[Congressional Record Volume 141, Number 44 (Thursday, March 9, 1995)]
[House]
[Pages H2914-H2923]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


            COMMON SENSE LEGAL STANDARDS REFORM ACT OF 1995

  The SPEAKER pro tempore. Pursuant to House Resolution 109 and rule 
XXIII, the Chair declares the House in the Committee of the Whole House 
on the State of the Union for the further consideration of the bill, 
H.R. 956.

                              {time}  1225


                     in the committee of the whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the further consideration of 
the bill (H.R. 956) to establish legal standards and procedures for 
product liability litigation, and for other purposes, with Mr. Dreier 
in the chair.
  The Clerk read the title of the bill.
  THe CHAIRMAN. When the Committee of the Whole rose on Wednesday, 
March 8, 1995, all time for general debate pursuant to House Resolution 
108 had expired.
  Pursuant to House Resolution 109, no further general debate is in 
order.
  The amendment in the nature of a substitute consisting of the text of 
H.R. 1075 is considered as an original bill for purposes of amendment 
and is considered as having been read.
  The text of the amendment in the nature of a substitute is as 
follows:
                               H.R. 1075

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Common 
     Sense Product Liability and Legal Reform Act of 1995''.
       (b) Table of Contents.--The table of contents is as 
     follows:

Sec. 1. Short title and table of contents.

                   TITLE I--PRODUCT LIABILITY REFORM

Sec. 101. Findings and purposes.
Sec. 102. Applicability and preemption.
Sec. 103. Liability rules applicable to product sellers.
Sec. 104. Defense based on claimant's use of intoxicating alcohol or 
              drugs.
Sec. 105. Misuse or alteration.
Sec. 106. Frivolous pleadings.
Sec. 107. Several liability for noneconomic loss.
Sec. 108. Statute of repose.
Sec. 109. Service of process.
Sec. 110. Definitions.

                   TITLE II--PUNITIVE DAMAGES REFORM

Sec. 201. Punitive damages.
Sec. 202. Definitions.

                   TITLE III--BIOMATERIALS SUPPLIERS

Sec. 301. Liability of biomaterials suppliers.
Sec. 302. Procedures for dismissal of civil actions against 
              biomaterials suppliers.
[[Page H2915]] Sec. 303. Definitions.

             TITLE IV--EFFECT ON OTHER LAW; EFFECTIVE DATE

Sec. 401. Effect on other law.
Sec. 402. Federal cause of action precluded.
Sec. 403. Effective date.
                   TITLE I--PRODUCT LIABILITY REFORM

     SEC. 101. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) the manufacture and distribution of goods in interstate 
     commerce is to a large extent a national activity which 
     affects national interests in a variety of important ways;
       (2) in recent years, the free flow of products in 
     interstate commerce has been increasingly burdened by product 
     liability law;
       (3) as a result of this burden, consumers have been 
     adversely affected through the withdrawal of products and 
     producers from the national market, and from excessive 
     liability costs passed on to them through higher prices;
       (4) the rules of product liability law in recent years have 
     evolved rapidly and inconsistently within and among the 
     several States, such that the body of product liability law 
     prevailing in this nation today is complex, contradictory, 
     and uncertain;
       (5) the unpredictability of product liability awards and 
     doctrines are inequitable to both plaintiffs and defendants 
     and have added considerably to the high cost of liability 
     insurance, making it difficult for producers and insurers to 
     protect their liability with any degree of confidence;
       (6) product liability actions and punitive damage awards 
     jeopardize the financial well-being of many industries and 
     are a particular threat to the viability of the nation's 
     small businesses;
       (7) the extraordinary costs of the product liability system 
     undermine the ability of American industry to compete 
     internationally, and is costing the loss of jobs and 
     productive capital; and
       (8) because of the national scope of the manufacture and 
     distribution of most products, it is not possible for the 
     individual states to enact laws that fully and effectively 
     respond to these problems.
       (b) Purposes.--Based upon the powers contained in Article 
     I, clause 3 of the United States Constitution, the purposes 
     of this title are to promote the free flow of goods in 
     interstate commerce--
       (1) by establishing certain uniform legal principles which 
     provide a fair balance between the interests of product 
     users, manufacturers, and product sellers,
       (2) by placing reasonable limits on product liability law,
       (3) by ensuring that product liability law operates to 
     compensate persons injured by the wrongdoing of others,
       (4) by reducing the unacceptable transactions costs and 
     delays which harm both plaintiffs and defendants,
       (5) by allocating responsibility for harm to those in the 
     best position to prevent such harm, and
       (6) by establishing greater predictability in product 
     liability actions.

     SEC. 102. APPLICABILITY AND PREEMPTION.

       (a) Preemption.--This title governs any product liability 
     action brought in any State or Federal court, on
      any theory for harm caused by a product. A civil action 
     brought for commercial loss shall be governed only by 
     applicable commercial or contract law.
       (b) Relationship to State Law.--This title supersedes State 
     law only to the extent that State law applies to an issue 
     covered by this title. Any issue that is not governed by this 
     title shall be governed by otherwise applicable State or 
     Federal law.

     SEC. 103. LIABILITY RULES APPLICABLE TO PRODUCT SELLERS.

       (a) General Rule.--Except as provided in subsection (b), in 
     any product liability action, a product seller other than a 
     manufacturer shall be liable to a claimant for harm only if 
     the claimant establishes that--
       (1)(A) the product which allegedly caused the harm 
     complained of was sold by the product seller; (B) the product 
     seller failed to exercise reasonable care with respect to the 
     product; and (C) such failure to exercise reasonable care was 
     a proximate cause of the claimant's harm; or
       (2)(A) the product seller made an express warranty 
     applicable to the product which allegedly caused the harm 
     complained of, independent of any express warranty made by a 
     manufacturer as to the same product; (B) the product failed 
     to conform to the warranty; and (C) the failure of the 
     product to conform to the warranty caused the claimant's 
     harm; or
       (3) the product seller engaged in intentional wrongdoing as 
     determined under applicable State law and such intentional 
     wrongdoing was a proximate cause of the harm complained of by 
     the claimant.

     For purposes of paragraph (1)(B), a product seller shall not 
     be considered to have failed to exercise reasonable care with 
     respect to the product based upon an alleged failure to 
     inspect a product where there was no reasonable opportunity 
     to inspect the product in a manner which would, in the 
     exercise of reasonable care, have revealed the aspect of the 
     product which allegedly caused the claimant's harm.
       (b) Exception.--In a product liability action, a product 
     seller shall be liable for harm to the claimant caused by 
     such product as if the product seller were the manufacturer 
     of such product if--
       (1) the manufacturer is not subject to service of process 
     under the laws of any State in which the action might have 
     been brought; or
       (2) the court determines that the claimant would be unable 
     to enforce a judgment against the manufacturer.

     SEC. 104. DEFENSE BASED ON CLAIMANT'S USE OF INTOXICATING 
                   ALCOHOL OR DRUGS.

       (a) General Rule.--In any product liability action, it 
     shall be a complete defense to such action if--
       (1) the claimant was intoxicated or was under the influence 
     of intoxicating alcohol or any drug when the accident or 
     other event which resulted in such claimant's harm occurred; 
     and
       (2) the claimant, as a result of the influence of the 
     alcohol or drug, was more than 50 percent responsible for 
     such accident or other event.
       (b) Construction.--For purposes of subsection (a)--
       (1) the determination of whether a person was intoxicated 
     or was under the influence of intoxicating alcohol or any 
     drug shall be made pursuant to applicable State law; and
       (2) the term ``drug'' means any controlled substance as 
     defined in the Controlled Substances Act (21 U.S.C. 802(6)) 
     that has been taken by the claimant other than in accordance 
     with the terms of a lawfully issued prescription.

     SEC. 105. MISUSE OR ALTERATION.

       (a) General Rule.--Except as provided in subsection (c), in 
     a product liability action, the damages for which a defendant 
     is otherwise liable under State law shall be reduced by the 
     percentage of responsibility for the claimant's harm 
     attributable to misuse or alteration of a product by any 
     person if the defendant establishes by a preponderance of the 
     evidence that such percentage of the claimant's harm was 
     proximately caused by--
       (1) a use or alteration of a product in violation of, or 
     contrary to, the defendant's express warnings or instructions 
     if the warnings or instructions are adequate as determined 
     pursuant to applicable State law, or
       (2) a use or alteration of a product involving a risk of 
     harm which was known or should have been known by the 
     ordinary person who uses or consumes the product with the 
     knowledge common to the class of persons who used or would be 
     reasonably anticipated to use the product.
       (b) Workplace Injury.--Notwithstanding subsection (a), the 
     damage for which a defendant is otherwise liable under State 
     law shall not be reduced by the percentage of responsibility 
     for the claimant's harm attributable to misuse or alteration 
     of the product by the claimant's employer or any co-employee 
     who is immune from suit by the claimant pursuant to the State 
     law applicable to workplace injuries.
     SEC. 106. FRIVOLOUS PLEADINGS.

