[Congressional Record Volume 144, Number 88 (Tuesday, July 7, 1998)]
[Senate]
[Pages S7526-S7534]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PRODUCT LIABILITY REFORM ACT OF 1997--MOTION TO PROCEED
The PRESIDING OFFICER. The question is on the motion to proceed. Is
there further debate on the motion?
Mr. THURMOND addressed the Chair.
The PRESIDING OFFICER. The Senator from South Carolina is recognized.
Mr. THURMOND. Mr. President, I ask unanimous consent to speak for
twelve minutes as in the morning hour.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
(The remarks of Mr. Thurmond pertaining to the introduction of S.
2266 are located in today's Record under ``Statements on Introduced
Bills and Joint Resolutions.'')
Mr. THURMOND. I yield the floor, Mr. President.
Mr. GORTON addressed the Chair.
The PRESIDING OFFICER. The distinguished Senator from Washington is
recognized.
Mr. GORTON. Mr. President, is the business before the Senate the
motion to proceed to S. 648?
The PRESIDING OFFICER. The Senator is correct.
Mr. GORTON. Mr. President, S. 648 is a bill relating to product
liability reported about 1 year ago by the Senate Commerce Committee.
That bill is identical or nearly identical to the product liability
legislation that passed both Houses of Congress in the last Congress
and was vetoed by President Clinton.
As and when the motion to proceed is agreed to, Senator Rockefeller
and I will propose an amendment in the nature of a substitute on the
same subject, product liability, somewhat more modest in scope than the
bill that was vetoed by the President. It is the result of more than 1
year of careful and detailed negotiation involving myself, other
members of this party, Senator Rockefeller and various of his allies,
and the Office of the President of the United States.
The willingness of the President of the United States to sign a
product liability bill in the form of this substitute is due to the
untiring and diligent efforts of the junior Senator from West Virginia,
who has literally been tireless in pursuing a solution to a question
that involved his time and my time for well over a decade, and a
willingness to pursue it in a White House from which a veto emanated
almost 2 years ago.
The bill, of course, is not as broad as the one that was then vetoed
or the bill that was passed out by the Commerce Committee.
Nevertheless, it does bring a significant degree of rationality and
predictability to product liability litigation. It removes a number of
severe inhibitions that stand in the way of research and development
for new and approved products in the commerce of the United States.
That may be its most important single feature, because we have an
economy in which litigation has provided a severe inhibition to the
improvement of our products, to the development of new products.
Perhaps the single most vivid illustration of the value of product
liability litigation is in the field of piston-driven aircraft, a
subject with which the Presiding Officer is more than familiar, where a
limitation on product liability litigation, a modest limitation, passed
half a dozen years ago, has resulted in the recovery of an industry
that had almost disappeared in the United States of America. So we are
not speaking about a theory when we talk about the inhibitions placed
on various forms of business enterprise, industrial and otherwise, by
the present state of the law varying from State to State through 50
States and several other jurisdictions.
While I would prefer broader product liability legislation, and while
I believe the Senator from West Virginia might prefer it to be somewhat
broader than it is at this point, this legislation nevertheless is good
for the economy of the United States, and it is good for those who are
injured by the actual or real negligence of manufacturers or sellers.
It does, however, say that in the case of the seller, the seller is
only going to be liable when the seller itself is negligent. It does
put some rational basis on the award of punitive damages with an actual
cap on punitive damages for modest and for small businesses. In that
regard, it sets a uniform national standard for punitive damages in
those States that allow punitive damages--my own, for example, does
not--raising the bar to require clear, cogent, and convincing evidence
for the award of punitive damages, a higher standard than exists in
most States at the present time, with a cap on punitive damages for
small businesses.
The National Federation of Independent Business has just come out
with a study as to who is impacted by that, and while the definition of
a small business in this bill is 25 employees or $5 million a year in
sales, their table shows that 73 percent of all the manufacturers in
the United States have fewer than 20 employees, 88 percent of all the
retailers in the United States have fewer than 20 employees, and 85
percent of the wholesalers in the United States fall within the same
category. So, for the vast majority of business enterprises in the
United States, there will be a cap on punitive damages that is
realistic in nature and is something that the business might
conceivably be able to pay, rather than simply being driven out of
business by such a verdict.
With respect to product sellers, it simply states that the product
seller avoids liability if the product seller is not itself negligent
or otherwise liable. Manufacturers, under those circumstances--since
they can't be joined in litigation with the product seller--can almost
always achieve what amounts to fraudulent joinder and thus get
diversity of citizenship, a diversity of citizenship that allows them
to get into a Federal court rather than into State courts where the
great majority of notorious and unwarranted verdicts in product
liability cases have taken place in the past.
Product manufacturers have been frustrated by the unavailability of a
``misuse'' defense. They have that, to a greater extent, as a result of
this bill. The bill includes a statute of repose, a very modest and
narrow statute of
[[Page S7527]]
repose but a statute of repose nevertheless, one of 18 years for
durable goods used in the workplace where the plaintiff already has
available to that plaintiff workers compensation or industrial
insurance.
Finally, a strong biomaterials bill, particularly important, in my
view, as the materials that go into implants--for example, heart
monitors and the like--are often very inexpensive. They are various
forms of plastic tubing and the like. Yet the biomaterials manufacturer
almost always finds itself as a defendant in a product liability suit
directed primarily at the manufacturer or the assembler of the implant.
And the cost, in the case of many relatively large corporations, of
successfully defending lawsuits based on those implants literally
exceeds the total sales price of the materials that they have sold that
go into those items. So a rational manufacturer of the materials that
go into various very important cutting-edge medical devices--the
rational manufacturer simply won't sell them. There is not much point
in selling $100,000 worth of materials in a year if it is going to cost
you $1 million a year successfully to defend yourself against lawsuits
directed primarily at the person who has used the materials that you
have manufactured.
Some of those companies have continued in the business just as a
matter of being good citizens, but we cannot call on them or believe
that they will continue to do so for an extended period of time. To the
best of our knowledge, we do not have any who have actually lost these
lawsuits, but the defense against these lawsuits is important in any
event.
We have a system that is sick, a system in which the greater
percentage of the money that goes into product liability litigation
goes to lawyers, insurance companies, insurance agents and the like,
and only a relatively modest portion of it ever gets to the actual
victims of actual negligence. We have a situation in which there are
highly publicized and outrageously large punitive damage awards in a
handful of States of the United States, but where, in the vast majority
of cases in which some at least modest compensation is due, the
compensation is less than actual damages.
This bill is a modest attempt to improve the compensation system for
defective products in the United States and it modestly improves it. It
is a modest move in the direction of uniformity. It certainly doesn't
create uniformity everywhere, but at least it is a modest step in that
direction. And it is a significant step in the direction of encouraging
companies to continue to be at the cutting edge of the development of
new products, new products used both in the workplace and by
individuals all across the United States--the kind of innovation and
development which have marked the United States from the very beginning
of our history and of our economy, and the kind of innovation and
leadership in the world economy that is vitally important. So I hope we
will be soon able to move to the bill, to pass the bill in the form as
it has been worked out by the Senator from West Virginia and myself
with the cooperation of the White House, its passage by the House, and
its signing by the President of the United States.
I dare not say in a body like this that this issue has occupied us
for more years than any other in which there has not been any actual
legislation passed, but if it doesn't rank No. 1 in that score, it
ranks very, very close to No. 1. We now have a real opportunity, if we
are constructive, to see to it that we are modestly successful, and I
hope in the course of the next week or 10 days that is exactly what we
will do.
