[Congressional Record Volume 141, Number 75 (Monday, May 8, 1995)]
[Senate]
[Pages S6242-S6254]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          COMMONSENSE PRODUCT LIABIL- ITY AND LEGAL REFORM ACT

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
resume consideration of H.R. 956, which the clerk will report.
  The bill clerk read as follows:

       A bill (H.R. 956) to establish legal standards and 
     procedures for product liability litigation, and for other 
     purposes.

  The Senate resumed consideration of the bill.

       Pending:
       Gorton Amendment No. 596, in the nature of a substitute.
       Coverdell/Dole amendment No. 690 (to Amendment No. 596), in 
     the nature of a substitute.

  Mr. REID. Mr. President, in the State of Nevada, and particularly in 
Las Vegas, we have some great illusionists. The most famous are two men 
by the name of Siegfried and Roy. Every night, twice a night, they are 
sold out. Presently, they are at the Mirage Hotel and have been there 
for the last 4 or 5 years.
  These illusionists, as great as they are, should be taking lessons 
from what is going on in the Congress today and during the past several 
weeks. We are talking about things that are really illusionary. For 
example, there has been a hue and cry that everything should be turned 
back to the States, that the States should make the decisions on their 
own destiny. All we hear is that we should leave them alone and let the 
States decide what is best for them.
  In the so-called Contract With America, that is what they talk 
about--returning as much back to the States as they could. But here we 
are, Mr. President, now talking about tort reform and standing that 
issue on its head. Instead of returning everything back to the States, 
we are saying in this area that we do not want the States to prevail, 
we want to have a national standard, which is really unusual to me to 
find out how people could reason that way.
  For example, Mr. President, the State of Washington does not allow 
punitive damages. I think the State of Washington is wrong. But that is 
a decision they made with their State legislature and the Governor.
  Would it not be wrong, Mr. President, if all States had to follow the 
same law as it relates to innkeepers, that we have in the State of 
Nevada. In the State of Nevada we have over--in Las Vegas alone--over 
100,000 rooms, more rooms in Las Vegas than any other city in the 
world.
  The State of Nevada basically is a resort State. Would it not be 
wrong for the laws of the State of Alabama as it relates to innkeepers 
to be the same as the State of Nevada? Of course, it would. We have 
special problems with tort law as it relates to innkeepers. Therefore, 
the State of Nevada should be left alone. We should be able to decide 
on our own what the law, as it relates to innkeepers, should be for the 
residents of the State of Nevada.
  The legislation that is before this body is a bill that usurps and 
destabilizes well-established State law and principles as it relates to 
seller liability.
  The legislature of the State of Nevada is meeting as we speak. They 
are talking about tort reform in Nevada as this debate is taking place.
  I would much rather rely on what the State legislature does regarding 
tort reform for Nevada than what we decide back here should be the 
standard in Nevada.
  The State of Nevada has carefully established rules as it relates to 
product liability. We have a strict liability standard for most 
products that are sold defectively. We are not unusual in that regard. 
There are 45 other States that have, through their courts or 
legislatures, adopted some form of strict liability as it relates to 
products.
  Only a handful of States have chosen to remove product liability from 
this general rule. Should not that handful of States be left alone?
  This bill would undo the law in at least two-thirds of the States. 
Contrary to nearly 200 years of State tort law, this bill would 
virtually immunize people who sold defective products.
  Another troubling matter, Mr. President, is that this bill 
overreaches in its efforts to protect small businesses by placing a 
restrictive cap on punitive damages, or any ``entity or organization 
with fewer than 25 full-time employees.'' This overlybroad language 
extends the protections of this bill well beyond the so-called small 
businesses. This cap, for example, would completely take away the right 
that we have in most States to allow punitive damages against drunk 
drivers, against child molesters, perpetrators of hate crimes, and even 
by those who sell drugs to children.
  I have, for more than a week, listened to this debate. Prior to 
coming here, I was a trial lawyer. I have tried scores of cases before 
juries--almost 100 jury trials. I believe that the jury system, Mr. 
President, is one of the things that we should be very proud of as a 
country.
  We ought to reflect on the value of the Magna Carta. It was signed in 
a meadow of England, in a place called Runnymede. King John could not 
write his name. He had to put a mark for his name. The Magna Carta was 
the beginning of the English common law that we adopted when we became 
a country. One of the things that we brought over the water and now 
have and have had for over 200 years is a jury system, where wrongs 
that are perpetrated can be brought before a group of people and they 
can adjudge the wrong, if in fact, there were any.
  My experience in the jury system, Mr. President, is that most of the 
time the juries arrive at the right decision. I would say that about 90 
percent of the time, they arrive at the right decision. Not always for 
the right reason, but the right decision. I think it is something that 
other countries have looked on with awe and respect--our jury system.
  Again, this bill would take away and undermine the jury system and 
places arbitrary caps on damages. The substitute arbitrarily caps 
punitive damages at two times other damages for all punitive damages 
cases. In order to have any deterrent impact, punitive damages should 
be based on conduct that is willful and wanton.
  We have heard so much about the McDonald's case. But what was the 
McDonald's case? Let me explain, Mr. President, what the McDonald's 
case was. A grandmother took her grandchild to baseball practice. She 
wanted a cup of coffee. She drove to McDonald's. She got a cup of 
coffee. She put the cup of coffee between her legs, and as she removed 
the lid from the cup of coffee, it spilled. She had third-degree burns 
over her body. Her genitals were burned. She had to undergo numerous 
painful skin grafts.
  A person might say, why should she be awarded for putting a cup of 
coffee between her legs? The fact of the matter is the reason the jury 
reacted in the way they did in this case is the fact that McDonald's 
had had 700 other burn cases where people had been burned with coffee. 
They had been warned and warned and warned that they served their 
coffee too hot --190 degrees is the temperature they served their 
coffee.
  Mr. President, if a person buys a coffeemaker and plugs it in at 
home, and makes his or her own coffee, it comes out at about 135 
degrees--something like that. McDonald's served their coffee at 180 to 
190 degrees that if accidentally spilled could result in third-degree 
burns in a matter of 2 or 3 seconds. [[Page S6243]] 
  The jury felt that McDonald's had been warned enough that they should 
not serve their coffee as hot as they did. Why did they serve it so 
hot? There were a lot of reasons, perhaps, but one reason they served 
coffee so hot is McDonald's felt they got more product by serving their 
coffee hot. That is, they got more juice of the beans, so to speak.
  The jury award, the punitive damages award in this case, Mr. 
President, was the amount of coffee sold by McDonald's for two days. 
That is why they came up with the $2.3 million verdict. The jury felt 
that McDonald's should get the message that 700 burnings or warnings 
were enough.
  The fact of the matter is that the court reduced this amount to 
$480,000 and the parties reached an out-of-court settlement for 
probably even less.
  She had skin grafts, and as I indicated, the jury came to realize 
this was not an isolated incident. This was a wrong that had to be 
corrected, a willful wrong in the mind of the jury.
  If a State, however, feels the McDonald's case sets such a bad 
precedent that they do not want to allow punitive damages, States have 
that right today. The State of Nevada, the State of Minnesota, the 
State of Mississippi, the State of Arizona--they can eliminate punitive 
damages if they want. But why should it not be done by the States? Why 
do we have to go and set a standard nationwide for how they handle 
their punitive damages?
  The substitute amendment does not allow punitive damages, even if a 
defendant's conduct was reckless or wanton. Punitive damages can be 
assessed only if an injured citizen can prove the super-heightened 
standard of, ``conscious, flagrant indifference to safety,'' a standard 
I never came across in all the time I practiced law. I never heard of 
that. That is a new standard. It is one that is set up to eliminate 
punitive damages. Even though punitive damages is the amount that could 
be awarded, even if you could prove conscious, flagrant indifference to 
safety, it is cut down significantly; almost eliminated. This would 
take any thought about having punitive damages completely out of the 
law. Nationally, there would be no punitive damages.
  Take companies like McDonald's or General Motors, and let us say we 
have a $250,000 punitive damage limit. Does that bother General Motors? 
Of course it does not.
  What about the Exxon Valdez oil spill? Keep in mind the facts of that 
case. A man who had previously been told not to drink on the job is 
drunk, controlling the ship and causes all this damage to the 
environment. Should Exxon Valdez not be required to respond in punitive 
damages? I think it should.
  Over the past few years we have seen an unfortunate entrance into the 
market of too many dangerous products that are marketed toward women: 
The Dalkon shield, the Copper-7 IUD, DES, silicon breast implants, are 
just a few of the alarming examples of dangerous products placed into 
the market that affect women. Why should there be some arbitrary 
standard now established that affects those cases? There should not be. 
It is wrong. To come up with a standard called ``conscious, flagrant 
indifference to safety'' is almost unconscionable. So a vote for the 
substitute is to vote to eliminate the existing legal incentives for 
companies to produce the safest possible products.
  The substitute eliminates joint and several liability for the people 
who truly rely on noneconomic damages the most: women, children and the 
elderly. These victims will now be required to bear the risk caused by 
potentially bankrupt defendants. The joint and several liability 
standard came about as a result of there being a number of defendants, 
some of whom who could not respond. I ask the question rhetorically, is 
it fair to limit companies' liability to the most vulnerable when only 
joint and several liability will ensure full compensation?
  This legislation creates a huge exemption for big business. The 
substitute excludes commercial loss from its scope. Is that not 
interesting? One of the reasons the products liability legislation was 
defeated last year is because it directed its attention to individuals 
suing each other, it directed its attention to the individual suing a 
company, but it did not focus on companies suing each other, and that 
is where most of the litigation takes place in products liability 
litigation. Again, this year the same problem exists because this 
provision, the commercial loss exclusion, essentially exempts big 
businesses from the restrictions in the bill that those same businesses 
seek to impose on consumers and workers injured by the products.
  Take an example. If a product used on the factory floor blows up 
because of a defect, the injured worker's right to seek compensation 
from the third-party manufacturer of the product is limited. But the 
owner of the factory can sue to his heart's content, for as much lost 
profits as he deems appropriate; or if he had some property that was 
damaged there as a result of the explosion he can sue all he wants. So 
as a result of an injury to a human being, no recovery; but injury to 
property, you can sue just as you always did. So big business is 
protected.
  There is a lack of uniformity. Proponents of this measure claim it 
will establish uniformity in product liability law. In reality, it 
creates prodefendant disuniformity. It is a one-way preemption at its 
worst. The amendment only preempts those State laws which favor 
consumers. How? It imposes an arbitrary cap on punitive damages in 
those States which allow it but it does not create punitive damages in 
those States which do not allow it. So in my earlier statement when I 
talked about the State of Washington having to now have an award given 
for punitive damages, some of those who are looking at this legislation 
say, ``That is absolutely wrong. In fact, if your standards are less 
than what is in the bill you can keep those.'' How unfair. It also 
establishes an arbitrary statute of repose for 20 years but allows 
States to impose shorter limitations if they so desire.
  So we are rushing hastily to pass a piece of legislation that 
dramatically favors big business. It dramatically will change centuries 
of State-developed law. It is ironic that those who argue most 
vigorously for a stronger 10th amendment are the proponents of this 
amendment. This is the Siegfried and Roy illusion I talked about in the 
beginning of my statement. The State of Nevada knows best as to how 
their litigation should be handled. Unfortunately, the proponents of 
this legislation think they know what is best for Nevada.
  We are saying to the American people that we no longer trust the 
judgments of State legislatures. We are saying we no longer trust 
people sitting as juries. And as I said earlier, the American system of 
justice and the jury system--while there are some decisions that I 
disagree with and we can all point to some of the criminal verdicts 
that have come about--the jury system is a uniquely American concept 
with its roots in the Magna Carta, grounded in democracy, and rooted in 
the ideal that ordinary Americans applying their inherent common sense 