       (a) General Rule.--
       (1) Signing of pleading.--The signing or verification of a 
     pleading in a product liability action in a State court 
     subject to this title constitutes a certificate that to the 
     signatory's or verifier's best knowledge, information, and 
     belief, formed after reasonable inquiry, the pleading is not 
     frivolous as determined under paragraph (2).
       (2) Definitions.--
       (A) For purposes of this section, a pleading is frivolous 
     if the pleading is--
       (i) groundless and brought in bad faith;
       (ii) groundless and brought for the purpose of harassment; 
     or
       (iii) groundless and interposed for any improper purpose, 
     such as to cause unnecessary delay or needless increase in 
     the cost of litigation.
       (B) For purposes of subparagraph (A), the term 
     ``groundless'' means--
       (i) no basis in fact; or
       (ii) not warranted by existing law or a good faith argument 
     for the extension, modification, or reversal of existing law.
       (b) Determination That Pleading Frivolous.--
       (1) Motion for determination.--Not later than 60 days after 
     the date a pleading in a product liability action in a State 
     court is filed, a party to the action may make a motion that 
     the court determine if the pleading is frivolous.
       (2) Court action.--The court in a product liability action 
     in a State court shall on the motion of a party or on its own 
     motion determine if a pleading is frivolous.
       (c) Considerations.--In making its determination of whether 
     a pleading is frivolous, the court shall take into account--
       (1) the multiplicity of parties;
       (2) the complexity of the claims and defenses;
       (3) the length of time available to the party to 
     investigate and conduct discovery; and
       (4) affidavits, depositions, and any other relevant matter.
       (d) Sanction.--If the court determines that a pleading is 
     frivolous, the court shall impose an appropriate sanction on 
     the signatory or verifier of the pleading. The sanction may 
     include one or more of the following:
       (1) the striking of a pleading or the offending portion 
     thereof;
       (2) the dismissal of a party; or
       (3) an order to pay to a party who stands in opposition to 
     the offending pleading the amounts of the reasonable expenses 
     incurred because of the filing of the pleading, including 
     costs, reasonable attorney's fees, witness fees, fees of 
     experts, and deposition expenses.
     [[Page H2916]]   (e) Construction.--For purposes of this 
     section--
       (1) a general denial does not constitute a frivolous 
     pleading; and
       (2) the amount requested for damages does not constitute a 
     frivolous pleading.

     SEC. 107. SEVERAL LIABILITY FOR NONECONOMIC LOSS.

       In any product liability action, the liability of each 
     defendant for noneconomic loss shall be several only and 
     shall not be joint. Each defendant shall be liable only for 
     the amount of noneconomic loss attributable to such defendant 
     in direct proportion to such defendant's proportionate share 
     of fault or responsibility for the claimant's harm, as 
     determined by the trier of fact.

     SEC. 108. STATUTE OF REPOSE.

       (a) General Rule.--A product liability action shall be 
     barred unless the complaint is served and filed within 15 
     years of the date of delivery of the product to its first 
     purchaser or lessee, who was not engaged in the business of 
     selling or leasing the product or of using the product as a 
     component in the manufacture of another product. This 
     subsection shall apply only if the court determines that the 
     claimant has received or would be eligible to receive full 
     compensation from any source for medical expense losses.
       (b) Exception.--Subsection (a)--
       (1) does not bar a product liability action against a 
     defendant who made an express warranty in writing as to the 
     safety of the specific product involved which was longer than 
     15 years, but it will apply at the expiration of such 
     warranty,
       (2) does not apply to a physical illness the evidence of 
     which does not ordinarily appear less than 15 years after the 
     first exposure to the product, and
       (3) does not affect the limitations period established by 
     the General Aviation Revitalization Act of 1994.

     SEC. 109. SERVICE OF PROCESS.

       This title shall not apply to a product liability action 
     unless the manufacturer of the product or component part has 
     appointed an agent in the United States for service of 
     process from anywhere in the United States.
     SEC. 110. DEFINITIONS.

       As used in this title:
       (1) The term ``claimant'' means any person who brings a 
     product liability action and any person on whose behalf such 
     an action is brought. If such an action is brought through or 
     on behalf of an estate, the term includes the claimant's 
     decedent. If such action is brought through or on behalf of a 
     minor or incompetent, the term includes the claimant's legal 
     guardian.
       (2) The term ``commercial loss'' means any loss of or 
     damage to a product itself incurred in the course of the 
     ongoing business enterprise consisting of providing goods or 
     services for compensation.
       (3) The term ``economic loss'' means any pecuniary loss 
     resulting from harm (including the loss of earnings, medical 
     expense loss, replacement services loss, loss due to death, 
     and burial costs) to the extent recovery for such loss is 
     allowed under applicable State law.
       (4) The term ``harm'' means any physical injury, illness, 
     disease, or death or damage to property caused by a product. 
     The term does not include commercial loss or loss or damage 
     to a product itself.
       (5) The term ``manufacturer'' means--
       (A) any person who is engaged in a business to produce, 
     create, make, or construct any product (or component part of 
     a product) and who (i) designs or formulates the product (or 
     component part of the product), (ii) has engaged another 
     person to design or formulate the product (or component part 
     of the product), or (iii) uses the design or formulation of 
     the product developed by another person;
       (B) a product seller of the product who, before placing the 
     product in the stream of commerce--
       (i) designs or formulates or has engaged another person to 
     design or formulate an aspect of the product after the 
     product was initially made by another, or
       (ii) produces, creates, makes, or constructs such aspect of 
     the product, or
       (C) any product seller not described in subparagraph (B) 
     which holds itself out as a manufacturer to the user of the 
     product.
       (6) The term ``noneconomic loss'' means subjective, 
     nonmonetary loss resulting from harm, including pain, 
     suffering, inconvenience, mental suffering, emotional 
     distress, loss of society and companionship, loss of 
     consortium, injury to reputation, and humiliation.
       (7) The term ``person'' means any individual, corporation, 
     company, association, firm, partnership, society, joint stock 
     company, or any other entity (including any governmental 
     entity).
       (8)(A) The term ``product'' means any object, substance, 
     mixture, or raw material in a gaseous, liquid, or solid state 
     which--
       (i) is capable of delivery itself or as an assembled whole, 
     in a mixed or combined state, or as a component part or 
     ingredient;
       (ii) is produced for introduction into trade or commerce;
       (iii) has intrinsic economic value; and
       (iv) is intended for sale or lease to persons for 
     commercial or personal use.
       (B) The term does not include--
       (i) human tissue, human organs, human blood, and human 
     blood products; or
       (ii) electricity, water delivered by a utility, natural 
     gas, or steam.
       (9) The term ``product liability action'' means a civil 
     action brought on any theory for harm caused by a product or 
     product use.
       (10) The term ``product seller'' means a person who, in the 
     course of a business conducted for that purpose, sells, 
     distributes, rents, leases, prepares, blends, packages, 
     labels a product, is otherwise involved in placing a product 
     in the stream of commerce, or installs, repairs, or maintains 
     the harm-causing aspect of a product. The term does not 
     include--
       (A) a seller or lessor of real property;
       (B) a provider of professional services in any case in 
     which the sale or use of a product is incidental to the 
     transaction and the essence of the transaction is the 
     furnishing of judgment, skill, or services; or
       (C) any person who--
       (i) acts in only a financial capacity with respect to the 
     sale of a product; or
       (ii) leases a product under a lease arrangement in which 
     the selection, possession, maintenance, and operation of the 
     product are controlled by a person other than the lessor.
       (11) The term ``State'' means any State of the United 
     States, the District of Columbia, Commonwealth of Puerto 
     Rico, the Northern Mariana Islands, the Virgin Islands, Guam, 
     American Samoa, and any other territory or possession of the 
     United States, or any political subdivision of any of the 
     foregoing.
                   TITLE II--PUNITIVE DAMAGES REFORM

     SEC. 201. PUNITIVE DAMAGES.