The PRESIDING OFFICER. The distinguished Senator from West Virginia
is recognized.
Privilege of the Floor
Mr. ROCKEFELLER. Mr. President, I ask unanimous consent that Rosalind
Wood, of my staff, be accorded floor privileges for the duration of the
consideration of the pending product liability bill.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ROCKEFELLER. Mr. President, here we are again. As always, I am
very proud to be standing across the aisle from my dear colleague,
Senator Gorton. Senator Lieberman is very much a part of this. There
are many who are very much a part of this.
I can report that we are in a position, as the Senator from
Washington has indicated, to pass and to have signed a product
liability bill for the first time in my living memory, at least, in the
Senate. This is, I guess, my 11th year on this subject.
We have a chance to have the bill signed, however, by the President,
only if we maintain the bill in its current very limited form. I,
obviously, congratulate Senator Gorton--who does a prodigious job in
all events--on this subject and many others, but he has also been
extraordinary in the way that he has accepted and rejected and
negotiated not only with myself, but also with the White House in his
discussions with the majority leader to, in effect, finally bring a
product liability bill to the floor which actually can pass, and if it
does pass, will be signed by the President, provided that it is in its
current limited form.
It is a good feeling to have a bill that can be signed. I am much
more accustomed to being here promoting a bill that I know would be a
good bill, but, on the other hand, which I know in the end isn't going
to be signed. When you know something is going to be signed, that says
two things: One is that you are dealing with some folks in the White
House who have been very honorable and consistent; and, second, you
have a very limited bill.
The Senator from Washington used a much more tactful phrase. He said
a ``somewhat more limited bill.'' I will be more direct and say that it
is a very much more limited bill. The logic for that is very simple. If
it was other than its current form, we might be able to pass it, but it
would not be signed. I just somehow fail to see the logic or the wisdom
of, once again, passing a bill that is vetoed. I don't see the point in
that. It takes up a lot of our time.
We have all worked at this for years and years. If we are going to do
something, let's get what we can. I think that is one of the lessons we
learned from health care reform--one which I myself did not learn
easily--that when we try to do the whole job, or at least a large chunk
of the job, the Congress is not willing to accept it. I now refer to
myself on health care reform as a ``raging incrementalist.'' I have had
to accept that position. On product liability reform, I now think the
more limited approach makes a great deal more sense.
I say again to my colleagues and those who work with them, that when
I say there is not a lot of room for deviation in this bill, the
Senator from West Virginia really means that. This is a process in
which I worked for a very long period of time negotiating with the
White House, knowing that it was fruitless to come forward with a bill
which would not meet with their approval. In essence, we had to look at
all of those things which were displeasing to the White House last year
when the veto took place and then simply excise all of those or
anything related to those, and proceed to craft a bill which did not
meet their objections. They were very tough about it, but they were
very fair about it. They were very consistent. I really respect them
for that. I can name the people who did that, and I will at the
appropriate time, but I really honor them for their consistency and
their willingness to let it be known where they stood.
Then, my obligation is to let my colleagues know that this is not one
of those bills where we can come in and do all kinds of things to it or
else it will be vetoed, and only the President holds the pen. He always
does, but sometimes there is more room for movement. On this one, I
think there is very little room for movement.
Senators know our legislative calendar is growing very short. That is
why I have been so adamant about urging floor consideration for the
reform agreement that has been reached with the White House and which
will be signed if passed. Senator Gorton and I recently completed work
on some technical changes which the White House had agreed to accept
but, again, technical, no substantive changes. No substantive changes
were contemplated by the White House; no substantive changes were
agreed to by the White House, only some technical changes.
Why? Because they are the controlling element here. They are the ones
who have the pen. They can veto it, or they can sign it. Therefore,
their leverage is considerable. I can pretend we
[[Page S7528]]
are otherwise, but it doesn't do me much good. That is the case.
Therefore, if we are going to have some form of bill, then let's
proceed to get what we can. That is the way Senator Gorton and I have
proceeded on this bill.
I reemphasize to my colleagues that the White House has publicly
committed to signing this bill if it remains in this form. That will
grate on some of my colleagues. I have also had private assurances this
bill will be signed if it is unamended. It is now up to the full Senate
to decide if they want a campaign issue or if they want to pass a
moderate, balanced, responsible reform bill that helps small business,
product sellers, renters, lessors, as well as consumers, but which, in
the end, is a fairly modest bill.
My colleagues know there are many of us who have worked very hard to
gain a meaningful and fair reform. I have taken on this task, not
because I am a lawyer, which I am not; not because I am heavily
involved in following these matters in the trade press, but for a very
simple reason. And that is I genuinely believe that in an international
global economy, we have to keep up with the competition.
I just returned from 10 days in China with the President. It is just
absolutely stunning to see what is going on there, the way that
economy, in spite of the Asian troubles, is leaping ahead. This is true
all over Asia. The Asia crisis is going to pass. It is going to be a
couple of years. It is going to pass. They are going to come back. The
Asian countries are predestined to be successful economically.
All the European Union nations have a single product liability law. I
know, just as a matter of common sense, that when something is
manufactured in a State, if it is an average State, 70 percent of the
manufactured products will be exported on an interstate, if not
international, basis. Therefore, State law, having had meaning at some
point, has much less meaning when it comes to interstate commerce, much
less international commerce. Again, it is not just a question of the
laws, but it is also a question of are we being competitive or not.
What is the added cost for liability insurance to our products as we
compete in Europe and Japan now, for example, which has also taken on a
single national uniform product liability law.
All of these things are extremely important. I also think having 50
States with separate laws is confusing. It means that people forum
shop. They go to the State where they can get the best deal. I think it
is true--I am not sure it is true this year--but it is true that last
year, 85 percent of all of the punitive damages awarded in this country
came out of Alabama, Texas, and California. That means that people knew
where to go to get into a court system which would, in a sense, respond
sympathetically. I don't think that is a wise way to carry on the
business of our country or the commerce of our country.
All of these States having different laws is very, very complex and
very difficult in allowing us to compete, and in fact, in even allowing
us to adjudicate in product liability cases where people have, in fact,
been injured and do, in fact, deserve payment and, in some cases,
punitive damages.
The plain fact to this Senator's way of thinking is that our current
system is simply unable to handle this problem in the modern
marketplace and much less--or more so, really--in the global
marketplace. States cannot deal with product liability problems that
occur out of their borders. They can't do that.
In contrast to the circumstances that existed when our tort system
was evolving, most goods, as I indicated, move outside of the State.
That is important. When our tort system was evolving, the States could
handle it. The States did handle it. Exporting from McDowell County,
WV, to Braxton County, WV, was the way life went on some time ago. Now
if you export to Ohio, much less the State of California, much less
Indonesia, Japan, or China, you have to be much more sophisticated in
the way you handle these problems. I think a Federal product liability
law does make sense. That does not mean in all respects, and this bill
does not do that in all respects, and I think that is an important
point.
I was a member of the National Governors' Association for 8 years,
and, like other companies, I was protective of States rights on all
issues. But they have fairly consistently recognized the importance of
establishing a Federal statute on product liability. I think that is
very significant and deserves the consideration of my colleagues.
