enrolled 
     several hundred people at high risk for HIV infection because 
     of their sexual practices or drug use. During the study, 
     three persons--none of whom had gotten the full course of 
     three shots--developed HIV infection through known routes of 
     exposure. This did not prove that the vaccines were useless, 
     but only that a single dose of them was not protective.
       Numerous members of the advisory panel said that before 
     moving to a larger trial, information should be learned about 
     these ``breakthrough'' cases: what subtype of virus caused 
     them; what their tests of immunity showed; and how their 
     infections progress.
       The panel considered two possible trials it could have 
     recommended for starting later this year. One would have 
     required 9,000 high-risk volunteers, divided equally into 
     three groups who would receive one of the two vaccines or 
     placebo. It would have had the power to determine with a high 
     degree of certainty whether a vaccine's effectiveness was 50 
     percent of greater. Such a study would take 3\1/2\ years to 
     run, at a cost of up to $18 million a year.
       The other option, enrolling 4,500 people, could reliably 
     identify a useful vaccine only if it was protective 70 
     percent of the time. There seemed to be little confidence 
     among panel members the gp120 candidates would perform that 
     well. They concluded such a study (with a price tag as high 
     as $9 million a year for two years) was not worth the money.
       A recent survey of a community network of potential vaccine 
     trial volunteers, set up under NIH auspices, showed that only 
     36 percent of gay men and injection drugs users were ``very 
     willing'' to participate in a vaccine trial.

  Mrs. BOXER. Mr. President, in this article there is not a mention of 
liability law. He just cannot get enough candidates.
  So I think it is very important that we not use faulty arguments here 
as we debate this, that we be honest about what the facts really are.
  In closing my brief remarks here right now, I just want to say that 
the issues that are raised by the Senator from Washington surrounding 
my remarks were not correct, that I know the difference between 
punitive damages and compensatory damages very well, and we know 
punitive damages because of their very existence have put the fear of 
God into some folks. And that is important so that we do not have women 
walking around who cannot have babies and damaged human beings, because 
if the Senator from Washington weighs it another way, I have to tell 
him I weigh it the other way. I am here to speak for those people.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Breaux). The Senator from Connecticut is 
recognized.
  Mr. LIEBERMAN. Mr. President, I thank the Chair.
  I want to respond briefly to the Senator from California and then 
propose introducing an amendment.
  The Senator is correct and this bill, like so many others, has been 
an educational process for so many of the Members of the Senate as to 
the difference between economic and noneconomic damages and 
compensatory damages and punitive damages.
  But I think it is very important to focus on what punitive damages 
are because it is punitive damages for which a higher standard is being 
set by this bill, and, remember, the punitive damages might be looked 
at as something that comes after a lot else that precedes.
  You have economic damages, which is to say that a person who is 
injured allegedly as a result of a defective product, gets all their 
out-of-pocket bills taken care of, not just medical bills, but lost 
wages, and all the rest. Then comes noneconomic damages, which are the 
so-called pain and suffering, a very broad category itself, subject to 
criticism for misuse, but not affected by the bill, and then on top of 
that comes punitive damages, which are basically a judgment by court or 
jury that we are going to punish the wrongdoer.
  And it is that punitive side of it that has been subject to abuse, 
not just abuse, as has been suggested by opponents of the bill, but as 
a deterrent to negligence by producers. I mean, gee, the producers 
already have, hopefully, their own self-regard to avoid negligent 
behavior, their own ethical standards. But assume that happens. They 
then have the fear, not of paying out-of-pocket expenses to injured 
plaintiffs, but this broad and open category of pain and suffering.
  And what has happened is that the abuse of the punitive damages 
element of awards in these cases has been one of the ways in which, 
frankly, the process has held up defendants. I mean held up, not in 
delay, but held up as at the point of a gun to settle cases for much 
more than they are worth just to avoid the enormous litigation expenses 
and the fear of the unknown that a jury will come along and award 
enormous punitive damages.
  And, remember, the issue at point here is the FDA. Do we say to a 
company that goes through the process of FDA approval, multiyear 
process--7, 8 years, I believe, on the average--that if you do that and 
your product is found to have caused an injury, you are still subject 
to all these other elements of damage, economic, noneconomic? But is it 
really fair to say to a company that has gone through the FDA process 
that you can still be punished for what the law describes as a 
conscious and flagrant disregard of the public safety? I do not think 
so.
  So we are all being educated, but that is the essence of what we are 
about.