       (a) General Rule.--Punitive damages may, to the extent 
     permitted by applicable State law, be awarded in any civil 
     action for harm in any Federal or State court against a 
     defendant if the claimant establishes by clear and convincing 
     evidence that the harm suffered was result of conduct--
       (1) specifically intended to cause harm, or
       (2) conduct manifesting a conscious, flagrant indifference 
     to the safety of others.
       (b) Proportional Awards.--The amount of punitive damages 
     that may be awarded in any civil action subject to this title 
     shall not exceed 3 times the amount of damages awarded to the 
     claimant for the economic loss on which the claimant's action 
     is based, or $250,000, whichever is greater.
       (c) Applicability and Preemption.--Except as provided in 
     section 401, this title shall apply to any civil action 
     brought in any Federal or State court on any theory where 
     punitive damages are sought. This title does not create a 
     cause of action for punitive damages in any jurisdiction that 
     does not authorize such actions.
       (d) Bifurcation.--At the request of any party, the trier of 
     fact shall consider in a separate proceeding whether punitive 
     damages are to be awarded and the amount of such award. If a 
     separate proceeding is requested, evidence relevant only to 
     the claim of punitive damages, as determined by applicable 
     State law, shall be inadmissible in any proceeding to 
     determine whether compensatory damages are to be awarded.
       (e) Consideration.--In determining the amount of punitive 
     damages, the trier of fact shall consider all relevant, 
     admissible evidence, including--
       (1) the severity of the harm caused by the conduct of the 
     defendant,
       (2) the duration of the conduct or any concealment of it by 
     the defendant,
       (3) the profitability of the specific conduct that caused 
     the harm to the defendant,
       (4) the number of products sold, the frequency of services 
     provided, or the type of activities conducted by the 
     defendant of the kind causing the harm complained of by the 
     claimant,
       (5) awards of punitive damages to persons similarly 
     situated to the claimant,
       (6) possibility of prospective awards of compensatory 
     damages to persons similarly situated to the claimant,
       (7) any criminal penalties imposed on the defendant as a 
     result of the conduct complained of by the claimant,
       (8) the amount of any civil and administrative fines and 
     penalties assessed against the defendant as a result of the 
     conduct complained of by the claimant, and
       (9) whether the foregoing considerations have been a factor 
     in any prior proceeding involving the defendant.

     SEC. 202. DEFINITIONS.

       As used in this title:
       (1) The term ``claimant'' means any person who brings a 
     civil action and any person on whose behalf such an action is 
     brought. If such action is brought through or on behalf of an 
     estate, the term includes the claimant's decedent. If such 
     action is brought through or on behalf of a minor or 
     incompetent, the term includes the claimant's legal guardian.
       (2) The term ``clear and convincing evidence'' is that 
     measure or degree of proof that will produce in the mind of 
     the trier of fact a firm belief or conviction as to the truth 
     of the allegations sought to be established. The level of 
     proof required to satisfy such standard is more than that 
     required under preponderance of the evidence, but less than 
     that required for proof beyond a reasonable doubt.
       (3) The term ``economic loss'' means any pecuniary loss 
     resulting from harm (including the loss of earnings, medical 
     expense loss, replacement services loss, loss due to death, 
     and burial costs), to the extent recovery for such loss is 
     allowed under applicable State law.
       (4) The term ``harm'' means any legally cognizable wrong or 
     injury for which punitive damages may be imposed.
     [[Page H2917]]   (5) The term ``punitive damages'' means 
     damages awarded against any person or entity to punish or 
     deter such person or entity, or others, from engaging in 
     similar behavior in the future.
       (6) The term ``State'' means any State of the United 
     States, the District of Columbia, Commonwealth of Puerto 
     Rico, the Northern Mariana Islands, the Virgin Islands, Guam, 
     American Samoa, and any other territory or possession of the 
     United States, or any political subdivision of any of the 
     foregoing.
                   TITLE III--BIOMATERIALS SUPPLIERS

     SEC. 301. LIABILITY OF BIOMATERIALS SUPPLIERS.

       A biomaterials supplier may, to the extent required and 
     permitted by any other applicable law, be liable for harm to 
     a claimant caused by a medical device, only if the claimant 
     in a product liability action shows that the conduct of the 
     biomaterials supplier was an actual and proximate cause of 
     the harm to the claimant and--
       (1) the raw materials or component parts delivered by the 
     biomaterials supplier either--
       (A) did not constitute the product described in the 
     contract between the biomaterials supplier and the person who 
     contracted for delivery of the product; or
       (B) failed to meet any specifications that were--
       (i) provided to the biomaterials supplier and not expressly 
     repudiated by the biomaterials supplier prior to acceptance 
     of delivery of the raw materials or component parts:
       (ii)(I) provided to the biomaterials supplier;
       (II) provided to the manufacturer by the biomaterials 
     supplier; or
       (III) contained in a master file that was submitted by the 
     biomaterials supplier to the Secretary of Health and Human 
     Services and that is currently maintained by the biomaterials 
     supplier of purposes of premarket approval of medical 
     devices; or
       (iii)(I) included in the submissions for the purposes of 
     premarket approval or review by the Secretary of Health and 
     Human Services under section 510, 513, 515, or 520 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360, 360c, 
     360e, or 360j); and
       (II) have received clearance from the Secretary of Health 
     and Human Services, if such specifications were provided by 
     the manufacturer to the biomaterials supplier and were not 
     expressly repudiated by the biomaterials supplier prior to 
     the acceptance by the raw materials or component parts;
       (2) the biomaterials supplier intentionally and wrongfully 
     withheld or misrepresented information that is material and 
     relevant to the harm suffered by the claimant; or
       (3) the biomaterials supplier had actual knowledge of 
     prospective fraudulent or malicious activities in the use of 
     its supplies where such activities are relevant to the harm 
     suffered by the claimant.
     SEC. 302. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS AGAINST 
                   BIOMATERIALS SUPPLIERS.

       (a) Motion To Dismiss.--
       (1) General rule.--Any biomaterials supplier who is a 
     defendant in any product liability action involving a medical 
     device which allegedly caused the harm for which the action 
     is brought and who did not take part in the design, 
     manufacture, or sale of such medical device may, at any time 
     during which a motion to dismiss may be filed under an 
     applicable law, move to dismiss the action on the grounds 
     that--
       (A) the claimant has failed to establish that the supplier 
     furnished raw materials or component parts in violation of 
     applicable contractual requirements or specifications agreed 
     to by the biomaterials supplier; or
       (B) the claimant has failed to comply with the requirements 
     of subsection (b).
       (2) Exception.--The biomaterials supplier may not move to 
     dismiss the action if--
       (A) the biomaterials supplier intentionally and wrongfully 
     withheld or misrepresented information that is material and 
     relevant to the harm suffered by the claimant; or
       (B) the biomaterials supplier had actual knowledge of 
     prospective fraudulent or malicious activities in the use of 
     its supplies where such activities are relevant to the harm 
     suffered by the claimant.
       (b) Manufacturer of Medical Device Shall Be Named a 
     Party.--The claimant shall be required to name the 
     manufacturer of the medical device to which the biomaterials 
     supplier furnished raw materials or component parts as a 
     party to the product liability action, unless--
       (1) the manufacturer is subject to service of process 
     solely in a jurisdiction in which the biomaterials supplier 
     is not domiciled or subject to a service of process; or
       (2) an action against the manufacturer is barred by 
     applicable law.
       (c) Proceedings on Motion to Dismiss.--The following rules 
     shall apply to any proceeding on a motion to dismiss filed 
     under this section:
       (1) Affidavits relating to status of defendant.--
       (A) Defendant affidavit.--The defendant in the action may 
     support a motion to dismiss by filing an affidavit 
     demonstrating that defendant is a biomaterials supplier and 
     that it is neither the manufacturer nor the product seller of 
     the medical device which caused the harm alleged by the 
     claimant.
       (B) Response to motion to dismiss.--In response to a motion 
     to dismiss described in this section, the claimant may submit 
     an affidavit demonstrating why it asserts that--
       (i) the defendant who filed the motion to dismiss is not a 
     biomaterials supplier with respect to the medical device 
     which caused the harm alleged by the claimant;
       (ii) on what basis it asserts that the supplier furnished 
     raw materials or component parts in violation of applicable 
     contractual requirements or specifications agreed to by the 
     biomaterials supplier;
       (iii) the biomaterials supplier intentionally and 
     wrongfully withheld or misrepresented information that is 
     material and relevant to the harm suffered by the claimant; 
     or
       (iv) the biomaterials supplier had actual knowledge of 
     prospective fraudulent or malicious activities in the use of 
     its supplies where such activities are relevant to the harm 
     suffered by the claimant.
       (2) Effect of motion to dismiss on discovery.--If a 
     defendant files a motion to dismiss, no discovery shall be 
     permitted in connection with the action that is the subject 
     of the motion, unless the affidavits submitted in accordance 
     with this section raise material issues of fact concerning 
     whether--
       (A) the supplier furnished raw materials or component parts 
     in violation of applicable contractual requirements or 
     specifications agreed to by the biomaterials supplier;
       (B) the biomaterials supplier intentionally and wrongfully 
     withheld or misrepresented information that is material and 
     relevant to the harm suffered by the claimant; or
       (C) the biomaterials supplier had actual knowledge of 
     prospective fraudulent or malicious activities in the use of 
     its supplies where such activities are relevant to the harm 
     suffered by the claimant.