There is another bipartisan group called the American Legislative
Exchange Council, a group of over 3,000 State legislators from all over
the country. They have repeatedly urged Congress to enact Federal
product liability reform--Federal product liability reform.
The bill we are proposing would address the problems in our product
liability reform system which we know exist. It would provide increased
predictability for business. It would improve the system for consumers
at the same time. Is it gigantic on any side? No, because it is not a
big bill. That we constantly bear in mind, because if it were a bigger
bill, it would not get signed. We want to get the bill signed. This is
not the ``nose under the tent'' theory. It simply would be nice to get
some sort of uniform Federal standards on product liability going.
Under today's product liability system, companies have a disincentive
to invent, to innovate. That means there are a lot of beneficial
upgrades that are not done. People do not undertake certain kinds of
biomedical research or pharmaceutical production or other things just
because they fear the result of getting sued. It isn't really so much
the number of suits. Those who oppose this Senator's position are
always talking about, ``The Senator from West Virginia is always
talking about the explosion of litigation.''
I have never talked about explosion of litigation. There is no
explosion of litigation. But the psychological factor of a company
sitting down and trying to decide whether it will go into a line of
research and development which could lead to a cure for some disease,
the present laws pull them back. Look at Viagra. It now has had about
300 deaths. I don't know what will happen with Viagra. Maybe they
deserve to get sued, maybe they don't, I don't know. But you can see
when people are looking at doing some kind of research that they want
to pull back. In the case of Viagra, maybe they should have in the
first place. Or maybe their warnings were not adequate.
I am not here to defend Viagra, as I was never here to defend Ford
Pinto--that was always the example. Ford Pinto is undefendable. They
should have been sued, they were sued, and that was the right thing to
do.
Keeping products off the market that can do remarkable good for
people is not in the American tradition; protecting consumers is in the
American tradition. But we have always managed to find a balance where
we both protect consumers and we move forward, strongly, in terms of
innovation. We have always been the country of basic research. Other
countries have been the countries of applied research. Basic research
is not undertaken unless you can foresee it ending up someday in the
marketplace. If you don't, then you don't do it.
We can help all of this by establishing a set of Federal rules for
product liability cases. The compromise bill that Senator Gorton and I
were able to work out with the White House, and which was introduced on
June 25, creates a national framework for a more rational process for
litigation regarding products, and products alone. If a manufacturer
was, in fact, responsible for injury, it would remain accountable. If
the seller of a product failed in its responsibility, it would be held
accountable. The legislation is limited, meaningful, and signable.
I ask unanimous consent a section-by-section analysis of the bill
appear in the Record at the conclusion of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 1.)
Mr. ROCKEFELLER. I will briefly run through a list of the bill's
major provisions for my colleagues in the hope that some of them and
some of their staff they work with are listening.
No. 1, the bill, as the Senator from Washington indicated, protects
product sellers, renters, and lessors from suits that should be brought
against manufacturers, not the product sellers, renters, or the
lessors. Product sellers, renters, or lessors will be held liable
[[Page S7529]]
for their own negligence, make no mistake. For their own negligence
they will be held accountable, or their failure to comply with express
warranty, but not for the negligence that is beyond their own control.
That comports, it seems to me, with common sense.
The product seller, renter, or lessor remains liable if the
manufacturer cannot be brought into court. So, again, a consumer
protection. Or they remain liable if the manufacturer is unable to pay
judgments. All of this is in order to ensure that consumers retain a
source of recovery. So, product sellers, renters, or lessors, et
cetera, are protected, but they are not protected in the ultimate
sense. That is, if manufacturers don't show up, are broke, can't pay,
they--the consumer, injured consumer--will still get recovery.
No. 2, this bill will create a defense in a product liability case if
a plaintiff is found to have been under the influence of illegal drugs
or alcohol and was responsible for more than 50 percent of his or her
own injuries. That has always struck me as a commonsense idea. We
should help discourage abuse of illegal drugs or alcohol. Maybe it
will, maybe it won't. But in any event, if people are responsible for
their own use of alcohol or drugs and responsible for more than 50
percent of their injury, there should be an absolute defense against
that.
No. 3, if a claimant's harm is attributable to the misuse or
alteration of a product, defendant's liability will be reduced by
whatever extent the harm is due to that misuse or alteration.
No. 4, consumers will have 2 full years to file a complaint from the
time he or she discovers or should have discovered the harm and--this
is new--the cause of the injury. A lot of States have the harm, the
discovery of the harm, but there are not as many that have the cause.
So, this is very, very strongly in favor of the consumer. This is
particularly true--on the veterans committee, I have worked very hard
on a variety of issues, including the Persian Gulf War Syndrome, all
kinds of things in the world we are moving into, like toxic harm, et
cetera, where the cause becomes much more important, because often
things don't show up until much later.
No. 5, the bill's 18-year statute of repose applies to only durable
goods in the workplace, and only in those situations which are covered
by State worker compensation laws, and specifically excludes injuries
caused by toxic harm. I just mentioned toxic harm. Well, toxic harm has
no place, there is no remedy for it, in this bill. This means that only
people who can recover for their injuries under State worker
compensation laws are subject to the statute of repose. The statute of
repose does not begin until after the product's express warranty
expires. This provision is good for consumers, and, frankly, it is good
for business. Businesses are relieved of unlimited liability, and
consumers have a source of recovery.
No. 6, alternative dispute resolution--this is not the most potent
part of the bill that I can imagine--we have an alternative dispute
resolution that avoids protracted legal battles. That is encouraged
under this bill. Either party can request alternative dispute
resolution using existing State ADR procedures.
No. 7, one of the main provisions of this bill limits punitive
damages for truly small businesses (under 25 employees with $5 million
in revenue), individuals (with incomes of $500,000 or less), and local
governments. It creates a Federal standard for awarding punitive
damages which are reserved for the most egregious cases--clear and
convincing. We simply take the Federal standard, uniform standard, and
put it, frankly, where I think most people agree it should be. The bill
sets the limit for these punitives for small businesses to $250,000, or
two times the economic and noneconomic damages. This limit means that
businesses will still have to pay punitives, should that be the
judgment of the court, but they are less likely to be bankrupted by the
cost of the penalty. This bill does not create punitive damages in
States that do not permit punitive damages. That needs to be said
clearly. If the State does not have it, this bill will not create it.
The bill includes a workplace safety incentive by affecting an
employer's right to recover worker compensation benefits from a
manufacturer whose product harms a worker if the employer's fault was a
substantial cause of the injury.
Finally, Senator Lieberman's biomaterials access assurance bill is
the second title of product liability reform. I should say, in all due
candor, this was something that was worked out between the White House,
Senator Lieberman, and other parties. I concentrated, as did Senator
Gorton, on the products aspect of this. Senator Lieberman did the
biomaterial section of that and did a very good job. The White House
has accepted it and it is part of the bill. This provision is designed
to alleviate the shortage of certain biomaterials due to biomaterials
suppliers who are increasingly unwilling--as those who would wish to do
basic research--to supply products that produce very little revenue,
but which would have high litigation costs attached to them. It should
ensure the availability of life-saving and life-enhancing medical
devices.
Specifically, the provision will protect suppliers of biomaterials by
allowing them to seek early dismissal from claims against a medical
device manufacturer, so long as the supplier did not manufacture or
sell the device and met its contract requirements.
In sum, then, Mr. President, this bill, I think, is balanced in its
treatment of consumers and business. Again, it is not a large bill. I
think it should have strong, bipartisan support.
