[Congressional Record Volume 142, Number 40 (Thursday, March 21, 1996)]
[Senate]
[Pages S2553-S2591]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  COMMONSENSE PRODUCT LIABILITY LEGAL REFORM ACT OF 1996--CONFERENCE 
                                 REPORT

  The PRESIDING OFFICER (Mr. DeWine). Under the previous order, the 
Senate will now proceed to the conference report to accompany H.R. 956. 
The time between now and 12 noon is equally divided.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     956), a bill to establish legal standards and procedures for 
     product liability litigation, and for other purposes, having 
     met, after full and fair conference, have agreed to recommend 
     and do recommend to their respective Houses this report, 
     signed by a majority of the conferees.

  The Senate resumed consideration of the conference report.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Mr. President, as we proceed toward the climax of the 
debate on product liability and a vote on the bill at noon, I believe 
it appropriate to state what I think the issues in this debate truly 
are. The question involved in whether or not we wish to reform the 
product liability litigation system of this country has, I think, 
primarily to do with the products that are available to the American 
people, the rapidity with which new products are researched, developed, 
introduced, and marketed, and the cost of those products to the people 
of the United States.
  In each of these cases, the closely related question, of course, is 
the system of justice by which people who believe that they have been 
wronged get a determination as to whether or not such a wrong has been 
committed and how much compensation should be granted when a wrong is 
determined.

  Our present legal system serves well neither of these goals. We have, 
in many areas, a frequent reduction in the number of companies that are 
willing to engage in vitally important businesses: a reduction from 
something like a dozen to one, in the producers of serum for whooping 
cough; a reduction from 20 to 2, in the number of companies willing to 
produce helmets, football helmets, for players, whether professional or 
college or high school or otherwise.
  There is a constant fear on the part of product developers that the 
unpredictable costs of product liability litigation, whether or not it 
is successful, are simply greater than any potential profits that can 
be gained from the development and marketing of a product. For example, 
Science magazine has identified three U.S. laboratories that suspended 
or canceled research on promising AIDS vaccines. Union Carbide funded 
and developed a suitcase-size kidney dialysis unit for home use. It was 
sold to a foreign corporation

[[Page S2554]]

after the company determined that potential liability risks under the 
present system of law made the product uneconomical.
  Another company developed a phosphate fiber substitute for asbestos, 
the subject, obviously, of a tremendous amount of litigation. Not only 
was the product safe, it was biodegradable and environmentally sound. 
Although the product could have generated an estimated $100 million a 
year in revenues, the company concluded that plaintiffs' attorneys 
would make the product a target for expensive legal claims, and it was 
therefore too risky to market.
  Another company developed a chemical process that would speed up the 
natural bacterial decomposition of hazardous materials and might have 
been used to clean up hundreds of leaking underground storage sites. 
Despite its successful demonstration at several sites, the new 
technology was abandoned because the risk from potential lawsuits was 
too great.
  In addition, even those companies that have been willing to stay in a 
particular business have been forced to increase the charges for the 
products they market, sometimes astronomically, in order to cover their 
cost of product liability litigation. Lederle Laboratories, which is 
now the lone maker of the DPT vaccine, all other manufacturers having 
abandoned the field, raised its price per dose from $2.80 in 1986 to 
$11.40 in 1987 to pay for the cost of lawsuits. One other company does 
continue to produce, solely out of a feeling of social responsibility.
  This chart behind me indicates the litigation tax cost of a number of 
products produced and marketed in the United States: almost $24 for an 
8-foot aluminum ladder; $3,000 for a heart pacemaker; $170 for a 
motorized wheelchair; 18 cents for a regulation baseball. There are 
example after example of the added costs to American consumers to pay 
for the lottery that is product liability litigation today.
  What do we have in the litigation system itself? We have a system 
that is truly a lottery, one in which the average small claimant with a 
very minor injury is likely to recover much more than that person's 
actual losses, while the average seriously injured individual recovers 
much less, with a few lucky ones in a few States with high punitive 
damage award histories receiving much more. But the bottom line, the 
total cost, is that for every dollar which the system itself costs, 
every dollar that goes into the product liability litigation system, 
well under 50 cents goes to the victim. Mr. President, 50 cents or more 
goes to the lawyers, and an additional amount in transaction costs for 
related professions. There is no wonder the defense of the present 
system is so fierce.

  So this bill is designed to do two things. It is designed, to a 
certain degree, to make more uniform and predictable the way in which 
the product liability litigation or claim system will work; to make it 
more just, actually to increase claimants' rights in some areas, like 
the statute of limitations; to reduce the cost of litigation and the 
overall transaction costs; to restore the competitiveness of American 
industry; to provide additional incentives for research, to develop, to 
offer for sale in the market widely the kinds of new and better medical 
devices, mechanical products, sporting goods that we, as Americans, 
have come to expect.
  No one else in the world has a system like ours. No one else has a 
system more expensive, no one else has a system that so discourages 
research and development and marketing of new products.
  Finally, Mr. President, we already have an example of how legislation 
like this works in the real world. In August 1994, less than 2 years 
ago, this Congress passed and this President signed an 18-year statute 
of repose for piston-driven aircraft, small aircraft. An industry that 
had almost been driven out of the United States--famous companies like 
Piper went into bankruptcy and others like Cessna, with barely one-
tenth of the production that they had a decade earlier because of the 
cost of litigation--has now begun a recovery, a recovery which has 
proceeded much more rapidly, I think, even than the sponsors of that 
bill hoped, but one which is symbolized better than anything else by 
the construction of a new plant for Cessna at a cost of some $40 
million to employ some 2,000 men and women at highly skilled, first-
rate jobs, producing high-quality private aircraft for American 
purchasers.
  This kind of legislation works, Mr. President. It works for the 
economy, it works for our consumers, it works for our system of 
justice. It should be passed and should become law.
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. Mr. President, I wonder if the Senator from South 
Carolina will yield me 15 minutes.
  Mr. HOLLINGS. I will be delighted to yield the distinguished Senator 
15 minutes.
  Mr. KENNEDY. Mr. President, just in terms of schedules, I ask 
unanimous consent that the Senator from California be recognized for 15 
minutes for her comments at the conclusion of my remarks.

  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KENNEDY. Mr. President, I think it is only appropriate that we 
look at the context in which this legislation has been presented to the 
Senate. Others have described the bill in great detail, and, if time 
permits, I will mention the various provisions in the bill that I find 
most objectionable. But I think this body and the American people ought 
to understand in a comprehensive way what is happening to consumer 
protections during the course of this Congress in this and other bills.
  This bill is supported by a number of big business, special interest 
groups who have advanced a series of legislative and regulatory 
initiatives designed to protect those interests.
  We cannot just look at this legislation in a vacuum, Mr. President. 
For example, we have to look at what is happening in the Appropriations 
Committees, where the appropriators are cutting back on inspections by 
the various agencies of Government responsible for protecting health 
and safety in the workplace. In the Occupational Safety and Health 
Administration, there is a 20-percent reduction in enforcement. In the 
Environmental Protection Agency, there is a 25-percent reduction in 
enforcement. The Consumer Product Safety Commission has been cut and is 
now at its lowest level of enforcement funding since 1972. Even the 
National Transportation Safety Administration is facing cuts, and that 
is an agency whose total enforcement budget is only about $8 million to 
begin with.
  What is happening? The same forces that are supporting this tort-
related legislation are trying to reduce protection for the American 
worker and the American consumer in the regulatory agencies by denying 
adequate enforcement of existing regulations.
  Second, these same forces are proposing sweeping changes in the 
landmark legislation that established the regulatory agencies. In the 
Labor and Human Resources Committee, for example, last week we 
considered a bill to weaken the Occupational Safety and Health Act, and 
next week we're moving on to the Food and Drug Administration. In the 
OSHA bill, 90 percent of all the companies would be excluded from any 
kind of inspection at all. That so-called reform bill would reduce the 
penalties and reduce the kinds of enforcement mechanisms that would be 
available to OSHA.
  So you have the cutbacks in inspections and you have the efforts by 
the same interests to reduce the effectiveness of the enforcement tools 
available to OSHA, FDA, EPA, and these other agencies. And at the same 
moment that is happening, we are presented with this product liability 
legislation. Anybody who believes that we are considering this in a 
vacuum does not understand what the legislative process is all about.
  Nor are the limits on tort liability in this bill the only ones under 
consideration in this Congress. The Republican leadership in the House 
of Representatives has added medical malpractice liability limits to 
the bipartisan bill that Senator Kassebaum and I introduced. We will 
have a chance to debate that next month. And it was not long ago that 
we were debating the loser pays concept, an antiquated system used in 
Great Britain which is now being abandoned there because it fails to 
protect the consumers in that country. And no doubt we will again face 
proposals to create an ``FDA Defense''

[[Page S2555]]

under which medical devices or pharmaceuticals approved by the FDA 
would be immune from lawsuits, no matter how recklessly they are 
manufactured. How long are we going to have to wait for that particular 
proposal? And the list goes on and on.
  So, Mr. President, we have to ask ourselves: What are the two major 
protections for American consumers? They are the tort system and 
regulatory protection. Those are the twin pillars under which the 
American people are protected. They are the twin pillars that assure us 
of the safest food, the safest water and the safest consumer products 
available. They are the twin pillars for the protection of the American 
worker in the workplace and against environmental hazards.
  But both pillars are under assault. That is the context in which this 
bill comes before the Senate.
  The other context in which we operate is a Republican Congress that 
has told us over and over again that Washington does not know best. But 
in the tort area, which has been recognized for over 200 years as being 
a State prerogative, its a different ballgame. I suppose our good 
friends who are proposing this bill say, ``All right, Washington knows 
best on this one.''
  Well under this bill, it appears that Massachusetts does not know 
best. Because even though my State legislature has decided that 
Massachusetts consumers should have the benefit of no statute of 
repose, this bill is going to impose a Federal 15-year period of repose 
on them. So there is going to be fewer protections for the people of 
Massachusetts because Washington knows best. Any State that has 
provided additional kinds of protections for their consumers, they are 
out of business.
  We have been listening to a lot of speeches in the last year and a 
half about how Washington does not always know best, there is local 
knowledge, States can fulfill their responsibilities to the people. I 
hope we will hear a diminution of the number of those speeches, because 
what in this particular proposal it turns out that the special 
interests, the special business interests, know what is best for the 
American consumer. That is hogwash, Mr. President, absolute hogwash.
  The American consumer wants to know who is going to be on their side. 
They want a safe workplace, safe food, inspections to ensure that we 
are going to have clean air, clean water, and a safe transportation 
system.
  All those are under assault in this Congress, and now in this product 
liability bill we are going to immunize the major companies that may 
even willingly or knowingly commit grievous negligence. In 15 years 
after they put a ticking time bomb on the market they are going to be 
immunized under this statute of repose. So, Mr. President, we should 
understand that this really is not about the research costs. This is 
not about health and safety costs to the consumer.
  What about those 2,700 women who died from perforated uteruses from 
the Dalkon shield before we passed the medical device legislation? We 
had those hearings. It was not long ago. You talk to individual after 
individual who appeared at those hearings and they say, ``Why didn't 
someone do something to protect us? Why didn't someone speak out?'' 
This is the responsibility of Government. Individual citizens have 
limited resources. They do not have the great financial resources to 
protect their interests alone.
  So, Mr. President, I agree with those who say to the consumer--
beware, beware. This legislation has a head of steam. It is bad enough. 
But, my friends, this is just the camel's nose under the tent with 
regard to the attack on consumer protections in this country.
  For that reason, and for all of the reasons that have been outlined 
in considerable detail in my statement which I will include in the 
Record, I hope this bill will be rejected in the Senate. And I admire 
the President of the United States for standing up against the special 
big business interests. He understands the anticonsumer context in 
which this bill may come before him. He understands what I am saying 
about the camel's nose under the tent. He understands that the next 
bill he sees may include medical malpractice liability limits.
  According to the Harvard public health study, tens of thousands of 
people died in hospitals in this country last year from negligence in 
the medical system. We will have an opportunity to debate that issue in 
the coming months.
  So, Mr. President, this is a matter of fundamental protection of 
American consumers. These extreme regulatory reform and tort reform 
bills are poised to deprive the American people of the safest food in 
the world, the safest air and water in the world and the safest 
products on the market. We must not sacrifice the interests of the 
American consumer.
  If we accept this bill, Mr. President--and if we did not have a 
President with the guts to stand up and veto it--we would be retreating 
on our commitment to the American consumer to protect them from death 
and serious bodily injury. I hope this bill is rejected, and I ask that 
the text of my prepared statement, be printed in the Record, along with 
an editorial from today's New York Times.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

    Statement of Senator Edward M. Kennedy on H.R. 956 The Product 
                      Liability Conference Report

       I strongly oppose the conference report on the product 
     liability bill, and I urge my colleagues to reject it, 
     because it constitutes an unacceptable threat to the health 
     and safety of American consumers.
       This is not ``common sense legal reform.'' It is special 
     interest legislation of the worst kind. Our Republican 
     friends pretend that it is designed to end current abuses of 
     the legal system. In reality, this bill panders to the worst 
     instincts of big business. President Clinton has promised to 
     veto this bill, and it eminently deserves the veto it will 
     get.
       This bill has three grave flaws. It arbitrarily caps 
     punitive damages against the most reckless manufacturers of 
     deadly products. It nullifies the sound common law principle 
     of joint and several liability. And it preempts State law in 
     ways that are both unwise and unfair.
       Even worse, this bill does not come before the Senate in 
     isolation. It is part of a shameful pattern. It comes before 
     the Senate at a time when the Republican Congress is waging 
     an all-out assault on the health and safety of the American 
     public:
       So-called regulatory reform bills would drastically weaken 
     the existing rules that protect public health and safety.
       Republican appropriations bills would drastically slash 
     enforcement funds for agencies that carry out the current 
     health and safety laws.
       And now, the entire tort system, which provides basic legal 
     protections for the public against defective products, is 
     under Republican attack in this bill.
       This is not a liability reform bill at all--it is an avoid-
     liability bill. It is part of a Republican triple play 
     against the health and safety of the American people by 
     irresponsible business interests.
       The strategy is all too clear--undermine the Government's 
     ability to protect health and safety by slashing agency rules 
     and budgets, then slam the courthouse door in the face of all 
     those harmed by the lack of consumer protections.
       Wise regulation, effective enforcement, and access to the 
     courts are three basic pillars of consumer protection. 
     Regulation is intended to prevent the manufacture of 
     defective products in the first place. Enforcement keeps 
     business honest. Tort law guarantees adequate remedies for 
     victims of dangerous and unsafe products when regulation and 
     enforcement fail.
       The same business interests who support this bill are also 
     urging Congress to weaken the regulatory protections and 
     defund enforcement.
       It is ironic that the many Republican supporters of this 
     bill who preach respect for the States refuse to practice 
     what they preach. This legislation is intentionally designed 
     to ride roughshod over State law.
       For the past year and a half, we have heard a great deal 
     from the Republican majority about States' rights. On issues 
     such as welfare, education and crime, the Republican majority 
     says it wants to return power to the States.
       But when it comes to making sure that big business is 
     protected from lawsuits brought by injured consumers, 
     suddenly ``Washington knows best.''
       Tort law is traditionally a State responsibility. In fact, 
     in recent years, many State legislatures have enacted genuine 
     reforms to address the problems of frivolous lawsuits and 
     excessive damage awards. Federal intervention is completely 
     unnecessary--and in this case, counter-productive.
       This bill is also very different from the securities 
     litigation reform bill enacted earlier this year, which I 
     supported. The integrity of the stock market is clearly a 
     Federal concern, and Congress has legislated in that area for 
     over 60 years. The field of product liability law, in 
     contrast, has been the province of State legislatures for 
     over 200 years. There is no compelling reason for 
     substituting the judgment of Congress for the judgment of 
     elected State officials and the State courts where the vast 
     majority of these cases are resolved.

[[Page S2556]]

       Our specific objections to this bill are numerous and 
     serious. It denies adequate compensation to victims of 
     defective products, and undermines necessary incentives for 
     manufacturers to produce safe products.
       The cap on punitive damages will limit the ability of the 
     courts to punish the most flagrant conduct by reckless 
     manufacturers. Punitive damages serve a valid purpose by 
     deterring wrongful conduct that injures innocent victims. 
     Such damages are especially justified as a deterrent against 
     manufacturers who engage in intentional wrongful conduct, or 
     who are recklessly indifferent to the safety of others. They 
     should not be let off with a slap on the wrist. Such extreme 
     misconduct must be fully punished in a manner that creates a 
     clear deterrent to future wrongdoing.
       The so-called ``waiver'' in the conference report is 
     supposed to permit courts to exceed the cap in flagrant 
     cases. But there is serious doubt about the constitutionality 
     of that provision under the seventh amendment. If it is 
     struck down, all that is left will be a rigid Federal cap on 
     damages.
       The nullification of the common law principle of ``joint 
     and several liability'' is also unacceptable. It will 
     severely hamper the ability of innocent victims to obtain 
     compensation for their injuries. For at least 100 years, 
     courts and State legislatures have recognized the 
     unfairness of forcing an innocent party to bear the cost 
     of other people's negligence, if one or more of the 
     wrongdoers are available to pay compensation. That is a 
     sensible rule, and Congress should not undermine it.
       Proponents of Federal product liability reform say they 
     want national standards for goods that are sold across State 
     lines. But the conference report before us achieves no such 
     uniformity. It preempts State laws in an uneven and unfair 
     manner.
       Punitive damage laws favorable to plaintiffs will be 
     replaced by the new Federal standard. But laws prohibiting 
     punitive damages altogether will stand. Similarly, the bill 
     creates a 15-year Federal statute of repose, but permits 
     State statutes of shorter length to remain in effect.
       The end result is not uniformity, but unfairness. This bill 
     is rigged to benefit negligent manufacturers and their 
     insurance companies, while ignoring injured plaintiffs and 
     the millions of American consumers who will no longer be 
     protected adequately from dangerous and defective products.
       All of these flaws were present in the Senate bill that 
     many of us opposed. But the anticonsumer bias of this 
     legislation became even worse after the conference with the 
     House of Representatives.
       For example, the Senate bill contained a 20-year statute of 
     repose, but the conferees have adopted a 15-year period. As a 
     result, after 15 years, manufacturers of even the most 
     defectively designed or recklessly produced products are 
     immunized from liability and will get off scot-free, no 
     matter how much injury their products may cause.
       In addition, types of products that qualify for this 
     blatant protection are expanded dramatically. In the Senate 
     bill, only workplace machinery was covered. But now, all 
     durable goods, including common household products, are given 
     this unjustified protection.
       Massachusetts currently has no statute of repose, so this 
     bill represents a major loss of protection for consumers in 
     my State.
       When the Senate debated this bill last year, I spoke at 
     length in opposition to medical malpractice amendments. I am 
     pleased that the conference report does not include such 
     amendments. Nor does it include the so-called ``FDA defense'' 
     in the House bill, which would prevent punitive damages in 
     cases involving drugs or medical devices approved by the FDA.
       But the bill does apply to manufacturers of drugs and 
     medical devices, just as it applies to other products. The 
     cumulative effect of the many anticonsumer provisions in the 
     bill is to protect these manufacturers at the expense of the 
     health and safety of the people who rely on these products.
       This bill is nonsense, not common sense. It pretends to 
     support the legitimate goals of reducing frivolous litigation 
     and improving the civil justice system. In reality, it is 
     special interest legislation that denies fair compensation to 
     victims of negligence and limits the ability of the tort 
     system to deal effectively with gross misconduct by business.
       If this bill came off the factory assembly line, it would 
     be labeled ``unsafe for human use.'' And if the principle of 
     quality control applies in the United States Senate, this 
     bill would be soundly rejected. It is a sweetheart deal for 
     business and insurance interests, and a raw deal for the 
     public interest.
                                                                    ____


                [From the New York Times, Mar. 21, 1996]

                     The Anti-Consumer Act of 1996

       The Senate is preparing to vote today on a pernicious piece 
     of anti-consumer legislation masquerading as product 
     liability ``reform.'' The measure is little more than a 
     bipartisan gift to manufacturers and trade associations that 
     supplemented their lobbying and generous campaign 
     contributions with misleading propaganda exaggerating the 
     problem of high verdicts. The bill would arbitrarily cap the 
     punitive damages that juries may award--dangerously weakening 
     the ability of the civil justice system to punish, and 
     thereby deter, the reckless manufacture or sale of unsafe 
     products.
       If a majority of senators will not heed legitimate concerns 
     about the measure's rollback of consumer protection, 
     President Clinton must be prepared to make good on his veto 
     threat.
       The bill is a convenient exception to Capitol Hill's 
     prevailing philosophy of devolving power to the states. It 
     would compel all states, even in their own courts, to limit 
     punitive damages. The phony rationale given is the need to 
     create a single national commercial standard. But that 
     standard would be applied only when it would benefit the 
     manufacturers. The bill would override the product liability 
     laws of states that allow unlimited punitive damages, for 
     example, but it would impose no such damages on states that 
     do not now have them.
       Under the measure, plaintiffs who sue successfully for farm 
     from faulty products could be compensated, as they should be, 
     for medical expenses, lost wages, damaged property and other 
     actual damages. But punitive damages, which are awarded by 
     juries in cases of egregious misconduct, would be limited in 
     most cases to $250,000 or two times actual damages, whichever 
     is greater. That is hardly enough money to serve as a 
     deterrent to major corporations.
       Senator John D. Rockefeller 4th of West Virginia, a 
     Democratic architect of this attack on civil justice, has 
     suggested that President Clinton is trying to scuttle the 
     bill to reward major campaign contributors, like trial 
     lawyers. True, the American Association of Trial Lawyers has 
     been one of Mr. Clinton's strongest political and financial 
     backers. But by now it is laughable for Mr. Rockefeller to 
     make purity an issue, given the far greater sums tossed into 
     this fight by the powerful business interests amassed on the 
     other side.
       ``For irresponsible companies willing to put profits above 
     all else, the bill's capping of punitive damages increases 
     the incentive to engage in the egregious misconduct of 
     knowingly manufacturing and selling of defective products,'' 
     Mr. Clinton said last week. On the merits, the President was 
     right.

  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. Thank you very much, Mr. President.
  I want to thank the Senator from Massachusetts for explaining, in his 
usual way, why this bill deserves to be defeated. Explaining that it 
is, in fact, part of a pattern of this Congress which continually 
brings up legislation that does not make life better for people, but in 
fact, puts them at risk. In fact, puts them at risk, whether it is 
cutting, as the Senator said, enforcement funds from the Environmental 
Protection Agency, or weakening our laws that have worked well to bring 
us the safest products in the world.
  Mr. President, I come to this debate by asking a very straightforward 
question. I am not an attorney, and I tend to look at things in a 
different way. This is the question I ask: If a young woman, say age 
21, is working in a factory and a faulty machine blows up in her face 
and she is disfigured beyond belief for the rest of her life, should 
the company who made that faulty product be penalized in such a way 
that they, and for that matter no other company, will ever make such a 
faulty product again? I say yes. I say yes.
  The company that made that faulty product, and as you will see in 
many cases, knew they were doing it, should face damages that act as a 
deterrent for the future. This bill does just the opposite. It will let 
a company that made such a product, and other companies that might make 
such a product, off the hook. If we pass this bill, such a company, 
which might well have profits in the billions of dollars, will be given 
the equivalent of a slap on the wrist. Because those punitive damages 
meant to punish them--that is what punitive damages mean, punishment--
will be so low they will not be large enough for them to care. Those 
are the brutal and cold facts. I wish they were not true, but they are 
true.
  I have heard many businesses use words like this: ``Oh, well, it is 
just a cost of doing business.'' ``Just a cost of doing business.'' In 
other words, they will factor in lawsuits that go against them into 
their bottom line. I think the Senator from Washington has proved the 
point. They factor it into their bottom line. He shows it on his chart.
  How cold can you get? If we cap punitive damages, as is put forth in 
this bill, we are taking the safest system in the world for consumers, 
changing it, and putting people at risk.
  There are other problems in this bill that deal with the statute of 
repose. Some machinery has a lifetime of 30, or 40 years. In 15 years, 
those companies are completely off the hook under this bill.
  I also join with the Senator from Massachusetts in thanking our 
President. He is taking the heat on this one. He is standing up for the 
consumers.

[[Page S2557]]

 He is standing up for future victims. He is standing up so that we 
will not have so many victims of faulty products.
  I want to give you some examples of actual cases. We are going to 
take the case of the Pinto automobile, and a young man named Richard 
Grimshaw. The exploding Pinto tank is a very clear example of what I am 
talking about. The gas tank exploded and burned in rear-end collisions. 
Many of us remember this. The company knew this was a problem. It all 
came out in court. But they sold the car anyway after they did a cost-
benefit analysis and found out it would save them $21 million to delay 
the corrections for 2 years.
  What happened when that fatal decision was made? A 13-year-old boy 
from my State, Richard Grimshaw, was badly burned in a rear-end 
accident while driving from Anaheim to Barstow. In the words of the 
California State court judge who presided over Richard's lawsuit, he 
suffered ``ghastly'' burns over 60 percent of his body, had whole 
fingers burned off, and required 60 surgeries over a 10-year period.
  That was 25 years ago. That tragic accident is still with Richard. 
For the rest of his life, it will be with Richard. Is that the kind of 
world we want to encourage, where a company figures it is more cost 
effective to delay fixing a dangerous product than to risk a lawsuit? I 
hope not. Yet, if this bill passes, my friends, that is what is going 
to happen in the boardrooms across America.
  Now, not all people in business fall into that category, but 
unfortunately we have got to look at history, my friends, and learn 
from it. The memos clearly showed in the Pinto case that a calculated 
decision was made to delay fixing that car.
  Let me read from the pen of the California State judge who upheld 
that award. In part, ``Punitive damages remain the most effective 
remedy for consumer protection against defectively designed mass 
produced articles.'' ``* * *. Punitive damages thus remain the most 
effective remedy.'' What does this bill do? It guts that. The court 
concluded, ``Ford could have corrected the hazardous design defects at 
minimal cost but decided to defer defection of the shortcomings by 
engaging in a cost-benefit analysis, balancing human lives and limbs 
against corporate profits.''
  Mr. President, are we going to ignore this judge's warning and turn 
back the clock to a time when callous companies ruined the lives of 
children, like that boy in Barstow, because of their bottom line? God, 
I hope we do not do that. If we do, in this particular Congress, I hope 
this President sticks with it and vetoes this bill.
  Did you ever hear about the baby crib story? Another example of a 
situation that happened in California in the 1970's. A baby crib 
company produced a dangerous crib where side slats would strangle a 
baby trying to climb out. Six babies were strangled and the company 
stopped selling the crib, but it refused to warn the existing owners 
that there was a problem. They refused to do that. So the parents of 
Gail Crusan, she was 13 months old, did not know it was a dangerous 
crib. The company even refused a request by the Consumer Product Safety 
Commission to issue a national press release. It took an award of 
$475,000 in punitive damages against the company to finally get them to 
notify parents who had bought that crib. Punitive damages did what the 
Government could not do. It caused the manufacturer to warn parents 
that their children were in cribs that could kill them.
  What are we going to do? We are going to make it possible for future 
companies to put our children at risk. I do not want to go back to 
those days, Mr. President. The proponents of this bill want us to 
substitute the long arm of the U.S. Senate and the Congress for the 
local jury of peers who sit in a courtroom.
  Again, I back up what my colleague from Massachusetts says. State 
control, local control, give them the welfare, give them the Medicaid, 
cancel national nursing home standards, let the local people decide--
that is what we hear out of the Republicans in this Congress, day in 
and day out. But when it comes to this, protecting consumers, we are 
going to pass a weaker law and force it on the States? Not on my watch. 
Not if I can help it. And not on this President's watch. Not if he can 
help it.
  I cannot believe the selective logic that we hear around here. When 
it suits this Republican Congress, they are all for shipping things 
back to the States. But when it is in their interest, keep the control 
in Washington. Boy, I tell you, there is not much shame about that. It 
simply does not add up.
  Now, we hear talk about special interests. Face it, there are special 
interests here. There are the lawyers on the one side and there are the 
corporations on the other. So I want to look at who does not have an ax 
to grind. Who are they? Let me tell you some of the people who oppose 
this bill. They have no ax to grind. They are not on one special 
interest or the other. The Brain Injury Association, the Center for 
Auto Safety, Children Afflicted by Toxic Substances, Citizen Action, 
Coalition for Consumer Rights, Coalition to Stop Gun Violence, Consumer 
Federation of America, Consumers Union, the Gray Panthers, National 
Consumers League, National Hispanic Council on Aging, Public Citizen, 
Remove Intoxicated Drivers, U.S. Public Interest Research Group, 
Violence Policy Center, Nuclear Information and Resource Services, 
Clean Water Action, the Sierra Club, Dalkon Shield Information Network, 
DES Action USA, the Feminist Majority, the National Organization of 
Women, the National Women's Health Network, the National Women's Law 
Center, and Women Employed.
  Mr. President, I ask unanimous consent to have printed in the Record 
a list of all of these groups.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 Thirty-Seven Citizen Groups Opposing the Product Liability Conference 
                                 Report

       AFL-CIO.
       Brain Injury Association.
       Center for Auto Safety.
       Children Afflicted by Toxic Substances.
       Citizen Action.
       Coalition for Consumer Rights.
       Coalition to Stop Gun Violence.
       Consumer Federation of America.
       Consumers Union.
       The Empower Program.
       Gray Panthers.
       International Association of Machinists and Aerospace 
     Workers.
       Int'l Union, United Automobile Aerospace & Agricultural 
     Implement Workers of America.
       Nat'l Conference of State Legislatures.
       National Consumers League.
       National Farmers Union.
       National Hispanic Council On Aging.
       Public Citizen.
       Remove Intoxicated Drivers.
       Safe Tables Our Priorities.
       United Food and Commercial Workers.
       U.S. Public Interest Research Group.
       United Steelworkers of America.
       Violence Policy Center.
       Nuclear Groups:
       Nuclear Information & Resource Service.
       Public Citizen's Critical Mass.
       Safe Energy Communication Council.
       U.S. Public Interest Research Group.
       Environmental Groups:
       Clean Water Action.
       Sierra Club.
       Sierra Club Legal Defense Fund.
       U.S. Public Interest Research Group.
       Women's Groups:
       Dalkon Shield Information Network.
       DES Action USA.
       Feminist Majority.
       National Organization for Women.
       National Women's Health Network.
       National Women's Law Center.
       Women Employed.

  Mrs. BOXER. Mr. President, we should not look to the lawyers and we 
should not look to the companies. We should look to the people who 
stand up and speak for consumers and speak for victims.
  Now, I think this bill is particularly tough on women. I do not know 
what has happened to this place, but do we forget things that just 
happened? Do we forget about the silicone gel breast implants which 
were introduced in the market in 1962 with no long-term testing before 
being placed inside women? Implant patients and some doctors were told 
by manufacturers that the implants were safe and would last a lifetime. 
However, the implants were found to leak or rupture, releasing silicone 
into the body, now known to migrate to the brain, liver, spinal fluid, 
and kidneys. Now many women with ruptured implants are sick with a 
variety of autoimmune diseases.
  It was because of a lawsuit that included a punitive damage award of 
$6.5 million that the full extent of the hazards associated with 
silicone gel breast implants were brought to the public's attention. 
The availability of silicone

[[Page S2558]]

gel breast implants were restricted only after Dow-Corning was held 
liable for punitive damages.
  Do we not think more about women's health? Have we forgotten that? 
Have we forgotten the Copper-Seven IUD? The manufacturer knew for more 
than 10 years that their product could cause loss of fertility, serious 
infection, and the need to remove reproductive organs. Instead of doing 
anything about it, the manufacturer continued to earn profits and put 
millions of women at risk. A jury awarded one $7 million punitive 
damage award for what it determined to be the manufacturer's 
intentional misrepresentation of its birth control devices. Under this 
bill, that manufacturer would have had to pay $250,000, or double the 
plaintiff's compensatory damages, whichever is higher. We know in most 
cases women do not get as much in compensatory damages as men because 
women often earn less money. We know that. This bill is antiwomen. We 
should call it what it is.
  How about the Dalkon shield? You heard the Senator from Massachusetts 
talk about that. It took eight punitive damage awards before A.H. 
Robins discontinued the Dalkon shield. A $7.5 million punitive damage 
award was awarded to a 27-year-old woman who had to have her uterus 
removed, rendering her sterile and in need of dangerous synthetic 
hormone treatments. That was extraordinary. But it took more than one 
punitive damage award. They made so much profit they kept on producing 
it. They concealed studies of the dangerous effects and even misled the 
doctors into prescribing the IUD.
  If it takes multiple punitive damage awards to force a major 
corporation like A.H. Robins to stop selling dangerous products, how 
could dangerous products be stopped by this legislation which caps 
punitive damage awards to relatively low amounts? The Dalkon shield is 
yet another example of how the current system finally took a dangerous 
contraceptive off the market.
  I cannot believe there are those in this body who feel that this 
legislation can make life better for the people of this country, just 
on the few examples that I have brought here today. To the contrary, it 
will put our people at great risk.
  The Senator from Washington shows you with his chart that businesses 
write it into the bottom line.
  The proponents of this legislation argue that the current system 
prevents women from having more choices when it comes to 
contraceptives. Well, I have a daughter, and a lot of you have 
daughters. Do you want to see dangerous contraceptives come on the 
market? Let me tell you unequivocally--and I will debate this point toe 
to toe with anyone in this Chamber--if the current system is preventing 
other Copper-7 IUD's or Dalkon shields, or other dangerous 
contraceptives from coming on the market, I say that is good. Because I 
do not want my daughter sterile, and I do not want my daughter sick, 
and I want her to have more children if she chooses to do that, and to 
live a healthy life. We want contraceptives, but we want them to be 
safe.
  In conclusion, Mr. President, let there be no mistake as to what this 
conference report is all about. This is not proconsumer legislation. 
This legislation is anticonsumer. That is why every major consumer 
group in this country opposes it strongly.
  The conference report is about protecting wrongdoers. Now, if some of 
my colleagues, for whom I have great respect, see it another way, that 
is their right. But I am here to call it the way I see it. It is 
designed to relieve corporate America of its proper legal duty to make 
safe products, represent them accurately, and treat consumers fairly.
  I have seen no justification put forth thus far in this debate by the 
proponents of this conference report that leads me to believe that it 
will help our people. I believe it will, in fact, trample on the rights 
of American consumers. We, in this Senate, are the last line of defense 
of the rights of the American consumers and for working families. I 
tell you, we need to protect them from this legislation.
  Again, I thank the President for getting out there and saying he is 
standing on the side of the consumers. To those who say, ``He is doing 
it for lawyers,'' we can argue that from night until day, lawyers on 
one side, big business on the other. For some, that is a tough choice. 
That is not what the choice is about. The choice is about the consumer. 
The choice is about little babies in cribs. The choice is about women's 
reproductive health, safety in the workplace, at home, and when we are 
at leisure. That is what it is about. I say that this U.S. Senate 
should stand with the consumers. If you do that, you are fulfilling 
your responsibilities.
  I thank the Chair, and I thank Senator Hollings.
  Mr. HOLLINGS. Mr. President, I thank the distinguished Senator, 
first, from Massachusetts, for his presentation this morning, in a most 
meaningful way and, of course, the Senator from California. She really 
keynoted the issue as it should be in a very cogent and persuasive 
fashion. When we say consumers, that is the people versus those making 
a profit on defective products, with shoddy manufacturing.
  America is the safest place in the world to live. That is part and 
parcel, as mostly I would say, I guess, because of our State 
legislatures. The State legislatures have acted on the need of product 
liability provisions. They have acted and they have maintained their 
laws. But it now becomes an assault in the name of a cost of a hotel 
room, or a ski lift, and such nonsense as that, trying to really move 
the attention, I guess, of the Senators, thinking they, frankly, do not 
have much sense and will go along with that kind of nonsense. Thinking 
that Senators will not understand what the Senator from California is 
trying to emphasize--these are real life injuries, and the more we get 
into them in a very meaningful way, as we do in trial law practice, the 
less danger and injury has been caused. So I could not express my 
gratitude enough to the Senator from California. I wish we could go 
ahead and vote right now, but I will retain the balance of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. GORTON. Mr. President, I yield such time as the Senator from West 
Virginia may desire.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. I thank my colleague. Mr. President, I am very happy 
that we are here this morning with this remaining part of the debate. 
Already, a variety of charges have been made, which have no basis in 
fact, as they relate to the product liability reform. But I think 
rather than to try to go into that, it would be better to focus on what 
this law is trying to do and why it is a good conference report.
  In a matter of a couple of hours, we are going to pass this 
conference report. It will pass. The House and the Senate, for the 
first time, I believe, in recent history will have passed product 
liability tort reform. So it is an interesting and, I think, a rather 
noteworthy point of history.
  We have had really a couple of decades of hearings, markups, and 
arguments. I remember one time a number of years ago we actually had 60 
votes on cloture, and the majority leader at that time--it was still 
legal to do so--stopped the vote, actually stopped the vote. The 
Presiding Officer was not here in this body yet. For 45 minutes we 
waited, and all of a sudden, two ``yes'' votes became two ``no'' votes. 
I retain in a desk drawer in my office the sheet which is held at the 
Democratic desk, which shows how the numbers go up, and they went up to 
57, 58, 59, and got to 60, and then it went from 60 to 59 to 58. So 
there is a lot of history on this. Of course, there is a lot of 
emotion. A lot of that emotion is justified. Some of it is not. But 
history, there is.

