[Congressional Record Volume 141, Number 52 (Tuesday, March 21, 1995)]
[Extensions of Remarks]
[Pages E650-E653]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


            COMMON SENSE LEGAL STANDARDS REFORM ACT OF 1995

                                 ______


                               speech of

                          HON. JOHN D. DINGELL

                              of michigan

                    in the house of representatives

                        Thursday, March 9, 1995

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 956) to 
     establish legal standards and procedures for product 
     liability litigation, and for other purposes:

  Mr. DINGELL, Mr. Chairman, on March 10, the House passed H.R. 956, 
the so-called Common Sense Product Liability and Legal Reform Act of 
1995. Unfortunately, the final bill distinguishes itself by not having 
enough to do with product liability reform and having very little to do 
with common sense. The bill is an extreme measure that makes sweeping 
changes in the Nation's legal system that go far beyond the scope of 
fair and balanced product liability reform. It protects wrongdoers at 
the expense of injured individuals. It excludes procedural safeguards 
designed to put U.S. companies on a more equal footing with foreign 
corporations. It creates extreme and rigid rules that fail to account 
for circumstances involving gross misconduct or severe and permanent 
injuries. It fails to simplify current law and creates a complex and 
confusing jurisdictional puzzle.
          [[Page E651]] Background and Committee Consideration

  I have long supported product liability reform legislation. In 1988, 
I presided over the infamous ``Torts Class From Hell,'' when the 
Committee on Energy and Commerce spent 10 days in markup before 
reporting H.R. 1115.\1\ since then, I have cosponsored major bills in 
the area and worked with Republicans and Democrats alike to enact 
effect and well-crafted legislation.
     Footnotes at end of article.
---------------------------------------------------------------------------
  This year's legislation was not the result of meaningful bipartisan 
efforts. It was forced through the committees and the House at 
breakneck speed. H.R. 917 was introduced by Chairman Oxley on February 
13, 1995. It was the subject of one hearing.\2\ No subcommittee markup 
was held. We were given 3 different substitute amendments in as many 
days prior to the markup on February 22. In Additional Views to the 
committee report, I cite examples of mistakes, defects, and 
inconsistencies found during this process.\3\ These problems largely 
were the result of the severe timetable dictated by the Republican 
leadership. Given proper time and consultation with all Members, the 
Committee could have produced a better bill supported by a more 
significant bipartisan majority of the Committee.
  H.R. 917, as reported, imposed more restrictions on product liability 
actions than previous bills, such as the bipartisan bill I cosponsored 
in the last Congress, H.R. 1910.\4\ Punitive damages were capped at the 
greater of $250,000 or 3 times economic damages, whereas H.R. 1910 had 
no cap. It set a 15-year statute of repose applicable to all products, 
whereas H.R. 1910 had a 25-year statute limited to capital goods. It 
voided joint liability for noneconomic damages for all defendants, 
whereas provisions in H.R. 1910 applies solely to product manufacturers 
and sellers. It added new provisions that were not in H.R. 1910, 
including a section on pleading requirements and a narrow special 
interest provision to benefit biomaterials suppliers.
  Despite misgivings, I voted to report the Committee bill. I did so 
because its core was consistent with bills I previously supported and 
because assurances were made that its shortcomings would be addressed 
when the bill reached the floor. But before the ink on the committee 
bill was dry, Chairmen Hyde and Bliley introduced yet another bill, 
H.R. 1075. Apart from deleting the so-called FDA defense, its product 
liability provisions were similar to those in H.R. 917. But other 
provisions went far beyond product liability reform, including Title II 
applying to punitive damages ``in any civil action for harm in any 
Federal or State court.'' This expansion of the bill was motivated by 
two interests: (1) to protect wrongdoers from punitive damages in 
nearly all civil cases, and (2) to open up the bill so that amendments 
unrelated to product liability reform would be germane on the floor.


