[Congressional Record Volume 142, Number 38 (Tuesday, March 19, 1996)]
[Senate]
[Pages S2300-S2302]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               COMMON SENSE PRODUCT LIABILITY REFORM ACT

  Mr. FAIRCLOTH. Mr. President, I rise in strong support of the 
conference report on H.R. 956, the Common Sense Product Liability 
Reform Act.
  The legislation is modest in its reach, but it includes long-overdue 
changes, and it pulls together commonsense reforms that command broad 
support in this Congress.
  Nonetheless, President Clinton announced that he will veto the bill 
and if, indeed, he does veto this legislation, he will line up with the 
special interests--the trial lawyers--rather than the American people.
  The President refused to buck the trial lawyers last year, also, and 
he vetoed securities litigation reform. His veto was overridden by a 
bipartisan vote. The senior Senator from Connecticut, Senator Dodd, 
brought strong support from the other side of the aisle, and we 
overrode the veto. It was not a radical bill. It was a balanced bill, 
modest reform. But the trial lawyers handed him the veto pen, and, 
political considerations at the forefront, he signed on the dotted line 
to veto securities reform.
  Likewise, the Product Liability Reform Act is not radical 
legislation, as Presidential campaign aides insist. It addresses some 
of the principal abuses--our efforts to pass an expansive bill failed--
and it, too, has a broad base of support. Just look at the bipartisan 
leadership on this bill. But despite the consensus for the bill, 
President Clinton again will do the trial lawyers' bidding, and he 
insists that he will veto yet another reform measure.
  The argument that this legislation goes too far just does not hold 
up. The conference report was hammered out with the 60 votes for 
cloture in mind. It is, by definition, a consensus bill. So, let the 
facts be clear, this veto is not about consumer protection--the trial 
lawyers are worried about changes to a legal racket that took them 
years to build--it is about political considerations in an election 
year.
  So, despite all the White House rhetoric about wages and growth, the 
President will take a stand for growth, but it will not be for growth 
in jobs. No, it will be for continued growth in the frivolous lawsuits 
that swell court dockets and cost American jobs.
  The American tort system is far and away the most expensive of any 
industrialized country. It cost $152 billion in 1994. This is 
equivalent to 2.2 percent of the gross domestic product. This has 
serious economic implications, and, in fact, it is estimated that the 
legal system keeps the growth of our gross domestic product 
approximately 10 percent below its potential.
  We have heard a lot of discussion about economic growth, but I 
believe that a good legal reform bill is, in effect, a growth bill.
  The costs of these baseless lawsuits are profound--lost jobs, good 
products withdrawn from the market, medical research discontinued, and 
limited economic growth--all because our tort system is far too 
expensive.
  We do not have the votes for general legal reform in this Chamber. I 
wish we did. However, we do have the votes for limited product 
liability reform, and we now have a bill that addresses the principal 
abuses.
  President Clinton will be forced to choose sides on this bill. I hope 
he will reconsider his announcement and line up with the American 
workers rather than the trial lawyers. This bill will reduce the costs 
of frivolous lawsuits--the cases that compel companies to settle rather 
than risk ruin in the hands of juries run amok--and it will boost 
capital investment in our factories. Consequently, this legislation 
will generate jobs--manufacturing jobs--and strengthen our industrial 
base. This is good economics, and, Mr. President, it is good for the 
working people of this country.
  Mr. President, I yield the floor.
  Mr. HATFIELD. Mr. President, for the better part of an hour we have 
notified Members through the communication system that we are ready to 
go to third reading and finalize, first of all, the managers' package--
for the better part of an hour. And I think it has now reached a 
reasonable period of time to bring this to a halt.
  So I want to say that at 5:05--in 15 minutes--I will ask for the 
lifting of the quorum and the Chair will put the question. So that will 
mean we have waited for an hour and 10 minutes for anyone to exercise 
their parliamentary right. I think that is a fairly good test of 
knowing if anyone is interested in doing so. Then we will move to the 
third reading following the adoption of the managers' package.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, may I proceed for 5 minutes?
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HOLLINGS. Mr. President, in response to my distinguished friend 
from North Carolina--and I know North Carolina very well--I would 
challenge the distinguished Senator to name the industry that refused 
to come to North Carolina, or to Tennessee, on account of product 
liability. Specifically, the State of North Carolina, as well as my 
State of South Carolina, has foreign industry galore. They talk about 
the international competition, and within that international 
competition we just located, with respect to investment Hoffman LaRoche 
from Switzerland, the finest medical-pharmaceutical facility that you 
could possibly imagine; with respect to the matter of photographic 
papers, Fuji has a beautiful new plant there; and we have Hitachi, a 
coil roller bearings, and we have over 40 industries from Japan and 100 
from Germany. The distinguished Presiding