can often best fashion a judgment or a decision that results in justice 
to the injured party.
  Who knows the number of lives saved and the catastrophes prevented 
because of our laws relating to punitive damages? In the area of 
products liability, I pause to think what would happen if 
manufacturers, especially big business, did not have to worry about 
their products being safe.
  So, let us not throw this standard out of the window and invite 
corporate wrongdoers to engage in a cost-benefit analysis of whether it 
makes sense to place defective products into the market. I think we 
would not be well served by adopting this legislation.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. LOTT. Mr. President, let me first inquire if we are in a period 
of general debate on the product liability legislation?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. LOTT. Mr. President, I would like to extend my congratulations to 
the distinguished Senator from Washington, Senator Gorton, for his 
outstanding leadership both in the Commerce, Science, and 
Transportation Committee and here on the floor, in an effort to get a 
very responsible piece of legislation through, the Product Liability 
Fairness Act. He has worked very closely with the Senator from West 
Virginia, Senator Rockefeller, [[Page S6244]] and they really have done 
yeomen's work in producing this legislation.
  The bill that was reported from the Commerce, Science, and 
Transportation Committee has been expanded. A number of amendments have 
been adopted. And in my opinion, all of those amendments are improving 
amendments. We are talking about legal reform, not just product 
liability reform.
  Having said that, it is obvious from votes late last week we are not 
going to be able to get through the broader bill, as much as I would 
like for that to happen. So there will be votes shortly, either later 
on this afternoon or, I assume, tomorrow morning--maybe this afternoon 
and tomorrow morning--on exactly what will be the final bill. I presume 
we will have a narrower bill than now exists before the Senate, one 
that is directed primarily at product liability but with some 
additional provisions, but not many, that have been approved 
overwhelmingly by the Senate.
  I urge my colleagues in the Senate to vote to invoke cloture to stop 
the filibuster and allow the Senate to vote on this very, very 
important issue. It has been suggested that this would be a rush to 
judgment. Rush to judgment? We have been debating this issue--product 
liability--for 10 years in the Senate. This will be the third time we 
have voted to try to end the filibuster so we can even get to a vote 
since I have been in the Senate. This is my seventh year. We know the 
issue. We know the details. This is not a rush to judgment.
  Plus, let it be noted once again that the Senate talks and the Senate 
stalls. The Senate is now in its third week on product liability and 
the effort to try to broaden it to have genuine legal reform. There 
have been legitimate negotiations going on led by Senator Gorton and 
Senator Rockefeller to bring this to a conclusion. We should be ready 
to do that. The leaders have listened to the Senate. We have looked at 
the amendments and how close they were. What can we do to get an end to 
the filibuster so we can get to a vote?
  This legislation will be narrow. It will be targeted primarily at 
product liability. It will not include medical malpractice reform even 
though we clearly need that and the Senate voted for it. But, if it is 
included, we probably cannot get the 60 votes that are necessary, once 
again, to end the filibuster.
  This bill does not include criminal matters. The President suggested 
that it does. I have heard suggestions here on the floor of the Senate 
that it does. It does not apply to criminal matters like hate crimes. 
It is just not applicable here. That is a scare tactic.
  Let me clarify this joint and several issues. It is amazing how 
things can be turned around in the debate here in the Senate. Joint and 
several--what does that mean? That means when you file a lawsuit, you 
file a lawsuit against everybody remotely connected or even in the area 
when you are wanting to sue and recover damages. But even though you 
were only remotely involved, like say maybe 5 or 10 percent of the 
damages attributable to you, if the other defendants are broke, you can 
be forced to pay the entire judgment. It is called deep pockets. If you 
happen to be in the area and you happen to be a successful company or 
an individual, you are the one who will get hit even though you were 
just involved to a very small degree. We are saying there ought to be 
some sensible limit there. You ought to pay for the damage you caused 
but not pay for everybody. It makes such good common sense.
  Let me remind my colleagues here today that the American people 
overwhelmingly support the idea of legal reform--overwhelmingly. We 
have a few interest groups that do not want that to happen. But the 
people understand who pays. I mean it is easy to stand here on the 
floor of the Senate and say let us make you, Exxon, pay. Let us make 
General Motors pay. You know who pays? The consumer pays. It does not 
just come out of the sky. Somebody pays the bill.
  When you have frivolous lawsuits against people acting in good faith, 
when you have doctors, ob-gyn's that are afraid to stay in their 
profession because they are liable to be sued paying thousands upon 
thousands of dollars for medical malpractice insurance, who loses? The 
patients lose. They pay more. Or you have doctors getting out of the 
business because they cannot afford to stay in it anymore.
  However, we will have to reserve most of this legal reform for 
another day. Here we are only talking about product liability. We are 
trying to get some uniformity in an area that clearly involves 
interstate commerce. We are trying to get some commonsense answer in 
this area to stop forum shopping where a small company in my State that 
produces heavy equipment can be sued in all kinds of forums all over 
the country, and you shop around until you find the best forum. Then 
you sue them there. Some uniformity is all we are seeking here.
  When scholars write the legislative history of Congress in the last 
quarter of the century, I think they will be puzzled by the debate the 
Senate has been engaged in now for 2 whole weeks and entering the third 
week. They will wonder why so much time, so much passion, so much 
pressure was expended on a bill that should have brought us together in 
unanimous agreement. It passed overwhelmingly out of the Commerce 
Committee. Yet when it gets to the floor the talk begins.
  The scholars will note that the substance of this legislation enjoyed 
overwhelming approval of the public, that it was a moderate proposal 
with bipartisan sponsorship, and that a much more expansive measure had 
already passed the House of Representatives by a whopping margin of 265 
to 161.
  Why could the House get such a broad bill providing for legal reform 
passed by an overwhelming margin but the Senate cannot do it? Answer: 
Because it takes 60 votes to stop the debate in the Senate. Just keep 
talking, keep talking, keep talking and never take action. This time we 
should take action. I believe we will.
  People will wonder in the future what could have been so 
controversial about the provisions in this bill. National uniformity in 
product liability law and putting American manufacturers on equal 
footing with foreign competitors should not be controversial. 
Encouraging alternative dispute resolution in place of lengthy and 
expensive court proceedings should not be controversial. That just 
simply says use a process to try to resolve a dispute instead of going 
through lengthy trials. It makes good common sense to me.
  It should not be controversial to require that the person who creates 
harm must take responsibility for it. If someone who is drunk or under 
the influence of illegal drugs is more than 50 percent responsible for 
his own injury, he should not be able to extort money from others by 
blaming them for what happened. People who rent or lease cars and 
equipment should not be legally liable for the acts of those who rent 
those items from them. If you rent a car and go out and get drunk, 
cause an accident, injure people, why should the rental company be 
responsible for your misconduct?
  It should not be controversial to stop the practice of holding 
defendants jointly liable for noneconomic damages usually referred to 
as ``pain and suffering.'' That has become a way for plaintiffs to get 
into the deep pockets of one defendant that I talked about earlier, 
even though some other defendant, with less resources, was at fault.
  Jury awards of punitive damages in the millions of dollars have 
become commonplace. One example just cited was the McDonald's case. 
That is just one example. I would recommend to people that when they 
buy a hot cup of coffee, they not set it between their legs and try to 
drive an automobile. It seems to me that is contributory negligence.
  It certainly should not be controversial to set a 20-year limit--a 
statute of repose--for a manufacturer's liability for a product used in 
the workplace. If a product is more than two decades old it should not 
be subject to a product liability suit unless it came with the written 
safety warranty longer than 20 years.
  None of these provisions should be terribly divisive. Indeed to most 
of us here, as to most of the public, they are just common sense. I 
have referred to that several times. We are trying to curb excesses in 
the civil--civil--justice system, not the criminal justice system, 
although clearly after watching television the last few weeks we have a 
little work we need to do in the criminal justice area, too. 
[[Page S6245]] 
  Yet somehow, H.R. 956, the vehicle for product liability reform, has 
become a battleground. We have allowed ourselves to get into heated 
debate. I have been guilty of that. I have said some things about the 
Trial Lawyers Association, the plaintiffs bar, that I should not have. 
I have had things attributed to me that I do not recall saying. It has 
been quoted that I said ``they cheat people all over America.'' That 
would be inappropriate. I reject that kind of language. Even having it 
attributed to me, I apologize for that. We do not need that kind of 
rhetoric. I should not contribute to it. None of us should contribute 
to it. What we should do instead is reason together. That is what is 
happening now. We are trying to find a solution so we can stop the 
debate, pass the legislation, get into conference with the House of 
Representatives, and do what is the right thing.
  In some measures, you understand, with the intensity of the debate, 
that ideologically divisive--left, right--divisions come into play. If 
something is good in the South but not good in North, we get pretty hot 
about it because you are talking about our constituency and our regions 
of the country. But that is not what is happening here. This is 
something that involves economic interests of all the people. It 
involves trying to get some legitimate litigation reform. I think we 
will be able to do that today.
  But what we have now has eroded--the public's respect for, and 
confidence in, the administration of civil justice.
  The worst of it--and the most important reason why this bill be so 
needed--is that litigation involving product liability is harming 
consumers, taxpayers, businesses, and investors. It limits job 
creation, stifles creativity, thwarts medical and scientific advances, 
and lessens our country's international competitiveness.
  And it benefits almost no one. Certainly not the hapless defendants, 
who often spend enormous amounts of money either defending themselves 
against frivolous lawsuits or settling out of court just to cut their 
losses. Nor does it help the plaintiffs all that much when a large 
share of their court winnings goes for attorney's fees, payments for 
expert witnesses, and court costs. One recent settlement against the 
Nation's major airlines gave consumers coupons for future flights, 
which they could redeem only a few dollars at a time. But the 
plaintiff's lawyers walked off with $16,012,500 in cold cash.
  I do not mean to suggest that anyone who finds fault with some 
provision of H.R. 956 does so from an unworthy motive. Reform of 
product liability laws is a complicated matter, and there are 
legitimate questions as to how far one or another reform should be 
taken. I will candidly admit that this bill does not go as far as I 
would like it to. But I understand that some of its supporters do not 
wish to broaden its provisions. Despite our disagreement in that 
regard, we agree on the need for reform and are forthrightly working 
together toward common ground.
  I am disappointed, however, that more Members of the Senate have not 
endorsed at least the principle of product liability reform, even if 
they might disagree with some provisions of H.R. 956. I wish they were 
trying to modify the bill to meet their objections, much as I might 
oppose their modifications, rather than trying to kill it. As it is, 
they have allowed themselves to become champions of the status quo, and 
that, I submit, is not an enviable position in the eyes of the American 
people.
  And that is why the Senate has been spending all this time on what 
should have been a rather brief and unifying exercise in legal reform. 
It is why we still have the threat of filibuster hanging over our 
heads. It is why we spent so many hours over the last 2 weeks on 
amendments--one that was later tabled by a vote of 94 to 3.
  We have dealt with several critical amendments, which have been 
accepted. One dealing with punitive damage awards against small 
businesses and charitable and volunteer organizations, many of which 
are being crippled by a justified fear of liability suits. Another 
would limit the use of joint and severable damage awards. A third will 
offer badly needed reforms in medical malpractice law. But what we have 
before us is a good start. It will bring about significant improvements 
in the way our courts operate, in the way our economy operates. It will 
make our civil justice system fairer, less costly, and more efficient.
 So I urge my colleagues here this afternoon to vote cloture. We still 
have some more amendments that can be offered. We could still discuss 
the final result. But it is time we vote and get this legislation 
moving forward.