  I expect the House to approve this report in short order and send it 
on to the President, who has a chance, I think, to do something 
remarkable and significant for this country, if he should choose to 
sign what will then be the legislation.
  I regret that yesterday's debate demonstrated--and already this 
morning some, too--there are some very fundamental misunderstandings. I 
think some of the misunderstandings are very deliberate. They are 
deliberately put forward to obscure and obfuscate. I think the reason 
for that is understandable. Product liability tort reform law is not 
everybody's first choice of the day when they get up in the morning. 
They do not say, ``How can I get deeper into product liability tort

[[Page S2559]]

reform law?'' Those of us who are not even lawyers understand best what 
I am talking about.
  Therefore, it becomes easy to mislead. I suppose it is easy for the 
proponents, as well as for the opponents of this legislation, to 
mislead. But I think that the proponents have really tried not to 
mislead, to stick to what is in the legislation. The opponents have 
been vigorous in their work, which is part of the legislative process.
  I want to emphasize that this conference report is only, Mr. 
President, about something called product liability reform. That is all 
it is. It does not pretend to be more. It does not pretend to solve the 
crisis in Bosnia or hunger in Rwanda, nor anything else. It is just 
about product liability reform.
  It establishes some uniformity for consumers and businesses in our 
product liability system. That is what we attempted to do. That is it. 
Product liability reform. This is not broad civil justice reform. This 
is not an overreaching House contract item. This is not a bill that 
protects drug traffickers, or gun users, or those who sell drugs or 
guns. This is not an extreme bill. This is a limited bill.
  The Senator from the State of Washington, who has been credible 
throughout this process, has been extraordinary, I think, in helping to 
discipline and to make sure that we sculpted this bill and then kept 
this bill basically in the form --virtually, with the main exception of 
the statute of repose--as the Senate passed it last May, which is 
almost a year ago.
  One of the reasons for this long, long period of time is that it took 
a long time for the House to accept that we really meant it, and that 
when we said we were going to stick with the Senate bill, we really 
meant it, and that in fact we had to, in any event because it was a 
matter of mathematics. Yesterday we did not get 58 votes, we got 60 
votes. Finally that was understood.
  So what this bill does is establish a fair and a balanced commonsense 
rule which benefits both consumers and business persons, and it will 
create jobs. The Senator from Washington has discussed the aviation 
liability reform. I think it will improve product safety because it 
will allow manufacturers to make improvements.
  Now, manufacturers often decline to make improvements to their 
product because they are afraid that if they make an improvement, it 
will infer somehow that their previous iteration of the same product 
was deficient or unsafe. So rather than take that chance they do not 
make the improvement. That does not help consumers.
  I think it will encourage innovation. I know it is going to encourage 
innovation. And I think it will stimulate economic growth just as the 
aviation bill did.
  I have to say once again that there are all kinds of ways of 
protecting the consumer. We can do it through being sure that there are 
punitive damages available. That is the reason for the additional 
amount that was added, and that is also the reason that at the 
suggestion of the Department of Justice we clarify, the additional 
amount to make it a stronger case should there be a constitutional 
challenge against it--because we are determined that there will be no 
cap on punitive damages except whatever the jury decides.
  I am forced just by definition of the world that we live in to look 
at, once again, at our competition. You know that when people lose jobs 
in our country or do not gain jobs that they might gain, that is one of 
the worst things you can do to them. It is injuring them in a very 
severe way. It is depriving them of family and economic justice. In the 
case where it puts people on Medicaid, that is very obviously the 
consequence of that. Not having a job is a way to hurt somebody deep 
and hard.
  In the European Economic Community, which has, I think, 350 million 
consumers--Europe is one of our huge competitors--there are 13 
countries in that community. Those countries presumably have provinces, 
or whatever they call them. It does not make any difference. They 
overrun all of that, and they have one uniform product liability law 
for all of those countries because they want to be able to minimize 
transactional costs, maximize research and development, maximize jobs, 
and maximize their competition against the United States of America, 
which is their principal competitor. So they have banded together to do 
this because they know that, if they do that, they will have a leg up 
on us in terms of the creation of jobs.
  Japan, which I think very few would argue is not a competitor to the 
United States economically, has just this year done the same thing. So 
they have a single uniform liability law for their entire nation. They 
do not sue a whole lot anyway. I think there are 13,000 lawyers in 
Japan, and there are 600,000 or 700,000 in the United States. 
Nevertheless, they are ready.
  So they understand that the system that America has has very, very 
high transaction costs, and they understand that the high transaction 
costs exceed the compensation that is ultimately paid to the victims of 
defective products. That is great for lawyers--both for trial lawyers 
and defense lawyers. They are both equally guilty. But they get the 
money, not the victim. They get the majority of it. It used to be that 
in the Wild West people carried six-shooters, and they would just 
shoot. We have a different, more modern way of doing it now, and we 
destroy ourselves in other kinds of ways.
  So these transaction costs, of course, are then real costs, and they 
have to be passed on to the consumers through higher priced products. 
People say when you pay more for a product that, ``Well, that is the 
kind of argument people make.'' It is true. We pay more. The Senator 
from Washington is prepared to give all kinds of statistics about that. 
He did yesterday. We pay more. Consumers pay more so that the trial 
lawyers and the defense lawyers can make more. In a sense, I am not 
blaming them because that is the system of law that they live under, as 
do we. That is why we are trying to change the law--so as to bring some 
more common sense into this process.

  The system's unpredictability and inefficiency are big items. 
Unpredictability is a bad thing. It is a bad thing. It is a lack of 
uniformity, a lack of predictability. It is harmful. It stifles 
innovation. It stifles research and development.
  What is the very first thing that happens in this country? I have 
heard many times the distinguished Senator from South Carolina say 
this. When a company gets in trouble, or a company is up against a 
lawsuit, or a company is whatever for whatever reason in trouble, what 
is the first thing they do? They cut out research and development. That 
is the first thing they cut, which is, in fact in many instances, one 
of the last things they should cut.
  It is just like a hospital. When a hospital gets in trouble 
financially, what is the first thing they do? They close the emergency 
room because it is the most expensive, which is often the last thing 
they should do in terms of the community they serve. But they act as 
they believe they have to act, and we have to understand that.
  So, stifling innovation and keeping beneficial products off the 
market has handicapped American firms as they try to compete in a 
global marketplace. The current system is simply unfair, therefore, 
again to consumers and to businesses alike, and that is why we are 
projecting this conference report forward.
  Of course, many of the States have fully recognized the inequities of 
the current system, as has been pointed out by a number on the other 
side of this argument. The States are very aggressive on this, and they 
have moved ahead to enact product liability reform. Thirty States have 
made major changes in joint and several, for example, and in most 
cases--virtually all cases--it is limiting joint and several. But by 
doing so, while solving some issues, they have inadvertently created 
other kinds of problems.
  Only through Federal product liability reform can we, in this 
Senator's judgment, resolve the problems caused by the current State-
by-State product liability system. State legislatures can be very 
helpful in this area, but it is virtually impossible for them to be 
uniform because they are all different.
  We have 134 legislators in our State of West Virginia in the senate 
and house. They are not going to do the same thing that Ohio does, or 
that Kentucky does, or that Virginia or Maryland do. They are just not 
going to. So you have, in fact, 51 different laws relating to product 
liability in our country.

[[Page S2560]]

  As I said yesterday, years and years ago I suppose that the majority 
of products made in the States were sold in those States. That is no 
longer true. Seventy percent of products made in the State of Ohio, and 
in the State of the Presiding Officer, if it is at the national 
average, are sold outside of Ohio. The same is true with the State of 
West Virginia, the State of Washington, and the State of South 
Carolina. So we are an interstate as well as an international economy. 
Therefore, we need uniformity at certain points to shape and adapt to 
that.
  For this reason, State reform legislation--because of the 70 percent 
being shipped outside of the State of manufactured goods, less than 30 
percent effectiveness is the standard for State law. I mean, by 
definition, they have to be less than 30 percent effective. On the 
other hand, all of the State citizens who sue in the State are governed 
by that State's product liability statute, and thus they fall victim to 
an antiquated system, and the people here want to protect them.
  That is why the National Governors' Association recognized both the 
need for product liability reform and the necessity of Federal action 
to effectuate that reform. They did not say, well, States, you have to 
do a better job and do things more alike. They said, no, there have to 
be places where the Federal Government sets uniform standards.
  The Senator from South Carolina was talking yesterday about how the 
States always want to have more power; they want to have the power 
shifted to them. That is the direction in which our country is going.
  That is not the direction of the National Governors' Association on 
product liability and tort reform. They want more Federal action. That 
is why the American Legislative Exchange Council, not very well-known, 
but it is a bipartisan group of over 2,500 State legislators--that is a 
lot of them--representing all 50 States, three times has called upon 
Congress to enact product liability law which is Federal. That is why 
President Clinton has said that he supports the enactment of limited 
but meaningful product liability reform at the Federal level. He said 
that in a number of statements--in a letter to us, in a statement of 
policy to us--during the course of this debate. H.R. 956 contains that 
limited but meaningful product liability reform which makes common 
sense and which has measures which are good for ordinary consumers and 
businesses.
  Incidentally, Mr. President, I wish to make one point. People keep 
referring--and even there was an article this morning in the Washington 
Post--to big business versus trial lawyers. On the business side, it is 
not big business which is really at stake here. It is small business. 
That is the reason for the support of the National Federation of 
Independent Businesses.
  Mr. President, 98 percent of businesses in America are small. Those 
are the people who get put out of business most quickly. Those are the 
people who have the least cash reserve. Those are the people who live 
at the margins. Those are also places, we have long established, from 
where often the best ideas come. That is the overwhelming dynamic 
center of the American economy.
  So H.R. 956 contains, as I have said, what I believe is needed.
  Mr. President, I ask unanimous consent that a list describing the 
major provisions of the conference report be printed in the Record at 
the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. ROCKEFELLER. Mr. President, the conference report does, however, 
provide the following: legal fairness for product sellers; a rule to 
discourage illegal use of alcohol and drugs--we cannot stop it but to 
discourage it, certainly not to reward it--a proconsumer statute of 
limitations, an enormously proconsumer statute of limitations; a 
statute of repose that will stimulate jobs and economic growth; 
alternative dispute resolution as a way of settling some of these 
matters. It is voluntary, which is not so thrilling to me. I wish it 
were not. I wish it were mandatory, but it is voluntary. At least it is 
there. That is the way they do things in Japan. That is why they settle 
everything over there, which is not to say they do not have their 
economic problems, but product liability is not one of their problems. 
Punitive damages fairness is in this bill. Opponents of the bill say we 
cap punitive damages. Untrue. Untrue. I will not vote for legislation 
which caps punitive damages, as I would not vote for legislation that 
caps what lawyers can make. Part of me would like to, but I do not 
believe that because I believe the market should make that decision. 
But punitive damages are not capped.
  We added the additional amount provision, originally called the judge 
additur provision, a suggestion which was endorsed by a number of high-
up folks at the White House and then the whole idea for making sure 
that it was more constitutional came from the Department of Justice, 
which I presume to be the executive branch of Government. So there are 
no caps on punitive damages, and I will assert there could not be 
because I was a part of this bill. I was not going to go along with a 
bill that would allow such a thing.

  There is several liability for noneconomic loss; workers compensation 
subrogation; biomaterials access assurance.
  These, Mr. President, are some of the highlights.
  Now, in winding up here, I should like to take a moment to comment on 
where we stand in the legislative process. I wish to be hopeful; I try 
to be hopeful; I am hopeful; I will insist on being hopeful; I will be 
everlastingly hopeful that the President will reconsider his decision 
to veto this product liability conference report and that in fact he 
will sign it. I firmly believe that the President can sign this bill, 
even recognizing that he will not support each of its provisions. There 
are some provisions that I think ought to be in this. There are some 
provisions which I think ought to be changed, some. Nobody gets 
everything they want. There are 535 people in the Congress.
  Even though the President might not support each of its provisions, 
when the product liability conference report is considered in its 
totality, in balance with the need for this reform, I remain hopeful 
that the President will still seize this opportunity to participate in 
product liability reform which will benefit in fact the American people 
and the American economy. From my point of view, I stand ready to work 
with the President to achieve what I believe is our common goal, his 
goal, my goal, our goal, of fairly balancing what needs to be fixed in 
our broken product liability system, which he surely must recognize, 
while preserving important rights for consumers. This is not business 
versus consumers. We are trying to achieve a balance where each 
business and consumer gets certain improvements, and providing business 
with the predictability that they need to compete in today's economy.
  In conclusion, because I do not know how much time is remaining--and 
I am not interested--I wish to thank a few people. First of all, I 
again wish to thank Senator Gorton, Senator Slade Gorton from the State 
of Washington, G-o-r-t-o-n. That is his name. He has been absolutely 
incredible over the years and continues to be in this process--
remarkable, calm, intellectual, unflappable, fair, flexible. It is just 
a stunning privilege to be able to work with Slade Gorton and with his 
staff, Jeanne Bumpus, Trent Erickson; Commerce Committee staff, Lance 
Bultena. We spend a lot of time together. When you do these things, you 
get real close.
  I thank all of the Democratic supporters, not that that is a 
convention full of people, but I thank each and every one of them and 
all of their staff. And, obviously and particularly, I want to thank my 
own staff: Jim Gottlieb, a superb lawyer--inventive, flexible, calm, 
tough, a great negotiator and a marvelous human being; Ellen Doneski, 
who is just indefatigable. She is just like some kind of a rolling 
army--cannot be stopped. She has a tremendous sense of humor, is 
relaxed, adamant, just puts her mind to this or other things. She is 
actually part of my health care staff, but she is so smart and so 
flexible she can get this mastered. She is not a lawyer, but do not 
tell anybody that because everybody thinks she is.
  Then I want to thank another person who is not here because her 
fiance has been through, and is still going through, a terrible, 
terrible crisis, and that is Tamera Stanton, who is kind of

[[Page S2561]]

here in spirit. When we were having this debate last year, she sat next 
to me. She is my legislative director, an extraordinary, brilliant, 
wonderful person who is now going through a very, very tough--but also 
encouraging--experience in terms of the health of her fiance, as they 
hope and plan to get married in June.
  So, I am mindful of these people, grateful to these people, and I 
thank my colleagues for their forbearance.
  Mr. President, I ask unanimous consent that numerous fact sheets, and 
a list and letter from small business organizations, be printed in the 
Record. I yield the floor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)

                               Exhibit 1


                 major provisions of conference report

       Legal Fairness For Product Sellers: Product sellers are 
     held liable only for their own negligence or failure to 
     comply with an express warranty. The product seller, however, 
     remains liable as if it were the manufacturer if the 
     manufacturer cannot be brought into court or is unable to pay 
     a judgement. This provision assures injured persons will 
     always have available an avenue for recovery, while relieving 
     retailers and wholesaler-distributors of substantial 
     unnecessary legal costs. The provision is ``consumer 
     neutral'' and any attempt to characterize it another way 
     lacks credibility.
       Rule to Discourage Illegal Use of Alcohol and Drugs: The 
     defendant has an absolute defense in a product liability 
     action if the plaintiff was under the influence of 
     intoxicating alcohol or illegal drugs and as a result this 
     influence was more than 50 percent responsible for his or her 
     own injuries. The alcohol/drug defense in H.R. 956 is 
     consistent with law of the substantial majority of states 
     implements sound public policy. It tells persons that if they 
     are drunk or on drugs and that is the principal cause of an 
     accident, they will not be rewarded through the product 
     liability system. It also relieves law-abiding citizens from 
     having to subsidize others' irresponsible conduct through 
     higher consumer prices. This provision has not been 
     controversial or challenged by professional consumer groups 
     as unfair.
       Pro-Consumer Statute of Limitation: H.R. 956 permits a 
     plaintiff to file a complaint within 2 years after he or she 
     discovers or should have discovered both the harm and its 
     cause. This is a liberal, pro-claimant provision, which will 
     be particularly helpful to persons who have been injured by 
     products that result in latent inquiries (e.g., drugs and 
     chemicals). Contrary to the suggestion by some opponents, 
     this provision will create a uniform, fair national standard 
     which will open courthouse doors to plaintiffs in many 
     states, such as Virginia.
       Statue Of Repose Will Create Jobs and Stimulate Economic 
     Growth: A limited statistic of repose of 15 years is 
     established for durable goods used in the workplace, unless 
     the defendant made an express warranty in writing as to the 
     safety of the specified product involved, and the warranty 
     was longer than the period of repose (15 years). Then, the 
     statue of repose does not apply until that warranty period is 
     complete. The statute of repose provision will not apply in 
     cases involving a ``toxic harm.''
       Strong support exists for this reform, particularly as a 
     result of the enactment of the General Aircraft 
     Revitalization Act of 1994, signed by President Clinton in 
     August 1994, which created a federal eighteen year statute of 
     repose of general aviation aircraft. This law has resulted in 
     production of safer aircraft and the creation of thousands of 
     new jobs and has not been perceived as unfair to consumers. A 
     growing number of states have enacted legislation in this 
     area as well. The statute of repose in H.R. 956 is both 
     longer and more limited in scope than any existing law.
       As one might expect, there are very few cases involving 
     older workplace durable goods and they are generally won by 
     defendants. Nevertheless, cases involving very old products 
     bring about substantial legal costs and put American machine 
     tool builders and other durable goods manufacturers at a 
     disadvantage with foreign competitors. Foreign competitors 
     rarely have machines in this country that are thirty or more 
     years old, so they pay less liability insurance than their 
     American competitors.
       Alternative Dispute Resolution: Either party may offer to 
     participate in a voluntary, non-binding state-approved 
     alternative dispute resolution (ADR) procedure. This pro-
     consumer provision is intended to promote the use of ADR 
     procedures, which can provide a quicker and cheaper mechanism 
     of handling legal claims. This provision should help such 
     individuals receive compensation for their claims more 
     quickly and bypass the need to retain costly legal 
     representation.
       Punitive Damages Fairness: Punitive damages are quasi-
     criminal punishment for wrongdoing; they are a windfall to 
     the claimant and have nothing to do with compensation for 
     injury. H.R. 956 permits punitive damages to be awarded if a 
     plaintiff proves, by clear and convincing evidence, that the 
     harm was caused by the defendant's ``conscious, flagrant 
     indifference to the rights or safety of others.'' The 
     standard is consistent with law in most states.
       Punitive damages may be awarded against a larger business 
     up to the greater of $250,000 or two times the claimant's 
     total economic and noneconomic damages; against an individual 
     or small business, punitive damages can be awarded up to the 
     lesser of $250,000 or two times the claimant's total economic 
     and noneconomic damages. The provision is ``gender neutral'' 
     and places no limitation on compensatory damages (economic 
     damages plus ``noneconomic damages'' such as pain and 
     suffering). A special rule allows a judge to augment the 
     punitive damages award against a big business when the 
     ``proportionate'' award is ``insufficient to punish the 
     egregious conduct of the defendant.'' A controversial 
     provision that would allow the defendant the right to a new 
     trial if the court used this special power has been removed 
     from the legislation and does not appear in the conference 
     report--as Senator Gorton and I vowed it would not.
       Approximately one-quarter of the States have set forth 
     guidelines on punitive damages awards, including Illinois, 
     Indiana, North Carolina, New Jersey, Oklahoma, and Texas in 
     1995. Because H.R. 956 is not preemptive, the outcome of many 
     punitive damages cases involving larger businesses would not 
     be affected. In some cases against small businesses, however, 
     the outcome may help the business survive, because the bill 
     limits the amount of punitive damages recoverable against a 
     small business to $250,000. This is a particular benefit to 
     the small business community, since an award exceeding 
     $250,000 could virtually wipe out most small businesses.
       Several Liability For Noneconomic Loss: The rule of joint 
     liability, commonly called joint and several liability, 
     provides that when two or more persons engage in conduct that 
     might subject them to individual liability and their conduct 
     produces a single, indivisible injury, each defendant will be 
     liable for the total amount of damages. This system is unfair 
     and blunts incentives for safety, because it allows 
     negligent actors to under-insure and puts full 
     responsibility on those who may have been only marginally 
     at fault. Thus, a jury's specific finding that a defendant 
     is minimally at fault gets overridden and the minor player 
     in the lawsuit bears an unfair and costly burden.
       Joint and several liability produces extreme harm for our 
     society. For example, Julie Nimmons, CEO of Shutt Sports 
     Group, Inc. in Illinois, has testified that joint liability 
     has caused manufacturers of protective sporting goods 
     equipment, such as safety helmets, to withdraw products from 
     the market or be chilled from introducing new products. 
     Recognizing the urgent need for reform of this unfair 
     doctrine, 33 states have already abolished or modified the 
     principle of joint and several liability.
       H.R. 956 adopts a balanced approach between those who call 
     for joint liability to be abolished and those who wish for it 
     to remain unchecked. The legislation eliminates joint 
     liability for ``noneconomic damages'' (e.g., damages for pain 
     and suffering or emotional distress), while permitting the 
     states to retain full joint liability with respect to 
     economic losses (e.g., lost wages, medical expenses, and 
     substitute domestic services). This means that each defendant 
     will be liable for noneconomic damages in an amount 
     proportional to its percentage of fault of the harm. This 
     ``fair share'' rule is based on a joint liability reform 
     enacted in California through a ballot initiative approved by 
     the majority of voters in 1986. The same approach was enacted 
     by the Nebraska legislature in 1991.
       It has been argued by some opponents that the provision is 
     ``anti-women'' because their economic damages may be lower 
     than men and, for that reason, they depend on noneconomic or 
     so-called ``pain and suffering'' damages. However, there has 
     been absolutely no showing in California, a large and 
     litigious state, that the California approach discriminated 
     against any sex or any group. In fact, noted California trial 
     attorney Suzell Smith has testified that the California law 
     is fair and has worked well for consumers.
       Workers' Compensation Subrogation: This provision preserves 
     an employer's right to recover workers' compensation benefits 
     from a manufacturer whose product harmed a worker unless the 
     manufacturer can prove, by clear and convincing evidence, 
     that the employer caused the injury. This provision would 
     modify state law in a very positive way. It would create a 
     new private incentive on employers to keep their workplace 
     safe and achieve this goal without reducing the amount an 
     injured employee can recover in a product liability action. 
     This provision has not been challenged by professional groups 
     as controversial or unfair.
       Biomaterials Access Assurance: Millions of citizens depend 
     on the availability of lifesaving and life-enhancing medical 
     devices, such as pacemakers and hip and knee joints. The 
     availability of these devices is critically threatened, 
     however, because suppliers have ceased supplying basic raw 
     materials to medical device manufacturers. A 1994 study by 
     Aronoff Associates concluded that there are significant 
     numbers of raw materials that are ``at risk'' of shortages in 
     the immediate future. Suppliers have found that the risks and 
     costs of responding to litigation related to medical 
     technology far exceeds potential sales revenues, even though 
     costs are not finding suppliers liable!
       H.R. 956 will safeguard the availability of a wide variety 
     of lifesaving and life-enhancing medical devices. The 
     provision was introduced in this Congress as S. 303, the

[[Page S2562]]

     ``Biomaterials Access Assurance Act of 1995,'' by Senators 
     Lieberman and McCain and was added to the Senate version of 
     H.R. 956 during the Commerce Committee's markup. The 
     provision, which has been the subject of hearings and enjoys 
     very strong bipartisan support, will help prevent a public 
     health crisis by limiting the liability of biomaterials 
     suppliers to instances of genuine fault and establishing a 
     procedure to ensure that suppliers--not manufacturers, can 
     avoid litigation without incurring heavy legal costs. This 
     provision is critically important to all Americans, 
     particularly women, according to Phyllis Greenberger, 
     Executive Director for the Society for the Advancement of 
     Women's Health Research.
       Ironically, even though this bipartisan provision would 
     unquestionably provide a tremendous public health benefit and 
     would not adversely affect consumers, it is not well 
     understood by some and, therefore, becomes a target by those 
     who are willing to concoct and perpetuate untruths in the 
     desperate attempt to selfishly promote their own economic 
     agenda. The fact is that this is a proconsumer provision 
     which does not in any way limit the ability of claimants to 
     seek recovery from medical device manufacturers; the 
     provision recognizes the ``common sense'' principal that 
     suppliers of basic materials, who are not dcurrently found 
     liable, should not be permitted to be indiscriminately hauled 
     into court.

                               Exhibit 2


                     the facts on product liability

       Fact: There is no cap on economic or noneconomic damages. 
     Claimants will continue to be able to recover whatever they 
     are awarded in a court.
       Fact: The statue of repose remains limited to durable goods 
     in the workplace only. Statements being made that we now 
     cover all goods are simply wrong.
       Fact: Product sellers, lessors, or renters will NOT be 
     protected from negligent entrustment liability. That is 
     precisely why the ``negligent entrustment'' exception was 
     moved to the product sellers section of the bill.
       Fact: Dow Corning, and other companies who made or make 
     breast implants will NOT be shielded from liability. Whether 
     or not they supplied the silicone, they remain liable as 
     manufacturers.
       Fact: Drunk drivers, gun users, etc will NOT be protected 
     from liability in any way. Opponents are intentionally trying 
     to confuse harm caused by a product, which IS covered in the 
     bill, and harm cause by the products' use by another, which 
     is NOT covered in the bill and remains totally subject to 
     existing state law. (See Sec 101 (15) and 102 (a)(1)--
     definition of product liability action includes only ``harm 
     caused by a product'' not ``use.'' This is a big difference.
       Fact: In all states that permit punitive damages, they will 
     continue to be available, and the ``additional amount'' 
     provision will apply in all those states, regardless of 
     whether caps are higher or lower in that state.
       Fact: Tolling of the statue of limitations will be covered 
     as they now are, by applicable state and federal law. For 
     example, see 11 USC 108c automatic tolling in bankruptcy 
     cases. Nothing in the bill or omitted from the bill will 
     change state law on tolling.
       Fact: State law will continue to control whether or not 
     electricity, stem, etc is considered a product or not.
       Fact: This is NOT one-way preemption, but a mix of state 
     and federal rules. Products are in interstate commerce, and 
     should be subject to more uniform rules for businesses and 
     consumers.
       Fact: 30 states have modified joint and several liability 
     at this point. The federal proposal follows the California 
     law affecting ONLY noneconomic damages.


   provision and product liability conference report, march 13, 1996

     Liability of Product Seller
       Same as Senate bill--Product seller can be held liable as 
     manufacturer only in limited circumstances.
     Applicability/Preemption
       Same as Senate bill--Applicable to product liability cases 
     only.
     Alternative Dispute Resolution
       Same as Senate bill--Dispute Resolution (ADR), with no 
     defendant loser pays provision.
     Defenses Regarding Alcohol or Drugs
       Same as Senate bill--Complete defense if claimant was more 
     than 50 percent responsible.
     Reduction for Misuse or Alteration
       Same as Senate bill--Reduction of damages by the percentage 
     of harm which is the result of the misuse or alteration.
     Punitive Damages
       Same as Senate bill: (a) Ceiling of greater of $250,000 or 
     2 compensatory; (b) DeWine Amendment including assets in 
     determination of damages; (c) DeWine small business amdt--
     limits punitive damage awards for business under 25 
     employees, to the lesser of $250,000 or 2 compensatory 
     damages; and (d) Judge can award an additional amount for 
     punitive damages in egregious cases, under factors set forth 
     in bill. [Clarification that judge can award all the way up 
     to the initial jury award.]
     Statute of Limitations
       Same as Senate bill--Two years after date of discovery of 
     the harm and cause of harm or date that these should have 
     been discovered.
     Statute of Repose
       Retains Senate scope--Limits to 15 years for durable goods 
     in the workplace only, with exception for toxic harm.
     Joint and Several Liability for Noneconomic Loss
       Same as Senate bill--Joint and several liability for all 
     economic damages, and several liability for noneconomic 
     damages.
     Federal Cause of Action
       Same as Senate bill--No new federal cause of action.
     Biomaterials
       Same as Senate bill--Biomaterial suppliers who furnish raw 
     materials or component parts, but who are not manufacturers 
     or sellers, are protected from liability; amendments 
     addressing shell corporation concerns and deleting the 
     certificate of merit requirement.

                      Is this one-way pre-emption?

