Congressional Record, Volume 142 Issue 46 (Friday, March 29, 1996)

[Congressional Record Volume 142, Number 46 (Friday, March 29, 1996)]
[House]
[Pages H3184-H3204]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

CONFERENCE REPORT ON H.R. 956, COMMONSENSE PRODUCT LIABILITY LEGAL
REFORM ACT OF 1996

Mr. HYDE. Mr. Speaker, pursuant to House Resolution 394, I call up
the conference report on the bill (H.R. 956) to establish legal
standards and procedures for product liability litigation, and for
other purposes.
The Clerk read the title of the bill.

[[Page H3185]]

The SPEAKER pro tempore. Pursuant to clause 2(c) of rule XXVIII, the
conference report is considered as having been read.
(For conference report and statement, see proceedings of the House of
March 14, 1996, at page H2238.)
The SPEAKER pro tempore. The gentleman from Illinois [Mr. Hyde] and
the gentleman from Michigan [Mr. Conyers] each will control 30 minutes.
The Chair recognizes the gentleman from Illinois [Mr. Hyde].

general leave

Mr. HYDE. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on the conference report on H.R. 956.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Illinois?
There was no objection.
Mr. HYDE. Mr. Speaker, I yield 15 minutes of my time to the gentleman
from Virginia [Mr. Bliley], chairman of the Committee on Commerce, and
I ask unanimous consent that he may be permitted to control that 15
minutes.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Illinois?
There was no objection.
Mr. CONYERS. Mr. Speaker, I yield 15 minutes to the gentleman from
Michigan [Mr. Dingell], former ranking member of the Committee on
Commerce, the Dean of the House, and I ask unanimous consent that he be
permitted to yield time in blocks.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. HYDE. Mr. Speaker, I yield myself 2 minutes.
(Mr. HYDE asked and was given permission to revise and extend his
remarks.)
Mr. HYDE. Mr. Speaker, I rise in support of the conference report on
H.R. 956, the Commonsense Product Liability Legal Reform Act of 1996.
This legislation is an important first step in the longstanding
congressional effort to reform our legal system. Although the reforms
contained in the conference report do not go as far as I and many in
this Chamber would have liked, this legislation takes some important
first steps in restraining the excesses of the current out-of-control
legal system. It is a solid downpayment on long-needed reform.
When the House passed H.R. 956, the Commonsense Product Liability
Legal Reform Act of 1995, in March of last year, we did so on a strong
bipartisan vote of 265 to 161. That vote sent a message that the new
Republican majority in Congress was resolute in its commitment to bring
about broad-based legal reform and an end to lawsuit abuse. It has
taken us more than a year to complete this process, but we now have
before us a conference agreement which, while not as ambitious as the
House bill, will for the first time in the history of Congress take aim
at the inequities and inefficiencies of our legal system.
This is not only a first step in the direction we need to head, but
it is a step which we can realistically enact this year. The Senate has
already approved this measure by a vote of 59 to 40. Despite the fact
that the agreement does not go far as reforms that the House voted
for--notably extending relief to all civil actions--we must not lose
sight of the fact that product liability reform is an historic
accomplishment. It will unleash an American job creation boom and will
translate into real growth for our economy.
I would like to take this opportunity to highlight several key
provisions contained in the conference report.

statute of repose

One very important part of this conference agreement imposes a
uniform statute of repose of 15 years for cases involving durable
goods. A statute of repose specifies the period of time after
manufacture of a product during which a lawsuit relating to the product
may be brought. The statute of repose addresses the unfairness that
results when manufacturers are sued on the basis of products that left
their control many years ago. This allows U.S. manufacturers to compete
with foreign companies that have entered the marketplace in recent
years and face no liability exposure for very old products.
Section 101(7) of the conference report defines the term durable good
as meaning first, ``any product or any component of any such product
which has a normal life expectancy of three or more years'' or second,
any product which ``is of a character subject to allowance for
depreciation under the Internal Revenue Code of 1986 and which is: (A)
used in a trade or business; (B) held for the production of income; or
(C) sold or donated to a governmental or private entity for the
production of goods, training, demonstration or any other similar
purpose.'' Thus, the agreement describes two distinct categories of
products which will be covered by the statute of repose provision.
Under the first clause of the definition, a manufacturer of a product
such as a machine tool, farm equipment, a bicycle or a ladder, a
toaster or gas furnace, an elevator, or building materials such as
plate glass, wall coatings, or roofing tiles could not be sued based on
harm allegedly caused by that product more than 15 years after the
product was first delivered. Thus, a product which has a normal life
expectancy of 3 or more years need not meet any other criteria to
qualify as a durable good.
Again, the second clause of section 101(7) covers products that are
subject to allowance for depreciation under the Internal Revenue Code
and used in a trade or business, held for the production of income, or
sold or donated to a governmental or private entity for the production
of goods, training, or similar purposes. These types of products would
also be covered by the 15-year statute of repose adopted in the
conference agreement.
Some have erroneously stated that the statute of repose in the
conference report is confined to goods used in the workplace. That is
not correct. The language of the conference agreement is clearly not
limited in this manner, nor should it be.
In his eloquent statement in support of the legislation, Senator
Gorton pointed out two examples--step ladders and football helmets--
where a large proportion of the price of the product is accounted for
by the cost of product liability actions and insurance. Senator
Gorton's use of these examples underscores the irrationality of any
workplace limitation on the statute of repose. A workplace limitation
would make unjustified and unfair distinctions between products, and
could produce wildly inconsistent results for manufacturers who may
have no control over where, and under what circumstances, their
products may be used.
For example, if the statute of repose were limited in such a manner,
a manufacturer of a ladder used in the workplace would be protected 15
years after the ladder is sold; but if that same ladder is used in the
home the statute of repose would not apply. A football helmet used in
professional sports would be covered by the statute of repose; but one
used in other settings would not be. There are numerous other examples
of arbitrary distinctions and unequal treatment that would result from
a workplace limitation. A manufacturer of a mower used by a farmer
would be protected from lawsuits after 15 years, while one whose same
product is used by a weekend gardener would not be. The conference
report rightly eliminates these types of arbitrary and unfair
distinctions.
The statute of repose provision contains certain exceptions. It does
not, for example, preempt the 18-year statute of repose contained in
the General Aviation Revitalization Act of 1994. Neither does it apply
in a case involving a vehicle used primarily for hire, where the
existing State statute of repose, if any, would continue to apply.
The conference agreement provisions will also not apply in the case
where the manufacturer or seller has expressly warranted the safety or
life expectancy of the product to be longer than 15 years. In those
cases, the private agreement of the parties will control.
The statute of repose also includes a toxic harm exception, which has
been the source of a great deal of confusion and uncertainty. This
exception was included in the Senate-passed bill to address a concern
which had been raised about products that cause physical injuries that
are latent, that is, injuries that do not manifest themselves for many
years after a person is first exposed to a product.

Because the term ``toxic harm'' was not defined in the Senate bill
and is

[[Page H3186]]

not defined in the conference report, I want to spend a few moments
clarifying the congressional intent with respect to the scope of this
provision. Numerous Federal statutes and regulations contain
definitions of the word ``toxic,'' and some of those definitions differ
widely from others. Some of those definitions, if relied upon to
interpret the ``toxic harm'' exception in H.R. 956, would broadly
except from the statute of repose products where the alleged harm
ranges from harm caused by excessive noise, cold, vibration, or
repetitive motion--such as repetitive stress injury--to those in which
the alleged harm is caused by chemical or other elements, to products
like asbestos, where the injury to a person caused by the product may
be latent for many years. The conferees did not adopt or incorporate
these wide-ranging definitions.
The House-passed bill contained a provision which addressed the
problem the Senate bill sought to address, but which used different
words. The House provision excluded from the statute of repose products
that cause latent harm, specifically, a ``physical illness the evidence
of which does not ordinarily appear less than 15 years after the first
exposure to the product.'' Although the words used were different, the
intent of the House and Senate provisions was the same: to except from
the statute's time bar actions involving products alleged to cause
latent illness.
The House, therefore, receded to the Senate bill's use of the ``toxic
harm'' language, because it too is intended to provide an exception
only for products that cause physical illness, evidence of which cannot
be detected until long after exposure to the product, such as, harm
that cannot be detected within a 15-year period.
Finally, it is important to note that the statute of repose contained
in the conference agreement only preempts State statutes of repose
which are longer than 15 years. It also does not limit a State statute
of repose from extending beyond durable goods to other types of
products. Thus, for example, a State statute of repose, which limits
suits to those brought within 12 years of delivery of the product, and
which covers all goods, would not be affected by the conference
agreement.

punitive damages

The conference agreement generally adopts the Senate's language
regarding a limitation on punitive damages. Punitive damages are
intended for cases where the defendant's conduct has been particularly
harmful--where the conduct involved gross negligence or intentional
conduct. They should be awarded only in the most serious cases.
Punitive damages are generally limited to two times compensatory
damages or $250,000 whichever is greater. This limitation will be
imposed by the court in the event that a jury--which is not to be told
of the cap--awards a higher amount. In the event that the cap operates
to limit an otherwise higher jury award, the conference agreement
allows the court to consider whether that cap is appropriate. If after
reviewing the facts of the case the court finds that the amount of
punitive damages allowed under the cap is inadequate, the court may
increase the award, up to the amount of the initial jury punitive
damage award level. In no event may the punitive damage award exceed
the amount of the original jury verdict.
The limitation on the court's ability to award punitive damages in
excess of the cap in no way suggests that the court will not have the
normal discretion to review and decrease punitive damage awards in the
proper circumstances. This power will continue to exist whether or not
the initial jury award exceeds the limitation imposed under the
conference agreement.
A special rule applies in the case of defendants with a net worth of
$500,000 or less, or entities employing 25 or fewer full-time
employees. For cases involving those defendants, the cap on punitive
damages will be two times compensatory damages or $250,000, whichever
is greater. For cases involving those defendants, the court may not
increase the award beyond the statutory limit.

The limitations imposed by the section are to be applied defendant by
defendant. Thus, in a case involving two or more defendants, the
plaintiff could potentially obtain the maximum amount of punitive
damages from each defendant. For purposes of calculating the limit for
each defendant, compensatory damages will include only the percentage
of damages for which that defendant is found liable.
The conference agreement permits a court to award additional damage
under section 108(a)(3), but only in cases of egregious conduct.
Egregious conduct in this context means conduct where the defendant
against which the punitive damages are awarded specifically intended to
cause the harm that is the subject of the action or acted with actual
malice toward the claimant. Unless the defendant's conduct meets this
standard, the provisions of section 108(a)(3) will not apply, and the
court will have no authority to exceed the amount of punitive damages
established in section 108(a)(1).
The provisions of the conference agreement in section 108(a)(3) which
allow the court to exceed limitations on punitive damages are intended
by the conferees to be treated as severable in the event a court
determines that judges lack constitutional authority to award
additional amounts of punitive damages. Should a court so find, the
continued operation of the limitations otherwise imposed by section 108
will not be affected.
Section 108 does not preempt State laws which more narrowly limit the
amount of punitive damages that may be awarded. Thus, if a State
imposes a dollar limit on punitive damages which is less than the cap
set forth in section 108(a)(1), the State law will apply, and the
conference agreement's provision allowing for the award of additional
damages by the court will not apply. Similarly, if the State law
contains a provision for additur, but restricts the amount of additur
permitted to less than the initial jury award, the provisions of the
State law will prevail.
Thus, the punitive damage reforms of H.R. 956 are minimum standards
and limitations designed to provide some measure of rationality; they
would not displace the law of States with more restrictive punitive
damage regimes. For example, many States have punitive damage
limitations that do not allow the judge to override the statutory
maximum. Nothing in the conference report displaces the laws of such
States. Similarly, States are free to require higher standards of proof
and to impose substantive requirements in addition to those in the
conference report.
The preemptive effect of the punitive damage reforms turns on three
separate provisions of the conference report. First, the Federal law
``supersedes State law only to the extent that State law applies to an
issue covered by the Act.'' Second, the conference report provides that
``punitive damages may, to the extent permitted by applicable State
law, be awarded against a defendant if the claimant establishes by
clear and convincing evidence that conduct carried out by the defendant
with a conscious, flagrant indifference to the rights or safety of
others was the proximate cause of the harm that is the subject of the
action.'' Third, the conference report provides that the Act ``does not
preempt or supersede any State or Federal law to the extent that such
law would further limit the award of punitive damages.''
Mr. Speaker, the express preservation of State laws that further
limit the award of punitive damages was part of the bill approved by
the House in March, but it was not part of the amendment passed by the
Senate. During the Conference, I led the House conferees in insisting
that this provision be included. The conference report adopts the House
preemption language--language that makes very clear the preemptive
effect of the punitive damage reforms.
Taken together with the other provisions, this provision conclusively
demonstrates that the Act would not expand liability for punitive
damages, or increase the permissible amount of punitive damages, in any
State. If State law imposes substantive or procedural requirements
concerning the circumstances under which punitive damages may be
awarded that are more stringent than the Federal law, the State law
controls. Similarly, if the application of State law limits on the
amount of punitive damages results in an award of punitive damages that
is less than that permitted under the Federal law, the State law
controls.

[[Page H3187]]

Let me explain, Mr. Speaker, why this is the only interpretation that
is consistent with the plain language of the conference report, as well
as the intent of its drafters.

Consider, for example, more stringent State standards for the award
of punitive damages. Everyone agrees that the act would not make
punitive damages available in States, such as Washington, that do not
currently allow the award of punitive damages. In such States, no award
of punitive damages is permitted by applicable State law and the
punitive damage provisions therefore do not come into play.
Likewise, the act would not lower the standards for awarding punitive
damages in States such as Colorado--which requires proof beyond a
reasonable doubt--or Maryland--which requires proof of actual malice.
If a claimant meets the standard of proof in the Federal law but not
the higher standard imposed by State law, no award of punitive damages
is permitted by applicable state law. Again, the punitive damage
provisions of the Federal statute simply do not apply to cases in which
punitive damages would not otherwise be available under State law.
In addition, State laws that impose a higher standard of proof than
the Federal act, or that provide for additional substantive
requirements, further limit awards of punitive damages and therefore
are not preempted by the act, which does not preempt or supersede any
State or Federal law to the extent that such law would further limit
the award of punitive damages. Any State law that would make punitive
damages unavailable even if the Federal requirements are met, or that
would result in an award of punitive damages lower than the Federal
limitations, is one that further limits the award of punitive damages.
Such laws expressly are not preempted.
It is also important to recognize, Mr. Speaker, that the act would
not affect State caps on punitive damages. In most cases, the act would
limit punitive damages to the greater of $250,000 or two times
compensatory damages. At the same time, many States have limited
punitive damages by providing a maximum dollar amount, a multiplier, or
some other statutory limitation on the amount of punitive damages. In
many cases, application of these State limitations would result in a
lower punitive damage award than would application of the Federal
limitations. In such cases, these State laws would remain in effect.
For example, Virginia has enacted an absolute cap of $350,000 for
punitive damages. Illinois limits punitive damages to three times
economic damages. Application of these limitations to a punitive damage
award results in the maximum amount of punitive damages permitted by
applicable State law. Even if the Federal law would allow a higher
award of punitive damages, therefore, the State law limitations would
control. By contrast, if the Federal limitations resulted in a lower
amount, the Federal limitations would control.
Lest there be any doubt on this subject, the conference report
expressly provides that the act ``does not preempt or supersede any
State or Federal law to the extent that such law would further limit
the award of punitive damages.'' This provision can only mean that if
application of a State limitation would result in a lower award of
punitive damages than the Federal rule, the further limit of the State
law controls.

Commercial Loss

The conference revisions to H.R. 956 are intended to clarify
congressional intent concerning claims for commercial loss. Commercial
loss, as defined in section 101(5), means any loss or damage to a
product itself, loss relating to a dispute over its value, or
consequential economic loss. As further stated in the definition, any
claim for any of these three types of loss is to be governed by the
Uniform Commercial Code or State law versions of its provisions, or by
contract law. This definitional requirement that all actions for
commercial loss be governed by commercial or contract law is
accompanied by the affirmative mandate in section 102(a)(2) that any
civil action brought for commercial loss shall be governed only by
applicable commercial or contract law. Congressional intent is to
codify the historical approach that tort theories are not applicable to
such claims, and may not be employed with respect to them.