  Mr. President, I yield the floor at this time and, observing no other 
Senator who wishes to speak, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HEFLIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Santorum). Without objection, it is so 
ordered.
  Mr. HEFLIN. Mr. President, a substitute has been offered and I want 
to go into some of the aspects of the substitute, and I will later.
  First, I think I stated in the beginning of the debate that I 
considered this to be an extremely unfair bill. While it was titled the 
``Product Liability Fairness'' bill, there were numerous provisions 
that were one-sided and which attempted to take away rather basic 
rights of a claimant in a lawsuit, and I thought it was extremely 
unfair. Also this bill was unfair because of the fact that it exempted 
all commercial loss and made commercial loss come under the category of 
commercial or contract law, primarily the Uniform Commercial Code.
  Commercial loss is a business loss, not a personal injury loss. Some 
of the most egregious punitive damage suits--practically all of the 
large ones--have been against business. Penzoil versus Texaco, $11 
billion, is the one that stands out primarily in the minds of most 
people. But commercial loss would be in most all instances restricted 
to corporate America suing corporate America.
  Manufacturers do not want to come under the provisions of this bill 
because they do not want to be put under the same laws as the people 
who receive personal injuries.
  For example, under the statute of limitations on implied warranties 
in contract law, it is substantially longer. My State of Alabama has a 
contract statute of limitations of 6 years. Under the Uniform 
Commercial Code, under warranties, it is 4 years. Yet, under this bill, 
it would come to apply to personal injury which is 2 years.
  There are several types of implied warranties under the Uniform 
Commercial Code. For example, there is an implied warranty that the 
product is suited for the purpose for which it is sold. However, under 
this bill implied warranties are not recognized.
  Therefore, if a person remains silent, there is no implied warranty. 
The rules with respect to implied warranties have been developed over 
the years and have been recognized as being an essential element in 
sales that a product ought to be fit for the purposes for which it is 
sold.
  There are other aspects of this that have emerged relating to its 
unfair provisions, and I will touch on some of these provisions at this 
time.
  First, I want to address my remarks initially to the Snowe amendment. 
The Snowe amendment has been touted as eliminating the unfairness of 
the original cap on punitive damages in this product liability case. 
Under the original bill, it was set at being three times the economic 
loss, or $250,000.
  There were those that said that noneconomic loss, such as scarring or 
disfigurement, the infertility or loss of childbearing ability of a 
woman, or other noneconomic factors such as loss of consortium, was 
discriminatory because of the fact that they would be limited to 
$250,000, whereas a person's economic loss could be up into the 
millions.
  In a speech I made last week, I cited a 55-year-old CEO of a 
corporation who is making $5 million annually who has an anticipated 
work expectancy of 10 years. We would have a situation where his loss 
of earnings, his economic loss, would be $5 million a year times 10 
years, or $50 million, and then multiply it by three. He would have a 
cap of $150 million, as opposed to the housewife [[Page S6246]] who has 
no economic loss, or the elderly who have no economic loss. Their cap 
would be $250,000--$150 million versus $250,000. That is quite a 
disparity in regard to caps, and I believe my point caused some 
Senators to reflect on the unfairness of the original punitive damage 
provision in the Gorton-Rockefeller substitute.
  As a result, there have been some changes made. The Snowe amendment 
now has a formula with regard to punitive damages which provides for 
twice the amount of total economic loss and the noneconomic loss--or 
twice times compensatory damages.
  Yet, there are still examples in which this would cause an even worse 
situation. In the case where death occurs instantaneously, there is no 
noneconomic--that is ``pain and suffering''--loss under the laws of 
most States. We would have a situation defined as meaning 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--all of this is in the definition of 
noneconomic loss that is in the substitute that we have now before the 
Senate.
  Now, on that scenario where a person died as a result of injury, what 
would be the situation? That same 55-year-old CEO who was making $5 
million a year, his economic loss would be $50 million on a work 
expectancy of 10 years times two under the Snowe amendment--or $100 
million.
  Well, that is less of a cap than the $150 million we have. But what 
do we have on the housewife? She also dies immediately. She did not 
suffer any pain and suffering, emotional distress, loss of society and 
companionship, and so forth, so she would really be in a situation 
where her noneconomic loss would be zero.
  Then we revert back to what the situation was under the original 
bill. She had no economic loss because she did not work outside the 
home, and therefore her total economic loss and her total noneconomic 
loss would be zero. We double zero, and we still have zero.
  Now, some might say, well, she would at least have an economic loss 
in funeral expenses. Well, there are some States--and I do not know 
whether this is the majority or not--that say that death is inevitable, 
like taxes. Therefore, we have a situation in which we are going to 
have to be buried, and that cannot be counted as an economic loss.
  Let's say, for purposes of discussion and debate, that all of the 
States were to allow it. Instead of the death case with the elderly or 
the housewife, it would be an economic loss of maybe $5,000 for funeral 
expenses, and we double that under the Snowe amendment and we have 
$10,000.
  So we still have the difference between the 55-year-old CEO who is 
killed, at $100 million; and we have, for the elderly or the housewife, 
maybe zero, and maybe $10,000 for funeral expenses.
  That shows, to me, the disparity of the Snowe amendment, and a 
situation in which it would not operate fairly. At least, under the 
original bill, we would have had a cap of $250,000. Now the cap, under 
the death case that I recited, would either be zero for the elderly and 
zero for the housewife, or perhaps maybe $10,000, or possibly $15,000, 
at the most, in regard to burial expenses.
  So this Snowe fix supposedly did come up under a situation in which 
death occurs, and as a result, if there were personal injuries, the 
personal injuries would have a different cap.
 But, therefore, it would be for the benefit of the wrongdoer who is 
going to be sued. A tortfeasor would much rather see the person dead 
than that he would be alive and incurring some pain and suffering and 
giving the jury some leeway in the determination of noneconomic loss, 
particularly if it is a person like a housewife, and elderly person, or 
a child or student, who has yet to begin making a living for herself.

  Under the Snowe amendment, a high-income victim will continue to be 
able to receive a high punitive award, whereas a homemaker, retiree, 
low-income victim will be limited to a very low punitive damage award 
in regards to these instances. Punitive damages are designed to punish 
and deter egregious conduct. They are not necessarily designed to have 
caps. You have to deal with it on an individual basis.
  As to the McDonald's hot coffee case, the situation was that the jury 
determined that punitive damages were in order to send a message to 
McDonald's, after 700 instances of burn cases. The jury in that 
situation decided on a punitive damage award of 2 days of the gross 
sales of coffee by the McDonald's Corp. which amounted to approximately 
$2.5 million, and then the judge reduced that down to $460,000. Later 
it was settled for an undisclosed sum that was protected by a secrecy 
order. There were third-degree burns in this case and McDonald's had 
repeated warnings that its coffee was being served way too hot. This 
bill takes away from the ability of juries to determine just what type 
of egregious conduct warrants an appropriate amount of punishment as to 
damages.
  Other language that appears in the Dole-Coverdell substitute has been 
changed. There was put into the substitute an amendment by Senator 
DeWine which appeared as a special rule. It says,

       The amount of punitive damages that may be awarded in any 
     products liability action against an individual whose net 
     worth does not exceed $500,000 or against an owner of an 
     incorporated business or any partnership, corporation, 
     association, unit of local government or organization that 
     has fewer than 25 employees, shall not exceed $250,000.