       This is a real red herring argument. The truth is this is a 
     balanced bill--for consumers and for business. In some cases 
     state law prevails, and in some cases, the federal law 
     controls.
       The goal of federal legislation, especially where you are 
     dealing with interstate commerce, is uniformity, fairness, 
     and predictability. It naturally follows that Federal laws 
     very often must preempt inconsistent state laws. And this 
     product liability bill allows maximum flexibility for the 
     states within a uniform federal system.
       The interpretation of which laws apply to which situations, 
     is complicated (and is best left to the lawyers). But lets 
     look at a few of the specifics of the bill:
       If a state has a shorter statute of limitations, and many 
     do, this bill makes it longer. Period. Which way is that 
     preemption?
       If a state has a statute of repose, this bill makes no 
     change as to the time period, but does make sure that victims 
     of toxic harm receive compensation regardless of the time 
     that their injury is discovered.
       If a state doesn't allow punitive damages, at all under 
     current law, this bill makes no change in that state's laws.
       In some states that do permit punitive damages, such as 
     Colorado and Maryland, the standard for allowing punitive 
     damages is lessened, not stricter. (The standard goes from 
     one requiring proof ``beyond a reasonable doubt'' and 
     ``actual malice'' to ``clear and convincing evidence.)
       If a state does permit punitive damages, I believe that the 
     new federal rules will, for the first time, permit judicial 
     flexibility in determining the amount of punitive damages, 
     even if there is a cap on the amount of punitive damages 
     under that state's law which is different that the new 
     federal bill.
       So, in summary, yes this bill does preempt state law in 
     some situations. But to suggest that it is totally one-way is 
     misleading at best.
       The conference report is a tightly balanced bill seeking to 
     make some uniformity out of a patchwork of conflicting state 
     laws.
                                                                    ____



                                                  U.S. Senate,

                                   Washington, DC, March 20, 1996.
     Katherine Prescott,
     National President, MADD, Irving, TX.
       Dear Ms. Prescott: Your letter of March 19 is wrong, and 
     based on a totally incorrect quoting of the proposed law.
       Your letter says that the product liability bill covers 
     ``harm caused by a product or product use.'' that is 
     incorrect.
       The legislation reads: ``harm caused by a product'' only.
       You have been misinformed, perhaps intentionally, in an 
     effort to convince you that cases of drunk driving would be 
     covered under the bill. The fact is that cases of drunk 
     driving or so-called dram shop cases would not be covered by 
     this legislation.
       In addition, those who ``negligently entrust'' a product, 
     such as alcohol, resulting in drunk driving situations, would 
     not be protected in any way under the law.
       I will read your incorrect letter, and this response, into 
     the Congressional Record today, and I expect you will want 
     for me to include your retraction letter as well.
       Kindly FAX your retraction to me immediately at 202-224-
     9575.
       Thank you.
           Sincerely,
     John D. Rockefeller IV.
                                                                    ____



 IMPACT OF FEDERAL PROVISIONS ELIMINATING JOINT AND SEVERAL LIABILITY 
           FOR NONECONOMIC DAMAGES IN PRODUCT LIABILITY CASES

       The Conference Committee version of the product liability 
     bill is currently expected to retain the Senate bill's 
     provision eliminating joint liability for noneconomic 
     damages. This Federal law provision would not significantly 
     change the law in those states which already either have 
     eliminated or severely limited joint liability, or have 
     imposed specific limitations on the award of noneconomic 
     damages.
       Twelve states have eliminated joint liability altogether: 
     Alaska, Arizona, Colorado, Idaho, Indiana, Kansas, Kentucky, 
     North Dakota, Tennessee, Utah, Vermont and Wyoming.
       Two states have eliminated joint liability for noneconomic 
     damages: California and Nebraska.
       Ten states have otherwise limited the availability of joint 
     liability as to noneconomic damages or damages generally, so

[[Page S2563]]

     as to make it significantly less likely that noneconomic 
     damages would be subject to joint liability: Florida, 
     Illinois, Iowa, Mississippi, Montana, New Hampshire, New 
     Jersey, New York, Oregon, and Texas.
       Three states have eliminated joint liability in cases in 
     which the plaintiff is negligent: Georgia, Ohio and Oklahoma.
       Five states (including three already mentioned) have capped 
     awards of noneconomic damages: Alaska, California, Kansas, 
     Maryland, Massachusetts and Michigan.
       In all, 30 states have adopted measures that already limit 
     the recovery of noneconomic damages. These include eight of 
     the nine largest states in the union--California, New York, 
     Texas, Florida, Illinois, Ohio, Michigan and New Jersey.
                                                                    ____



    SMALL BUSINESS ORGANIZATIONS SUPPORTING PRODUCT LIABILITY REFORM

       National Federation of Independent Business (600,000 small 
     businesses).
       National Association of Wholesaler-Distributors (156 trade 
     associations representing 250,000 small businesses).
       U.S. Chamber of Commerce (215,000 small businesses).
       National Association of Manufacturers (10,000 small 
     businesses).
       Small Business Legislative Council.
       National Association of Women Business Owners.
       National Small Business United.
                                                                    ____



   joint letter to members of congress from american small business 
           leaders on product liability reform, april 3, 1995

       Dear Members of Congress: On behalf of the nation's more 
     than 21 million small and growing businesses, we are writing 
     to strongly urge your support of S. 565, The Product 
     Liability Fairness Act of 1995.
       You know the problem: A single lawsuit can and has put many 
     small business owners out of business.
       For many small businesses, the explosion in product 
     liability cases means it is simply impossible to find and 
     keep affordable liability insurance.
       You've heard the horror stories. (If you haven't, give us a 
     call.)
       Why should you care? Small businesses create virtually all 
     the net new jobs in the economy. And businesses owned by 
     women now employ more people than the entire Fortune 500 
     combined. While most of our company names are not household 
     words, small business comprises the backbone of the nation's 
     economy--from Main Street to Wall Street.
       We need your help.
       Product liability reform was the #1 issue at the White 
     House Conference on Small Business in 1986. Finally, after 
     more than a decade of struggle, product liability reform 
     seems within our reach.
       Please support S. 565, The Product Liability Fairness Act 
     of 1995, and help protect U.S. consumers, workers and small 
     businesses. Our future and the future of our nation's 
     economy, depends on it.
       Thank you for your support.
     Gary Kushner, President, Kushner & Company, Inc., President, 
         National Small Business United, Kalamazoo, Michigan
     Carol Ann Schneider, President, Seek, Inc., President, 
         Independent Business Association of Wisconsin
     Patty DeDominici, President, National Association of Women 
         Business Owners (NAWBO), Los Angeles, California
     Willis T. White, President, California Black Chamber of 
         Commerce, Burlingame, California
     Thomas Gearing, President, The Patriot Company, Federal 
         Reserve Board, Small Business Advisory Committee, 
         Milwaukee, Wisconsin
     Margaret M. Morris, NAWBO Chapter President, Chevy Chase, 
         Maryland
     Lewis G. Kranick, Chairman of the Board, Krandex Corporation, 
         Wisconsin Delegation Chair--1986, White House Conference 
         on Small Business, Milwaukee, Wisconsin
     Linda Pinson, Principal, Out of Your Mind . . . and Into the 
         Marketplace, NAWBO Financial Services Council, Tustin, 
         California
     Dale O. Anderson, President, Greater North Dakota 
         Association, Bismark, North Dakota
     Chellie Campbell, President, Cameren Diversified Management, 
         Inc., NAWBO Public Policy Council, Pacific Palisades, 
         California
     Brooke Miller, NAWBO Chapter President, St. Louis, Missouri
     John F. Robinson, President & C.E.O., National Minority 
         Business Council, Inc., New York, New York
     Lucille Treganowan, President, Transmissions by Lucille, 
         Inc., NAWBO Chapter President, Pittsburgh, Pennsylvania
     Wanda Gozdz, President, W. Gozdz Enterprises, Inc., NAWBO 
         Public Policy Council, Plantation, Florida
     Frank A. Buethe, Manager, Advance Business Development 
         Center, Green Bay Chamber of Commerce, Green Bay, 
         Wisconsin
     Rachel A. Owens, Family Business Specialist, Mass Mutual, 
         NAWBO Chapter President, Irvine, California
     Brenda Dandy, Vice President, Marine Enterprises 
         International, Inc., NAWBO Financial Services Council, 
         Baltimore, Maryland
     Terry E. Tullo, Executive Director, National Business 
         Association, Dallas, Texas
     Tana S. Davis, Owner, Tana Davis C.P.A., NAWBO Chapter 
         President, Encino, California
     Mary G. Zahn, President, M.C. Zahn & Associates, NAWBO Public 
         Policy Council, Philadelphia, Pennsylvania
     Gary Woodbury, President, Small Business Association of 
         Michigan
     Hector M. Hyacinthe, President, Packard Frank Organization, 
         Inc., New York Delegation Chair--1986, White House 
         Conference on Small Business, Ardsley, New York
     Mary Ellen Mitchell, Executive Director, Independent Business 
         Association of Wisconsin, NSBU Council of Regional 
         Executives, Madison, Wisconsin
     Susan J. Winer, President, Stratenomics, Illinois Delegation 
         Chair--1986, White House Conference on Small Business, 
         Chicago, Illinois
     Lucy R. Benham, Vice President, Keywelland Rosenfeld, P.C., 
         NAWBO Public Policy Council, Troy, Michigan
     Beverly J. Cremer, Chief Executive Officer, I & S Packaging, 
         NAWBO Chapter President, Kansas City, Missouri
     C. Virginia Kirkpatrick, President/Owner, CVK Personnel 
         Management & Training Specialists, NAWBO Financial 
         Services Council, St. Louis, Missouri
     Mary Ann Ellis, President, American Speedy Printing, NAWBO 
         Chapter President, Boynton Beach, Florida
     Shaw Mudge, Jr., Vice President, Operations, Shaw Mudge & 
         Company, Connecticut Delegation Chair--1986, White House 
         Conference on Small Business, Stamford, Connecticut
     Eunice M. Conn, Executive Director, Small Business United of 
         Illinois, NSBJ Council of Regional Executives, Niles, 
         Illinois
     Ronald B. Cohen, President, Cohen & Company, Immediate Past 
         President, NSBJ, Cleveland, Ohio
     Hilda Heglund, Executive Director, Council of Small Business 
         Executives, Metropolitan Milwaukee Association of 
         Commerce, Milwaukee, Wisconsin
     Karin L. Kane, Owner/Operator, Dorrino's Pizza, NAVBO Chapter 
         President, Salt Lake City, Utah
     Suzanne F. Taylor, President & Owner, S.T.A. Southern 
         California, Inc., Vice President--Public Policy Council, 
         NAWBO, South Laguna, California
     Suzanne Pease, Owner, Ampersand Graphics, NAWBO Chapter 
         President, Morganville, New Jersey
     Maryjane Rebick, Co-Owner, Executive Vice President, Copy 
         Systems, NAWBO Public Policy Council, Little Rock, 
         Arkansas
     Arlene Weis, President, Heart to Home, Inc., NAWBO Public 
         Policy Council, Great Neck, New York
     Deepay Mukerjee, President, R.F. Technologies, 1995 Delegate, 
         White House Conference on Small Business, Lewiston, Maine
     David Sahagun, Dealer, Castro Street Chevron, 1995 Delegate, 
         White House Conference on Small Business, San Francisco, 
         California
     Dona Penn, Owner, Gigantic Cleaners, NAWBO Public Policy 
         Council, Aurora, Colorado
     Barbara Baranowski, Owner, Condo Getaways, NAWBO Chapter 
         President, North Monmouth, New Jersey
     Sheelah R. Yawitz, President, Missouri Merchants and 
         Manufacturers Association, Chesterfield, Missouri
     David R. Pinkus, Executive Director, Small Business United of 
         Texas, Texas Delegation Chair--1986, White House 
         Conference on Small Business, Austin, Texas
     David P. Asbridge, Partner, Sunrise Construction, Inc., 1995 
         Delegate, White House Conference on Small Business, Rapid 
         City, South Dakota
     Marj Flemming, Owner, Expeditions in Leadership, 1995 
         Delegate, White House Conference on Small Business, 
         Signal Mountain, Tennessee
     Jo Lee Lutnes, Owner, Studio 7 Public Relations, 1995 
         Delegate, White House Conference on Small Business, 
         Columbus, Nebraska
     Margaret Lescrenier, Vice President, Gammex RMI, Small 
         Business Committee Member, Wisconsin Manufacturers and 
         Commerce
     Gordon Thomsen, Chief Executive Officer, Trail King 
         Industries, Inc., 1994 Small Business Administration 
         National Exporter of the Year, Mitchell, South Dakota
     Leri Slonneger, NAWBO Chapter President, Washington, Illinois
     Shalmerdean A. Knuths, Co-Owner/Director of Administration, 
         Rosco Manufacturing Company, 1995 Delegate, White House 
         Conference on Small Business, Madison, South Dakota
     Alan M. Shaivitz, President, Allan Shaivitz Associates, Inc., 
         1995 Delegate, White House Conference on Small Business, 
         Baltimore, Maryland
     Linda Butts, President/Owner, Prairie Restaurant & Bakery, 
         Member, NFIB, Carrington, North Dakota
     Malcolm N. Outlaw, Owner/President, Sunwest Mud Company, 
         Board Member, Small Business United of Texas, Midland, 
         Texas
     Suzanne Martin, Council of Smaller Enterprises, Greater 
         Cleveland Growth Association, NSBJ Council of Regional 
         Executives, Cleveland, Ohio

[[Page S2564]]

     David L. Condra, President, Dalcon Computer Systems, 1995 
         Delegate, White House Conference on Small Business, 
         Nashville, Tennessee
     Doris Morgan, Vice President, Cherrybank, 1995 Delegate, 
         White House Conference on Small Business, Hazlehurst, 
         Mississippi
     Dr. Earl H. Hess, Lancaster Laboratories, Inc., Pennsylvania 
         Delegation Chair--1986, White House Conference on Small 
         Business, Lancaster, Pennsylvania
     Ralph S. Goldin, President, Goldin & Stafford, Inc., 1995 
         Delegate, White House Conference on Small Business, 
         Landover, Maryland
     John C. Rennie, President, Pacer Systems, Inc., Past 
         President, NSBU, Billerica, Massachusetts
     Murray A. Gerber, President, Prototype & Plastic Mold 
         Company, Inc., Connecticut Delegation Chair--1986, White 
         House Conference on Small Business, Middletown, 
         Connecticut
     Robert E. Greene, Chairman & CEO, Network Recruiters, Inc., 
         1995 Delegate, White House Conference on Small Business, 
         Bel Air, Maryland
     Jule M. Scofield, Executive Director, Smaller Business 
         Association of New England, Waltham, Massachusetts
     Jack Kavaney, President, Gateway Properties, 1995 Delegate, 
         White House Conference on Small Business, Bismarck, North 
         Dakota
     Leo R. McDonough, President, Pennsylvania Small Business 
         United, Pittsburgh, Pennsylvania
     Sarah Lumley, Co-Proprietor, Save-A-Buck Auto Sales, 1995 
         Delegate, White House Conference on Small Business, 
         Sumter, South Carolina
     David A. Nicholas, General Manager, Dapco Welding Supplies, 
         Inc., Hagerstown, Maryland
     Joan Frentz, NAWBO Chapter President, 1995 Delegate, White 
         House Conference on Small Business, Louisville, Kentucky
     Bruce A. Hasche, Controller, Sencore, Inc., South Dakota 
         Delegation Chair--1995, White House Conference on Small 
         Business, Sioux Falls, South Dakota
     Michael J. McCurdy, Franchisee, 7-Eleven, 1995 Delegate, 
         White House Conference on Small Business, Baltimore, 
         Maryland
     Robert G. Clark, President, Clark Publishing, Inc., 1995 
         Delegate, White House Conference on Small Business, 
         Lexington, Kentucky
     Michael Stocklin, President, Flathead Business & Industry 
         Association, Kalispell, Montana
     Van Billington, Executive Director, Retail Confectioners 
         International, NSBC Council of Regional Executives, 
         Glenview, Illinois
     Daniel L. Biedenbender, Vice President, Atlas Iron & Wire 
         Works, Inc., National Treasurer, American Subcontractors 
         Association, Milwaukee, Wisconsin
     Earl B. Chavis, Owner, CTM Tech, Inc., 1995 Delegate, White 
         House Conference on Small Business, Florence, South 
         Carolina
     Patricia F. Moenert, President & Owner, Moenert Executive 
         Realty, Inc., Boynton Beach, Florida
     Rudolph Lewis, President, National Association of Home Based 
         Businesses, Owings Mills, Maryland
     Robert F. Taylor, President, Erie Manufacturing Company, 
         Board of Directors, Council of Small Business Executives, 
         Milwaukee, Wisconsin
     Duane E. Smith, Administrative Partner, Charles Bailly & 
         Company, 1995 Delegate, White House Conference on Small 
         Business, Billings, Montana
     Gary Batey, General Manager, Independent Cement Corporation, 
         Hagerstown, Maryland
     G. Jesse Flynn, C.E.O., Flynn Brothers Contracting, Inc., 
         1995 Delegate, White House Conference on Small Business, 
         Louisville, Kentucky
     Frank J. Tooke, Montana Society of CPAs, 1995 Delegate, White 
         House Conference on Small Business, Miles City, Montana
     Brenda B. Schissler, President, StaffMasters, 1995 Delegate, 
         White House Conference on Small Business, Louisville, 
         Kentucky
     Henry Carson III, Vice President, Henry Carson Company, 
         Member, South Dakota Family Business Council, Sioux 
         Falls, South Dakota
     Roy H. Hunt, President & C.E.O., Hunt Tractor, Inc., Kentucky 
         Delegation Chair--1995, White House Conference on Small 
         Business, Louisville, Kentucky
     Susan D. Cutaia, President, Tiger Security Products, 1995 
         Delegate, White House Conference on Small Business, Boca 
         Raton, Florida
     Charles F. Hood, Franchisee, 7-Eleven, Member, Baltimore 
         Franchise Owners Association, Jarr, Maryland
     Kenneth D. Gough, President, Accurate Machine Products 
         Corporation, Chairman, Small Business Committee, Tri-
         Health Business Alliance, Johnson City, Tennessee
     James W. Kessinger, President, Anderson Packaging, Inc., 
         Kentucky Delegation Vice-Chair--1995, White House 
         Conference on Small Business, Lawrenceburg, Kentucky
     Charles Aiken, Owner, Health Force of Columbia, 1995 
         Delegate, White House Conference on Small Business, 
         Columbia, South Carolina
     Kay Meurer, President, Discount Office Interiors, 1995 
         Delegate, White House Conference on Small Business, 
         Louisville, Kentucky
     Kevin R. Nyberg, President, Nyberg's Ace Hardware, Member, 
         National Retail Hardware Association, Sioux Falls, South 
         Dakota
     Tom Everist, President, L.G. Everist, Inc., Sioux Falls, 
         South Dakota
     Lewis A. Shattuck, Executive Vice President, Barre Granite 
         Association, Member, Associated Industries of Vermont, 
         Barre, Vermont
     Tom Batcheller, President, Zip Feed Mills, Inc., 1995 
         Delegate, White House Conference on Small Business, Sioux 
         Falls, South Dakota
     Lalit K. Sarin, President & C.E.O., Shelby Industries, Inc., 
         1995 Delegate, White House Conference on Small Business, 
         Shelbyville, Kentucky
     Christine S. Huston, Manager, Economic & Business 
         Development, Indiana Chamber's Small Business Council, 
         NSBU Council of Regional Executives, Indianapolis, 
         Indiana
     Dean M. Randash, President, NAPA Auto Parts, 1995 Delegate, 
         White House Conference on Small Business, Helena, Montana
     Luis G. Fernandez, M.D., Director, Trauma Services, Mother 
         Frances Hospital, Member, American College of Surgeons, 
         Tyler, Texas
     Ed Grogan, President & C.E.O., Montana Medical Benefit Plan, 
         1995 Delegate, White House Conference on Small Business, 
         Kalispell, Montana
     David Davis, President, Advanced Home Care, Inc., 1995 
         Delegate, White House Conference on Small Business, 
         Unicoi, Tennessee
     Joe Kropkowski, President, Baltimore Franchise Owners 
         Association, Bel Air, Maryland
     Susan Szymczak, President, Safeway Sling USA, Inc., Member, 
         Metropolitan Milwaukee Association of Commerce, 
         Milwaukee, Wisconsin
     H. Victoria Nelson, Proprietor, Jarnel Iron & Forge, 1995 
         Delegate, White House Conference on Small Business, 
         Hagerstown, Maryland
     Helen Selinger, President, Sloan Products Company, Inc., 1995 
         Delegate, White House Conference on Small Business, 
         Matawan, New Jersey
     Charles B. Holder, President, Hol-Mac Corporation, 1995 
         Delegate, White House Conference on Small Business, Bay 
         Springs, Mississippi
     Marguerite Tebbets, President, Window Pretties, Inc., 
         President, Women Business Development Center, Kennebunk, 
         Maine
     Catherine Pawelek, NAWBO Chapter President, Coral Gables, 
         Florida
     Mak Gonzenbach, Vice President, Valley Queen Cheese Factory, 
         Inc., 1995 Delegate, White House Conference on Small 
         Business, Milbank, South Dakota
     Geoff Titherington, Owner, Bonanza, American Franchisees 
         Association, Sanford, Maine
     Richard Watson, Executive Vice President, Walker Machine 
         Products, Inc., National Screw Machine Products 
         Association, Collierville, Tennessee
     Tonya G. Jones, President, Mark IV Enterprises, Inc., NFIE 
         Guardian Advisory Council, 1995 Delegate, White House 
         Conference on Small Business, Nashville, Tennessee

  The PRESIDING OFFICER (Mr. Coverdell). Who yields time?
  The Chair recognizes the Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, my distinguished colleague from West 
Virginia just thanked a group of people. I wondered who they were. I 
knew no lawyer who had ever tried a case in a courtroom would ever put 
up a bill of this kind. So, having sponsored this measure, they would 
have to have some extraneous help of some kind to fashion an abortion 
as this ``conspiracy''--not conference--report. I emphasize 
``conspiracy,'' Mr. President.
  The distinguished Senator from West Virginia says when you work with 
him, it is very close and everything else. Of course, he did not thank 
the Senator from South Carolina because we never got close because we 
never conferred and we never were told about a meeting. We could not 
see the draft. We heard first about this so-called conference, or 
conspiracy, report, with Richard Threlkeld on CBS at 7:20 last Thursday 
evening on the evening news, when he said it was coming up. I had yet 
to get a copy, even though I am a member of the conference, struggling 
around on Friday to try to find out what we were going to have.
  The story down in the local press, the way they politically work it, 
was that the Senator from South Carolina was going to filibuster. We 
had not had a chance to debate. We had not had a chance to debate. But 
the point of the matter is that, as the Senator from West Virginia 
talks about small business, small business--look at the chart. That is 
not small business. I think he ought to talk more closely with the

[[Page S2565]]

distinguished Senator from Washington, whom he has been working with, 
because they are not quite in step.
  These heart pacemakers at $3,000, motorized wheelchairs, hotel bills, 
tonsillectomies, maternity stays, and all--maybe somebody is selling a 
baseball. We will let that one go by--18 cents. I hope we are not 
finding a Federal need up here, with all the States rights atmosphere, 
to all of a sudden pass a Federal law on account of 18 cents on the 
cost of a baseball.
  We go through, and it is really sad, because, going right to the 
chart, we have never seen that before. I guess that is the option of 
those who do not have a case, to try to do it by sheer surprise. They 
came in first years ago--I will never forget it--and said there was a 
litigation explosion. You do not hear them arguing about the litigation 
explosion anymore.
  They said there was an insurance crisis. We have here in the record 
that insurance companies are making billions and billions of dollars, 
so there is not that. Their reserves are up to an all-time high. They 
are doing great. So the insurance company is doing well, so you do not 
have that.
  Then they had the matter of uniformity. Mr. President, they were 
going to get all the States together and have uniformity, but it is 
quite obvious that the many splendored thing, the test tube of 
federalism at the State level, clashed with that uniformity. And they 
created specific exemptions for those States who had more stringent 
requirements of an injured party. Those State laws could hold. Those 
who had less stringent laws would have to come under the stringent 
restrictions of this particular measure. So on the face of it, it 
showed absolutely no uniformity. So they gave up on uniformity, in a 
fashion.
  Then they went to the matter of global competition. That is a sort of 
mystique around this Congress. We in Washington have discovered global 
competition. The matter of losing your job is psychological--the 
``anxiety society'' they write about. ``Downsizing.'' It is all so 
polite. Heck, they have been fired, and they moved the jobs overseas. 
Who has moved them? It is not global; it is us.
  It is like the Spanish Civil War with the fifth column. Over half of 
what we are importing in here are American multinational generated. I 
used the figure that they had researched back in the late 1970's. It 
was 41 percent. I know over 50 percent of the imports are by 200 
companies of the Fortune 500. They are the big, powerful people who can 
afford it. Small business cannot move overseas, but big business has 
moved overseas and continues, in a veritable hemorrhage. We explained 
it to everyone so they could understand the cost of manufacture. It was 
30 percent of volume for the associates or workers, employees--you can 
save as much as 20 percent.
  It is a given, if you move to a low-wage country, a $500 million 
company can save $100 million if they just keep their executive office 
here, their sales force, but move their manufacture to a low-wage 
country. They can move offshore and get rich, or they can continue to 
stay and work their own people and go broke. That is the trade policy 
of this Congress. These companies are not greedy. If I ran the company, 
if you ran the company, we would do the same thing. Competition has 
moved. So are we going to sit around here and wonder--what? That 
Congress is running around in a circle about term limits and all these 
other little funny things they can think of, including product 
liability that the States have long handled.
  The distinguished Senator from Rhode Island got up and said ``15 
years, 15 years'' the Congress has considered this issue. But the State 
of Rhode Island has responded. That is the mystery to me, that the 
proponents come around and act, all of a sudden, like they have 
discovered these things. Assume everything is true on that chart next 
to the Senator of Washington. What has the legislature of the State of 
Washington done about it? They have acted. The State of Georgia has 
acted. The State of South Carolina had product liability reform back in 
1988. It was fully debated. But all of a sudden, we in Congress 
discover things. Why? Because we take a poll. None of these pollsters 
has ever served in public office, but they get the hot-button items, 
six or seven of them--and you have Victor Schwartz, that is a good 
one--saying how they went after the lawyers. They go after the doctors. 
Everybody is against the doctors, until they need one. Everybody is 
against the lawyers, until they need one. That is a given in society.

  But you do not just pass Federal laws to vitiate the laws of the 50 
States on a statute of repose. Take the referendum they had in the 
State of Arizona. The proponents of this measure say, ``Forget about 
your referendum.'' They want to get back to the people, but ``we are 
going to tell you from Washington what to do, State of Arizona, 
regardless of your referendum.'' So what is going on up here?
  Now they come with the shunt. We are used to trying cases. You are 
limited to the record and the proof that you have, but this crowd just 
makes it up at the last minute. They have gone back to the products 
that have been kept off the market, and the shunt. I had not heard 
about the shunt, so we called up the Food and Drug Administration and 
they said there is no problem.
  Yes, Dow has been cited by our distinguished colleagues from 
Connecticut and Washington as going broke. It ought to go broke. They 
will never make--and a lot of other companies will never make--those 
implants like that again and try to sell them like hot cakes. Yes, 
sirree, that is what happens in our society, and we repair that kind of 
nonsense that goes on. Innocent women going in and thinking they are 
getting a health cure and instead they are ending their lives.
  So Dow does not sell them anymore, but Applied Silicon sells silicon, 
Neusal sells silicon. And we get another list of those--that little bit 
of material that goes into the shunt that takes the water off the 
brain. The inference of the Senators here trying to use that argument 
is that children and individuals are going to die unless we pass 
product liability at the Federal level. Come on.
  Take that chart next to the Senator from Washington. If a pacemaker 
costs $3,000, that has far more intricate materials than a shunt. They 
would take pacemakers off the market if you followed the logic of their 
argument. You could not afford $3,000 for that. I question that figure, 
to tell you the truth. I wish I had a chance to try it. My mother 
passed on just a few years ago, dying at 95 years of age, but she had 
four pacemakers and we never paid that. Maybe it is cheaper in Georgia 
and South Carolina than up here in this land--$18,000.
  But let us assume the truth. If the truth is there, then pacemakers 
have to get off the market, using the logic of the argument about the 
shunt and a little bit of silicon material that goes into it. Come on. 
It is available. It is a false argument.
  We are going to have to have a legislative congressional committee 
appointed on ski lifts, because it is only $2. It is way more dangerous 
than $2. I have been on them. The Presiding Officer has been on them. 
Get on one of those things and find out they are only spending $2 for 
safety. We have to get that up.
  That is the real Federal problem. Their little charts. They had the 
coffee chart yesterday. They took down the coffee chart. At least they 
have some shame. We proved that punitive damages award had been cut. 
The judges in New Mexico have sense, but the coffee case had no sense. 
When the proponents finally found that out, they took the chart down.
  What do they do here? Assuming all of that, as I say, is true, they 
act like the States have never acted before. I wanted to emphasize, 
too, coming in with this thing. Now let me read you this particular ad 
by the American pharmaceutical research companies, which appeared on 
the Federal page of the Washington Post on March 27, 1995. Here is what 
the American pharmaceutical group of manufacturers advertise in this 
ad:

       Drug companies target major diseases with record R&D 
     investment. Pharmaceutical companies will spend nearly $15 
     billion on drug research and development in 1995. New 
     medicines in development for leading diseases include 86 for 
     heart disease and stroke, 124 for cancer, 107 for AIDS and 
     AIDS-related diseases, 19 for Alzheimer's, 46 for mental 
     diseases, and 79 for infectious diseases.

  In this ad the pharmaceutical companies include a bar graph showing 
their steady increase in R&D investment

[[Page S2566]]

since 1977. They spent $1.3 billion in 1977, $2 billion in 1980, $3.2 
billion in 1983, $4.7 billion in 1986, $7.3 billion in 1989, $11.5 
billion in 1992, and an estimated $14.9 billion in 1995.
  Maybe they will go out and research a new kind of silicon--they spent 
almost $15 billion on overall research in 1995. But if you listen to 
the Senator from Connecticut and the Senator from Washington, you would 
think you cannot get the drugs on account of product liability; the 
drug companies are all going out of business.
  In fact, the foreign drug companies are all coming from Europe over 
here like gangbusters and investing. I will have a list before we end 
this debate this morning of the pharmaceutical companies joining in and 
they are not complaining. They are coming from Switzerland to South 
Carolina and Hoffmann-La Roche is not complaining about product 
liability. Wellcome is coming in with Glaxo in North Carolina. They are 
not complaining about product liability. We have product liability laws 
in our States.
  What they do in this measure, Mr. President, if you read it, goes way 
too far. We see this the more we now have a chance to look at it and 
wonder why. For example, I wondered why MADD came out against this 
bill, and then when I read that provision about punitive damages and 
substances--let us have all the drunk drivers not worry about punitive 
damages, do not worry about punishment, go ahead, drive drunk. Here we 
have the finest movement under MADD at the Federal and the State level. 
But this crowd now wants to write a bill so zealous about punitive 
damages and getting rid of it--at least one Senator said he did not 
even believe in punitive damages--that I can tell you now that they 
said tell the drunk drivers to go ahead, do not worry about punishment, 
drive. Tell the trial judge that you are obligated under the common law 
to charge the jury with the law, but keep it a secret.
  The Senator from West Virginia said we do not have a cap. I guess 
that is the part he is reading in the bill, because as far as the jury 
knows, there is no cap. Why? Because that is the law under the common 
law, but they have a provision in here where the judge does not tell 
the jury about the law.
  Now come on, what kind of laws are we passing here? Tell the drunk 
drivers, ``Go ahead, drive drunk.'' Tell the judge who has the 
responsibility to stay out of the facts of the case, to, by gosh, keep 
the law secret and then come around and have a new hearing on the facts 
in violation of the Constitution.
  The Cessna crowd, tell them now with the statute of repose, ``Don't 
worry about it, as long as the part would last for 15 years.'' Most of 
the planes I have been flying in are more than that. When you fly 
around in a State in small planes, you will find they are more than 15 
years old. But tell Cessna that they can go like gangbusters, do not 
worry about the parts.
  There, shoot the Maytag man. Put him out of business. He does not 
have to stand there and say, ``My refrigerator is not going to catch 
fire. It is 30 years old, and they still haven't called me to repair 
it.'' Shoot the Maytag man.
  Blow up the furnaces. I went through a textile plant just the other 
day. It is 100 years old, but the machinery is brand new. They are 
competitive. When I first started, the shunts, as they call them, in 
the weaving machines used to be about 200; then they got to 400, then 
1,500. The Japanese made machines up above that, I do not know how many 
thousands. They have the newest machinery.
  Yes, somebody in the plant may have been hurt. But now, hereafter, 
when you have to put all that investment in there, do not worry about 
the cost of the safety of the worker after the machine is 15 years old. 
I think they will close down the textile show we have in Greenville for 
new machinery because we are going to pass the law that after 15 years 
you can forget about how safe a machine is. There is no more product 
liability. They will take the hindmost. Just get hurt. Do not worry 
about it. Let society take care of the injuries and everything else 
because the national Congress, in the face of the State laws and 
provisions that are working extremely well as of now, decided exactly 
what to do.
  The utilities, oh, heavens, we had a good half-hour show on yesterday 
about the utilities. The utilities, now they did not want to write 
strict liability, so they wrote a double negative in the particular 
provision. Of course, the distinguished Senator had a difficult time 
trying to answer the questions because you could tell the lawyers 
downtown wrote this thing, not the staff. If the staff had written it, 
you would have seen somebody getting cussed out for writing that kind 
of thing. But the lawyers downtown were writing that thing up. They did 
not want to mention what they really meant.
  That is, for the utilities, do not worry about the highest degree of 
care we require in Georgia, South Carolina and the States of America 
because now we have a provision in here to tell the utilities to go 
ahead, forget about the highest degree of care.
  Then, the corporate head was riding with his worker after work in the 
evening. They get into a wreck. A big trucking company runs the red 
light. The corporate head can get $16 million--no, excuse me, it says 
double economic damages. We had one corporate head making $16 million, 
so he could get a $32 million verdict. But the poor fellow sitting in 
the front seat with him has got a cap--the gentleman said it ``ain't no 
cap'' --but he gets $250,000. He is capped.
  That is how the workers and consumers got this. The proponents of the 
bill discriminate against the people they say they are trying to help. 
They cannot name an organization of workers, consumers or others who 
are not affluent that favors this nonsense. The proponents come around 
and discriminate against those of modest means--the senior citizens, 
women, children.
  Oh, on pain and suffering, well, they are compensated. They have to 
have another hurdle. We put in another hurdle for them regarding joint 
and several liability. Mr. President, they come right down to the wire.
  I was watching this morning when the distinguished majority leader 
was on TV. He was talking about guns and the second amendment. Let me 
read two other amendments.

       In suits at common law [amendment VII], where the value in 
     controversy shall exceed twenty dollars, the right of trial 
     by jury shall be preserved, and no fact tried by a jury, 
     shall be otherwise reexamined in any Court of the United 
     States, than according to the rules of common law.

  They absolutely mandate it be reexamined by the trial judge. That is 
in violation of amendment VII.

  Then amendment X:

       The powers not delegated to the United States by the 
     Constitution, nor prohibited by it to the States, are 
     reserved to States respectively, or to the people.

  The distinguished majority leader always comes and says, ``Look, I 
have got here in my pocket'' the 10th amendment--some carry around the 
contract. The distinguished senior Senator from West Virginia carries 
around the Constitution. The distinguished majority leader carries 
around the 10th amendment, until this.
  When it comes to Medicaid, let the States handle it. When it comes to 
education, abolish the Department; that is a function of the States. 
When it comes to welfare, the Governors come in and say, let the States 
handle it. When it comes, by cracky, to crime, we have had a 2-year 
intramural around here trying to make sure that we get back to a 
program that we know did not work.
  President Nixon put in LEAA, block grants, to the States. The next 
thing you know, they had a tank down in Hampton, VA, to protect the 
courthouse. I do not know what was going to attack the courthouse in 
Hampton. They had the Governor of Indiana buying a plane, a Beechcraft, 
so his wife could go and buy her clothes in New York. They were buying 
planes and buying tanks and everything else. Trying to get the money 
down to the officer on the beat was like delivering letters by way of a 
rabbit; you could not get it there.
  At the time the city, the council, got it, the State, whatever, a 
politician got his hands on it. It was all for law enforcement, but law 
enforcement never saw it. But they say, ``Oh, no, we've got to have 
block grants.'' After the experience where we had to abolish the LEAA, 
they come with this one on account of the political poll.
  Lawyers. They have two giants, they say, the consumers and the trial 
lawyers, consumers and trial lawyers. The

[[Page S2567]]

Senator from California emphasized what needs to be emphasized, and 
that is that we are looking out for individuals and individual 
injuries. It is not easy to try these injury cases. As we all know, 
less than 4 percent of all civil cases are product liability, less than 
1 percent get to the courts, and product liability accounts for less 
than 1 percent of the cost of any of these products. They can keep on 
putting up charts, but the Conference Board refuted that. They said 
less than 1 percent of the cost of any of their articles were 
attributable to product liability. So what did we do? What did we do? 
We pass a totally unconstitutional measure. But more than anything 
else, Mr. President, the word ``greed'' has been used around here. I 
could not, in conscience, come and say, now, let us apply this all to 
injured individuals but not to injured businesses. Oh, no. No, no.
  I see where United Airlines wants to sue that manufacturer of the 
baggage handler. It got loose up in Denver, that machine. We had one of 
those machines, Mr. President, when I was in college. It had the 
laundry where you sent your clothes over there, and it had a machine 
that ripped the buttons off your shirt and shot them through your 
socks. I know that machine now is up at the Denver airport. It tears up 
the package, rips into the bags, and skirts it into the gears, stopping 
everything.
  So now, Mr. President, we have the business that can go ahead and get 
its way on punitive damages--do not worry about any $250,000, keeping 
it a secret, and then tell the trial judge later to start on his own 
factual findings and everything else like that in violation of the 
Constitution. Do not worry about any of that. Sue, like Pennzoil did 
Texaco--get a $10 billion verdict, $10.2 billion. That is more than all 
the product liability verdicts for injured matters in the last 20 years 
put together--$10.2 billion. Add them up. One business.
  The overwhelming majority of product liability is businesses suing 
businesses. They believe when they get a bad product misrepresented, 
they ought to have a cause of action. But they have done everything in 
the world to put hurdles in this thing, unconstitutional provisions, 
separating the injured parties, separating the businesses out, making 
sure that the corporate heads and those of affluence get big economic 
damages. They can get big verdicts; not women, not children, not senior 
citizens who have retired. They have all of a sudden become second 
class citizens.
  That is the bill. It is a shame. I yield the floor.
  Mr. GORTON. Mr. President, I think a few brief moments in outlining 
what this bill does and what it does not do may be particularly in 
order at this stage in the debate.
  If we were to take at face value what we have heard from my 
distinguished colleague from South Carolina, coupled with his 
colleagues from Massachusetts and California, we would entirely lose 
sight of the fact that nothing in this bill limits in any respect the 
ability of any individual to recover a verdict in any court for all of 
the actual damages suffered by that individual as a result of what a 
jury may determine to have been a defective product.
  Let me repeat that. The Presiding Officer, if he is injured by a 
defective product, will recover in the future, as he has in the past, 
all of his actual and provable damages. Obviously, there will be a 
difference in those damages from one person to another, even with 
similar injuries.
  Second, Mr. President, nothing in this bill limits the ability of an 
injured person to recover as a result of a jury verdict all of the 
damages that jury may attribute to pain and suffering or to noneconomic 
damages.
  I find the argument of the Senator from South Carolina particularly 
curious. He says this is a terrible bill because an executive making $2 
million a year can recover more than someone making the minimum wage. 
Mr. President, that seems to me to be an argument that we ought to 
impose caps, caps that we have not imposed. Perhaps the Senator from 
South Carolina is suggesting a reform which no one, as far as I know, 
has ever proposed anywhere in the United States. That is, that there 
ought to be a cap on the economic damages that any individual can 
receive, and that if an individual making $100,000 loses a year of 
work, that person should not be able to recover any more than a person 
who makes $20,000, or vice versa. But that is a change in the law that, 
as far as I know, no one has ever proposed.
  This bill allows you, Mr. President, to recover all of the actual 
damages that you have suffered as a result of an accident that is the 
fault of some product, including your lost wages, based on whatever 
your wages are. Is that unequal justice because some people have higher 
wages than others? I do not think so. It also allows the jury to award 
you or anyone else whatever it may determine in the way of noneconomic 
damages.
  We did have a debate on this subject in this body the first time 
around, not in connection with punitive damages but in connection with 
medical malpractice. There was an attempt on the floor to put a ceiling 
on the amount of noneconomic damages that could be recovered in a 
medical malpractice case. That proposition lost on the floor of the 
Senate, Mr. President, and ultimately the entire medical malpractice 
section was taken out of the bill, to be dealt with separately.
  This bill proposed no such limit in committee, no such limit on the 
floor when it was being debated last year, and has no such limitations 
now. What is limited in any respect is the imposition of punitive 
damage awards--by definition, an award that is above and beyond all of 
the damages caused by the defective product.
  My distinguished friend and colleague who is so complimentary to me, 
the Senator from West Virginia, has said that he would not vote for a 
bill that had an absolute cap on punitive damages. This is a field in 
which we disagree. I would. In fact, I do not believe, as an individual 
Senator, that there is any place in the civil justice system for 
punitive damages at all. They are not permitted in tort litigation in 
the State of Washington and in a handful of other States.