I believe in the need to develop a Federal-level framework. To me,
the free flow of interstate commerce demands some form of a rational
and fair approach. I think that involves, to a certain extent, Federal
standards. We are, after all, in a global economy, and the world has
changed almost totally in the last 10 years as regards to this product
liability subject, and the need for the legislation is greater than
ever.
I am not naive. As we head into this debate, there is long
experience--over a decade--of filibusters and vetoes on products
legislation. That is why I am so pleased that we have succeeded in
negotiating a new bill with the President and his team. This bill has a
firm commitment from the White House that it will be signed if it is
unaltered. My colleagues do not like to hear the phrase ``if it is
unaltered.'' The Senate does have a right to work its will, but if the
Senate works its will and the White House is displeased, of course,
there will be no bill. That is a choice the Senate will have to make.
So to hit the highlights again--one gives this speech only once
during the course of debate--we would gain strong protections for
product sellers, renters, lessors and suppliers; strong protections for
biomaterials suppliers; uniform Federal statute of limitations and
workplace durable goods statute of repose; uniform Federal rules on
alcohol and drugs; uniform Federal rules on misuse or alteration;
uniform Federal legal and evidentiary standard for punitive damages--
the key word being ``uniform''--strong protections for small business
from punitive damage awards; States' advances on joint and several
liability determination would remain in place; more uniform rules of
preemption (punitive damages and statute of repose changes). And then,
as I indicated, there are incentives to resolve litigation, although
they are not mighty in their nature. Nevertheless, they are there.
I am fully aware that some have reservations about the limited nature
of the product liability compromise that we secured with the White
House, believing that it does not go far enough. That is a view that in
other places or at other times, perhaps, might have my concurrence. But
we are not in other places and in other times; we are here and now. It
is not my view that we will move forward toward enactment of anything
if we make changes to this bill.
For the Record, let me acknowledge that we will face amendments that
go beyond the compromise that Senator Slade Gorton and I have now
secured with the White House. That was true in the last attempt to move
product liability reform, and it resulted in--guess what? A veto, and
no law. Those expansions will not have my support. I will not support
them, and they cannot be signed into law.
As I have stated many times before, I don't intend to support product
liability reform provisions for the sake of doing it, so that I can say
I did it. I want to see a law. I want to see something come from this
process after all
[[Page S7530]]
these years. As the Senate proceeds with debate on product liability
reform, I sincerely hope and believe that the majority leader will take
advantage of what I consider to be virtually the last opportunity to
enact limited Federal reform of our product liability laws in the
foreseeable future.
Mr. President, that is all I have to say at the present time. I thank
the Presiding Officer and yield the floor.
(Exhibit 1)
PRODUCT LIABILITY REFORM ACT OF 1998
Section-by-Section Summary
1. Short Title; Table of Contents.
2. Findings; Purposes.
Title 1--Product Liability Reform
101. Definitions.
102. Applicability; Preemption.
The Act covers product liability actions brought in federal
or state court on any theory for harm caused by a product,
but excludes actions for: (i) commercial loss; (ii) negligent
entrustment; (iii) negligence per se concerning firearms and
ammunition; (iv) dram-shop; (v) harm caused by a tobacco
product; or (vi) harm caused by a silicone breast implant.
State law is superseded only to the extent it applies to a
matter covered by the Act. Matters not governed by the Act,
including the standard of liability applicable to a
manufacturer, continue to be governed by applicable federal
or state law.
103. Liability Rules Applicable to Product Sellers, Renters,
and Lessors
Product sellers, rentors, and lessors will be liable only
for their own failures and misdeeds: a product seller, rentor
or lessor is liable if the harm that is the subject of the
action was caused by (i) his failure to exercise reasonable
care, (ii) his intentional wrongdoing, or (iii) the product's
failure to conform to his express warranty; failure to
inspect the product will not constitute failure to exercise
reasonable care if there was no opportunity to inspect the
product or an inspection wouldn't have revealed the problem;
product sellers are liable as manufacturers if the
manufacturer is judgment-proof or not subject to service of
process, in which case the statute of limitations is tolled
until judgment is entered against the manufacturer; and
rentors and lessors are not liable solely by reason of
ownership.
104. Defense Based on Claimant's Use of Alcohol
It is a complete defense in a product liability action if
the claimant was under the influence of drugs or alcohol and,
as a result, was more than 50 percent responsible for the
harm.
105. Misuse or Alteration.
Damages for which a defendant is otherwise liable under
state or federal law are reduced in proportion to the
percentage of harm caused by misuse or alteration of a
product if such misuse or alteration was in violation of a
manufacturer's warning or involved a risk that was or should
have been known by an ordinary person who uses the product.
Such damages are not reduced by the percentage of harm
attributable to an employer who is immune from suit.
106. Statute of Limitations.
The Act creates a uniform, 2-year statute of limitations--
product liability claims in all states must be filed within 2
years of the date the harm and the cause of the harm was, or
reasonably should have been, discovered.
107. Statute of Repose for Durable Goods Used in a Trade or
Business.
The Act creates a uniform 18-year statute of repose for
harm (other than toxic harm) caused by durable workplace
goods where the claimant has workers compensation coverage,
with exceptions for general aviation, transportation of
passengers for hire, and products with an express warranty of
safety of life expectancy beyond 18 years.
108. Transitional Provision.
Claimants have a full year after enactment to bring a
claim, regardless of the impact of the new federal statute of
limitations or statute of repose.
109. Alternative Dispute Resolution.
Claimants and defendants are encouraged to use voluntary,
non-binding ADR as available under state law.
110. Punitive Damages Reforms
Uniform Standard. The Act creates a uniform legal and
evidentiary standard for punitive damages--the claimant must
establish by clear and convincing evidence that the harm was
the result of conduct carried out with a conscious, flagrant
indifference to the rights or safety of others. Punitive
damages are explicitly not created in states that do not
otherwise allow them.
Bifurcation. Any party can request that punitive damages be
determined in a separate proceeding and that evidence
relevant only to the punitive damages determination not be
introduced in the underlying action.
Small Business Limit. Punitive damages awards against small
businesses may not exceed 2 times the amount of compensatory
damages or $250,000, whichever is less. Small business is
defined to cover entities with 25 or fewer employees and less
than $5 million in annual revenue. Limitation also applies to
local governments and individuals with net worth under
$500,000.
111. Liability for Certain Claims Relating to Death.
Provisions regarding punitive damages will not apply for
one year in states that, in wrongful death actions, permit
recovery only for punitive damages.
112. Workers Compensation Subrogation
An employer or insurer may lose its lien against a judgment
or settlement in a products liability case involving a
workplace accident if the employer's conduct was a
substantial factor in causing the claimant's harm--thereby
providing an incentive for safer workplaces and ensuring
workers receive full recovery for their injuries.
title ii--biomaterials access assurance
A supplier of biomaterials (component or raw materials used
in the manufacture of implantable devices) is permitted to
seek early dismissal from claims unless he (i) manufactured
the device; (ii) sold the device; or (iii) furnished
materials that failed to meet contract requirements or
specifications. In the event that the manufacturer or other
responsible party is bankrupt or judgment-proof, a supplier
will be brought back into the suit if there is evidence of
his liability. Lawsuits involving silicone gel breast
implants are expressly excluded.
title III--limitations on applicability; effective date
301. Federal Cause of Action Precluded.
No federal causes of action are created.