The reforms contained in H.R. 956 are aimed predominantly at
correcting certain abuses and providing some reasonable uniformity in
the tort law of products liability. Claims for commercial loss
traditionally do not fall in the tort realm, but are dealt with in
accordance with the contractual agreement created by the parties
themselves, or by the UCC. This economic loss rule is typified by the
opinions of the California supreme court in Seely versus White Motor
Company, and the U.S. Supreme Court in East River Steamship Corporation
versus Transamerica Delavel. Despite limited judicial inroads by other
courts that have sought inappropriately to engraft tort branches onto
the commercial tree, the bill excludes commercial loss from the scope
of its tort-related provisions. In so excluding commercial loss,
Congress did not seek to carve out a category of loss undeserving of
the bill's protections, but rather to recognize that there is a
massive, extant body of commercial and contract law historically more
suited to such claims. In order to assure that such claims are not
subject to tort system abuses that the bill aims to rectify, the
conference chose affirmatively to mandate that commercial loss claims
be governed exclusively by commercial or contract law. Such a rule of
law is necessary to promote uniformity and predictability, in the
interests of interstate commerce and due process. This position is
entirely consistent with the House Judiciary Committee report (H. Rept.
104-64), and codifies the common law rule.
This bill does not intend to disrupt or affect application of the
economic loss doctrine. Congress fully supports the traditional rule
that disputes that essentially involve failed commercial expectations,
damage or loss to a product itself, or diminished product value, are
not recoverable in tort. Exclusion of commercial loss from the bill is
intended to protect the body of extant contract and commercial law, and
while assuring that tort or other inappropriate causes of action are
not engrafted onto that body of law.

definition of product

The definition of a product in section 101(14) of the conference
agreement is not intended to include improvements to real property. A
manufacturer is able to test its product and control quality in a way
that is impossible on a construction site where a variety of systems
are being coordinated to create a more complex structure. Each
construction project is built from an extremely complicated and unique
set of drawings and specifications involving interrelated systems and
many individual products specified by a design professional and over
which the constructor has little control. Forty-seven States have
recognized this distinction between a product and an improvement to
real property by enacting specific statutes of repose for improvements
to real property. It was the intent of the conferees that the
definition of product in H.R. 956 honor this distinction.
Mr. Speaker, after nearly two decades of effort to fashion a
comprehensive set of product liability reforms, we have crafted a
bipartisan consensus package of bottom-up reforms. These reforms are
desperately needed to restore some fairness to our present system and
to remove roadblocks to our country's economic growth and job creation.
I urge my colleagues to join me in supporting the conference report to
accompany H.R. 956.
Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
(Mr. CONYERS asked and was given permission to revise and extend his
remarks.)
Mr. CONYERS. Mr. Speaker, this is a continuation of the war on public
safety. We have before us a conference measure which would not only cap
and limit the amount of damages an injured victim can recover, but
would, in instances, completely cut off our consumers' and workers'
rights to seek compensation, even in uncontested cases of negligence.
Mr. Speaker, this bill, the conference measure before us, in every
conceivable way has been designed to disadvantage American consumers
and benefit negligent corporations. The question that hangs over this
discussion is why.
Remember, the Conyers amendment to get tough with foreign
corporations,

[[Page H3188]]

which we voted twice, was dropped in conference, to require the foreign
corporations to subject themselves to the discovery and jurisdiction in
the U.S. courts as a condition of doing business in this country, just
like everybody else. What is wrong with this, and why did the
conference committee specifically refute the judgment of the majority
of Members, Democratic and Republican, about this provision?
To make matters worse, Mr. Speaker, we are considering the bill at
the same time the majority leader of the House, the gentleman from
Texas, Mr. Armey, is proposing to completely eliminate safety agencies
like the Consumer Product Safety Commission, while simultaneously
slashing and eliminating safety regulations. Why?
If Members do not think that the threat of private lawsuits can help
keep dangerous products off the market, which is what we hope to
continue to do in our legal system, just ask the parents of children
who have been killed by flammable pajamas, or the women who have been
maimed by the Dalkon shield. Both these products are now off the
market, thanks to the threat of punitive damages.
Mr. Speaker, this bill will not reduce litigation, but will stack
jury awards in favor of those with large incomes or that can afford
powerful legal counsel, and it would remove the most important
deterrence that stopped dangerous products from coming into our homes
and communities. So the bill will not reduce litigation, Mr. Speaker,
because, contrary to the myth, product liability suits represent a
minute portion of litigation in the United States.
Is there a law student in any school in America that is not aware
that product liability suits represent less than 2 percent of the
litigation carried on in the U.S. courts? Is there anybody that does
not know that? This is not a partisan fact, it is not a factoid: Less
than 2 percent of all the suits in the country involve product
liability; and also, that product liability premiums are going down.
Punitive damages is also a myth that must be addressed among lawyers
and Members of Congress. There are only an average of 14 awards a year
in punitive damages. Please, 14 awards a year in punitive damages. When
they are awarded, they prevent against deadly dangers in the
marketplace, asbestos cases, dangerous intrauterine devices. The cap of
$250,000 on punitive damages is tragic. No Fortune 500 company, or some
not even Fortune 500, will be deterred from placing dangerous products
on the market because of a quarter of a million dollar threat of
punitive damages. It will be factored into the pricing.
Mr. Speaker, I think more and more of us are aware of that, and are
going to oppose this measure for those reasons.
Mr. Speaker, in this measure before us, a conference bill, we limit
the victim's rights to recover what are known as noneconomic damages
when they are joint tort feasors. So if a dangerous product induces a
loss of reproductive capacity in a housewife, say, she may likely be
limited in her recovery where there are joint tort feasors; but if a
corporate executive of some expense is injured by the same product or a
different one and loses his large salary, the bill ensures that he will
be fully compensated.

Mr. Speaker, I appeal to Members on the sense of fairness, this is a
one-way street of Federalism: Return power to the States, as long as it
disadvantages consumers and working people.
Finally, do not forget about the special interest favors lurking in
the bill. Gun sellers and bar owners have obtained special language
limiting their potential liability for careless sales to third parties.
Did Members know that was there? It is. Electricity, water, and gas
utilities corporations have obtained a provision overruling liability
laws in States which hold them strictly liable for utility disasters.
Do Members know that is in the bill?
Like ministers, Congressmen can preach through little babies' cries.
It does not bother me a bit.
There are other hidden favors. Mothers Against Drunk Drivers are
opposed to the bill. Special interests have poured $26 million into it
to see these special things occur. Mr. Speaker, this bill is of special
interests, by special interests, and for special interests. The
administration has indicated that it will veto it. It is going nowhere,
again, so vote against this extremely damaging, discriminatory piece of
legislation.
The following is a more detailed description of the final conference
report, outlining my concerns with the bill.
Section 1. Short Title and Table of Contents
Sec. 2. Findings and Purposes.--Sets forth a number of
findings, most notably that our nation is experiencing a
litigation explosion which harms our competitiveness. What
the conference report fails to note is that the most recent
study by the Bureau of Justice Statistics found that product
liability cases represent a mere 1.67 percent of civil cases.
And the clear trend of product liability filings as well as
damages awarded has been decreasing: according to the
National Association of Insurance Commissioners, product
liability insurance premiums have dropped more than 28
percent between 1989 and 1994. The incidence of punitive
damages in product liability cases is far rarer yet: a study
by Professor Michael Rustad, termed by the U.S. Supreme Court
as the ``most exhaustive study'' ever, found an average of
only 14 such cases per year from 1965-1990. The conference
report also fails to note that the bill will have very little
effect on American competitiveness, since the total of all
product liability costs represent a mere one cent per five
dollar purchase (according to a comprehensive study completed
by the Consumer Federation of America). The one provision in
the House bill which would have helped U.S. firms compete--by
making it easier for American consumers to sue negligent
foreign manufacturers on the same terms as American firms--
was quietly dropped in conference, even though the Conyers
Amendment on this matter passed by a bipartisan vote of 285-
166, and the House later approved a motion instructing
conferees to retain the provision by a vote of 256-142.
Section 101. Definitions.--The term ``product'' is defined
to include (i) electricity, water and gas utilities which are
ordinarily subject to a strict liability in tort, and (ii)
human tissue, organs, and blood products (both categories of
items which were specifically excluded from the House-passed
bill). The utility provision has the effect of granting
utilities in 44 States the benefit of the various damage caps
and limitations in the bill. No rationale has been proffered
for treating utilities in these states more beneficially than
others.
Sec. 102. Applicability and Preemption.--The conference
report preempts product liability law in all 50 states and
the District of Columbia to the extent they are inconsistent
with the report. This represents one of the most significant
shifts ever in power from the states to the federal
government. Despite the fact that 47 states have altered
their product liability laws in the last decade, states will
no longer be free to promulgate laws which protect their
citizens from dangerous and harmful products (although the
bill generally does not preempt states from having more
restrictive anti-consumer laws). The bill does not apply to
limit the product liability rights of businesses suing
manufacturers because it includes a ``commercial loss''
exception. In other words, the bill only applies to limit the
rights of workers and individual citizens, not corporations.
Sec. 103. Seller and Lessor Liability.--Provides that a
seller or lessor may only be sued for breach of an express
warranty, failure to exercise reasonable care, or intentional
wrongdoing, unless the court determines the victim would be
unable to enforce a judgment against the manufacturer in any
state court. This could force victims to bring actions in
out-of-state venues against outside manufacturers, rather
than being able to bring suit against their instate seller
who could then bring the manufacturer into the action. This
section could also have the effect of eliminating a seller's
common law liability for failure to warn a consumer about its
unsafe characteristics and eliminate the doctrine of implied
product warranties by sellers. Although this section does not
apply to ``negligent entrustment'' actions, such as those
relating to careless sale of liquor or guns, the provision is
drafted in a manner so that such liquor and gun sellers would
benefit from the other sections of the bill (e.g., relating
to limits on punitive damages and joint and several
liability). The definition of ``manufacturer'' is so narrowly
written that the entity who assembled the product may in some
instances not be included within its scope (e.g., the
assembler used the preexisting design of another party). In
such an event there may be no responsible party for the
injured victim to sue--the seller is relieved of liability
and there is no ``manufacturer.''
Sec. 104. Defense Based on Claimant's use of Alcohol or
Drugs.--Alters the common law rule of contributory negligence
(under which a victim's damages are limited to the extent
that his or her own negligence contributed to the accident in
question) by specifying that it shall be a complete defense
to a product liability action if the victim was intoxicated
and was more than 50% responsible for the accident. Since the
section provides for no exceptions, it can result in a number
of unfair results. For example manufacturers of devices
designed to protect against using a product while
intoxicated--such as breathalyzers now installed on some
cars--would appear to be fully immunized from liability.
Sec. 105. Misuse or Alteration.--Defendants may have their
liability lessened by the percentage of liability
attributable to any alteration or misuse of the product. This
would

[[Page H3189]]

even apply in cases where a third party (other than an
employer) was responsible for the alteration.
Sec. 106. Time Limitations of Liability.--Section 106(a)
provides for a nationwide two-year statute of limitations,
preempting longer statutes in 25 states and the District of
Columbia. Section 106(b) creates a new federal ``statute of
repose,'' barring any product liability action for certain
goods not brought within fifteen years of the date of
delivery. The statute of repose applies not only to business
goods (such as machinery), but to consumer goods (such as
bicycles and microwaves) having a life expectancy of three or
more years. The statute of repose provision would result in
many occasions where a defective product leads to harm that
is totally non-compensable. The one-sided nature of the
statute of repose provision is highlighted by the fact that
it does not preempt state laws providing for a shorter
statute of repose.
Sec. 107. Alternative Dispute Resolution Procedures.--
Parties are encouraged to pursue alternative dispute
resolution under applicable state law, but there are no
penalties for parties who refuse to participate.
Sec. 108. Punitive Damages.--Would arbitrarily limit the
maximum amount of punitive damages which may be awarded to
the greater of two times compensatory damages or $250,000
(although the judge would have very limited discretion to
allow an increased award based on a variety of very narrow
extenuating factors). Lawsuits against individuals whose net
worth does not exceed $500,000 and businesses with less than
25 full-time employees would be subject to a reduced punitive
damages cap equal to the lesser of $250,000 or two times
compensatory damages. The bill would also limit the award of
punitive damages to only those cases where the victim had
established by ``clear and convincing evidence'' that the
injury was the ``proximate cause'' of conduct specifically
intended to cause harm manifesting a ``conscious, flagrant
indifference to the rights and safety of others.'' Finally,
the section would permit any party to request a separate
proceeding to determine whether punitive damages should be
awarded and the extent of such damages. Again, the punitive
damages cap is written so it only preempts states with no
punitive damage caps or higher caps, it does not preempt
states with lower caps. (This could create confusion to the
extent a state's cap is more lenient in some respects, and
more restrictive in other respects than the federal
standard.)
These changes would in large part eliminate the role of
punitive damages in the product liability system, thereby
reducing the system's overall deterrent effect. For a civil
case, these proposed evidentiary and substantive standards
come close to ``criminalizing'' tort law for purposes of
punitive damages: in other words, an injured victim would
almost have to show that a manufacturer acted with ``criminal
intent''--and not gross negligence. Moreover, the legislation
creates a standard of ``conscious indifference'' which
appears to be so narrow as to be mutually exclusive.
Permitting parties to bifurcate proceedings concerning the
award of punitive damages will lead to far more costly and
time consuming proceedings, generally working to the
disadvantage of harmed victims. The proposed caps largely
eliminate incentives for manufacturers to remove life-
threatening products from the market place, and instead allow
defendants to substitute ``cost-benefit'' analyses based on
the estimated value of lives. The exception for ``small
businesses'' would insulate more than \2/3\ of American
businesses from significant punitive damages (according to
Census Bureau data), and create perverse new incentives to
avoid expanding employment opportunities. The ``additur''
procedure allowing the court to increase punitive damages
above the statutory cap may well be held to be an
unconstitutional violation of the defendant's right to a jury
trial in federal court. See Dimick v. Schiedt, 293 U.S. 474
(1935).
Sec. 109. Liability for Certain Claims Related to Death.--
This incorporates provisions from the Senate bill so that the
punitive damages cap does not apply to a particular action
brought in Alabama.
Sec. 110. Joint and Several Liability--Would supersede
traditional state common law by eliminating joint and several
liability for non-economic damages, such as pain and
suffering. (The justification for the common law rule is that
it is better that a wrongdoer who can afford to do so pay
more than its share, rather than an innocent victim obtain
less than full recovery; also, a defendant who pays more than
its share of damages can seek contribution from the other
defendants.) The provision has the effect of discriminating
against groups less likely to be able to establish
significant economic damages, such as women, minorities,
seniors and the poor. Moreover, the elimination of joint and
several liability would actually increase courts' caseloads
and increase litigation costs, by discouraging settlements
and requiring injured consumers to initiate multiple claims.
Sec. 111. Workers Compensation Subrogation--In addition to
codifying certain state laws permitting employers to seek
subrogation from their employees, this provision allows a
responsible manufacturer to seek contribution from a
negligent employer up to the amount of workers compensation
benefits paid by the employer. (The provision also provides
for reimbursement of the employer's legal fees by the
manufacturer if the employer is wrongfully brought into an
action.) Legal aspects of workers compensation are new issues
that the House has never considered or debated before.
Title II--Limitation on Liability relating to Medical
Implants--Suppliers of raw material and component parts used
to assemble medical implants (such as breast implants) would
only be liable under State law if a victim establishes the
supplier failed to meet the contract requirements or
specifications for the implant. The bill also specifies new
rules for bringing suits against biomaterials manufacturers
and sellers, provides for an expedited removal procedure for
the biomaterials suits and provides for reimbursement of the
defendant's legal fees if the victim's claim against it is
found to be meritless. (No reimbursement mechanism is
provided for the victim if the suit is successful, however.)
Title III--Limits on Application; Effective Date--Specifies
that federal appellate court decisions supersede other court
interpretations and the Act applies to lawsuits brought after
the date of enactment.

Mr. Speaker, I reserve the balance of my time.
Mr. BLILEY. Mr. Speaker, I yield myself 3 minutes.
(Mr. BLILEY asked and was given permission to revise and extend his
remarks.)
Mr. BLILEY. Mr. Speaker, I rise in support of the conference report
on H.R. 956, the Commonsense Product Liability and legal Reform Act of
1995. This is a projobs, procompetitiveness bill that will help to
bring fairness and accountability back into our legal system.
Almost two decades ago, the Commerce Committee began a bipartisan
effort to reform our product liability laws. Over the years, we have
held dozens of hearings, receiving written and oral testimony from
hundreds of witnesses. Early last year, the committee reported
legislation which is incorporated into the conference report before us
now. And today, as part of the Contract with America, and with the
leadership of the distinguished chairman of the Judiciary Committee, we
stand ready to put some historic changes into place.
I regret that the conference report falls somewhat short of the
reforms included in our earlier House bill, which passed the House by a
wide, bipartisan margin. Nonetheless, the conference report contains a
number of reforms which the Commerce Committee has worked on, and which
will clearly help to relieve the burden of excessive litigation.
For example, the conference report still contains critical
protections for biomaterials suppliers developed in our committee to
ensure that consumers will have continued access to lifesaving and
lifeenhancing medical devices. It also still contains provisions for
reasonableness and balance in product liability punitive damage awards,
and sets forth enumerated guidelines which should be considered before
such awards are made. In addition, it includes important exceptions for
environmental claims, and allows for reasonable limits on the life
expectancy for products in the workplace.
These reforms are essential to the long-term competitiveness of the
American economy, as we established in our work in the Commerce
Committee over the past number of years.
Mr. Speaker, I include for the Record, relevant portions of the
Commerce's Committee's report on H.R. 917, legislation which was
incorporated in significant part into H.R. 956, the bill before us
today.