  There are very few serious arguments made that there is no justice 
available for civil litigants as a result. There is an extremely strong 
argument, it seems to me, against punitive damages at all. Why should 
any individual recover more than a jury thinks that individual has 
actually suffered, especially when there is no limitation on the 
ability of the jury to make an award for pain and suffering for 
noneconomic damages in addition to the proven actual damages in a case?
  We have a system in this country that is peculiar with respect to 
punitive damages designed as punishment without any limitations 
whatever. Every criminal code, for every crime up to and including 
first-degree murder and treason, has some kind of limitation. You 
cannot be executed twice for two murders. But with respect to punitive 
damages, in most places there are no limitations at all.
  The Supreme Court of the United States has asked us to address this 
issue. I think we ought to address this issue. We do address it in a 
modest fashion in this bill, a very modest fashion, but only punitive 
damages, not any of the actual losses to any plaintiff in a product 
liability action whatever.
  If you heard only the arguments on the other side of this case, you 
would think everyone was being denied justice, that no one was going to 
be able to recover their losses, their actual damages in a piece of 
product liability litigation.
  Why should there be some predictability, some limitation on punitive 
damages? First, of course, because under the present system there can 
be an infinite number of actions with respect to the same product. We 
have a sentence, a punishment imposed, not with all of the protections 
of the criminal code, not with the usual unanimous jury requirement, 
but just at the total, complete and unfettered discretion of juries.
  I think, as I say, that it is a terribly poor system. I did not 
prevail in my debates with my allies on my own side of the aisle or 
with my friend from West Virginia. I cannot remember what the views of 
my friend from Connecticut are on the subject. So we have a form of 
control which is not a cap. The Senator from West Virginia is entirely 
correct with respect to that; however, nothing with respect to 
requiring a company or an individual to pay its full share of the 
damages that it has caused, whether noneconomic or economic.

[[Page S2568]]

  Mr. President, this bill is about people. I spoke yesterday, and 
speak again today, briefly, about young Miss Tara Ransom in the State 
of Arizona who has spoken to Senator McCain and to people in my office 
about her silicon-based shunt for hydrocephalus.
  The great and deep concern that she and thousands of others have 
about the availability of a medical device, which has literally given 
her life and made that life worth living, is that it is increasingly 
unavailable due to a present system of absolutely uncontrolled and 
unlimited punitive damages.
  The next to the last paragraph in the article about this young lady 
from Arizona reads:

       The good news is that there are reform efforts underway in 
     Arizona and at the Federal level. The Senate is planning to 
     vote, as early as today, on legislation to place reasonable 
     limits on punitive damages and eliminate unfair allocations 
     of liability in all civil cases. This would protect all 
     Americans --not just the manufacturers of medical products, 
     but also small businesses, service providers, local 
     governments, and non-profit groups. Above all, it would save 
     children like Tara.

  This is about American business, and competitiveness, and low prices 
for products. But it is even more about the people who use those 
products.
  Finally, Mr. President, we get this nonsense about drunk drivers, 
this utter nonsense about the drunk drivers. Well, of course, nothing 
in this bill has anything to do with suing drunk drivers. The 
implication that it has something to do with suing the people who 
supply them with alcohol negligently, the so-called dram stop 
situation--well, this bill specifically says, ``A civil action for 
negligent entrustment shall not be subject to the provisions of this 
section but shall be subject to any applicable State law.''
  That argument, Mr. President, is pure nonsense. This is a product 
liability bill. It is not a negligent entrustment bill. It has nothing 
to do with someone who deliberately sells a gun to someone to kill a 
third person, or deliberately allow someone to become drunk and is sued 
under dram stop statutes at all. It does have to do with product 
liability, with people like Tara Ransom, with companies like Cessna, 
with those who manufacture devices and therapeutic drugs, and a myriad 
of other products for the American people. It does have to do with 
giving them a better deal than the present system does, which is a 
lottery for plaintiffs and a bonanza for those who represent them.
  The PRESIDING OFFICER. Who yields time?
  Mr. HOLLINGS. Mr. President, I yield the distinguished Senator from 
Alabama 15 or more minutes, as he may require.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Alabama.
  Mr. HEFLIN. Mr. President, I just found out that Senator Rockefeller 
is going to vote for the conference report. Senator Gorton has said 
that Senator Rockefeller could never vote for a bill if it had a cap in 
it, a definite cap. And as I read it--now, maybe he can, in some way or 
another, explain this language --we have a language on page 10 of the 
report relating to punitive damages. First, the language in the report 
says the ``greater'' of two times the sum of the amount awarded to a 
claimant for economic loss and noneconomic loss, or $250,000. That is 
not a definite cap because the amount of economic loss and noneconomic 
loss is a variable. But language immediately thereafter says, ``special 
rule.'' This applies to the rule on punitive damages for small 
businesses where these corporations have 25 employees or less. I might 
add that this language applies also to individuals. The ``special 
rule'' provides that punitive damages shall not exceed the ``lesser'' 
of two times the economic loss and noneconomic loss, or $250,000. So 
punitive damages cannot exceed, in any event, $250,000. So that is a 
definite, established cap.
  I am not going to hold Senator Rockefeller to that since he did not 
make the statement to me. He must have made that statement to Senator 
Gorton who is present on the floor. I would not want to put him in an 
embarrassing situation. But I think this special rule shows very 
definitely that there is a cap in the bill.
  Now, that also points out that a lot of language in this bill is 
slyly inserted, and so craftily placed, that I think some of its key 
features have escaped a great number of people's attention. That is 
true with regard to the biomaterials provision. The biomaterials 
provisions, to which Senator Lieberman refers regarding raw materials, 
also contains language regarding component parts. There are numerous 
implants that have component parts. I mentioned before that I have a 
pacemaker which has numerous component parts. There is a battery, and 
there are various wires that go down into the chambers of the heart 
that causes electrical charges to emit; it has various sensors and a 
computer that records the history of my heartbeats over a period of 
time. When doctors check it, they can check and see whether or not 
there was some unusual rhythm or unusual activity taking place. 
Basically under the provisions of title II, on an implant that has 
component parts, there is complete immunity in regard to the supplier 
of the component parts, or the raw materials of an implant.
  Now, there is an exception in the event the manufacturer of the 
component part is also the manufacturer of the entire device or also 
the seller. But most medical devices are made from component parts, 
such as the batteries, and people furnish those separately. Title II 
gives complete immunity to suppliers with no chance to even discover 
whether or not there was any negligence on the part of the supplier. It 
is interesting to see where the crafty language is written. It 
indicates that ``implant'' means--and this is the definition on page 17 
of the conference report--

       a medical device that is intended by the manufacturer of a 
     device to be placed into a surgically or naturally formed or 
     existing cavity of the body for a period of at least 30 days, 
     or to remain in contact with bodily fluids, or internal human 
     tissue through a surgically produced opening for a period of 
     less than 30 days.

  Well, what is less than 30 days? I would assume that less than 30 
days could mean 2 seconds or 1 second. It is very craftily designed. 
What is a surgically produced opening? Well, there is no definition in 
here, but a surgically produced opening would appear to me to be an 
opening in which you use surgical tools. Of course, that would mean 
that you normally think of a knife, of a scalpel, or of something like 
that. But what about intravenous materials, one of these locks where 
you tie it into you? You have devices where they put it in and out of 
your body, and they can put fluids into the body such as a blood 
transfusion. Consider a hypodermic needle--is that a surgical tube?

  You have a situation where we find that title could have some 
applicability with a blood transfusion. We should consider where a 
blood transfusion occurs, and we know that blood has to be highly 
inspected and is subject to the highest standard of care because of 
AIDS and other matters. This bill is designed toward an interpretation 
that could mean that AIDS in blood is subject--where someone has made a 
mistake, who has been negligent or otherwise--to the provisions and the 
limitations and protections that are put within this bill.
  It is very carefully crafted, as I pointed out yesterday, in 
inserting a comma in the definitions section of durable goods, now 
within the purview of the report is any type of a product that has a 
life of more than 3 years--baby cribs, lawn mowers, toasters, or 
virtually any type of kitchen appliance.
  There are a great number of provisions in the bill that disturb me, 
in particular, the way that they are designed to favor the manufacturer 
or the seller, and it puts the injured party at such a disadvantage. 
For example, there is the misuse or alteration provision, which 
provides that in a product liability action, the damages of a defendant 
will be reduced by the percentage of responsibility for a claimant's 
harm attributable to the misuse or alteration. But I see problems where 
there could phantom defendants--the phantom defendants where there is 
nobody there to be held responsible--and they can try to invoke the 
several liability provisions in the report as to noneconomic damages. 
These phantoms are the ones that are all at fault and there is nobody 
left responsible for a claimant's injury.
  Then we have a situation in regard to employer and coemployee, as to 
whether or not they might have misused or

[[Page S2569]]

altered, or were at fault. So, in order to leave the impression on the 
jury, this bill requires that that be the last issue that is presented 
to a jury, because when they leave and go back to the jury room to 
decide, that is the last thing that they heard. So they are trying to 
put it off--the negligence or the lack of responsibility on the part of 
the manufacturer--and impose it on someone else and to give it to that 
person just as he goes into the jury room as the last thing that they 
hear that will be predominantly on their mind. Is that fair to the 
claimant?
  There are numerous other aspects of that which disturb me. I suppose 
one of the things that I just cannot understand at all in regard to 
this is how--if it is good for the goose, why is it not good for the 
gander? And they exempt business losses. One business suing another 
business can bring his suit for commercial losses, losses of profit, 
unlimited amount, unlimited amount relative to punitive damages, and 
different statutes of limitation.
  The Uniform Commercial Code, I assume, is uniform everywhere. I 
understand there are a few differences in it. But in our State in 
Alabama, you have a 4-year statute of limitations in regard to the 
Uniform Commercial Code. The conference report imposes a shorter 2-year 
statute of limitations.
  The Senate-passed bill contained an exception to the 2-year statute-
of-limitation provision stating that if a civil action under the bill 
is stayed or enjoined, the statute of limitation is suspended or tolled 
until the end of the injunction. That provision was deleted from the 
conference report. Is that fair? I think not.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Shelby). Who yields time?
  Mr. GORTON. How much time remains?
  The PRESIDING OFFICER. Thirty-four minutes.
  Mr. GORTON. How much of that time does the Senator from Connecticut 
request?
  I yield 15 minutes to the Senator from Connecticut.
  The PRESIDING OFFICER. The Senator from Connecticut is recognized.
  Mr. LIEBERMAN. I thank the Chair. I thank my friend from the State of 
Washington.
  Mr. President, I have been thinking as I listened to the debate this 
morning, and what preceded it yesterday and before that, that there is 
a way of thinking around the Capitol that is not the way of thinking 
that I hear back home in Connecticut. It is what I call either-or. You 
know if an idea is put forward by a Republican, no Democrat shall be 
for it. If an idea is put forward by a Democrat, no Republican should 
be for it, or, in this case, if something is good for business, it has 
to be bad for consumers. That does not figure, particularly if you look 
at the overall effects of this bill.
  What I want to contend here is that because of the extraordinary work 
done by Senators Gorton and Rockefeller, and by the conferees from the 
Senate and the House, this is a win-win bill.
  This is a bill that is good for consumers and good for business. In 
that sense, it is good for our country overall.
  There is a way in which the opponents to the legislation approach it 
with such skepticism, turning every word in the most potentially 
damaging light and not considering the intentions of the sponsors and 
the authors and the record that we have tried constantly to build on 
the floor.
  Everybody in America knows, at least most everybody knows, that our 
civil justice system is not working well. I do not think anybody really 
can stand up and defend the status quo of the litigation system in 
America. Nothing is wrong with it. That is preposterous. The average 
person on the street--I stop them in Hartford, New Haven, Bridgeport--
knows that lawsuits take too long; that people do not get justice in a 
timely fashion; that too much of the money goes to lawyers. They know 
that.
  I think the question is, how are we going to make it better? Why 
should we make it better? Because of the specific problems and 
shortcomings of the current system I just referred to and also because 
the public, the people have as little faith as the people of our 
country do today in our system of justice. That is a profound problem 
that goes beyond tort reform and anything else. It strikes at the very 
heart of people's faith in the Government they have. Lord knows, we 
know they have enough lack of confidence in the legislative branch, 
maybe some in the executive, but it goes to the judicial as well.
  I honestly believe, deeply believe that this bill--moderate, modest, 
sensible, small, incremental reform--is a step in the direction of 
beginning to restore some faith in the system, making it work for 
people who are injured and making sure that it does not destroy faith 
in the system by punishing people who are not guilty and letting those 
who are guilty often off without being punished.
  So I say this is win-win. It is good for business and it is good for 
consumers. It will create jobs by removing a deterrent to innovation 
and investment. It will reduce consumer prices by making litigation 
less expensive. If 20 percent of the costs that we are paying for a 
ladder is litigation-related costs, the cost of that ladder is going to 
go down if we can reduce that litigation cost some, and it goes on and 
on throughout the system.
  I wish to talk particularly again about this biomaterials section of 
the bill of which I am a cosponsor. It comes from something that is 
very real that is threatening something very good. The very real 
element here is that there is an unnatural shortage of raw materials. 
Judge Heflin referred to it. Thank God, Judge Heflin is healthy and 
well today because of the pacemaker he has. He is one of 8 million 
people who have benefited from medical implants of one kind or another. 
The device is put together by a manufacturer but it takes parts they 
buy from people who do not make these parts particularly for this 
purpose. They are not making much money on selling those parts. 
Batteries are one. The information I put into the Record yesterday 
shows that one of the manufacturers of batteries--a couple actually--
used in pacemakers have stopped selling to the manufacturers of 
pacemakers because they are afraid they are going to get sued for 
something that is not their fault. They would just as well sell the 
batteries to somebody else where the chance of a lawsuit is not as 
great. They are not worried about the negligence. They are worried 
about what it is going to cost them if they get tied up in a lawsuit.
  In the debate there is such skepticism expressed about these medical 
devices and pharmaceutical companies, et cetera. Sometimes when I look 
back and read history and I say, now, how far have we really come; how 
much better is the human race? I wonder if we have ascended very far in 
the way in which we deal with one another.
  However, there is one way we can objectively show that there has been 
extraordinary progress in human experience and that is in our health. 
We are living longer. You can see it year-by-year. We are up, I guess, 
in the mid-seventies now in terms of average life-span. A lot of that 
has to do with pharmaceuticals, these wonder drugs that have been 
invented. And a lot of it has to do with these medical devices that we 
are trying to protect by making sure that the manufacturers can 
continue to get the parts, the materials and the component parts, and 
are not frightened out of supplying those parts because of the fear of 
lawsuits.

  I said yesterday, when I talked about the allegations, the opponents 
of this bill keep lighting fires around the periphery to sort of stop 
people from voting for the bill. Those of us who support it put out one 
or two fires and there are three more burning over here. And one of the 
fires has been lit about how this bill would affect the existing breast 
implant procedure. I said at length yesterday--I will not repeat it 
today--the bill will not impact this procedure. This is prospective, 
only affects people who may file claims later. Breast implants are not 
being done any more. They were stopped by the FDA, except for a small 
number of clinical trials in 1992.
  With regard to new products, you cannot escape liability under the 
biomaterials section of this bill, if you are not just a supplier but 
you are a manufacturer or a seller or what you have done is negligently 
done in the sense that it violates either the contract requirements 
that the manufacturer has given you for the raw material or component 
part, which obviously would be for a part or material

[[Page S2570]]

that is not negligently made, or the specifications for that part that 
are issued as part of the approval process. Every one of these medical 
devices has to go through the FDA before it can be sold and used to 
benefit people.
  Senator Gorton has spoken about one young girl and the extraordinary 
benefit to her life from the shunt that was put in her brain. We had 
testimony at a hearing I conducted from a Mr. Martin Reily of Houston, 
TX, about his young child, Thomas, who was discovered when he was 8 
months old to have water on the brain, hydrocephalus. Mr. Reily said:

       Jane and I will never forget the Saturday in late October 
     1985, when we learned that Thomas had hydrocephalus. We 
     initially were told that based on the level of fluid 
     accumulated on his brain and the resulting pressure, he would 
     surely have brain damage, probably severe. Surgery to place a 
     shunt in Thomas was scheduled for the first thing Monday 
     morning [2 days later]. The hours from late Saturday to 
     Monday morning were the longest and darkest we have ever 
     experienced.
       The thought of waiting even 1 day to have the surgery was 
     almost unbearable, for each minute that passed the pressure 
     was building in Thomas' head, which could further damage him. 
     . . .
       On Monday morning, Thomas received a shunt. Within hours, 
     he was showing improvement. His lethargy disappeared. He was 
     alert. He smiled again for the first time in weeks and even 
     stood up in his hospital crib. Within 36 hours, we were back 
     home with the new Thomas. How different the outcome would 
     have been for Thomas that day without the availability of the 
     medical device he so desperately needed.

  What a miracle. Mr. Reily continues:

       Six months after his original surgery, Thomas' shunt 
     clogged and required revision. In the 6 hours that Thomas 
     waited for his shunt revision surgery, he became violently 
     ill, vomiting continuously and finally becoming semi-
     comatose. Mercifully, his revision was successful and 
     immediately he regained his old form, laughing and smiling 
     while playing games in his hospital bed. Again, how different 
     yet predictably sad and final would have been Thomas' fate 
     without this medical device. As I reflect on Thomas' brief 
     life, I see a child who has already overcome a lifetime of 
     medical difficulties.

                           *   *   *   *   *

       Early on, Thomas' mother and I went through a grieving 
     process. We were grieving for the death of our vision of our 
     perfect child. It was not until we let that vision go that we 
     were able to see something much more beautiful; a young boy 
     with an indomitable yet loving spirit who will not let his 
     personal medical setbacks defeat him. I think that must be 
     surely God's spirit living inside him.

  Mr. Reily concluded:

       So I stand before you today, as the guardian of that 
     spirit, as Thomas' father, beseeching you to do everything in 
     your power to ensure that the biomaterials necessary for 
     Thomas' medical implant device be readily available and of 
     the highest quality. For some time in the future, perhaps 
     next month or next year, Thomas will wake me in the middle of 
     the night to tell me that his head hurts and that he thinks 
     his shunt has broken. He will ask if we can go to the 
     hospital to get a new one right away. I pray I will be able 
     to give him the only acceptable answer.

  It is remarkable testimony. We had other testimony that day from a 
most impressive woman, Peggy Phillips, who has worked for awhile as 
chief of congressional affairs for the Air Force Surgeon General, going 
to law school in the evening, getting home at 10 p.m., working until 
midnight, and so on, office work, very busy. ``However, on November 26, 
1986,'' as she says, ``my life changed. I am told that I collapsed as I 
walked from my office to my car. I stopped breathing. I had no pulse. I 
had no blood flow to my brain, I was clinically dead.''
  The story ends happily. She agreed to have an automatic implantable 
cardioverter defibrillator put into her stomach.
  ``Following a few minor adjustments,'' she says, ``life with the AICD 
has not been much different than before.'' She goes on to document 
changes that have occurred, and appeals to us to make sure that some of 
the simple parts of that AICD, which keeps her going, monitors her 
heartbeat, gives her a shock when there is a danger that her heart is 
going to stop, keeping her alive--that flow of materials is not going 
to stop.
  These are consumers. Does this help business? It helps the businesses 
that make the medical devices; it helps Thomas Reily; it helps Peggy 
Phillips; it helps 8 million other people who are going to be kept 
alive, allowed to live normally by these devices.
  Earlier this morning my friend from California made some references 
about the impact of this legislation--somewhat on breast implant cases 
which I have spoken to earlier--but on women generally. I do want to 
put into the Record a statement here. I am going quote from it.
  Phyllis Greenburger, who is the executive director of a group called 
the Society for the Advancement of Women's Health Research, testified 
on April 4, 1995, to that same Senate subcommittee, that, `` * * * the 
current liability climate is preventing women from receiving the full 
benefits that science and medicine can provide. That,'' she says, ``is 
the reason I am here before you today.''
  She went on to say:

       . . . there is evidence that maintaining the current 
     liability system harms the advancement of women's health 
     research.

  She completed her testimony by stating:

       Manufacturers of raw materials, unwilling to risk lawsuits, 
     are limiting, and in some cases, terminating the sale of 
     their product for use in an implantable medical device. . . . 
     The threat to health is further magnified in cases where 
     suitable substitute materials are not available.
       Women may be disproportionately impacted by such a shortage 
     simply because they live longer than men, and as a result, 
     suffer more from chronic disease, increasing their chances of 
     needing a medical device, such as hip or joint replacements. 
     For those of us currently in good health, the loss of these 
     substances seems inconsequential. Yet for those like Peggy 
     Phillips . . . [Whom I spoke of before] and others suffering 
     from osteoporosis, heart disease, rheumatoid arthritis, 
     and other diseases, access to a full range of medical 
     devices is crucial.

  I wonder if I might ask the Senator from Washington for 5 more 
minutes?
  The PRESIDING OFFICER. Who yields time?
  Mr. GORTON. The Senator from Nebraska also wishes to speak on our 
side. Will the Senator from Connecticut settle for 2?
  Mr. LIEBERMAN. I will settle for 3.
  Mr. GORTON. Fine.
  The PRESIDING OFFICER. The Senator is recognized for 3 minutes.
  Mr. LIEBERMAN. A study by the Committee for Contraceptive 
Development, jointly staffed and administered by the National Research 
Council and the Institute of Medicine, found that only one major U.S. 
pharmaceutical company still invests in contraceptive research. Why? 
The study blamed the legal climate, fear of lawsuits, for this 
situation. H.R. 956, this bill before us, would make these drugs and 
other medical devices more available.
  We have said over and over again, this bill protects the right of an 
injured plaintiff to get full recovery for damages, cost of medical 
care, loss of wages, any other provable item. It goes beyond, and says 
you can get recovery for noneconomic losses, intangibles like pain and 
suffering, from those who are responsible for the negligence.
  It simply puts a small limit on punitive damages. In doing so, yes, 
it helps some businesses expand, provide the miraculous products I have 
talked about, sell products for less; but it helps millions of other 
people. In a way, the beneficiaries of this legislation are not so 
visible. That is why I read from this testimony. But they, and millions 
and millions of others of them, are counting on us to pass this bill to 
bring balance and trust back to our legal system.
  I thank the Chair and I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. HOLLINGS. Mr. President, let me just for a minute respond.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. I will yield to the distinguished Senator from 
Nebraska.
  The distinguished Senator from Connecticut is very persuasive and I 
wanted to answer these pleading comments about ``walking down the 
street'' and ``everybody knows the litigation system is in disrepair.'' 
Absolutely false, with respect to the civil justice system.

[[Page S2571]]

  We have all seen the O.J. case and that jury of 12 let him go. But 
the American public jury did not let him go. Everybody knows that.
  We have, here, just this past week, March 18, U.S. News & World 
Report:

       In New York City, a movement is under way to impeach 
     Criminal Court Judge Laurin Duckman. A 33-year-old woman 
     sought court protection from a former boyfriend, a convicted 
     rapist, who had attacked her three times. Despite the 
     beatings, Judge Duckman coolly noted that the woman was 
     ``bruised but not disfigured,'' lowered bail in the case and 
     suggested that the man would stop bothering the woman if she 
     gave back his dog. Three weeks later, the man shot her to 
     death.

  In another case:

       Police in a high-activity drug area at 5 a.m. noticed a 
     slowly moving car with out-of-state plates. The car stopped, 
     the driver popped the hood of the trunk and four men placed 
     two large duffel bags inside. When police approached, the men 
     moved away rapidly in different directions. One ran. Police 
     searched the trunk and found 80 pounds of cocaine. The 
     driver, a Michigan woman, confessed in a 40-minute videotaped 
     statement, saying that this was just one of more than 20 
     large drug buys she had made in Manhattan. But Judge Baer 
     ruled that police had conducted an unreasonable search. What 
     about the men bolting from the scene? Since residents in the 
     area regard cops as corrupt and abusive, opined the judge, it 
     would have been unusual if the men hadn't run away, so 
     fleeing was no cause for a search. In other words, the perps 
     had reason to be suspicious of police, but police had no 
     reason to be suspicious of the perps.
  Come on. I ask unanimous consent to have this list of cases printed 
in the Record
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. HOLLINGS. We are all disturbed about the criminal court system. 
But not, where the distinguished Senator from Connecticut served as the 
majority leader in the State legislature of Connecticut, he acts--
``walking down the street,'' that he is the only one walking down the 
street talking.
  Come on. We even had one former member went up as Governor and pull 
an income tax on the people of Connecticut, Governor Weicker. The 
people of Connecticut will respond, with leadership. And they do have a 
product liability statute in that State.
  But these folks come and talk about fair. ``Yes, I hope I can 
certainly get this shot so I can continue breathing.'' I mean, grown 
folks, men and women in the U.S. Senate, acting like this? That case 
would be thrown out. Talking about what is not good for the consumer, 
good for business.
  I ask unanimous consent to have printed in the Record ``Suing For 
Safety.'' It is by Thomas Lambert, Jr. I ask to have this printed in 
the Record, included with the ``Stupid Court Tricks.'' Include them 
both.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)
  Mr. HOLLINGS. Mr. President, that ``Suing for Safety'' gives case 
after case after case where it had not been good for the consumer. The 
consumer had to get a trial lawyer, had to go before 12 jurors in his 
community, had to go up on appeal and pay all the court costs and 
finally get a verdict.
  Why is it good for the consumer and good for the business? On account 
of product liability. We have it at the State level, and it is working. 
That is why I put that case in the Record.
  We know what business does. Some businesses will cut corners, they 
will not give warnings, they try to save money. Everybody knows there 
were a few dollars in the Pinto case. Now we see time and again, week 
after week, recalls. They just recalled one of my cars to put another 
safety device on.
  Why do you think that was done? On account of the trial lawyers. 
Product liability. That is why they have done it, and everybody in the 
Senate knows it. But the little poll says get rid of the lawyers, like 
Dick the Butcher in Henry VI, ``Kill all the lawyers.'' That is a 
popular thing.
  So that is what we have. I reserve the remainder of my time.

                               Exhibit 1

             [From U.S. News & World Report, Mar. 18, 1996]

                          Stupid Court Tricks

                             (By John Leo)

       Some judges and some judges' decisions are better than 
     others. Here are some others:
       In New York City, a movement is under way to impeach 
     Criminal Court Judge Laurin Duckman. A 33-year-old woman 
     sought court protection from a former boyfriend, a convicted 
     rapist, who had attacked her three times. Despite the 
     beatings, Judge Duckman coolly noted that the woman was 
     ``bruised but not disfigured,'' lowered bail in the case and 
     suggested that the man would stop bothering the woman if she 
     gave back his dog. Three weeks later, the man shot her to 
     death. In another domestic violence case, Judge Duckman 
     allowed a beater to go free hours after a jury had found him 
     guilty. Last month, the man was charged with another attack 
     on the same woman.
       North of the border, the loopiest judicial decision of the 
     year came when the Canadian Supreme Court ruled that 
     drunkenness was a defense against rape charges. It ordered a 
     new trial for a Montreal man who had been convicted of 
     sexually assaulting a 65-year-old woman in a wheelchair. The 
     court predicted that the alcohol defense would be rare, but 
     within weeks drunks and addicts were being acquitted across 
     Canada. Sanity prevailed, however. Parliament passed a law 
     banning the drunkenness defense.
       Judge Rosemary Barkett, a Clinton appointee, has brought 
     sexual harassment litigation into the fifth grade. Writing 
     for the majority on the 11th Circuit Court of Appeals last 
     month, she said that the mother of a fifth grader who was 
     repeatedly pestered by another fifth grader could sue the 
     school district under Title IX of the 1972 Education 
     Amendments. In a recent dissent in another case, Barkett 
     implied that a statute requiring drug tests for some state 
     jobs in Georgia may violate the First Amendment by seeking to 
     keep persons ``who might disagree with the current policy 
     criminalizing drug use'' out of government.
       Another Clinton appointee, Judge Harold Baer, caused a 
     spreading uproar with his colorful botching of a drug case. 
     Police in a high-activity drug area at 5 a.m. noticed a 
     slowly moving car with out-of-state plates. The car stopped, 
     the driver popped the hood of the trunk and four men placed 
     two large duffel bags inside. When police approached, the men 
     moved away rapidly in different directions. One ran. Police 
     searched the trunk and found 80 pounds of cocaine. The 
     driver, a Michigan woman, confessed in a 40-minute videotaped 
     statement, saying that this was just one of more than 20 
     large drug buys she had made in Manhattan. But Judge Baer 
     ruled that police had conducted an unreasonable search. What 
     about the men bolting from the scene? Since residents in the 
     area regard cops as corrupt and abusive, opined the judge, it 
     would have been unusual if the men hadn't run away, so 
     fleeing was no cause for a search. In other words, the perps 
     had reason to be suspicious of police, but police had no 
     reason to be suspicious of the perps. Since the confession 
     stemmed from the search, Baer threw it out. The prevailing 
     New York opinion: Judge Baer is an idiot.
       Can the state legally confiscate the property of innocent 
     people? The U.S. Supreme Court said yes this month in a 
     Detroit case. A 5-to-4 ruling allowed confiscation of a 1977 
     Pontiac half-owned by a woman after her husband was arrested 
     for having sex with a prostitute in the car. The Wayne County 
     prosecutor's office had sued to confiscate the car under 
     Michigan's public nuisance statutes. In a dry dissent, 
     Justice John Paul Stevens said that until this case, no state 
     had ``decided to experiment with the punishment of innocent 
     third parties.''
       In a notably tortured decision, the federal 10th Circuit 
     Court of Appeals ruled that a male prisoner who wishes to 
     become a female is not entitled to get hormone injections at 
     public expense under the 14th Amendment, but he may be 
     entitled to them under the Eighth Amendment, which bans cruel 
     and unusual punishment.
       Much egg on is on the faces of federal judges of the Fourth 
     Circuit Court of Appeals for their handling of the Rodney 
     Hamrick case. While serving prison time for threatening the 
     life of President Reagan, Hamrick built five bombs and 
     threatened to blow up a courthouse, an airplane and NAACP 
     headquarters. While serving more time for threatening to kill 
     the judge in his case, he built and mailed a bomb to a U.S. 
     attorney who had prosecuted him. The bomb fizzled, scorching 
     the envelope but not detonating. Hamrick was convicted, but a 
     three-judge panel of the Fourth Circuit reversed the 
     conviction on grounds that the bomb was not a deadly or 
     dangerous weapon because it had been badly built. This 
     decision flew in the face of a relevant Supreme Court ruling 
     that even an unloaded gun could be considered dangerous. For 
     some strange reason, Solicitor General Drew Days did not 
     request a rehearing on the Hamrick ruling by all the judges 
     of the entire Fourth Circuit. But the judges decided to do so 
     on their own, and they narrowly upheld Hamrick's conviction. 
     Eight judges thought that the faulty bomb qualified as 
     dangerous, while six judges disagreed. No word yet from Drew 
     Davis. Is anybody in charge here?

                               Exhibit 2

                [From the Trial magazine, November 1983]

                            Suing for Safety

                      (By Thomas F. Lambert, Jr.)