  Now it appears in the substitute that the Dewine exemption applies in 
all civil cases--not just product liability cases--against an 
individual whose net worth does not exceed $500,000 or a partnership, 
corporation, so on--but it has as its cap, two times the sum of the 
economic damages and the noneconomic damages--still Snowe--or $250,000, 
but then it has the language which says, ``which amount is lesser.''
  So a suit against a small corporation, partnership or an individual 
where the net worth does not exceed $500,000--and of course a small 
business has fewer than 25 employees--that has as its caps Snowe, which 
is double the compensatory damages or $250,000, but which amount is 
lesser.
  This exemption applies to all civil cases. I believe the President 
called a similar provision the drunk drivers' protection act.
  It is still a drunk drivers' protection act against a limited number 
of people. It just says that if you are drinking while driving you 
better not be worth more than $500,000 or you must not be an owner of 
an unincorporated business or be involved in a partnership or 
corporation. But it still is a drunk drivers' protection act, as it 
would apply to the limits that are placed in the bill, because it 
applies to any civil action, not just product liability.
  But let us also look at these caps and see how they apply. That 55-
year-old CEO who is, we will say, killed, he has a situation in which 
he had a work expectancy of 10 years; with a $5 million annual salary 
he would have had a $50 million loss as his economic loss; multiply 
that times two and that would be $100 million. But under this, he would 
be limited to $250,000. Because that is the lesser of his $250,000 or 
two times his compensatory damages. So if he gets killed by a drunk 
driver, then the drunk driver is limited under the now substituted 
proposal to $250,000.
  Let us take the housewife, the elderly person, or the child in some 
instances. You would think they would still be under the $250,000, but 
that amount is greater. It is not lesser. And the language here says 
``is the lesser.'' So the housewife who has no economic loss, and no 
noneconomic loss, it is still zero. For the elderly person who has no 
economic loss, the cap is zero because it is the lesser. Because the 
compensatory damages that they would suffer, in a death case, would be 
less than the $250,000, therefore the lesser amount, zero, would apply.
  This amendment also, as it is written now affects automobile 
accidents almost every type of conceivable accident, not just products 
liability incidents. It fails to take into account how much insurance 
an individual carries on his automobile or how much liability insurance 
he carries in his business. An individual may have $1 million or $5 
million in liability insurance.
 But he still could have a net worth of less than $500,000. So he is 
protected under this special rule. He is protected by this small 
business exemption and the individual net worth figure, and his 
insurance goes home free. Certainly, if he [[Page S6247]] had $1 
million worth of insurance, as a lot of people carry on their various 
businesses or automobiles--many individuals carry umbrella policies to 
try to protect them against that sort of thing--then that cap applies 
to him. But as to the housewife, the cap is zero or to the elderly the 
cap is zero.

  So I just point these out to show how these caps would apply and what 
inequities would come about and would occur. These also would apply to 
any civil action. I wonder in regard to the Oklahoma City explosion if 
there were attempts to bring suits against those that are eventually 
determined to be responsible for that bombing.
  So I just want to point out that there are many problems with the way 
this amendment is written. Certainly, if somebody carries insurance, 
the amount of the insurance ought to be counted in calculating whether 
or not a cap goes into effect. The idea is to protect the small 
business or the individual not worth more than $500,000. He might have 
a total net worth of $50,000 or $100,000 or $150,000 and carry $100,000 
worth of insurance or carry $1 million worth of insurance. But these do 
not take into account his insurance that he carries on his car in the 
way it is written.
  I mentioned one time in a previous speech about the situation of the 
homeowner policy. Homeowner policies have for years and years now 
carried comprehensive liability coverage. Comprehensive liability 
coverage is very comprehensive, and basically it is written in a manner 
in which it has to exclude those things that are not covered. But 
practically all homeowners carry some type of comprehensive liability 
insurance. Again, that insurance does not come into effect as the way 
this substitute--the change of the language--took place from the DeWine 
amendment. To me, that is another example of how this is being written 
for the advantage of insurance companies. Therefore, I think that ought 
to be given very careful consideration.
  There are numerous aspects of this bill that are unfair as they apply 
to real life situations. I think it is very unfair to local government. 
There are some units of local government that are included under the 
DeWine amendment, if they have fewer than 25 full-time employees. But 
the way the bill is written, a claimant is defined to include a 
governmental entity. This affects most local governments, anywhere from 
a city that has about 25 employees. They usually define that as a city 
of anywhere from 10,000 and up with various types of departments: 
street department, fire department, police department and so on. I do 
not know the exact number. But it includes in the claimant.
  So, therefore, a city or county, State government or Federal 
Government which has a claim arising out of this, or property damage, 
may have some claim in regard to subrogation rights under certain 
circumstances and would also include the Federal Government. Therefore, 
they come within the purview of this relative to all of the provisions 
that are in this substitute, including the misuse and alteration of a 
product by any person, not the claimant himself. He might not have 
anything to do with it. But they are entitled to a reduction in regard 
to the percentage of fault in regard to misuse or alteration.
  With regard to the statute of repose, many, many products are bought 
by these governmental entities. Then the bill, or substitute, includes 
the Federal Government, the Army, the services. Most of our armed 
services utilize, helicopter, trucks, automobiles, Jeeps, and other 
vehicles all of which are built for the test of time. Many of them 
today are far in excess in age of over 20 years. For example, many of 
the types of helicopters that were used in the Vietnam war are still in 
use today. But the statute of repose in effect applies to them.
  The purpose of this bill is obviously to save money for business, 
corporate America, and insurance companies. In this instance, who are 
they going to save money from in regard to their defective product--
governmental entities?
  There are provisions relating to several liability which concern me. 
You do not even have to be a party. You can prove it against a 
nondefendant in a suit. You prove several liability on that, and that 
includes coemployees, which in most States you cannot sue the employer. 
It has a provision that, if there is any fault to be allocated against 
the coemployee and the employer, then that is the last item that you 
are to bring up in the priority of how you present your case before a 
jury.
  There are many other aspects of this that continue to be of concern, 
and I may mention some of these later as I go along. But there are 
numerous provisions in this bill that are written in such a manner 
which are directed toward taking away rights of the injured party and 
benefiting the wrongdoer.
  The provision that says you cannot introduce gross negligence or any 
punitive damage elements in your main trial relative to compensation if 
you have demanded punitive damages and there is a call for a bifurcated 
or separated trial is further evidence of the bill's basic unfairness. 
To me that is a real serious situation. A claimant, for example, could 
not show if a person was guilty of drunkenness. That would be a 
punitive damage element, and you could not show that in the trial in 
chief.
  Mr. President, for the time being, I am going to yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GORTON. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                 Amendment No. 709 to Amendment No. 690

(Purpose: To provide for a uniform product liability law and to provide 
              assurance of access to certain biomaterials)

  Mr. GORTON. Mr. President, on my behalf and on behalf of the Senator 
from West Virginia [Mr. Rockefeller], I have just filed with the clerk 
a second-degree amendment, and I ask that that second-degree amendment 
be reported.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Washington [Mr. Gorton], for himself and 
     Mr. Rockefeller, proposes an amendment numbered 709.