     Any such discovery shall be limited solely to such material 
     facts.
       (3) Response to motion to dismiss.--The court shall rule on 
     the motion to dismiss solely on the basis of the affidavits 
     filed under this section and on the basis of any evidence 
     developed in the course of discovery under paragraph (2) and 
     subsequently submitted to the court in accordance with 
     applicable rules of evidence.
       (d) Attorney Fees.--The court shall require the claimant to 
     compensate the biomaterials supplier for attorney fees and 
     costs, if--
       (1) the claimant named or joined the biomaterials supplier; 
     and
       (2) the court found the claim against the biomaterials 
     supplier to be without merit and frivolous.

     SEC. 303. DEFINITIONS.

       For purposes of this title:
       (1) The term ``biomaterials supplier'' means an entity that 
     directly or indirectly supplies, or licenses another person 
     to supply, a component part or raw material for use in the 
     manufacture of a medical device--
       (A) that is intended by the manufacturer of the device--
       (i) to be placed into a surgically or naturally formed or 
     existing cavity of the body for a period of at least 30 days; 
     or
       (ii) to remain in contact with bodily fluids of internal 
     human tissue through a surgically produced opening for a 
     period of less than 30 days; and
       (B) suture materials used in implant procedures.
       (2) Notwithstanding paragraph (1), the term ``biomaterials 
     supplier'' excludes any person, with respect to a medical 
     device which is the subject of a product liability action--
       (A) who is engaged in the manufacture, preparation, 
     propagation, compounding, or processing (as defined in 
     section 510(a)(1) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 360(a)(1)) of the medical device, and has 
     registered with the Secretary of Health and Human Services 
     pursuant to section 510 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 360) and the regulations issued under 
     such section, and has included the medical device on a list 
     of devices filed with the Secretary of Health and Human 
     Services pursuant to section 510(j) of such Act (21 U.S.C. 
     360(j)) and the regulations issued under such section; or
       (B) who, in the course of a business conducted for that 
     purpose, has sold, distributed, leased, packaged, labeled, or 
     otherwise placed the implant in the stream of commerce after 
     it was manufactured.
       (3) The term ``harm'' means any physical injury, illness, 
     disease, or death or damage to property caused by a product. 
     The term does not include commercial loss or loss or damage 
     to a product itself.
       (4) The term ``product liability action'' means a civil 
     action brought on any theory for harm caused by a product or 
     product use.
             TITLE IV--EFFECT ON OTHER LAW; EFFECTIVE DATE

     SEC. 401. EFFECT ON OTHER LAW.

       Nothing in title I, II, or III shall be construed to--
       (1) waive or affect any defense of sovereign immunity 
     asserted by any State under any law;
       (2) supersede any Federal law;
       (3) waive or affect any defense of sovereign immunity 
     asserted by the United States;
       (4) affect the applicability of any provision of chapter 97 
     of title 28, United States Code;
       (5) preempt State choice-of-law rules with respect to 
     claims brought by a foreign nation or a citizen of a foreign 
     nation; or
       (6) affect the right of any court to transfer venue or to 
     apply the law of a foreign nation or to dismiss a claim of a 
     foreign nation or of a citizen of a foreign nation on the 
     ground of inconvenient forum.
     [[Page H2918]] SEC. 402. FEDERAL CAUSE OF ACTION PRECLUDED.

       The district courts of the United States shall not have 
     jurisdiction pursuant to this Act based on section 1331 or 
     1337 of title 28, United States Code.

     SEC. 403. EFFECTIVE DATE.

       Titles I, II, and III shall apply with respect to actions 
     which are commenced after the date of the enactment of this 
     Act.

  The CHAIRMAN. No amendment to the amendment in the nature of a 
substitute shall be in order except the amendments printed in House 
Report 104-72 or in section 2 of House Resolution 109, as amended. Each 
amendment may be offered only in the order printed in the report, may 
be offered only by a Member designated in the report, shall be 
considered as read, shall not be subject to amendment, and shall not be 
subject to a demand for division of the question.
  Debate time on each amendment will be equally divided and controlled 
by the proponent and an opponent of the amendment.
  It is now in order to consider amendment number 1 printed in section 
2 of House Resolution 109, as amended.

              AMENDMENT OFFERED BY MR. PETE GEREN OF TEXAS

  Mr. PETE GEREN of Texas. Mr. Chairman, I offer an amendment made in 
order under the rule.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment offered by Mr. Pete Geren of Texas: Page 7, 
     insert after line 3 the following:
       (c) Notwithstanding any other provision of law, any person 
     engaged in the business of renting or leasing a product shall 
     be subject to liability under subsection (a) but shall not 
     liable to a claimant for the tortious act of another 
     involving a product solely by reason of ownership of such 
     product.

  The CHAIRMAN. Pursuant to the rule, the gentleman from Texas, Mr. 
Pete Geren and a Member opposed will each be recognized for 5 minutes.
  The Chair recognizes the gentleman from Texas, Mr. Pete Geren.
  Mr. PETE GEREN of Texas. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, this amendment is in fact a clarifying amendment to 
title I of H.R. 1075. Our amendment would clarify that companies that 
rent or lease products are covered by the provisions of title I. 
Currently under title I it is clear that product liability actions 
against companies that sell products are subject to section 103. 
Section 103 provides that a product liability action cannot be pursued 
against a product seller unless the seller has been negligent, has 
offered an express warranted offer, or has engaged in intentional 
wrongdoing. Simply stated, there should be no liability without fault. 
That is the intention of this clarifying amendment.
  Mr. HYDE. Mr. Chairman, will the gentleman yield?
  Mr. PETE GEREN of Texas. I yield to the gentleman from Illinois.
  Mr. HYDE. Mr. Chairman, this amendment amplifies and is consistent 
with an amendment offered in the committee by the gentleman from 
Illinois [Mr. Flanagan]. We find it perfectly acceptable, and I am 
pleased to accept the amendment.
  Mr. PETE GEREN of Texas. Reclaiming my time, Mr. Chairman, I yield 
such time as he may consume to the gentleman from Texas [Mr. Bryant].
  (Mr. BRYANT of Texas asked and was given permission to revise and 
extend his remarks.)
  Mr. BRYANT of Texas. Mr. Chairman, I thank the gentleman for yielding 
me the time, and I rise in support of the amendment.
  Mr. PETE GEREN of Texas. Mr. Chairman, I yield 1 minute to the 
gentleman from Minnesota [Mr. Ramstad].
  Mr. RAMSTAD. I thank the gentleman for yielding me the time.
  Mr. Chairman, I too rise in strong support of this amendment. 
Vicarious liability is plain and simple: liability without fault. Every 
month car dealers, rental companies and leasing firms are held liable 
under these vicarious liability laws for harm to third parties that 
they in no way could prevent. There is no negligence whatsoever, and I 
believe that this clarifying amendment is essential because of the cost 
to American consumers literally equaling tens of millions of dollars in 
higher prices for car rental leases and also we are paying a price in 
terms of competition in these industries.
  This bill has the support of the auto manufacturers, the new and used 
car dealers and the car rental industry. If there is any opposition, it 
comes from those who have used the vicarious liability laws to coerce 
companies into unfair and inequitable settlements.
  This reform is long overdue. I commend the gentleman from Texas for 
bringing this amendment to the floor. I urge my colleagues to support 
it.
  The CHAIRMAN. The Chair would inquire if there is any Member who 
wishes to speak in opposition to the amendment.
  Mrs. SCHROEDER. Mr. Chairman, I rise in opposition.
  The CHAIRMAN. The gentlewoman from Colorado [Mrs. Schroeder] is 
recognized for 5 minutes.
  Mrs. SCHROEDER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I do not rise in strong opposition to this but I must 
say I rise with great concern because there were so many amendments 
that were really very, very substantive and they were not allowed, and 
here we are with the first amendment, one that was basically adopted by 
the committee. I do not think there is a tremendous amount of dissent 
about it, and I think it just shows what a lot of us have been trying 
to say during the rules debate.