                           Amendment No. 1938

  (Purpose: To make negligent entrustment actions not subject to the 
                           act's provisions)

  Mr. LIEBERMAN. Mr. President, I have given a copy of an amendment I 
am about to propose to Senator Hollings. I am hopeful that we can have 
agreement on it. I intend to introduce the amendment on behalf of 
myself, Senator Rockefeller, and Senator Gorton. We consider it to be 
technical, but a necessary clarification of the bill.
  The idea of this amendment is to make it abundantly clear that this 
bill, the product liability bill, has absolutely no impact, not 
intended or unintentional, on an area of the law called negligent 
entrustment. Again, we are all going back to law school.
  This area of law is completely distinct from product liability. It is 
the intention of the sponsors of the bill that this area of the law be 
left totally to the States and it is the intention of this amendment to 
make that clear.
  Now, why even the need to make it clear? Well, questions were raised, 
as this bill, S. 687, was coming to the floor, from some surprising 
places about the bill's alleged affect on the ability to sue through 
the concept of negligent entrustment against certain categories of 
businesses, including particularly gun sellers, or what are called dram 
shops, which has to do with the liability of those who negligently sell 
alcohol to people.
  These questions may have been encouraged by opponents of the bill; 
certainly they were raised by opponents of the underlying bill.
  But the point that this amendment intends to make clear is it is not 
what the bill is about. The amendment clarifies two points.
  First, that the bill does not make any change in State laws that 
apply to gun sellers who negligently sell guns to criminals, minors, or 
other people not allowed to buy guns. It is far away from our 
intention, but this specifically makes it clear. The bill passes no 
opinion on these laws and certainly has no affect on those laws.
  Second, this amendment would ensure that the bill does not affect so-
called dram shop laws that exist in many States, which hold the owners 
of businesses that sell alcoholic beverages responsible for accidents 
that are caused by selling that alcohol to people who the seller should 
have known were intoxicated or become so intoxicated that they are a 
danger to others.
  With this amendment, I ask unanimous consent to enter into the Record 
copies of several letters from the sponsors of S. 687, the Product 
Liability Fairness Act, to organizations that have raised questions 
about these issues.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:


                                                  U.S. Senate,

                                    Washington, DC, June 27, 1994.
     Rebecca A. Brown,
     Mothers Against Drunk Driving, Irving, TX.
       Dear Ms. Brown: We are writing to respond to your letter of 
     June 22 regarding S. 687, the Product Liability Fairness Act. 
     You stated correctly that it is not the intent of the 
     legislation to preempt state dram shop laws. We strongly 
     disagree with your analysis of the bill when you concluded 
     that it does preempt such laws.
       Dram shop laws are used by claimants who allege that a 
     bartender and/or tavern provided alcohol to an individual 
     that was drunk, and that drunk individual caused the harm 
     that is the subject of the litigation. In such cases, the 
     claimant alleges that the harm was caused by providing the 
     alcohol to the individual. The harm was not caused by the 
     product because the claimant would never allege nor be able 
     to prove that the product was defectively designed or 
     manufactured or that there was a failure to warn of the risks 
     associated with the product or breach of a warranty--the 
     bases for a product liability suit. As you pointed out in 
     your letter, S. 687 covers only claims ``. . . for harm 
     caused by a product.'' Dram shop laws are outside the scope 
     of S. 687.
       As strong supporters of highway safety and anti-drunk 
     driving initiatives, we would oppose any attempt to hinder 
     ongoing efforts in this area. Although we disagree with your 
     legal analysis, we intend to offer an amendment to S. 687 to 
     clarify that the bill does not preempt dram shop laws. 
     Attached is a copy of the amendment. Upon reviewing this 
     proposal, we request that you contact our colleagues again to 
     indicate that your concerns have been satisfied and that you 
     withdraw your opposition to consideration of S. 687.
       We appreciate the opportunity to work with you to clarify 
     this matter.
     John D. Rockefeller IV,
       U.S. Senator.
     Slade Gorton,
       U.S. Senator.
     Joseph I. Lieberman,
       U.S. Senator.
                                  ____