Excerpts From House Report 104-63, Part 1

background and need for legislation

For two decades, the Committee on Commerce has grappled
with the issue of product liability reform. After developing
an extensive record on the subject of product liability law,
the Committee has concluded that the present system places an
enormous burden on interstate commerce, inflates prices,
stifles innovation, and subjects manufacturers and sellers to
a capricious lottery where sanctions can exceed any found in
criminal law. In light of these facts, Congressional action
is long overdue.
Historically, injury caused by a defective product gave
rise to a tort action in State courts. As transportation and
communications systems developed, more products crossed State
boundaries, increasing the volume of interstate commerce
exponentially, creating more interstate product liability.
From 1973 to 1988, product liability suits in Federal courts
increased 1000%; in State courts the increase was between
300% and 500%. Meanwhile, tort doctrine in State courts
evolved from fault-based standards to strict liability for
manufacturers and sellers.
Tort costs have risen significantly as well, reaching an
estimated $132 billion in 1991. (Tillinghast. (1992) tort
Cost Trends: An International Perspective. New York:

[[Page H3190]]

Tillinghast.) Products manufactured in one State are now sold
in another and cause injury in yet others. Because each State
has different rules governing recovery in tort, forum
shopping is encouraged, common law is developed unevenly, and
manufacturers are found liable for conduct in one State that
would fail to give rise to a cause of action in another.
American manufacturers and sellers have found that, given
the multiplicity of evidentiary standards in State tort law,
products may be found defective even after full compliance
with all applicable regulations. The vast majority of product
liability cases are filed in State courts. This leaves
manufacturers and sellers without the benefit of uniform
standards on which to base conduct in the design, manufacture
and sale of goods. Manufacturers are told that their products
must be ``safe,'' without being told what constitutes safety.
In many jurisdictions, liability on the part of a
manufacturer for economic and punitive damages is found in
the absence of negligence or malice. The doctrine of joint
and several liability often compels a defendant to pay
damages far in excess of his proportionate responsibility for
the injury, and the plaintiff's Bar has become remarkably
skilled at identifying and joining defendants with deep
pockets who, despite limited responsibility for injury, would
rather settle a case than face the costs and publicity
associated with litigation.
Because over 70% of products manufactured in any one State
cross State borders before the point of final sale, American
manufacturers must contend with the uncertainty created by 51
different product liability jurisdictions in their own
domestic market. The result is a de facto ``liability tax''
which chills interstate commerce and deprives consumers of
product choice available to consumers in other nations
throughout the world. Unfortunately, instead of encouraging
the development of safer products, the present system often
forces manufacturers to increase product prices or withdraw
products from the market altogether. According to surveys
reported to the committee by Pace University Professor of Law
M. Stuart Madden, because of liability costs, 36% of American
manufacturers have withdrawn products from the world
market, 47% have withdrawn products from the domestic
market, 39% have decided not to introduce new products,
and 25% have discontinued new product research.
The case of Bendectin is illustrative: Bendectin is the
only prescription drug in the United States ever approved for
combating nausea and vomiting in pregnancy. Introduced in
1956, the drug was used in over 30 million pregnancies. In
1969, allegations that Bendectin could cause birth defects
appeared in some scientific journals. Despite the fact that
no causal relationship between Bendectin and birth defects
was ever established (the Food and Drug Administration
affirmed the drug's safety), nearly 1,700 product liability
suits were brought against the manufacturer.
Almost all cases that went to court were decided in favor
of the manufacturer, yet annual revenues from the sale of the
drug barely exceeded legal fees and insurance premiums. The
manufacturer voluntarily withdrew Bendectin from the market
in 1983. While the rate of birth defects has not declined
since Bendectin was withdrawn, the cost in the U.S. for
treatment of severe nausea during pregnancy is now nearly $40
million per year.
Another example comes from the sporting goods industry. In
a 1988 Forbes magazine article, author Peter Huber noted that
product liability legal fees and insurance premiums accounted
for 55% of the price of a football helmet. (Peter Huber.
(Oct. 1988) Forbes ``The Litigation Scandal.'') In 1988,
Rawlings Sporting Goods announced that it would no longer
manufacture, distribute, or sell football helmets. Rawlings
was the 18th company in 18 years to abandon the football
helmet business due to liability exposure, joining Spaulding,
MacGregor, Medalist, Hutch, and other manufacturers. As one
commentator observed:
``This situation is not what the crafters of product
liability law intended. Product liability law was created to
improve product safety and compensate victims of unsafe
products. It was not meant to penalize conscientious
companies that provide products and services vital to the
U.S. economy.''

(Frederick B. Sontag. (1994) Product Liability and
Innovation. ``Indirect Effects of Product Liability on a
Corporation.'' National Academy of Engineering.)

In addition to driving products from the marketplace,
raising prices, and draining capital, the patchwork of
liability standards throughout the nation severely inhibits
the competitiveness of U.S. industry. While it is true that a
foreign company doing business in the United States is
subject to the same liability laws as a U.S. company, most
U.S. companies have had products in the marketplace for
longer than their foreign competitors.
Since many states have no statute of repose, products which
have been in use for 15 or more years can still expose a
manufacturer to liability. The costs of insuring against
product liability and legal fees spent in liability lawsuits
are built into the cost of such products, creating a price
disadvantage for domestic producers facing well financed
foreign competition with far less liability exposure.
American industry's chief foreign competitors face no such
handicap in their domestic markets. Both the European
Community (EC) and Japan have uniform product
liability regulations. The EC Directive establishing
product liability standards was published in 1985, and
differs significantly from product liability law in the
United States in the following ways: first, a single
definition of product ``defect'' applies; second, if a
product complies with mandatory regulations issued by
public authorities, the manufacturer has no liability
exposure; third, noneconomic damages (pain and suffering)
are limited; fourth, punitive damages are generally not
allowed; fifth, most EC countries limit liability to known
technical knowledge; and sixth, a 10-year statute of
repose begins when the manufacturer puts a product into
the stream of commerce. Operating under the provisions of
this Directive, European manufacturers and sellers pay, on
average, twenty times less for liability coverage than
their American competitors.
The status quo also retards the ability of American firms
to create jobs. A memorandum dated November 30, 1990, from
the Office of Vice President Quayle to Members of
Congressional Committees considering product liability reform
legislation states that 40% of chief executive said product
liability has had a major impact on their business; 36%
stopped some manufacturing as a result; 15% laid off workers,
and 8% closed plants. Almost 90% of American companies will
be defendants in a product liability claim at least once
according to a 1988 Rand Institute study. In the study, of
19,500 companies surveyed, 17,000 were lead defendants in at
least one product liability suit.
In summarizing the background and need for H.R. 917, the
Committee finds itself in agreement with the observations of
Francois Castaing:
``It is well understood that product liability laws have a
purpose. They are supposed to compensate for injury, promote
safety, and penalize gross negligence. If a corporation is
irresponsible, it should be held accountable. But in the
United States, the situation has gone beyond punishing gross
negligence. Now punishment is meted out for many risks that
simply cannot be avoided when a product is produced and sold
to a public that has wide discretion in how it chooses to use
that product. When no distinctions are made in assigning
responsibility for risk and companies are held responsible
(and penalized) for all risk--from those attributable to the
vagaries of human nature to those truly within a company's
aegis--the ability to innovate, engineer, and compete is
compromised.''

Francois J. Castaing. (1994) Product Liability and
Innovation. ``Automotive Engineering and Product Liability,''
National Academy of Engineering.

The present product liability system in the United States
unfairly denies consumers the right of free choice in the
marketplace and inflates prices for available products. For
manufacturers and sellers, the system discourages innovation,
retards capital formation, and creates a distinct competitive
disadvantage in the world market.
The Committee has developed an extensive record on the
negative impact of product liability on commerce in the
United States, and has concluded that Congressional action is
long overdue. Support for product liability reform within the
Commerce Committee has always been bipartisan, and
legislation has been reported from the Committee to the House
under both Republican and Democratic Chairmen.

hearings

During the 104th Congress, the Subcommittee on Commerce,
Trade, and Hazardous Materials held one day of hearings on
H.R. 917, the Common Sense Product Liability Reform Act, and
related legislation, including section 103 of H.R. 10, the
Common Sense Legal Reform Act. Additionally, since the 99th
Congress, the Committee has held 12 days of hearings on the
subject of product liability reform and that record
contributed significantly to the Committee's consideration of
H.R. 917.
On February 21, 1995, the Subcommittee on Commerce, Trade,
and Hazardous Materials held a hearing on H.R. 917, the
Common Sense Product Liability Reform Act and Related
legislation. Testimony was received from Mr. Paul R. Huard,
Senior Vice President, National Association of Manufacturers;
Mr. Larry S. Stewart, President, Association of Trial Lawyers
of America; Mr. Victor E. Schwartz, Esq., General Counsel,
Product Liability Coordinating Committee; Mr. Daniel E.
Richardson, Administrator, Latta Road Nursing Home,
(testifying on behalf of the National Federation of
Independent Business); Mr. Jeffery J. Teitz, Executive
Committee, Vice-Chair, Assembly on Federal Issues of the
National Conference of State Legislators; and Mr. James A.
Anderson, Jr., Vice President of Government Relations,
National Association of Wholesaler-Distributors.
During the 103rd Congress, the Subcommittee on Commerce,
Consumer Protection and Competitiveness held three days of
hearings on H.R. 1910, the Fairness in Product Liability Act,
whose language is closely tracked by H.R. 917. The first
hearing was held on February 2, 1994 and focused on the
impact of product liability reform on the health care
industry. The Subcommittee received testimony from Ms.
Stephanie Kanarek; Mr. Ted R. Mannen, Executive Vice-
President, Health Industry Manufacturers Association; Mr.

[[Page H3191]]

Calvin A. Campbell, Jr., President and CEO, Goodman Equipment
Corporation (testifying on behalf of the American Mining
Congress); Ms. Lucinda Finley, Professor, State University of
New York at Buffalo Law School; Mr. Victor E. Schwartz, Esq.,
General Counsel, Product Liability Coordinating Committee;
and Mr. Bruce Finzen, Robins, Kaplan, Miller & Ciresi.
The second hearing sought a broad spectrum of opinion on
the bill from consumers, manufacturers, and academics and was
held on April 21, 1994. The Subcommittee received testimony
from Mr. Marcus Griffith, President, The Hairlox Company
(testifying on behalf of the National Association of
Manufacturers); Ms. Dianne Weaver, Weaver, Weaver & Lipton;
Ms. Norma Wallis, President, Livernois Engineering
(testifying on behalf of the Association of Manufacturing
Technology); Mr. Robert Creamer, Executive Director, Illinois
Public Action; Professor Stuart Madden, Pace University
School of Law; and Professor Andrew Popper, Deputy Dean,
Washington College of Law, The American University.
The Subcommittee received testimony from victims of
defective products and other interested parties on May 3,
1994, from Janey and Lawrence Fair; Amy Goldrich for Sybil
Goldrich, Command Trust Network; Charles Ruhi (accompanied by
Don Singer, Attorney); James L. Martin, Director, State &
Federal Affairs, National Governors Association; Emmett W.
McCarthy, Dreis and Krump Manufacturing Company; James
Oliphant, President, Defense Research Institute; Liberty
Magarian (testifying on behalf of the Product liability
Coordinating Committee); and Larry R. Rogers, Power, Rogers,
& Smith.
In the 100th Congress, the Subcommittee on Commerce,
Consumer Protection, and Competitiveness held seven hearings
on Federal product liability reform covering punitive damages
reform, joint and several liability, workplace safety, the
impact of product liability reform on the general aviation
industry, state-of-the-art and government standards
defenses, the effect of product liability reform on the
affordability and availability of product liability
insurance, and the issue of product liability reform in
general.
Witnesses included: Representatives Jim Slattery and Al
Swift; the Honorable Malcolm Baldrige, Secretary of Commerce;
The Honorable Harry L. Carrico, Chief Justice, Supreme Court
of Virginia; Mr. Robert H. Mallot, Chairman and CEO, FMC
Corporation; Mr. Victor E. Schwartz, Esq., Crowell & Moring;
Mr. John B. Curico, Chairman, President, and CEO, Mack
Trucks, Inc.; Mr. Marcus M. Griffith, Hairlox Company; Mr.
Joseph Goffman, Public Citizen; Ms. Pamela Gilbert, United
States Public Interest Research Group; Mr. Gene Kimmelman,
Legislative Director, Consumer Federation of America; Robert
L. Habush, President, Association of Trial Lawyers of
America; Mr. John T. Subak, Action Commission to Improve the
Tort Liability System, American Bar Association; Mr. Stephen
Daniels, Project Director, Punitive Damage Project, American
Bar Foundation; Professor David G. Owen, University of South
Carolina School of Law; Mr. Malcolm Wheeler, Esq., Skadden,
Arps, Slate, Meagher & Flom; Mr. Bill Wagner, Esq., Wagner,
Cunningham; Mr. George S. Frazza Esq., General Counsel,
Johnson and Johnson Products, Inc.; Professor David Randolph
Smith, Vanderbilt University School of Law; Professor Aaron
Twerski, Brooklyn Law School; Senator Robert Frey, National
Conference of State Legislators; Mr. Alfred W. Cortese, Jr.,
Esq., Kirkland & Ellis (representing Lawyers for Civil
Justice); Mr. Robert Martin, Esq., Martin, Pringle, Oliver,
Tripplett & Wallace (representing Beech Aircraft
Corporation); Mr. Charles T. Hvass, Jr.; Mr. Frederick B.
Sontag, President, Unison Industries; Mr. C.O. Miller, Safety
Systems, Inc.; Mr. John S. Yodice, Esq., General Counsel,
Aircraft Owners and Pilots Association; Mr. Jonathan Howe,
President, National Business Aircraft Association; Mr. David
M. Silberman, Associate General Counsel, AFL-CIO; Mr. John
Mottley III, Director of Federal Government Relations,
National Federation of Independent Business; Mr. Richard
Duffy Director, Department of Occupational Health and Safety,
International Association of Firefighters (accompanied by
Cheryl Gannon, Legislative Assistant); Mr. Kent Martin,
Chairman of Government Affairs Committee, National Printing
Equipment and Supply Association (accompanied by Mr. Mark J.
Nuzzaco, NPES Government Affairs Director); Mr. James A.
Mack, Public Affairs Director, National Machine Tool Builders
Association; Mr. Jonathan Reynolds, Esq., Cosco, Inc.; Mr.
Clarence Ditlow, Executive Director, Center for Auto Safety;
Mr. Geoffry R.W. Smith, Esq., McCutchen, Doyle, Brown, and
Enerson; Dr. Sidney Wolfe, Health Research Group; Mr. R.
David Pittle, Technical Director, Consumers Union; Professor
Nicolas A. Ashford, Associate Professor of Technology and
Policy, Massachusetts Institute of Technology; Mr. Howard M.
Acosta, Esq., Rahdert, Acosta, and Dickson, P.A.; Professor
Jerry Phillips, University of Tennessee School of Law;
Richard A. Bowman, Esq., Bowman and Brook; Mr. Frank S.
Swain, Chief Counsel for Advocacy, United States Small
Business Administration; Professor Joseph A. Page, Georgetown
University Law Center; Mr. Edward H. Southton, Deputy
Commissioner for Company Supervision, Office of the Insurance
Commissioner; Ms. Linda Matson, State Director, National
Federation of Independent Business (accompanied by Ms. Mary
Jane Norville, National Federal of Independent Business); Ms.
Jean Stinson, Vice President, R.W. Summers Railroad
Contractor, Inc.; Ms. Debra Ballen, Vice President for Policy
Development and Research, American Insurance Association; and
Mr. Thomas A. O'Day, Associate Vice President, Alliance of
American Insurers (accompanied by Mavis A. Walters, Senior
Vice President, Insurance Services Office).

section-by-section analysis of the legislation

Section 1. Short Title; Table of Contents.
This section provides the title of the Act and a table of
contents.
Section 2. Preemption.
This section establishes the scope of the Common Sense
Product Liability Reform Act, governing any product liability
action in any State or Federal court brought against a
manufacturer or product seller, on any theory, for harm
caused by a product. It does not include actions for
commercial loss. State law is only superseded to the extent
that State law applies to the same issue. The Act does not
affect the sovereign immunity of the States, choice-of-law
rules, venue, or environmental laws.
Section 3. Product Seller Liability.
This section sets forth the standard of liability for
product sellers. A product seller is only liable for harm
caused by its product where (1) the claimant establishes that
the product was sold by the seller, that the seller failed to
exercise reasonable care regarding the product, and that such
failure was a proximate cause of the claimant's harm; (2) the
seller made an independent express warranty, the product
failed to conform to the warranty, and such failure caused
the claimant's harm; or (3) the seller was engaged in
intentional wrongdoing as determined under State law, and
such wrongdoing was the proximate cause of the claimant's
harm. Sellers are not required to inspect a product where
there is no reasonable opportunity to inspect such product in
a manner which would reasonably have revealed the aspect of
the product which caused the claimant's harm. A seller would
become liable, however, by stepping into the shoes of the
manufacturer if the State where the action is filed would not
be able to serve process against the manufacturer, or if the
State determines that the claimant would be unable to enforce
a judgment against the manufacturer.
Section 4. Alcohol and Drug Defense.
This section provides a defense to a liability action where
a claimant is more than 50% responsible for the accident
causing harm as a result of being under the influence of
intoxicating alcohol or illegal drug. The determination of
intoxication or whether the claimant is under the influence
of alcohol or drugs shall be made according to the relevant
State law. Illegal drugs include any controlled substances
according to federal law.
Section 5. Misuse or Alteration.
This section allows a manufacturer or product seller to
establish that a percentage of a claimant's harm was
proximately caused by the misuse or alteration of a product
in violation of an express warning or instructions, or by the
misuse or alteration of a product involving a risk of harm
which would be known by the typical consumer. The award of
damages against the manufacturer or product seller would be
reduced by such percentage of claimant's misuse or
alteration. The manufacturer's or product seller's liability
shall not, however, be reduced by the percentage of
responsibility for the harm attributable to the misuse or
alteration of a product by the claimant's employer or
coemployees who are immune from suit by the claimant
pursuant to State law applicable to workplace injuries.
These provisions only supersede State law to the extent
that State laws are inconsistent.
Section 6. Statute of Repose.
This section bars liability for a product liability action
unless the complaint is served and filed within 15 years of
the time of first retail purchase. This bar will only apply,
however, if the claimant is eligible for workers'
compensation for the harm, if the harm did not cause a
chronic illness, and if the manufacturer or seller did not
include an express written warranty as to the useful safe
life of the product which was longer than 15 years.
Section 7. Punitive Damagers.
This section provides that where states allow punitive
damages, such damages may be awarded where a claimant
establishes by clear and convincing evidence that the harm
suffered was the result of conduct manifesting a conscious,
flagrant indifference to the safety of those persons who
might be harmed by the product. The punitive damages awarded
shall not exceed the greater of $250,000 or three times the
economic injury.
A failure to exercise reasonable care in selecting among
alternative product designs or warnings shall not by itself
constitute conduct meriting punitive damages, and punitive
damages may not be awarded unless compensatory damages have
been awarded which are not merely nominal damages. A
defendant may request a separate proceeding to determine an
award of punitive damages, in which case evidence related
only to the claim of punitive damages shall not be admissible
in the proceedings to determine compensatory damages.
The trier of fact shall consider all relevant evidence in
determining a punitive damage