       It has been well and truly said, ``If you would plant for a 
     year, plant grain; for a decade, plant trees; but if you 
     would plant for eternity, educate a man.'' For nearly four 
     generations, ATLA has been teaching its men and women, and 
     they have been demonstrating to one another, that you can sue 
     for safety. Indeed, one of the most practical measures for 
     cutting down accidents and injuries in the field of product 
     failure is a successful lawsuit against the supplier of the

[[Page S2572]]

     flawed product. Here, as well as elsewhere in Tort Law, 
     immunity breeds irresponsibility while liability induces the 
     taking of preventive vigilence. The best way to make a 
     merchant responsible is to make him accountable for harms 
     caused by his defective products. The responsible merchant is 
     the answerable merchant.
       Harm is the tort signature. The primary aim at Tort Law, of 
     the civil liability system, is compensation for harm. Tort 
     law also has a secondary, auxiliary and supportive function--
     the accident prevention function or prophylactic purpose of 
     tort law--sometimes called the deterrent or admonitory 
     function. Accident prevention, or course, is even better than 
     accident compensation, an insight leading to ATLA's 
     longstanding credo: ``A Fence at the Top of the Cliff Is 
     Better Than an Ambulance in the Valley Below.''
       As trial lawyers say, however, ``If you would fortify, 
     specify.'' The proposition that you can sue for safety is 
     readily demonstratable because it is laced and leavened with 
     specifics. They swarm as easily to mind as leaves to the 
     trees.


accident prevention through successful suits in the products liability 
                                 field

       (1) Case for Charcoal Briquets Causing Death from Carbon 
     Monoxide. Liability was imposed on the manufacturer of 
     charcoal briquets for the carbon monoxide death and injury of 
     young men who used the briquets indoors to heat an unvented 
     mountain cabin. The 10-pound bags read, ``Quick to Give Off 
     Heat'' and ``Ideal for Cooking in or Out of Doors.'' The 
     manufacturer was guilty of failure to warn of a lethal latent 
     danger. Any misuse of the product was foreseeable because it 
     was virtually invited. Next time you stop in at the local 
     supermarket or hardware store, glance at the label on the 
     bags of charcoal briquets. In large capital letters you will 
     find the following: ``WARNING. DO NOT USE FOR INDOOR HEATING 
     OR COOKING UNLESS VENTILATION IS PROVIDED FOR EXHAUSTING 
     FUMES TO OUTSIDE. TOXIC FUMES MAY ACCUMULATE AND CAUSE 
     DEATH.'' Liability here inspired and exacted a harder, more 
     emphatic warning, once again reducing the level of excessive 
     preventable danger.
       (2) Case of the Exploding Cans of Draino. When granular 
     Drano is combined with water, its caustic soda interacts with 
     aluminum, another ingredient in its formula and produces 
     intensive heat converting any water into steam at a rapid 
     rate. If the mixture is confined, the pressure builds up 
     until an explosion results. The manufacturer's use of a 
     screw-on top in the teeth of such well known hazard was a 
     design for tragedy. The expectable came to pass (as is the 
     fashion with expectability). In Moore v. Jewel Tea Co., a 48-
     year-old housewife suffered total blindness from the 
     explosion of a Drano can with a screw-on top, eventuating in 
     a $900,000 compensatory and $10,000 punitive award to the 
     wife and a $20,000 award to her husband for loss of conjugal 
     fellowship.
       A high school chemistry student could see that what was 
     needed was a ``flip top'' or ``snap cap'' designed to come 
     off at a pressure of, say, 15-20 pounds per square inch. 
     After a series of adverse judgments, the manufacturer 
     substituted the safer flip top. Of course, even the Drano 
     flip top will be marked for failure if not accompanied by 
     adequate testing and quality control. Capers involved a suit 
     for irreversible blindness suffered by 10-year-old Joe Capers 
     when the redesigned flip top of a can of Drano failed to snap 
     off when the can fell into the bathtub and the caustic 
     contents spurted 8\1/2\ feet high impacting Joe in the face 
     and eyes with resulting total blindness. The shortcomings in 
     testing the can with the reformulated design cost the company 
     an award of $805,000. As a great Torts scholar has said, 
     ``Defective products should be scrapped in the factory, not 
     dodged in the home.''
       Drayton v. Jiffee Chemical Corp., is a grim and striking 
     companion case to the Drano decisions mentioned above, and it 
     underscores the same engineering verities of those cases: the 
     place to design out dangers is on the drawing boards or when 
     prescribing the chemical formula. A one-year-old black girl 
     suffered horrendous facial injuries, ``saponification'' or 
     fusion of her facial features, when an uncapped container of 
     Liquid-Plumr was inadvertently tipped over. At the time of 
     the accident, this excessively and unnecessarily caustic 
     drain cleaner was composed of 26 percent sodium hydroxide, 
     i.e., lye. No antidote existed because, as the manufacturer 
     knew, Liquid-Plumr would dissolve human tissue in a fraction 
     of a second. To a child (or any human being) a chemical bath 
     of this drain cleaner could be as disfiguring as falling into 
     a pool of piranha fish. Liquid-Plumr, mind you, was a 
     household product, which means that its expectable 
     environment of use must contemplate the ``patter of little 
     feet,'' as the children's hour in the American home 
     encompasses 24 hours of the day.
       At the time of marketing this highly caustic drain cleaner, 
     having made no tests as to its effect on human tissue, within 
     the existing state of the art, the defendant could have 
     reformulated the design to use 5 percent potassium hydroxide 
     which would have been less expensive, just as effective and 
     much safer. After some 59 other Liquid-Plumr injuries were 
     reported to defendant, it finally reformulated its design to 
     produce a safer product. In Drayton the defendant was allowed 
     to argue in defense and mitigation that its management was 
     new, that it had learned from its prior claims and litigation 
     experience and that it had purged the enterprise of its prior 
     egregious misconduct.
       To open the courtroom door is often to open a school door 
     for predatory producers.
       (3) Case of the Tip-Over Steam Vaporizer. A tip-over steam 
     vaporizer, true to that ominous description, was upset by a 
     little girl who tripped over the unit's electric outlet cord 
     on the way to the bathroom in the middle of the night. The 
     sudden spillage of scalding water in the vaporizer's glass 
     jar severely burned the 3-year-old child. The worst injuries 
     in the world are burn injuries. The cause of the catastrophe 
     was a loose-lidded top which could have been eliminated by 
     adopting any one of several accessible, safe, practical, 
     available, desirable and feasible design alternatives, such 
     as a screw-on or child-guard top. The truth is that the 
     manufacturer, Hankscraft, had experienced a dozen prior 
     similar disasters. In the instant case, the little girl 
     recovered a $150,000 judgment against the heedless 
     manufacturer, impeaching the vaporizer's design because of 
     lack of a screw-on or child-guard top. When the manufacturer, 
     with icy indifference to the serious risks to infant users of 
     its household product refused to take its liability carrier's 
     advice to recall and redesign its loose-lidded vaporizer, 
     persisting in its stubborn refusal when over 100 claims had 
     been filed against it, the carrier finally balked and refused 
     to continue coverage unless the company would recall and 
     redesign. Then and only then did Hankscraft stir itself to 
     redeem and correct the faulty design of its product, 
     thereafter proudly proclaiming (and I quote), ``Cover-lock 
     top protects against sudden spillage if accidentally 
     tipped.'' Once again Tort Law had to play professor and 
     policeman and teach another manufacturer that safety does not 
     cost: It pays. Under what might be called the Cost-Cost 
     formula, the manufacturer will add safety features when it 
     comes to understand that the cost of accidents is greater 
     than the cost of their prevention. The Tip-Over Steam 
     Vaporizer case is the most graphic example known to use 
     showing that corporate management can be recalled to its 
     social responsibilities by threat of stringent liability, 
     enhanced by deserved civil punishment via punitive 
     damages, and that belief in such a proposition is more 
     than an ivory tower illusion.
       A good companion case to the Tip-Over-Steam-Vaporizer case, 
     serving the same Tort Touchstone of Deterrence, is the 
     supremely instructive Case of the Remington Mohawk 600 Rifle. 
     While a 14-year-old boy was seeking to unload one of these 
     rifles, pushing the safety to the ``off'' position as 
     required for the purpose, the rifle discharged with the 
     bullet entering the boy's father's back, leaving him 
     paralyzed and near death for a long time. The agony of his 
     guilt, his feeling that he was to blame for his father's 
     devastating injuries, pressed down on the boy's brow like a 
     crown of thorns and almost unhinged his sanity. Assiduous 
     investigation by the family's lawyer unearthed expert 
     evidence of unsafe design and construction and lax quality 
     control of the safety selector and trigger assemblies of the 
     Mohawk 600.
       The result of the exertions of the plaintiff's lawyer, 
     deeply and redoubtedly involved in challenging the safety 
     history of the rifle model, was a capitulation by Remington 
     and an agreement to settle the father's claim (he was a 
     seasoned and successful defense trial lawyer) for $6.8 
     million. Remington also wrote the son a letter, muting some 
     of his anguish by stating that the weapon was the whole 
     problem and that he was in no way responsible for his 
     father's injuries. Then, facing the threat of cancelled 
     coverage from its carriers for skyrocketing premiums in the 
     projection of other multimillion dollar awards, Remington 
     commendably served the public interest by announcing the 
     recall campaign in which we see another electrifying example 
     of Tort Law litigating another hazardous product feature from 
     the market.
       Remington's nationwide recall program affected 200,000 
     firearms; notices in newspapers and magazines similar to this 
     one that appeared in the January 1979 issue of Field and 
     Stream cut back on the harvest of hurt and heartbreak: 
     ``IMPORTANT MESSAGE TO OWNERS OF REMINGTON MODEL 600 AND 660 
     RIFLES, MOHAWK 600 RIFLES, AND XP-100 PISTOLS. Under certain 
     unusual circumstances, the safety selector and trigger of 
     these firearms could be manipulated in a way that could 
     result in accidental discharge. The installation of a new 
     trigger assembly will remedy this situation. Remington is 
     therefore recalling all Model 600 rifles except those with a 
     serial number starting with an `A' . . . Remington recommends 
     that prior to any further usage of guns included in the 
     recall, they be inspected and modified if necessary. 
     [Directions are then given for obtaining name and address of 
     nearest Remington Recommended Gunsmith who would perform the 
     inspection and modification service free of charge.].''
       Tort Law forced Remington to look down the barrel and see 
     what it was up against. Once again Tort Law was the death 
     knell to excessive preventable danger.
       For a wonderfully absorbing account of the Mohawk 600, see 
     Stuart M. Speiser's justly praised Lawsuit (Horizon Press, 
     New York, 1980) 348-55.
       (4) Case of MER/29, the Anti-Cholesterol Drug Which Turned 
     out to Cause Cataracts. Many trial lawyers will recall the 
     prescription drug MER/29 marketed for its benign and 
     benevolent effect in lowering blood cholesterol levels and 
     treating hardening of the

[[Page S2573]]

     arteries but which turned out to have an unpleasant and 
     unbargained-for effect on users, the risk of causing 
     cataracts. As Peter DeVries recently observed, ``There is 
     nothing like a calamity to help us fight our troubles.'' 
     Blatant fraud and suppression of evidence from animal 
     experiments were proved on the manufacturer's part in the 
     marketing of this dangerous drug. Who did more--the federal 
     government or private trial lawyers--in getting this 
     dangerous drug off the market and compensating the numerous 
     victims left in its wake? The question carries its own 
     answer. The United States drug industry has annual sales of 
     16 billion dollars per year, while the Food and Drug 
     Administration has an annual budget of 65 million dollars to 
     oversee all drug manufacture, production and safety. How 
     can the foothills keep the Alps under surveillance? Worse, 
     as shown by the MER/29 experience, enforcement of the law 
     in that situation, far from being vigorous and vigilant, 
     was lame, limp and lack-luster. It was only private suits 
     advanced by trial lawyers that furnished the real muscle 
     of enforcement and sanction, compensation for victims, 
     deterrence of wrongdoing, and discouragement of corporate 
     attitudes toward the public recalling that attributed to 
     Commodore Vanderbilt.
       As to the indispensible role and mission of the trial 
     lawyer in Suing for Safety, it should not be overlooked that 
     the current Administration has moved to sharply restrict the 
     regulation of product safety by the Consumer Product Safety 
     Commission. The 1982 budget for the commission was reduced by 
     30 percent in the first round of Reagan Administration budget 
     cuts and is marked for further cuts in the future.
       As the Thalidomide, MER/29, Dalkon Shield, Asbestos, DES, 
     Slip-into-Reverse Transmissions and Fuel Tank scandals have 
     been starkly revealed, we have crime in the suites as well as 
     crime in the streets. Corporate culpability calls for 
     corporate accountability, and our society has developed no 
     better instrument to encourage socially responsible corporate 
     behavior than the vehicle of adverse judgments beefed up by 
     punitive damages. In the MER/29 situation, for example, the 
     criminal fines levied on the corporate producer and its 
     executives were slap-on-the-wrist trivial when contrasted 
     with the deterrent impact of punitive damage awards in 
     current uncrashworthiness cases where flagrant corporate 
     indifference to public safety was established.
       Our leading scholar in the field of punitive damages, 
     writing with verve and virtuosity on that subject, concluded 
     in 1976 that punitive damages awards should be permitted in 
     appropriate products liability cases. Writing in 1982 with 
     the same unbeatable authority, Professor David G. Owen traces 
     the ferment and developments of doctrine in the ensuing years 
     and then delivers a conclusion informed by exhaustive 
     research, seasoned reflection, and an obvious morality of 
     mind. ``I remain convinced of the need to retain this tool of 
     legal control over corporate abuses. . . .''
       (5) Case of the Infant Who Died from Drinking Toxic 
     Furniture Polish Where Manufacturer Failed to Warn Mother to 
     Keep Toxic Product out of Reach of Children. This is the 
     celebrated case of Spruill v. Boyle-Midway, Inc., in which a 
     14-month-old child reach over from his crib and pulled a 
     doily off a bureau, causing a bottle of Old English Red Oil 
     Furniture Polish, manufactured by the defendant, to fall into 
     the toddler's crib. During the few minutes his mother was out 
     of the room, the baby got the cap off the bottle and drank a 
     little bit of the polish. He was dead within two days of 
     resulting chemical pneumonia. The bottle had a separate 
     warning about combustibility in letters \1/8\ inch high, but 
     only in the midst of other text entitled ``Directions'' in 
     letters \1/32\ inch high did it say ``contains refined 
     petroleum distillates. May be harmful if swallowed, 
     especially by children.'' The mother testified that she saw 
     the warning about combustibility but did not read the 
     directions because she knew how to use furniture polish. In a 
     negligence action against the maker, the jury found that both 
     defendant and the baby's mother were negligent and awarded 
     wrongful death damages to the child's father and siblings but 
     not to the mother. The Fourth Circuit in keeping with the 
     grain of modern authority held that it was irrelevant that 
     the child's ingestion of the toxic polish was an unintended 
     use of the product. The jury could properly find that in the 
     absence of an adequate warning to the mother that she could 
     read and heed--to keep the polish out of the reach of 
     children--such misuse of the product was a foreseeable one. 
     The defect was to be tested not only by intended uses but by 
     foreseeable misuses.
       The jury could find that the manufacturer's placement of 
     the warning was designed more to conceal than reveal, 
     especially in view of the grater prominence given the fire 
     warning (\1/8\ of an inch compared to the Lilliputian print, 
     \1/32\ of an inch, as to the contents containing ``refined 
     petroleum distillates''). The poison warning could be found 
     to fall short to what was required to convey to the average 
     person the dangerous nature of this household product. The 
     label suggested that harm from drinking the polish was not 
     certain but merely possible, while experts on both sides 
     agreed that a single teaspoon would be lethal to children.
       The warning in short could properly be found to be 
     inadequate--too soft, mispositioned and not sufficiently eye-
     arresting. Defendant admitted in answer to interrogatories 
     that it knew of 32 prior cases of poisoning from ingestion of 
     its ``Old English Red Polish.''
       Did the imposition of liability in this seminal Spruill 
     case supra stimulate, goad or spur the manufacturer to take 
     safety measures against the foreseeable risk of ingestion by 
     innocent children? A trip to the local hardware store a 
     couples of days ago reveals that Old English Red Oil Polish 
     now sports the following on its label: ``DANGER HARMFUL OR 
     FATAL IF SWALLOWED. COMBUSTIBLE. KEEP OUT OF REACH OF 
     CHILDREN. SAFETY CAP.''
       An error is not a mistake unless you refuse to correct it.
       (6) Case Holding Manufacturer of PAM (Intended to Keep Food 
     from Sticking to Cooking Surfaces) Liable for Death of Teen-
     Ager from Inhalation of PAM's Concentrated Vapors. Harless v. 
     Boyle-Midway Div. of Amer. Home Products, involved an 
     increasing number of teenagers who were dying of a ``glue-
     sniffing syndrome,'' inhaling the concentrated vapors of PAM, 
     a household product intended to keep food from sticking to 
     cooking surfaces. Originally, the manufacturer used only a 
     soft warning on the can's label: ``Avoid direct inhalation of 
     concentrated vapors. Keep out of the reach of children.'' 
     However, to the knowledge of defendant, the children 
     continued sniffing and dying. Then the manufacturer, as an 
     increasing number of lawsuits were pressed upon it for the 
     preventable deaths of such children, changed the warning on 
     its labels. shifting to harder warning: ``CAUTION: Use only 
     as directed, intentional misuse by deliberately concentrating 
     and inhaling the contents can be fatal.'' This was, of 
     course, a much harder and more emphatic warning. The Fifth 
     Circuit held that it was reversible error to exclude 
     plaintiff's evidence (in an action for the wrongful death of 
     a PAM-sniffing 14-year-old) that no deaths had occurred from 
     PAM sniffing after the defendant had hardened its warning by 
     warning against the danger of death, the ultimate trauma.
       On remand the jury brought in a verdict for the boy's 
     estate in the amount of $585,000 with an additional finding 
     by the jury that the lad's administrator was entitled to an 
     award of punitive damages. Prior to the punitive damages 
     suit, the case was settled for a total of $1.25 million. It 
     was uncontested that prior to the lad's death the 
     manufacturer knew of 45 inhalation deaths from foreseeable 
     misuse of its product, and upon remand admitted to an 
     additional 68 from the same expectable cause.
       If you will examine the label on the can of PAM on your 
     shelf, as the writer has just done, you will find: ``WARNING: 
     USE ONLY AS DIRECTED. INTENTIONAL MISUSE BY DELIBERATELY 
     CONCENTRATING AND INHALING THE CONTENTS CAN BE HARMFUL OR 
     FATAL.'' Once again the pressures of liability stimulated a 
     producer to avoid excessive preventable dangers in its 
     product's use by strengthening its warning label, thereby 
     enhancing consumer protection.
       (7) Case of the Poisonous Insecticide Holding That Warnings 
     Must Contain Appropriate Symbols. Such as Skull and 
     Crossbones, Where Manufacturer knows That Product May Be Used 
     by Illiterate Workers (Spanish-Speaking Imported Puerto Rican 
     Laborers) Who Would Not Understand English. This is the 
     salutary holding in the celebrated case of Hubbard-Hall Chem. 
     Co. v. Silverman. The First Circuit upheld judgments entered 
     on jury verdicts for the wrongful death of two illiterate 
     migrant farm workers who were imported by a Massachusetts 
     tobacco farmer and killed by contact with a highly toxic 
     insecticide manufactured and distributed by defendant. Even 
     though the comprehensive and detailed danger warnings on the 
     sacks fully complied with label requirements of the 
     Department of Agriculture, the jury could properly find that 
     because of the lack of a skull or crossbones or other 
     comparable symbols the warning was inadequate. Use of the 
     admittedly dangerous product by persons who were of limited 
     education and reading ability was within the range of 
     apprehension of the manufacturer. While evidence of 
     compliance with governmental regulations was admissible, it 
     was not decisive. Governmental standards are ``minimums,'' a 
     floor not a ceiling, and so far as adequate precautions are 
     concerned, federal regulations do not oust the possibly 
     higher common-law standards of the Commonwealth of 
     Massachusetts.
       The steady, unflagging pressures of litigation against the 
     inertia, complacency and moral obtuseness of manufacturers 
     have not only resulted in enhanced safety in the field of 
     conscious design choices (substituting child-guard screw-on 
     tops on tip-over steam vaporizers or over-the-axle fuel tanks 
     for those mispositioned more vulnerably in front of the axle 
     or adding rear-view mirrors to blind behemothic earth-moving 
     machines whose design obstructs the vision of a reversing 
     operator, etc.) But also in inducing product suppliers to 
     reduce marketing defects in the products they sell by 
     strengthening the adequacy of the instructions and warnings 
     that accompany their products set afloat in the stream of 
     commerce.
       The net effect of such benign and beneficial litigation has 
     been to improve the adequacy and efficacy of the educational 
     information given to consumers by producers via improvements 
     in the conspicuousness of warnings given; making them more 
     prominent, eye-arresting, comprehensive, complete and 
     emphatic; placing the warnings in more effective locations; 
     avoiding ambiguous warning; extending warnings to the safe 
     disposition of the product; and avoiding any dilution of the 
     warnings given. In short, the

[[Page S2574]]

     bottom line, as indicated in the cited representative 
     sampling of cases, is that successful lawsuits operate as 
     safety incentives to ``inspire'' product suppliers to furnish 
     instructions and warnings that are in ratio to the risk and 
     in proportion to the perils attending foreseeable uses of the 
     marketed products.
       Here, too, we see the conspicuous usefulness of the lawsuit 
     as the weapon for ferreting out marketing defects, whether 
     ingenious or ingenuous, in selling dangerously defective 
     products.
       (8) Case of Marketing Carbon Tetrochloride Using Warnings 
     Found to Be Inadequate Because Inconspicuous. Suppose a 
     defendant sells carbon tetrachloride and places on all four 
     sides of the can, in large letters, the words ``Safety 
     Kleen,'' and then uses small letters (Lippiputian print) to 
     warn of the serious risk of using the cleaning fluid in an 
     unventialated place (of places the fine print warning only on 
     the bottom of the can). It requires no tongue of prophecy to 
     predict that this warning will be found inadequate because 
     too inconspicuous. It was so held in Maize v. Atlantic 
     Refining Co. Not only was the warning inadequate because 
     not conspicuous enough, but the representation of safety 
     (``Safety Kleen'') operated to dilute, weaken, and 
     counteract the warning. Moreover, in Tampa Drug Co. v. 
     Wait, the court upheld a judgment for the wrongful death 
     of a 38-year-old husband who died from carbon 
     tetrachloride poisoning after using a jug of the product 
     to clean the floors of his home. While the label warned 
     that the vapor from the liquid was harmful and that 
     prolonged breathing of it or repeated contact with the 
     skin should be avoided and that the product should only be 
     used in well ventilated areas, the court with laser-beam 
     accuracy ruled that the warning nonetheless could be found 
     inadequate because of its failure to warn with qualitative 
     sufficiency as to deadly effects or fatal potentialities 
     which might follow from exposure to its fumes.
       Decisions such as Maize and Wait supra were the prologue 
     and predicate for the action taken by the FDA in 1970, under 
     the Federal Hazardous Substances Act, to ban and outlaw 
     carbon tetrachloride.
       Torts archivists know that successful private lawsuits to 
     recover for harm from products simply too dangerous to be 
     sold at all, regardless of the completeness or urgency of the 
     warning given, frequently lead to a recall and reformulation 
     of the product's design or to a decision to ban the product 
     from the market. Life and limb are too important to trade off 
     against unmarketed inventory.
       (9) Case of the 8-Year-Old Boy Who Choked to Death from 
     Strangling on a Quarter-Inch Rubber Rivet, Part of a Riviton 
     Toy Kit Given Him for Christmas. This case will indeed rivet 
     the attention (in the sense of attract, fasten and hold) of 
     concerned citizens who wish to understand how the threat of 
     liability operates as a spur to safety on the part of product 
     producers. The present example involves a toymaker whose work 
     is indeed ``child's play.''
       Parker Brothers, a General Mills subsidiary headquartered 
     some 18 miles north of Boston, had big plans for Riviton. 
     This was a toy kit consisting of plastic parts, rubber rivets 
     and a riveting tool with which overjoyed children could put 
     together anything from a windmill to an airplane. In the 
     first year on the market in 1977, the Riviton set seemed on 
     its way to becoming one of those classic toys that parents 
     will buy everlastingly. However, one of the 450,000 
     Riveton sets bought in 1977 ended up under the Christmas 
     tree of an 8-year-old boy in Menomonee Falls, Wis. He 
     played with it daily for three weeks. Then he put one of 
     the quarter-inch long rubber rivets into his mouth and 
     choked to death. Ten months later, with Riveton sales well 
     on their way to an expected $8.5 million for the year, a 
     second child strangled on a rivet.
       What should the company do? Just shrug off the two fatal 
     child strangulations, ascribe the deaths to freakish 
     mischance, try to shift the blame to parental failure to 
     supervise and police their children at play, or assign 
     responsibility to the child's abnormal misuse or abuse of 
     their product? Could not the company cap its disavowal of 
     responsibility by a bromidic disclaimer that, ``After all, 
     peanuts are the greatest cause of strangulation among 
     children and nobody advocates the banning of the peanut.''
       However, as manufacturers, Parker Brothers well knew that 
     they would be held liable to an expert's skill and knowledge 
     in the particular business of toymaking and were bound to 
     keep reasonably abreast of scientific knowledge, discoveries 
     and hazards associated with toys in their expectable 
     environment of use by unsupervised children in the home. The 
     toymaker knew that the Riveton set must be so designed and 
     accompanied by proper instructions and warnings that its 
     parts would be reasonably safe for purposes for which it was 
     intended but also for other uses which, in the hands of the 
     inexperienced, impulsive and artless children, were 
     reasonably foreseeable. When you manufacture for children, 
     you produce for the improvident, the impetuous, the 
     irresponsible. As a seasoned judge put it: ``The concept of a 
     prudent child, God forbid, is a grotesque combination.'' Much 
     must be expected from children not to be anticipated when you 
     are dealing with adults, especially the propensity of 
     children to put dangerous or toxic or air-stopping objects 
     into their mouths. The motto of childhood seems to be: ``When 
     in doubt, eat it.'' Knowledge of such childish propensity is 
     imputed to all manufacturers who produce products, especially 
     toys, which are intended for the use of or exposure to 
     children. Cases abound to document this axiom.
       Recently, Wham-O Manufacturing Co. of San Gabriel, Calif., 
     voluntarily recalled its Water Wiggle, a garden hose 
     attachment that drowned a child when it jammed in its throat. 
     Still more recent, Mattel, Inc. of Hawthorne, Calif., 
     initiated a recall of missiles fired by it Battlestar 
     Gallactica toys when a 4-year-old boy inhaled one and died. 
     The manufacturer of a ``Play Family'' set of toy figurines 
     would have been well advised to pull from the market and 
     redesign the small carved and molded figures in the toy set, 
     intended for children of the teething age. A 14-month-old 
     child swallowed one of the toy figures 1\3/4\'' high and \7/
     8\'' in diameter, and before it could be extricated from his 
     throat at a hospital's emergency room, the child was reduced 
     to vegetable status as a result of irreversible brain damage 
     from the toy's windpipe blockage of air supply to the brain. 
     The manufacturer's dereliction of design and lack of product 
     testing were to cost it a $3.1 million jury verdict for the 
     child and his parents.\24\
       Against the marketing milieu and the legal setting sketched 
     above, what should be the proper response of Parker Brothers, 
     manufacturers of the Riviton toy set, when its executives 
     learned of the second child's death from strangulation on the 
     quarter-inch rubber rivet in the toy kit? Should they have 
     tried to tough it out or luck it out in the well known 
     lottery called ``do nothing and wait and see''? The company 
     was sensitive not only to the constraints of the law 
     (liability follows the marketing of defective products), but 
     also to the imperatives of moral duty and social 
     responsibility, and the commercial value of an untarnished 
     public image. Parker Brothers decided to halt sales and 
     recall the toy. As the company president succinctly stated, 
     ``Were we supposed to sit back and wait for death No. 3?''
       Business, the Frenchman observed, is a combination of war 
     and sport. Tort Law pressures business to realize how 
     profitless it may provide to war against children or to 
     trifle and jest with their safety. The commendable conduct of 
     Parker Brothers in this case is one of the most striking 
     tributes we know to the deterrent value and efficacy of Tort 
     Law and the example would make a splendid case study for the 
     nation's business schools.
       (10) Case of the Recycling Washing Machine That Pulled Out 
     a Boy's Arm. In Garcia v. Halsett, the plaintiff, an 11-year-
     old boy, sued the owner of a coin-operated laundromat for 
     injuries inflicted while he was using one of the washing 
     machines in the launderette. He waited several minutes after 
     the machine had stopped its spin cycle before opening the 
     door to unload his clothing. As he was inserting his hand 
     into the machine a second time to remove a second handful of 
     clothes the machine suddenly recycled and started spinning, 
     entangling his arm in the clothing, causing him serious 
     resulting injuries. The evidence was clear that a common $2 
     micro switch--feasible, desirable, long available--would have 
     prevented the accident by automatically shutting off the 
     electricity in the machine when the door was opened. The 
     reviewing court held the launderette owner strictly liable 
     for defective design because the machine lacked a necessary 
     safety device, an available micro switch. Shortly thereafter 
     the defendant obtained 12 of these micro switches and 
     installed them himself on the machines. Once again, the 
     threat of tort liability serves to deter--the prophylactic 
     purpose of Tort Law at work. The deterrent function of Tort 
     Law is not just an idea in the air; it has landing gear, has 
     come down to earth and gone to work.


                                summary

       The foregoing 10 cases and categories are merely random and 
     representative examples, not intended to be complete or 
     exhaustive, of the deterrent aim and effect of Tort Law in 
     the field of product failure or disappointment.
       It needs to be emphasized that the preventive aim of Tort 
     Law is pervasive and runs like a red thread throughout the 
     entire corpus of Torts. For example, the private Tort 
     litigation system has served, continues to serve, as an 
     effective and useful therapeutic and prophylactic tool in 
     achieving better health care for our people by discouraging 
     and thereby reducing the incidence of medical mistakes, 
     mishaps and ``misadventures.'' An error does not become a 
     mistake unless you refuse to correct it. For example, 
     successful medical malpractice suits have induced 
     hospitals and doctors to introduce such safety procedures 
     as sponge counts, electrical grounding of anesthesia 
     machines, the padding of shoulder bars on operating 
     tables, and the avoidance of colorless sterilizing 
     solutions in spinal anesthesia agents. Remember, the 
     fraudulent butchery practiced on defenseless patients by 
     the notorious Dr. John Nork was not unearthed, pilloried 
     or ended by the vigilant action of hospital 
     administrators, peer review groups, or medical societies 
     but by successful, energetically pressed malpractice 
     actions prosecuted by trial lawyers in behalf of the 
     victimized patients.
       So we come full circle and end as we began: Accident 
     Prevention Is Better Than Accident Compensation: ``A Fence at 
     the Top of the Cliff Is Better Than an Ambulance in the 
     Valley Below.'' A successful lawsuit and the pressures of 
     stringent liability are one of the most effective means for 
     cutting down on excessive preventable dangers in our risk-
     beleaguered society.

[[Page S2575]]

       My hero in the foregoing chronicle of good lawyering has 
     been the hard-working trial lawyer with his care, commitment 
     and concern for public safety, the civil religion of us all.
       He more than any other professional has proved that we can 
     indeed Sue for Safety. My tribute to him is in words Raymond 
     Chandler used to salute his hero: ``Down these mean streets a 
     man must go who is not himself mean, who is neither tarnished 
     nor afraid.''

       product liability does not extend to negligent entrustment

  Mr. ROCKEFELLER. Will the Senator from Washington yield for a 
question about the applicability of the bill?
  Mr. GORTON. Yes, I would be glad to do so.
  Mr. ROCKEFELLER. Mr. President, we have been seeing a lot of paper 
about this conference reports' effects on so-called dram shop laws 
which allow victims of drunk driving crashes to seek recovery from 
those individuals or establishments who negligently sell, or serve, 
alcoholic beverages to persons who are intoxicated or to minors who 
subsequently kill or injure someone while driving under the influence.
  Mr. GORTON. Yes, we have. I believe those laws can be valuable and 
help enhance highway safety and antidrunk driving initiatives, as well 
as encourage the responsible service of alcoholic beverages. Section 
104 of the conference report is an example of a provision in the very 
bill we are considering which tries, in a small way, to discourage 
alcohol and drug abuse in this country. Section 104 tells persons that, 
if they are drunk or on drugs and that is the principal cause of an 
accident, they will not be rewarded through the product liability 
system.
  Mr. ROCKEFELLER. I agree. I am troubled that I continue to hear 
opponents of product liability reform, claim that these laws will be 
adversely affected by the proposed legislation.
  Mr. GORTON. The short response, Senator, is these laws will not be 
adversely affected or affected in any way. The Senate Commerce 
Committee report, which has been adopted as the legislative history of 
the conference report, states unequivocally at page 25, footnote 90:

       [T]he provisions of the Act would not cover a seller of 
     liquor in a bar who sold to a person who was intoxicated or a 
     car rental agency that rents a car to a person who is 
     obviously unfit to drive or a gun dealer that sells a firearm 
     to a ``straw man'' fronting for children or felons. These 
     actions would not be covered by the Act, because they 
     involved a claim that the product seller was negligent with 
     respect to the purchaser and not the product. Such actions 
     would continue to be governed by state law.

  Clearly, H.R. 956 will not in any way affect State law regarding the 
liability of those individuals who serve additional alcohol to persons 
who are obviously under the influence. Similarly, H.R. 956 will not 
affect State law regarding the liability of a product seller who fails 
to exercise reasonable care in selling a weapon, such as a handgun, to 
a minor or known criminals. The legislation also will not affect State 
law regarding the liability of a rental agency that fails to exercise 
reasonable care by renting an automobile to someone who, at the time, 
is obviously unfit to drive.
  Mr. ROCKEFELLER. Mr. President, I think we should say to our 
colleagues that the product seller provision's application does not 
mean that these cases will be affected.
  Mr. GORTON. The Senator is absolutely correct, these cases are not 
affected. First and foremost, this is a product liability bill and it 
applies to product liability actions. Product liability actions 
generally involve harm caused by alleged product defect.
  As all are aware, the harm in cases involving drunk drivers is often 
severe, indeed, and may even mean the death of an innocent person or a 
child. It is important, however, to avoid the misleading arguments by 
those who oppose legal fairness and who intentionally attempt to 
confuse product liability actions, which are covered by the conference 
report, with negligent entrustment cases, which are not covered by the 
legislation. As in the past, they use attention-getting, but totally 
irrelevant examples, such as drunk driving cases and gun violence.
  Mr. ROCKEFELLER. And that remains true, regardless of the fact that 
the applicability section of the conference report, says that the act 
applies to ``any product liability action brought in any State or 
Federal Court on any theory for harm caused by a product.'' Is that not 
right?
  Mr. GORTON. The reason for this broad definition is to assure that 
the bill covers all theories of product liability, such as negligence, 
implied warranty, and strict liability. It is not broadly defined in 
order to extend to cases beyond product liability, and certainly not to 
extend the bill to cases involving negligent entrustment, such as in 
cases involving the sale of alcohol to an obviously intoxicated 
individual or the sale of a gun to a known felon.