                                                  U.S. Senate,

                                    Washington, DC, June 10, 1994.
     Mr. Josh Sugarmann.
     Executive Director, Violence Policy Center, Washington, DC.
       Dear Mr. Sugarmann: We were quite surprised to read that 
     you believe S.687 would somehow frustrate lawsuits against 
     gun dealers who sell to minors through intermediaries. We are 
     quite mystified as to how you reached your conclusions. To 
     the best of our knowledge, no one has ever raised this 
     argument before, not even the Consumers Union which has 
     submitted testimony with respect to this bill in the past.
       Upon review of the bill, we simply do not see how you could 
     interpret this legislation to arrive at the conclusion you 
     reach. Moreover, the cause of action you appear to describe, 
     one for negligent entrustment, is not normally considered to 
     be within the realm of product liability law. The most 
     reasonable construction of the bill is that it does not 
     affect suits such as the one you describe. S.687 will not 
     frustrate lawsuits against gun dealers who sell to minors 
     through intermediaries.
       We are also very disappointed with the manner in which you 
     chose to raise your concerns. You did not attempt to contact 
     us, or any members of our staffs prior to making these 
     claims. We suspect that this issue is one that can be easily 
     cleared up, if that is your goal. We invite you to contact 
     our staffs to discuss this matter further.
           Sincerely,
     John D. Rockefeller IV.
     Joseph I. Lieberman.
     John C. Danforth.
     Slade Gorton.
     Christopher J. Dodd.
                                  ____



                                                  U.S. Senate,

                                    Washington, DC, June 10, 1994.
     Ms. Kristin Rand,
     Counsel, Consumers Union, Washington, DC.
       Dear Ms. Rand: We were quite surprised to read that you 
     believe S. 687 would somehow frustrate lawsuits against gun 
     dealers who sell to minors through intermediaries. We are 
     quite mystified as to how you reached your conclusions. You 
     have never raised this in previous testimony with respect to 
     this bill, and, to the best of our knowledge, neither has 
     anyone else.
       Upon review of the bill, we simply do not see how you could 
     interpret this legislation to arrive at the conclusion you 
     reach. Moreover, the cause of action you appear to describe, 
     one for negligent entrustment, is not normally considered to 
     be within the realm of product liability law. The most 
     reasonable construction of the bill is that it does not 
     affect suits such as the one you describe. S. 687 will not 
     frustrate lawsuits against gun dealers who sell to minors 
     through intermediaries.
       We are also very disappointed with the manner in which you 
     chose to raise your concerns. You did not attempt to contact 
     us, or any members of our staffs prior to making these 
     claims. We suspect that this issue is one that can be easily 
     cleared up, if that is your goal. We invite you to contact 
     our staffs to discuss this matter further.
           Sincerely,
     John D. Rockefeller IV.
     Joseph I. Lieberman.
     John C. Danforth.
     Slade Gorton.
     Christopher J. Dodd.

  Mr. LIEBERMAN. I thank the Chair. These letters provide very clear 
answers clarifying, as this amendment does, that the so-called area of 
negligent entrustment is not affected by this bill.
  Mr. President, it is unfortunate that these concerns have been 
raised. The truth is that we could have saved people a lot of time and 
worry if those who were worried had come to the sponsors to express 
their concerns. But, in any case, this amendment is intended to put 
these concerns to rest.
  Mr. President, at this time, I send the amendment to the desk.
  The PRESIDING OFFICER. The clerk will report the amendment of the 
Senator from Connecticut.
  The legislative clerk read as follows:

       The Senator from Connecticut [Mr. Lieberman], for himself, 
     Mr. Rockefeller and Mr. Gorton, proposes an amendment 
     numbered 1938.

  Mr. LIEBERMAN. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection it is so ordered.
  The amendment is as follows:

       On page 8, line 20, after the period insert the following: 
     ``A civil action for negligent entrustment is not subject to 
     this Act and shall be governed by applicable State law. For 
     purposes of the preceding sentence, the term ``negligent 
     entrustment'' means causes of action under applicable State 
     law that subject product sellers to liability for their 
     failure to meet the applicable standard of care under State 
     law in selling a product to a person who, because of his 
     youth, inexperience, or otherwise, is likely to handle the 
     product in a manner to cause harm to himself or others.