  Mr. GORTON. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. GORTON. Mr. President, I address these remarks to the President, 
and through him to my distinguished colleague from Alabama, who is 
opposed to this bill, and I hope to all Senators or to their staffs, 
because I hope and trust that this will be the final amendment with 
which we will deal on this bill, as we are to vote cloture on the 
Coverdell substitute at 4 o'clock. But as the proponents of product 
liability hope that Coverdell will be amended as per this proposal by 
Senator Rockefeller and myself, I believe I should outline the key 
changes between the Coverdell proposal of last Friday and this one, 
because either before or after cloture it will be this amendment which 
becomes the final product liability vehicle for the Senate to vote on.
  We can discuss a bit later all of the details of the proposal. But as 
the Senate will remember, last week what had started out to be a 
product liability bill was very considerably expanded, first by an 
amendment by Senator Abraham from Michigan on relationships between 
lawyers and clients with respect to their fees and, second, by a 
proposal with respect to civil procedure 11 on frivolous lawsuits.
  But more significantly, there was added an entirely new set of 
provisions on medical malpractice--a new medical malpractice code--to 
override, in many respects, the codes of the States. And, secondly, a 
broadening amendment by the majority leader, Senator Dole, which 
extended the punitive damage rules contained in the product liability 
bill at that point to all civil litigation; and, of course, some change 
in the rules relating to punitive damages by the adoption of the Snowe 
amendment which limited punitive damages in product liability cases and 
then, by extension of the Dole amendment, to all [[Page S6248]] cases 
to an amount not to exceed twice the total of both noneconomic and 
economic damages.
  When on two occasions last Thursday cloture was rejected on that 
broadened legal reform proposal, Senator Coverdell, with the help of 
the majority leader, Senator Dole, put the Coverdell substitute on the 
desk on Friday and filed a cloture motion on it. It returned the bill 
pretty much to the status of a product liability bill, with one 
exception that I will speak to in a moment. It restored for all 
practical purposes the original Rockefeller-Gorton bill with the Snowe 
and DeWine changes to punitive damages.
  The Snowe amendment, as I have already said, said that punitive 
damages would be limited to an amount twice the amount of the total of 
all compensatory damages, economic, and noneconomic. The DeWine 
amendment limited the amount of punitive damages to $250,000 in the 
case of small businesses, those with fewer than 25 employees, and 
individual defendants of modest means with a net worth of less than 
$500,000.
  There was no Abraham amendment in the Coverdell substitute. There was 
no change in rule 11 in the Coverdell substitute. There were also no 
alternative dispute resolution provisions at all, as they had been 
stricken before the cloture vote by a Kyl amendment.
  However, the Coverdell substitute did extend the punitive damage 
rules related to small businesses only--that is to say, the DeWine 
amendment limiting punitive damages against small businesses or modest 
individuals to $250,000--to all litigation. It retained that part of 
the original Dole amendment.
  After extensive negotiations Friday and over the weekend with my 
partner in this, Senator Rockefeller, and his negotiations with as many 
as 15 members of the Democratic Party who want some product liability 
reform but who have been, to a greater or lesser extent, opposed to any 
theoretical limitations on the potential for punitive damages, we have 
arrived at this Rockefeller-Gorton second-degree amendment.
  How does this change the Coverdell proposal? Mr. President, it 
changes it in about four ways.
  First, we do return to a set of alternative dispute reasons or 
sections in the bill, but they are not the alternative dispute 
resolution provisions that were stricken by the Kyl amendment.
  Senator Kyl opposed those for two reasons: First, because they 
overrode the alternative dispute rules of the various States; and, 
second, because they provided sanctions against defendants but no 
comparable sanctions against plaintiffs when the proposed ADR solution 
was more favorable to the winning party.
  The new Rockefeller-Gorton proposal on alternative dispute 
resolutions simply set up a set of rules under which States will 
conduct their own alternative dispute resolution proceedings. We do not 
override State rules on ADR, alternative dispute resolutions, except 
with respect to the time with which they must be commenced. So the only 
places in which these rules would be more or less mandatory are in that 
tiny handful of States that have no ADR provisions whatsoever.
  The second and most important change in this bill relates to the 
formula for the maximum level of punitive damages.
  The long and short of it is, Mr. President, that there is no longer 
any theoretical maximum limit on punitive damages, which I think will 
secure the support of many Senators of both parties who have wanted 
some kind of reform in the product liability field but have not wanted 
even the limitations that were contained in the Snowe amendment. So let 
me describe what they are now.
  In cases that go before juries, the Snowe amendment will continue to 
be the case with the modifications proposed by Senator DeWine; that is 
to say, the jury will have an upward limit in its award of punitive 
damages of twice the total of both economic and noneconomic damages.
  Economic damages, Mr. President, are those for lost wages, for 
medical expenses and the like, the full out of pocket losses of the 
claimant. Noneconomic damages are those for pain and suffering which, 
almost by definition, are more subjective in nature.
  You will total up the sum of noneconomic and economic damages and 
punitive damages can be awarded or, of course, not awarded, but cannot 
be awarded by the jury in an amount greater than twice the total of 
those economic and noneconomic damages, except that if that total is 
less than $250,000, the jury can award up to $250,000. So the maximum 
jury award will be $250,000 or twice the total of all compensatory 
damages, whichever is higher.
  The big change, Mr. President, however, is the fact that the judge in 
the case may add to that award of punitive damages if the judge feels 
that it is inadequate because of the egregious nature of the tort which 
led to the punitive damages in the first place. The judge may add to 
that number and may do so in an unlimited fashion, there is no cap in 
this Rockefeller-Gorton amendment, except that if a judge does do so--
in other words, what we consider a requirement by the seventh 
amendment--the defendant would have the right to a new trial to go back 
and start all over again.
  There is one other major difference and that other major difference 
is a criticism which the Senator from Alabama made just a few moments 
ago against the Coverdell amendment; that is, there is no attempt in 
this bill to extend these punitive damage rules or limitations to cases 
other than product liability. In other words, that portion of the Dole 
amendment of last week which was left in the Coverdell substitute is 
now gone. This bill now applies to punitive damage cases only, as it 
did when it was reported by the Commerce Committee.
  The profound difference between the form in which it finds itself 
here and the way in which it was reported from the Commerce Committee 
with debate beginning 2 weeks ago today, if my memory serves me 
correctly, the profound difference is in respect to punitive damages. 
You will remember that the original bill from the Commerce Committee 
had a cap of $250,000 or three times economic damages only, whichever 
was higher. The Snowe amendment effectively lifted that cap, to a 
certain degree. This removes the cap entirely, but only when a judge 
determines that that limitation would be unreasonable and finds the 
actions of the defendant sufficiently egregious to warrant it.
  Excuse me, there is one other matter, the DeWine amendment, which 
does set a separate rule for small business defendants and for 
individual defendants whose assets do not exceed half a million 
dollars, designed to see a single case does not bankrupt.
  So, Mr. President, I recognize that this is, oh, if not a complicated 
set of changes, still a complicated bill because the Senator from West 
Virginia and this Senator have collaborated on drafting this amendment 
because it reflects, I believe--and he can speak to it himself when he 
gets to the floor--because it reflects the views of the more than a 
dozen additional members of the Democratic Party who have been working 
with Senator Rockefeller, and because it represents the considered 
views of the majority leader at this point. I hope that we will be 
permitted to adopt this second-degree amendment before 4 o'clock, so 
that it is absolutely clear exactly what the cloture vote is on.
  I can say, Mr. President, that if that does not happen, if we have 
not adopted the second-degree amendment by 4 o'clock, I can assure 
Members that this amendment will be adopted postcloture before we reach 
a vote on final passage on the bill. I speak in this case for myself, 
for Senator Rockefeller and for the majority leader; in other words, I 
believe that among us, we can guarantee enough votes so that Members 
can be assured that what they are bringing to a close is a debate on 
this modified proposal, a proposal which does not have the caps on 
punitive damages which caused, I think, the great bulk of the debate on 
this issue during the course of the last 2 weeks.
  I can say rather bluntly, Mr. President, that I do not regard this as 
a totally satisfactory response. I believe that the desire for 
predictability and for economic progress and opportunity in this 
country calls for limitations on punitive damages which this proposal 
lacks. [[Page S6249]] 
  So I have given up ideas which I think are quite important in 
connection with this aspect of legal reform, but I have done so for the 
greater good for accomplishing something, for doing something to bring 
a greater degree of balance and fairness into this whole field than 
exists at the present time.
  I expect during the course of the next hour that my friend, the 
Senator from West Virginia, will be here. I believe that the majority 
leader will ratify what I have said. I see the Senator from Alabama on 
his feet, and I will let him either speak to it----
  Mr. HEFLIN. I just wanted to ask if the Senator will yield and 
respond to a couple questions.
  Mr. GORTON. I will be delighted to do so.
  Mr. HEFLIN. Let me ask the Senator this. Is the Shelby amendment 
included?
  Mr. GORTON. The single printed copy of the amendment that I had was 
submitted to the desk about 15 minutes ago, and it is in the process of 
being copied. I hope within the next 5 minutes we will have copies for 
every Member.
  Mr. HEFLIN. To answer my question, is the Shelby amendment included 
or not?
  Mr. GORTON. The Shelby amendment is not included in it, I say to the 
Senator from Alabama. On consideration and on speaking to a wide number 
of other Members, we believe that the peculiar rules in Alabama with 
respect to wrongful death decisions, that we were going to do one of 
two things: Either create a hole in this bill big enough to drive a 
truck through or, alternatively, encourage the Alabama Legislature to 
change its law to conform with those of other States.
  Mr. HEFLIN. Let me ask the Senator this. In regard to the DeWine 
amendment, is it still the lesser of $250,000 or two times compensatory 
plus noncompensatory? Is it still the lesser?
  Mr. GORTON. No, it is the greater of.
  Mr. HEFLIN. What I have written out to me is the lesser of it. This 
was handed out as some sort of brief statement.
  Mr. GORTON. That is a very good question, I say to the Senator from 
Alabama. It is my intention to have it the greater. I know this says 
the lesser. I will check and see and we will change it.
  Mr. HEFLIN. I think the distinguished Senator from Washington wishes 
to speak. I yield the floor.
  Mrs. MURRAY addressed the Chair.
  The PRESIDING OFFICER (Mr. Kyl). The Senator from Washington.
  Mr. GORTON. Excuse me, Mr. President, the Senator from Washington has 
the floor.
  Mr. President, can I have the attention of the Senator from Alabama?
  Mr. HEFLIN. Yes.
  Mr. GORTON. I need to say to the Senator from Alabama, I believe I 
misspoke myself because there are two separate uses of the $250,000 
figure.
  Mrs. BOXER. Parliamentary inquiry. What is the status of the floor 
debate at this time?
  The PRESIDING OFFICER. The senior Senator from Washington has the 
floor. The Gorton substitute, amendment No. 709, a second-degree 
amendment is the pending business. He yielded the floor to the Senator 
from Alabama for a question and he is responding to that.
  Mr. GORTON. There are two separate uses of the figure $250,000 in 
this Gorton-Rockefeller second-degree amendment. The first is that in 
most cases, in normal cases, the $250,000--rather the Snowe amendment 
says that the maximum punitive damage award is twice the total of 
economic and noneconomic damages. This adds to that, or $250,000, 
whichever is greater.
  Let us say in a case the total economic and noneconomic damages were 
$15,000. Twice that is $30,000. Under this amendment, nonetheless, the 
jury could award $250,000 as being greater than $30,000.
  In the case of the small business, however, the business with fewer 
than 25 employees or the individual defendant with less than $500,000 
in assets, $250,000 or twice economic and noneconomic damages, 
whichever is the lesser is the ceiling.
  Mrs. MURRAY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington
  Mr. GORTON. I yield the floor.
  Mrs. MURRAY. Mr. President, I rise today in opposition to S. 565. The 
bill before the Senate claims to promote fairness, but I believe it is 
actually far from fair to consumers in my home State of Washington and 
throughout this Nation.
  I will leave it to the lawyers here to discuss the legal intricacies 
of the bill. However, I want to raise some very serious, commonsense 
problems I have with this legislation.
  First, I am deeply concerned about the bill's potential to 
disproportionately harm women.
  I am amazed that the bill before us treats a corporate executive's 
loss of salary as more important and deserving of compensation than the 
loss of such priceless assets as the ability to bear children, the 
senses of sight and touch, the love of a parent or husband, and the 
ability to move freely--unhindered by disability, disfigurement, or 
lifelong pain.
  Certainly, this body must believe that raising a family, and having 
children should not be seen as unimportant in our legal system.
  S. 565 would eliminate joint and several liability for noneconomic 
losses. And, by making noneconomic damages more difficult to recover, 
it would impair a woman's ability to recover her full damage award.
  It is unfair to require only the victims of noneconomic losses--such 
as a woman who has lost the ability to bear children, or a child 
disabled in his youth--to bear the burden of pulling all the defendants 
who caused them harm into court.
  Joint and several liability allows injured victims to receive full 
compensation, and leaves it to the guilty defendants to divide the 
damages appropriately among themselves. It seems to me much fairer to 
place this burden with the guilty parties, than with those who are 
injured.
  The singling out of noneconomic losses for adverse treatment will 
prevent women from being fully and fairly compensated. This is 
especially objectionable because women have been the victims of many of 
our Nation's most severe drug and medical device disasters--DES, Dalkon 
shield and Copper-7 IUD's, and silicon breast implants are just three 
examples.
  I have met with many women from my home State of Washington whose 
lives have been devastated by these products. Their stories are tragic. 
Their lives have been changed dramatically. They deserve a system of 
laws that treats them fairly.
  Mr. President, mandating a nationwide cap on punitive damages also 
seems ill-conceived in light of the number of dangerous products that 
have been marketed primarily to women in this country.
  S. 565 establishes a cap on punitive damages of three times a 
person's economic injury or $250,000, whichever is greater.
  We should not forget in our rush to make changes in this Congress 
that the purpose of punitive damages is to deter bad behavior by making 
it impossible to calculate the risk of engaging in such behavior. Under 
S. 565's cap, I fear wrongdoers will find it more cost effective to 
continue marketing their dangerous products rather than removing them 
from the marketplace.
  Even Senator Snowe's amendment to change the cap on punitive damages 
to two times compensatory damages does not remedy the unfairness of 
this cap. Although, Senator Snowe's amendment includes noneconomic 
damages within the formula for punitive damages, it does not 
acknowledge the important role of punitive damages in deterring and 
punishing outrageous misconduct.
  Last year, Senator Kohl introduced an amendment to the product 
liability bill that, unfortunately, was not adopted. He sought to 
incorporate more fairness in this legislation by restricting the 
ability of Federal courts to sanction secrecy in cases affecting public 
health and safety. I was proud to join him as a cosponsor of his 
antisecrecy amendment last year, and look forward to joining him again 
when he raises the issue in this Congress.
  The settlement of the Stern case in 1985 by Dow Corning is a great 
example of why such a change is necessary. As a result of a secret 
settlement agreement, Dow Corning was able to hide its decade-old 
knowledge of the serious health problems its silicon breast implants 
could cause for 6 additional years. [[Page S6250]] 
  The damaging information did not become public until the FDA launched 
a breast cancer implant investigation in 1992. In the meantime, nearly 
10,000 women received breast implants every month, and countless women 
were harmed.
  Mr. President, this bill would not only disproportionately harm 
women, it would also deprive injured consumers in my home State of 
Washington of rights they currently have.
  This is significant because Washington has one of the most 
conservative tort law schemes in the Nation. This bill would reduce the 
statute of limitations in my home State of Washington from 3 years to 2 
years. Injured consumers would have less time in which to file lawsuits 
when they are harmed by dangerous products. The bill also would reduce 
the number of situations in which product sellers can be held liable in 
Washington State. And the bill would abolish joint and several 
liability for noneconomic damages currently available in Washington 
when the injured person has not contributed to her injury.
  As the Seattle Times editorialized just last week:

       Recent polls show that the great majority of Americans 
     oppose restricting the right of individuals to hold 
     manufacturers and medical workers accountable for their 
     injurious act.
       The National Conference of State Legislatures opposes 
     having Congress federalize an area of law that has been the 
     exclusive domain of state lawmakers for 200 years. And state 
     judges are coming out against federal statutes that would 
     tamper with century-old jurisprudence developed in state 
     courts.
       The rush to impose federal rules on tort claims runs 
     counter to the Republican philosophy of giving more power to 
     the states. Surely, this is one area where state judges and 
     legislators are better suited to determine what's needed in 
     their communities.
       The Washington Legislature, for example, passed a 
     comprehensive tort-reform law in 1986. Many other states have 
     done so in the past decade, Yet, voters in some places, such 
     as Arizona and Michigan, have turned down tort reform 
     initiatives. Why should Congress now force those voters to 
     live with legal changes they rejected at the polls. * * *

  I ask unanimous consent to have the editorial printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                [From the Seattle Times, Apr. 30, 1995]

                Federal Tort Reform Usurps States Rights

       The only parties pushing for tort reform seems to be big 
     businesses, doctors intent on curbing medical malpractice 
     lawsuits, and lawmakers who receive financial contributions 
     from those lobbies.
       Recent polls show that the great majority of Americans 
     oppose restricting the right of individuals to hold 
     manufacturers and medical workers accountable for their 
     injurious acts.
       The National Conference of State Legislatures oppose having 
     Congress federalize an area of law that has been the 
     exclusive domain of state lawmakers for 200 years. And state 
     judges are coming out against federal statutes that would 
     tamper with century-old jurisprudence developed in state 
     courts.
       The rush to impose federal rules on tort claims runs 
     counter to the Republican philosophy of giving more power to 
     the states. Surely, this is one area where state judges and 
     legislators are better suited to determine what's needed in 
     their communities.
       The Washington Legislature, for example, passed a 
     comprehensive tort-reform law in 1986. Many other states have 
     done so in the past decade. Yet, voters in some places, such 
     as Arizona and Michigan, have turned down tort reform 
     initiatives. Why should Congress now force those voters to 
     live with legal changes they rejected at the polls?
       The Senate product-liability bill, sponsored by Sen. Slade 
     Gorton, though more limited than the House legislation, is 
     still an unnecessary federal intrusion into state law.
       The Senate bill does not include the House's onerous 
     ``loser pays'' rule that would prevent individuals and small 
     businesses from filing legitimate lawsuits for fear of having 
     to pay legal fees for the opposing side. But like the House 
     bill, it would cap punitive damages in dangerous-product 
     cases to $250,000 or three times the economic loss, whichever 
     is greater.
       The change might make sense if it created a uniform rule 
     across all 50 states. But it won't. Washington law does not 
     allow punitive damage awards at all, so the proposed federal 
     standard won't apply here.
       Other provisions of the Senate bill, however, will affect 
     Washington residents. One provision would make it harder for 
     people injured by defective products to collect for ``pain 
     and suffering.'' The bill places limits on lawsuits by 
     individuals, yet places no such limits on businesses.
       Tort reform will not unclog the court systems. Though 
     businesses routinely complain about the litigation explosion, 
     tort claims account for only 9 percent of all civil suits, 
     and product-liability cases make up only 4 percent of tort 
     claims. The real problem is with companies suing each other--
     a phenomenon completely unaddressed by the proposed 
     legislation.
       But this isn't about clearing up court dockets or improving 
     the way judges and juries handle tort claims. It is about 
     reducing the financial exposure of manufacturers even when 
     there are serious proven injuries. If states believe 
     protection is needed for businesses, they are free to enact 
     tort reform without congressional interference.

  Mrs. MURRAY. Mr. President, I have serious concerns about S. 565 and 
cannot support passage of this legislation. I urge my colleagues to 
think long and hard about consumer health and safety, their individual 
State's autonomy in determining its own tort laws, as well as the 
potential impact of this bill on women.
  I believe this bill tilts the scales of justice far too dramatically 
in favor of corporate profits. It is our job to do all we can to assure 
the families we represent that the products they use are safe, and that 
they will have recourse if they are harmed.
  Mr. President, this bill hurts the little guy. Is it not time we all 
stepped back, and remembered the adage--there but for the grace of God 
go I.
  Mrs. BOXER addressed the Chair.
  The PRESIDING OFFICER. The Senator from California [Mrs. Boxer] is 
recognized.
  Mrs. BOXER. Mr. President, I want to associate myself with my 
colleague from Washington, Senator Murray, because I think that she, as 
she usually does, puts her finger on real people.
  Who are the real people that are going to be impacted by this change 
in this law that is before us? I hope that we do not vote for cloture. 
The bill that would be before us, if cloture is voted, is a bill that I 
think is very, very harmful to the American people. It is bad for 
consumers; it is bad for a system that has produced the safest products 
in the world.
  With all our problems, we still have the safest products because we 
have a legal system out there that acts as a deterrent to those sitting 
around in the boardrooms deciding if they can write off a certain 
number of injuries and still make a profit.
  I said the last time I debated this that this so-called reform is not 
so much about what will go on in the courtroom as what goes on in the 
boardroom, because it is in the boardroom--and we see it through 
discovery in other products cases--where the dollars and cents take 
hold. We have heard about automobile manufacturers who knowingly did 
not spend enough time on safety and said, ``we can afford to have so 
many explosions and we will still make money.'' We want to make sure 
that that kind of callous attitude does not increase in America today. 
We want the safest products.
  My friend from Washington, Senator Murray--I have to be clear because 
we have the two Senators from Washington on different sides of this--
was very clear on who could be hurt from this so-called reform. Again, 
I want to make the point here that it is the Republican Congress that 
keeps on saying, ``We want the people of the States to handle 
everything. They are better at it.'' Yet, when it comes to product 
liability, for whatever reason, they want big brother and big sister 
and the U.S. Senate to dictate to every judge and jury in this country 
as to what damages ought to be. I find it almost amusing, if it were 
not such a serious matter.
  When it is convenient, you are for the local people, and when it is 
not, do not let philosophy get in the way. I think Senator Thompson 
from Tennessee made that point very clearly, as a Republican Senator 
who does not like this bill, asking if this goes against the grain of 
what he said Republicans are trying to do. I applaud him for that 
directness.
  Now, we know that there are going to be some changes to the bill as 
it is before us in order to get enough votes to move forward. I was 
very pleased to see that not even a majority of this Senate would stand 
up for that Dole amendment which would put a punitive damages cap on 
all civil cases.
 It was so far-reaching and so hurtful that Senator Dole could not even 
get 50, 51 votes. I think he got 47. That is very far from shutting off 
debate.