                          Floor Consideration

  The Republican leadership decided to muzzle meaningful debate long 
before any formal rule was adopted. Within moments after H.R. 1075 was 
introduced on February 28, Chairman Solomon announced that: the Rules 
Committee intended to make H.R. 1075 in order as a substitute for H.R. 
956\5\; amendments to the bill should be submitted by March 3; and the 
Rules Committee intended ``to grant a rule which may restrict 
amendments for the consideration of H.R. 956.''\6\ After its March 7 
hearing to consider 81 amendments filed by the announced deadline,\7\ 
the Rules Committee voted to report a gag rule.\8\ The Committee made 
15 amendments in order, allocated severe time limits for each, and 
prohibited amendments to the specified amendments. They chose to reject 
many moderate amendments, including those that had bipartisan support 
and would have undoubtedly passed. They refused to make in order 
amendments concerning the bill's preemptive effect on State laws, 
denying debate on one of the most important aspects of the bill. They 
made in order extreme Republican amendments applying to matters beyond 
the scope of product liability reform that have not been the subject of 
any hearings or consideration by any committee during this Congress.
  The basis for product liability reform is that frivolous lawsuits are 
stifling American competitiveness and innovation; that because product 
liability is inextricably related to interstate commerce, a uniform, 
national approach is needed; and that ``legislation should address key 
topics and provide a fair resolution of claims.''\9\ But the House bill 
goes far afield of fair and balanced product liability reform 
legislation.


                          preemption standards

  H.R. 956, as passed by the House, creates numerous, varying standards 
for preemption of State laws that will create confusion rather than 
uniformity. Consider the following:
  1. Under Title I (product liability actions), State laws are 
superseded ``only to the extent that State law applies to an issue 
covered by this title.''\10\ It states that civil actions for 
``commercial loss'' will be governed ``only by applicable commercial or 
contract law,''\11\ creating one standard for injured individuals and 
another for corporations that sue each other.\12\
  2. Section 201 (punitive damages) applies to ``any civil action 
brought in any Federal or State court on any theory where punitive 
damages are sought'' but it ``does not preempt or supersede any State 
or Federal law to the extent that such law would further limit the 
award of punitive damages.'' Section 203 (liability for noneconomic 
damages) applies to ``any product liability or other civil action 
brought in any Federal or State court on any theory where noneconomic 
damages are sought'' but it ``does not preempt or supersede any State 
or Federal law to the extent that such law would further limit the 
application of the theory of joint liability to any kind of damages.'' 
Sections 201 and 202 apply ``[e]xept as provided in section 401,'' 
limiting their application to cases that ``affect'' interstate 
commerce.
  3. Section 202 (noneconomic damages cap) applies to ``any health care 
liability action brought in any Federal or State court on any theory'' 
but it ``does not preempt or supersede any State or Federal law to the 
extent that such law would further limit the award of noneconomic 
damages'' nor does it preempt ``any State law enacted before the date 
of enactment of this Act that places a cap on the total liability in a 
health care liability action.'' It also applies ``[e]xcept as provided 
in section 401.''
  4. Section 401 of the bill provides that ``Titles I, II, and III 
shall apply only to product liability and other civil actions affecting 
interstate commerce.''\13\
  Anyone claiming the bill creates uniformity is sadly mistaken. It 
makes rules, exceptions to rules, and special rules that, if enacted, 
would take years of litigation to sort out. The rules governing product 
liability actions in Title I are relatively clear, although their 
relationship to title III needs clarification. Sections 201, 202, and 
203 promote restrictions on noneconomic and punitive damage awards 
rather than consistency in the States. They preempt State laws except 
where State laws ``further limit'' the subject of such provisions, 
creating an elusive measure subject to varying interpretations. For 
example, do State laws requiring proof beyond a reasonable doubt for 
punitive damages but that do not cap such damages ``further limit the 
award of punitive damages''? Likewise, the purpose of section 401 is 
unclear and its application difficult. It purports to prohibit 
preemption of State laws where ``pure'' State cases are involved--that 
is those involving parties and claims that do not ``affect'' interstate 
commerce. Is this a bone being thrown to the concept of States' rights 
or is there some other reason to treat identical cases differently if a 
court determines one ``affects'' interstate commerce while the other 
does not? And the special rule in section 202(b)--prohibiting 
preemption of a previously enacted State law that caps total liability 
in health care liability actions--apparently is motivated by the desire 
to preserve one specific California law.
  Amendments that would have improved or affected the bill's preemption 
provisions were not made in order by the Republicans on the Rules 
Committee, including: (1) Representative Quillen's amendment to limit 
product liability rules in the bill to cases in Federal court; (2) 
Representative Schiff's amendment to make title II applicable solely to 
product liability actions; and (3) Representative Deutsch's amendment 
to require uniformity in State laws governing joint liability for 
economic loss and punitive damage awards. It is clear the Republicans 
did not wish to even debate the important issues pertaining to the 
bill's application to State laws and instead chose to concoct a 
complicated scheme that creates more disorder than consistency.