                              {time}  1230

  Really critical issues about which there is a lot of debate and a lot 
of concern have been moved aside, and they made room instead for 
amendments like this which were really more like a love-in. Basically, 
this amendment too goes to the issue a little bit more of tort. I think 
it is a little bit more of concern to some that it is kind of squeezed 
into the product liability, and I have some question as to how it may 
have moved into the torts area, and it is not quite clear. But 
nevertheless, my position at this point, and the committee's position 
on this side of the aisle would be that it is a shame we could not have 
substituted some of the amendments that there was much more dissent 
about than spending precious time on the floor on this.
  Mr. Chairman, I reserve the balance of my time.
  Mr. PETE GEREN of Texas. Mr. Chairman, I yield 30 seconds to the 
gentleman from Florida [Mr. Deutsch].
  Mr. DEUTSCH. Mr. Chairman, I rise in support of this amendment. This 
amendment clarifies what the committee tried to do in terms of making 
sure that a renter of a product is not automatically liable in that 
situation, and I urge the adoption of the amendment.
  Mr. PETE GEREN of Texas. Mr. Chairman, I yield 30 seconds to the 
gentleman from Illinois [Mr. Flanagan].
  (Mr. FLANAGAN asked and was given permission to revise and extend his 
remarks.)
  Mr. FLANAGAN. Mr. Chairman, I also rise in support of this amendment.
  During the Committee on the Judiciary markup of the product liability 
bill I offered an amendment which was adopted by voice vote to assure 
that companies who rent products were covered under the definition of 
product seller. This amendment is a further improvement on the 
Judiciary Committee bill, and it expressly states that a company that 
rents and leases products is to be treated as a product seller under 
title I of the bill. It makes clear that those companies will not be 
held liable for injuries they do not cause.
  This amendment deserves the support of every Member of the body, and 
I urge my colleagues to support it overwhelmingly.
  Mr. Chairman, among the problems H.R. 1075 is designed to address is 
the tort doctrine of vicarious liability for motor vehicles. The 
amendment, which I have coauthored with Messrs. Geren, Ramstad, and 
Cox, is a mere clarification of the bill's scope. It would assure that 
vicarious liability--or liability without fault--is covered under the 
product liability legislation before us today.
  Mr. Chairman, 11 States and the District of Columbia currently have 
these vicarious liability laws on the books--laws which hold the owners 
of motor vehicles liable for damages caused by their vehicles even 
though the owners were not negligent and there is no defect in their 
automobiles.
  [[Page H2919]] Many businesses, such as car rental companies, 
automobile dealers, and leasing companies are being held strictly 
liable in these vicarious liability States for injuries they did not 
cause and could not prevent. These companies have not been negligent, 
and yet they are being forced to pay for the negligence of others.
  For example, in my neighboring State of Iowa, a renter of an 
automobile fell asleep at the wheel. The vehicle he was driving left 
the road and struck a parked truck. Unfortunately, the renter's wife 
and child were killed in the accident. Although there was no negligence 
on behalf of the car rental company, the court still imposed a $800,000 
judgement on the rental company. Mr. Chairman, is this fair?
  To cite one more example, this time in New York, where a renter, 
allegedly using the vehicle for drug trafficking, struck a pedestrian 
on a downtown Manhattan street. The pedestrian received severe head 
injuries from the accident. The settlement by the car rental company 
was set at $1.226 million. Again, the car rental company had to pay-out 
$1,226,000 although it was not negligent. Surely, in this instance, the 
car rental company should not have been held at fault.
  The Geren-Ramstad-Cox-Flanagan amendment will provide relief in these 
circumstances and would assure that companies that rent or lease 
products are not held liable for damages caused by rented or leased 
products if the company could not have prevented the harm.
  This provision would not exempt these companies from liability if the 
company is negligent and would not exempt these companies from State 
financial responsibility laws for vehicle owners in each State.
  In addition, this amendment would not, as has been alleged, cover all 
automobile accidents. Such a statement ignores the plain wording of the 
amendment. The amendment would cover only civil actions involving 
product sellers, not civil actions against all drivers of motor 
vehicles. Again, this amendment only covers product sellers as defined 
in section 110 of the bill.
  Mr. Chairman, I believe it is appropriate to include the Geren-
Ramstad-Cox-Flanagan provision in H.R. 1075 because vicarious liability 
impacts the car rental industry in the same fashion that product 
liability impacts other product sellers.
  Vicarious liability claims cost car rental companies over $75 million 
annually--costs which drive up rental and leasing rates for all 
Americans.
  In addition, vicarious liability has driven smaller companies out of 
business or forced them to refrain from doing business in States with 
vicarious liability laws. This leads to decreased competition, 
increased rates, and limited choice for consumers.
  In sum, Mr. Chairman, section 103 of H.R. 1075 states that a product 
seller shall not be held liable without fault. This amendment simply 
extends this principle to companies that rent or lease products.
  Therefore, Mr. Chairman, I urge my colleagues to support the 
amendment.
  Mrs. SCHROEDER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I continue my protest that we had amendments that were 
very, very critical that were shut out. One of the ones that I had 
wanted to offer that had everybody from the Right to Life Committee to 
NARAL joining in consensus on was a very critical one.
  It dealt with people's reproductive organs, and the fact that it 
should be removed from this bill because people feel very, very 
strongly, and especially women who have had incident after incident 
after incident of people manufacturing things that did affect their 
reproductive organs. We really felt we wanted to make it very clear we 
thought that that should not be covered by this bill. That was not 
allowed.
  I find that pretty amazing when we have this consensus from right to 
left, and it is rather historic, I do not think we have had that kind 
of consensus in this body for a very long time, that that amendment was 
not allowed, and yet we have this as an amendment that was adopted by 
voice vote, as the gentleman from Illinois said, in the committee, and 
here we are just continuing to perfect it a little bit and taking up 
time.
  There are many other amendments similar to mine in the 82 that were 
there, and of course many fell off the table. And then of course many 
of the ones that we had, such as the one I will have next, has been 
limited to 20 minutes. We got hardly any time to discuss very serious 
legal principles that have been established in this country since the 
beginning of the Republic that we are now changing today, and it seems 
to me that we should have taken the precious time that we have and 
allocated it to many more of the serious issues about which there is 
real contention than this, which is really more of a cosmetic, 
housekeeping amendment about which there really has not been a lot of 
disagreement.
  Mr. Chairman, I reserve the balance of my time.
  Mr. PETE GEREN of Texas. Mr. Chairman, I yield myself such time as I 
may consume, and I yield to the gentleman from Louisiana [Mr. Tauzin] 
for the purposes of a colloquy.
  The CHAIRMAN. The gentleman from Texas, Mr. Pete Geren, has 1\1/2\ 
minutes remaining.
  Mr. TAUZIN. Mr. Chairman, will the gentleman yield?
  Mr. PETE GEREN of Texas. I yield to the gentleman from Louisiana.
  Mr. TAUZIN. Mr. Chairman, I thank the gentleman for yielding. It is 
my understanding that this amendment is intended only to preempt the 
State laws in a small minority of jurisdictions that impose unlimited 
financial liability on owners of motor vehicles for harm caused by the 
permissive users of their vehicles, and that nothing in this amendment 
should be construed to excuse any motor vehicle owner from meeting the 
minimum financial responsibility laws required by each State.
  Mr. PETE GEREN of Texas. The gentleman's understanding of this 
amendment is correct, and that is an accurate characterization of it. I 
appreciate the gentleman helping us to clarify the intent of this 
amendment.
  Mr. TAUZIN. I thank the gentleman, and I urge support for the 
amendment.
  Mr. PETE GEREN of Texas. Mr. Chairman, borrowing from the wisdom I 
picked up from the gentleman from Louisiana over my years here, and 
drawing on the comments of the gentlewoman from Colorado, when the 
package is sold, you wrap it up.
  Mr. Chairman, I yield back the balance of my time.
  Mrs. SCHROEDER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, obviously I have a lot to say on my next amendment, and 
whatever time I have left, if I could just use it for that I would be 
very, very appreciative.
  In my next amendment I am going to be talking about noneconomic 
damages, and it is called the family values amendment. I think even the 
gentleman from Texas would join me in saying that this body should 
stand up for this next family values amendment that hopefully will be 
coming up almost immediately after a voice vote on this, because it is 
a very serious amendment. We are talking about we cannot talk family 
values and say they do not amount to anything, and unless we pass this 
amendment that is exactly what we will be saying. So I apologize to the 
gentleman from Texas for using our 5 minutes to talk about some of the 
problems we have in trying to deal with this because of the rule, but I 
felt that that was really the only fair thing to do since we were not 
allowed to offer many of the amendments that really, really were coming 
up. So what I will be able to do then, hopefully, is find a way to get 
people's attention as to how patched together this is, how uncertain 
many of us are, and the concerns we have.
  The CHAIRMAN. The time of the gentlewoman from Colorado [Mrs. 
Schroeder] has expired. All time has expired.
  The question is on the amendment offered by the gentleman from Texas, 
Mr. Pete Geren.
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider amendment No. 2 printed 
in section 2 of House Resolution 109.


                  AMENDMENT OFFERED BY MRS. SCHROEDER

  Mrs. SCHROEDER. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment offered by Mrs. Schroeder: Page 11, strike lines 
     17 through 24, and redesignate succeeding sections 
     accordingly.
       Page 17, line 25, insert ``and noneconomic'' before 
     ``loss''.

