[Congressional Record Volume 140, Number 85 (Wednesday, June 29, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 29, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                     S. 687--PRODUCT LIABILITY BILL

  Mr. BRADLEY. Mr. President, I rise in opposition, to S. 687, the 
Product Liability Fairness Act. The debate on this bill has been 
spirited and informative. I have reviewed the present bill and compared 
it to S. 640, the prior product liability bill that this body 
considered in 1992. While I think that this bill is better than the 
prior bill, I do not think that it goes far enough in striking a 
balance between the desires of manufacturers and product sellers to 
streamline the product liability process and the ability of ordinary 
Americans to bring lawsuits seeking relief from injuries resulting from 
defective and dangerous products.
  My initial concern with the bill is that I think the provision 
concerning expedited settlement puts an undue burden on plaintiffs by 
placing a cap on attorneys' fees of $50,000 when the defendant rejects 
a settlement offer and the plaintiff receives a judgment that is 
greater than the amount of the offer. As an initial matter, I think 
that the cap will affect the quality of legal talent that will be 
available to plaintiffs who wish to pursue litigation. In our market-
driven society, as in any profession, attorneys in the legal profession 
with superior skills will gravitate toward those cases that yield the 
greatest compensation. No such cap is placed on fees that attorneys for 
defendant can receive. While I share the concerns of some that a few 
attorneys may be receiving a windfall with respect to fees in these 
cases, I think that the present cap will place too much of a burden on 
plaintiffs by limiting their options in choosing and retaining skilled 
attorneys when the defendants make the determination that plaintiffs 
adjudicate their claims in court.
  Also, I believe that such a cap will force plaintiffs to play Russian 
Roulette with the decision of whether to go to trial based on advice 
from an attorney that would inject the issue of attorney's fees into 
the decision-making process. A decision to proceed to trial should be 
made solely on the basic of a consideration of the merits of the 
underlying claim. This bill, however, would dilute that decision by 
placing the issue of attorney's fees into the equation. Plaintiffs are 
frequently persons of modest means who perceive a lawsuit as a unique 
event. Their attorneys usually take these cases on a contingency fee 
basis and thus accept part of the risk of losing the case. On the other 
hand, defendants perceive these lawsuits as a regular and calculable 
part of business. Thus, plaintiffs and their attorneys are likely to be 
more risk averse than defendants and will accept a smaller sum to avoid 
the risk of losing in court. Such a scheme does not place plaintiffs 
and defendants on equal ground in the legal arena.

  Mr. President, with respect to the provisions of the bill that 
provide an exemption from punitive damages for drug companies and 
aircraft companies, I think that this provision places too much of a 
burden on a weak and ill-equipped Federal regulatory system to protect 
the safety and well-being of American citizens. There is no question 
that over the last decade, the budgets and personnel of regulatory 
agencies have been severely cut. For example, between 1979 and 1989, 
the FDA's staff was reduced by over 1,000 employees. Thus, I think that 
it is incongruous to pass a bill that strips the judiciary of the 
ability to protect consumers from defective and dangerous products 
without strengthening the first line of defense against unsafe 
products, the regulatory agencies.
  Mr. President, I have some broad concerns regarding the impact of 
this bill on the American public. While the bill places restrictions on 
the ability of individual citizens to seek redress from defective 
products, it places no restrictions on corporations to seek such 
redress. For example, this bill contains a provision that bars civil 
actions if a capital good that is 25 years or older is alleged to have 
caused harm. Thus, if a capital product explodes and severs the leg of 
an individual worker while causing extensive damage to a plant, an 
individual claimant entitled to worker's compensation has no claim, 
while the corporation can sue for damage to the plant even though the 
corporation has insurance.
  Mr. President, I have heard that these lawsuits are eroding American 
corporate competitiveness. However, Mr. President, any bill that 
attempts to improve U.S. competitiveness by reducing the amount of 
litigation in our society should be comprehensive. It should not focus 
solely on cases brought by individuals who claim to be injured by 
certain products, but should also focus on litigation between other 
actors in the system on a variety of legal theories. Nothing hampers 
U.S. competitiveness more than a system which encourages our businesses 
to sue each other over matters that could be resolved outside the 
courts. In our search for legal reform, let's try to rid the courts of 
some of these cases as well.
  Mr. President, we have been told that there is a litigation explosion 
with respect to product liability and that corporations and the 
business community are suffering under the weight of this explosion. We 
have been told that this bill will place plaintiffs and defendants on 
more equal ground in the litigation process. However, Mr. President, 
the New York Times just last week reported the results of a study which 
concludes that in 1992, juries awarded judgments to plaintiffs in 
personal injury cases 52 percent of the time. This figure is down from 
63 percent in 1989. With respect to product liability cases, the study 
found that in 1993, the plaintiffs chances of winning at trial are 41 
percent. Thus, statistics show that at the present time, defendants, 
not plaintiffs, are victorious in a majority of the product liability 
cases that are adjudicated. While one could conclude that plaintiffs 
may be losing these lawsuits because they are frivolous, the fact is 
that State and Federal courts have procedures in place to sanction 
plaintiffs who bring frivolous lawsuits, and no evidence has been 
presented to this legislative body that plaintiffs are engaging in the 
practice of bringing frivolous actions.

  Mr. President, although there have been relatively few punitive 
damage awards in product liability cases over the last 25 years, we 
have been told that the threat of punitive damages encourages many 
product manufacturers to settle cases that they would have no problem 
winning in an effort to avoid having claims for punitive damages go to 
juries unfamiliar with the precautions that are now taken to ensure 
that products are safe. However, Mr. President, the numbers simply do 
not add up to the conclusion that the business community is being 
treated unfairly by juries. Indeed, in almost 60 percent of the product 
liability cases brought in 1993, plaintiffs were the losing parties.
  Mr. President, it has additionally been argued that these lawsuits 
increase the costs of producing products in this country and thus hurts 
American competitiveness. However, a 1987 conference board survey of 
risk managers of 232 corporations shows that product liability costs 
for most businesses are 1 percent or less of the final price of a 
product, and have very little impact on larger economic issues such as 
market share or jobs. In addition, the American Insurance Association, 
the largest trade association representing the insurance industry, has 
testified that this legislation will have virtually no effect on 
insurance costs.
  Mr. President, to put it succinctly, I do not think that the bill 
will really do what its proponents say it will do. As mentioned 
earlier, the proponents of this bill argue that the business community 
is suffering under the weight of a litigation explosion. They contend 
that this bill will decrease both the incidence and cost of litigation. 
Mr. President, no one disagrees that we are an overly litigious 
society. However, I am not convinced that this bill can correct the 
problem of litigiousness by focusing on just one aspect of the system. 
A recent University of Wisconsin study shows that when you take out 
asbestos cases, the number of product liability cases has actually 
decreased since 1985, and according to a survey of several State court 
systems by the National Center for State Courts, ``the most dramatic 
increase in the civil caseloads tended to be for real property rights 
cases or contract cases, not torts.'' Nothing in the current bill 
addresses the other types of cases.
  In conclusion, Mr. President, because of the above stated concerns, I 
must oppose S. 687, the Product Liability Fairness Act.

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