                           the cox amendments

  The House adopted two amendments offered by Representative Cox. The 
first abolishes joint liability for noneconomic damages and applies to 
``any product
 liability or other civil action brought in State or Federal 
court.''\14\ I could not support this broad expansion of the bill for 
the following reasons:

  1. It was not considered by either committee nor were any hearings 
held on the amendment. Under the rule, 40 minutes were allocated to 
debate fundamental changes the amendment would make to more than 200 
years of American jurisprudence.
  2. It expands the bill far beyond product liability cases, abolishing 
joint liability in any State or Federal case affecting interstate 
commerce. I am particularly concerned that it treats simple negligence 
in the same manner as intentional and gross misconduct. Is it unfair to 
hold one of several wrongdoers fully responsible for noneconomic harm 
if he maliciously caused harm? Should victims of intentional torts such 
as assault, battery, and intentional infliction of emotional distress 
bear any costs for harm instead of holding fully responsible any single 
wrongdoer who proximately caused the harm?
  3. Examples cited in support of the amendment included defendants 
found to be minimally at fault who, under joint liability laws, 
[[Page E652]] would be fully liable if other defendants were insolvent 
or absent. But it abolishes joint liability for even those who are 
principally at fault. Amendments that would apply several liability 
only to minimally responsible defendants were not made in order, 
denying Members any option to consider more moderate provisions.\15\
  4. Proponents emphasized that it applies only to noneconomic damages 
and that it would not affect actual damages. The subtext here is that 
noneconomic damages are not as easy to calculate as economic damages 
and thus are not as real. The amendment even renames Title II as 
``Limitations on Speculative and Arbitrary Damage Awards.'' But it 
fails to recognize that pain and suffering, total disability, permanent 
disfigurement, loss of reproductive capacity, and similar noneconomic 
harms are a very real part of many injuries. For those with low or 
moderate wages, noneconomic damages may be a greater part of total 
losses. By limiting recovery for noneconomic damages, the amendment 
treats injured middle- and low-income workers, homemakers, retirees, 
children, and disabled persons less favorably than corporate executives 
and others who have large economic losses.
  The amendment also struck a provision in H.R. 956 (section 109) 
requiring foreign manufacturers to appoint a U.S. agent for service of 
process in order to claim the benefits of the legislation. Section 109 
was truly a commonsense provision designed to level the playing field 
between foreign corporations and American companies.\16\ By striking 
it, the House also gutted the previously adopted Conyers amendment 
subjecting foreign companies to discovery in our courts, giving those 
foreign companies a distinct advantage over American companies, and 
making it more difficult for persons injured by foreign products to 
obtain relief. Reflecting a strong bipartisan consensus, 258 Members 
voted in favor of the Conyers amendment,\17\ but this bipartisan effort 
was nullified by the Cox amendment. Because of the speed of the 
proceedings and incorrect claims by Mr. Cox and others that striking 
the service of process requirement would have no effect on the Conyers 
amendment, Members did not have an adequate opportunity to understand 
the situation. Restoring the service of process provision was one of 
two items in the motion to recommit, which received 195 votes. Had 
there been sufficient time to explain the true effect of the amendment, 
I am confident the motion would have been adopted.
  The second Cox amendment limits noneconomic damages in ``health care 
liability actions'' to $250,000.\18\ This provision goes well beyond 
medical malpractice cases, and includes any civil case in State or 
Federal court against a health care provider, any entity obligated to 
provide or pay health benefits, or the manufacturer, distributor, 
supplier, marketer, promoter, or seller of a medical product, where a 
claimant alleges a claim ``based upon the provision of (or the failure 
to provide or pay for) health care services or the use of a medical 
product.''\19\ No hearings were held on the amendment nor was it 
considered by either committee. Only 40 minutes of floor time were 
allowed to debate this fundamental change in our legal system. An 
alternative amendment encouraging resolution of such cases by mediation 
and arbitration was not made in order by the Rules Committee.
  The amendment arbitrarily caps noneconomic damages at $250,000, 
striking hardest at vulnerable individuals whose main damages are 
noneconomic. It prevents compensation even in the most extreme cases, 
such as loss of sight or other senses, loss of reproductive capacity, 
loss of limbs, and loss of life. The most jaded argument made by its 
proponents is that the amendment constitutes health care reform. 
Arguably, the amendment gives license to doctors and other
 health providers to make mistakes and practice bad medicine. It may 
provide a financial windfall to physicians, manufacturers and sellers 
of drugs and devices, and other health care providers who injure 
persons, not to mention health insurance companies that deny health 
claims in bad faith. None of the alleged savings from the amendment are 
redirected in adjustments to Medicare and Medicaid payments or reduced 
private health insurance premiums. It does nothing to deter litigation 
and limits the ability of injured persons to receive compensation for 
harm caused by health care professionals and providers. If this is 
health care reform, we are all in great peril.