  The CHAIRMAN. Pursuant to the rule, the gentlewoman from Colorado 
[Mrs. Schroeder] and a Member opposed will each be recognized for 10 
minutes.
  [[Page H2920]] The Chair recognizes the gentlewoman from Colorado 
[Mrs. Schroeder].
  Mrs. SCHROEDER. Mr. Chairman, I yield myself 2 minutes.
  Mr. Chairman, this amendment I have called the family values 
amendment, and I think it is very critical. I was very pleased when I 
offered it in the committee that it had a very large vote, and we had 
votes from both sides of the aisle.
  Americans value this families. We talk family values. Here is a 
chance to put our money where our mouths are, because under this bill 
noneconomic damages are discriminated against very, very much, and I do 
not think that is fair.
  Noneconomic damages mean if you do not get a paycheck, you do not 
count. So the fact that you were staying home and taking care of your 
family, no matter which parent you are, that does not matter. That is 
noneconomic damages. You do not count.
  Let me tell my colleagues, every parent is a working parent, whether 
they are working in the house or out of the house, so I think that is 
ridiculous.
  Second, if you are a child obviously you are not getting a paycheck, 
so that does not count.
  Third, if a woman is working outside the home, they are still, 
unfortunately, very apt to be discriminated against, so any paycheck 
they would get still reflects the discrimination we have in society.
  Finally, one of the areas I feel strongest about is the whole area of 
people's reproductive organs, because we have seen so many problems in 
this area in the past, with the Dalcon shield and all sorts of other 
issues that people are more and more familiar with. If we do not deal 
with this noneconomic damage issue in this bill, then we are really 
saying those do not matter. And we will not have joint and several 
liability on those issues, which means even if you get some kind of a 
judgment, it is very apt that you will not be able to collect it, you 
cannot collect it nearly as easy as you can with economic damages.
  And this bill discriminates on punitive damages by not allowing 
noneconomic damages to count. So we are really saying you are only 
valued for your paycheck. There is no other value to you, and any other 
value that you have, whether it is about your reproductive organs or 
not, it does not count.
  The CHAIRMAN. Does any Member seek recognition in opposition to the 
amendment?
  Mr. HYDE. Mr. Chairman, indeed there is. I rise in opposition to the 
amendment.
  The CHAIRMAN. The gentleman from Illinois [Mr. Hyde] is recognized 
for 10 minutes.
  Mr. HYDE. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, the amendment offered by the gentlewoman from Colorado 
eliminates the protection against disproportionate liability for 
subjective, nonmonetary losses and weakens the protection of the 
punitive damages cap. For these reasons I urge the defeat of the 
pending amendment. It was offered in committee and was defeated in 
committee.
  Section 107, in the interests of fairness, protects a defendant from 
being held liable for noneconomic losses that are attributable to the 
fault or responsibility of another individual or entity. The concept of 
a defendant paying for its own proportionate share of fault or 
responsibility sounds self-evident to most people. Many States, 
however, give expression in their law to the principle of joint and 
several liability, which in its unrestricted form means that a party 
with relatively nominal responsibility, perhaps 1 percent, can be held 
liable for the fault attributable to the others, perhaps 99 percent.
  The result of the principle of joint and several liability is that 
litigation imposes severe risks for solvent businesses, often 
necessitating excessive settlement offers, increasing liability 
insurance costs, and making goods more expensive for consumer. All of 
these factors have negative implications for our competitiveness in 
international markets and our ability to keep enterprises, with all of 
the jobs involved, in the United States.
  Section 107 essentially is a compromise between the principle of 
joint and several liability with its disproportionate attendant costs, 
and the concept of liability limited to degree of fault or 
responsibility. Under section 107, a defendant can only be held liable 
for noneconomic losses in proportion to its share of the total fault or 
responsibility, but can continue to be held liable to the extent 
authorized by State law for economic losses that exceed its 
proportionate share.
  This bill does not impinge on the rights of claimants to recover 
noneconomic damages from a defendant for the harm it inflicts, but 
appropriately safeguards one party from having to pay for the harm 
others inflict. Disproportionate liability for noneconomic damages not 
only is unfair, but results in expenses that are passed on to all 
Americans.
  I strongly recommend defeat of this amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mrs. SCHROEDER. Mr. Chairman, I yield myself 1 minute.
  Mr. Chairman, I just wanted to quickly answer my chairman. If joint 
and several is so terrible, then joint and several liability should be 
removed for both compensatory and noneconomic damages, and it is not. 
They are keeping it for one and taking it away for another, which is 
saying that family values do not count.
  Mr. DOGGETT. Mr. Chairman, will the gentlewoman yield?
  Mrs. SCHROEDER. I yield to the gentleman from Texas.
  Mr. DOGGETT. Mr. Chairman, if I understand the focus of the 
gentlewoman's amendment, this bill as written discriminates against the 
young child who has a limb severed or is decapitated, really, as a 
result of playground equipment, a senior citizen who is burned horribly 
in a fire with a defective heater, a student who is exposed to toxic 
substances and is impaired for life, a homemaker, be that male or 
female, but usually it ends up being female, a woman who is at home 
providing for her family but not a wage earner at that time? All of 
these people are treated as second-class citizens under this piece of 
legislation unless the gentlewoman's amendment is adopted.