  I have to say that I believe the substitute bill will have some 
terrible consequences. Yes, it stripped out the [[Page S6251]] other 
areas of law, and they are just sticking to products.
  I think there will be three consequences. By the way, I am not 
suggesting that the people who support this bill want these 
consequences. But I believe these are the consequences of the bill.
  First, it will make our products less safe--less safe--for consumers.
  Second, the formula for punitive damages is blatantly unfair. It 
favors the wealthiest. Let me repeat that: The formula for punitive 
damages is blatantly unfair and favors the wealthy. I will show a 
particular case where we have a wealthy corporate executive suffer the 
same injury from the same product as a homemaker and wait until we see 
the difference in the award that they get. It will make your hair stand 
on end, it is so unfair.
  Third, there is another issue that has not yet been raised that deals 
with the biomaterials section, which I believe will unduly restrict 
liability for suppliers of component parts. In other words, if a person 
gets hurt by a product that has a number of parts, what this would do 
is put some of the manufacturers of those parts off limits. They would 
have no liability. It sets up a real problem, which I will go into.
  Moving to consumer safety, one study done on tort law and its effect 
on improved safety, reported that the State system of product liability 
saves lives. The study estimates that 6,000 to 7,000 accidental deaths 
are prevented and as many as 3 million fewer injuries occur every year 
because of State product liability laws. We are talking here about 
changing laws that studies have shown saves lives.
  Why do we want to do that? Some 6,000 to 7,000 deaths are prevented 
every year. Three million fewer injuries. Why do we want to change a 
system that helps this country? I do not believe the proponents of this 
legislation want to see more deaths and injuries, but I believe that is 
an unintended consequence of this bill. The best products in the world, 
and we are messing with it over here, and I think it is wrong.
  Now, I want to talk about fairness. The Dole bill, as it is before 
the Senate, and I know that Senator Gorton plans to amend it so I will 
address both, would do the following, and I will prove it by giving a 
case and walking through a case.
  There is a CEO who earns $400,000 a year. His auto engine explodes 
and he is unable to work for a year. Then, there is a 45-year-old 
female homemaker. She earns no wages. Same thing happens to her. Her 
auto engine explodes and she is unable to work for a year. The 
automaker is found 100 percent liable by the jury.
  For the CEO, the jury awards economic damages of $425,000--the 
$400,000 he makes plus $25,000 in medical bills; pain and suffering 
damages of $25,000; he gets a compensatory damage award of $450,000. 
When we add that in with the punitive damages, which is two times 
compensatory damages, he gets $1.35 million.
  Identical injury, different results. Now we will look at the 
homemaker, 45 years old--same age as the CEO. She earns no wages. Her 
auto engine explodes and she cannot work for a year. She is not working 
anyway. She has no wages. The automaker is found 100 percent liable. 
She gets economic damages of $25,000. She has no lost wages. She has 
$25,000 in medical bills, pain and suffering of $25,000. Her total 
compensatory damage award is $50,000.
  Here is what happens to her: She gets compensatory damages of 
$50,000; punitive damages of $100,000, for a total award of $150,000. 
Same injury, different result.
  This is the bill that is before the Senate. Senator Gorton wants to 
make it better. I am glad he does. He is putting back the $250,000, so 
she could get $250,000 in punitive damages if his amendment holds.
  Now, giving them the benefit of the doubt, that they change it to 
$250,000, it is $1.35 million versus $300,000--same injury, different 
result. This is what we are voting on.
  I hate to say it, but it hurts women the most. Women still earn only 
71 cents for every $1 earned by a man. And women and minorities make up 
only 5 percent of top management jobs. The consequences of that 
disparity here will play out.
  Who will get hurt? Middle-income people, women, the elderly, 
children. Who gets the highest award? A high-paid executive. Oh good. 
Just what we needed. Robin Hood in reverse. A court system that pays 
this man $1.35 million and pays this woman $300,000 or $150,000, 
depending on what we wind up with.
  I have to say that anyone who votes for this is voting for something 
that is blatantly unfair, blatantly unfair. We in the almighty Senate 
are putting our imprimatur on this kind of a plan.
  Not this Senator. I hope we have enough Senators who stand up and be 
counted for the little guy, as my colleague Senator Murray says, the 
little guy, the little gal. They do not have pinstripe suiters around 
here. They do not get on the plane and come and knock on our door. But 
the big guys can. And that is what this bill is for. Unfair, blatantly 
unfair.
  The bottom line is that juries, who see these cases firsthand, can 
make these decisions. That is the bottom line.
  Now, I want to talk about medical devices. This is something that 
hits home again to a large number, particularly of women, although I 
might say men who have pacemakers or other kinds of devices implanted 
should be very concerned about the biomaterials section in this bill. 
Senator Heflin and I have discussed this, and we both agree that this 
title of the bill has not gotten enough attention.
  As biomaterial suppliers, component parts manufacturers would be 
shielded from liability under this bill.
  I am concerned that these provisions go too far. We know about 
silicone gel implants. Would the people who make that silicone be 
immunized under the bill? Will they be protected from lawsuits?
  We know Dow Chemical set up a corporation just to make breast 
implants, and they called it Dow Corning. They tried to protect Dow 
Chemical from liability that way even though Dow Chemical made the 
chlorinated organic compounds, the solvents and the catalyst that went 
into these implants.
  The product of silicone breast implants, we know, is the subject of 
ongoing litigation, but will this title in the bill that is still in 
the bill mean that Dow Chemical could be dismissed from the case? What 
would we be telling the women, infants, and children whose lives have 
been devastated by these leaking silicone implants? What would we be 
telling them now that they are finally ending their battle with the 
chemical giants? Are they going to be told, ``Sorry, Congress just gave 
extraordinary protection to Dow, and you are left with no way to be 
made whole?''
 I hope we will not vote cloture on this bill.

  We are not sure if Dow would be shielded, but it is clear that 
manufacturers will try for this absolute defense.
  Mind you, in that section they will be shielded from liability for 
component parts. And will these provisions encourage device 
manufacturers to set up their own separate entities to manufacture all 
the component parts and supply all the raw materials? Would these 
provisions protect these shell corporations from reckless conduct or 
even deliberate harm?
  I know small businesses are concerned about this, if they supply a 
small part. I am not talking about that situation. I am talking about a 
situation that could occur in this bill with this title where a 
corporation that makes, say, the silicone breast implant, sets up 
another corporation at an arm's distance, legally, and that second 
corporation supplies all of the component parts. If the product is 
unsafe and the company that makes the product goes out of business, no 
one can go after the company that makes component parts because--guess 
why--they are shielded under this bill.
  Let us not mess with the product liability laws in this land.
  In the beginning we heard a lot of talk: Oh, there is a crisis, so 
many cases. There have been about 350 cases in 25 years where there 
have been punitive damage awards. I think we have proven that on this 
floor over and over again. The leadership on this, from my side of the 
aisle, has been magnificent. Senator Hollings and Senator Heflin have 
been on their feet, hour after hour after hour, peeling away the talk 
and [[Page S6252]] looking at the facts of what this bill will do.
  I think the American people are starting to get scared, because just 
because somebody says ``legal reform'' does not mean necessarily that 
is what it is. This is not reform, this is basically the Federal 
Government taking over and tying the hands of judges and juries, tying 
their hands, so if someone is disfigured or has brain damage or cannot 
have a child and suffers mightily and his or her family suffers 
mightily, that judge and that jury cannot decide the dollar number to 
put on that case.
  We know there are enough checks and balances in the system today. We 
do not need to take over this area of the law. I hope we will stand 
strong today, again, against cloture. Just keep in mind in this 
accident: Identical injuries, different results--a homemaker getting a 
maximum of $150,000; with the Gorton amendment getting a maximum of 
$300,000; and the same identical injury, a CEO making $400,000 comes 
away with $1.35 million.
  To me that is a denial of equal protection under the law. But, yet, 
that is the kind of law we are looking at.
  Let us beat back this other attempt at cloture. Let us protect the 
American people from this bill. It is not necessary and it will be very 
hurtful.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. HEFLIN. Mr. President, this bill ought to be determined kill 
them, not injure them. Certainly in regard to the DeWine small business 
amendment, where it is the lesser of $250,000 or two times noneconomic 
and economic damages, you can have instances in death cases where the 
limit would be zero because there are no economic damages and because 
death occurs immediately, without pain and suffering, or with a minimum 
amount of time in which one goes through that.
  But the whole issue comes down to the role of the Senate. To me, the 
role of the Senate in regards to this is extremely important. Some of 
my colleagues, I am afraid, do not realize there will be a conference 
and the House of Representatives bill, which was passed, which has a 
15-year statute of repose, which does not even have the Snowe 
amendment, which I consider not to be--an improvement--does not have it 
in it. And when you go to conference what is going to happen? I do not 
see the Speaker of the House of Representatives is going to be outdone 
by my good friend, Senator Rockefeller. I think he will come out with a 
House version of the bill.
  So, regardless of what substitute to a substitute might be offered 
here, if cloture were to be agreed to then what do you do? You go to 
conference and what do you come out with? You come out with the 
Gingrich bill.
  The role of the Senate is to be a deliberative body. We are not a 
body that votes aye and nay, and the majority rules in the event a 
person desires to take advantage of the rules. You have the cloture 
situation. So what is really at stake here is an issue in regards to 
the role of the Senate and the rules of the Senate.
  Do not be under any illusion to the effect that what you might adopt 
as a substitute to a substitute is going to be the final bill that goes 
to the President. It goes to conference. I think we ought to realize 
very clearly what the situation will be.
  There are just so many bugs in this. One of the lawyers on Senator 
Hollings staff mentioned to me you can organize subsidiary corporations 
or you can keep down the major corporations to fewer than 25 employees. 
There are so many maneuvers and various activities that can occur 
relative to that, that opens the market wide open pertaining to this.
  So I have already spoken. Senator Hollings is here, and others that 
will probably want to speak. I am not going to speak long on this, but 
this is basically saying that life in the United States, if a wrongdoer 
kills you, it is worth no more than $250,000, particularly in the event 
that you fall under the small business protection. I say this is flawed 
with great unfairness throughout. I have outlined it before.
  But the main issue to be considered in this cloture vote that is 
upcoming is the role of the Senate. Do not forget there is going to be 
a conference. Do not forget who is going to control the conference. I 
hope my colleagues bear that in mind as they consider their cloture 
vote.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, the Senator from Alabama is right on 
target. I remember my children years ago used to listen to a little 
Saturday morning radio show, ``Big John and Sparky,'' and they had 
little squeaky Sparky with the voice:

     All the way through your life,
     Make this your goal,
     Keep your eye on the doughnut,
     And not on the hole.