                            the fda defense

  The House passed an amendment immunizing manufacturers and sellers of 
drugs and medical devices from punitive damages if the drug or device 
was approved by the Food and Drug Administration [FDA] and the 
manufacturer or seller has not misrepresented or withheld information 
required to be submitted to the FDA or has not bribed an FDA 
official.\20\ While I previously have supported such a provision, I am 
compelled to reconsider my position due to the Republican leadership's 
stated desire to change FDA's approval process radically, to privatize 
functions of the agency, to reduce its funding, or even to eliminate 
the agency.
  The FDA defense is based on the idea that FDA approval is meaningful 
and effective. It assumes a strong, vigorous, and adequately funded 
FDA. It is entirely inconsistent with the vision of a weak agency whose 
primary focus is to get products on the market as fast as possible 
based on weakened standards of safety and efficacy. Americans trust 
that when they take a drug or use a medical device, it will not harm 
them. This trust is based on a careful, scrupulous process that allows 
only safe, effective products on the market and removes products from 
the market when they may pose harm. I am committed to continuing 
efforts to ensure that FDA is an agency in which we may all place our 
trust. But I find it difficult to support the FDA defense when the 
Republican leadership and interest groups are pulling out the long 
knives to drastically alter the mission and slash the already limited 
resources of the agency.


                            other provisions

  Statute of repose.--The 15-year statute of repose in the bill is 
significantly more restrictive than previous bipartisan bills. It 
applies to all products, instead of only capital goods, subject to 
limited exceptions.\21\ H.R. 1075 also limited it to cases where ``the 
court determines that the claimant has received or would be eligible to 
receive full compensation from any source for medical expense 
losses.''\22\ This provision was intended to ensure that claimants 
would not be completely foreclosed from at least recovering medical 
expenses where an older product causes harm. But an amendment offered 
by Mr. Hyde and passed by the House struck this commonsense provision 
from the bill. This mean-spirited amendment is further evidence of the 
Republicans' extreme views. It increases public costs and places 
uninsured workers and others at risk. Nor has any adequate explanation 
been offered as to why the provision should apply to all products 
instead of capital goods alone or why an absolute limit of 15 years 
makes sense in each and every case. An amendment filed by Mr. Bryant 
would have created a statute of repose based on a resumption of 15 
years. Under the amendment, the presumption could be rebutted if the 
claimant could prove the defendant concealed or failed to give adequate 
warning of a defect that he knew about or if the claimant was required 
to use the product as a condition of employment. This amendment was not 
made in order. Because the statute's application is so severe, these 
issues deserve further scrutiny.
  Punitive damages cap.--The bill caps punitive damage awards in any 
civil case for harm in any State or Federal court at the greater of 
$250,000 or 3 times economic loss.\23\ An amendment to delete the cap 
was made in order and defeated by the House,\24\ but other moderate 
amendments that enjoyed bipartisan support were never considered under 
the gag rule adopted by the Rules Committee. For example, Chairman 
Oxley and Representative Gordon filed an amendment to replace $250,000 
with $1 million. It is my firm belief that, if made in order, the 
Oxley/Gordon amendment would have passed. Other amendments put the 
minimum at $500,000 or allowed punitive damages based on three times 
compensatory damages. Given the required quantum of proof (clear and 
convincing evidence), new procedures that benefit defendants (separate 
proceeding for punitive damages and standards for determining awards), 
and the type of conduct involved (conscious flagrant indifference to 
safety of others or intentional conduct), the cap on punitive damages 
in the bill may be too severe to adequately address actions by those 
who engage in gross misconduct.
  Biomaterials suppliers.--Title III of the bill limits the liability 
of biomaterials suppliers in certain circumstances. During committee 
markup of a similar provision, I questioned the wisdom of insulating 
suppliers even if they had intentionally and wrongfully withheld 
material information or if they knew of fraudulent or malicious 
activities in the use of their supplies. Mr. Hastert, the author of the 
amendment, and others indicated their desire to try and address these 
concerns before floor consideration. I was pleased to see an effort to 
accommodate these matters in H.R. 1075 (section 302(c)(2)(B) and (C)). 
While I filed an amendment to make technical and other clarifying 
changes to Title III, I decided to withdraw it when it became evident 
that there were many other problems with this title. I support a fair 
and balanced provision to ensure that biomaterials suppliers are not 
subjected to needless harassment, but I do not believe it should be 
converted to a wholesale abolition of all responsibility by such 
persons, particularly if these suppliers are significantly at fault for 
a claimant's injuries.