  Mr. LIEBERMAN. I thank the Chair.
  The PRESIDING OFFICER. Who seeks recognition?
  Ms. MOSELEY-BRAUN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Illinois.
  Ms. MOSELEY-BRAUN. Thank you, Mr. President.
  I am prepared to file an amendment in the second degree to the 
amendment offered by the Senator from Connecticut on the grounds, in 
the first instance, that this amendment does nothing; that it is 
ineffectual.
  I appreciate the sincerity of the approach by the Senator from 
Connecticut, but, at the same time, it seems to me that national issues 
pertaining to health, and particularly women's health. As eloquently 
stated by the junior Senator from California, those issues are entirely 
too important to allow for a masquerade to be approved by this body. 
And this amendment, without a second-degree, I believe would be such a 
masquerade.
  Let me talk for a moment about why the amendment in the first 
instance causes a problem. This amendment and the underlying 
legislation does nothing to remove what we call--Mr. President, I 
understand the Senator from Connecticut wants to discuss this 
amendment, so I suggest the absence of a quorum.
  The PRESIDING OFFICER. The absence of a quorum is noted.
  The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the call of 
the quorum be suspended.
  The PRESIDING OFFICER. Is there objection?
  Ms. MOSELEY-BRAUN. There is objection.
  The PRESIDING OFFICER. Objection is heard.
  The clerk will continue the call of the roll.
  The legislative clerk resumed the call of the roll.
  Ms. MOSELEY-BRAUN. Mr. President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. MOSELEY-BRAUN. Mr. President, the Senator from Connecticut has 
just advised that this is another amendment and not the one regarding 
specifically the FDA.
  So, while I would take this moment to discuss the substance of the 
amendment of the FDA excuse and to pick up where the junior Senator 
from California left off, my remarks however are intended to that part 
of the bill and not to the part of the bill relating to the amendment 
just filed by the Senator from Connecticut.
  Mr. LIEBERMAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. LIEBERMAN. Mr. President, I wonder if my friend and colleague 
from Illinois would withhold a minute so I might move adoption of this 
amendment, unless there is objection.
  Mr. HEFLIN. I think we are going to have some discussion of the 
amendment.
  Mr. LIEBERMAN. There is some clear indication of that from the 
Senator from Alabama.
  I withhold that and yield back to the Senator from Illinois.
  Ms. MOSELEY-BRAUN. I thank the Senator from Connecticut for his 
graciousness.
  I would like to pick up, however, with regard to a couple of points 
raised by the junior Senator from California.
  First, with regard to the whole notion in this legislation of an FDA 
excuse, I would point out to my colleagues that this represents one of 
the first times that we will have provided absolute insulation from 
responsibility by the actions of an administrative agency.
  In short, by the decisionmaking or not, as the case may be, of 
nameless bureaucrats at the FDA, an individual will be shielded, or a 
company, more to the point, will be shielded from responsibility for 
punitive damages which affect women's health. Those damages, of course, 
can, in many instances, be death, can be life threatening, can be the 
end of reproductive opportunities, can be the kind of situations and 
the particular situations as raised by the Senator from California.
  I would point out further that the FDA excuse here provides for this 
insulation from responsibility in a context which the agency itself is 
not capable of handling.
  In the first instance, the agency approval process, which we all know 
has been convoluted over time, is not adequate to the task of actually 
researching, analyzing, and understanding the particulars with regard 
to products which may cause damages. In fact, if anything, of all of 
the Federal agencies that we have authorized to have some regulatory 
authority, the FDA stands in this case singularly unprepared and 
incapable of providing the kind of protection for women's health that 
other agencies have.
  Specifically, the FDA does not have subpoena authority. We have 