                              {time}  1245

  Mrs. SCHROEDER. The gentleman is absolutely correct. That is why we 
call it family values. I think we respect something besides just a 
paycheck.
  The paycheck is raised to a much higher level in this bill. It is 
going to be much easier to collect if you can show a paycheck. If you 
cannot, then you do not get the options of joint and several liability, 
you do not get the punitive damages. You are in real trouble. Those are 
the people that we are saying that do not count. We say, ``We like you, 
but good luck getting any damages on that.''
  Mr. HYDE. Mr. Chairman, I am pleased to yield 3 minutes to the 
gentleman from Wisconsin [Mr. Sensenbrenner], a valued member of the 
committee.
  Mr. SENSENBRENNER. I thank the gentleman for yielding.
  Mr. Chairman, this amendment is a killer amendment, and it is a 
killer amendment because it goes back from the principles stated in the 
bill that the party who is at fault pays and the party who is not at 
fault does not pay.
  The bill provides for several liability for noneconomic losses. That 
means that if a person or a party is determined by the jury to be 1 
percent at fault, that party will pay 1 percent of the noneconomic 
losses, not 100 percent, if the party who is found more negligent by 
the jury ends up not having any assets or not having any insurance to 
pay for the judgment.
  Mrs. SCHROEDER. Mr. Chairman, will the gentleman yield?
  Mr. SENSENBRENNER. I have a limited amount of time. I think it is 
only fair, the gentlewoman from Colorado, that the opponents use their 
time to lay out the case and not horn in on the opponents' time and 
take all of the time in support of it.
  Second, what the gentlewoman from Colorado's amendment also proposes 
to do is to limit the cap on punitive damages. Punitive damages are not 
compensation for anything. It is designed to be punishment for the 
party or the parties that are at fault. And the bill provides an 
elastic ceiling on punitive damages of $250,000, or three times the 
actual damages, whichever is greater. 
[[Page H2921]] So if there is more than $83,000 or $84,000 of actual 
damages, then the punitive damages cap goes up.
  Punitive damages are not compensation for anything, whether it is an 
economic loss or a noneconomic loss.
  So the gentlewoman is now trying to increase punitive damages awards, 
which will end up, of course, enriching not only a plaintiff for not 
what they actually lost but also manufacture's attorney.
  I would hope, for these two reasons, that this killer amendment would 
be defeated.
  Mrs. SCHROEDER. Mr. Chairman, I yield 2 minutes to the gentleman from 
Texas [Mr. Bryant].
  Mr. BRYANT of Texas. I thank the gentlewoman for yielding this time 
to me.
  Mr. Sensenbrenner, as we all know, the purpose of punitive damages is 
to deter manufacturers of dangerous products from being willing to put 
the dangerous products on the market because they might hurt somebody.
  As we all know, because we are all human beings, some companies have 
done this, there will always be someone willing to do that, and we want 
them to be afraid to do it because if they do do it, they could get 
socked with punitive damages. That is the purpose of punitive damages.
  You are taking these out of the bill. Basically, you are saying the 
cap on punitive damages is $250,000, which is not enough to frighten 
any major company, or three times earnings.
  Once again, this is a bill basically for rich folks and it is bill 
that is going to hurt poor folks, poor working people. Why? Because 
under the Republican bill, you could get three times your economic 
damages for punitive damages. So, for a wealthy fellow who is making a 
lot of money, it is going to be three times a whole lot of money. But 
for a working person who is not making very much money, it is going to 
be three times not much, even though they both lost the same thing--
that is, their ability to live a normal life and to make a living for 
their families.
  So the rich are going to get plenty of money under your bill, the 
poor folks are not going to get much at all.
  Or the regular folks, the working folks, the retired folks, or women 
who work in the home, for example, who cannot show great economic loss 
because they cannot work anymore, they are going to get very little. 
Your friends are going to get a whole lot. Why? Because your friends 
make a lot of money.
  That is the bill you brought out to the House here today.
  In 1966, 24 American young men were killed playing football. In 1990, 
none were killed playing football. Sports Illustrated reported that 
that is because of the fear of the manufacturers of football equipment 
that if they did not make the stuff safer, they would get sued and get 
a punitive damage award.
  You are taking the punitive damage awards out of this bill, for all 
practicable purposes. You are saying the cap is $250,000, or three 
times economic damages, and you know that for 99 percent of the 
American people economic damages will not amount to very much. Well, 
they certainly will not amount to enough to deter one of these big 
companies from putting a bad product on the market.
  I urge a vote for the amendment of the gentlewoman from Colorado 
[Mrs. Schroeder].
  Mr. HYDE. Mr. Chairman, I am pleased to yield 2 minutes to the 
distinguished gentleman from Ohio [Mr. Oxley].
  Mr. OXLEY. I thank the chairman for yielding this time to me.
  Mr. Chairman, let me say first of all that I hope we could have 
avoided some of the class war rhetoric that we have heard in debating 
this legislation. The fact is that in many cases in Europe, for 
example, where they probably have the safest automobiles in the world, 
there is no provision for punitive damages over there. The fact is that 
the American automobile manufacturers could not have child safety seats 
for about 7 years after Europe had introduced them because of the 
concern for product liability suits over here.
  I suspect there are a number of young people who were killed in auto 
crashes before these child restraint seats were made available in the 
United States because of the fear of excessive litigation in this 
country versus Europe.
  The idea behind our system was to make the plaintiff whole. It was 
basically to provide that the plaintiff be made whole. That is whole 
system that we talk about. Joint liability was created as a risk 
distribution insurance mechanism to insure that valid claimants would 
receive at least some compensation. However, no insurance program, not 
any workers' compensation program in any State, provides benefits or 
coverage for noneconomic damages.
  The voters of California passed a State initiative in 1986 which 
eliminated joint liability for noneconomic damages. California trial 
attorney Suzel Smith, who practices for both defendants and plaintiffs, 
testified twice last year in the Senate that the elimination of joint 
liability for noneconomic damages in California has been fair and that 
there has been no effort to repeal or modify the law.
  I think it is fundamentally unfair to have a situation where you have 
got a defendant who is found to be 1 percent responsible and yet, 
because they may have deep pockets, they will get 100 percent of the 
judgment.
  Mrs. SCHROEDER. Mr. Chairman, I now yield 2 minutes to the 
distinguished gentleman from Virginia [Mr. Scott].
  Mr. SCOTT. I thank the gentlewoman for yielding.
  Mr. Chairman, we have already heard the outrage that this bill has, 
by discriminating against children, retirees and homemakers who may 
lose limbs, suffer blindness or others, without the economic loss. And 
they do not receive the same kind of treatment under this bill as 
someone with a big fat paycheck.
  I want to talk a minute about joint and several liability. Mr. 
Chairman, we have heard the scare tactics of 1 percent fault having to 
pay the full damage. Well, Mr. Chairman, the majority saw an amendment 
proposed that would have said that only those with a substantial amount 
of participation, 20 percent, would be forced to pay the full freight, 
not those with 1 percent. That amendment was ruled out of order.
  Mr. Chairman, if we have a situation where there is a problem with 
the design and the manufacture and the possible misrepresentation at 
sale, why should the victim have to sort all this out, getting three 
separate verdicts and having to chase down three separate defendants?
  The fact is that in the business community you can insure for that 
loss and apportion it before it happens, and you ought not have to have 
that done by the defendant.
  Mr. Chairman, there is a case, Gray versus Dayton Hudson Corp., where 
the manufacturers of children's pajamas had a product that the court 
found the manufacturer was uniquely aware that the product was 
flammable. The court noted that the pajamas in question burned almost 
as quickly as newsprint.
  Mr. Chairman, this company could have, economically, feasibly treated 
the pajamas so they would not burn. This company would benefit if this 
amendment were not passed.
  Children sleep safely tonight, Mr. Chairman, because punitive damages 
removed these from the market.
  Let us not turn the clock on consumer protection.
  Mr. HYDE. Mr. Chairman, does the gentleman from Illinois have the 
right to close debate?
  The CHAIRMAN. The gentleman is correct. The chairman of the committee 
has the right to close.
  Mr. HYDE. I have only one speaker left, Mr. Chairman, and I reserve 
the balance of my time.
  Mrs. SCHROEDER. Mr. Chairman, I yield myself the balance of my time.
  Mr. Chairman, I must say this has been frustrating because we have 
not been able to have a debate and all the artificial time limits on 
here have made this all really kind of a charade.
  When you listen to people stand up and talk about how terrible it is 
we have punitive damages, there are no punitive damages and punitive 
damages are terrible. OK. But this bill does not do away with punitive 
damages, it just leaves it for economic interests. So if you guys think 
punitive damages are so bad, then be fair and do away with all of them. 
But you are leaving them for your fat cat friends. If you happen to 
have a paycheck, you get 
[[Page H2922]] economic damages and punitive damages. If you do not 
have a paycheck, if you are a child who has been burned by pajamas, it 
is tough bunchies, you do not get anything because they just burn a 
child who is not worth anything because a child is not working and does 
not have a paycheck.
  Listen to what the gentleman from Virginia is saying. If that were 
your child, America, you would be angry.
  Now, if we are going to do away with all punitive damages, fine. But 
this bill does not do it. It puts a fence around wage earners and fat 
cats, and it allows them joint and several liability. You heard the 
gentleman from Wisconsin saying how terrible joint and several 
liability is. Yes; this does not do away with it, it just limits it to 
people with a paycheck. So if you have a paycheck, America, we love 
you. If you have a paycheck, you get both joint and several liability, 
which means even if they are only 1 percent liable, they will pay your 
whole paycheck. And you also get punitive damages. But if you do not 
get a paycheck, you are nothing.
  So, if you are staying home taking care of your children, you do not 
get punitive damages and you do not get joint and several liability. If 
you are a child, you do not get that. If you take a drug and it ruins 
your reproductive organs, too bad. If you are caught up with breast 
implants, too bad. On and on and on.
  I thought in America we had a few values left for things other than 
just paychecks. So, before you listen to this rhetoric that, ``That is 
right, we don't need punitive damages and we don't need joint and 
several,'' you are not getting the whole picture. This does not do away 
with those. It only does away with those for noneconomic damages. If 
you vote ``yes'' on this amendment, you will have a level playing 
field.
  Mr. Chairman, this amendment can be called the family values 
amendment, because it amends two provisions in this bill that have the 
effect of discriminating against families and family values.
  When I offered this amendment in committee, although it failed 
narrowly, it received votes from both sides of the aisle. This 
amendment should receive bipartisan support from everyone in this body 
who believes, as I do, that we Americans value our families more than 
their jobs, and that our ability to have children is more valuable than 
any paycheck could ever be.
  Without my amendment, the bill before us today will establish into 
law the notion that the paycheck is valued more in our system of civil 
justice than our families, and our right to bear children. The bill 
divides compensatory damages into two categories, economic and 
noneconomic, and says that the type of loss that includes our 
paychecks--wages that a victim loses because of an injury--are to be 
given first class treatment, while family-related losses, including 
loss of reproductive capacity, are to be given second-class treatment. 
My amendment would make sure that economic and noneconomic losses are 
treated equally for purposes of joint and several liability--which in 
many cases means the difference between collecting or not collecting 
your damages. My amendment also makes sure that all compensatory 
damages could for purposes of calculating the cap on punitive damages, 
and not just economic losses. Noneconomic losses reflect real injury, 
and that is no reason to give them second-class status.
  The two-class system of justice this bill would establish hurts women 
and children in several ways. First, because of the enduring wage gap 
between women and men in the workforce, any provision that gives 
preferential treatment to ``economic'' losses, and gives second-class 
treatment to ``noneconomic'' losses, will have a disproportionately 
harsh impact on women, as well as on children and lower-income workers. 
This second-class treatment will be particularly evident in the case of 
women who are housewives, and women who are staying home with their 
children, because the damages they suffer are strongly weighted toward 
``noneconomic'' losses.
  The second way this bill devastates families has to do with 
reproductive harm. Many of the most infamous, dangerous products ever 
sold have been products like DES and the Dalkon Shield that inflicted 
terrible reproductive injuries upon their victims. DES exposed 
approximately 10 million women and men to reproductive damage. The 
Dalkon Shield caused injuries to the reproductive systems of thousands 
of women. Accutane, an anti-acne medication, caused birth defects when 
women used it while they were pregnant.
  Harm to the reproductive system is an extremely devastating form of 
loss. I feel very confident that if you surveyed Americans about 
whether they would consider the loss of their reproductive capacity to 
be of less importance to them than the loss of wages, you would find 
very few people who would say, as this bill does, that lost wages are 
more highly valued than loss of reproductive capacity. Yet, unless my 
amendment is adopted, this bill will write into the law of this land 
that lost wages are deserving of better treatment under the law than is 
loss of reproductive capacity.
  Mr. Chairman, this amendment is truly a family values amendment. It 
makes sure that our justice system values the family as much as it 
values the paycheck. It eliminates the harsh, discriminatory impact 
this bill has on women, children, and lower income individuals. I urge 
the adoption of this family values amendment.
  The CHAIRMAN. The gentleman from Illinois [Mr. Hyde] is recognized 
for 3 minutes to close debate.
  Mr. HYDE. Mr. Chairman, we have heard for the last 2 days capping 
noneconomic damages and liability suits would hurt women. The reason 
given is that women stay at home, so juries cannot calculate economic 
damages for them in the way they can for men who work. This is a 
strange argument, even a bizarre argument, coming from women who have 
spent their political careers telling us the traditional family is dead 
and we had better get used to it. I never thought I would hear the 
gentlewoman portray an ``Ozzie and Harriet'' view of America.
  The facts are, in fact, just the opposite. Many women now, of course, 
work. There is no problem in calculating the economic damages there. 
But even more striking, juries now regularly calculate what the market 
value of a woman's services to a household would cost on the open 
market. Every woman has done this calculation in her head. I dare say 
the gentlewoman from Colorado has: chauffeur, cook, nanny, 
housecleaner, manager of the family budget, child care professional; 
the list goes on and one.
  I am told that when juries make this calculation, they regularly come 
up with six figures; in other words, more than what most families make 
through their jobs. Juries respect and honor the economic role of 
women, including homemakers.
  Mr. Chairman, I am amazed that those in this Chamber who have been so 
self-righteous for so long about their role in defending women would 
make arguments that essentially demean the role of women in our 
society.
  This amendment severely weakens the much-needed punitive damages 
reform.