302. Effective Date.
The Act applies to all actions commenced on or after the
date of enactment.
Mr. HOLLINGS addressed the Chair.
The PRESIDING OFFICER (Mr. Thomas). The distinguished Senator from
South Carolina is recognized.
Mr. HOLLINGS. I thank the Chair. Mr. President, in a phrase, we ought
to ``bail this buzzard.'' This bill ought to be killed outright. It is
nothing more than a political farce. The distinguished Senator from
West Virginia says 10 years; it is 20 years, really. What sustains a
20-year drive is nothing more than political polling. I was elected
some 50 years ago, and if I have watched a dismaying trend, it is the
lack of really addressing the true needs of a State or the Nation, and
instead addressing the needs of the individual politician, as reflected
in the political poll.
Now, Mr. President, right to the point. We all have heard
Shakespeare's comment that Dick the butcher calls out in Henry VI,
``First, we must kill all the lawyers.'' That is in response to the
intent of fomenting anarchy, imposing tyranny; and Dick the butcher,
like Adolf Hitler himself, wanted to get rid of the lawyers first. Dick
the butcher says, ``First, we must kill all the lawyers,'' because he
knew that as long as you have lawyers standing for individual rights,
you cannot have anarchy; you cannot have tyranny. But ask people about
lawyers--until they need one; just like doctors, until they need one--
and they will say get rid of all the lawyers. And over the 20-year
period, I have kept my good friend Victor Schwartz in business. Maybe
he will go out of business now with this jury-built nonsense called an
amendment that we only got on yesterday, and I haven't had a chance--
that is why I have been scurrying around here at the desk--to pick up
the thrust of this latest assault.
But back to the initial point--we have been taken over by the
pollsters.
Only the week before last, the House of Representatives, the most
central organ of our representative government, the body that controls
the purse strings, voted overwhelmingly to do away with tax revenues,
some $970 billion--just gut the source to pay the bills--that we are
going to spend and spend and spend. They use substitutes now of
borrowing from yourself. We passed section 13301 of the Budget Act to
forbid it. They disregard it regularly, borrowing so much from Social
Security, the highway trust fund, the airport trust fund, the civil
service pension fund, the military retirees pension fund, and the
Federal Financing Bank--at this point over $111 billion--to bring about
talks of surplus.
In fact, this year we are spending over $111 billion more than we are
taking in--a deficit, if you please. But with all of the jargon around
and the news media coverage that is supposed to educate and illuminate
and keep us to the truth, politicians have joined in the conspiracy.
They babble ``surplus, surplus''-- everywhere they call ``surplus.''
Well, there isn't any surplus.
Of course, this bill here is intended strictly to get at the
lawyers--not as the distinguished gentleman used the expression of ``in
the American tradition.'' ``In the American tradition,'' Heavens above.
The American tradition, Mr. President, has been for the
[[Page S7531]]
States to regulate our torts. They have done so commendably. There
isn't any question. All the farcical preambles--they try to really get
away from the preambles and just some dribble about interstate
commerce. I use the expression ``dribble'' and otherwise, because we
know otherwise.
The reality, heavens above, is that we have a great economy and
booming small businesses. The National Federation of Independent
Businesses says small businesses are having the best of times. My staff
completed a Lexis-Nexis search for small businesses that couldn't
operate on account of product liability. You know what--they couldn't
find any large and serious cases against small businesses. But I
presume during the debate this legislation's supporters will bring us
some, and we will see how many they bring.
The fact remains that there isn't a problem. But there is a political
interest. There is a political problem. Oh, yes. We have to say we did
something--we did something to get rid of the lawyers. We showed those
lawyers. And, as a result, they not only voted away the tax system--now
here on the Senate side for a nonproblem they come up and talk about
the American tradition whereby they ask, and the gentleman says,
``There goes that trial lawyer crowd.'' You are right. They are the
ones who have really been keeping the system honest. They haven't
succeeded but in 27 percent of the product liability cases. But they
still, when they have the clients who have been injured, try to keep
the system honest. And what happens is that we have the States here--
not only the trial lawyers but we have the States--and the American Bar
Association.
So I am very proud to stand here with the State legislature. Don't
tell me about the Governors. I have been one of those, just like the
Senator from West Virginia. And when we had Democratic Governors, then
they voted against this thing right on down the line. Now the
Republican Governors, the last time they got together and even bothered
to take action was 6 or 7 years ago. They are not really bothered by
it. But the State legislatures are bothered by it.
We have an update here of June 18, less than a month ago. Here is
what they really said when this was proposed, again on this particular
bill, before with the amendment, which is to be introduced, I take it,
later on. This is from the National Conference of State Legislatures:
As you know, product liability legislation, in some form,
may come to the Senate floor before Congress adjourns in
November. I urge you, on behalf of the National Conference of
State Legislatures, to vote against any such bill, for the
simple reason that this is an issue best resolved by state
legislatures.
A good deal of lip service is given today to the advantages
of our constitutional system of federalism and to the
advantages of devolving authority to the states. But, from
the point of view of state legislators, this rhetoric belies
the reality of an accelerating trend toward concentration of
power in Washington. Every year, Congress passes more laws
and federal agencies adopt more rules that preempt state
authority. Little consideration is given to the cumulative
effect of preemption piled upon preemption. Little thought is
given to the shrinking policy jurisdiction of state
legislatures.
Moreover, little consideration is given to whether state
legislatures are responsibly exercising their authority. The
threat to preempt state product liability law, for example,
comes at a time when state legislatures have been
particularly active in passing reform bills. As the attached
article from the June issue of The States' Advocate shows,
over the past ten years, thirty-three product liability
reform bills have been enacted in the states. In addition,
states have been reforming their tort law generally. As of
December 1996, 34 states had revised their rules of joint and
several liability and 31 had acted to curb punitive damages.
Just as the preemption contemplated by a national products
law is unprecedented, so the intrusion on the operation of
state courts is both unprecedented and disturbing. National
products standards would be grafted onto state law. In a
sense, Congress would act as a state legislature to amend
selected elements of state law, thus blurring the lines of
political accountability in ways that raise several Tenth
Amendment issues. Given the Supreme Court's recent
interpretation of the Tenth Amendment in Printz v. United
States, the legislation might even be unconstitutional.
Our constitutional tradition of federalism deserves more
than lip service. It's time to vote ``no'' on product
liability and similar proposals to unjustifiably preempt
state law.
That is from the president of the conference and the president-elect
of the National Conference of State Legislatures, which now has been
updated in a letter to this Senator dated June 18, 1998.
Dear Senator Hollings: I write on behalf of the National
Conference of State Legislatures in opposition to S. 648, a
bill that would supplant state liability laws with federal
standards.
For the National Conference of State Legislatures, this is
a simple matter of federalism and states' rights. Tort reform
is an issue for state legislatures, not Congress. There is no
precedent for such a federal intrusion into such an important
area of civil law. Moreover, we regard it as highly
inappropriate and perhaps unconstitutional for the state
courts to be commandeered as instruments of federal policy in
the fashion contemplated by S. 648.
The states have made considerable progress in reforming
their state law, including product liability law, over the
past decade. State legislatures are in a good position to
balance the needs of the business community and those of
consumers, not just in the abstract but in a way that
reflects local values and local economic conditions. This is
as the Founders intended it when they established a federal
republic rather than a unitary state.