looked.
  I will submit for the Record, Mr. President, a list of agencies in 
the Federal Government that have subpoena authority, which ranges from 
the administrative law judges, Advisory Commission on the Conferences 
in Ocean Shipping, all the way through the Department of Agriculture, 
Department of Commerce, Departments of Energy, Health and Human 
Services, Housing and Urban Development, Department of the Interior, 
Department of Justice, Department of Labor, Department of State, 
Department of Transportation, National Transportation Safety Board, 
Department of the Treasury, Environmental Protection Agency, Farm 
Credit Administration, FCC, Federal Deposit Insurance Corporation, 
Federal Election Commission, Federal Energy Regulator Commission, 
Federal Home Loan Bank Board, et cetera, et cetera--through the 
Veterans' Administration.
  I would point out the FDA is nowhere in this allowed to subpoena 
documents and information that may go to the adequacy for marketing of 
products which can be as dangerous as the Dalkon shield, as DES, as 
silicon breast implants, as the Copper-7 IUD, which we know has caused 
huge damage to any number of people.
  In fact, I would point out on this list of Federal agency subpoena 
authority, the Department of Agriculture can subpoena information 
regarding watermelon research, can subpoena information regarding egg 
research and promotion, and yet this legislation would preclude the 
FDA--the Food and Drug Administration--from subpoenaing information 
regarding the Dalkon shield, the IUD, Copper-7 IUD, or other devices, 
medical devices which have been shown to be inimical to women's health.
  In that regard the absence of subpoena authority detracts from the 
capacity of this agency to do the job that this legislation suggests it 
can and should do.
  Further, it is not only the absence of subpoena authority, but we 
have had discussions with the FDA--there is no question but there is 
inadequate staff to do the kind of thorough job that would give the 
kind of protection that this legislation calls on it to give. In fact, 
if anything, one of the frightening things about this legislation--and 
I believe the reason for the remarks by the Senator from California--is 
we are essentially ducking responsibility here, saying let the 
bureaucrats decide whether these products are safe or not. And in so 
doing, saying we are going to let the bureaucrats decide in a context 
in which they cannot even themselves ask for the information. And what 
is even worse about this legislation, it says if the bureaucrats decide 
based on information submitted by the manufacturer of these harmful 
products, that is fine by us.
  It seems to me that is an inadequate standard for the protection of 
women's health particularly. That is an inadequate standard with regard 
to life-threatening drugs and medical devices.
  I point out further in the discussion of punitive damages that it is 
important the Members of this body understand the fundamental use and 
the reason that we have such things--that we have punitive damages, 
that we have damage awards that go beyond just the basic compensatory 
damages, compensating someone for what has actually happened here.
  Tort law--bottom line--is never value free. It relates to the values 
affecting the individual as well as the society as a whole. Over time, 
it has always been the case that punitive damages in tort law related 
specifically to providing protections for the public interest, as a way 
of giving something more, giving something extra.
  I would say to the Presiding Officer, there is a term in Louisiana 
called ``lagniappe.'' That means something extra. The reason for the 
something extra with punitive damages is precisely to say: This is 
society's interest here that has been violated. This interest goes 
beyond the interests of the individual who is specifically hurt. We 
want to make certain you get the message loud and clear that 
compensation requires compensation for the public. And that punitive 
damages will be awarded as a way of stopping future harmful action from 
occurring.
  In the law books, what is called black letter law, describing 
punitive damages--I would like to give this description:

       Something more than the mere commission of a tort is always 
     required for punitive damages. There must be circumstances of 
     aggravation or outrage, such as a spirit of malice or a 
     fraudulent or evil motive on the part of the defendant. Mere 
     negligence is not enough, even though it is so extreme in 
     degree as to be characterized as gross.

  So punitive damages go to those instances where manufacturers, for 
example, in this instance, have taken a step that is in flagrant 
disregard, not only of the rights and interests of the individual, but 
of society as a whole.
  I point out to my colleagues we have example after example of 
specific medical devices that were marketed precisely to vulnerable 
populations. The Copper-7 IUD was marketed in spite of the fact that 
there was already evidence that it affected negatively a specific 
population. It was targeted and marketed specifically to that 
population.
  It seems to me the company that did that ought to be held to account, 
not only for its harm to the young women who themselves would be 
rendered incapable of having children, not only with regard to their 
medical bills and the specifics of their case, but also would be held 
to account to the public as a whole.
  The Copper-7 IUD, I point out, did receive FDA approval. It was 
registered as a drug, not a medical device, because the trace amounts 
of copper in the product chemically interact with women's bodies. As a 
result, ultimately, it was shown the marketing of this product was 
causing real harm, that women suffered serious cases of infection, of 
loss of fertility, had to have surgery for the removal of organs. And 
that litigation went on and on, again because of a decision to market a 
product known to be harmful to the most vulnerable populations that 
would suffer their harm.
  It seems to me that is exactly what punitive damages are calculated 
to address. The whole idea is to say you cannot do this to this 
individual, but more to the point, you should not do this in the future 
to the public at large. You have to have a level of responsibility and 
accountability.
  I join my colleague's early remarks when he painted this in broad 
strokes and made the point about how important it is for us to have 
tort reform, that it is important for us to address job creation 
issues, and the like. But I urge my colleagues not to lose sight of the 
fact that this is not just a theoretical, abstract debate. This is not 
just a matter of the law and legalisms in the heaven of legal theory. 
This is something that applies specifically to women's bodies, applies 
specifically to the health and safety of the American people.
  And as we address the balance of interests and the balance of rights, 
we must never lose sight of what is in the public interest. And we 
must, therefore, take those steps to make certain there is 
accountability, there is certainty, and there is responsibility in the 
law.
  The FDA excuse removes that accountability. It removes that 
responsibility. And effectively it shields and insulates egregious 
conduct from the reach of the law, from the reach of punitive damages, 
from the reach of those who would want to see society's interests, as 
well as the interests of individuals, protected.
  So I will address this point again later. The amendment of the 
Senator from Connecticut is on another point altogether, and I do not 
know whether he wants to call for a vote on that now.
  Again I point out the most important thing about this document is not 
all the agencies that are named but the fact that the FDA is not named 
on here. The FDA does not have subpoena authority with regard to 
devices such as the Copper-7 IUD, such as the Dalkon shield, Accutane, 
high estrogen contraceptives, and any number of other drugs and 
instrumentalities that affect women's health.
  I congratulate the Senator from California for her eloquent statement 
in behalf of women's health and the issues involved here and suggest to 
my colleagues we have a balancing to do here. I do understand the 
motivation. But at the same time we are dealing with peoples' lives and 
the safety and health of the American people, and I hope we do not rush 
to judgment here and avoid standard principles of law and avoid 
allowing the law to fill its highest purpose, which is the protection 
of public safety and the public order.
  I ask unanimous consent to have printed in the Record this three-page 
document, ``Federal Agency Subpoena Authority.''
  There being no objection, the list was ordered to be printed in the 
Record, as follows:

                   Federal Agency Subpoena Authority

       Administrative Law Judges.
       Advisory Commission on Conferences in Ocean Shipping.
       Corporation of Foreign Securities Holders.
       Commission on Civil Rights.
       Commodities Futures Trading Commission.
       Department of Agriculture: Grain standards; Pesticide 
     control; Perishable commodities; Tobacco inspection; Nonbasic 
     commodities; General provisions, seeds; Cotton research and 
     promotion; Potato research and promotion; Egg research and 
     promotion; Beef research and promotion; Wheat research; 
     Floral research and information; Dairy promotion; Port 
     promotion; Watermelon research; Protection of horses; 
     Endangered species; Interagency cooperation.
       Department of Commerce: China Trade Act; Weather 
     modification; Licensing of remote sensing systems; Endangered 
     species; interagency cooperation; Fishery conservation; 
     Antarctic conservation enforcement; Control of illegally 
     taken fish and wildlife; Northern pacific halibut; Civil 
     penalties.
       Department of Energy: Gather energy information; 
     Environmental protection and control; Energy conservation; 
     Standards for consumer products.
       Department of Health and Human Services: Appeals of cost; 
     Reimbursement providers by providers of medical services.
       Department of Housing and Urban Development: Real estate 
     settlement procedures; Interstate land sales; Enforcement of 
     fair housing laws; Enforcement manufactured home construction 
     and safety standards.
       Department of the Interior: Archaeological resources; 
     Endangered species; Interagency cooperation; Antarctic 
     conservation enforcement; Control of illegally taken fish and 
     wildlife; Surface mining control; Oil and gas royalty; 
     District land offices; Virgin Islands.
       Department of Justice: Restraint of trade; Drug abuse 
     prevention; Report on African National Congress; False claims 
     investigations.
       Department of Justice, Immigration and Naturalization 
     Service: Enforcement of immigration laws; Enforcement of 
     alien employment laws; Enforcement of prohibition against 
     unfair immigration-related employment practices; 
     Investigation of petitions for naturalization; Arbitration of 
     commercial disputes.
       Department of Labor: Relief from injury cased by import 
     competition; Enforcement of Occupational Safety and Health 
     Law (OSHA); Protection of migrant and seasonal workers; Mine 
     safety and health (MSHA); Worker's compensation benefits.
       Department of State: Accountability Review Board; 
     Commission on Security and Cooperation in Europe; United 
     Nations economic and communications sanctions; Foreign Claims 
     Settlement Commission vesting and liquidation of Bulgarian, 
     Hungarian, and Rumanian property international claims.
       Department of Transportation: Automobile safety; Bumper 
     standards; Consumer information; Odometer requirements; 
     Automobile fuel economy standards; Regulation of deepwater 
     ports; Outer Continental Shelf; Investigation of use and 
     necessity for block-signal systems for railway systems; 
     Safety appliances; Rail transportation unification and 
     coordination projects.
       National Transportation Safety Board: Airports and landing 
     areas; Commercial space launch.
       Department of the Treasury: Antarctic conservation 
     enforcement; Smuggling of controlled substances.
       Environmental Protection Agency: Automobile fuel economy; 
     Toxic substance control; Pollution control; Noise pollution 
     regulations; Enforcement of solid waste disposal laws and 
     regulations; Enforcement of underground storage tank 
     standards; Air pollution prevention; Air pollution control; 
     Fuel and fuel additives; Investigation of employment effects 
     of air pollution control; Enforcement of Superfund.
       Farm Credit Administration.
       Federal Communication Commission.
       Federal Deposit Insurance Corp.
       Federal Election Commission.
       Federal Energy Regulatory Commission: Federal regulation 
     and development of power; General investigatory power to 
     monitor programs; Regulation of energy matters.
       Federal Home Loan Bank Board.
       Federal Labor Relations Authority.
       Federal Maritime Commission.
       Federal Reserve System.
       Federal Savings and Loan Insurance Corp.
       Federal Services Impasse Panel.
       Federal Trade Commission: Investigation of unfair or 
     deceptive practices affecting commerce.
       Foreign Claims Settlement Commission.
       General Accounting Office.
       International Monetary Fund.
       International Trade Commission.
       Interstate Commerce Commission.
       Judicial Conference of the U.S.
       Judicial Councils of the Circuits.
       Merit Systems Protection Board.
       National Commission on Electronic Fund Transfers.
       National Credit Union Administration.
       National Guard.
       National Labor Relations Board.
       National Mediation Board.
       National Oceanic and Atmospheric Administration.
       National Science Foundation.
       Nuclear Regulatory Commission.
       Office of Technology Assessment.
       Office of Personnel Management.
       Pension Benefit Guarantee Corporation.
       Railroad Retirement Board.
       Securities Exchange Commission: Regulation of securities 
     market industry; Regulation of the bond marketing industry; 
     Regulation of securities exchanges; Enforcement of Public 
     Utility Holding Company Act; Enforcement of Investment 
     Company and Adviser's Act of 1940.
       Small Business Administration: Aiding small business; 
     Licensing of small business investment companies; Monitoring 
     of small business investment company program.
       Veterans' Administration.