                              {time}  1300

  It will undermine the punitive damages reform contained in the bill 
by lumping in highly speculative, noneconomic damages such as pain and 
suffering, and emotional distress, into the basis for determining 
punitive damages. This will result in a continuation of inflated 
punitive damages awarded, exactly what this bill is seeking to contain.
  Mr. Chairman, I respectfully request my colleagues to vote no on the 
amendment offered by the gentlewoman from Colorado [Mrs. Schroeder].
  Mrs. SCHROEDER. Mr. Chairman, will the gentleman yield?
  Mr. HYDE. Of course, I yield to the gentlewoman from Colorado.
  Mrs. SCHROEDER. Would the gentleman like to talk about children? 
Would he like to talk about the elderly? Would he like to talk about--
--
  Mr. HYDE. I am one of each.
  Mrs. SCHROEDER. Reproductive organs?
  I also think the gentleman knows that economic damages for women in 
the workplace are very severely limited--who are not in the workplace, 
and I think----
  Mr. HYDE. Reclaiming my time, Mr. Speaker, I respectfully disagree 
with the gentlewoman from Colorado [Mrs. Schroeder].
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Colorado [Mrs. Schroeder].
  The question was taken; and the Chairman announced that the noes 
appeared to have it.


                             recorded vote

  Mrs. SCHROEDER. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  [[Page H2923]] The vote was taken by electronic device, and there 
were--ayes 179, noes 247, not voting 8, as follows:

                             [Roll No. 219]

                               AYES--179

     Abercrombie
     Ackerman
     Andrews
     Baldacci
     Barcia
     Barrett (WI)
     Bateman
     Becerra
     Beilenson
     Bentsen
     Berman
     Bevill
     Bishop
     Bonior
     Borski
     Boucher
     Browder
     Brown (CA)
     Brown (FL)
     Brown (OH)
     Bryant (TX)
     Cardin
     Chapman
     Clay
     Clayton
     Clyburn
     Coble
     Coleman
     Collins (IL)
     Collins (MI)
     Conyers
     Costello
     Coyne
     Cramer
     de la Garza
     DeFazio
     DeLauro
     Dellums
     Deutsch
     Diaz-Balart
     Dicks
     Dingell
     Dixon
     Doggett
     Doyle
     Durbin
     Engel
     English
     Eshoo
     Evans
     Farr
     Fattah
     Fazio
     Fields (LA)
     Filner
     Flake
     Foglietta
     Ford
     Frank (MA)
     Frost
     Furse
     Gejdenson
     Gephardt
     Gonzalez
     Gordon
     Green
     Gutierrez
     Hall (OH)
     Harman
     Hastings (FL)
     Hefner
     Hilliard
     Hinchey
     Holden
     Hoyer
     Jackson-Lee
     Jefferson
     Johnson (SD)
     Johnson, E.B.
     Johnston
     Kanjorski
     Kaptur
     Kennedy (MA)
     Kennedy (RI)
     Kennelly
     Kildee
     Kleczka
     Klink
     LaFalce
     Lantos
     Levin
     Lewis (GA)
     Lincoln
     Lipinski
     Lofgren
     Lowey
     Luther
     Maloney
     Manton
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy
     McDermott
     McHale
     McKinney
     McNulty
     Meehan
     Meek
     Menendez
     Mfume
     Miller (CA)
     Mineta
     Minge
     Mink
     Moakley
     Morella
     Murtha
     Nadler
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pastor
     Payne (NJ)
     Peterson (FL)
     Poshard
     Rahall
     Reed
     Reynolds
     Richardson
     Rivers
     Rose
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Sawyer
     Schiff
     Schroeder
     Schumer
     Scott
     Serrano
     Skaggs
     Skelton
     Slaughter
     Spratt
     Stark
     Stokes
     Studds
     Stupak
     Tejeda
     Thompson
     Thornton
     Thurman
     Torres
     Torricelli
     Towns
     Traficant
     Tucker
     Velazquez
     Vento
     Visclosky
     Volkmer
     Ward
     Waters
     Watt (NC)
     Waxman
     Williams
     Wilson
     Wise
     Woolsey
     Wyden
     Wynn
     Yates

                               NOES--247

     Allard
     Archer
     Armey
     Bachus
     Baesler
     Baker (CA)
     Baker (LA)
     Ballenger
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bereuter
     Bilbray
     Bilirakis
     Bliley
     Blute
     Boehlert
     Bonilla
     Bono
     Brewster
     Brownback
     Bryant (TN)
     Bunn
     Bunning
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Canady
     Castle
     Chabot
     Chambliss
     Chenoweth
     Christensen
     Chrysler
     Clement
     Clinger
     Coburn
     Collins (GA)
     Combest
     Condit
     Cooley
     Cox
     Crane
     Crapo
     Cremeans
     Cubin
     Cunningham
     Danner
     Davis
     Deal
     DeLay
     Dickey
     Dooley
     Doolittle
     Dornan
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Ehrlich
     Emerson
     Ensign
     Everett
     Ewing
     Fawell
     Fields (TX)
     Flanagan
     Foley
     Forbes
     Fowler
     Fox
     Franks (CT)
     Franks (NJ)
     Frelinghuysen
     Frisa
     Funderburk
     Gallegly
     Ganske
     Gekas
     Geren
     Gilchrest
     Gillmor
     Gilman
     Goodlatte
     Goodling
     Goss
     Graham
     Greenwood
     Gunderson
     Gutknecht
     Hall (TX)
     Hamilton
     Hancock
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Heineman
     Herger
     Hilleary
     Hobson
     Hoekstra
     Hoke
     Horn
     Hostettler
     Houghton
     Hunter
     Hutchinson
     Hyde
     Inglis
     Jacobs
     Johnson (CT)
     Johnson, Sam
     Jones
     Kasich
     Kelly
     Kim
     King
     Kingston
     Klug
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Laughlin
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Lightfoot
     Linder
     Livingston
     Longley
     Lucas
     Manzullo
     Martini
     McCollum
     McDade
     McHugh
     McInnis
     McIntosh
     McKeon
     Metcalf
     Meyers
     Mica
     Miller (FL)
     Molinari
     Mollohan
     Montgomery
     Moorhead
     Moran
     Myers
     Myrick
     Nethercutt
     Neumann
     Ney
     Norwood
     Nussle
     Orton
     Oxley
     Packard
     Parker
     Paxon
     Payne (VA)
     Peterson (MN)
     Petri
     Pickett
     Pombo
     Pomeroy
     Porter
     Portman
     Pryce
     Quillen
     Quinn
     Radanovich
     Ramstad
     Regula
     Riggs
     Roberts
     Roemer
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roth
     Roukema
     Royce
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaefer
     Seastrand
     Sensenbrenner
     Shadegg
     Shaw
     Shays
     Shuster
     Sisisky
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Solomon
     Souder
     Spence
     Stearns
     Stenholm
     Stockman
     Stump
     Talent
     Tanner
     Tate
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Thomas
     Thornberry
     Tiahrt
     Torkildsen
     Upton
     Vucanovich
     Waldholtz
     Walker
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     White
     Whitfield
     Wicker
     Wolf
     Young (AK)
     Young (FL)
     Zeliff
     Zimmer

                             NOT VOTING--8

     Boehner
     Gibbons
     Istook
     LoBiondo
     McCrery
     Pelosi
     Rangel
     Watts (OK)

                              {time}  1320

  The Clerk announced the following pair:
  On this vote:

       Mr. Rangel, with Mr. Watts of Oklahoma for against.

  Mr. CLEMENT changed his vote from ``aye'' to ``no.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  

                          ____________________