  Mr. ROCKEFELLER. Mr. President, section 103 of the bill, the so-
called product sellers provision, imposes liability when a product 
seller fails to exercise reasonable care with respect to a product. If 
a tavern owner fails to exercise reasonable care in selling alcohol to 
an intoxicated person, would that case be subject to the bill?
  Mr. GORTON. No. The case against the tavern owner is based on the 
tavern owner's action; it is not based on an alleged defect in the 
product, that is, the alcohol. Cases in which a tavern owner sells 
alcohol to an intoxicated person involve negligent entrustment and are 
not subject to the provisions of the conference report; State law 
continues to apply.
  To hold that such laws were affected by the bill would be a clear and 
obvious misconstruction of the bill. To make this clear, one only need 
look to the acts covered by product sellers in the conference report. 
This appears in the definition of product seller, which is set forth in 
sections 101(11)(B), 101(16)(A). H.R. 956 is applicable to product 
sellers, ``but only with respect to those aspects of a product (or 
component part of a product) which are created or affected when before 
placing the product in the stream of commerce.'' The definition then 
addresses those things where the product seller ``produces, creates, 
makes, constructs, designs, or formulates * * * an aspect of the 
product * * * made by another.'' This is classic product liability and 
simply does not apply to the negligent tavern owner.
  Mr. ROCKEFELLER. And would you agree with me that the ``product 
sellers'' provision, as it applies to rented or leased products 
(section 103(c)(2)) in the conference report which states that a `` 
`product liability action' means a civil action brought on any theory 
for harm caused by a product or product use,'' cannot be interpreted to 
mean use of alcohol, or use of a gun?
  Mr. GORTON. The Senator is correct. First, the clarification is only 
included in the rented or leased products portion of the product seller 
provision. Thus, by way of example, in a situation where a car rental 
agency has exercised reasonable care with respect to maintaining and 
inspecting a vehicle, for example, the brakes, the engine, or the 
tires, and the person who shows up at the desk to rent the vehicle has 
an impeccable driving record, does not appear unfit to drive, and has a 
valid driver's license. The renter then takes the car and is 
subsequently involved in an accident. The product use language in 
section 103(c)(2) holds that the rental company cannot be held 
vicariously liable for the negligence of the renter simply because the 
company owns the product and has given permission for its use.

  In contrast, if the rental agency rented a car to an obviously 
intoxicated person and that person was in a subsequent accident, then 
the rental agency would have been negligent in renting, or in 
negligently entrusting, the car to the person who was, at the time, 
obviously intoxicated. As spelled out clearly in the legislative 
history, ``Such actions would continue to be governed by State law,'' 
and are not subject to H.R. 956.
  Thus, even in the renter and lessor context, the distinction comes 
down to whether the seller was negligent as to the product, such as by 
failing to inspect the brakes, or negligent as to the person, such as 
by renting to a person with no driver's license and a notorious 
criminal record. H.R. 956 covers product liability actions; it does not 
cover negligent entrustment actions.
  Mr. ROCKEFELLER. Thank you for that discussion. I hope it will help 
counter some of the misinformation that has been circulating regarding 
this provision. Is there any special provision of the bill that 
emphasizes what you have said here today?
  Mr. GORTON. In fact, in order to address these very concerns you have

[[Page S2576]]

thoughtfully raised, Senator, the product seller section specifically 
provides that the conference report does not cover negligent 
entrustment or negligence in selling, leasing or renting to an 
inappropriate party. Section 103(d) expressly states: ``A civil action 
for negligent entrustment shall not be subject to the provisions of 
this Act, but shall be subject to any applicable State law.'' Frankly, 
I believe this provision is superfluous, and for this reason, it does 
not matter if, or where the provision appears in the conference report.
  In sum, the product liability bill covers product liability, not 
negligent entrustment or failure to exercise reasonable care with 
regard to whom products are sold, rented or leased. H.R. 956 clearly 
would not cover ``a seller of liquor in a bar who sold to a person who 
was intoxicated or a car rental agency that rents a car to a person who 
is obviously unfit to drive or a gun dealer that sells a firearm to a 
`straw man' fronting for children or felons.''
  Mr. ABRAHAM. Mr. President, I rise today in support of H.R. 956, a 
bill to reform product liability law.
  A few months ago, the 104th Congress took the first momentous step 
toward legal reform. Over President Clinton's veto, we passed H.R. 
1056, a bill to reform securities litigation.
  This legislation will significantly curb the epidemic of frivolous 
lawsuits that are diverting our Nation's resources away from productive 
activity and into transaction costs.
  In passing H.R. 956, the Senate will be taking an equally important 
second step on the road toward a sane legal regime of civil justice.
  Our current legal system, under which we spend $300 billion or 4.5 
percent of our gross domestic product each year, is not just broken, it 
is falling apart.
  This is a system in which plaintiffs receive less than half of every 
dollar spent on litigation-related costs. It is a system that forces 
necessary goods, such as pharmaceuticals that can treat a number of 
debilitating diseases and conditions, off the market in this country.
  This is a system in which neighbors are turned into litigants. I was 
particularly struck by a recent example reported in the Washington 
Post. This case involved two 3-year-old children whose mothers could 
not settle a sandbox dispute--literally, a pre-school altercation in 
the sandbox--without going to court.
  Something must be done about this situation and this litigious 
psychology, Mr. President, and this bill puts us on the road to real, 
substantive reform.
  It institutes caps on punitive damages, thereby limiting potential 
windfalls for plaintiffs without in any way interfering with their 
ability to obtain full recovery for their injuries.
  It provides product manufacturers with long-overdue relief from 
abusers of their products.
  And it protects these makers, and sellers, from being made to pay for 
all or most non-economic damages when they are responsible for only a 
small percentage.
  First, as to punitive damages. No one wants to see plaintiffs denied 
full and fair compensation for their injuries. And this bill would do 
nothing to get in the way of such recoveries.
  Unfortunately, punitive damages have come to be seen as part of the 
normal package of compensation to be expected by plaintiffs. George 
Priest of the Yale Law School reports that in one county, Bullock, AL, 
95.6 percent of all cases filed in 1993-94 included claims for punitive 
damages.
  Punitive damages are intended to punish and deter wrongdoing. When 
they become routine--one might say when they reach epidemic 
proportions--they end up hurting us all by increasing the cost of 
important goods and services.
  For example, the American Tort Reform Association reports that, of 
the $18,000 cost of a heart pacemaker, $3,000 goes to cover lawsuits, 
as does $170 of the $1,000 cost of a motorized wheelchair and $500 of 
the cost of a 2-day maternity hospital stay.
  We can no longer afford to allow this trend to continue. I am glad, 
therefore, that this bill begins to cap punitive damages--although in 
my judgment it only makes a beginning in that area.
  I am particularly glad that the bill imposes a hard cap of $250,000 
on punitive damages assessed against small businesses--the engine of 
growth and invention in our Nation.
  Of course, punitive damage awards are not the only things increasing 
the costs of needed products.
  Throughout the debate over civil justice reform I have been referring 
to the case of Piper Aircraft versus Cleveland. I use that example 
because it shows how ridiculous legal standards can literally kill an 
industry--as they did light aircraft manufacturing in America--and cost 
thousands of American jobs.
  In Piper Aircraft, a man took the front seat out of his plane and 
intentionally attempted to fly it from the back seat. He crashed, not 
surprisingly, and his family sued and won over $1 million in damages on 
the grounds that he should have been able to fly safely from the back 
seat.
  These are the kinds of decisions we must stop. Drunken plaintiffs, 
plaintiffs who abuse and misuse products--plaintiffs who blame 
manufacturers and sellers for their own misconduct--should not be 
rewarded with large sums of money. They may deserve our concern and 
sympathy, but we as a people do not deserve to pay for their misconduct 
through the loss of entire industries.
  I am happy that this bill establishes defenses based on plaintiff 
inebriation and abuse of the product because I believe these defenses 
will benefit all Americans.
  Finally, it seems clear to me that no manufacturer should be held 
liable for non-economic damages which that individual or company did 
not cause.
  In its common form, the doctrine of joint liability allows the 
plaintiff to collect the entire amount of a judgment from any defendant 
found partially responsible for the plaintiff's damages.
  Thus, for example, a defendant found to be 1 percent responsible for 
the plaintiff's damages could be forced to pay 100 percent of the 
plaintiff's judgment.
  This is unfair. And the unfairness is aggravated when noneconomic 
damages are awarded.
  Noneconomic damages are intended to compensate plaintiffs for 
subjective harm, like pain and suffering, emotional distress, and 
humiliation.
  Because noneconomic damages are not based on tangible losses, 
however, there are no objective criteria for calculating their amount. 
As a result, the size of these awards often depends more on the luck of 
the draw, in terms of the jury, than on the rule of law. Defendants can 
be forced to pay enormous sums for unverifiable damages they did not 
substantially cause.
  This bill would reform joint liability in the product liability 
context by allowing it to be imposed for economic damages only, so that 
a defendant could be forced to pay for only his proportionate share of 
noneconomic damages.
  As a result, plaintiffs would be fully compensated for their out-of-
pocket losses, while defendants would be better able to predict and 
verify the amount of damages they would be forced to pay.
  This reform thus would address the most pressing concerns of 
plaintiffs and defendants alike.
  Mr. President, problems will remain with our civil justice system 
after this bill is made into law--if this bill is signed by President 
Clinton and made law.
  Charities and their volunteers will remain unprotected from frivolous 
lawsuits.
  Our municipalities will remain exposed to profit-seeking plaintiffs.
  And the nonproducts area of private civil law in general will remain 
unreformed--3-year-olds and their mothers may still end up in court 
over a sandbox altercation.
  In the last session I and some of my colleagues fought for more 
extensive, substantive, and programmatic reforms to our civil justice 
system. These were consistently turned back.
  I believe at this point it is time for us to consider more neutral, 
procedural reforms, such as in the area of Federal conflicts rules, to 
rationalize a system we cannot seem to tame.
  But I am certain, Mr. President, that this bill marks an important 
step toward a fairer, more reasonable and less expensive civil justice 
system.
  This is why I am frustrated that President Clinton has threatened to 
veto this bill.

[[Page S2577]]

  The President has stated repeatedly that he would support balanced, 
limited product liability reform. He has been singularly unhelpful in 
his opposition to more far-reaching reforms that would do more for 
American workers and consumers. But he has claimed that he would 
support product liability reform.
  Now the President is claiming that this legislation is somehow 
``unfair to consumers.''
  Mr. President, is a system in which fifty-seven cents of every dollar 
awarded in court goes to lawyers and other transaction costs fair to 
consumers of legal services?
  Is it really pro-consumer to have a system in which, as reported in a 
conference board survey, 47 percent of firms withdraw products from the 
marketplace, 25 percent discontinue some form of research, and 8 
percent lay off employees, all out of fear of lawsuits?
  Please tell me, Mr. President, are consumers helped by a system in 
which, according to a recent Gallup survey, one out of every five small 
businesses decides not to introduce a new product, or not to improve an 
existing one, out of fear of lawsuits?
  The clear answer, I believe, is that consumers are hurt by our out-
of-control civil justice system, a system which makes them pay more for 
less sophisticated and updated goods.
  I respectfully suggest that President Clinton look beyond the 
interests of his friends among the trial lawyers to the interests of 
the American people as a whole.
  If he looks to that interest he will find a nation hungry for reform, 
yearning to be freed from a civil justice system that is neither civil 
nor just, seeking protection from egregious wrongs, but not willing to 
sacrifice necessary goods, important public and voluntary services, and 
the very character of their communities to a system that no longer 
produces fair and predictable results.
  If we in this chamber consult the interest of the people, Mr. 
President, we will pass this bill. If President Clinton consults that 
primary interest, he will sign the bill and make it law.
  Mr. President, I yield the floor.
  Ms. SNOWE. Mr. President, for those who were becoming skeptical, the 
conference report before us demonstrates that bipartisanship is still 
alive and well in the U.S. Congress.
  First, I would like to express my appreciation to those who have 
contributed so greatly to the completion of this legislation--not only 
in the 104th Congress, but in some cases for more than a decade. The 
chairman of the Commerce Committee, Senator Pressler, has been 
instrumental in shepherding this legislation from the committee, to the 
Senate floor, into conference, and now back to the Senate floor. Also, 
Senator Rockefeller and Senator Gorton--whose commitment and leadership 
on this issue have been unsurpassed in the Senate, and without whose 
efforts we would not be voting on this conference report today--were 
invaluable in crafting this legislation.
  As I stated during the markup of S. 565 in the Senate Commerce 
Committee, and later during consideration of the bill on the floor of 
the Senate, I believe there is a compelling case for product liability 
reform in this country.
  I firmly believe the legislation the Senate adopted early last year 
was a critical and long overdue first step to reforming an area of law 
that touches each and every one of us as consumers in America. 
Therefore, I am now eager to see a well-conceived and balanced bill 
accomplishing this goal enacted during the 104th Congress. It is a goal 
I think we can and should reach. I believe the conference report before 
us is well-conceived and balanced, and am particularly pleased that it 
contains the punitive damage cap I offered, and which was adopted, 
during consideration of the Senate bill.
  In my statement on product liability on the floor of the Senate many 
months ago, I established my own personal checklist of critical issues 
I believed this legislation ought to address to make the bill fair, 
equitable, and effective. That is now also true for this conference 
report.
  First, we must allow safe consumer products to be developed to meet 
consumer needs, and ensure that consumers can seek reasonable 
compensation when injuries and damages occur.
  Second, the law must dissuade consumers from filing frivolous 
lawsuits, without discouraging Americans who have substantive 
complaints from filing legitimate suits.
  Third, a uniform law must encourage companies to police the safety of 
their own products--both by providing incentives for excellence in 
safety and strong punishment when product safety is breached.
  Last, and perhaps most importantly, one of our fundamental goals must 
be to ensure that this legislation protects the interests of the 
average American consumer who makes hefty use of products, but knows 
little of their innate safety or risk.
  I believe that this conference report--like the Senate-passed bill--
meets these criteria. One component of this conference report that I 
considered crucial to fulfilling these requirements is the cap on 
punitive damages.
  To understand the issue of a punitive damage cap, I think it is 
valuable to remember what punitive damages are--and are not. I believe 
this issue is particularly important before today's vote because of 
recent reports in various news sources that have confused a cap on 
punitive damages with a cap on pain-and-suffering, or a cap on economic 
damages.
  Punitive damages are punishment that serve an invaluable role in 
deterring quasi-criminal behavior by businesses. They have nothing to 
do with providing compensation to a person who has been harmed and are 
not intended in any way to make the plaintiff. That purpose is served 
by compensatory damages, which provide recovery for both economic 
damages--which include lost wages and medical expenses--and noneconomic 
damages, which include pain and suffering and other losses, such as 
those cased by the loss of one's sight, appendage, or reproductive 
organs.
  One of the overriding problems in our current system is the absence 
of any consistent, meaningful standards for determining whether 
punitive damages should be awarded and--if so--in what amounts. The 
absence of consistent standards not only leads to widely disparate and 
runaway punitive awards, but it also affects the settlement process. 
Individuals and companies that are sued often face a catch 22: pay high 
legal fees to fight a case through trial, verdict, and appeal--or 
simply settle out of court for any amount less than these anticipated 
legal fees.
  Even for the defendant who recognizes the cost of proving innocence 
to be too great, or simply hopes to avoid the lottery nature of a 
possible punitive award--seeking a settlement carries a hidden cost. 
The lack of a uniform national standard--or simply the existence of 
vague State standards--forces the defendant to include a punitive 
premium in their settlements, even when the likelihood of a punitive 
award is small or even nonexistent. In addition, the high reversal rate 
of punitive damage awards underscores the absence of clear and 
understandable rules.
  Therefore, in establishing a cap, I considered it vital that the 
measure we chose be fair, uniform, act as adequate punishment, and 
serve as an adequate deterrent. I believe a cap based on compensatory 
damages accomplishes all of these objectives, which is why I fought to 
include such a measure in the Senate bill. This measure is fair because 
it is blind to the socioeconomic position of the plaintiff. In 
addition, because a punitive cap that includes noneconomic damages in 
its formula is inherently unpredictable, one cannot argue that a 
business with quasi-criminal intents will be able to predict the 
ultimate cost of all possible punitive claims and make a financial 
decision to produce a dangerous product.
  At the same time, I do not believe that a cap based on a measure of 
economic damages alone would accomplish all of these objectives in all 
circumstances. Although such a measure might serve as adequate 
punishment and act as an adequate deterrent in many cases, it relies 
too greatly on the economic position of the plaintiff in establishing a 
sufficient level of punishment.

  While the Senate bill also included an additur provision that allowed 
the judge to impose a higher punitive damage award in particularly 
egregious circumstances--and this conference report also includes a 
modified additur

[[Page S2578]]

provision--I believe the measure based on compensatory damages will 
work for everyone and will subject egregious offenders to strong 
punishment. This standard is fair and nondiscriminatory. It will apply 
to all litigants equally--whether you are a man or woman, wealthy or 
poor, a child or an adult. Therefore, I am particularly pleased that 
the conference report before us maintains the Snowe amendment on 
punitive damages. And while I believe that the additur will be proven 
to be unnecessary due to the inherently even-handed and unpredictable 
nature of total compensatory damages, I accept its inclusion in the 
conference report as a means of providing the opportunity for 
additional punishment in cases where a judge--staying within the 
parameters set by the jury--deems it necessary.
  Mr. President, the bill before us--as outlined by Senators Gorton and 
Rockefeller--is a targeted bill that brings common sense and reform to 
one class of lawsuits: those pertaining to product liability. I believe 
this legislation is sound and will benefit consumers and businesses. As 
a result, I share the disappointment of other Members of this body in 
President Clinton's statement that he would veto this bipartisan 
legislation. At the least, I found it surprising that President Clinton 
opposes legislation that he endorsed as a member of the National 
Governors' Association when he was Governor Clinton. I remain hopeful 
that President Clinton will reconsider his opposition in the coming 
days. I think a strong bipartisan vote in favor of this legislation is 
just what the President needs in order to see the light on this issue.
  Mr. President, we must be able to show the American people that we 
not only considered this essential and historic legislation, but that 
we passed it with strong bipartisan support as well. There is simply no 
question that, if enacted, this reform will have a positive and wide-
ranging impact on millions of Americans. Thank you, Mr. President, I 
yield the floor.
  Mr. COHEN. Mr. President, I continue to oppose the product liability 
reform bill for two main reasons: it unnecessarily intrudes upon the 
prerogatives of our State governments and the purported problem the 
bill attempts to address--the impact of punitive damages--is 
overstated.
  For over two centuries, tort law has been developed by our common law 
courts and State legislatures. The same is true for our contract law, 
real property law, insurance law, and a host of other subjects. The 
core principles of tort law are the same across the country, but each 
State has adjusted its laws to suit its individual needs, experimented 
with liability reforms, and attempted to strike a careful balance the 
interests of business and consumers.
  The Federal product liability bill would put an end to this era of 
local experimentation and adjustment. Instead, it would contribute to 
the trend of the last half century of centralizing power in Washington. 
Unfortunately, the product liability bill will be only the first step 
in this process. Once it is completed other interests will follow with 
pleas for Federal intervention. And eventually the States will be 
stripped of yet another area of authority. This trend runs entirely 
counter to the generally accepted principle that the Federal Government 
is too big and that more authority should be returned to the States and 
localities.
  Ironically, we are taking this step at a time when the States are 
vigorously engaged in the topic of tort reform. Just this year, New 
Jersey, Indiana, Wisconsin, Illinois, and Texas have passed tort reform 
legislation. In fact, since 1986, 31 States have altered their product 
liability laws, 30 States limit the amount of punitive damages in some 
manner and 41 States have changed or abolished the rule of joint and 
several liability. With this much activity on the state level, there is 
no justification for this sweeping, intrusive Federal bill.

  I also believe that the case for tort reform has been exaggerated. 
Unfortunately, the debate over this legislation has been driven more by 
anecdote and horror stories than objective facts. Indeed, the dearth of 
solid, unbiased research led the Wall Street Journal to conclude last 
year that ``Truth Is the First Casualty of the Tort-Reform Debate.''
  A review of some data collected by the Bureau of Justice Statistics, 
a neutral arbiter on this topic, demonstrates that runaway jury 
verdicts are not as great of a problem as the tort reform advocates 
suggest. The study showed that courts in the 75 largest counties in the 
country decided 762,000 civil cases in 1992. Punitive damages were 
awarded in only 364 of these cases--.04 percent. Only 360 of the 
762,000 cases involved product liability. Punitive damages were awarded 
in only three of those cases. And the total amount of punitive damages 
awarded was only $40,000.
  The study also suggests that if we are looking to solve problems with 
the application of punitive damages, perhaps we should be addressing 
other areas of the law. Of the cases in which the plaintiff won a jury 
verdict, punitive damages were awarded in 30 percent of all slander 
cases, 21 percent of all fraud cases, but only 2 percent of all product 
liability cases.
  I do not deny that there have been abusive cases where excessive 
awards have been made for minor injuries. But to address this problem, 
we need to do more to punish attorneys who bring frivolous cases or use 
the force of the legal system to coerce companies to settle meritless 
claims. We also need to encourage judges to intervene when juries run 
amok. Instead of taking these steps, this bill places caps on damages 
and limits the ability of injured parties to collect judgments imposed 
against wrongdoers. In essence, it limits the ability of those with 
meritorious claims to gain full compensation in order to rid the system 
of shameful cases that should have never been filed in the first place.
  In my view, this is an unwise approach that will do damage to our 
principle of federalism. I will vote against this conference report.
  Mrs. MURRAY. Mr. President, I would like to explain why I voted 
against this product liability conference report.
  All of us in this room have heard horrific stories about people who 
got hurt when they did stupid or silly things with a product and then 
recovered tremendous amounts of money from innocent businesses. Those 
few stories have gotten a lot of mileage. They have gotten us to a 
conference report that takes power from consumers and gives it to 
corporations.
  Mr. President, I am a mother who wants to be responsible for passing 
laws that improve the chances for my children to live healthy, safe 
lives. I am glad that victims have used the current State-based product 
liability laws to force manufacturers to make safe toys, nonflammable 
pajamas, and cars and trucks that don't explode. The current legal 
system forced companies to be responsible or face the possibility of 
significant financial loss.
  I also want to be responsible for passing laws that provide the hard 
working men and women of this country an opportunity to be fully 
compensated for injuries that are a direct result of products they use 
in the workplace. This conference report makes it much harder for our 
workers to recover damages from those responsible for their injuries. 
It is designed to give advantage to corporations and disadvantage to 
our workers through its limits on joint liability for noneconomic 
damages, on punitive damages, and on seller liability, as well as its 
broadly drawn defenses to liability, such as the statute of repose.
  In addition, I want to support legislation that allows our citizens 
to trust that the medical devices they are receiving are safe. So many 
women needlessly suffered when the maker of silicone gel breast 
implants refused to heed initial warning signs that their product was 
flawed. Today, there is no dispute that there is a strong correlation 
between silicone breast implants and serious health disorders, 
including joint and muscle pain, tremors, and autoimmune diseases. And, 
unfortunately, not all of the victims of these implants are known. For 
those who have not yet filed, this bill will block them from seeking 
redress from this grossly negligent company. That is wrong.
  Finally, I want to be responsible for legislation that improves our 
citizens' quality of life. This bill could severely limit lawsuits 
involving products that damage the environment, such as pesticides and 
toxic chemicals. In particular, the provision addressing joint and

[[Page S2579]]

several liability could make it nearly impossible for victims to 
receive full and fair compensation for harm caused by a mixture of 
toxic substances where a victim is unable to prove the percentage of 
damage caused by each chemical. Especially now, when we see efforts to 
scale back Government's role in environmental protection, the civil 
justice system is an even more important mechanism for deterring 
environmental degradation.
  I know that responsible businesses feel threatened by the current 
system. I believe we should seek to reform and improve our system. But 
this approach is too sweeping. We need to take smaller steps and make 
more incremental reforms.
  Mr. President, I have voted against this conference report for all of 
the above reasons. I cannot support a products liability law that 
shifts power from the States to the Federal Government and takes power 
away from our children, the elderly and working people and gives it to 
the companies that produce harmful products.
  Mr. DOMENICI. Mr. President, today I am pleased to support the 
conference agreement on product liability litigation reform--reached 
after tremendous efforts by my colleagues in both the House and Senate. 
The Senator from Washington [Mr. Gorton], the Senator from Utah [Mr. 
Hatch], and the Senator from West Virginia [Mr. Rockefeller] deserve a 
lot of credit for putting together a thoughtful, bi-partisan approach 
to solving the problems associated with products liability lawsuits. 
This is a bill that President Clinton should sign.
  I also must commend the House conferees, particularly the 
distinguished chairman of the House Judiciary Committee, Mr. Hyde, for 
their willingness to reach a compromise on some of the more 
controversial provisions in their bill, in order that we could 
successfully pass a conference report that still will have a positive 
impact on our products liability litigation system. There are some, and 
I am among them, who would have liked to see a conference report which 
went even further on some issues than the agreement we have before us. 
However, I realize that we would have had a difficult time passing a 
more expansive and comprehensive legal reform bill. Clearly some reform 
is better than no reform at all. Our legal system needs it.
  I have watched the products liability reform debate over the past 
several months with great interest. There was a time when many believed 
that this type of legal reform would not be possible. No one, least of 
all me, underestimates the power of the trial lawyers to derail even 
the most reasonable lawsuit reform efforts. Senator Dodd and I fought 
for years to fix our Nation's securities class-action system, and late 
last year the Congress overrode President Clinton's veto of the bill 
and enacted comprehensive securities litigation reform. I hope that the 
President will examine this bill closely, because if he does, the only 
conclusion he should reach is that this is a reasonable, commonsense 
approach to reform that is good for the country.
  There can be no doubt that our current products liability system 
extracts tremendous costs from the business community and from 
consumers. The great expense associated with products liability 
lawsuits drives up the cost of producing and selling goods, and these 
costs are passed on to the American consumer. I have heard many tell me 
about how half of the cost of a $200 football helmet is associated with 
products liability litigation, and how $8 out of the cost of a $12 
vaccine goes to products liability costs. We can no longer afford to 
require our consumers to pay this tort tax.
  Because of the high costs associated with products liability 
litigation, American companies often find it difficult to obtain 
liability insurance. The insurance industry has estimated that the 
current cost to business and consumers of the U.S. tort system is over 
$100 billion. Insurance costs in the United States are 15 to 20 times 
greater than those of our competitors in Europe and Japan. Much of this 
money ends up in the pockets of lawyers, who exploit the system and 
reap huge fee awards while plaintiffs go under compensated. Meanwhile, 
businesses which create jobs and prosperity in America suffer.
  For companies involved in the manufacture of certain products, like 
machine tools, medical devices, and vaccines, this means that 
beneficial products go undeveloped, or after they are developed, they 
do not make it to the marketplace out of fear of generating a products 
liability lawsuit. This hampers our competitiveness abroad, and limits 
the products available to consumers. Harvard Business School Prof. 
Michael Porter has written about how products liability affects 
American competitiveness. He has written:

       In the United States . . . product liability is so extreme 
     and uncertain as to retard innovation. The legal and 
     regulatory climate places firms in constant jeopardy of 
     costly, and, as importantly, lengthy product liability suits. 
     The existing approach goes beyond any reasonable need to 
     protect consumers, as other nations have demonstrated through 
     more pragmatic approaches.

  In the case of manufacturers of vaccines and other medical devices, 
the cost of our unreasonable and certainly un-pragmatic products 
liability litigation system often means that potentially life-saving 
innovations never make it to the American public. Products liability 
adds $3,000 to the cost of a pacemaker, and $170 to the cost of a 
motorized wheelchair. It also has caused the DuPont Co. to cease 
manufacturing the polyester yarn used in heart surgery out of fears of 
products liability litigation. Five cents worth of yarn cost them $5 
million to defend a case, and DuPont decided that they simply could not 
afford further litigation costs. Now, foreign companies manufacture the 
yarn, but will not sell it in the United States out of fear of also 
being sued. These are products which could save lives and improve the 
quality of living for all Americans.
  In cases where a truly defective product has injured an individual, 
the litigation process is too slow, too costly and too unpredictable. 
This bill, because it creates a Federal system of products liability 
law, will return some certainty to a system that now often 
undercompensates those really injured by defective products and 
overcompensates those with frivolous claims.
  Those injured by defective products often must wait 4 or 5 years to 
receive compensation. This leads some victims to settle more quickly in 
order to receive relief within a reasonable time. Companies often must 
expend huge amounts of money in legal fees to settle or litigate these 
long, complicated cases. These again are resources that could be better 
spent developing new products or improving the designs of existing 
ones.
  I believe that the most important reform in this conference report is 
the way it treats punitive damages. As their name implies, punitive 
damages are designed to punish companies and deter future wrongful 
conduct. They are assessed in these cases in addition to the actual 
damages suffered by injured victims.
  Unfortunately, these damages do not do much, except line the pockets 
of lawyers. They serve relatively little deterrent purpose and led 
former Supreme Court Justice Lewis Powell to describe them as inviting 
``punishment so arbitrary as to be virtually random.'' Justice Powell 
wisely has commented that because juries can impose virtually limitless 
punitive damages, they act as ``legislator and judge, without the 
training, experience, or guidance of either.'' Justice Powell is 
absolutely correct, and I applaud the drafters of this bill for dealing 
with the problems associated with these types of damages.
  The Washington Post also agrees that punitive damages reform is 
necessary. An editorial in support of the conference report printed 
last week notes that ``there are no ground rules for judges and juries 
in this area'' and that ``the whole thing is like a lottery, which is 
terribly unfair.'' The editorial concludes that ``the compromise should 
be accepted by both houses and signed by the President.''
  Reform of punitive damages will return some common sense to the 
system. Huge punitive damage awards threaten to wipe out small 
businesses and charitable organizations and I applaud the conferees for 
providing special protection for these important entities, which are 
particularly vulnerable to legal extortion by trial lawyers.
  By capping the amount of punitive damages available in product 
liability cases and raising the legal threshold for an award of 
punitive damages, the conference report will relieve some of

[[Page S2580]]

the pressure on even the most innocent defendant to settle or face an 
award which could potentially bankrupt the company. It however 
reasonably allows judges some flexibility to go above the cap in truly 
egregious cases, where increased punitive damages might be warranted.
  The conferees also have taken the wise step to reform joint 
liability, without limiting the ability of plaintiffs to recover their 
economic damages. The new law will abolish joint liability for 
noneconomic damages, like pain and suffering, but allows States to 
retain it for economic damages like hospital bills. This will reduce 
the pressure on defendants who are only nominally responsible for the 
injury to settle the case or risk huge liability out of proportion to 
their degree of fault, while ensuring that injured victims get 
compensated for their out-of-pocket loss.

  The compromise also limits liability in cases where the victim 
altered or misused the allegedly defective product in an unforeseeable 
way. It simply is unfair to hold manufacturers liable in cases where 
consumers use products in ways for which they were not intended. It 
also is unfair to hold defendants liable in cases where the plaintiff's 
use of alcohol or drugs significantly contributed to their injury. I am 
happy to see that the new law will provide an absolute defense in such 
cases.
  Mr. President, as I said earlier, I am no stranger to legal reform. 
Many of those who are responsible for this important and well-crafted 
legislation were cosponsors of the securities reform bill Senator Dodd 
and I authored earlier this Congress. Our tort system is badly in need 
of reform, and the conference report on products liability before us is 
a step in the right direction. I support it, and I hope that my 
colleagues and the President will as well.
  Ms. MOSELEY-BRAUN. Mr. President, I voted for S. 565, the Senate 
product liability bill, when it was before the Senate last May, and I 
support this conference report, which is, in virtually all of its 
essential provisions, identical to that bill. I supported the bill last 
year, and I continue to support it now, because I believe that Federal 
product liability reform makes sense for Americans, and because it 
makes sense for America.
  Lets be clear what product liability reform is and is not about. It 
is not about an explosion of litigation that our courts physically 
cannot handle. It is about the chilling effect that product liability 
judicial decisions in one State can have on businesses across the 
Nation.
  It is not about making it more difficult for Americans injured by 
products to get justice from those who injured them. It is about 
reducing the number of frivolous suits and unnecessary legal costs.
  It is not about tilting the playing field in favor of business and 
against consumers or employees. It is about taking a step toward making 
the playing field more level for consumers, employees and businesses 
all across this Nation.
  And it is not about taking powers away from States in order to 
disadvantage ordinary Americans. Rather, it is a narrow, carefully 
crafted approach to reform based on the realities of commerce today.
  The basic fact that underlies this bill is that commerce is not 
local, but national and international. Over 70 percent of what is 
manufactured in Illinois is sold elsewhere, and Illinois is not unique 
in that regard. Because commerce is national, and indeed, increasingly 
international, the laws of any one State are simply not effective in 
establishing product liability standards for manufacturers in that 
State. Our Nation's Governors have recognized that fact, which is why 
the National Governor's Association has three times unanimously 
approved resolutions supporting Federal product liability reform.
  Article I, section 8 of the Constitution grants Congress the power to 
regulate interstate commerce. Given the interstate and international 
nature of commerce, and the importance of having a healthy climate for 
manufacturing here in the United States, reform is essential, both so 
we can compete successfully in an ever-more competitive world 
marketplace and so we can generate the kind of economic growth needed 
to offer every American the opportunity to achieve the American Dream.
  Achieving that dream depends on being able to find a good job at good 
wages, jobs that make it possible for American families to purchase 
their own homes and to send their children to college, and that 
suggests a healthy climate for manufacturing--which tends to produce 
the kinds of jobs Americans want and need--is in our national interest.
  The current fragmented product liability system offers less certainty 
than a casino. That lack of certainty means that the current product 
liability system imposes costs far greater than the amounts awarded to 
successful plaintiffs, or the costs involved in defending and pursuing 
product liability cases. It adds costs to products, even when a company 
has never been sued, and unnecessary higher costs hurt consumers, and 
hurt job creation. And, while it is impossible to quantify, there is no 
doubt that the current product liability system causes some companies 
not to produce some products. That, too, means fewer good paying 
manufacturing jobs.