[[Page H3192]]

award, including the severity of harm, the duration,
concealment, or profitability of the defendant's conduct, the
number of products sold by the defendant which can cause such
harm, previous punitive awards to similar claimants,
prospective compensatory awards to other claimants, the
criminal or civil penalties imposed on the defendant for the
complained of conduct, and whether any of the foregoing have
been presented in a prior proceeding involving the defendant.
Punitive damages shall not be awarded against a
manufacturer or seller of a drug or device which caused the
claimant's harm where such product was preapproved by the
Food and Drug Administration (FDA) with respect to its
formulation, performance, or adequacy of packaging or
labeling, or where it is generally recognized as safe and
effective pursuant to conditions established by the FDA. This
bar on punitive damages shall not apply where the defendant,
before or after FDA approval, intentionally and wrongfully
withheld from or misrepresented to the FDA information which
is required to be submitted concerning the drug or device, or
if any illegal payment to FDA employees were made for the
purpose of securing or maintaining drug or device approval.
The manufacturer and seller of a drug shall not be held
liable for punitive damages for a product liability action
for harm relating to the adequacy of the drug packaging or
labeling, where the drug is required to have tamper-
resistance packaging (and labeling) under regulations of the
Secretary of Health and Human Services, unless the claimant
establishes by clear and convincing evidence that the drug
product is substantially out of compliance with such
regulations.
Section 8. Several Liability for Noneconomic Damages.
This section provides that joint liability for noneconomic
damages shall not be recognized. A separate judgment shall be
rendered against each defendant for their several liability
for noneconomic damages, which shall be in direct proportion
to their individual percentage of responsibility for the
claimant's harm, as determined by the trier of fact.
Section 9. Federal Cause of Action Precluded.
This section precludes any new Federal cause of action
pursuant to a Federal question or Act Congress regulating
commerce. It is intended to ensure that no additional
jurisdiction is granted under this Act to the Federal courts.
Section 10. Frivolous Pleadings.
This section provides that the signing or verification of a
pleading in a product liability action shall be considered a
certification that to the signor's or verifor's best
knowledge, information, and belief, formed after reasonable
inquiry, the pleading is not frivolous. A pleading is defined
as frivolous if the pleading is groundless and brought in bad
faith or for the purpose of harassment or other improper
purpose such as to cause unnecessary delay or needless
increase in the cost of litigation. Groundless is defined as
having no basis in fact or unwarranted by existing law or a
good faith argument for the extension, modification, or
reversal of existing law.
Within 60 days after a pleading in a product action is
filed, a party may petition the court to determine the
pleading is frivolous. In making this determination, the
court shall consider the multiplicity of parties, the
complexity of the claims and defenses, the length of time
available to the party to investigate and conduct discovery,
and the affidavits, depositions, and other relevant matters.
If the court determines that a pleading is indeed frivolous,
the court shall impose an appropriate sanction on the
signatory or verifier of the pleading, which may include the
striking of the offending portion or the entire pleading, the
dismissal of a party, or an order to pay the reasonable
expenses of an opposition party incurred because of the
filing of the pleading, including costs, fees of attorneys,
witnesses and experts, and deposition expenses. A general
denial and the amount requested for damages shall not
constitute a frivolous pleading.
Section 11. Liability of Biomaterials Suppliers.
This section provides that a biomaterials supplier is
liable for harm caused by a medical device only if the
claimant establishes that the biomaterials supplier's failure
to meet contract specifications as set forth below was an
actual and proximate cause of harm to the plaintiff. The
biomaterials supplier is deemed to have failed to meet
contract specifications if the raw materials or component
parts delivered by the biomaterials supplier did not
constitute the product described in the contract between the
biomaterials supplier and purchaser, or they fail to meet any
specifications that were provided to the biomaterials
supplier and not expressly repudiated prior to acceptance of
delivery of the supplies, or that were provided to the
biomaterials supplier or to the manufacturer by the
biomaterials supplier, or which are contained in a master
file submitted by the biomaterials supplier to the Secretary
of Health and Human Services (HHS) that is currently
maintained by the biomaterials supplier for the purposes of
premarket approval of medical devices, or specifications that
were included in the submissions of the purposes of premarket
approval or review by the Secretary of HHS and which have
received such clearance and were not expressly repudiated
by the biomaterials supplier prior to acceptance.
Section 12. Definitions.
This section provides definitions for the following terms:
``biomaterials supplier,'' ``claimant,'' ``commercial loss,''
``harm,'' ``manufacturer,'' ``product,'' ``product liability
action,'' ``product seller,'' and ``State.''
Section 13. Effective Date.
This section provides that the Act shall apply to actions
which are commenced after the date of its enactment.

Mr. Speaker, I believe this information will help to establish the
need for a number of the reforms contained in the pending conference
report.
Mr. Speaker, we need commonsense legal reform that will put more
power into the hands of the American people to make their own consumer
choices, and bring some sanity back to our legal system. We need
reforms that recognize responsible behavior, and put an end to the
legal jackpot mentality. We need commonsense legal reforms today.
I urge support of this bill.

{time} 1215

Mr. DINGELL. Mr. Speaker, I yield myself 4 minutes.
(Mr. DINGELL asked and was given permission to revise and extend his
remarks.)
Mr. DINGELL. Mr. Speaker, I will vote for the conference report today
for three reasons. The first is that the context is relatively balanced
and sound. The second, it is consistent with similar legislation which
I have supported over the years. Third, it represents a complete and
utter repudiation of the extremist Republican agenda, which included
tacking on to the original House bill a host of special interest
amendments stripping average Americans of the traditional legal rights
for the benefits of the wealthy and the powerful few.
I take some measure of pride, Mr. Speaker, in having launched the
original product liability reform movement in the Congress back in the
late 1970's. So it is as one who is no John-Dingell-come-lately to this
issue. I am pleased today for those people in America's manufacturing
community who have worked with me for many years on this issue. I
particularly want to single out one individual for special thanks, Dr.
Victor Schwarz, an attorney, professor, casebook editor, and nationally
renowned expert on tort law who, for nearly 20 years has helped guide
this movement and its supporters in the Congress with sound advice,
good judgment, and personal integrity.
But I have trouble mustering any great enthusiasm for today's events.
The reason is simple. The process leading up to our having this
legislation on the floor today has been an utter disgrace. The
conference on this bill was a complete sham. At the one and only
meeting which the conferees held in December, we were told that the
conference would be open and bipartisan. Nothing was further from the
truth. Instead, precisely the opposite occurred. The House Republicans
proceeded to cut a secret deal in closed meetings with no participation
by anybody else. There was no discussion, no consultation, and no
conference meeting after that time.
Our staffs were presented with the final conference report on a take-
it-or-leave-it basis late one evening after the Members had gone home.
We were not even given the courtesy of being able to review the
documents overnight. This is apparently the Republican definition of
open and bipartisan. It may be open and bipartisan on the other side of
the aisle, but it is not open and bipartisan, nor is it a process which
follows the traditions of this House or which takes into consideration
the concerns of the American people that the matters of this Congress
should be done in an open and honorable fashion.
The House Republicans not only excluded Democratic conferees from all
discussions and decisions, but they ignored the will of the House on
one very important issue. Last year the House voted to include a
provision ensuring that foreign companies that sell defective products
to American consumers are treated the same way as American
corporations. That amendment was adopted under the leadership of the
distinguished gentleman from Michigan [Mr. Conyers]. The House recently
reaffirmed that commonsense position by voting to instruct the House
conferees to insist on this provision in the conference. Despite two
overwhelming and bipartisan votes, I note, the Republican conferees
dropped the provision

[[Page H3193]]

entirely. To my knowledge, the Republican Members never even raised
this issue in the secret backroom discussions on this legislation.
I note that all eight House Republican conferees voted against the
original amendment on the motion to instruct. Those few Members are
entitled to their views, but those views get preferential treatment to
foreign corporations to the disadvantages of American corporations. But
that should not empower them to so brazenly disregard the expressed
will of the House, the expressed will of the American people as clearly
expressed by this House. The Republicans say they want to reduce
Federal power, yet last year they were busy sticking the Federal snout
into dog bite cases, accidents, and slip and fall disputes.

The bill that passed last year as a part of the contract on America
amounted to a wish list of all manner of scoundrels and wrongdoers.
That legislation protected drunk drivers, sexual predators, scoundrels,
and others who prey upon the weak, defenseless, and infirm, and those
who intentionally inflict great harm and damage. They treated cases
involving intentional and gross misconduct as though they were simple
negligence cases.
Fortunately, they are not going to get their way. I do not believe
that the Republican leadership ever wanted enactment of this bill as
public law. If they did, they would not have allowed it to languish for
the best part of a year before even asking for a conference. If they
did, they would not have included in the process a system which
systematically excluded House Democrats like me who have for years
supported product liability reform, and they would not have conducted
the overall matter in the way in which they did. Instead, this will get
what they really want, not a law, but a campaign issue.
We have reached the bottom of the barrel when for pure partisan
games, Republicans will not let Democrats who agree with them work with
them or participate in the legislative process. Once again, we have
seen, as it has happened so many times in this Republican Congress, the
constituents who need real action are getting just promises and press
conferences and not real action. They will be the losers.
Mr. Speaker, I reserve the balance of my time.
Mr. HYDE. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Pennsylvania [Mr. Gekas].
Mr. GEKAS. Mr. Speaker, I thank the gentleman for yielding me this
time.
I stand here today to plead for a special interest, I say to the
gentleman from Michigan, who so quickly criticizes every manner and
means of special interest. The special interest for which I make a plea
are some 8 million Americans who this day contain in their bodies
medical devices that have been implanted, which have saved their lives
in many cases, and the supplies for which are being threatened by the
massive lawsuits that have caused the suppliers of raw materials to
withhold those materials from future medical devices, like heart
transplants, brain shunts, heart valves, knee replacements, hip
replacements.
That is a special interest, I say to the gentleman from Michigan,
where we ought to be doing everything we can to make sure that those
consumers who need replacements, who need heart valves, who need all of
these medical devices for the sake of their health and their lives, we
ought to give them the opportunity to have future medical devices
available, access to them. And what title II does, of this piece of
legislation, is to release a little bit of the raw material suppliers
from that type of massive liability that makes no sense, that keeps
them from supplying these raw materials to the manufacturers of these
lifesaving medical devices.
When are we going to try to understand that special interests
sometimes are those people who are victims of heart attacks, victims of
disease that we can help if we simply relax a little bit on the
restrictions on liability that some of the suppliers of these raw
materials have to face.
I say it is time for us to encourage the President not to veto heart
transplants, not to veto brain shunts, not to veto hip replacements,
but rather to sign the bill into law that will acquire for the American
people a balance and allow them to have access to all sorts of new and
wonderful lifesaving medical devices.
Mr. CONYERS. Mr. Speaker, I yield myself 30 seconds to remind my
friend from Pennsylvania, Mr. Gekas, that title II of the products
liability conference report would prohibit most women from recovering
any damages from the supplier of silicone gel, despite evidence that
the supplier misled women and many of their doctors about the safety of
that product. It would also prohibit suits against suppliers of
biomaterials used in the manufacture of medical implants.
Mr. Speaker, I yield 2 minutes to the gentleman from Virginia [Mr.
Scott], a distinguished member of the Committee on the Judiciary.
Mr. SCOTT, Mr. Speaker, there is no explosion in punitive damage
products cases. This chart shows the total number of civil cases that
are filed, now many are products liability cases. The products
liability cases get decided by trial, and then when you get down to
punitive damage awards in liability cases, it is in the millions; 391
million of the cases filed are punitive damage cases involving
products.
Mr. Speaker, one study in 1995 of cases decided in 1992 could only
find three punitive damage cases in the entire United States.
This bill is not balanced. It helps corporate wrongdoings at the
expense of innocent victims. One is the limitation on punitive damages.
Although they are rare, they have a deterrent effect. Those pajamas
that the ranking member pointed out, for 3 cents per set of pajamas,
they could have made them inflammable pajamas, and yet they wanted to
make that extra 3 cents for every set of pajamas. It is only the
punitive damages that took them off the market.
Mr. Speaker, another benefit for wrongdoers is the issue of joint and
several liability. Most States allow the wrongdoers to figure out who
has to pay the total damages. This bill forces the innocent victim to
chase all the insolvent, out of town, and uncooperative defendants in
order to get their full cooperation.
Another little benefit for the corporate wrongdoers is that only
overturned State laws can benefit the consumers. The State laws are
free to provide additional protection for the corporate wrongdoers, but
not allowed to provide any more protection for the consumers.
Mr. Speaker, this hurts the consumer, it helps the corporate
wrongdoers, it eliminates the deterrent effect, it benefits the
wrongdoers and forces the plaintiff to chase around for the defendants,
and I think we should defeat this bill and keep the State laws as they
are today.

{time} 1230

Mr. BLILEY. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Florida [Mr. Stearns], a member of the committee.
Mr. STEARNS. Mr. Speaker, I thank my colleague for yielding time to
me.
Mr. Speaker, I also rise in support of the conference report, and I
was very glad to hear that the gentleman from Michigan [Mr. Dingell],
who is the former chairman of the Committee on Commerce, supports the
bill. Also I want to recognize Victor Schwarz for all his long-term
work on this project.
For almost two decades, Congress has been struggling to interject
common sense into our product liability laws. I want to commend the
conferees for their success in bringing balance and reasonableness to
our legal system. Everyone has heard justice delayed is justice denied.
Well, this legislation ensures legitimate plaintiffs finally have their
day in court by ending the frivolous lawsuits that needlessly tie up
our judicial system.
Mr. Speaker, these lawsuits have effectively prohibited individuals
from pursuing legitimate grievances through the judicial system due to
the fact that the dockets are overcrowded with meritless lawsuits.
There are studies that indicate that fully half of the costs of our
tort system are consumed in legal fees and expenses, while only one
quarter goes to compensate actual economic losses. Attorneys are
primarily the ones benefiting under the current system. This
legislation encourages settlements out of court, thereby getting
lawyers out of the way.

[[Page H3194]]

I urge all of my colleagues to support this conference report that
emphasizes fairness and individual accountability while maintaining an
injured party's fundamental right to restitution.
Mr. DINGELL. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Texas [Mr. Doggett].
Mr. DOGGETT. Mr. Speaker, I thank the gentleman for yielding time to
me.
In this very serious and weighty debate, I cannot help but be a
little amused that some of the same forces that come here and complain
about the litigation explosion, about how our courts are too crowded
are the same folks that I read about this week in USA Today who are
going around the country making it against the law to speak ill of
vegetables. Yes, if you bad mouth brussels sprouts, the USA Today
reports, it could cost you, if you are opposed to onions, if you diss a
kiwi. Now in 12 States, it is against the law to do that and you can be
hauled into court.
So the same folks that come here and say there are too many lawsuits
in our courts are going around the country, in fact they are trying to
do it this week in Maryland, enacting laws to get us in trouble for
speaking ill of vegetables. But if they turn us into a vegetable
because of their disregard for safety and health in this country, then
our rights will be limited.
Mr. Speaker, this is not about the litigation explosion, it is about
limiting the rights of individuals whose health and safety is affected.
What about the effect on cost and on jobs that we have heard so much
about? Well, the folks that put out Consumer Reports, that is the
magazine that a lot of us turn to when we have got to buy a
refrigerator or television or some kind of service and we want to find
out what the most cost effective alternative is, they report that over
30 million Americans each year are injured by consumer products and
29,000 are killed. Only a small fraction of those result in lawsuits,
but the total cost to us of having assurance that there is protection
in the event that there is harm caused by a defective product comes to
about one penny one of a $5 purchase.