[[Page S2301]]

Officer has 98 Japanese plants in Tennessee. In my 35 years dealing 
with industry and bringing industry into South Carolina, they have yet 
to mention product liability.
  Now, let us get to the trial lawyers. Bless them, because if there is 
a lazy crowd of bums, it is the corporate lawyers that sit downtown 
here and infest this particular democratic body with billable hours--
billable hours. All they have to do is get up and see a Senator, and 
they send a bill. All they have to do is sit down and say something, 
and it is $200, $300, $400, or $500 an hour--the whole crowd up here in 
Washington. They have hardly ever tried a case in court.
  Let us go right to the particular product liability cases. The 
American trial bar association--the American Bar Association--is 
opposed to this measure. The Senator from North Carolina should know 
that. The Association of State Legislators have opposed it. The 
Association of State Supreme Court Judges have opposed it. The 
attorneys general have come here and law professors from all around the 
country have come here to oppose it. The reason they have come is that 
this is the most dastardly measure you could possibly imagine.
  Talk about balancing how they got together, why not apply this bill 
to the manufacturing? It is all applied to the injured parties who have 
difficulty getting a lawyer in the first instance. You have to have a 
chance to get in court, not just your day in court. But to get to 
court, you have to be willing to take on the expenses--not billable 
hours, but the risk of winning or losing. Under the contingency 
arrangement unless 12 jurors find in their behalf and the courts of 
appeal affirm that particular finding, you don't get paid. So it is not 
willy-nilly.
  They mention a coffee case--they have anecdotal nonsense--the coffee 
case in New Mexico where the lady dropped the hot coffee. She got 
third-degree burns. She went to the hospital for an extended period of 
time. But the trial judge cut back on that particular award. They never 
mentioned that. We have a good judiciary there in the State of New 
Mexico.
  So we can go into these cases. But to come here, as I heard one 
particular statement just earlier this afternoon, that the President of 
the United States was threatening a veto because he was bankrolled by 
the trial lawyers--I wish every one would look up and see the Senator 
who made that statement. He is an expert in bankrolling.
  That is all I can say.
  I yield the floor.
  Mr. DOMENICI. Mr. President, I want to say to my friend, Senator 
Hollings, that he mentioned New Mexico and the McDonald case. I do not 
know how this story will strike you, but about 10 days after that 
event--and the paper was full of the stories--I pulled into a 
McDonald's in downtown Albuquerque on my way to Santa Fe in the car. 
And we pulled up to the drive-in window to get coffee, and in the 
process talking to the nice lady working for McDonald's, we asked for 
the coffee. She had it ready. Just as we started to leave, I was 
sitting in the front seat with one of my staff men right here. We were 
looking at her, and she was smiling heavily--almost laughing. I said, 
``What is the matter, ma'am?'' We had been talking about the case 
before. She said, ``Well, last night a truck came by here and the man 
in the driver's seat sitting right here close to me said, `Don't bother 
with the cup. Just pour it in my lap.' '' [Laughter.]
  Mr. CHAFEE. Mr. President, I ask that I might proceed for 3 minutes 
as if in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CHAFEE. Mr. President, I want to take a moment of the Senate to 
discuss further the matter that the distinguished Senator from North 
Carolina brought up, namely, the product liability reform conference 
report.
  I want to take a moment to discuss an important matter that today or 
tomorrow will come before the Senate: namely, the product liability 
reform conference report. I must say that I was sorely disappointed to 
read over the weekend that the President has issued a veto threat for 
this carefully balanced, carefully drafted, well-thought-out measure. I 
find it hard to believe the President's advisors could come up with a 
credible basis for objecting to this commonsense bill. I strongly urge 
the President to reconsider.