The issue then is not finding the right compromise between
consumer and business interests in crafting the language of
S. 648. The issue is whether we will take a giant step toward
nationalizing the civil law, to the detriment of our
constitutional system of Federalism. Again, please oppose S.
648.
That is from the Conference of State Legislatures, which, of course,
is once again over this 20-year period bolstered by the American Bar
Association in a letter dated July 1, 1998.
Dear Senator: We understand that on July 7, broad federal
product liability legislation will be the subject of a
cloture vote on the Senate floor. I am writing to you to
express the American Bar Association's opposition to S. 648,
the bill reported by the Commerce Committee, and S. 2236, the
compromise proposal introduced by Senators Gorton and
Rockefeller. The ABA believes that improvements in the tort
liability system should continue to be implemented at the
state level and not be preempted by broad Federal law.
S. 648 and S. 2236, which would federalize portions of tort
law, would deprive consumers in the United States of the
guidance of the well-developed product liability laws of
their individual states. This legislation would also deprive
the states of their traditional flexibility to refine
carefully the product liability laws through their state
courts and state legislatures.
The ABA has worked extensively to improve our civil justice
system, including developing extensive recommendations on
punitive damages and on other aspects of the tort liability
system for consideration at the state level. Broad federal
product liability legislation, however, would constitute an
unwise and unnecessary intrusion of major proportion on the
long-standing authority of the states to promulgate tort law.
Such preemption would cause the whole body of state tort law
to become unsettled and create new complexities for the
federal system. Unequal results would occur when product
liability litigation is combined with other types of law that
have differing rules of law. An example of this would be a
situation where a product liability claim is joined with a
medical malpractice claim. If state tort laws differ from the
federal law in areas such as caps on punitive damages,
conflicts and uncertainly would likely result; one defendant
in an action could well be treated entirely different than
another. Having one set of rules to try product liability
cases and another set of rules to try other tort cases is not
consistent with the sound and equitable administration of
justice.
The ABA opposes the product seller provisions of section
103 of S. 648 and S. 2236 because those provisions remove the
motivation of the only party with direct contact with the
consumer, the seller, to ensure that the shelves in American
businesses are stocked only with safe products. Seller
liability is an effective way of maintaining and improving
product safety. Manufacturers traditionally rely on sellers
to market their products. Through their purchasing and
marketing power, sellers have influenced manufacturers to
design and produce safer consumer goods.
Ambiguity in the language of S. 648 and S. 2236 may result
in unintentionally eliminating grounds for liability which
promote safety. For example, the two bills expressly
eliminate a product seller's liability for breach of warranty
except for breach of express warranties. This Uniform
Commercial Code, long regarded as a reasonable, balanced law,
holds sellers responsible for breach of implied warranties as
well. By their vague and ambiguous language, S. 648 and S.
2236 may result in preempting these long established grounds
of liability.
We urge you to vote no on federal product liability
legislation as it is an unwise and unnecessary intrusion on
the long-standing authority of the states to promulgate tort
law.
Now, Mr. President, we all know the majority crowd and how they came
to power in 1995. The election in 1994 said that Contract sounds pretty
good, and
[[Page S7532]]
one of the big things about that Contract was regulation, regulation,
regulation. They wanted to diminish regulation. Well, heavens above, as
they said in the American Bar Association letter, you have two bills
expressly eliminating a product seller's liability and thereby coming
and taking the Uniform Commercial Code and standing it on its head.
So we surgically are running into the Uniform Commercial Code, tried
and true at the State level, and you have the most complex regulatory
mess you have ever seen. All in the attempt to diminish litigation,
they compound it. Oh, yes, all in essence to protect the 10th
amendment.
The first vote we had was the particular vote with respect to
unfunded mandates upon the States, and what-have-you. And here is an
unfunded mandate, constitutional mandate, if you please, because they
don't give a Federal cause of action. They come with an unfunded
mandate on the States and say we know best up here in the Congress in
the light of the most dynamic economy we have ever seen.
Where is Mr. Greenspan's statement.
Federal Reserve Board Chairman Alan Greenspan offered a
decidedly upbeat assessment of the Nation's economic health
yesterday--
This is dated June 11--
pronouncing the current expansion ``as impressive as any I
have witnessed in nearly half a century of daily operation.''
Where is the small business response?
Let's get the rebound. This is another quote.
``The rebound in the optimism index, coupled with other
national economic indicators, suggests economic growth for
this year will be a lot closer to last year's level than many
have predicted,'' said National Federation of Independent
Business Foundation Chief Economist William Dunkelberg.
Far from worrying the expansion has just about played
itself out, more and more small business owners feel the best
is yet to come.
Dunkelberg noted that, ``Small business capital investment remains
exceptionally strong.''
On and on, on and on, Mr. President. There is no foundation for
claims that trial lawyers are undermining small business entrepreneurs.
That is why I say this is a political farce responding to the political
poll. It is not responding to the needs of small business. It is not
responding to the needs of the States, their inability to handle
product liability law. It is in response to the needs of the political
poll and the drive of trying to get rid of trial by jury and lawyers.
They know, in business, they are in their heyday here, and they are
onto a real binge here, having a wonderful time--that they can come in
now with this particular Congress ready to do away with the income
tax--let's do away with the lawyers and trial by jury. Whoopee. They
get Gallup at the White House, and the White House follows the polls
too, so they get together on this jury-built thing that is really an
embarrassment for a lawyer to read.
They have a statute of repose in here for the individual but not for
the business, so the individual injured is barred by the statute of
repose, but the business he is working for, they can sue for the
particular product and get a verdict. I never heard of a more selfish
instrument than that presented here, just crassly selfish, trying to do
away with trial by juries, the States and lawyers. Pell-mell, in a
rush, this body now just writes in such things.
And what about tobacco? Here we have been debating for a month one of
the most injurious products that everybody agrees upon. Do you know
what? This bill says exempt tobacco. The unmitigated gall of the White
House and these authors that write this thing--it is just unforgivable
to come forth here, now, after 4 weeks and everybody charged up, we are
going to do something about the victims of tobacco; how it is habit-
forming and everything else of that kind, so many deaths, more than
heart attacks, more than cancer, more than all the rest, the injury--
the unmitigated gall to come and have a product liability that exempts
tobacco. You would never get my name on such a charade, a political
farce as this, all in the name of the political poll. Kill all the
lawyers, that is right. Just kill all the lawyers. So we really got it.
Small businesses are not asking for it. The States are not asking for
it. They are trying to force Federal law upon the States over their
objections. I was just amazed when the distinguished Senator from West
Virginia started talking about competition with Japan. I cannot keep
them out of my State. They are running all over me. We just broke
ground for Honda at Timmonsville. We just broke ground for another
division of Fuji photographic equipment and the little speed cameras.
They make 60,000 a day. This is the fourth increment of Fuji, a $1
billion investment there. There are 58 Japanese plants, 100 German
plants--foreign competition? They are buying us up. Yet they find out
we cannot compete with the foreigners.
I make a habit of visiting these industries. We shake hands, of
course, with all, if they will allow us in the plant. I went through
the GE plant.
Incidentally, they think we are nothing but textiles. Tell them keep
on thinking. We lost, since NAFTA, 24,000 textile and apparel jobs in
South Carolina. Little South Carolina lost 24,000 textile and apparel
jobs. That is from the National Bureau of Labor Statistics as of the
end of April this year. And we have had, in May-June, several other
closings. So that is the April figure by the Bureau of Labor
Statistics. We were proud of those jobs. We hate to lose them. But we
have these other industries here and they are exporting like
gangbusters.