That is a very small price to pay for the assurance that someone who
is burned and who will face one painful skin graft after another, to a
young family whose infant is going to require care for the rest of that
child's life, to a young child who is scarred for life, why deny rights
to those people when the cost to America is 1 cent for a $5 purchase?
But we are told, of course, that this is a jobs bill, that it means
more jobs. It is only anecdotal evidence that tells us that, but why
then if it is a jobs bill are we replacing the concept of personal
responsibility with giving foreign manufacturers an advantage over
American manufacturers? We say that if you build your project in
Taiwan, in Singapore, in Germany, you are going to have under this
piece of legislation advantages that are not available to American
manufacturers. I think that has got it all backward.
Just as this reliance on something other than personal responsibility
has got it all backwards, just as the argument of States' rights, of
letting our States resolve these issues, rather than turning them all
over to the Federal Government to resolve, has got it all backwards.
Mr. HYDE. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from South Carolina [Mr. Inglis].
Mr. INGLIS of South Carolina. Mr. Speaker, I thank the chairman for
yielding me the time.
I rise in strong support of this conference report and with some
observations. We have heard a lot about how this is going to impair the
ability of those that are legitimately injured to recover, so I think
it is important just to go through an example. Let us assume, as I did
recently when I had an opportunity to discuss this bill at the Wilson
Equipment Co. in Spartanburg, SC, that one of their John Deere tractors
injures somebody.
Let us assume this scenario. Mr. Jones is cutting grass with a riding
lawnmower. A rock is thrown out of the lawnmower, hits Mrs. Jones who
is nearby tending the flower garden or something. Mrs. Jones is hurt
badly. Let us say she is hurt real badly. Let us see what happens in
this case. Well, of course the Jones are going to sue for the medical
bills that Mrs. Jones incurred. They are also going to probably sue for
pain and suffering, and they are going to sue for punitive damages,
everybody does. So let us see what happens.
Economic damages, let us say she had medical bills of $200,000.
Again, I am assuming that Mrs. Jones is really hurt. If she is really,
really hurt, it is more than $200,000. But I am intentionally choosing
a relatively low number, $200,000 economic damages. Now, let us assume
that the jury awards Mrs. Jones $200,000 for pain and suffering. Mind
you, it is very important to note this is not limited in this bill.
Pain and suffering will not be limited so the jury is free to decide
whatever they want. Mrs. Jones is really hurt and they give her
$200,000 pain and suffering. She has $200,000 economic damages,
$200,000 pain and suffering.
Now we come to the only limit imposed in the bill and that is of
course punitive damages. The jury is instructed and here is what they
can do. They can give her 200 plus 200 times 2, would be the maximum
that they could give in this case. So Mrs. Jones here will get $400,000
potentially in punitive damages. So she has gotten $200,000 economic
damages, plus $200,000 pain and suffering, plus $400,000 punitive
damages. I am sorry, plus $800,000. She has 200 plus 200 times 2, so
that is $800,000 punitive damage amount. So Mrs. Jones can recover 200
plus 200 plus 800, which is $1.2 million.
Now, that is a fair amount of money, but it does not really put Mrs.
Jones back where she was, and we have to admit that. If she is really
badly hurt, it is just a bad situation. She has gotten $1.2 million,
but she would really rather not have the money. She would really rather
have her health back. But we cannot put her health back, so we give her
$1.2 million. That is our system operating rationally, I believe; $1.2
million for this hurt Mrs. Jones.
Now mind you, there is still plenty of money for the trial lawyers,
and I realize a lot of people in this body defend trial lawyers as
though they are the greatest folks in America. There is still one-third
for them, so in this case the trail lawyers get $400,000. There is
still plenty of money in the system for adequate recovery.
Mr. HYDE. Mr. Speaker, I yield such time as he may consume to the
gentleman from California. [Mr. Campbell].
(Mr. CAMPBELL asked and was given permission to revise and extend his
remarks.)
Mr. CAMPBELL. Mr. Speaker, I rise in support of this bill.
I would like to take this time to comment on the issue of tort
reform, and its ramifications on our business community, and especially
upon California's Silicon Valley.
For years, the debate has raged over whether our country engages in
excessive litigation. Some have offered the argument that lawsuits are
socially useful in defusing workplace tension, deterring dangerous
means of production, and compensating those who have been harmed.
Others have as strongly maintained that lawsuits have siphoned off
scandalous amounts of time and energy, caused many good ideas never to
be commercialized, dried up capital for investment, and crippled
America in competition with the world. So, who is right?
I have concluded that our civil liability laws are indeed in need of
reform to stem the flood of frivolous lawsuits that have detrimentally
affected productivity and overall employment not only in California but
across the Nation. My position is based upon a study that I
participated in, which showed conclusively that the more a State
reformed its civil liability laws, the greater its productivity and
employment increased.
Here are a few facts and statistics:
Frivolous strike suits, which allege fraud when stocks take
inevitable dips, have hit every one of Silicon Valley's top 10
companies and more than 60 percent of the valley's high-technology
firms.
According to one estimate, shareholder suits are a $1.4 billion a
year business, with settlements averaging $11 million.
A suit brought against 60 computer monitor manufacturers alleges
fraud on behalf of the manufacturers because monitors labeled as 15
inches have--due to the dark border characteristic of computer
technology--an actual viewing space of 14\3/4\ inches.
The accounting firm of Tillinghast-Towers Perrin reports that the
tort portion of our legal system cost $152 billion in 1994--two and
half times the industrialized world average.
What we need are reforms that will stem this explosion of tort
litigation; reforms like

[[Page H3195]]

placing caps on contingent fees and pain and suffering awards; allowing
defendants to pay damages over time; constraining punitive damages; and
modifying the joint-and-several-liability rule where a party only
partly at fault can end up paying the entire damage award if the other
parties at fault cannot.
I want to make clear that I seek only to bar frivolous lawsuits and
not block those that have merit. A step in this direction was taken
when Congress over-rode a Presidential veto and enacted the Securities
and Litigation Reform Act of 1996. It reigns in frivolous class-action
suits that victimize employers and investors across State lines. It
provides, for example, protection to companies with solid records of
rapid growth from lawsuits over a minor loss in a single quarter. And
when legal costs can easily rise to the millions of dollars, mostly
new, startup entrepreneurial high-technology firms are at greatest
risk. This is especially true for Silicon Valley.
The litigation mess is not only affecting big business. It also
prevents small businesses from expanding, causes new drugs and new
products never to reach the market, and results in charities running
short of volunteers.
Everyone today is a potential hostage to capricious and expensive
lawsuits. National civil liability reform is needed to correct this
broken system. I do not seek to sanction corporate irresponsibility,
but merely to obtain reforms necessary to obtain fairness and common
sense; with the result being more jobs and greater productivity in
every State.
Finally, I was disturbed to learn that there is now an Internet web
site which invites the public to invest in shares of lawsuit stock.
Essentially what this outfit wants to do is publicly sell and trade
stock based not on the performance of a corporation, but on the outcome
of a lawsuit. I cannot view this approach in any other light than as
another example of how out of control our tort system has become and
how essential it is that we institute systemic reforms like the ones I
have mentioned.
Mr. CONYERS. Mr. Speaker, I yield myself 10 seconds.
Mr. Speaker, I remind the distinguished gentleman from South Carolina
[Mr. Inglis] that in his hypothetical, he used up 1 of the 14 punitive
damages cases that occur annually in the U.S. courts.
Mr. Speaker, I yield 3 minutes to the gentleman from Michigan [Mr.
Bonior], the minority whip.
Mr. BONIOR. Mr. Speaker, I thank the gentleman from Michigan [Mr.
Conyers] for yielding me the time.
Let us be clear what this bill does. Let me put this in another
perspective from the example that was just given by my friend from
South Carolina. If you are a corporate CEO and you make $1 million a
year and God forbid you should have an accident because of a product
malfunction, this bill says that you can receive full recovery of your
economic losses. But if you are a working mom and you make $15,000 a
year and you are struggling to put a little away for your child's
education and you should be injured by that same accident and that
accident involves more than one wrongdoer and God forbid you should
lose your ability to have children, you may never be fully compensated
for pain and loss. Now that is what this bill does.
This bill says the lives of corporate CEO's and Wall Street bankers
and the economic elite are more important and more valuable than the
lives of the working men and women, and I think it is shameful. Mr.
Speaker, we do not need a bill that tilts the balance away from victims
of defective products and toward the big corporations who make them.
We certainly do not need a bill that gives foreign manufacturers a
leg up on American companies. Even though 82 of my Republican friends
supported an amendment that put America first, it was dropped in the
conference committee by the Republicans. That too is shameful. Mr.
Speaker, if we live in a country where 98 percent of the growth in
income since 1979 has gone to the top 20 percent, the other 80 percent
has gotten 2 percent of real income growth in this country. What is
going on here?
Mr. Speaker, yesterday the Republican leadership, in both this body
and in the other body, blocked efforts to raise the minimum wage, and
once again we are here today trying to write special rules for the
wealthy one more time. Mr. Speaker, enough is enough. It is a tragedy
when anybody is injured by a faulty product. Let us not make women and
children and seniors pay a special price.
I urge my colleagues to vote ``no'' on this conference report. The
President has indicated he will veto this bill because of the reasons
and other reasons that have been given on this floor, the reasons that
I gave and others have given, and we will need roughly 140-some votes
to sustain his veto. So this is a very important vote this afternoon,
and I urge my colleagues for economic justice for the people that we
represent that we send this measure down to defeat this afternoon.
Mr. BLILEY. Mr. Speaker, could we get a report on how much time
remains?
The SPEAKER pro tempore (Mr. Gunderson). The gentleman from Virginia
[Mr. Bliley] has 11 minutes remaining, the gentleman from Illinois [Mr.
Hyde] has 8 minutes remaining, the gentleman from Michigan [Mr.
Conyers] has 1\1/2\ minutes remaining, and the gentleman from Michigan
[Mr. Dingell] has 7 minutes remaining.
Mr. BLILEY. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from
Ohio [Mr. Oxley].
Mr. OXLEY. Mr. Speaker, I rise in support of the conference report.
For almost two decades now, the House Committee on Commerce has
grappled with the issue of product liability reform. After developing
an extensive record on the subject of product liability law, the
committee concluded that the present system places an enormous burden
on interstate commerce, inflates prices, stifles innovation, and
subjects manufacturers and sellers to a capricious lottery where
sanctions can exceed any found in criminal law.
Last year, we worked with the Judiciary Committee to draft a joint
legal reform bill to bring some common sense back into our legal
system. We then worked with our Senate counterparts to help them move
this critical legislation forward. While the final conference agreement
falls somewhat short of the reforms passed in the House, it still
represents a great achievement and far more than anyone might have
hoped for just 2 years ago.
For the first time in our Nation's history, we will enjoy the
protections of proportionality requirements for punitive damage awards.
Damage awards for speculative noneconomic injuries will now be based
directly on someone's actual responsibility for the harm, not on the
depth of a defendant's financial pockets. Plaintiffs who harm
themselves primarily through their own excessive use of drugs and
alcohol will no longer be able to transfer the costs of their addiction
to third parties, and frivolous claims against innocent product sellers
and biomaterials suppliers will no longer be allowed.
These reforms will play a critical role in increasing the long-term
competitiveness of American industry and thereby protecting American
jobs. And they will create a renewed emphasis on fairness and
accountability in our legal system, without undercutting the basic
rights to restitution for consumers.
I recognize that the President has promised to veto this pro-jobs,
pro-fairness bill. This is unfortunate. As Governor, President Clinton
twice supported resolutions drafted and unanimously approved by the
National Governors Association calling for Federal product liability
reform.
Throughout the last year we have been working with Senator
Rockefeller's staff in the Senate to communicate with the President and
modify the bill accordingly, deleting numerous stronger House reforms
and adopting an extended additur provision for punitive damages which
his own Cabinet helped to write. The administration's last minute bait-
and-switch was subsequently decried by Senator Rockefeller, who noted
that ``Special interests and raw political considerations in the White
House have overridden sound policy judgment.'' This sort of trial
lawyer protectionism and turnstile politics, revealed earlier on
securities litigation reform, is beginning to ring very hollow.
Part of the premise of the Contract With America was to put an end to
politics as usual in Washington. This legislation is a consensus
solution, built on decades of bipartisan efforts by my Democratic
colleagues and fellow Republicans, for bringing some balance and
reasonableness back into our legal system. I ask your support in
helping us bring this commonsense reform back into our legal system.
Let us pass this with an overwhelming vote and send it to the
President and hope he changes his mind.

[[Page H3196]]

{time} 1245

Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentlewoman from New York [Mrs. Lowey].
(Mrs. LOWEY asked and was given permission to revise and extend her
remarks.)
Mrs. LOWEY. Mr. Speaker, I rise in opposition to the conference
report on the product liability reform. This bill benefits those who
place profits above the health and safety of the American public, and
it should be defeated.
Let's look at some of the real-life consequences that this ill-
considered legislation would have.
Currently, there are approximately 1 million women who have silicone
breast implants. To date 100,000 of them have suffered real harm from
these devices. Although these women were told that the implants were
safe, many began to leak and break--exposing the women to the silicone
inside. If this bill is passed, implant manufacturers will be exempted
from liability, and thousands of the women who are ill will be
prevented from recovering damages.
This bill will hurt American women in other ways. The legislation
eliminates joint and several liability for noneconomic losses--which
means that if a housewife from my district and Donald Trump are both
injured by the same defective product, Donald Trump will be able to
recover much more money for injuries. That's wrong Mr. Speaker--we must
not make it more difficult for women to recover damages from the
companies of defective products.
I would also like to bring to my colleagues' attention a very
shocking unintended result of this bill. Mothers Against Drunk Driving
opposes this bill because it will cap punitive damages that can be
enforced against those who serve alcoholic beverages to obviously
intoxicated persons and minors.
Last year, this House passed a measure that I introduced that will
finally get tough on underage drunk driving. That measure is now the
law of the land and States that do not have zero tolerance policies for
teens who drink and drive are in the process of adopting them. We must
not now take away one of the biggest disincentives bar owners have to
serving minors by passing this bill. We must not send a mixed message
to Americans about drunk driving.
My colleagues, this bill says to companies that making defective
products is just another cost of doing business. We must demand that
companies take responsibility for their actions--just as we demand that
individuals do. Those who put profits ahead of their fellow human
beings do not deserve our protection.
Mr. HYDE. Mr. Speaker, I yield myself 30 seconds simply to say I have
heard so many things about this bill that just are not so. There is
nothing in the world inhibiting a woman who has a faulty breast implant
from suing and getting full recovery, economic, noneconomic, and, if
the case warrants, punitive damages, twice whatever the economic and
noneconomic total up to. And if it is an egregious case, the judge can
add more to it.
So I just do not know what I am hearing here. They are talking about
some other bill that has not been written.
Mr. Speaker, I yield 3\1/2\ minutes to the distinguished gentleman
from Tennessee [Mr. Bryant].
(Mr. BRYANT of Tennessee asked and was given permission to revise and
extend his remarks.)
Mr. BRYANT of Tennessee. Mr. Speaker, I thank the gentleman for
yielding me this time.
I, too, rise in strong support of this bill, this conference report,
and think it is a very modest bit of reform.
As an attorney who practiced in the civil litigation area for a
number of years, it is interesting to hear the debate on this floor. It
is very different being in the courtroom where you can respond directly
to statements that are made, sometimes outrageous statements that are
made, sometimes misstatements that are made. And in the arena on this
floor it is difficult to sit here and listen to some of these examples
that are being thrown out as why this very good reform should not
occur.
Let me tell you what, let me respond, I guess, in the best way I can
to some of the allegations being made about this bill. The chart goes
up and says, well, punitive damages cases are not that significant in
number, very few are filed in a year, even less awarded.
Let me tell you in the real world how punitive damage cases affect
you and I that cause a huge litigation tax on the average American
citizen that is in the thousands of dollars each year that we all pay
for in some way or another in direct or indirect costs of product
liability lawsuits.

Every case that comes in that has punitive damages claims has to be
assessed and has to be judged as to whether or not what that case is
worth in terms of actual compensatory damages and what it is worth from
a punitive damages standpoint. Many of these cases are settled before
they even result in lawsuits. They are settled before a case is even
filed. Those cases are not going to show up on this chart. Most cases
are settled, once they are filed, out of court before they go to
judgment. As you settle these cases wherever it is in the process, you
have to take into account what is this case worth from a punitive
damage standpoint. It affects very dramatically the cost of litigation.
Cases that should be settled early should be settled quickly, that do
not have to go through the long extensive litigation that costs
everyone, are not settled because of this. If we place a cap, a
reasonable cap, on punitive damages, it will help the consumer, it will
help the injured plaintiff get quicker disposition of their lawsuit,
quicker settlement, quicker money in their hands, quicker compensation.
And I suggest to you it would be more fair to all concerned. It
completely allows full recovery for compensatory damages. This bill is
no way affects a person's right to recover for pain and suffering,
permanent disability, lost time from work, future income, earning
capacity diminished, medical bills. It affects that in no way. All it
affects are punitive damages, and its gets some correlation, some
relationship between this case and not a pie-in-the-sky figure that
that particular jury feels like awarding that day, whether it is a
McDonald's case or the BMW case or whatever. It makes the person
responsible pay for the negligence they caused, their portion of the
injury. If a defendant is found liable for 20 percent of the injury,
they do not have to pay 100 percent of the damages. That is only fair.
You only pay what you are responsible for causing. And we are hearing
complaints about that.
We have heard about the special-interest groups here, and we are not
really, I guess I should say that this debate really may even be moot
because we have already been told by our President that he is going to
veto this bill. He says he is for small business and for doing things
to stimulate the economy and helping out the small people. But yet he
is already saying he is going to veto this very modest bill that is
supported by people on both sides.
This is not a Republican-Democrat issue.
Mr. CONYERS. Mr. Speaker, I yield such time as he may consume to the
gentleman from California [Mr. Berman], a distinguished member of the
Committee on the Judiciary.
(Mr. BERMAN asked and was given permission to revise and extend his
remarks.)
Mr. BERMAN. Mr. Speaker, I rise in opposition to the conference
report on what I would view as the Victim Compensation Depriving and
Deterrence Weakening Product Liability Report.
I do not oppose this bill in the belief that American law on product
liability is perfect. But like many other Members of this body, I found
that my efforts, in committee and on the floor, to moderate the
excesses of this legislation, and in so doing, to articulate the sorts
of reforms I can support, were entirely shut out by a majority hell-
bent on moving an industry agenda at the expense of American consumers.
Nor is it the notion of uniform Federal law on the subject of product
liability which I oppose, even though this subject has traditionally
been viewed as a matter for State law. States' rights is not my
watchword, though I thought it was the operating principle for my
colleagues in the majority, a principle they seem to set aside when
expedience dictates.
But what we find in this conference report is not uniformity.
Instead, what we have is Federal standards except where a State's law
is worse in terms of consumer protection. So let there be no mistake
about what this legislation is about. Uniform national standards?
Hogwash. This is lowest common denominator justice for consumers.