               senate history re product liability reform

  This issue is not a new one, and this legislation was not drafted in 
a hasty or casual manner. Indeed, it is the cumulation of more than a 
decade's worth of hard work. Let me outline the enormous time and 
energy that has been expended on behalf of this bill by its Senate 
sponsors:
  I would like to just briefly outline what is going into this bill. No 
one can suggest that this is a will-o'-the-wisp piece of legislation 
that just suddenly came out of nowhere. In 1981, legislation was 
introduced similar to the bill that was finally approved and comes from 
the conference today or this week. It was introduced in 1981.
  In the 97th Congress (1981-82), S. 2631 was introduced by Senator 
Kasten and others. It was reported by the Commerce Committee but never 
taken up by the Senate. In the 98th Congress (1983-84), Senators 
Kasten, Percy, and Gorton again introduced product liability 
legislation (S. 44), and again it was reported by Commerce. And again 
it saw no further action.
  In the 99th Congress (1985-86), Senator Kasten introduced a revised 
version of his product liability reform proposal (S. 100). This bill 
was defeated on a tie vote in Committee. However, a host of 
freestanding amendments were considered during hearings. Eventually an 
original Committee bill (S. 2760) was sent to the floor, where the 
Senate voted overwhelmingly to consider it. Yet notwithstanding the 
strong votes, the bill was returned to the calendar and the Senate 
recessed for the year.
  In every Congress we have worked on this particular piece of 
legislation.
  In the 100th Congress (1987-88), Senators Kasten, Pressler, 
Rockefeller, and Danforth, soldiering on, introduced two more revised 
bills (S. 666, S. 711), neither of which was taken up by the Committee 
or the Senate. In the 101st Congress (1989-90), ever hopeful, Senators 
Kasten, Gorton, Pressler, and Rockefeller introduced their bill. S. 
1400 won Committee approval, but was blocked from Senate consideration.
  In the 102d Congress (1991-92), Senators Kasten and Rockefeller led a 
bipartisan group in introducing S. 640. The bill was favorably 
reported, but was stalled for 7 months by liability reform opponents. 
To force floor action, S. 640 was offered as an amendment to the then-
pending motor-voter bill. But cloture failed, and subsequently the 
amendment was sent to Judiciary for further hearings. However, 
proponents were able to win a commitment from the Democratic leader to 
bring the bill up later. That fall, the Senate witnessed an 
extraordinary effort by bill opponents to stymie the bill by forcing 
the Senate to hold three back-to-back cloture votes, each of which fell 
at least 2 votes short of the 60 needed. The end result? That bill also 
died.
  How about the 103d Congress? Anything better? Not much. S. 687 was 
introduced in March 1993 with Senators Rockefeller and Gorton again 
bravely leading the charge. After a hearing and the strongest committee 
vote yet, 16 to 4, the bill went to the floor, but again the opponents 
stopped its momentum with two cloture votes, and that killed the bill 
for the rest of the 103d.
  Now we come to the 104th Congress, some 15 years after the first 
Kasten bill was presented. Prospects seemed pretty good. Supporters had 
gained new adherents on both sides of the aisle. Product liability and 
tort reform had caught the public's attention and support. The 
legislation in itself had plenty of time to ripen. After all, there had 
been countless hearings and enormous opportunity for public comment.
  To their credit, the sponsors continued to take all legitimate 
concerns into account and came up with reasonable responses to those 
questions raised.
  Will this be the year of product liability reform? Well, let us see. 
S. 565 was introduced in March 1995, a year ago, by Senators Gorton, 
Rockefeller, Pressler, Lieberman, and others, and a large bipartisan 
coalition. The bill was reported in April. The committee took up the 
bill in late April and began voting on amendments. A total of 
four cloture votes were held on or in relation to the bill, with the 
fourth vote in this grueling

[[Page S2302]]

procession being ultimately successful. On May 10, with bipartisan 
support, the bill as amended passed the Senate, 61-37. Now the 
conference report is finally before us. But now we learn that all this 
work is for naught--for notwithstanding the views of some of his 
advisors and the strong support of many Democrats, the President has 
decided to veto this bill.

  Frankly, I believe this bill has seen more roadblocks in the last 
decade than practically any other bill we have seen. I venture to guess 
that product liability has been subject to more cloture votes than any 
other bill: two in 1986, three in 1992, two in 1993, and four in 1995.
  Yet, it seemed we were close to beating that gridlock with this new 
Congress. The drafting of the bill was bipartisan from Day One. The 
White House was well aware of what was going on, watching closely as 
the Senate took up the bill and began adding amendments. Indeed, I 
understand from the key Republican and Democratic sponsors of the bill 
that it was the administration that, during the Senate debate in May, 
quite helpfully suggested the addition of the so-called additur 
provision to the final version of the Senate bill--the provision that 
helped the bill win final approval by that 61 to 37 margin.


