[Congressional Record Volume 144, Number 21 (Thursday, March 5, 1998)]
[Extensions of Remarks]
[Pages E319-E320]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             PROTECT SMALL BUSINESSES FROM ABUSIVE LAWSUITS

                                 ______
                                 

                            HON. BOB INGLIS

                           of south carolina

                    in the house of representatives

                        Thursday, March 5, 1998

  Mr. INGLIS of South Carolina. Mr. Speaker, I rise today to introduce 
the Small Business Lawsuit Abuse Protection Act of 1998.
  American small businesses are under assault from excessive taxation, 
regulation and litigation. Particularly frustrating to many 
entrepreneurs is the fact that the current legal system makes them 
liable for accidents they do not cause and are powerless to prevent.
  In the 104th Congress, the House of Representatives overwhelmingly 
supported common sense reform of our legal system. Today, however, 
because a comprehensive reform package was not enacted, it is vitally 
important that we stand up for small businesses facing a barrage of 
frivolous lawsuits. In the absence of a comprehensive package, we can 
still achieve much needed reform by advancing legislation that will 
offer targeted and incremental reform, as we did in 1997 by enacting 
the Volunteer Protection Act.
  Mr. Speaker, I believe we can build on the momentum we started with 
the Volunteer Protection Act and provide similar protections to small 
businesses. The Small Business Lawsuit Abuse Protection Act of 1998 is 
simple and straightforward. It will offer three important protections 
to small businesses with 50 or fewer employees: Protects small 
businesses by allowing the imposition of punitive damages in any civil 
action only if the claimant establishes by clear and convincing 
evidence that the conduct carried out by the defendant through willful, 
misconduct or with a conscious, flagrant indifference to the right or 
safety of others was the proximate cause of the harm that is the 
subject of the action; protects small businesses by limiting punitive 
damages to the lesser of either two times the total amount of economic 
and non-economic losses or $250,000; and protects small businesses by 
holding them liable in an amount that is proportionate to the degree of 
harm for which they are responsible.
  A broad and bi-partisan consensus exists on the need to protect 
America's small businesses from abusive litigation. This legislation is 
supported by the United States Chamber of Commerce, the National 
Restaurant Association, National Small Business United and the National 
Federation of Independent Business.
  Mr. Speaker, I encourage my colleagues to give this measure swift and 
favorable consideration.

[[Page E320]]


                              National Restaurant Association,

                                Washington, DC, February 10, 1998.
     Hon. Bob Inglis,
     House of Representatives,
     Washington, DC.
       Dear Representative Inglis: The National Restaurant 
     Association--the leading representative for the nation's 
     restaurant industry which employs more than nine million 
     Americans--strongly applauds your effort to protect small 
     businesses from litigation excesses.
       Many small businesses, particularly restaurants, have 
     become vulnerable to excessive litigation in recent years. 
     Indeed, our members are all too familiar with the rising 
     costs of liability insurance and with the reality that a 
     single frivolous lawsuit can be enough to drive a restaurant 
     out of business. We strongly support the Small Business 
     Lawsuit Abuse Protection Act of 1997 and believe it will go a 
     long way toward curbing lawsuit abuse.
       Because of the fear of unlimited punitive damages when 
     faced with a claim, many small business owners settle out of 
     court for significant award amounts, even if the plaintiff's 
     claim is frivolous and unwarranted. Plaintiffs' attorneys 
     take advantage of a small business owner's fear, pursuing 
     claims against businesses that they know will have 
     ``settlement value.'' The Small Business Lawsuit Abuse 
     Protection Act limits the amount of punitive damages that may 
     be awarded against a small business. In any civil action 
     against a small business, punitive damages may not exceed the 
     lesser of two times the amount awarded to the claimant for 
     economic and noneconomic losses, or $250,000. Putting a cap 
     on the amount of punitive damages would help to reduce 
     frivolous suits and would enable businesses to obtain more 
     equitable settlements and avoid costly and unnecessary legal 
     fees.
       In addition to limiting punitive damages, we are pleased 
     that your legislation includes a provision to limit several 
     liability for noneconomic damages. Under joint and several 
     liability, small business owners are often dragged into 
     lawsuits with which they had little, or nothing, to do. The 
     Inglis Small Business Lawsuit Abuse Protection Act takes an 
     important first step by limiting the liability for 
     noneconomic loss to the proportion of the small business' 
     responsibility. The limitation on several liability would 
     apply in any civil action against a small business.
       Representative Inglis, we appreciate your continued 
     commitment to small business and to legal reform. We look 
     forward to working with you to pass the Small Business 
     Lawsuit Abuse Protection Act.
           Sincerely,

                                             Elaine Z. Graham,

                                            Senior Vice President,
                              Government Relations and Membership.
                                              Christina M. Howard,
                                Senior Legislative Representative.