  Keeping our eyes on the doughnut and trying to avoid falling into 
holes that these folks have on course, all we need do is go to the 
contract, the contract and what is really intended.
  The theme of the contract is that Government is not the solution; 
Government is the problem. The Government is the enemy. Abolish the 
Department of Education; abolish the Department of Commerce; abolish 
the Department of Housing and Urban Development; abolish the Department 
of Energy; get rid of public TV; get rid of private TV; abolish the 
Federal Communications Commission; abolish the Endowment for the Arts 
on the one hand, the Environmental Protection Agency on the other hand. 
And then, as concerns fundamental rights, we come to trial by jury. 
This is none other than an assault on the seventh amendment, the 
fundamental right given under our Government for a jury of your peers.
  I could quote Patrick Henry, James Madison, Thomas Jefferson. We 
could go right on down the line, up to Chief Justice Rehnquist --and we 
will have time to do that--very, very interesting observations, right 
up to date. But you can see it in that contract, the English rule.
  Now, you have to watch them closely to get the eye on the doughnut. 
It is not in there--tort reform--but it is over in H.R. 988, a separate 
bill. In that separate bill, yes, they have the English rule on the one 
hand, and interestingly, Mr. President, they sneaked in what the 
Senator from West Virginia said. Now we do not have that in our bill 
this year; that is, the settlement process whereby if you are offered a 
settlement and decline, and you get a verdict of less than that 
settlement, you have to pay the attorney's fees on the other side. That 
is the English rule of intimidation, and they have it in this separate 
bill. You can bet your boots they will get it in the conference.
  Yes, they constantly are reminding us that we lost. You are right. 
Tom Foley is not over there; Newt Gingrich is over there. I have seen 
him whip these young Congressmen from my own State into line. It was 
said conscientiously we did not have the money for a tax cut. We did 
not have it; no. They are opposed to a tax cut because we just did not 
have it. What we needed to do was pay the bill--on and on. But we are 
now in the bottom nine game. You either come out for practice or you do 
not play on the team.
  Speaker Gingrich is a hard taskmaster. You can bet your boots when 
this bill or any bill gets there, it needs little fixes at the end 
before cloture votes. Essentially, they are that; just momentary fixes 
to get just a title or anything that would relate to it over to the 
House side, for they know what they can get by an overwhelming Gingrich 
vote over there, and bring it back where the poor majority leader has 
to mimic because he is all wound up in a Presidential race.
  I know the distinguished Senator from Kansas does not want to do away 
with punitive damages in all civil cases. But anything you can do, I 
can do better. So you do one. So I up the ante and go to all civil 
cases. We will find out who is for who, and who ought to be the 
Republican nominee, and we will just out-Republican each other. And you 
have all kinds of mischief afoot if you do not keep your eye on the 
doughnut and watch it very, very closely.
  They never would apply this to the manufacturers. I just allude here 
to one case because they keep talking about punitive damages. It is the 
case of TXO Production Corp. verses Reliance Resources, decided just 2 
years ago by whom? The U.S. Supreme Court, on punitive damages. What 
were the actual damages? They were $19,000. What were the punitive 
damages? They [[Page S6253]] were $10 million. You get all of this 
anecdotal nonsense. They come out in individual injury cases like it is 
so outrageous, that the poor lady who was burned with the McDonald's 
coffee was just outrageous, not this kind of percentage. They go to 
1,000 percent. This is way more than that $19,000 actual, $10 million 
punitive, the most recent case on punitive damages before the U.S. 
Supreme Court in a civil action.
  So there it is. They do not believe in it because they will not apply 
that to themselves. They have the unmitigated gall to come around 
saying they represent the consumers, but they will not let it apply to 
the manufacturers. Come on. Come on. Do not give me that this bill is 
for consumers, and the consumer and the injured party are not getting 
enough money. Do not come with respect to the trial lawyers that bought 
the crowd. Come on. Everybody is in the contribution business. I would 
like to get some more from the trial lawyers. I would like to get more 
from the chamber of commerce. You do not think that the chamber of 
commerce, the National Association of Manufacturers, the Conference 
Board, the Business Round Table, and the National Federation of 
Independent Businesses, yes, they have PAC's. And they give away more 
money. But you cannot find it quoted in the newspaper.
  They not only give more in contributions but they have a better 
currency. They have organized PAC's and organized focus. I see them in 
my elections. They come to you, and they say, ``How about it, now? We 
want you to help us on this bill.'' I am getting the letters. I am 
getting the calls now. The people in a position of objecting to this 
heinous measure here, the Consumer Federation of America, the leading 
one, they do not have a PAC. They do not give you a nickel.
  Do you think you get calls at election time? The NFIB and the small 
business people out there are calling, the chamber of commerce is 
calling, big boys from the Business Round Table and the National 
Association of Manufacturers in my State are calling. The Consumer 
Federation of America does not have a PAC. Public Citizen does not have 
a PAC. The Association of State Legislatures does not have a PAC. The 
Association of State Supreme Court Justices does not have a PAC. The 
Attorneys General of the United States does not have a PAC. The 
American Bar Association does not have a PAC. Let us clear the air here 
and find out who is who, and who is supporting who.
  This insulting reference that this bill ought to just whip right on 
through, they do not believe in it themselves, or their own 
manufacturers that they represent. They do not believe it by way of 
contractors, because the contractors are sending everything back to the 
people. This bill is to take it away, take it away from the people; 
bring it to the Washington bureaucrats on the one hand, and take away 
the rights of trial by jury on the other. You do not just outright 
abolish the seventh amendment. You nibble at it. You nibble at it. You 
just erode it like a rat just gnawing at it gradually. Yes, get rid of 
punitive damages. Get rid of joint and several liability. Limit the 
evidence that goes in. Get a bifurcated--a divided--proof of actual and 
proof of punitive. Go right on down the list. Give them the English 
rule.
  Well, that is not 170 years ago. I had this quote from none other 
than the British National Council for Civil Liberties, what they had to 
say about the systematic erosion of the English jury system between 
1967 and 1978:

       The jury system has been badly undermined in recent years. 
     The prosecution in criminal cases, otherwise than civil 
     cases, need no longer convince 12 jurors. They can convict on 
     the views of only 10.

  They state that to come in now, to allow a check on the jurors' 
backgrounds, while the defense is not even allowed to know his 
occupation, the prosecution can secretly bet your all for their 
political loyalty, yet the defense is not even allowed to ask jurors 
questions in open court. The principle of randomness has been used to 
cut down defense challenges but leave prosecution challenges unlimited. 
A large percentage of the criminal work has been removed from the jury 
to the magistrates court. And on the civil side, we find that less than 
2 percent of the civil cases are tried before a jury.
  I had a lawyer friend that went to the American Bar Association 
seminars and interviewed the prospective jurors at random. He kept 
going through, trying to find any that would serve. He could not find 
anybody in London. He went on up to Scotland. They just did not serve 
on juries. You have to be a member of the elite. So do not come and 
give me the English rule.
  I know about the unstudied mind of the ideas of the Magna Carta, King 
John at Runnymede. I remember, I say to the Senator, when we went over 
on one of these tourist trips to London. They got on the bus one 
afternoon and stopped at Runnymede, and my friend is as talkative as I 
am. He said, ``Now, what happened here?'' The bus driver called back 
and said, ``King John, the signing of the Magna Carta.'' And he said, 
``Well, when was that?'' The driver shouted back, ``1215.'' He looked 
at his watch. He said, ``Florence, damn it, you are 2 hours late again. 
We are behind time.''
  That is about how much this crowd knows about Runnymede and the Magna 
Carta. They do not know about the English system. They do not know it 
is totally eroded. The fundamental right of trial by jury here is being 
assaulted.
  Let us look at that so-called English rule that they have on another 
bill that they hope to put in in conference. I will never forget one 
case I had before I got elected to the Senate. In fact, it was settled 
after I got out of the law practice and in the Senate. My law partner 
and I were the only two who tried the case. There was a firm of 12 
lawyers in Charleston. There was a firm of 17 lawyers in Columbia. 
There were some from New York that came in. They had 20-some lawyers. 
They had to get three tables. And just he and I had an injured party 
and we were trying the case.
  I think back to the fact that particular case never even received an 
offer of any kind of settlement until it went out to the jury, never a 
red cent of offer. It was one of the most injurious cases--injuries, 
clear-cut proof--that I had ever been engaged in. I never could 
understand why they would not make us an offer.
  But you have these insurance company lawyers who will say, ``We don't 
settle cases.'' They think that is macho and everything else. 
Translated, we factor it in the cost of litigation. So we have no idea 
of settling. So what happens? You intimidate the injured party.
  Look at a case we had last year in the district court under Judge 
Ross Anderson with General Motors. General Motors was represented by 
four of the biggest law firms. They had a grand total from those firms 
of 1,000 lawyers. Present in the courtroom representing General Motors 
was the former Attorney General Griffin Bell, the former Attorney 
General William Barr, the former Solicitor General, Kenneth Starr--you 
can go down the list--some of the most well known attorneys that you 
will ever find. They have to be paid $400 to $500 an hour.
  You would think that the plaintiff in that case would not bring the 
case when they have General Motors and all of those lawyers and 
everything else and have to run the risk of not prevailing and getting 
all 12 jurors. They talk about consumers and everything else. They are 
trying inch by inch, yard by yard to get rid of the trial by jury. It 
has happened in England and they would like to have it happen right now 
in the United States of America.
  That cannot be emphasized too much as it now concerns what we have 
before us because we have to look at the doughnut and not the hole. We 
look at all these little ramifications. They will put in any and every 
kind of amendment that you can possibly think of just to fix this vote 
or fix that vote or change the vote we had last week, knowing all along 
that they have kept their word and the amendment is clear.
  Then when they get on the other side, they will be telling the truth 
again when they say, ``Well, you know, Speaker Gingrich took over and 
this is his bill, and that is all we could get the House Members to 
vote for and that is what we got in the conference report.'' And then 
you really have all of this thing piled on you. That is why some of us 
in this Chamber struggle so because we can see exactly what is 
occurring. Everything that was reprehensible in these previous bills by 
the distinguished Senator from West Virginia, in [[Page S6254]] the 
House bills, and considered in separate bills over there and everything 
else of that kind, is being and is going to be reinserted. And so when 
they get to conference, just like this bill started as a product 
liability measure; it soon became a malpractice, a medical malpractice 
measure. And just as soon as it became a medical malpractice measure, 
the next thing you look around it was all civil cases that it would 
apply to. And that is exactly how the conference would go if we did 
exactly as they wish, and that is let us get this little change here 
and that little change there, and we will all be happy.
  We all have been working hard. We have been on this for several 
years. And the plea is to what you committed. Laws are really passed at 
campaign time. Too often it is that these eminent organizations come--
the National Federation of Independent Businesses--for one thing only, 
your vote on their bill. Necessarily you want their support. In fact, 
they give you a little award, a little statue, and that is the NFIB 
award. And it is the treasure board award that you get from that small 
business group.
  They have thousands of mailouts. I can tell you, trial lawyers do not 
have any thousands of mailouts. The others, as well, including consumer 
organizations, do not mail out anything. They just do not have any 
PAC's at the supreme courts of the 50 States. The American Bar 
Association, which opposes this measure, does not have any PAC. They do 
not have political mailouts. But the NFIB mails out; the chamber of 
commerce has its meetings as well as the mailouts. The National 
Association of Manufacturers is strong in my State. They come around, 
and they have not only mailouts but special manufacturers come around 
and meet with you and everything else of that kind.
  So if you are not studied as to the individual rights of injured 
parties, you may not realize how horrendous this legislation is, and 
the detrimental impact it will have on our Nation's civil justice 
system. What's worse is that it is based on a total distorted record. 
They lament and lament about punitive damages. However, according to 
the hearing record, the amount of all of product liability punitive 
damage awards in the last 30 years adds up to only a fraction of the $3 
billion Pennzoil versus Texaco verdict, or the $3 billion verdict in 
the Exxon Valdez case.
  Are they really concerned about consumers? Are they really concerned 
about the injured parties?
  Mr. President, of all civil filings, torts represent 9 percent, and 
of those tort filings only 4 percent of the 9 percent, are product 
liability cases--.38--thirty-eight one-hundredths--percent. And this 
thing has taken 2 weeks now. To do what? To take it away from the 
States that have had jurisdiction for 230 years, the English law and 
everything else of that kind, or the regular statutes, the regular 
burdens of proof, the greater weight of the preponderance of evidence, 
all 12 jurors have to find it and on appeal and everything, injured 
party on a contingent basis. It has worked. The States themselves over 
the past 15 years have reformed their laws, and there is no question in 
my mind that they are handling it and handling it well. My judges tell 
me so, particularly my Republican judges that we have confirmed that I 
am proud of because I voted for their confirmation.
  But I wanted to make absolutely sure that we did not have that 
problem. I am assured of it. But they are trying now to get their foot 
in the door, and the ultimate goal is to restrict, if not totally 
eliminate, as they have in England, trial by jury.
  I yield the floor.
  Mr. GORTON. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Craig). The absence of a quorum has been 
noted. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HELMS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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