[[Page H3197]]

I also want to express my very strong support for solving the
problems faced by biomaterials suppliers. I am dismayed that their
interests have been sacrificed to advance an extreme agenda I cannot
support. If this bill is indeed vetoed, and that veto is sustained, I
hope that we can move the biomaterials access reforms to solve that
particular industry's problems for the benefit of all Americans.
Mr. Speaker, I cannot support legislation that deprives injured
victims of fair compensation, and eliminates important deterrents to
the design and manufacture of unsafe products in the first place. I
oppose this conference report, and I urge my colleagues to do so as
well.
Mr. CONYERS. Mr. Speaker, I yield such time as he may consume to the
distinguished gentleman from North Carolina [Mr. Watt], a member of the
Committee on the Judiciary.
(Mr. WATT of North Carolina asked and was given permission to revise
and extend his remarks.)
Mr. WATT of North Carolina. Mr. Speaker, I rise today in opposition
to House conference bill H.R. 956, the conference report on the
Products Liability Reform Act.
Folks are on the floor today blaming lawyers for all the ills in
America today. And this conference report is suppose to protect America
from these greedy trial lawyers. Well, for the record I want you all to
know that prior to coming to this place, I practiced law for 22 years
and I'm proud of that and I'm proud of the contributions of the bar in
shaping America and making it a better place for all of us.
People often quote the line from Shakespeare's ``Henry VI,'' ``First
thing we do, let's kill all the lawyers.'' Sounds funny out of context.
But they don't tell you about the scene. It's a scene where a corrupt
king and his followers are trying to figure out how to suspend
everybody's freedoms and rights and the only folks who could possibly
stand in their way--you got it, the lawyers. Think about that the next
time you're tempted to use this quote.
Calling someone a hypocrite might be funny too, if it's taken out of
context. And yesterday, we spent an hour debating whether it was proper
debate for one of my Republican colleagues to call Democrats
hypocrites. Well, I want to be careful not to call any one or any party
a hypocrite, even though the ruling of the Chair yesterday confirmed
that I would be within my rights to do so. I would, however, like to
pose the question in the context of this debate on product liability
reform: Exactly who is being hypocritical?
Who is being hypocritical when they claim they want to stop the
explosion of individual product liability claims so that you can
alleviate the backlog on civil court dockets when, in fact, the backlog
has been cased by an explosion of civil claims filed by big businesses
against other big businesses over commercial disputes? My 22 years of
practicing law showed me, and the statistics confirm it, that antitrust
and commercial litigation is getting longer and longer, more and more
complex and taking up more and more court time. At the same time,
individuals are being squeezed out and priced out of courts. Courts are
no longer for the people. They can't afford them.
Who is being hypocritical when they preach about personal
responsibility for individual citizens but then absolve corporate
citizens from responsibility for injuries they cause, even when the
corporations make a calculated business decision to do so?
Who is being hypocritical when they claim to be champions of States'
rights and a limited Federal Government on one hand, but then fight for
this legislation, which would preempt the laws of 50 States which have
developed over hundreds of years on the other hand?
Finally, who is being hypocritical when they claim to support
individual rights even though they're supporting a bill that will
severely limit an individual's access to justice? That's what this bill
does.
Vote ``no'' on this bill. Fight hypocrisy.
Mr. CONYERS. Mr. Speaker, I yield 1 minute and 20 seconds to the
gentleman from Massachusetts [Mr. Frank], the ranking member of the
Subcommittee on the Constitution of the Committee on the Judiciary.
Mr. FRANK of Massachusetts. Mr. Speaker, I had been undecided on this
bill. I am now going to vote against it. It is a far better bill than
the one the House previously did. I still have concerns about the
unequal effects on women.
But I must tell you that I am very unprepared at this point to vote
for one more piece of legislation that the corporate leadership of the
country wants at a time when it has unfortunately been so resistant and
unyielding to the cries many of us have made for some fairness and for
some social justice.
A company in the city I represent, New Bedford, we just learned, has
been bought up by a larger entity and a profitable company will be shut
down, jobs will be lost, and it will be moved away. In the right
overall mix, I am prepared to support product liability. But at a time
when the minimum wage is stonewalled, when unions are, in effect,
dismantled by the misuse of the law by employers, when corporate
salaries go up and up and up and we get no sympathy whatsoever for the
plight of workers, I am not prepared to provide one more thing on the
shopping list of those who are already doing well.
On the merits, as part of an overall package, I could support this. I
would hope it would be somewhat better drafted. But I will not at this
point contribute, will not be part of furthering a public policy
imbalance which says that those who own do better and better and those
who work, unfortunately, are treated less and less fairly.
As part of an overall approach to fairness in America, I would be
supportive of this, but not as simply one more gift to those who are
already gifted.
Mr. BLILEY. Mr. Speaker, I yield 2 minutes to the gentleman from Iowa
[Mr. Ganske], a member of the committee.
(Mr. GANSKE asked and was given permission to revise and extend his
remarks.)
Mr. GANSKE. Mr. Speaker, I would just like to address the gentleman
from Massachusetts for a moment and ask that he strongly consider
supporting this bill. I am going to deviate from my notes and speak to
a prior speaker who had concerns about breast implants.
My mother had breast cancer when she was 24 years old. I can remember
as a child her external implant falling out of her swimming suit. She
has had a breast implant since then, and this has been a great thing
for her.
As a physician, I have been involved with medical devices. I am
concerned about the availability of these products for our patients. My
wife had a sister who was born with a condition called hydrocephalus.
This is where the cerebral spinal fluid does not get absorbed, and if
there is not a cerebral spinal fluid shot, the head rapidly expands.
Had that product been available to my wife's sister, she would still be
alive today.
If we do not get a handle on product liability, we will not have the
type of medical devices that will be necessary to protect the lives and
health of our brothers, our sisters, our parents. This is a very
reasonable and modest bill. I am glad that my colleague from Michigan
[Mr. Dingell], the ranking member of the Committee on Commerce,
supports this bill.
I would urge the President to sign this bill. This is a bipartisan
bill. This is not about politics. This should not be about politics.
This bill is about providing products for people's health and their
lives.
Mr. GANSKE. Mr. Speaker, this do-something Congress is working hard
for the American people. Yesterday, we passed legislation to make
health insurance more affordable. We passed a bill to allow senior
citizens to retain more of their earnings if they remain in the work
force. We passed a bill to give regulatory relief to businesses. We
passed the line-item veto. And we gave final approval to legislation to
modernize our Depression-era farm programs.
Today, we will send to the President product liability legislation to
restore common sense in this area; to protect consumers and prevent
abuse that unnecessarily raises the price of practically everything we
buy. Amazingly, President Clinton has threatened to veto this modest
bill that Mr. Dingell supports.
Mr. Speaker, if the President vetoes this bill, the losers will be
the American people, victims of a hidden lawsuit tax. They pay more for
goods and services because businesses are forced to spend hundreds of
millions of dollars in defending frivolous lawsuits.
Mr. Speaker, this is not partisan politics. A leading Democrat in the
other body said ``Unfortunately, special interests and raw political
considerations in the White House have overridden sound policy
judgment.'' That's a Member of the President's own party speaking.
I urge my colleagues to vote for this limited legal reform bill and
to give it the votes necessary to override a threatened veto.
This bill isn't everything I think is important, nor is it everything
my colleague from Michigan wants. But in the spirit of cooperation in
order to move to a better solution, we are both supporting this bill. I
urge Members of both sides to put aside partisan politics and support
this bill.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentlewoman from California [Ms. Waters].
Ms. WATERS. Mr. Speaker, I rise in strenuous opposition to this
conference report.

[[Page H3198]]

Remember the famous Pinto automobile recall, the exploding gas tanks.
Remember the fact that the manufacturer knew the gas tank in the back
of the car would explode if hit in an accident. Remember the in-house
memo that the manufacturer sent that admitted they knew the gas tank
would explode, but made the cold-blooded decision it would not be cost-
effective to recall the car? They said it would cost them too much
money. Lives were lost. People were harmed.
How dare anybody suggest we dismantle our current product liability
laws? Greedy corporations will increase their profits at the expense of
the American people if we, as public policymakers, do not have enough
backbone to stand up for the protections for our citizens. We do not
deserve to be here if we cannot protect them. As many as 6,000 American
lives were saved each year due to the current deterrent of product
liability laws.
Mr. Speaker, this bill is a sham. It must be defeated.

{time} 1300

Mr. HYDE. Mr. Speaker, I am pleased to yield 1 minute to the
gentleman from Virginia [Mr. Goodlatte], a distinguished member of the
Committee on the Judiciary.
(Mr. GOODLATTE asked and was given permission to revise and extend
his remarks.)
Mr. GOODLATTE. Mr. Speaker, I thank the chairman of the committee for
yielding me this time.
Mr. Speaker, the other side and the President have a number of times
said that this is an anticonsumer bill. Mr. Speaker, this is a
proconsumer bill. This bill is very fair to those who may experience
harm as a result of a defective product, but at the same time taking
away from juries the opportunity to give unlimited amounts of awards
that affect every consumer in this country by taking product off the
market, as the previous speaker, the gentleman from Iowa [Mr. Ganske],
just indicated, and by increasing the cost of insurance and, as every
corporation in this country does, spreading that increased cost to
every consumer in this country with increased prices. This is a very
fair bill. Juries should not be legislators. They are unelected. They
should have the opportunity to determine the compensatory damages, to
determine the pain and suffering award, and a reasonable amount of
punitive damages in cases where they find it appropriate, but it should
not be unlimited.
Mr. Speaker, I urge support of this report.
Mr. CONYERS. Mr. Speaker, how much time do I have remaining?
The SPEAKER pro tempore (Mr. Gunderson). The gentleman from Michigan
has 10 seconds remaining.
Mr. CONYERS. Mr. Speaker, I yield the balance of my time to the
gentleman from Michigan [Mr. Dingell], the dean of the House, and ask
unanimous consent that he be allowed to allocate that time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the gentleman from
California [Mr. Becerra].
Mr. BECERRA. Mr. Speaker, I thank the gentleman for yielding me the
time.
Mr. Speaker, on balance, this conference report is transparently
unbalanced. It is bad where State laws would otherwise benefit
consumers and victims, and it is good where State laws would benefit
manufacturers. The problems for States, this law preempts States that
wish to take action at the State level against product liability abuse.
Who does this conference report exclude the Conyers provision that
would have held foreign manufacturers liable for damaging, injuring,
killing American citizens?
Why does this conference report on the manufacturer of a defective
elevator that might be 14 years, 364 days old, let that victim sue that
manufacturer of that defective elevator, but the next day that same
victim would not be able to sue because of a statute of limitations
that would not allow that to occur?
Why does a victim of a manufacturer's product have to prove, through
a higher burden of proof, the damage occurred or the injury occurred?
This is an unbalanced conference report. It does not deserve the
support of this conference, because it does not support the American
consumer. I urge a ``no'' vote.
Mr. BLILEY. Mr. Speaker, I yield 2 minutes to the gentleman from
Washington [Mr. White], a member of the committee.
Mr. WHITE. Mr. Speaker, until about a year and a half ago, for 15
years I practiced law in the city of Seattle. I have to tell you that
anybody who has been involved in our legal system and has taken a fair
and objective look at it knows that, unfortunately, our legal system is
broken and badly needs to be fixed.
It does not have so much to do with the number of cases that are
filed, the number of product liability cases that we have. It is the
fact that every week we hear a new ruling that offends our fundamental
sense of justice about what our system is supposed to produce. Every
week we hear about the cup of coffee is spilled on someone when they
are driving in their car and all of a sudden they can collect $2 or $3
million for that. We hear about the paint job that was not quite right
on the BMW, and somehow that results in a judgment of multimillions of
dollars.
Ordinary people and lawyers and all of us who hear these things get
the impression that, unfortunately, it is becoming true that our legal
system has turned into an elaborate game of chance, where if you play
the game right, you have the right lawyers, you can hit the jackpot and
make a lot of money.
That is the most pernicious thing about the developments we have seen
in our legal system over the last several years. It is a tragedy when a
child is killed or someone is injured because of using a product. But
the fact is, no matter how much money we compensate that person for, we
cannot bring back the child, we cannot bring back the arm that is cut
off, or we cannot fully solve the damages. Unfortunately, our system
seems to equate paying money to solving that problem. It is something
we just cannot do.
This bill is a modest bill. This bill does not go far enough. There
are many additional things that we should do to solve the problems in
our legal system. But it is a modest step that we need to take.
Mr. Speaker, I urge my colleagues to vote for this, and I hope very
much the White House will change its mind and sign this bill when we
pass it in this Congress.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from Missouri [Mr. Skelton].
Mr. SKELTON. Mr. Speaker, the sad part of this whole debate is the
fact that it attacks the confidence and credibility of an institution
that has served Great Britain and the United States and our various
States now for some 700 years, and that is the jury trial. Sure, juries
are composed of humans, and you are going to find some cases that many
people will disagree with the outcome of. Jessie James' brother, Frank
James, for instance, was acquitted, even though there was hard evidence
that he held up those banks. Many people disagreed with the outcome of
the O.J. Simpson case. But overall, Mr. Speaker, the jury trial is a
very basic institution. What this does is this takes it out of balance.
I had the opportunity through the years to participate in the
American justice system by trying cases, by defending people accused in
civil cases, by representing others. So I think we should do our very
best maybe to look at this again in light of the fact that we have a
very sound institution called the jury system.
Mr. HYDE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I was shocked to learn that the jury system is somehow
no longer applicable. That is news to me.
Mr. BLILEY. Mr. Speaker, it gives me pleasure to yield 2 minutes to
the gentleman from Louisiana [Mr. Tauzin], a member of the committee.
Mr. TAUZIN. Mr. Speaker, I thank the chairman for yielding me time.
Mr. Speaker, let me first make a confession: I am a former trial
lawyer. I still hold a law degree.
Let me also disabuse you all of a notion: This House is not composed
of a majority of lawyers. Only 170 Members of this House admit or
believe they

[[Page H3199]]

have a law degree; 435 Members, 170, that means three-fifths of this
House are not lawyers. That surprises most people. They think it is the
other way around.
Many of the lawyers in this House rise as I do today in support of
these commonsense legal reforms, and it is to the lawyers in the House
I want to speak for a minute.
We have a responsibility to the legal profession. We were educated in
it. Many of us practiced in it. Our obligation is to make sure that it
is a good profession, that it works well, that justice arises out of
it. And when the law and when the practice of the law is such that it
encourages frivolous lawsuits, that it encourages the pursuit of deep-
pocket defendants instead of responsible parties, when it does not make
people personally responsible for their own actions, as this bill does
when it says if you are drunk or on drugs and you have an accident and
that is the real cause of the injury you ought not be able to sue
someone and collect, when we in this body are prepared to write
comonsense legal reform, lawyers ought to be the first ones to rise and
say we are prepared to do it.

We did that on security litigation reform. We passed that bill by a
two-thirds vote of this House and the other body. The President vetoed
it. We overrode his veto. We passed good commonsense medical reform,
malpractice reform yesterday in this House. I hope we see that through
to finish.
If we pass this bill today and send it to the President, I hope he
will do something very important. If lawyers in this House can say yes
to commonsense legal reform, then the President ought to be able to say
no to some of his trial lawyer friends, and he ought to sign this good
bill when it hits his desk.
Mr. BLILEY. Mr. Speaker, it is a great pleasure to yield the balance
of my time to the gentleman from Colorado [Mr. Schaefer], the chairman
of the subcommittee.
The SPEAKER pro tempore. The gentleman from Colorado is recognized
for 2\1/2\ minutes.
(Mr. SCHAEFER asked and was given permission to revise and extend his
remarks.)
Mr. SCHAEFER. Mr. Speaker, I thank the chairman of the committee for
yielding time to me. I commend the work of the House conferees on this
important legislation. This plan will bring some commonsense to our
country's product liability laws.
Sadly, frivolous litigation has become a fact of American life. Too
often, bringing people to court has taken the place of personal
responsibility. People treat liability damages like a lottery. Urged on
by attorneys with huge financial stakes, many people no longer look at
themselves first for blame, but instead search out the easiest way for
a big court settlement.
Frivolous suits cost our economy up to $80 billion every year. Thus,
American companies have become hesitant to pursue technological
innovation and product development for fear that their actions may
result in never-ending court battles and financial ruin. This well-
founded fear is costing jobs, consumer benefits and, if continued
unchecked, it will cost America its competitive edge.
I would like to address one particular section, the biomaterials
access provision. One of America's leading industries is the
biomaterial device field. These products literally save and enhance
lives every day. From pacemakers to artificial heart valves to cataract
replacements, the products afford miraculous opportunities for
recovery, allowing people to continue their lives.
The suppliers of base materials oftentimes provide the manufacturer
with elements of the device that are too costly to produce except in
mass quantities, but alone have no implant value or purpose.
Unfortunately, in recent years, these suppliers have been named as
codefendants in lawsuits against actual device manufacturers. In almost
every case, they are cleared of any wrong-doing or negligence.
Nevertheless, in the process, they are forced to spend vast financial
resources to achieve exoneration.
This litigation risk has caused many supply companies to, quite
simply, stop providing base materials for these life-savings devices.
Consequently, the inability of device manufacturers to obtain the
needed base supplies is causing the death of the biomaterials industry
in America.
The biomaterials section addresses this tragic consequence of
overzealous litigation. This language will assure that, quite simply,
unless the supplier is negligent in the design specifications requested
by the device manufacturer or if the supplier is also a party in the
overall manufacture or marketing of the device, the supplier is cleared
from liability.
This commonsense legal reform bill goes a long way toward ending this
litigation madness, while preserving each individual's right to pursue
just compensation for actual harm. I urge my colleagues to support this
long overdue reform.
Mr. DINGELL. Mr. Speaker, I yield such time as he may consume to the
gentleman from Texas, Mr. Pete Geren.
(Mr. PETE GEREN of Texas asked and was given permission to revise and
extend his remarks.)
Mr. PETE GEREN of Texas. Mr. Speaker, I rise in support of this
conference report.
I believe the Commonsense Product Liability Act has become necessary
to deal with our increasingly litigious society and the arbitrary and
capricious nature of many punitive damage awards.
Today, in 1996, product liability unquestionably has become a major
factor in interstate commerce. Less so 20 years ago, but today product
liability determines what goods are available in what States and at
what price. Further, liability laws have had the impact of sending the
manufacture of goods overseas, taking American jobs with them, for
example, as we've seen in the private aircraft industry.
There can be no doubt that the measures in this legislation--punitive
damage reform, joint and several liability reform, and a provision
similar to an amendment that I offered to the original House bill--that
limits the liability of rental and leasing agencies for the tortious
acts of another--fall well within this category of appropriate and much
needed reform. The changes proposed in this bill will rearrange the
legal landscape, but they will further the cause of commerce and
competitiveness, reduce costs for consumers and create jobs across
America.
The problems we address in this bill are national problems. American
citizens, businesses, municipalities, and other charities across our
Nation pay $80 billion a year as a litigation tax. And these costs are
paid by all of us through increased costs in our goods and services.
Today 30 percent of the price of a stepladder and over 95 percent of
the price of childhood vaccines go to cover the costs of tort
liability. Each new private aircraft made by American workers has a
$100,000 litigation tax added to its cost. The present system costs
jobs, costs lives, and burdens every citizen in America with a
litigation tax that is unaffordable.
The time has come for sensible product liability reform. This
legislation will strengthen the economy and the free market by removing
the impediments to interstate commerce and encouraging innovation. His
legislation provides a national solution to a national problem, and I
hope my colleagues will join me in supporting it.
Mr. DINGELL. Mr. Speaker, I yield the balance of my time to the
gentlewoman from Texas [Ms. Jackson-Lee].
The SPEAKER pro tempore (Mr. Gunderson). The gentlewoman from Texas
[Ms. Jackson-Lee] is recognized for 2 minutes and 10 seconds.
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Speaker, I am here to talk about
people. I think that is what we have missed in this whole debate.
Thirty million Americans are injured by consumer products, not
including automobiles; 29,000 people are killed in tragedies that
involve everything from medical devices to chain saws.
It is important that my colleagues realize that we should not draw
the line in the sand amongst ourselves. This is in fact the people's
House. Most do not care what side we are on. They only ask that we
remedy a problem that exists for the American people.
I have heard my colleagues talk about frivolous lawsuits and moneys
that are expended.
Mr. Speaker, may I share with my colleagues that the Department of
Justice said that product liability cases represent only 1.6 percent of
civil cases. May I say to my colleagues that we have only had 14 injury
awards of punitive damages annually for the last 2 years. But allow me
to tell Members