I was in that GE plant. I would say of those gas turbines, almost 100
percent are exported. One turbine was ready for delivery at Riyadh,
Saudi Arabia; another one was ready for delivery to Tokyo, Japan. The
same is true for all of these Torrington and other industries. They are
in the context of manufacture.
I said do you have any problem here with product liability? They
almost--well, at Bosch they got insulted. ``What do you mean, product
liability?'' They went over there and showed me the antilock brake that
they got a contract for from Mercedes, Toyota, and all of General
Motors. They said, ``Here is a number. We know it immediately. We never
have had product liability. We practice safety, Senator.'' As if I had
insulted them with the question.
We have a result from these wonderful trial lawyers that nobody wants
to talk about. We have the safest society in the entire world. Let's
talk about competitiveness. We have Europe. The Pacific Rim--
economically, competitively on the ropes. And here they want to put in
a bill to compete with Japan, and Japan is coming here and saying we
love it in America. The other States have always had Japanese plants
coming. I have yet to have one of them say I can't come because of your
product liability and the litigation explosion and all, torts. What is
all these silly expressions they have here in these preambles? Here is
what they have been referring to ever since last year: that the civil
justice system is overcrowded, sluggish, and costly.
Mr. President, what is the actual fact? The National Center for State
Courts, on State civil filings, their most recent statistics show that
product liability cases constitute only 4 percent of all State tort
filings, and a mere \36/100\ of 1 percent of all civil cases.
Explosion? Come on. Where is the support? They just use this language
around here that the distinguished Senator from Washington put in,
these preambles here, ``excessive, unpredictable and often arbitrary
damage awards.''
What does the Justice Department say here? In a recent report, they
validate all the studies and the witnesses who appeared before our
committees, and said, ``Juries nationwide have become much tougher on
plaintiffs.'' According to the Department of Justice report,
``Plaintiffs prevailed in only 27 percent of the product liability
cases that were filed in Federal court between 1994 and 1995.''
In 1992, Professors James Henderson, a supporter of tort reform, and
Theodore Eisenberg, of Cornell University, released a study, ``Inside
the Quiet Revolution in Products Liability,'' which also found
``notable declines in the number of product liability cases filed, as
well as significant decreases in the size of awards.'' The study
concludes that:
By most measures, product liability has returned to where
it was at the beginning of the decade.
The study confirmed Professors Henderson and Eisenberg's findings in
an earlier study which found:
[[Page S7533]]
A quiet revolution away from extending the boundaries of
products liability and toward placing significant limitations
on plaintiffs' rights to recover in tort for product-related
injuries.
And then the other preamble about all the punitive damages.
There is another study. The American Bar Foundation conducted a
nationwide study overseen by Dr. Steven Daniels of 25,000 civil jury
awards, and it found that punitive damages were only awarded in 4.9
percent of the cases reviewed. Can you imagine that, only 4.9 percent?
He stated that the debate over punitive damages ``changed in the
eighties as the part of an intense, well-organized and well-financed
political campaign by interest groups seeking fundamental reforms in
the civil justice system benefiting themselves.''
Did you hear that?--A ``political campaign by interest groups.''
Then the American Bar Foundation went on to state that this
``politicization of the punitive damages debate makes the debate more
emotional and manipulative and less reasoned. The reformers appeal to
emotions, fear and anxiety in this political effort, while avoiding
reason and rational discourse.''
He concluded that punitive damages were not routinely awarded, were
awarded in modest amounts, were awarded more often in financial and
property harm cases than in product liability cases, which, of course,
is like Pennzoil suing Texaco with a $12 billion award in Texas, which
was more than all the oil product liability verdicts given cumulatively
since the beginning of product liability law. Just add them all up, and
you will never get to $12 billion. But there it goes from the American
Bar on down.
I think there was one particular study that showed there were only
350 punitive damage awards. I want to find out the exact period of
time. This is Professor Rustid of the Suffolk University Law School and
Professor Thomas Kearney of Northeastern University. The Supreme Court
recently referred to this report. This is our U.S. Supreme Court:
The most exhaustive study of punitive damages . . .
Professors Rustid and Kearney reviewed all product liability awards
from 1965 to 1990 in both State and Federal courts. During that time,
punitive damages were awarded in only 355 cases --355 cases. That is
what we find, as a matter of Federal interest, to violate the tenth
amendment, to violate the Republican contract of trying to get
Government back to the people, trying to preserve and not have unfunded
mandates upon the States.
We can go on and on, Mr. President. But what really has happened--and
it is why this Senator is somewhat disarmed because I have seen it
occur over the past 20 years--Mr. Victor Schwartz with the National
Association of Manufacturers has buddied up now with the Chamber of
Commerce, my friend, Tom Donahue. He is a fighter, and I respect him.
Also, the Business Roundtable and the Conference Board, they seek out
the candidates before they even get here.
They say, ``We would like to help you, but are you for tort reform?''
``Of course.''
With respect to the general expression ``tort reform'' and
``torts''--``Yeah, yeah, yeah, I'm for tort reform.'' So you see them
marching like sheep up to the voting table down in the well voting, by
gosh, to stop debate on one of the most heinous bills that has ever
been presented in the U.S. Senate, because politically they remember
their campaigns and politically they were asked and politically they
answered, ``Yes, I'm for reform,'' and they know that if they don't
vote that way, some opponent is going to come and say, ``Here is what
you said and then flip-flopped.''
They didn't even know the facts of the case. In essence, the jury is
fixed. The jury is fixed, Mr. President, before I can get to them,
before the National Conference of State Legislatures can get to them,
before the American Bar Association can get to them, before the Supreme
Court citing the most exhaustive study on punitive damages can get to
them.
There are no facts to support this particular initiative. This is
just jerry-built from the word go. They say, ``Let's remove the seller
from strict liability on toxic''--by the way, they have some very
dangerous language in here, because some of the lawyers know how to
word this language to get rid of the Dalkon Shield cases.
Let me quote this particular finding:
The difficulty in using the toxic nature of a product as a
means of statutorily differentiating between products covered
by the statute of repose is highlighted by the following
scenario that occurred in an asbestos case brought against
Owens-Corning Fiberglas Corp. In their opening statement, the
Owens-Corning Fiberglas Corp.'s counsel pronounced that their
product, Kaylo [K-A-Y-L-O, Kaylo] an insulation product
containing 1.5 percent amosite and chrysotile [C-H-R-Y-S-O-T-
I-L-E] asbestos was not toxic. OC's counsel relied on the
1964 article in the Journal of the American Medical
Association that stated that asbestos was not considered
toxic because it does not produce systemic poisoning.
I can tell you right now, that is trying to get rid of the asbestosis
cases and the Dalkon Shield cases, when they give to women $250,000 for
the stay-at-home mom. Where have I heard that expression, the ``stay-
at-home mom''? Oh, they were so disturbed on tobacco for the stay-at-
home mom who doesn't economically win anything. I never heard of the
husband paying the wife a salary. Maybe that happens somewhere else. It
doesn't happen in South Carolina, I can tell you that.
So there is no economic loss. You can come in with a Dalkon Shield
case, be injured for life, never be able to reproduce, never have that
family, and buy it off for $250,000. That is easy pickings, easy
pickings.