                            the veto threat

  What, then, happened to change the White House attitude? Did the bill 
change drastically in conference? The answer is no, hardly at all. It 
was clear to all that the House broader tort reform bill would not win 
administration approval. Therefore, to their credit, the conferees were 
careful to stick closely to the Senate version. The bill that we will 
vote on is virtually identical to the Senate-passed bill that won such 
strong approval.
  What, then, has caused the President to issue the veto threat? I 
cannot believe he is personally opposed to a Federal liability law, for 
as Governor he sat on the National Governors' Association Committee 
that drafted the NGA's first resolution favoring Federal liability 
reform.
  Here in my hand I have the letter to Senator Dole stating the veto 
threat. The reasons for the veto are couched very carefully but do not 
stand up to close scrutiny. First, we are told the bill is an 
``unwarranted intrusion on state authority''--yet in this case, the 
need for a uniform product liability law--not 50 separate laws--is so 
warranted that the NGA enthusiastically supports this measure. Second, 
we are told the bill would ``encourage wrongful conduct'' because it 
abolishes joint liability. But that deduction stretches credibility; 
moreover, joint and several liability remains for economic damages. 
Third, the letter accuses the bill of ``increas[ing] the incentive to 
engage in the egregious misconduct of knowingly manufacturing and 
selling defective products--a charge that makes no sense--and then goes 
on to say that the additur provision the White House itself asked for 
does not take care of this alleged problem.
  None of these three statements accurately represents what this 
balanced, bipartisan conference report would do. They are merely there 
for cover, to allow a veto to proceed. That is a shame. I am inclined 
to agree with my friend from West Virginia, who has worked so long on 
this bill, when he says with regret that ``special interest and 
obvious, raw political considerations in the White House are overriding 
sound and reasonable policy judgment.''


              the 1996 product liability conference report

  No question about it--this bill is sound and reasonable policy. Let 
me quickly outline its key provisions.
  Under this bill, those who sell, not make, products are liable only 
if they did not exercise reasonable care; if they offered their own 
warranty and it was not met; or they engaged in intentional wrongdoing. 
In other words, they cannot be caught up in a liability suit if they 
did not do anything wrong. That concept should sound familiar to most 
Americans.
  Also under this bill, if the injured person was under the influence 
of drugs or alcohol, and that condition was more than 50 percent 
responsible for the event that led to their injury, the defendant 
cannot be held liable. Likewise, if the plaintiff misused or altered 
the product--in violation of instructions or warnings to the contrary, 
or in violation of just plain common sense--damages must be reduced 
accordingly. Of all the provisions in the bill, it seems to me these 
are the ones that are the most obvious. Why on earth should we blame 
the manufacturer for behavior that everyone knows would place the 
product user at risk? Is that fair? No. Does that not contradict our 
notion of an individual's personal responsibility? Yes. This provision 
goes a long way toward ensuring that freely undertaken behavioral 
choices are taken into account in liability actions.
  Regarding time limits, the bill allows injured persons to file an 
action up to 2 years after the date they discovered, or should have 
discovered, the harm and its cause. For durable goods, actions may be 
filed up to 15 years after the initial delivery of the product. These 
provisions are fair, providing some certainty with regard to liability 
exposure while at the same time protecting consumers who have been 
harmed.
  Either party may offer to proceed to voluntary nonbinding alternative 
dispute resolution. Simple, but again, it makes sense.
  Now the most controversial element of the bill: punitive damages. Let 
me remind my colleagues that these damages are separate and apart from 
compensatory damages. Compensatory damages are meant to make the 
injured party whole, by compensating him or her for economic and 
noneconomic losses; punitives are meant to deter and punish. Under the 
bill, punitives may be awarded if a ``clear and convincing evidence'' 
standard proving ``conscious, flagrant indifference to the right of 
safety of others'' is met. The amount awarded may not exceed two times 
the amount awarded for compensatory loss, or $250,000--whichever is 
greater--for small business, whichever is less. At the suggestion of 
the White House, a further provision was included: If the court finds 
the award to be insufficient, it may order additional damages.
  Again, this compromise seems to make sense. It sets a framework for 
punitive damage awards in which the level of punitives is tied to the 
harm actually suffered by the plaintiff, with the ability to go beyond 
the cap in truly egregious cases. This compromise cap helps resolve the 
problem of arbitrary and inconsistent awards, while at the same time 
ensuring that punitive awards will not be meaningless inproportion to 
the injury suffered. The Washington Post calls this approach an 
important first step that creates some order and boundaries.
  Each of the provisions I have outlined make eminent sense. Each helps 
provide certainly in an area where there now, notoriously, is none. 
That is why Senator Rockefeller says the conference report ``delivers 
fair and reasonable legal reform'' that ``would make American industry 
and American workers more competitive.'' He is absolutely right.
  I pay my compliments to Senators Rockefeller, Gorton, Pressler, and 
Lieberman. They have worked tirelessly for years and years to enact 
meaningful and fair product liability reform. They have done this 
Nation a great service. And their work should not be for naught.
  Thus, I urge the President to reconsider his position, and join the 
bipartisan coalition supporting this critically important legislation. 
I urge him to disregard the powerful political constituencies aligned 
against this bill. I urge him to sign this bill into law.
  Mr. President, I hope that this laborious marathon that we have been 
engaged in to see product liability reform passed here will finally 
succeed.
  I thank the Chair.

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