[[Page H3200]]

a story of an American worker who may be injured by a product older
than 15 years old. That injured worker may be injured by a product that
explodes while he is trying to work for his family. That individual has
no rights under this law. But yet his corporation or his factory could
still go to court and charge that the product maker interfered with his
business. But that injured employee can no longer go to the court under
this legislation. Thirty million Americans are injured by devices.
I heard my colleague talk about breast implants. Let me respect his
expertise and the acknowledgment of the progress that has been made in
breast implants. But there are many, many women who have suffered under
the present design. I want to make sure that the sons and daughters in
the future will not suffer the pain of these women who are involved in
present-day breast implant litigation.
That is what this House is here for. The people's House is here to
ensure the people's rights. And this products liability bill is, in
fact, what the New York Times said, it is the ``Anticonsumer bill for
1996.''
Remember the 30 million, remember the 29,000. Vote against this
legislation.
Mr. Speaker, I rise today to express my concerns regarding the
conference report on H.R. 956, the product liability reform bill. The
proponents of H.R. 956 may have intended for this bill to level the
playing field among consumers and manufacturers but it does not achieve
this goal. The bill eliminates joint liability for noneconomic damages
and caps punitive damages at $250,000 or two times compensatory
damages, whichever is greater.
While most interested observers agree that some elements of the
current product liability system need to be reformed, they do not
believe that such reform is necessary because of a great explosion of
product liability lawsuits. The Justice Department's Bureau of Justice
Statistics indicates that product liability cases represent only 1.6
percent of civil cases. Another influential study on product liability
lawsuits indicates that there have been only an average of 14 jury
awards of punitive damages annually for the last two decades.
Contrary to arguments made by proponents of the bill, the current
system is not discouraging capital investment or increasing the costs
of developing new products. In fact, the General Accounting Office
reports that insurance costs to businesses represent less than 1
percent of most businesses' gross annual receipts. Moreover, the
National Association of Insurance Commissioners indicate that product
liability insurance premiums have dropped by nearly 30 percent over the
last 6 years.
President Clinton has already announced that he will veto this bill
because it preempts State law when such law favor consumers and defers
to State law when such provisions favor the manufacturers. I am
surprised that many members of the majority party in the House support
this bill's uniform, Federal product liability standards since these
Members strongly favor granting more authority to State governments.
Specifically, I am concerned about the elimination of joint and
several liability for noneconomic losses because of its potentially
disproportionate impact on women, children, and the elderly. The bill
retains joint and several liability for economic losses such as lost
wages. Noneconomic losses such as disfigurement or loss of fertility
deserve similar treatment by the legal system as economic losses such
as lost wages. This particularly impacts the number of breast implant
cases affecting women across America.
The provisions of the bill relating to punitive damages must be
carefully examined because punitive damages provide a powerful
incentive for manufacturers to make strong efforts to ensure that their
products are safe. A cap of $250,000 on punitive damages would mean
that some large companies may incorporate this figure as a cost of
doing business as they implement their quality control procedures for
manufacturing products. Moreover, a provision in the bill permits
judges to award punitive damages exceeding $250,000 in egregious
circumstances. The intent of the bill however, is that a judge would
rarely exercise this discretion.
Additionally, I am concerned about the statute of repose provision
that prohibits courts from awarding damages for injuries caused by
durable goods that are 15 years or older. The definition of durable
goods is narrow and excludes various consumer products.
During the recent elections in California, the voters of that State
rejected various referenda that would have changed the tort liability
system by restricting the rights of consumers.
Mr. Speaker, I urge the Members of the House to carefully review the
provisions of this bill and consider its potential impact on millions
of American consumers.
Mr. HYDE. Mr. Speaker, I yield the balance of my time to the
gentleman from Illinois [Mr. Manzullo].
The SPEAKER pro tempore. The gentleman from Illinois [Mr. Manzullo]
is recognized for 3 minutes.
(Mr. MANZULLO asked and was given permission to revise and extend his
remarks.)
Mr. MANZULLO. Mr. Speaker, today we have a great opportunity to move
America forward by passing this conference report on products liability
reform. This is not a perfect bill, but it is a fair bill. It is fair
to the consumers in America, and it is fair to the companies that make
the products.
One of the companies is Mattison Technologies of Rockford, IL. This
is a company facing liability lawsuits involving products that are as
old as the company itself. Madison is celebrating its 100th year of
operation. That is correct, Mr. Speaker, Mattison Technologies have
been manufacturing tools for one century.
Recently they were sued by a plaintiff in Ohio for a machine that was
built in 1917. That is right, 1917, the same year Americans went to
fight in the First World War, the same year the Bolsheviks were turning
out Czar Nicholas. That is a long time for a machine tool to be
functioning and too long for a company to be held liable for one of its
products. Mattison has 150 employees and yet every 3 months the sheriff
shows up with a brandnew summons bringing a brandnew lawsuit against
the company.
I have a letter from Robert Jennings, the general manager. Listen to
what he said: ``The present product liability situation in this country
has had a tremendous impact on our ability to successfully compete in
the marketplace.''
We are continuously defending lawsuits concerning machines built 30,
60, and even 70 years ago. ``We are being penalized for building
quality and longevity into our equipment, yet we believe this is what
made in America is all about.''
And what a bitter irony it is that current law keeps manufacturers
from making better equipment or modifying it because that modification
could be used to prove the initial design may not have been safe
enough.
This bill would help rectify the problem. A 15-year statute of repose
would stop such lawsuits on old products.
Mr. Speaker, a company being sued for a machine they manufactured in
1917. This is outrageous. This bill provides a balance. It protects the
consumers. It protects the employers. And it also protects employees.
Why are the 150 employees of Mattison Technologies the beneficiaries of
this legislation? It is easy. Because if Mattison did not have to
defend against these lawsuits, they could pour more into productivity,
more into investment, more employees would be hired. They would become
more competitive overseas.
Mr. Speaker, this is a good bill. It is a tough bill. It is a bill
that is good for the economy of America. It is a bill that relates to
one of the 1,800 companies in the district that I represent. I would
encourage the Members of this body to vote in favor of the conference
report.

Mattison Technologies Inc.,

Rockford, IL, March 28, 1996.
Re Common Sense Product Liability Legal Reform Act.

Hon. Donald Manzullo,
House of Representatives,
Washington, DC.
Dear Congressman Manzullo: On behalf of Mattison
Technologies, Inc. and its 150 employees, I ask that you
support the above referenced legislation.
The present product liability situation in this country has
had a tremendous impact on our ability to successfully
compete in the marketplace.
We are required to defend product liability claims against
equipment that we built 50, 60, and yes, even 70 years ago.
We recently received a Complaint on a woodworking machine
we built and shipped in 1917; that's 79 years ago!

[[Page H3201]]

We are being penalized for building quality and longevity
into our equipment, yet we believe this is what ``Made In
America'' is all about.
Among other sensible uniform product liability changes,
this Act addresses the ``forever liability problem'' with a
15 year Statute of Repose.
The machinery manufacturing community, so vital to Illinois
and the nation's economy, needs this reform.
Thank you for your support.
Sincerely yours,
Robert K. Jennings.

Mr. CARDIN. Mr. Speaker, I rise to express my disappointment with the
conference report on H.R. 956, the Product Liability Reform Act. I have
long been a supporter of legal reform and in particular, product
liability tort reform. Unfortunately, some of the measures in this bill
are too extreme and therefore, I must vote ``no'' on final passage.
I support a number of the provisions in the conference report
including the abolishment of joint and several liability for
noneconomic damages and the encouragement of alternative dispute
resolution. In addition, the FDA defense proposed in the original
House-passed bill was lifted in conference. Under the House bill,
plaintiffs would have been barred from winning punitive damages for
harm caused by products approved by the Food and Drug Administration.
The conference agreement also contains a more workable legal standard
for punitive damages. Under the House bill, plaintiffs would be
required to prove that a product was specifically intended to cause
harm. The conference languages, which sets a standard of clear and
convincing evidence for punitive damages, is a much more reasonable
standard.
While the conference report improves on the House-passed legislation
on punitive damages restrictions, I believe the language is still
unacceptable. I support reasonable caps on punitive damages. However,
the conference report allows a large number of businesses to be subject
to an unreasonably low cap on punitive damages. In addition, an overall
limit on $250,000, or two times compensatory damages, is also too low.
I and many of my colleagues had suggested a cap of $500,000. I regret
that the Conference Committee did not accept that recommendation.
The additur language was a good attempt to ease the impact of the
punitive damage cap. It would allow a judge to award punitive damages
above the cap if the judge determines the defendant's conduct was
egregious. Although this provision is an improvement, it is subject to
constitutional challenge, and would not apply to small business.
As I have indicated, I support many provisions in the conference
report. However, there is much that I cannot support, including the
preemption of States' rights, the statue of limitations, and lawsuit
limits placed on victims of firearms violence.
I find particularly offensive the inclusion of negligent entrustment
cases under the limits of this legislation. Sensible product liability
reform should not subject cases involving gun or alcohol sales to
minors to these new lower punitive damage limits or higher standards of
proof.
Mr. Speaker, we can reform the legal system while still ensuring
consumer protection. As a supporter of legal reform, I urge a ``no''
vote on this conference report so that it can be sent back to
conference for further consideration.
Mr. BILBRAY. Mr. Speaker, I rise in strong support of H.R. 956.
Because of unwarranted product litigation, medical device
manufacturers are in danger of being denied access to essential raw
materials for the production of life-saving technologies. An alarming
number of suppliers are refusing to sell these raw products to the
manufacturers, for fear of being joined in a liability suit against the
manufacturer.
Mr. Speaker, a full 32 percent of the Nation's medical device
manufacturers are headquartered in California. A great number of these
are in my San Diego district. These companies make pacemakers, heart
valves, and other implantable medical devices which improve the quality
of life and ease the suffering of innumerable patients. These companies
depend on patented alloys and synthetics, such as Teflon and synthetic
polymers, to ensure that these devices will be compatible with the
patients who need them.
Under current law, the suppliers of these raw materials can be liable
in product liability actions brought against device manufacturers, even
though they have no role in the production or sale of the finished
devices. As a result, many suppliers have announced plans to limit or
discontinue sales of these raw biomaterials to device companies. This
would drastically restrict the ability to provide these innovative
devices to people who desperately need them.
This bipartisan conference report will reform this tragic situation,
by allowing suppliers to resume sales to cutting-edge California device
manufacturers, and in turn ensure that patients nationwide retain
access to state-of-the-art technologies. This is about people, Mr.
Chairman, and doing what we can to make sure patients in need are
provided relief from their afflictions and suffering.
Mr. Speaker, this is a fair and bipartisan reform package, and I urge
my colleagues to support it. Let us send H.R. 956 to the President,
with the knowledge that Californians who need this reform are watching,
as is the entire Nation. A veto of this bill, as promised by the
President and supported by the Trial Lawyers Association, would be
tragic; however, it would clearly demonstrate to the American people
where the priorities of this administration truly lie.
Mrs. MINK of Hawaii. Mr. Speaker, I rise today in opposition to the
conference report on H.R. 956, the so-called Commonsense Product
Liability Legal Reform Act. The only relation this bill has to common
sense is that it takes just a little common sense to see that it is
designed to protect big business at the expense of U.S. consumers.
It pulls the rug out from under U.S. consumers by applying unfair
limitations on the means through which they can seek relief if hurt by
a faulty product. It is puzzling that the party who has screamed about
States' rights for the last year chooses to impose a Federal standard
when it comes to limiting the rights of consumers. While this bill sets
a Federal standard for product liability cases it allows States to
retain their own laws only when it benefits big business. Specifically
it requires States to adhere to the cap placed on punitive damages by
this bill, but it does not require punitive damages in States that
currently do not have punitive damages.
The arbitrary cap on punitive damages at $250,000 or two times actual
damages, which ever is greater, is based on highly inflammatory
rhetoric about the explosion of unreasonable jury awards in product
liability cases. Product liability cases make up less than 0.5 percent
of all lawsuits in the Nation. Cases in which punitive damages were
awarded are even fewer. In 1994, punitive damages were awarded in only
15 cases nationwide. And nearly 80 percent of these cases resulted in
the withdrawal of the product, improved product design, or strengthened
warnings. Punitive damages are meant to punish wrongful actions of
manufacturers and to deter the future production of similar faulty
products. A cap of $250,000 is hardly a deterrent for a mega-
corporation.
For smaller businesses the cap is the lesser of $250,000 or two times
actual damages. Utilizing a different standard for small business
establishes a precedent that a person harmed by a small business is
entitled to less, even though the loss, disfigurement, or pain is equal
to or greater than an injury incurred by a product of a larger
business.
Furthermore, the bill imposes a more difficult burden of proof in
order for punitive damages to be awarded, further reducing the
effectiveness of punitive damages as a deterrent. Punitive damages are
allowed to be awarded only if the plaintiff proves clear and convincing
evidence that the conduct of the defendant was a conscious flagrant
indifference to the rights and safety.
The most offensive provision to me personally is the provision which
discriminates against women, children, and the elderly by barring joint
and several liability for noneconomic damages. Treating economic and
noneconomic damages differently establishes a two-tiered system which
hurts women, children and the elderly, who typically have damages not
related to lost wages. Their damages are injury related and go to pain
and suffering, disability and physical losses. Under this bill a high-
paid corporate executive would recoup all of his economic, income,
damages while a woman who stays home with her children, a person with
little or no economic loss, would not. Equal justice should not be
dependent on age, employment, and economic status.
The intent of this bill is to discriminate against women, children,
and the elderly. Since women have been subject to so many faulty
products and drugs, like DES, silicone breast implants, IUD's, and the
Dalkon Shield, it is grossly unfair.
I am a DES mother who took this harmful drug. If this law had been in
effect at the time of my lawsuit, it would have been very upsetting. My
losses would not have qualified for access to joint and several
liability. Such a bar to fair and equitable recovery is unconscionable.
This bill must be defeated.
If we are going to move toward a national standard on product
liability, let it be a fair standard. One that treats men and women the
same, one that recognizes the value of noneconomic damages, one that
applies fairly to all businesses, and one that does not arbitrarily
limit punitive measures needed to curb the production of faulty
products.
Mr. Speaker, I urge my colleagues to vote down this conference
report.