     
                                                                    ____
                                        Chamber of Commerce of the


                                     United States of America,

                                Washington, DC, February 11, 1998.
     Hon. Bob Inglis,
     House of Representatives,
     Washington, DC.
       Dear Representative Inglis: The U.S. Chamber of Commerce--
     the world's largest business federation, representing more 
     than three million businesses of every size, sector and 
     region--continues to be a strong advocate of tort reform. 
     Indeed, American consumers and businesses squander more than 
     $150 billion annually in excessive litigation cost and higher 
     liability insurance premiums. That's why we are pleased to 
     support your legislation as another step forward in providing 
     relief from the litigation crisis. We urge Congress to build 
     on the momentum created by the enactment last year of the 
     Volunteer Protection Act by passing your bill, the Small 
     Business Lawsuit Abuse Protection Act.
       Small business, the backbone of our nation's economy, are 
     particularly vulnerable to excessive litigation. Small 
     business owners too often face the practical equivalent of a 
     death sentence for their business, with consequent loss of 
     jobs and needed goods and services. The Small Business 
     Lawsuit Abuse Protection Act will level the playing field for 
     small businesses by providing reasonable and well-balanced 
     reforms.
       The bill addresses the lottery aspect of litigation in two 
     major ways: (1) by limiting punitive damage awards to the 
     lesser of $250,000 or two times compensatory damages, and (2) 
     by requiring the claimant to prove by clear and convincing 
     evidence that the harm was caused by the small business with 
     a conscious, flagrant indifference to the rights or safety of 
     the claimant. In addition, for noneconomic damages, the bill 
     limits liability to the proportion of the small business' 
     responsibility for causing the harm.
       The Chamber greatly appreciates your continued leadership 
     on liability reform issues and support of small business 
     issues. We look forward to working with you and your 
     colleagues to pass the Small Business Lawsuit Abuse 
     Protection Act.
           Sincerely,
                                                  R. Bruce Josten.


     
                                                                    ____
                               National Small Business United,

                                Washington, DC, February 19, 1998.
     Hon. Bob Inglis,
     House of Representatives,
     Washington, DC.
       Dear Representative Inglis: National Small Business United 
     (NSBU), the oldest small business advocacy organization 
     congratulates you on the introduction of the Small Business 
     Lawsuit Abuse Protection Act. Having reviewed the content and 
     intent of the proposed legislation, NSBU--on behalf of its 
     65,000 members--offers our full support
       Lawsuit abuse is a serious issue for all of America's 
     businesses, but especially troubling for the nation's 22 
     million plus small businesses. Small businesses generally do 
     not have the legal resources to combat the onslaught of 
     frivolous lawsuits that have an unnerving grip on this 
     country. Your bill set in place common-sense criteria that 
     would protect millions of businesses from frivolous lawsuits 
     while not inhibiting legitimate litigation.
       A key component of the bill is your efforts to limit 
     punitive damages at reasonable levels and straight-forward 
     reforms to joint and several liability. NSBU has been calling 
     on Congress to act on these very issues for many years.
       By modeling proven and accepted legislation like the 
     Volunteer Protection Act of 1997, the Lawsuit Abuse 
     Protection Act is critical and necessary litigation reform 
     for small business. Representative Inglis, your bill--with 
     its bipartisan support--is welcomed by NSBU and our members.
           Sincerely,
                                                   Todd McCracken,
                                                        President.


     
                                                                    ____
                                            National Federation of


                                         Independent Business,

                                    Washington, DC, March 5, 1998.
     Hon  Bob Inglis,
     House of Representatives,
     Washington, DC.
       Dear Representative Inglis: On behalf of the 600,000 small 
     business owners of the National Federation of Independent 
     Business (NFIB), I am writing to commend you for your efforts 
     to put an end to abusive litigation and restore common sense 
     to our civil justice system.
       Legal reform is a small business issue and was listed as a 
     top priority at the 1995 White House Conference on Small 
     Business. The frequency and cost of litigation have been 
     exploding at an alarming rate. Our civil justice system is 
     becoming increasingly inaccessible, unaffordable and 
     intimidating, not to mention unfair. It is now so strained 
     that it threatens not only the fair judicial process but also 
     has become a huge disincentive to business start-ups. The 
     cost and availability of liability insurance was listed as a 
     top concern to small business owners in a survey conducted 
     recently by the NFIB Education Foundation.
       Small business owners now see the legal system as a ``no 
     win'' situation. If sued--even if completely innocent--it 
     means either a costly, protracted trial or being forced into 
     an expensive settlement to avoid a trial. Thousands of small 
     business owners across the country are having their business, 
     their employees, and their future put at risk by a legal 
     system that is out of control.
       Small business owners support any measures that inject more 
     fairness into our civil justice system and allow for the 
     affordable pursuit--or defense--of legitimate cases. Your 
     legislation, the Small Business Lawsuit Abuse Protection Act 
     of 1997, is an important vehicle for those goals. With our 
     courts facing an extraordinary backlog with delays up to 
     several years in some jurisdictions, your bill will 
     discourage frivolous or malicious cases, and help streamline 
     and balance the system.
       Thank you for your continued support of small business.
           Sincerely,

                                                   Dan Danner,

                                                   Vice President,
                                   Federal Governmental Relations.