  I do not suggest that Americans who might be injured by products 
should sacrifice their rights to redress for their injuries in order to 
help our economy generate new, good paying jobs--and this bill does not 
ask that of any American. But we must all remember that Americans 
aren't just consumers; they don't have just one interest at stake. 
Instead of dividing Americans from one another, therefore, we should be 
working together for the kind of reform that is in all of our 
interests.
  By creating greater certainty, by reducing unnecessary cost, and by 
addressing the inadvertent chilling effect the current system has on 
new product creation, product liability reform will help generate new 
economic growth, and new jobs. And reform will add to the 
competitiveness of U.S. manufacturing, something that is essential in 
this ever more competitive world economy.
  Some continue to argue that we should leave this issue to the States 
to address. However, the fact is that, given today's economic 
realities--and tomorrow's--product liability, no less than health care 
and other components of our social safety net, is a legitimate and 
necessary subject for Federal action. And the fact is is that the right 
kind of product liability reform, like the right kind of health care 
reform, and the right kind of welfare reform, and expand opportunity, 
and help create a brighter future for Americans individually and for 
our Nation collectively.
  While this bill is not perfect, I think that, in general, it is the 
right kind of reform. It will bring greater uniformity to product 
liability law. It will help cut out the unnecessary costs the current 
product liability system imposes on businesses, consumers, and 
employees. And it tries very hard to appropriately balance the 
competing concerns involved.
  I know that some Americans do not share the view that Federal product 
liability reform is needed, and that there are a number of concerns 
regarding specific provisions of the bill. I think it is worth noting, 
however, that the conference report now before us is, with very modest 
changes, the bill this Senate sent to conference. I ask unanimous 
consent, Mr. President, that a table comparing the original Senate bill 
and the conference report be printed in the Record at the conclusion of 
my remarks.
  I know the statute of repose has generated some controversy. I would 
simply point out three things. First, the 15-year statute of repose 
applies to workplace goods only.
  Second, no State with a statute of repose provides a more liberal 
time period than the one in the conference report; and
  Third, the bill permits plaintiffs in every State to file a complaint 
after she or he discovers or should have discovered both the harm and 
its cause, a provision that is particularly important to plaintiffs who 
have trouble identifying the cause of the injury they suffered. For 
example, a person who developed a cancer many years after exposure to a 
chemical would be able to file suit anytime up to 2 years after the 
link between the chemical, and the harm he or she suffered, was 
identified.
  The punitive damages provision has also been controversial. However, 
this

[[Page S2581]]

provision is virtually identical to the bill as it passed the Senate 
last year. And it is more proconsumer than the laws in about half of 
the States.
  Moreover, the bill does not put a hard cap on punitive damages. For 
cases involving all but the smallest of businesses, it allows punitive 
damages to be imposed up to the greater of $250,000 or twice the 
plaintiff's economic and noneconomic damages, including pain and 
suffering, and allows the judge in the case to increase the award by up 
to double those limits--in other words, to go up to four times the 
plaintiff's economic and noneconomic damages--if necessary ``to punish 
the egregious conduct of the defendant.'' This approach was modeled on 
a recommendation made by the American College of Trial Lawyers, and it 
will permit huge punitive damages awards in cases where such awards are 
justified by the nature of the conduct and the severity of the harm 
involved, even when the harm is mostly noneconomic in nature.

  As to the concerns regarding joint and several liability, I think it 
is worth pointing out that the conference report, like the original 
Senate-passed bill, only eliminates joint and several liability for 
noneconomic damages. This formulation is already the law in California, 
and it provides reasonable protection both for plaintiffs and for 
businesses who have only a minor involvement in the harm suffered by 
the plaintiff, but who can be held responsible for the entire amount of 
damages if the other defendants in the case are not able to pay their 
share of the amount awarded.
  It is also worth noting that the conference report does not contain 
the broad, unjustified preemption of State civil justice systems that 
was in the House-passed bill, provisions that could of undermined the 
civil rights of Americans, and which would have almost casually 
overturned our whole State justice system. And it does not contain the 
medical malpractice provisions that were in the House bill, provisions 
that did not and do not belong in a product liability bill.
  Moreover, the conference report does not contain the so-called FDA 
excuse that I strongly opposed in the last Congress. The bill that 
emerged from conference is the kind of narrow, carefully tailored 
approach that was needed, and the only approach that I could possibly 
support.
  Mr. President, I said in 1994 that the problems present in our 
product liability system are problems that this body must address. Last 
year, when the product liability bill was before the Senate, I 
reiterated my view that reform is necessary, and I supported S. 565 as 
a reasonable approach to achieving that necessary reform. The 
conference report before now before us does not contain the provisions 
from the House bill that I believe have no place in this legislation. 
And, as I said at the outset of my remarks, it is close to identical to 
the bill I voted for last May. I therefore voted for cloture yesterday, 
and will vote in favor of sending this conference report to the 
President. I hope he will reconsider his position, and sign it, because 
enacting this bill into law is in the interest of every American.
  Mr. President, I want to conclude by congratulating Senators Gorton 
and Rockefeller for their leadership in bringing the bill to this 
point. I particularly want to thank my colleague from West Virginia. He 
went to great lengths to consult with me, and with other Senators, and 
to make all of us part of that conference, even though we technically 
were not among the conferees. I greatly appreciate his commitment to 
the kind of balanced, narrowly crafted reform that is so greatly needed 
and so long overdue. I am pleased to have this opportunity to vote with 
him, and with the other supporters on a set of reforms that are based 
on common sense, and that make sense for America.
  Mr. KERRY. Mr. President, our laws play an important role in 
fostering a competitive economic environment by establishing ground 
rules for fair competition and by helping to reduce the costs of doing 
business. But our laws play an even more critical role in protecting 
the rights of individuals, workers, and consumers. Congress, therefore, 
has a special responsibility to ensure that the laws we write are 
reasonable and fair.
  The conference report on H.R. 956, the so-called Common Sense Product 
Liability Reform Act of l996, fails the ``reasonable and fair'' test.
  The conference report, if enacted, will take away the rights U.S. 
citizens enjoy today in seeking redress for harm caused by unsafe 
products while giving manufacturers no incentive to produce safer 
products. This conference report is not fair to the working men and 
women of this country. It is biased against low-income individuals, 
women, and the elderly and it is plain dangerous for consumers. The 
products liability conference report will overturn the laws of every 
State and, I fear, will do great harm.
  Consider that every year thousands of workers are injured or killed 
as a direct result of defects in products they use in the workplace. 
For many of them, the tort system is the only recourse for full redress 
of their injuries. Yet, this conference report will make it harder for 
workers to hold fully accountable those who cause the injury. The 
limits on joint liability for non-economic damages, on punitive 
damages, on seller liability and the greatly expanded coverage under 
the statute of repose are all one-sided. Together, these provisions 
clearly favor wealthy corporations at the expense of working Americans.
  The 15-year statute of repose would affect more than one-half of the 
products claims filed against machine tool manufacturers. Under the 
conference report, workers injured by defective machinery 15 years 
after first delivery would be prohibited from seeking to prove in court 
that even a grossly negligent manufacturer was responsible for their 
injury. On the other hand, the right of the business to pursue an 
action against the same manufacturer for commercial loss would be fully 
preserved.
  The conference report would cap punitive damages at $250,000 or two 
times compensatory damages, whichever is greater, except in cases 
involving small businesses with fewer than 25 employees, where 
punitives would be capped at $250,000 or two times compensatories, 
whichever is the lesser amount. Such limits clearly undermine the 
deterrent value of punitive damages.
  The threat of punitive damages has in part contributed to the recall, 
discontinuance, or change in the use of many dangerous and defective 
products, including the Ford Pinto, asbestos, the Dalkon shield, the 
Suzuki Samurai, heart valves, and silicone breast implants. Punitive 
damages have also helped make products safer: the redesign of the Jeep 
CJ-5; adding guards to chainsaws; the replacement of lap-belts with 
rear-seat three-point safety belts in passenger cars; the use of roll 
bars on farm tractors; warnings on toxic household chemicals; the use 
of flame-retardant fabric in children's sleepwear; and the list goes on 
and on. The conference report will defang the threat inherent in 
punitive damages.
  But perhaps the most disturbing aspect of this legislation is that 
Ford Motor calculated that it was cheaper under the current tort system 
to settle rather than to try to protect the lives of every Pinto owner 
with a recall. The manufacturers of silicone breast implants calculated 
it was cheaper under the current tort system to continue selling 
implants that their own sales force reported had leakage problems 
rather than to alert the more than 1 million women in this country with 
implants about the danger of the products. Playtex calculated it was 
cheaper to continue to market its super-absorbent tampon than to try to 
warn women about the deadly effects of toxic shock syndrome. If Ford 
Motor, Dow, Playtex, and other major manufacturers failed to take 
corrective action to make their products safer under the present tort 
system, there is no reason to expect this conference report will 
encourage them to act more responsibly.
  Would anyone settle for $250,000 in exchange for losing a loved one 
to death by a product that the manufacturer knew was unsafe? If this 
conference report becomes law, no one would be able to get even 
$250,000 because there is not a lawyer in this country who would take 
the case. No law firm could afford to go up against companies like Ford 
Motor or Dow or others with their host of attorneys and huge legal 
budgets and an infinite ability to push motions and appeals to the

[[Page S2582]]

limit and slow down the process to their advantage. It just would not 
happen.
  Proponents of this legislation stress that the current tort system is 
biased against them: they point to insurance rates that disable 
American manufacturers by forcing them to pay 10 to 50 times more for 
product liability insurance than their foreign competitors; they claim 
there is an ``explosion'' in products liability litigation, with 
uncontrollable punitive damages awards; and they argue that the present 
system of ``lottery'' liability, where liability differs from state to 
state, does not enhance the safety of U.S. products. The proponents are 
wrong on each of these points.

  Over the past decade, products liability insurance cost 26 cents per 
$100 of retail product sales, or about $26 on the price of a $10,000 
automobile. Two recent reports by the National Association of Insurance 
Commissioners confirm there is no ``crisis'' in the cost of product 
liability insurance. In fact, the Association reported in January l995 
that earned premiums for product liability have steadily dropped from 
more than $2.1 billion in l989 to $1.6 billion in l994--a drop of 26 
percent. The Association pointed to shifts to self-insurance and 
competition in the industry as reasons for the decline, but did not 
mention tort reform as a factor. Moreover, the Association reported in 
October l995 that the premium volume for product liability insurance 
premiums has remained virtually flat from l986 through l994.
  The so-called explosion in products cases is another myth. While 
consumer products are responsible for some 39,000 deaths and 30 million 
injuries each year, a l993 study by Boston's Suffolk University Law 
School and Northeastern University found there were only 355 awards in 
products suits from l965 through l990, and that half of these were 
overturned or reduced. Indeed, the National Center for State Courts 
reported that product liability cases accounted for .0036 percent of 
the total civil case load in l992, and the Legal Times reported that 
products claims in Federal courts declined by 36 percent from l985 to 
l991. In my own state of Massachusetts, there were absolutely no 
punitive damages awarded in products cases; punitive damages are only 
permitted in wrongful death cases.
  The conference report on H.R. 956 will not resolve the problem of 51 
different products liability laws in the United States. On the 
contrary, it will only serve to further complicate the tort system and 
tilt it strongly in favor of manufacturers and against consumers. The 
conference report contains only one-way preemption.
  The conference report places caps on punitive damages in products 
cases, yet allows the laws to stand in the 39 States where those laws 
prohibit punitive damage awards or where they place more restrictions 
on victims' rights. On the other hand, the conference report does not 
require that these States award punitive damages.
  The conference report preempts State law on misuse or alteration of a 
product only to the extent state law is inconsistent with the 
conference report, meaning that the 37 States that provide a complete 
defense to liability in some cases of product misuse or alteration 
would not be preempted.
  The conference report prohibits lawsuits involving durable goods that 
are more than 15 years old, but specifically preserves State laws with 
shorter limitations.
  The Products Liability Fairness Act, S. 565, will overturn the laws 
of every State that enable people who have been harmed by unsafe or 
faulty products from obtaining full and fair recovery. It will prevent 
citizens from holding wrongdoers accountable. It will preempt 
legitimate claims that deserve to be heard. It will strip citizens of 
their rights and it should be rejected.
  I cannot support legislation that would have placed limits on 
punitive damages for the family of the 5-year-old boy in New Bedford, 
MA, who died in a house fire after igniting a couch with matches. I 
cannot support legislation that would have limited damages for the 
family of the 8-month-old boy who suffered second and third degree 
burns on his arms, legs and back in a house fire that started when the 
bedding in his crib was ignited by a portable electric heater that had 
been placed within 6 inches of his crib to keep him warm.
  I surely cannot support legislation that would have limited the 
liability of the big corporations in Woburn, MA, whose highly toxic 
pollutants killed and injured children. The Woburn case, in which eight 
working class families sued two of our Nation's biggest corporations 
because they suspected the companies had polluted the water supply with 
highly toxic industrial solvents, took 9 years. The young attorney that 
pleaded the case spent $1 million of his own money on it. The jury 
ultimately found one of the companies negligent, and the scientific 
research done during the 9-year trial demonstrated the link between the 
industrial solvents in the water supply and human disease. The company 
is now helping to cleanup the polluted aquifer. The attorney has said 
that if this bill were law today, he would never have considered the 
case.
  Mr. President, the conference report on H.R. 956 will take away the 
right every American enjoys today through the jury box to force 
accountability for dangerous, careless or reckless behavior. In the 
jury box, every American can bring about positive change. If we take 
away this fundamental right, we will have compromised our Nation's core 
values.
  The conference report promotes the interests of business at the 
expense of the rights of consumers. It will create a nightmarish new 
legal thicket that should be avoided rather than embraced. After we 
have argued all the complicated points of law, after we have poured 
over horror story after horror story, the issues boil down to one 
simple point: this bill is not fair, it is not reasonable and it should 
be rejected.
  Mr. GLENN. Mr. President, I rise in support of this legislation and 
want to commend the efforts of Senators Rockefeller and Gorton on their 
work. This legislation has been needed for a long time and I am pleased 
that we will be taking this positive step forward today.
  I have been concerned for years about our current product liability 
system and I believe that meaningful reform is long overdue. I believe 
that this bill will benefit both consumers and businesses. Under our 
current system, manufacturers of products are subject to a patchwork of 
varying State laws which contribute to unpredictable outcomes. In some 
cases plaintiffs receive less than they deserve and in others, 
plaintiffs receive too much. Because of the unpredictability, cases 
that are substantially similar receive very different results.
  The Congress is currently debating the proper role of the Federal 
Government across a broad range of issue areas. Many believe that 
functions now conducted at the Federal level should be moved to the 
States. On this issue I believe that we need a more uniform system of 
product liability and therefore Federal standards are necessary.
  I believe this legislation will improve the competitiveness of our 
industries which means jobs. I also believe that the biomaterials 
provisions will help insure that much needed medical devices will 
remain available to many Americans. Because of liability concerns many 
products are becoming unavailable. Examples include materials used in 
heart valves, artificial blood vessels, and other medical implants. In 
Cincinnati, OH, Fusite, a part of Emerson Electric Co., has been in 
business since 1943. They supply glass-to-metal sealed hermetic 
terminals. One terminal body is used by the makers of implantable 
batteries in heart pacemakers. In 1995, because of the liability 
concerns, Fusite determined it would no longer supply this product.
  The current system is unfair to consumers. Much too much money is 
spent on litigation rather than compensation and the high cost of 
product liability insurance means higher costs for consumers.
  Without doubt an injured party deserves fair compensation, however 
the cost of litigation is substantial. More and more is spent on legal 
fees and less is spent on important areas such as research and 
development. In some cases manufacturers decide not to invest in or 
develop new products because of product liability concerns. Ultimately 
this burden of product liability makes our companies less competitive 
in world markets than foreign companies.
  I have been particularly concerned that as we reform our product 
liability

[[Page S2583]]

laws we do not affect the rights of individuals to bring suits when 
they have been harmed. On the contrary, it is my intent to bring 
rationality to a system that has become more like a lottery. For me, 
legal reform does not mean putting a padlock on the court house door.
  There are several very important improvements that this legislation 
will provide. A statute of repose of fifteen years is established. 
Joint liability is abolished for noneconomic damages in product 
liability cases. Defendants are liable only in direct proportion to 
their responsibility for harm. Therefore, fault will be the controlling 
factor in the award of damages, not the size of a defendant's wallet.
  Another important area is punitive damages. Although I am concerned 
about the establishment of caps on punitive damages, I believe that the 
judge additur provision included in the bill will allow for appropriate 
punitive damages in egregious cases.
  Mr. President, not every provision in this legislation is written the 
way I would have preferred, but I believe that it is significant reform 
and urge its passage.
  Mr. GORTON. Mr. President, I would like to clarify an issue I 
discussed in a lengthy, and frankly, rather confusing colloquy with my 
colleague from North Dakota, Mr. Dorgan.
  Mr. Dorgan sought clarification of a provision on the Product 
Liability Conference Report dealing with the way in which this 
legislation will apply to utilities. Although I had characterized a 
change made in conference as technical, he asserted that the change was 
substantive.
  The intent of the bill is to cover all products. This intent is 
expressed in the comprehensive definition of a product found in section 
101(14) of the conference report, which defines products to include 
``any object, substance, mixture, or raw material in a gaseous, liquid, 
or solid state * * *'' This definition clearly encompasses electricity, 
water delivered by a utility, natural gas, and steam. To simplify this 
discussion I will refer only to electricity.
  Another goal of the legislation, however, is to leave in place state 
determinations of when electricity is a product. Most States treat the 
transmission of electricity as a service. For this reason, the Senate 
bill excluded electricity from the definition of product. This 
exclusion, however, overlooked the fact that once electricity has 
passed through a customer's meter, many States consider it to be a 
product, and subject it to a strict liability standard.
  Because of this oversight, the Senate provision created an unintended 
conflict between the two goals of this bill: First to cover all 
products, and second, to leave undisturbed the state determination of 
whether or not electricity is a product. The desire to meet both these 
goals is reflected on page 24, footnote 86, of the Committee on 
Commerce, Science, and Transportation Report on the Senate bill. But to 
repeat, the language of the Senate did not do what it needed; it 
exempted electricity, whether or not it was treated as a product by 
state law and whether or not it was subject to a rule of strict 
liability.
  In conference, the statutory language was made explicitly consistent 
with those dual intentions. That is to say, the bill should respect 
state choice as to whether or not a utility is a product, but the bill 
should apply evenly to all products. Consequently, language was added 
to the conference report saying that electricity was excluded from the 
definition of product, unless it was subject under State law to strict 
liability, that is to say, is treated as a product.
  Senator Dorgan is correct that the conference report does change the 
substance of this provision. I think it does so wisely and in order to 
make the legislation clearly express our intent.
  Mr. SPECTER. Mr. President, after extensive deliberation, on a very 
close call, I have decided to vote against the conference report on 
product liability legislation.
  This is a close question for me because the conference report 
corrects my concern on punitive damages and there is a need to make 
American business more competitive in world markets to provide economic 
expansion and job opportunities.
  In the final analysis, my judgment is that the disadvantages of the 
bill outweigh the advantages. For example, the 15-year statute of 
repose would deny recovery to injured parties from products intended 
for and used long after 15 years.
  The changes in the law involving workmen's compensation make it more 
difficult for plaintiffs to recover where a coworker or the employer is 
at fault. That provision also limits the employer's traditional 
subrogation rights leading to the opposition of homebuilders, workmen's 
compensation insurance carriers and other business interests because 
workmen's compensation costs will escalate.
  The conference report further limits the manufacturers' liability in 
cases where injuries result from a defective product where alcohol has 
been used. A defective seat belt is supposed to protect the car's 
driver regardless of his/her condition.
  This vote against the conference report is consistent with my vote 
yesterday for cloture. As I said in my statement on yesterday's vote, I 
believe the Senate's final determination on product liability 
legislation should be decided by majority vote rather than the super 
majority of 60 required for cloture.
  A decision on whether to support cloture depends upon a variety of 
factors such as whether there should be more debate to fully air the 
issue or whether a constitutional issue or some other fundamental issue 
is involved which warrants a super majority of 60.
  On this bill on the merits, I believe it should be decided by the 
traditional majority vote because it is such a close question without 
an underlying constitutional issue or some other fundamental matter. On 
the merits of the bill, in my judgment the disadvantages outweigh the 
advantages.
  Mr. GRAMS. Mr. President, today is a day of victory and celebration 
for America's manufacturers, consumers, and taxpayers. Congress has 
finally succeeded in taking the first important step in overhauling our 
Nation's badly broken product liability system.
  Mr. President, I would like to commend my colleagues, Senators Gorton 
and Rockefeller for their endless hours of hard work and commitment to 
enacting long-needed product liability reforms. This truly is a 
significant accomplishment.
  Unfortunately, the President has already issued his press release 
stating that he will stop this important bill--dead in its tracks--with 
his veto pen. Despite bipartisan support, he claims this bill fails to 
``fairly balance the interests of consumers with those of manufacturers 
and sellers.'' Mr. President, I disagree.
  This bill is a good compromise; it's fair; and it does protect 
sellers, manufacturers and most importantly, consumers.
  Mr. President, too many people today are filing lawsuits in the hopes 
that they will hit the jackpot even if there is little merit to their 
case. The lawyers get wealthy, but under our current system, that 
wealth comes at the expense of America's consumers.
  Our society has become so accustomed to suing that a recent study 
showed that 90 percent of all U.S. companies can expect to be named in 
a product liability lawsuit. Furthermore, 89 percent of Americans 
believe that ``too many lawsuits are being filed in America today.''
  Mr. President, the price tag of lawsuits is astronomical. In fact, 
some experts have estimated that the total cost of all lawsuits filed 
in America exceeds $300 billion each year. And according to the Product 
Liability Coordinating Committee, the cost of product liability 
lawsuits, alone, ranges anywhere from $80 to $120 billion annually.
  American consumers ultimately pay the price of frivolous lawsuits 
which are paralyzing our country's economic growth and ability to 
create new jobs. Instead, prices increase and jobs are eliminated when 
businesses close, downsize or decline new product introduction for fear 
of a frivolous lawsuit.
  As a former small businessman, I understand how devastating the 
threat of a potential lawsuit can be on any company. Our laws have 
created a hostile business climate that has compromised the competitive 
position of many companies, forcing them to reduce salaries or lay off 
employees to avoid going out of business.
  Companies who are sued have two choices: endure a lengthy and costly 
trial in the hopes of proving their innocence or settle out of court to 
save

[[Page S2584]]

trial costs. Small businesses don't have the time or resources to spend 
countless days in a courtroom when they are struggling to make payroll 
and meet customer needs.
  Everyone agrees that an injured person should have a day in court, 
and this legislation will not prevent legal recourse for justifiable 
claims. However, it will put an end to the fishing expeditions that 
trial attorneys use to extract huge, unwarranted settlements from 
businesses fearful of protracted litigation costs.
  Businesses, taxpayers, and consumers can no longer bear this burden, 
making passage of this legislation critical. Americans understand that 
our current system is a litigation lottery which increases the costs 
consumers pay when they purchase a product. It even forces companies to 
lay-off employees.
  Far too often, the cost of meeting these outrageous judgments eats up 
resources that could have gone toward new jobs and better salaries. The 
President and the trial lawyers are kidding themselves if they believe 
these costs are not passed on to you and me as consumers. 
Appropriately, this is called the tort tax.
  Mr. President, most of my colleagues know that I am a strong opponent 
of tax increases of any kind. I believe the Product Liability 
Conference Report will lessen the tort tax on America's consumers.
  This legislation addresses many of the problems in our current 
system. It limits manufacturer liability when a product is misused or 
altered by the user; it caps punitive damages to twice the compensatory 
damages or $250,000, whichever is greater; it allows judges the 
flexibility to impose higher damages in extreme cases; and, it 
eliminates joint and several liability for certain damages, such as 
pain and suffering, so defendants pay only for the damages they cause--
not those caused by others.
  In addition to the overall benefits consumers will enjoy after 
enactment of this bill, Minnesota will see an additional benefit. The 
reality is our current system is stifling technological innovation, in 
particular, the production of medical devices.
  Mr. President, Minnesota is a world leader in the development of 
lifesaving medical technology and this industry is a vital part of 
Minnesota's growing economy.
  In 1994, there were 568 registered medical device establishments in 
Minnesota. Furthermore, Minnesota ranks 2nd in the Nation with over 
16,000 people employed in medical device manufacturing.
  More than 11 million Americans rely on implanted medical technologies 
to sustain or enhance the quality of their lives. Many of these 
products are manufactured in my State including artificial joints, 
cardiac defibrillators, drug infusion pumps and heart valves.
  Unfortunately, many suppliers of the raw materials used to make 
medical devices are restricting the use of their products in medical 
implants for fear of exposing themselves to costly product liability 
litigation.
  Suppliers of raw materials play no role in the design or manufacture 
of the medical device and courts have consistently found them free from 
liability. Unfortunately, the costs of the lawsuit ``discovery'' 
process are surpassing the profits raw material suppliers will receive 
from selling their products to device manufacturers.
  If biomaterials suppliers refuse to sell their raw materials to 
America's medical device companies, device manufacturers are forced to 
either substitute another material, which many times is impossible, or 
discontinue production of a device which is fulfilling a vital need for 
patients.
  A recent example was highlighted in the Wall Street Journal by a 
mother whose daughter suffers from hydrocephalus, or water on the 
brain. The only medical therapy that treats this is a surgically 
implanted device, called a shunt, made of silicone.
  Fifty-thousand Americans depend on shunts to keep them alive, but 
because of recent lawsuits, companies who supply silicone for the 
production of devices like shunts are no longer willing to sell the raw 
materials. This situation is devastating to patients who desperately 
need these lifesaving devices.
  Essentially, this legislation's Biomaterials Access Assurance 
provision would allow suppliers of the raw materials or biomaterials 
used to make medical devices, to obtain dismissal, without extensive 
discovery or other legal costs, in certain tort suits in which 
plaintiffs allege harm from a finished medical device.
  This provision would allow raw materials suppliers to be dismissed 
from lawsuits if the generic raw material used in the medical device 
met contract specifications, and if the biomaterials supplier cannot be 
classified as either a manufacturer or seller of the medical device. 
Most importantly, this provision would not affect the ability of 
plaintiffs to sue manufacturers or sellers of medical devices.
  As the chairman of the Senate's Medical Technology Caucus, I would 
like to thank the Senator from Connecticut for all his hard work to 
ensure that the Product Liability bill recognizes the urgency of 
providing much-needed relief to suppliers of bio-materials who have no 
direct role in the raw material's ultimate use as a ``biomaterial'' in 
a medical device.
  Mr. President, I would like to note that even President Clinton 
recognizes this provision as ``a laudable attempt to ensure that 
suppliers of biomaterials will provide sufficient quantities of their 
products'' to medical device manufacturers.
  The bill before us today is the first step in the right direction, 
but certainly not the last. While we have made great progress toward 
reforming our current system, I believe we should do more. We need to 
extend protections to America's consumers in civil liability cases 
which have devastated local girl scout troops, neighborhood little 
leagues and community recreational organizations.
  Furthermore, Congress should pass medical malpractice reforms to 
ensure that the doctor-patient relationship is protected from lawyers. 
Doctors complain that many times they are forced to order unnecessary 
tests just to protect themselves against frivolous lawsuits. This 
practice called ``defensive medicine'' costs our country over $15 
billion each year.
  Mr. President, the Senate should adopt this first step and continue 
moving forward to reform our overall liability system. Failing to enact 
this legislation will result in even higher costs to customers, fewer 
products developed and fewer jobs as companies downsize to adjust to 
increasingly high legal costs.
  I urge my colleagues to recognize the positive impact this 
legislation will have on countless businesses across our country. 
Ultimately, it will benefit the employees whose jobs will be secured as 
a result of enactment of this long overdue legislation, while at the 
same time, we continue to protect consumers seeking judgements against 
companies who have manufactured faulty products.
  Mr. DORGAN. Mr. President, today the Senate will vote on the 
conference report on H.R. 956, the Common Sense Product Liability Legal 
Reform Act of 1996. I intend to vote in favor of this legislation 
because I believe that modest legislation in this area is necessary.
  The issue of product liability reform is one of those circumstances 
where I think there is some truth on both sides. Tort reform is by its 
very nature controversial. The ability of citizens to seek redress 
through the courts for harm caused to them is a very important right we 
must respect and protect. At the same time, it is a fact that our court 
system in the United States is deluged with a flood of lawsuits, many 
of which have no merit.
  Unfortunately, the excesses of some force a reaction that affects 
everyone. I appreciate the sensitivity with which we in the Congress 
must proceed in passing any Federal legislation that reforms tort laws. 
I realize that because of our court system and because of the activism 
of well meaning consumer advocates, our Nation does have safer cars, 
toys, and other products. If it had not been for key cases that put the 
fire to the feet of corporations who would rather cut corners to 
enhance the bottom line than concern themselves with the safety of 
consumers, I am convinced that there would be more exploding cars and 
more dangerous toys that hurt children.
  Deadly and dangerous products such as asbestos, flammable children's 
pajamas, and exploding Ford Pintos were all removed from the market 
only after action was taken in court to hold the

[[Page S2585]]

manufacturers of these products accountable. Because these cases 
occurred, our lives are safer as a result. There have been many cases 
where manufacturers were legitimately held liable for their negligent 
or egregious actions.
  However, these cases do not tell the entire story about our tort 
system. Unfortunately, there are so many other cases that may have 
little merit that are filed, not with the goal to seek fair 
compensation or change the behavior of a manufacture, but are filed 
with a goal to get rich quick. The result is that many manufacturers 
and businesses are strangled in liability cases that defy common sense. 
These cases don't help consumers.
  It seems to me that Federal action is warranted in the area of 
product liability suits. But, I believe that any Federal action in this 
area must be modest and narrowly construed. Over the past few years, I 
have been an active participant in the development of this legislation. 
In the 103d Congress, I fought against a provision that would have 
provided complete immunity to manufacturers of medical products and 
aircraft manufacturers from all punitive damage awards. The FDA/FAA 
defense provision, as it was called, took this reform effort way too 
far in my judgment. That is why I fought to have the provision removed 
and if this provision existed in the legislation before the Senate 
today, I would be voting no.
  Fortunatly, the bill sponsors saw fit to not include the FDA/FAA 
defense provision in the conference report we are considering today. As 
a result, we have a bill which I believe advances some modest reform 
without closing the door on consumers who legitimately need to look to 
the courts for compensation.
  I believe it is important to advance this modest tort reform 
legislation. It is my hope that if this legislation becomes law, it 
will result in more reasonableness in our tort system.
  I am under no illusions that this legislation is going to create a 
perfect world in the courts. However, I hope this legislation will 
create a better world that restores some moderation to excessive 
litigation, while not destroying the rights of consumers to seek 
redress for their grievances in the courts.
  The PRESIDING OFFICER. Who yields time?
  Mr. GORTON. Mr. President, I yield 5 minutes to the Senator from 
Nebraska.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized for 5 
minutes.
  Mr. EXON. Mr. President, I thank the Chair and thank my friend and 
colleague from Washington. I signed the conference report with regard 
to the product liability measure that is before us. I recommend that 
the Senate accept this. I hope the President will not veto it, as he 
has threatened.
  I have been listening to the debate, and I have studied this issue 
for a long, long time. Over 20 years ago, when I had the opportunity to 
serve my State as Governor, we worked on and we enacted a piece of 
legislation that is related to this whole area. It was with regard to 
malpractice in the health care field. There were concerns about that. I 
listened to both sides at that time. I finally decided, in the best 
interest of Nebraska, that malpractice piece of legislation should go 
into effect to provide adequate and better health care, to keep 
everyone involved.
  I must say, that was one of the early pieces of legislation with 
regard to placing caps on malpractice legislation, and I must say that 
it has been a resounding success in Nebraska.
  I recognize and have heard the debate on both sides of the issue, 
and, as so often is the case, Mr. President, we do not pass perfect 
legislation here, but ignoring the problem that we have today, that we 
have had for all of these years--this is as near a place we can solve 
it with what I think is a reasonable piece of legislation, a piece of 
legislation that where, if there is gross misconduct on the part of the 
manufacturer or the inventor, there is some relief.
  I think we accomplish very little by citing this case and citing that 
case. If we continue with that kind of a proposition, we will simply 
confuse the public at large, and maybe the House and Senate, that we 
should do nothing. I think if there is one thing that is obvious, it is 
that we have to do something. I think the ``something'' is this bill 
that has been carefully crafted, that has been worked out in committee, 
that has been worked out in the conference between the House and the 
Senate, and I believe if there was ever a true workable compromise, 
this is a principal example.
  So, I simply salute the people who have provided the leadership in 
this over the years. I hope the bill will be resoundingly approved by 
the Senate with our vote around noontime today. Maybe we can get on 
with solving this problem. There is a problem. No one can deny that. I 
am sure many of my colleagues feel very strongly that this is a bad 
piece of legislation. It is not a perfect piece of legislation, but it 
is a piece of legislation that has been carefully crafted, compromised. 
I think it is the best we can do under the circumstances, and I believe 
we should do it.
  I intend to vote enthusiastically in support of this legislation. I 
thank the Chair and thank my friend from Washington.
  Mr. GORTON. Mr. President, I yield 5 minutes to the Senator from West 
Virginia.

  The PRESIDING OFFICER. The Senator from West Virginia is recognized 
for 5 minutes.
  Mr. ROCKEFELLER. Mr. President, I thank the distinguished Senator 
from Washington. The debate now is about over, and we are about to 
vote. We are about to vote on a bill which I think is profoundly 
important, not only in the symbolism of it but in the reality. You 
cannot have an engine in a car that is invented by 51 separate people 
who do not communicate with each other and expect the engine to move 
the car forward.
  Similarly, you cannot protect and extend predictability and fairness 
and consumer protection--for example, as witness the statute of 
limitations--to help people in this country get justice from injury, 
from defective products if the engine that they have to depend upon is 
invented by 51 separate people who never talk to each other, and then 
somebody turns the key on and who knows where the system goes, or where 
the car goes. Probably nowhere.
  We have a system that works particularly well for a few. We have, 
however, a system that works particularly poorly for the most. It is 
the job, it seems to me, of the U.S. Senate and the U.S. Congress to 
try to improve the condition and the lot of our people in a fair and 
balanced manner. One cannot reasonably come into this Chamber all the 
time and say, ``I'm only going to do things which will help an injured 
person but pay no attention to other aspects of their life,'' for 
example, whether they are employed, whether they have a reasonable 
expectation of having a job.
  What we have tried to do in this product liability conference report 
is to make a fair, reasonable balance between the interests of 
consumers and business. We have done that. We have had asserted 
constantly against us that we have not, assertions which are made every 
year we discuss these things, which are wrong.
  So now we are prepared to do something, and I fully expect the Senate 
will adopt this conference report. It is an important bill. I repeat 
that I hope the President of the United States, who I think very much 
wants to sign a product liability reform bill--in fact, I am told very 
directly that he wants to sign a product liability bill. The question 
is what condition must it be in. I think we are presenting the 
President with a fair bill, one in which the Senate did not try to 
expand beyond products, one in which the Senate rejected virtually all 
other suggestions in which the only basic change was the statute of 
repose.
  It is a very good bill. There is no other way to say it than that. I 
also want to thank the Senator from Connecticut, Senator Lieberman, for 
his enormous role in all of this product liability debate, and his 
chief of staff, Bill Bonvillian, who is also an extraordinary person, 
who has been unbelievably kind and attentive to my legislative 
director, Tamera Stanton, to whom I referred earlier, who is going 
through a difficult situation just now.
  This is fair. This is the way America ought to work. The bill, I 
believe, will pass. I can only pray that the President will sign it. I 
thank the President and yield the floor.