  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I wish to speak on the bill. It is my 
understanding that we were going to recess at 12:30.
  The PRESIDING OFFICER. The Senator is correct. Under the previous 
order, 12:30 was the recess time.
  Mr. GRASSLEY. I ask unanimous consent that we extend it for 20 
minutes. I would ask unanimous consent that I have 10 minutes and 
Senator Wofford have 10 minutes.
  The PRESIDING OFFICER. Is there objection to the unanimous-consent 
request of the Senator from Iowa? The Chair hears none, and it is so 
orderd.
  the Senator from Iowa is recognized for 10 minutes.
  Mr. GRASSLEY. Mr. President, will the Chair please advise me when I 
have used 5 minutes because I have two subjects I wish to speak on, and 
I do not want to use all my time.
  The PRESIDING OFFICER. The Senator is recognized for 5 minutes.
  Mr. GRASSLEY. Mr. President, widespread problems exist in our system 
of product liability. Our laws governing this important subject are not 
consistent.
  The process for compensating victims is very slow and expensive. 
Because of the expense, more than half of the money designed to 
compensate victims instead goes to lawyers on both sides. Some 
beneficial products are never developed because of fear of liability.
  Today, the product liability system operates as a lottery. The 
claimants win a windfall occasionally, but at a cost to everybody else. 
The litigation costs are passed on to consumers as a hidden tax on 
everything they buy. And the possibility of a windfall serves to 
encourage additional, less meritorious cases to be brought, which add 
further cost to the system.
  The Product Liability Fairness Act is a step we need to take to begin 
to reduce the chaos of the current system of product liability. It is a 
balanced bill. And it will help restore the ability of American 
businesses to compete in the marketplace because our competitors have 
established uniform rules in their countries.
  The bill will help consumers in more ways than reducing the hidden 
product liability tax. It will enable them to receive their 
compensation faster than under the current system. Expedited 
settlements will be encouraged. If a defendant refuses the claimant's 
settlement offer, and the claimant obtains more at trial than the 
offer, then the defendant will pay the claimant's reasonable attorney 
fees up to $50,000. If the claimant rejects the defendant's settlement 
offer and then recovers nothing at trial, he faces no penalty.
  The bill also will encourage speedier and cheaper resolution of 
product liability claims through voluntary, nonbinding alternative 
dispute resolution. If the defendant unreasonably refuses to 
participate in ADR, it will be liable for the claimant's attorney fees 
if the defendant loses. The claimant faces no penalty for declining 
ADR.
  Consumers benefit from other provisions in the bill as well. The 
discovery rule for the statute of limitations will apply. And the bill 
contains no damages caps and no exception for inherently dangerous 
products.
  One of the most important reasons for the unpredictable nature of 
product liability law today is varying standards for the award of 
punitive damages. Punitive damages do not compensate claimants for 
their injuries. Standards for imposing punitive damages very widely, 
although the bill before us adopts the plurality rule.
  We may hear that setting substantive standards for punitive damages 
is unnecessary in light of the Supreme Court's decision last Friday in 
Honda Motor Co. versus Oberg. Because judges are now required under the 
due process clause to review punitive damage awards for arbitrariness, 
we may be told that there is no need for legislation to insure fairness 
in this area. That is not true.
  The Supreme Court's ruling did not dictate any standard for the 
imposition of punitive damages. The absence of uniformity prevailing 
before the Honda decision still remains.
  The Court did make a point relevant to this bill on the issue of 
burden of proof.
  Under the State law applied in the Honda case, punitive damages can 
be awarded only if the claimant proves ``by clear and convincing 
evidence'' that the defendant exhibited strong disregard for the 
health, safety, and welfare of others. The majority opinion called the 
clear and convincing requirement ``an important check against 
unwarranted imposition of punitive damages.''
  The bill before us would adopt both of these standards on a 
nationwide basis.
  Punitive damages face few of our foreign competitors. Only in America 
do juries award punitive damages. Only in America can claimants receive 
damages for pain and suffering. And only in America does joint and 
several liability exist.
  Our competitors enjoy uniform rules on product liability. Our own 
manufacturing companies and their employees deserve certainty in the 
law as well. The bill will ensure greater uniformity than now exists. 
All State and Federal courts within a region will be required to follow 
the Federal court of appeals in the area. This provision will quickly 
produce uniformity.
  Moreover, it is constitutional. Congress has the power to pass this 
legislation under the commerce clause. Since Congress could divest 
State courts from hearing any cases under this statute, it can 
certainly require that State courts follow rules of decision 
established by the courts of appeals.
  Mr. President, the American people deserve protection from injury, 
but they also deserve to keep the system that compensates for injury 
working fairly and efficiently. Today, that system performs badly by 
every measure for everyone except the lawyers for the parties.
  S. 687 provides the first measure of relief to injured persons who 
now obtain justice too late or not at all, to businesses who are 
deterred from manufacturing products beneficial to society, and to 
consumers who pay more than necessary for those products. I urge my 
colleagues to vote for cloture and for the bill.

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