[[Page H3202]]

Mr. BEREUTER. Mr. Speaker, this Member rises in support of this
measure and to express his pleasure that this legislation has advanced
to this stage and is one step closer to becoming law.
This Member introduced the first product liability legislation in the
Nebraska Unicameral Legislature in 1977. During this process this
Member realized that this issue must be dealt with on the Federal
level, because the vast majority of products and services move through
interstate commerce. Addressing product liability at the State level is
like patching 1 hole in a tire with 50 holes.
Mr. Speaker, all Americans are paying higher prices for consumer
goods and services because this legislation has been delayed for so
very long. The insurance costs incurred by companies protecting against
and paying for outrageous product liability suits are passed along to
the consumer each and every day, in each and every product and service
purchased.
Perhaps even more outrageously, the current system unfairly imposes
upon the American public product design standards, which are created in
response to penalties awarded in a few States with the highest punitive
and compensatory damages. Those States get to impose their juries'
ideas of appropriate design and safety standards on the rest of the
Nation. That is a perversion of federalism. National standards should
be set by the national legislature. That is what this bill will do.
Mr. Speaker, this Member has been a long-time cosponsor of product
liability reform, dating back to at least 1986 when this Member was an
early cosponsor of registration introduced by his distinguished
colleague, Mr. Roth. This Member is pleased that this conference report
is before the House for final approval and urges his colleagues to
support it.
Mr. RAMSTAD. Mr. Speaker, as chair of the task force which crafted
the legal reform plank of the Contract With America, I feel extremely
gratified to see an important part of our efforts come so far in the
process.
Although the reforms contained in the conference report are not as
sweeping as those the House put forward last year, they are a vast
improvement over the present legal system. Our present system results
in higher prices for consumers, lost jobs, and stifled innovation.
I want to talk about a particular provision in this conference report
which is more than just sound economic policy; it is sound health
policy.
Over 11 million Americans rely on implanted medical technologies,
ranging from artificial joints to complex mechanical devices such as
cardiac defribrillators and drug infusion pumps.
Unfortunately, the spectre of product liability litigation has caused
many raw material suppliers to restrict the use of their products in
implanted medical devices. The lack of materials and components for
these medical devices jeopardizes the well-being--and in some cases the
very lives--of the millions of Americans who depend on these
technologies.
The biomaterials access assurance provisions of H.R. 956 will help
ensure that the threat of product liability litigation will not hurt
patients who need access to implanted medical devices. H.R. 956 will
prohibit claims against biomaterials supplier unless the company acted
irresponsibly and its mistake actually caused the harm.
It is also important to note what the biomaterials access assurance
provisions will not do. Nothing will reduce the amount of money to
which a person injured by a defective implant is entitled. Device
manufacturers will design suitability and performance specifications
for the raw materials, certified by the FDA, and suppliers will
continue to be liable when materials or components do not meet the
specifications.
But suppliers will not be responsible when their products meet the
manufacturer's specifications. In these circumstances, the
manufacturers will be responsible for any product defect. This
commonsense approach protects the rights of injured plaintiffs, but at
the same time presents a biomaterials shortage our country just cannot
afford.
I urge my colleagues to support this important bill.
Mr. BUYER. Mr. Speaker, I am pleased to support this legislation
which will return common sense to our legal system as it applies to
products. While these reforms do not go as far as I would like, they
are essential to restoring balance to our legal system as we seek to
protect consumers while providing predictability to manufacturers.
The bill establishes a 15-year limit on when a manufacturer may be
held liable for its products. Product sellers will not be liable in
cases where illegal drugs or alcohol contributed more than 50 percent
toward the harm. In addition, producers will not be liable for the
percentage of blame attributed to product misuse or alteration.
This measure makes clear that punitive damages should be awarded only
in the most serious cases of egregious conduct. Punitive damage awards
will be linked to the actual harm caused by allowing punitive damage
awards of up to two times the compensatory damages or $250,000,
whichever is greater. There are special rules for individuals of
limited net worth and to small businesses.
Liability for noneconomic damages will be several, rather than joint,
making defendants liable only for their proportionate share of the
fault. This addresses the deep pocket syndrome.
The bill also addresses the unique difficulty faced by biomedical
device manufacturers. Medical device manufacturers are quickly losing
suppliers of materials due to litigation. Huge awards are often sought
from suppliers even though they had no role in the design, manufacture,
or sale of a device. The courts are not finding suppliers liable, yet
millions of dollars and countless hours are spent on defense in court.
This bill will provide expedited dismissal against suppliers in court
and they cannot be sued unless they are a manufacturer or a seller of
devices and as long as they have abided by the contract and supply
specifications of the manufacturer. Biomedical device manufacturers in
Warsaw, IN, BIOMET, Zimmer, DePuy, and Danek, are producing the needed
devices, pacemakers, heart valves, artificial blood vessels, hip and
knee joints, that add so much to the quality of life for countless
individuals.
There are so many small businesses in the Fifth District of Indiana
that will be helped by this legislation. These businesses will be able
to concentrate on product development and expansion rather than
fighting lawsuits. One such company is Whallon Machinery of Royal
Center, IN, which manufacturers industrial material handling machines.
In nearly 30 years of business, over 83 percent of all machines built
are still in use. Prior to 1993, Whallon had no product liability
claims. One customer had modified a Whallon machine. Had this
legislation been in place then, Whallon Machinery may not have faced a
fourfold increase in insurance premiums.
It is time to return a sense of reasonableness to ensure that injured
parties are compensated in a manner that protects all consumers and
America's competitiveness. This legislation is a very good start.
Mr. COSTELLO. Mr. Speaker, I rise today in strong opposition to the
product liability conference report. This bill effectively condones
egregious misconduct, carelessness, and greed of manufacturers which
produce and sell defective products. This bill makes it cost-effective
for some companies to put profits ahead of safe products. In my
opinion, Mr. Speaker, this is wrong. The unfortunate victims of the
repercussions of this legislation are the American consumers.
I object to the provisions in this bill which arbitrarily limit the
amount of punitive damages injured person may recoup when harmed by
faulty or dangerous products. Punitive damages should serve as a
deterrent to manufacturers who knowingly build and sell dangerous
products. Punitive damages force companies to fix dangerous products.
For example, punitive damages have been effective in making safer
children's pajamas and baby cribs, automobiles, and medical devices.
Without the threat of these large damage awards, manufacturers have an
incentive to settle with individuals hurt by dangerous products rather
than correcting their wrongs. We cannot actively condone and promote
such unconscionable business practice.
Proponents of this legislation argue for the need to limit punitive
damages to $250,000 because without such caps juries have awarded
ridiculously high punitive damage awards. This is simply not true. The
National Center for State Courts reports that only 600 of the 1 million
tort actions filed each year result in punitive damages. It should
further be noted that most of those are reduced on appeal. It is easy
to talk about the outrageous $2.7 million award to the woman who was
burned by the hot coffee at McDonald's. However, let us examine the
facts. This grandmother had to undergo extensive skin grafts for her
burns. McDonald's had ignored 700 prior complaints about too-hot coffee
and, in fact, the judge reduced the punitive damage award to $400,000.
How many burns must it take to have a company change its harmful ways?
The unfortunate fact remains that business usually comes down to
dollars. Mr. Speaker, it cannot pay to make dangerous products. I urge
my colleagues to defeat this bill.
Mrs. MEEK of Florida. Mr. Speaker, I ask unanimous consent to revise
and extend my remarks.
Mr. Speaker, I strongly oppose the so-called Common Sense Product
Liability Legal Reform Act.
There is no common sense in it.
What is the common sense of having Washington dictate to juries in
each of the 50 States how to decide a case where someone has been
injured by a dangerous product?
What is the common sense of having Washington dictate to the voters
and State legislatures in each of the 50 States? The States are

[[Page H3203]]

acting. For example, in 1988 Florida's voters rejected, by a vote of 57
percent to 43 percent, an amendment to the constitution that would have
arbitrarily capped noneconomic damages in all tort cases at $100,000.
Since 1986, 31 State legislatures have altered their product liability
laws.
The Republican majority preaches federalism and returning power to
the people. But its actions speak louder than its words. The Republican
leadership wants to override what the States are doing because it does
not like what the citizens of each State are deciding.
The Republican leadership preaches that individuals should be
accountable for their actions. Why not apply the same standard to
corporations that make and sell dangerous products?
Title II of this bill will prevent women who needlessly suffered from
faulty breast implants from suing the company that negligently supplied
the silicone gel. That is wrong.
Mr. Speaker, President Clinton is right when he said he will veto
this bill. This conference report favors corporate profits over the
health and safety of our citizens, and I urge my colleagues to vote
against it.
Mr. KLECZKA. Mr. Speaker, I rise in opposition to the conference
report on H.R. 956, product liability reform.
Last March, I voted in favor of this legislation because I believed
there were problems in our product liability system which needed to be
addressed. We have all heard stories of excessive awards, or juries
granting vastly different awards for similar injuries. However, the
conference report before us today and recent congressional action
radically shift the balance against the consumers.
To get a better understanding how this new version of product
liability reform would affect the buying public, I met with Mary
Griffin from Consumers Union. She discussed with me a number of the
conference report's provisions which would adversely impact consumers,
including the 15-year statute of repose, pre-emption of State laws more
favorable to plaintiffs, the combined effect of the bill and other
deregulatory efforts, and the 2-year statute of limitations on filing
lawsuits.
This legislation contains a number of provisions which, in my
judgment, would place unreasonable restrictions on individuals' ability
to receive compensation for injuries caused by faulty products. Taken
together, these provisions cause the product liability system to tilt
dramatically against consumers.
The bill establishes a false and unfair distinction between
individuals and corporations by limiting the ability of the individual
to collect damages in product liability cases. For example, the statute
of repose is set at 15 years for durable products like heavy machinery
and elevators. If a defective product is more than 15 years old, an
individual may not sue the manufacturer for injuries the product
caused. Companies, however, could still go to court to recover damages.
As a result, if a 16-year-old defective furnace explodes in a factory
and kills a worker, that individual's family cannot sue the furnace
manufacturer. The employer, however, is still permitted to take the
furnace company to court to collect compensation for lost production,
repairs, and so on.
The State pre-emption provisions of the conference report also
trouble me deeply. State laws more favorable to consumers, such as
higher or unlimited punitive damages, are pre-empted by this bill. At
the same time, if the State standards are stricter, they are allowed to
stand. This position is ironic to me given the current mood of Congress
in returning authority to the States. Evidently, the congressional
leadership is not confident that States will protect big business
sufficiently. Under this legislation, companies would not have to go to
the trouble of venue-shopping; Congress simply guarantees them the best
possible deal. These pre-emption provisions have earned the bill the
opposition of the National Conference of State Legislatures, the
Conference of Chief Justices, Mothers Against Drunk Driving, and many
other groups.

I am troubled by the apparent link between this product liability
reform bill and the current congressional efforts toward deregulation.
Congress is cutting the budgets of agencies like the Occupational
Safety and Health Administration and the Consumer Product Safety
Commission, which are responsible for overseeing the safety of products
in the workplace and the home. It simply does not make sense to cut
government safety oversight and, at the same time, slam the courthouse
door on consumers who are injured by defective products.
Finally, I must object to the 2-year statute of limitations inserted
by the conference committee. Under this provision, a person must file a
lawsuit within 2 years of discovering their injury. Mr. Speaker, many
of the ailments caused by these injuries are progressive in nature,
developing over time. A person cannot possibly file a lawsuit when they
have no idea how their condition may progress and what sort of medical
treatment they may require in the future.
For these reasons, I cannot support the conference report on H.R.
956. I urge my colleagues to vote ``no'' on this legislation.
Mr. PALLONE. Mr. Speaker, I am strongly opposed to H.R. 956, the so-
called Common Sense Product Liability Legal Reform Act.
H.R. 956 would pre-empt State law to require a $250,000 cap on
punitive damage awards. Punitive damages are not compensation to a
victim--through they serve that purpose--they are intended as
punishment to businesses that are negligent. Punitive damage awards
serve as a deterrent to bad actors in the market place who put
explosive water heaters or automobiles on the market. It forces
companies to be very careful and it forces them not to cut corners in
an attempt to make a few dollars more.
It does not take a degree in math to realize that a $250,000 punitive
damage award is hardly a deterrent to negligent Fortune 500 companies
that rake in hundreds of millions or even billions of dollars each
year. In fact, what this fixed figure does is allow companies to
carefully calculate the costs and benefits of being negligent. Right
now, because punitive damage awards are uncertain, the maker of a gas
heater that has a faulty valve has no idea how much the company will
lose as a result of successful suits against its faulty product. But
under this bill, all that manufacturer would have to do is figure out
how many of those heaters will explode, multiply by $250,000 and then
compare that with expected profits. If profits outweigh damage awards,
then you can bet that that deadly product will be out on the market.
This bill also does not contain language that I and 257 of my
colleagues supported to hold foreign manufacturers to at least the same
silly standards in this bill. So if you lose your sight, or your arms,
or your children because of some negligent U.S. manufacturer, you can
take some solace in the fact that you will get limited compensation,
and the manufacturer will have to pay a little bit of money for being
bad. But, if you lose a family member or your legs as a result of some
faulty product from a foreign manufacturer, you get nothing. That
company gets away scot-free, because H.R. 956 gives foreign
manufacturers a free ride on the health, safety, and welfare of
American consumers.
I also find it ironic that Republicans--who have harped on the issue
of States rights for many years--have put together a bill that tramples
on States rights. Currently, States enjoy the right to impose either
ceilings or floors on punitive damages; however, this legislation would
impose a ceiling while still allowing States to enact even lower damage
caps. A similar situation exists with regard to the statute of repose
which is capped at 15 years. In addition, a provision was recently
added to the bill that would pre-empt the law in numerous States
governing the liability of certain utilities, including gas pipelines.
The truth is time after time in this Congress, Republicans have put
special corporate interests ahead of the needs of the average American.
That is why I wrote to the President recently urging him to veto H.R.
956, and I ask that the text of my letter be made part of the Record.
This is just the latest in a series of efforts to undermine consumer
protection at the expense of the health and safety of the average
American. This undermining of American health and safety law represents
a sea change from the consensus that reigned here for many years. But
things have changed, and they have changed for the worse.
For example, early in the year, we passed a risk assessment bill
that, if enacted, would have effectively repealed current statutory and
regulatory standards designed to protect health, safety, and the
environment. That bill contained language that in a mindless, sweeping
way, would have wiped away decades of work done by Congress, and by
State and Federal courts.
And just today, as we were considering H.R. 965, Republicans were
telling us that the Consumer Product Safety Commission--which each year
helps prevent millions of injuries due to negligent manufacturers or
faulty products--had outlived its usefulness because the people were
well protected by our Nation's product liability laws.
Mr. Speaker, we need to ensure public safety. We need to protect
small children. But what we do not need is the H.R. 956 the corporate
dollars and sense Product Liability Reform Act. I am sure the President
will veto, and I hope my colleagues will sustain his veto and stop
Republicans from gutting consumer protections for the benefit of
corporate special interests.

House of Representatives,

Washington, DC, March 25, 1996.
Hon. William J. Clinton,
President of the United States,
Washington, DC.
Dear President Clinton: I am writing in support of your
announced intention to veto H.R. 956, the Common Sense
Product Liability Legal Reform Act.
H.R. 956 would pre-empt state law to require a $250,000 cap
on punitive damage

[[Page H3204]]

awards. Currently, states enjoy the right to impose either
ceilings or floors on punitive damages; however, this
legislation would impose a ceiling while still allowing
states to enact even lower damage caps. A similar situation
exists with regard to the statute of repose which is capped
at 15 years. In addition, a provision was recently added to
the bill that would pre-empt the law in numerous states
governing the liability of certain utilities, including gas
pipelines.
Also, it is clear that the threat of a $250,000 penalty is
not a sufficient deterrent to irresponsible behavior in many
instances. Nor is it adequate punishment for conduct that
results in death or serious injury such as the loss of a
limb. Coupled with the legislation's elimination of joint-
and-several liability for noneconomic damages, this bill, if
enacted, would definitively tip the balance against consumers
and in favor of those who manufacture and market defective
products.
Finally, it is important to note that this legislation is
not being considered in a vacuum. The Republican majority in
Congress continues to attack public health, safety and
consumer protection laws both through the authorization
process and by underfunding the agencies that enforce those
laws. Enactment of extreme legislation, like H.R. 956, taken
together with these other efforts will surely threaten the
health, safety and well being of all Americans.
For these reasons, I urge you to veto H.R. 956.
Sincerely,
Frank Pallone, Jr.,
Member of Congress.
The SPEAKER pro tempore. Without objection, the previous question is
ordered.
There was no objection.
The SPEAKER pro tempore. The question is on the conference report.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. HYDE. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 259,
nays 158, not voting 14, as follows:

[Roll No. 110]

YEAS--259

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

NAYS--158

Abercrombie
Ackerman
Andrews
Baesler
Baldacci
Barrett (WI)
Becerra
Beilenson
Bentsen
Berman
Bevill
Bishop
Bonior
Borski
Brown (CA)
Brown (FL)
Brown (OH)
Cardin
Chapman
Clay
Clayton
Clyburn
Coble
Coleman
Collins (MI)
Conyers
Costello
Coyne
Danner
DeFazio
DeLauro
Dellums
Deutsch
Diaz-Balart
Dicks
Dixon
Doggett
Doyle
Durbin
Engel
Evans
Farr
Fattah
Fazio
Fields (LA)
Filner
Flake
Foglietta
Frank (MA)
Frost
Furse
Gejdenson
Gephardt
Gibbons
Gilman
Gonzalez
Green
Gutierrez
Hastings (FL)
Hilliard
Hinchey
Hoyer
Jackson (IL)
Jackson-Lee (TX)
Jacobs
Jefferson
Johnson (SD)
Johnson, E. B.
Johnston
Kanjorski
Kennedy (MA)
Kennedy (RI)
Kildee
King
Kleczka
Klink
LaFalce
Lantos
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Luther
Maloney
Manton
Markey
Martinez
Martini
Mascara
Matsui
McCarthy
McDermott
McHale
McKinney
Meehan
Meek
Menendez
Miller (CA)
Mink
Moakley
Mollohan
Murtha
Nadler
Neal
Oberstar
Obey
Olver
Ortiz
Orton
Owens
Pallone
Pastor
Payne (NJ)
Pelosi
Pickett
Pomeroy
Poshard
Rahall
Rangel
Richardson
Rivers
Rose
Roybal-Allard
Rush
Sabo
Sanders
Sawyer
Schroeder
Schumer
Scott
Serrano
Skaggs
Skelton
Stark
Studds
Stupak
Tejeda
Thompson
Thornton
Thurman
Torricelli
Towns
Traficant
Velazquez
Vento
Visclosky
Volkmer
Ward
Waters
Watt (NC)
Waxman
Williams
Wilson
Wise
Woolsey
Wynn
Yates

NOT VOTING--14

Bryant (TX)
Collins (IL)
de la Garza
Eshoo
Fields (TX)
Ford
Fowler
Hayes
McNulty
Smith (TX)
Stokes
Torres
Weldon (PA)
Weller

{time} 1343

The Clerk announced the following pair:
On this vote:

Mrs. Fowler for, with Mrs. Collins of Illinois against.

Mr. EDWARDS changed his vote from ``nay'' to ``yea.''

____________________