Let me tell you, Mr. President, this thing is a dangerous measure, as
well as a political farce. When they come out with, for example,
punitive damages, I go back to that 1978 case. I remind my colleagues
of the wonderful result of punitive damages.
In 1978, Mr. Mark Robinson in San Diego brought the Pinto case
against Ford Motor Co. The verdict--the Presiding Officer is a good
trial lawyer--the verdict, I think, was $3.5 million actual damages and
$125 million punitive damages.
Now, Mr. Robinson had not been able to collect a red cent of that
$125 million, but, boy, oh, boy, hasn't that brought safety practices
galore, saving lives, saving injury galore over the past 20 years.
They had a recall; it was on the radio this morning; Ford Motor just
recalled--I know they recalled about 1.5 million about 2 months ago
because the wheels were coming off, but they had another recall, here,
of how many vehicles involved in this--another 11,200 recalled
yesterday. I remember Chrysler, at the end of the year, recalled 1.5
million hatchbacks. We will get in the debate the National Safety
Transportation Administration's statistical recalls, but recall upon
recall upon recall didn't impoverish the businesses but it sure made
safer this society in which we live.
I came when we were talking about toxic fumes of the Love Canal up
there in Buffalo, NY. We put in the Environmental Protection Agency,
the impact statements, and they are a matter of habit now. We look
environmentally, and we have the dump costs and everything else that
has to take care of in this Congress, I hope before we leave. But it
has been a wonderful result, so that environmentally we know now that
we are not inhaling the fumes and otherwise on account of the
Environmental Protection Agency.
We then had the little babies burning up in the cribs--flammable
blankets. Since my time, we have instituted a Consumer Product Safety
Commission. At one time, J.C. Penney's took me up to their safety lab
in New York and showed how, not just blankets, but toys and the various
products that they sold, they were testing in this particular lab to
make sure, so they put in safety ahead of giving it to the seller and
otherwise. So we got the Consumer Product Safety Commission.
And right to tobacco. Of course, they haven't won a class action.
That was an individual suit down in Florida; all the rest have been
turned aside. So when they whine on the floor of the U.S. Senate, ``Why
could you give this particular industry immunity from liability? Why
are we doing this?''--because the jurors of America have given them,
time and time and time again, immunity. They say, look, the Congress,
in its wisdom, has required ``smoking is dangerous to your health''
[[Page S7534]]
notification on every one of those packs of cigarettes. It is your
assumption of risk. You could have stopped. More people have stopped
smoking than have started smoking in America this minute.
So the jurors, in their wisdom--but, oh, no, they want to exempt
tobacco on the one hand here, and the cases brought by the attorneys
general and the trial lawyers have done more to save people from cancer
than Dr. Koop and Dr. Kessler and the American Cancer Society for the
last 30 years that I have been up here. They really have gotten us
aware, and more people have stopped smoking, like I say, than are
smoking this minute in the United States of America.
So when we go to the hearings where we used to have an ashtray and
the room was clouded with smoke and my distinguished beloved former
chairman, the Senator from Washington, Senator Magnuson, with that
cigar right there--we don't have that anymore. But we don't have it not
on account of Dr. Koop and Dr. Kessler but on account of the trial
lawyers. They are the ones who got into the records. They are the ones
bringing the truth out. They are the ones bringing the class action
suits, bringing about settlements in Florida, Mississippi, Texas, and
Minnesota, and they continue to bring the cases.
They had an orderly process to end all litigation and get a
sweetheart deal in the interest of society whereby they would advertise
negatively--we can't control their advertising under the first
amendment, but they agreed to it--whereby they would have a look-back
provision whereby we could come in and control that and fine them if
they didn't control it. But instead, that case now is temporarily on
hold--tobacco--and these particular authors want to make sure that
tobacco, the most injurious of products, is exempted from this so-
called product liability bill.
Mr. FAIRCLOTH. Mr. President, I rise in strong support of this bill,
and it is long overdue. In a way, this is a tax cut bill, because it
will cut the ``trial lawyer tax'' often referred to as the ``tort
tax.''
The ``trial lawyer tax'' is equivalent to the amount of liability
insurance that people pay to protect themselves from trial lawyers.
They pay it because no one is safe anymore.
We're looking at product liability cases here, but the problem
extends far beyond product liability, and I remain committed to broad
civil justice reform.
If any Senators think this narrow bill is sufficient, let me mention
a few recent verdicts from the tort capital of the United States, New
York City. I am convinced that Senators will think twice before they
put civil justice reform on the back burner after they hear these
horror stories.
A mugger on the New York City subway who was preying on the elderly
became a multimillionaire when a Manhattan jury awarded him $4.3
million for being shot as he fled from the scene of a crime. A Bronx
jury gave $500,000 to a woman who broke her toe in a pothole. Another
Bronx jury awarded $6 million to the family of a drunk who fell in
front of a subway train after the jury found the drunk wholly without
fault. Another jury in a medical malpractice case awarded $27 million
to an injured patient and another $6 million to the members of his
family--even though they hadn't even sued.
Mr. President, let me return to the subject at hand, which is limited
product liability reform. The tort system is really a ``trial lawyer
tax'' that costs American consumers more than $132 billion per year.
This is a 125 percent increase over the past 10 years. In fact,
between 1930 and 1994, tort costs grew four times faster than the
growth rate of the economy.
This tort tax costs the average American consumer $616 per year. The
civil justice system, in effect, deputizes the trial lawyers as tax
collectors. Further, because they often sue under a contingent fee
arrangement, the trial lawyers are bounty hunters.
They all want to bag the big case--the trophy case--and raid those
``deep pockets.''
The U.S. tort system is the most expensive in the world and costs 2.2
percent of gross domestic product.
This is a jobs issue, Mr. President, because tort reform is good for
economic development. The evidence is clear: when States pass tort
reform, productivity increases, and employment rises. Let me offer a
few examples of the ``trial lawyer tax'' in action. A heart pacemaker
costs $18,000; $3,000 of that is the ``trial lawyer tax.'' A motorized
wheelchair averages $1,000; $170 of that is the ``trial lawyer tax.'' A
doctor's fee for removing tonsils averages $578; $191 of that is the
``trial lawyer tax.'' A two-day maternity stay averages $3,367; $500 is
the ``trial lawyer tax.''
These are the costs of the ``trial lawyer tax.'' Now let's contrast
that with the benefits of product liability reform.
Before federal legislation was enacted, production of single engine
aircraft had fallen 95 percent from the previous highs of the late
1970s.
Plants were closed and more than 100,000 jobs were lost. In 1986,
Cessna Aircraft Company discontinued production of the single engine
aircraft. However, Cessna pledged that it would resume production if
Congress passed product liability legislation to protect the general
aviation industry from the predatory practices of the trial lawyers.
When the Congress finally passed the General Aviation Revitalization
Act, Cessna invested $55 million in facilities and equipment, and it
now employs 650 people and plans to double that number.
That is the choice, Mr. President, jobs or lawsuits. Money for
working Americans or rapacious trial lawyers. Productivity or
litigation.
I'll side with working Americans, not fat-cat trial lawyers, and I
hope the Senate will invoke cloture on this landmark bill.
I yield the floor and I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Sessions). The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BROWNBACK. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BROWNBACK. Mr. President, I ask unanimous consent to proceed for
a period of up to 15 minutes as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
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