                                summary

  The issues involved in product liability reform are complex and 
controversial. While Federal legislation is needed, I firmly believe 
any such legislation must be fair and balanced. H.R. 956 does not pass 
this test. Nor can it be considered in a vacuum. H.R. 988, 
[[Page E653]] passed shortly before H.R. 956 was considered, applies to 
certain Federal civil cases. The bill requires the ``loser'' to pay the 
opposing party's attorney fees under certain circumstances, amends rule 
11 of the Federal Rules of Procedure to mandate sanctions a Federal 
judge must impose against lawyers who file frivolous lawsuits or engage 
in abusive litigation tactics, and limits the admissibility of certain 
scientific testimony of expert witnesses. These provisions, if enacted, 
would apply further limits on certain product liability actions, health 
care liability actions, and other civil actions for harm filed in 
Federal court governed by H.R. 956. H.R. 988 further tilts the balance 
in favor of defendants in all such cases.
  Cheap sound bites and anecdotal examples of extreme results--while 
more easily understood than the details of these complex and 
controversial issues--do not serve the public interest. Both proponents 
and opponents of legal reform legislation have used such tactics to 
justify their respective positions. But the Republican majority has a 
public responsibility to be careful in its drafting and, above all, to 
do harm. Instead, it artificial and unrealistic timetable for passing 
legal reforms made speed more of a priority than crafting sensible and 
defensible legislation.
  I plan to work with my colleagues on both sides of the aisle and on 
both sides of Capitol Hill to enact fair and balanced product liability 
reform legislation this year. But in doing so, I refuse blindly to 
support extreme legislation that is contrary to common sense.
                               footnotes

     1. H. Rpt. 100-748, Part 1.
     2. Hearing on H.R. 917, the Common Sense Product Liability 
     Reform Act, including related product liability legislation, 
     Feb. 21, 1995, Subcommittee on Commerce, Trade, and Hazardous 
     Materials.
     3. H. Rpt. 104-63, Part 1.
     4 H.R. 1910 Republican cosponsors included: Representatives 
     Gingrich, Hyde, Bliley, Moorhead, Oxley, Barton, Hastert, 
     Upton, Stearns, Paxon, Gillmor, Klug, Franks, and Greenwood.
     5. H.R. 956 was a bill referred to and reported by the 
     Judiciary Committee, H. Rpt. 104-64, Part 1.
     6. Congressional Record, Feb. 28, 1995.
     7. An additional amendment, filed by Chairman Solomon after 
     the March 3 deadline, was considered but not made in order by 
     the Rules Committee.
     8. H. Res. 109.
     9. Testimony of Victor E. Schwartz, Esq., on behalf of the 
     Product Liability Coordinating Committee; hearing before the 
     Subcommittee on Commerce, Trade, and Hazardous Materials Feb. 
     21, 1995.
     10. Section 102(b), H.R. 956 (as passed by the House).
     11. Section 102(a) and section 110(2), H.R. 956 (as passed by 
     House).
     12. An amendment filed by Representative Markey that would 
     have treated commercial loss cases in the same manner as 
     product liability actions was not made in order by the Rules 
     Committee.
     13. Sec. 401 defines ``interstate commerce'' as ``commerce 
     among the several states or with foreign nations, or in any 
     territory of the United States or the District of Columbia, 
     or between any such territory and another, or between any 
     such territory and any State or foreign nation, or between 
     the District of Columbia and any State or territory or 
     foreign nation.''
     14. Congressional Record, Mar. 9, 1995.
     15. For example, Representatives Frank and Berman filed 
     amendments that would apply several liability to defendants 
     found to be less than 20 percent responsible for the 
     claimant's harm.
     16. Section 109 of H.R. 1075 was entitled ``Service of 
     Process'' and provided: ``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.'' This section was deleted from the bill by 
     the Cox amendment.
     17. Congressional Record, Mar. 9, 1995.
     18. Congressional Record, Mar. 9, 1995.
     19. Section 202(b), H.R. 956 (as passed by House).
     20. Section 201(f), H.R. 956 (as passed by House). See, 
     Congressional Record, Mar. 9, 1995.
     21. Section 108(b)(2), H.R. 956 (as passed by House).
     22. Section 108(a), H.R. 956 (as passed by House).
     23. Section 201(b), H.R. 956 (as passed by House).
     24. Amendment offered by Representative Furse, Congressional 
     Record, Mar. 9, 1995.
     

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