[[Page S2586]]

  The PRESIDING OFFICER. Who yields time?
  The Senator from South Carolina has 12 minutes.
  Mr. HOLLINGS. How much, Mr. President?
  The PRESIDING OFFICER. The Senator has 12 minutes.
  Mr. HOLLINGS. I thank the distinguished Chair. I want to reserve time 
for the distinguished minority leader, the Senator from South Dakota, 
who just notified us he would like a little time here.
  Mr. President, I rise to urge my colleagues to reject this 
legislation. The only thing that stands in the way of an act of 
Congress overturning 200 years of State law and placing severe 
restrictions on the civil rights of American citizens is the vote on 
this conference report.
  Some try to simplify this issue as a debate between trial lawyers and 
manufacturers. But this issue is larger than that. This matter goes to 
the heart of our Nation's constitutional federalism. I am convinced 
that to the extent Congress can selectively preempt State law, override 
State constitutions, overturn State legislative decisions, and dictate 
to State judges and juries the standards they must follow on matters 
that have nothing to do with Federal constitutional rights, then States 
essentially have lost their sovereignty. Maintaining an independent 
civil justice system is the essence of a free state. This freedom, 
however, would be seriously eroded by this bill.


                  i. state sovereignty/dual federalism

  The stated purpose of this bill is to erect barriers regarding the 
use of the civil justice system for redress of injuries caused by 
dangerous products. However, I would remind my colleagues that, unlike 
the judicial systems of other countries, the American judicial system 
is rooted in democratic principles of individual redress, the right to 
a jury trial, and reliance on the people to resolve disputes. These 
were principles established by the Founding Fathers when they adopted 
the 7th and 10th amendments to the Constitution. Surely, issues such as 
whether to limit access to courts, limit redress remedies, or penalize 
citizens for merely bringing suits were considered by the Founding 
Fathers, as well as the judges and State officials that have 
administered our system of justice for over 200 years. But they decided 
against such measures, and opted instead to maintain a system that 
features free access to the courts, common law, and giving the people 
the ultimate authority to resolve conflicts.
  The supporters of this bill, however, are seeking to overturn this 
longstanding American history and judicial precedent. They would prefer 
to ram through this sweeping and unprecedented legislation.
  I am, indeed, confounded that the Senate is even considering this 
legislation. At the beginning of this Congress, Member after Member 
came to the floor during consideration of S. 1, the unfunded mandates 
bill, to declare that this would be the Congress of States' rights, 
where Government would be returned to the people. The Jeffersonian 
democracy of government was revived. If we've heard it once, we've 
heard it a million times, that State and local governments know best 
how to protect the health and safety of their citizens, and that they 
do not need Congress telling them what to do. How many times did we 
hear that the one clear message sent by the voters in November 1994 was 
that the people wanted to get the Federal Government off their backs 
and out of their pockets?
  The 10th amendment, lost in the shuffle for many years, was given new 
light. The majority leader himself, in his opening address to the new 
Congress, proclaimed:

       . . . America has reconnected us with the hopes for a 
     nation made free by demanding a Government that is more 
     limited. Reigning in our government will be my mandate, and I 
     hope it will be the purpose and principal accomplishment of 
     the 104th Congress.
       . . . We do not have all the answers in Washington, D.C. 
     Why should we tell Idaho, or the State of South Dakota, or 
     the State of Oregon, or any other State that we are going to 
     pass this Federal law and that we are going to require you to 
     do certain things . . . 

  The majority leader went on to say:

       . . . Federalism is an idea that power should be kept close 
     to the people. It is an idea on which our nation was founded. 
     But there are some in Washington--perhaps fewer this year 
     than last--who believe that our states can't be trusted 
     with power. . . . If I have one goal for the 104th 
     Congress, it is this: That we will dust off the 10th 
     Amendment and restore it to its rightful place.

  If we are going to respect the 10th amendment, Mr. President, then we 
must be consistent.
  But consistency is not something in which this Congress seems to be 
interested. The same Congress that has championed States rights 
regarding welfare is now advancing the power of the Federal Government 
over State civil courts. It appears that some believe the States have 
all the answers when it comes to welfare and education, but for some 
reason are incapable of running their own courts.
  To the extent any reforms are needed, the States already have 
instituted such measures. Since 1986, over 40 States have enacted tort 
reform legislation. This includes my home State of South Carolina, 
which enacted a major tort reform measure in 1988. The States--through 
their work with members of the bar, the chamber of commerce, the 
insurance industry, and consumer groups--have addressed concerns about 
the tort system, and have crafted legislation they believe is in the 
best interest of their citizens. The proponents of this bill, however, 
would override the enormous and commendable efforts and time the States 
have devoted to this issue, and force their own brand of reform on the 
States.
  Ironically, during the 1994 elections, when many of those who now so 
vehemently champion States rights were elected, the people of Arizona 
considered a State-wide tort reform referendum that consisted of many 
of the initiatives in this conference agreement. By a 2-to-1 vote, the 
people of Arizona rejected the referendum. Now some Members would like 
to reward them by using their Federal power to force on the citizens of 
Arizona the initiatives they soundly rejected at the ballot box.


         II. Refutation of Claims Regarding Need of Legislation

  The conference report contains a number of ``findings'' regarding the 
need for this legislation. Most of the findings are repeats of the 
various claims that have been made over the last decade. Nevertheless, 
it is necessary again to set the record straight with the facts.
  Finding No. 1 states:

       Our nation is overly litigious, the civil justice system is 
     overcrowded, sluggish, and excessively costly and the costs 
     of lawsuits, both direct and indirect, are inflicting serious 
     and unnecessary injury on the national economy.

  Rebuttal:
  This is the old litigation explosion claim. However, there has never 
been any evidence of a litigation explosion as the following data 
demonstrate:
  A 1991 Rand study found that only 2 percent of Americans injured by 
products ever file a lawsuit.
  A 1994 report by the National Center for State Courts found that 
product liability cases are less than 1 percent of all civil filings.
  A 1995 study by the National Center for State Courts found that, of 
the 2 percent of lawsuits that are filed, 90 percent are disposed of by 
nontrial, such as dismissals or settlements.
  In June 1994, the New York Times featured a front page story on how 
juries are growing tougher on plaintiffs. Citing the latest research by 
Jury Verdicts Research, Inc., the Times stated that plaintiffs' success 
rates in product liability cases have dropped from 59 to 41 percent 
between 1989 and 1994. A 1995 report by the National Center for State 
Courts shows that tort filings have declined 6 percent since 1991.
  Profs. James Henderson, a supporter of State product liability 
reform, and Theodore Eisenberg of Cornell University released a study 
in 1992, which showed that product liability filings had declined by 44 
percent by 1991. They concluded that by ``most measures, product 
liability has returned to where it was at the beginning of the 
decade,'' beginning in the 1980's.


                          business litigation

  Where is the real litigation explosion? It is in the corporate board 
rooms. According to professor Marc Galanter of the University of 
Wisconsin Law School, the real litigation explosion in recent years has 
involved businesses suing each other, not injured persons seeking 
redress of their rights. He found that business contract filings in 
Federal courts increased by 232 percent between 1960 and 1988, and

[[Page S2587]]

by 1988 comprised the largest category of civil cases in the Federal 
courts.
  In August 1995, the National Law Journal released the findings of its 
study of judicial emergencies in Federal courts. The study found that 
33 percent of the judicial emergencies involved business litigation.
  Between 1989 and 1994, of the 83 largest civil damage awards 
nationwide, 73 percent involved business suits. Between 1987 and 1994, 
just 76 of the top business verdicts alone accounted for more than $10 
billion. They included: Litton Systems versus Honeywell, a patent 
infringement dispute--$1.2 billion; Rubicon Petroleum versus Amoco, a 
breach of contract dispute--$500 million, including $250 million in 
punitive damages; Amoco Chemical versus Certain Lloyds of London, a 
breach of contract dispute--$425 million, including $341 million in 
punitive damages; Avia Development versus American General Reality 
Investment, a breach of contract--$309 million, including $262 million 
in punitive damages. Of course, this does not include the greatest 
verdict of them all--the $10.5 billion awarded in 1985 in the Pennzoil 
versus Texaco case.
  Notwithstanding the excessiveness of business suites, however, the 
bill specifically exempts business litigation from the legislation.


                          ii. competitiveness

  Finding No. 2 of the conference report states:

       Excessive, unpredictable, and often arbitrary damage awards 
     and unfair allocations of liability have a direct and 
     undesirable effect on interstate commerce by increasing the 
     cost and decreasing the availability of goods and services.

  Rebuttal:
  To refute these unfounded claims about competitiveness, I simply cite 
the comments of Mr. Jerry Jasinowski, president of the National 
Association of Manufacturers [NAM], that appeared in the Washington 
Post editorial section on Sunday, March 17, 1996. Mr. Jasinowski 
severely decried those who have criticized American business 
competitiveness.
  According to Mr. Jasinowski: the American industrial renaissance over 
the last 4 years has restored the United States ``to the top spot among 
the world's economies.'' While some are ``busy berating our capitalist 
system, the U.S. economy has become the envy of the industrialized 
world.'' ``The American economy has quietly grown richer--gaining 8 
million new jobs since 1992 and putting the unemployment rate at an 
historically low 5.5 percent.'' ``In the past 25 years''--during the 
midst of the so-called product liability crisis--``U.S. employment has 
increased 59 percent and we have created more than 5 times as many net 
jobs as all the countries of Europe combined.''


                    other studies on competitiveness

  Mr. Jasinowski's editorial affirms other studies which have found no 
evidence relating product liability to U.S. competitiveness.
  A 1987 Conference Board survey of risk managers of 232 corportions 
shows that product liability costs for most businesses are 1 percent or 
less of the final price of products, and have very little impact on 
larger economic issues such as market share or jobs.

  The Rand Corporation found that less than 1 percent of U.S. 
manufacturers are ever named in a product liability lawsuit, and that 
``available evidence does not support the notion that product liability 
is crippling American business.''
  In 1991, the GAO released a study of the effects of product liability 
on competitiveness, and stated that it could find ``no acceptable 
methodology for relating product liability to competitiveness.''


                      findings on insurance costs

  Finding No. 7 states:

       The unpredictability of damage awards is inequitable to 
     both plaintiffs and defendants and has added considerably to 
     the high cost of liability insurance, making it difficult for 
     producers, consumers, volunteers, and nonprofit organizations 
     to protect themselves from liability with any degree of 
     confidence and at a reasonable cost.

  Rebuttal:
  The claim that there was an insurance crisis was one of the first 
justifications put forth by supporters of the legislation in the 
1980's. However, there is ample evidence that there never was, and is 
not currently, a product liability insurance crisis.
  A study released in March 1995 by Bob Hunter of the Consumer 
Federation of America, who was formerly the Texas Insurance 
Commissioner, shows that product liability insurance costs for U.S. 
businesses amount to no more than 26 cents for every $100 of total 
costs.
  In January 1995, the National Association of Insurance Commissioners 
reported that between 1989 and 1993 product liability insurance 
premiums declined by 26 percent.
  According to the Insurance Information Institute, insurance 
companies' surplus, assets minus liabilities, rose from $29 billion to 
over $230 billion between 1977 and 1995. Surplus is the money available 
after all losses and bills have been paid. These figures show that, to 
the extent there was an insurance downfall, it sure was not felt by the 
insurance industry.
  Additionally, according to the testimony of the American Insurance 
Association [AIA], the legislation will have no effect on insurance 
rates anyway.


                               uniformity

  Finding No. 10 states:

       The rules of law governing product liability actions, 
     damage awards, and allocations of liability have evolved 
     inconsistently within and among the states, resulting in a 
     complex, contradictory, and uncertain regime that is 
     inequitable to both plaintiffs and defendants and unduly 
     burdens interstate commerce.

  Rebuttal:
  This finding is part of the proponents' claim regarding uniformity. 
However, contrary to the proponents' claims, the bill does not, and is 
not intended to, create uniformity. State law is preempted in this bill 
only to the extent it favors defendant corporations. For example, with 
respect to punitive damages, the legislation would not disturb the law 
in the State of Washington since that State prohibits punitive damages, 
but would preempt the law in South Carolina, which permits punitive 
awards.
  The Chief Justices of the States have indicated that the legislation 
is likely to create considerable confusion, and lead to more 
litigation, as a result of the varying interpretations and applications 
of its provisions by different State courts.
  The bill imposes its own set of rules on State courts without 
imposing the same rules directly on the Federal courts. Because of the 
absence of a Federal cause of action, Federal courts will hear cases 
involving the legislation only if there is diversity of citizenship or 
location of the parties.


        CONFERENCE REPORT HURTS CONSUMERS MORE THAN SENATE BILL

  Proponents continue to state that the conference report is not 
expanded beyond the Senate amendment. However, the conference agreement 
extends well beyond the Senate amendment in undercutting the rights of 
victims. The bill now limits victims' rights to be compensated for harm 
caused by energy and utility related disasters, such as hazardous gas 
storage facilities, and negligent entrustment cases, including the 
unlawful sale of dangerous products to minors. In addition, the statute 
of repose has been reduced from 20 to 15 years. Once restricted to 
workplace products, this provision has also been expanded to cover any 
product that has an expected life span of more than 3 years. Further, 
products now covered by the legislation include used cars, elevators, 
children's toys, and medical devices made for handicapped citizens.
  The bill has retained the abolition of joint liability for pain and 
suffering damages. The restriction is applicable even if there is proof 
that defendants worked together as a joint venture, or as parent and 
subsidiary.
  The bill has maintained discriminatory punitive damages caps. By 
basing the cap on income and wealth, the bill permits higher punitive 
awards for individuals with the most economic advantages. In an effort 
to rectify the disparate treatment of high income and low income 
victims, a provision was added on the Senate floor to permit judges to 
increase punitive awards beyond the cap. Federal judges, and judges in 
most State jurisdictions, however, are constitutionally prohibited from 
increasing damages without the consent of the parties. Indeed, we find 
it hard to believe that any defendant would consent to higher punitive 
awards. The proponents stated the constitutional issue would be 
resolved in conference. The conference agreement, however, has actually 
enhanced the

[[Page S2588]]

power of judges to increase damages, all but ensuring the provision 
will be deemed unconstitutional. The end result will be that additur 
will be removed, and the discriminatory cap will remain. Additionally, 
we question why Congress would pass a law it recognizes as unfair, and 
then shift the responsibility to judges to rectify the problem.


                               CONCLUSION

  Simply put, Mr. President, there is no product liability crisis. 
Indeed, if there are problems that need to be examined in the tort 
system, they already are being addressed by the States, where this 
issue belongs.
  This legislation is the epitome of congressional arrogance. It takes 
away from the States an area of the law that has been reserved to the 
States for 200 years.
  What will this bill do? It will make it more difficult for consumers 
to be compensated for their harm from products; it will shield from 
liability manufacturers which consciously manufacture defective 
products; it will take away from the States rules of law they have 
carefully developed; and it will remove incentives for manufacturers to 
make their products safe. These are some of the results of this bill, 
results which are not in the best interests of our citizens.
  I conclude by urging my colleagues to reject cloture on this 
conference report. Despite years of effort, no case has ever been made 
for Federal product liability law. The proponents move from claim to 
claim about the need for this bill, because they know that this is a 
sham. If there ever was special interest legislation, it is this bill. 
It is special interest at the expense of the constitutional and civil 
liberties of the American people. I urge my colleagues not to be misled 
by the proponents' claims, and to vote against this conference report.
  There are so many things to say in the limited time. But section 
106(b)(3)(C) refers to a general aviation statute of repose limitation 
period. It is for 18 years. That is the way the distinguished Senator 
from Washington started talking about this bill yesterday. It was all 
about Cessna and aviation and everything else like that.
  All the provisions of the products bill apply to general aviation, so 
there are no longer protections for people injured, of course, on the 
ground or the air ambulance people, even though the 1994 law provided 
those protections. But what I wonder about, if this general aviation 
provision of 18 years has done such a remarkable revival of the 
aviation industry, why are we limiting it? There we go.
  No. The Senator from Nebraska says there is a real problem and 
everybody knows it. That is absolutely false. We know that the States 
have taken care of this problem. Yes, there is a political problem, 
because Presidential politics has preempted everything up here in 
Washington.
  I saw some article in one of the magazines about the campaign 
starting. The campaign started early last year. In 100 days we were 
going to do this, get rid of everybody, 10 things in the Contract, we 
are going to pass them in 100 days, and whoopee. And we were off, and 
everything else of that kind--until reality set in.
  But now there is the time of some embarrassment, since some of these 
things have not been passed--and for very, very good reason. A good 
reason, of course, assuming the truth of everything that the Senator 
from Connecticut says, is that the State Legislature of Connecticut is 
ready, willing, able, alert, and responsive. He was a majority leader 
of it. The State of Connecticut has taken care of these problems. We 
all take care of these problems in the several States.
  But right to the point, this bill is a travesty, Mr. President. The 
Presiding Officer knows it. It separates people. It separates them 
according to their economic worth. That is a dastardly thing to do. I 
cannot see people of good sense and reason voting for a thing of this 
kind and hoping the President will sign it. The President knows the 
facts. He has reiterated them in the letter. He said, if it is so good 
and so fair, as they plead, then why does it not apply to business--the 
very people who drew it up? This thing was drafted by business, of 
business, for business, greedy business. That is what it has been for, 
and the proponents all know it.
  I say that advisedly. I have gotten every business award you can 
find. I am proud of them. I work closely with business. We have more 
business coming to our State than all these other States that these 
Senators represent. I challenge them to compete with us on taking care 
of business. That has been my 40-year record of public service.
  So I know when they step over the line. The fact of the matter is, 
there is a small segment, Victor Schwartz and his crowd, stepping over 
the line that has picked up the political fever of ``kill all the 
lawyers.'' It is the business of travesty that increases the legal 
costs for those trying to really try their cases. They know that these 
are contingency fees.
  So if you get a good verdict, and it is a punitive damage verdict, 
you do OK. We put in the Record where punitive damages have disciplined 
these businesses. Thank heavens it has because we are all safer on 
account of it. That is why we get the recalls, because the 
manufacturers are put on notice. The proponents know that is why we are 
getting the recalls in our society. But now they have to go through a 
whole new hearing. And they talk about simplicity and transaction 
costs.
  How can they claim simplicity with all the different proceedings they 
have here now, trying to limit legal costs? They tell the utilities 
they can forget about strict liability, they can forget about the 
highest degree of care. The Senator from North Dakota and the Senator 
from Washington got into a very clear dialog about simple negligence. 
Let the boilers blow up, let the gas blow up, let it explode. The 
highest degree of care now is no longer required under this bill.

  Yes, we put in the Record about the drunk drivers. I reiterate, in 
the letter of MADD in opposition, Mothers Against Drunk Drivers, they 
oppose this bill. They know and they read and they understand and they 
stand by their particular opposition.
  It encourages the lack of care with that statute of repose on 
manufacturers. Manufacturers here are exercising the highest degree of 
care. They are not in these other lands. But now the proponents want to 
talk about global competition. I have touched on that. They are 
competing with themselves. They want to take down the high degree of 
care by overriding the strict liability. Punitive damages is another 
thing that has given us safe products in this land, safe places to 
work, safe places to sleep, safe drugs and food, and everything else of 
that kind.
  More than anything else, Mr. President, it is just patently 
unconstitutional. Amendment VII:

       In suits of common law, where the value in controversy 
     shall exceed twenty dollars, the right of trial by jury shall 
     be preserved, and no fact tried by a jury, shall be otherwise 
     reexamined in any Court of the United States. . . .

  This particular bill says reexamine it at the trial court level, but 
keep it a secret. The judge is supposed to charge the jury under the 
law, stay out of the facts. But this bill says, by gosh, reexamine it 
in violation of amendment VII. Of course, it ignores amendment X that 
the distinguished majority leader has run all over the entire United 
States talking about, saying, ``I've got one thing here in my pocket, 
the 10th amendment.''
  These folks all come up here and act like they never heard of the 
States from which they were sent. The States have acted on product 
liability over the 15 years that the Senator from Rhode Island 
complained about. They have acted very judiciously. It is not a 
problem. It is a little political gimmick in the contract. It is a 
shame and disgrace that we have taken up the time of the National 
Congress on this matter that the States have taken care of.
  I reserve the remainder of my time. How many minutes do I have?
  The PRESIDING OFFICER. The Senator from South Carolina has 3 minutes 
30 seconds.
  Mr. DASCHLE addressed the Chair.
  The PRESIDING OFFICER. The minority leader.
  Mr. DASCHLE. I thank the distinguished Senator from South Carolina 
for yielding. I will use whatever leader time I may require to finish 
my statement.
  Let me commend the Senator from South Carolina for the arguments he 
has again made in his summary on this

[[Page S2589]]

debate. I applaud him for the leadership and the effort he has put 
forth. I very enthusiastically endorse his position. Let me also thank 
the distinguished Senators from Washington and from West Virginia and 
from Connecticut that have, as well as they have, brought this bill 
closer to a bill that is reasonable.
  As the distinguished Senator from South Carolina said, Mr. President, 
it is ironic in the extreme that, in this era of devolution, in this 
era of States rights, in this era of empowering States with more 
opportunities to deal with issues at the local level, this Congress, of 
all Congresses, would now pass a bill that says the Federal Government 
knows better. It is especially ironic that this Congress would say the 
Federal Government knows better on an issue as profound as this, 
affecting victims in the worst set of circumstances.
  I respect the Presiding Officer for his consistency in suggesting 
that devolution and new Federalism, or whatever we call it, ought to be 
sustained, regardless of the issue, that we ought not pick issues 
depending on the special interests, that we really have a 
responsibility to be consistent.
  Certainly in this case it would require, I believe, a second look. We 
can do better than this. We can do better than what we are going to be 
voting on this afternoon.
  I am very troubled by a couple of provisions. One in particular 
troubles me. Mr. President, to say that someone working on a defective 
piece of machinery is going to be protected if that machinery is 
functional for 15 years, but not for 16 years, to me is amazing. To ask 
people on the work line, to ask people on the combine, to ask people in 
whatever set of working circumstances they face, to accept the risk 
that this equipment is going to hold out after that period is more than 
I can support. To ask American companies to live up to their 
obligation, to understand how important it is that people working on 
assembly lines or in a field have the protection and the certainty and 
the opportunity to come to work knowing they will be able to come home 
whole is not too much to ask. A 20-year statute of repose is not too 
much to ask.
  Mr. President, the other issue has to do with component parts. We 
have gone through some terrible situations in the last several years 
involving defective component parts. One example involves women who 
were given breast implants that were defective, when it was well known 
that a component of the breast implants posed severe health risks in 
the body of a woman. Now to immunize from liability people who 
manufacture defective component parts and to say we are going to, 
through statute, give them our blessing is wrong. It is wrong.
  Mr. President, we can do better than this. We have to do better than 
this. Those of us opposing this bill will continue to do so. This fight 
is not over. The President has said in no uncertain terms this bill 
will be vetoed. I predict we will have more than enough votes to 
sustain a veto.
  Again, this fight is not over. We can do better than this. We ought 
to do better than this. In working with the President, the Presiding 
Officer and others, we will. I yield the floor.
  Mr. GORTON. Mr. President, I yield 3 minutes to the Senator from 
Missouri.
  Mr. ASHCROFT. Mr. President, I thank the Senator from Washington. I 
commend the Senator from Washington and the Senator from West Virginia 
for bringing to the floor of the Senate a reasonable, moderate product 
liability bill which the President ought to sign.
  The representations in this Chamber that we should do better and 
could do better belie the current performance of this Chamber, which 
for 15 years has sought to enact a bill like this, but never really 
brought one forward that could be passed. This is a bill that can be 
passed.
  There can be debate about whether or not there is a litigation 
explosion in this country. Some can say we have too much litigation or 
too little. Let me give you a fact. The fact is that tort costs are 2.3 
percent of the Gross Domestic Product in the United States, according 
to the Tillinghast study. That is 2\1/2\ times the world average. In 
short, we have the most expensive tort liability system in the world. 
It is time for us to change that. We must stop wasting money by 
exchanging it between the trial lawyers and punitive damage recipients 
instead of using it to create the competitive and economic edge that 
will allow us to be successful--to create jobs and build equipment, and 
to grow this economy. We need to revitalize the industrial base of the 
United States of America.

  Uniform standards in product liability law would help return good 
products to the markets, reduce the price of consumer goods, and break 
the legal shackles on American businesses to help them become more 
competitive internationally.
  This bill will make products safer. Litigation, which we have had 
plenty of, stifles innovation that makes products safe. Overall product 
safety in the United States improved steadily in the first half of this 
century, when a much more limited liability system was in effect. We 
need to make sure that safety, not greed, is what is emphasized by our 
laws in this area.
  Let me make another point. We need to make this fundamentally clear: 
No person will be denied the right to recover actual damages under this 
bill. Every cent of damages, even damages for pain and suffering 
previously that has been available, is available under this bill. The 
bill has limits on punitive damages, but those are damages to punish. 
Those are not damages to make a person whole for what has happened to 
them.
  One last point that I raise, this bill was pared down from what it 
ought to be and what it should be--in an effort to accommodate the 
President. We ought to really be extending some tort reform protection 
to our charities. This bill does not provide protection to churches, to 
voluntary and charitable organizations, which means there will be no 
liability protection for volunteers in the Little League, the American 
Red Cross, the Salvation Army, the American Cancer Society, for people 
who run soup kitchens. We need an explosion of people helping solve 
America's endemic social pathologies. What do we have in the United 
States instead? A tort system which threatens everyone who tries to 
help his neighbor with the potential of bankrupting liability.
  Dick Aft, president of the United Way & Community Chest of 
Cincinnati, put it this way, ``The litigious climate imposes a cost for 
all charities, costs that can be measured in resigning trustees, lost 
volunteer hours and sky-high insurance premiums. These are tough times 
for charities. The last thing we need is a legal system that adds to 
our burden.''
  Mr. President, as long as our litigation system forces a would-be 
volunteer to consider whether the risks of being sued outweigh the 
benefits of contributing one's time and talent to charitable 
organizations efforts to solve society's problems will continue to be 
unnecessarily stymied.
  In order to try to entice the President of the United States to go 
back to his previous position supporting federal product liability 
reform, the Senate has had to take the protections for non-profits out 
of this bill. Then the President still comes out and opposes the bill. 
As a result, I do not know how to trust the President on anything he 
says. He previously said he supports it. Now he says he does not.
  Maybe we should distrust his latest representation that he will veto 
this. We should pass this legislation and give the President a chance 
to flip-flop back to the right side of the agenda, and I do not mean 
political right, I mean right versus wrong as a matter of good 
government policy. This bill is right, it provides a reasonable 
framework to do business in the United States. It will protect 
consumers. I believe it should be enacted for the good of consumers and 
the good of the country.
  Mr. GORTON. I yield 30 seconds to the Senator from Virginia.
  Mr. WARNER. I thank the distinguished managers of the bill. I 
strongly support the bill and commend the managers of this bill.
  Mr. President, this is a jobs bill. It throws a liferaft to small 
business. Small business today is being buffeted in the turbulent seas 
of lawsuits, yet it affords adequate protection in litigation for those 
who are wrongfully hurt.
  Mr. President, I rise in support of the Commonsense Product Liability 
and Legal Reform Act of 1996. I do so because I believe that this bill 
is strongly

[[Page S2590]]

proconsumer. The opponents of this bill may claim to be defending the 
rights of the injured. Well, this bill not only defends their rights to 
be fairly compensated for injuries caused by defective products, but 
also defends the rights of the rest of us not to pay for the outrageous 
verdicts, settlements, and insurance payments that American businesses 
pass on to consumers because of our broken legal system.
  It is important to remember what exactly this bill does. There are a 
number of commonsense provisions which nobody besides the trial lawyers 
could oppose. For example, no longer would companies be liable when the 
injured party was drunk, on drugs, or otherwise responsible for their 
own injuries, or when the consumer had altered the product. It also 
would provide protection to companies producing biomaterials for use in 
medical implants: These sections are necessary to allow these companies 
to help save lives and to worry less about being sued for merely 
providing raw materials which ended up in a heart valve or pacemaker.
  Then there is the issue of punitive damages which have been the 
subject of so much discussion. Again, it is important to remember what 
punitive damages are. Imagine a plaintiff injured by a defective 
product, say a car with faulty brakes which causes an accident. The 
plaintiff will be able to recover every last penny of lost income, 
medical costs, and financial losses he can demonstrate. In addition, he 
will be entitled to recover for pain and suffering as the jury sees fit 
and in relation to the injuries suffered. Then, on top of being 
completely compensated, he can ask for punitive damages which may have 
no relation to the amount he received for compensatory damages. 
Sometimes punitive damages are granted, sometimes not: more often a 
company is forced to settle a case to avoid the possibility of a 
outrageous jury verdict. This is a pure lottery having nothing to do 
with the injuries suffered by the plaintiff which mainly benefits the 
lawyer working on a contingent fee. It is a crazy way to dispense 
justice.

  My State of Virginia has recognized this problem and placed a 
reasonable cap on punitive damages. But Virginians buy products 
produced in other States and pay for the costs of this legal lottery 
created by the legal systems in other States. President Clinton says 
that this bill usurps the power of the States. Commerce, however, is 
nationwide and where States are placing undue burdens on interstate 
commerce, Congress is correct to step in and make reforms.
  Now remember also that when President Clinton was Governor, he 
endorsed uniform legislation for punitive damages. Even the Washington 
Post has recognized that the President and the opponents of this bill 
are on the side of the trial attorneys, rather than American consumers 
and businesses.
  I urge that the Senate move to consideration of this badly needed 
legislation and that it be enacted as soon as possible.
  Mr. GORTON. Mr. President, article 1, section 8 of the Constitution 
of the United States reads in part as follows: ``The Congress shall 
have power to regulate commerce among the several States.'' The 
purposes of this bill, as outlined in this bill, read as follows:

       Based upon the powers contained in Article 1, Section 8, 
     Clause 3 of the 14th amendment of the United States 
     Constitution, the purposes of this act are to promote the 
     free flow of goods and services, to lessen burdens on 
     interstate commerce, and to uphold the constitutionally 
     protected due process by, (1), establishing certain uniform 
     legal principles of product liability which provide a fair 
     balance among the interests of product users, manufacturers 
     and product sellers; (2), placing reasonable limits on 
     damages over and above the actual damages suffered by a 
     claimant; (3), ensuring the fair allocation of liability in 
     civil actions; (4), reducing the unacceptable cost and delays 
     of our civil justice system caused by excessive litigation 
     which harm both plaintiffs and defendants; (5), establishing 
     greater fairness, rationality, and predictability, in the 
     civil justice system.

  That is precisely what this bill is designed to do, Mr. President. 
That is precisely what this bill does.
  I yield the remaining 2 minutes to the distinguished chairman of the 
Commerce Committee.
  Mr. PRESSLER. Mr. President, I rise in strong support of this 
legislation. I want to pay tribute to both Senator Rockefeller and 
Senator Gorton who have had such great courage, leading this 
controversial bill and bringing it here. This is perhaps one of the 
most important pieces of legislation this Congress will consider 
because of the benefits it will have for small business.
  Senator Gorton, who has appeared before the Supreme Court 14 times, 
is a legal expert. His expertise in explaining this bill, both in the 
committee and on the floor, have been very, very valuable. This bill 
would not be here without Senator Slade Gorton. He has been able to 
explain this bill, the technical parts of it.
  Senator Rockefeller, in my opinion has shown great courage. I wanted 
to use my time to pay tribute to those two leaders who have fought so 
long and hard through the committee.
  I strongly support this legislation.
  Mr. GORTON. Mr. President, I simply would like to say after this 
extended debate, not only over the period of the last 2 days but over 
the period of the last year, and for that matter several Congresses, 
that it is wonderful to have at least this phase of it completed. This 
very important element in the reform of our country's legal system 
would not have been completed with this degree of success without the 
help of both many Members and a significant number of staff.
  When one names names, one runs the risk of leaving out many people 
who deserve credit, but particular credit from my perspective belongs 
to Lance Bultena of the Commerce Committee staff, and my own Jeanne 
Bumpus and Trent Erickson. Together they have put in so many hours on 
this subject that it cannot possibly be measured, and have done a 
wonderful job in educating and advising me.
  For Senator Rockefeller, Jim Gottlieb, a magnificent and skilled 
attorney, and Ellen Doneski have provided similar services. All of my 
cosponsors I wish to thank. All those who voted with me, I wish to 
thank. Most particularly, however, is the Senator from West Virginia 
[Mr. Rockefeller]. We have come to be close personal friends during the 
course of the many years that we have worked together on this subject. 
He is a wonderful, thoughtful, and hard-working individual. In this 
connection, he is a courageous individual with the willingness to take 
on a majority of his own party and his own President.
  His devotion to the public interest is not exceeded by any Member of 
this body. The ability to become such a close personal friend has been 
an important ancillary privilege of leading the debate on product 
liability.
  With that, Mr. President, I am sure it is time to move on.
  Mr. President, I yield the remainder of our time.
  The PRESIDING OFFICER. The question is on agreeing to the conference 
report to accompany H.R. 956.
  The yeas and nays have been ordered.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. FORD. I announce that the Senator from Nebraska [Mr. Kerrey] is 
necessarily absent.
  The result was announced--yeas 59, nays 40, as follows:

                      [Rollcall Vote No. 46 Leg.]

                                YEAS--59

     Abraham
     Ashcroft
     Bennett
     Bond
     Brown
     Burns
     Campbell
     Chafee
     Coats
     Cochran
     Coverdell
     Craig
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Exon
     Faircloth
     Frist
     Glenn
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Hatfield
     Helms
     Hutchison
     Inhofe
     Jeffords
     Johnston
     Kassebaum
     Kempthorne
     Kohl
     Kyl
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Moseley-Braun
     Murkowski
     Nickles
     Nunn
     Pell
     Pressler
     Pryor
     Rockefeller
     Santorum
     Smith
     Snowe
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--40

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Byrd
     Cohen
     Conrad
     D'Amato
     Daschle
     Feingold
     Feinstein
     Ford
     Graham
     Harkin
     Heflin
     Hollings
     Inouye
     Kennedy
     Kerry
     Lautenberg
     Leahy
     Levin
     Mikulski
     Moynihan
     Murray
     Reid
     Robb
     Roth
     Sarbanes
     Shelby
     Simon
     Simpson
     Specter
     Wellstone
     Wyden

[[Page S2591]]

                             NOT VOTING--1

       
     Kerrey
       
  So the conference report was agreed to.
  Mr. GORTON. Mr. President, I move to reconsider the vote.
  Mr. EXON. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

                          ____________________