[Congressional Record Volume 144, Number 90 (Thursday, July 9, 1998)]
[Senate]
[Pages S7707-S7710]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      PRODUCT LIABILITY REFORM ACT

  Mr. HOLLINGS. Mr. President, what really occurs is we are back now--
the leadership says after 10 years--really after 20 years. And much has 
occurred during that 20-year period. Practically all of the States have 
faced up--the State of Oklahoma, the State of South Carolina have all 
enacted product liability reform. It is not a particular problem. The 
small businesses, for example, are enjoying the best of investment, the 
best of new initiatives in small business.
  The small business folks, the National Federation of Independent 
Businesses, are really quoted as saying here that--and I quote an 
economist for the NFIB--``Far from worrying that the expansion has just 
about played itself out, more and more small-business owners feel that 
the best is yet to come.'' So the small businesses really are not 
having any problem.
  The idea of the litigation explosion has been answered, that you 
could not get insurance to get insurance. Foreign competition--the 
foreign companies are flowing into America without any problem of 
product liability. So now they try to say it is the small business 
thing. And, of course, the small businesses say the best is yet to come 
and they are having one of the finest clips that they have ever had. So 
they are not having problems.
  We searched Lexis-Nexis to find where these egregious verdicts are 
that this particular measure would take care of. They are nonexistent. 
So we looked at the bill itself. And you find out really what is a 
politically rigged instrument to take care of the political needs, not 
the business needs, of America, whereby you take a poll and kill all 
the lawyers. And we have been into that.
  The lawyers have become unpopular until everybody needs one. And the 
best of the best lawyers, who have been bringing these cases and 
succeeding and everything else, are to be sidelined in this drive by 
big business, all under the cover of small business.
  The bill itself, Mr. President, is an atrocity. I say that because 
now the plea, in the preamble of the Rockefeller-Gorton measure, is 
uniformity. And they start off immediately saying, with punitive 
damages, those States who regulate the punitive damages or control them 
are not applied to by this particular measure; but those States that 
have it, this bill would apply. So there is no uniformity on the very 
face or attempt to get uniformity itself. It is not just for small 
businesses. That is for all businesses, large and small, relative to 
the matter of uniformity and relative, of course, to the matter of 
small businesses itself.
  But we come, Mr. President, with the phone ringing all during the 
weekend and last night with respect to the sellers being exempted under 
this bill. They know what they are doing. There are dozens and dozens 
of cases up in New York to the effect that the sellers--only one--the 
hospital, where they have incurred AIDS, hemophiliacs have incurred 
AIDS, through tainted blood transfusions or otherwise. And obviously 
they cannot find out the individual, but you know it is applied by the 
hospital. You want to get the safety practice by the hospital or the 
seller. Now, this vitiates dozens and dozens of cases over the country, 
and particularly in the New York area.
  Again, with respect to asbestos cases, they know exactly what they 
are writing. They are saying, with respect to toxic materials, that, of 
course, this does not apply to toxic materials, that the asbestos is 
exempted from the 18-year statute imposed because the reference is to 
the exclusion of toxic harm. But, of course, asbestos is not toxic in 
the eyes of the Owens Corning counsel. He announced asbestos is not 
toxic, so they get rid of that group of cases.
  Otherwise, they really come with the statute of repose, which is the 
most egregious thing I have ever seen. Here we are trying, in product 
liability, to protect consumers and individuals, and they say now that 
they would exempt an injured person from a defective product; but the 
purchaser or owner of

[[Page S7708]]

that particular product for whom the injured person is working, he or 
she or it can sue that manufacturer. So the rights of businesses are 
protected to the detriment of injured consumers in America. The 
unmitigated gall of including that particular provision in this bill, 
talking about product liability is just unheard of.
  But in any event, the lower-income worker, the matter of the punitive 
damages of $250,000 or less--you can well see that lower-income worker 
from McDonald's who is making $15,000 or $17,000 a year--double the 
economic injury; namely, double that salary loss of $34,000 for a 
Dalkon Shield user, that we have the Dow Chemical implant on the front 
page, the settlement, this morning, $3.2 billion. But under the Dalkon 
Shield here, that particular individual----
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. HOLLINGS. We still have until half past the hour, Mr. President.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. HOLLINGS. What time has expired? I got 15 minutes.
  The PRESIDING OFFICER. The Senator's time has expired. There was 
agreement to divide the time equally that was remaining. That was 13 
minutes. Your time has expired.
  Mr. HOLLINGS. I would question the ruling of the Chair. I was told I 
would have the 15 minutes. I don't know how the Chair can change that 
ruling. That was the understanding.
  The PRESIDING OFFICER. There was objection to your unanimous consent 
request. That was not the case.
  Mr. HOLLINGS. I am sorry I could not sneak in the majority leader's 
handwritten amendment. He can amend but we can't.
  Mr. TORRICELLI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. TORRICELLI. The Senate will soon be considering the product 
liability legislation. If enacted, the Senate would be continuing an 
unfortunate practice in this country where manufacturers of firearms 
have some special protection outside of consumer products.
  Mr. President, as indicated by this chart, for many years this 
country has regulated the manufacture and the sale of consumer 
products, items as seemingly as innocent as teddy bears, for recall, 
safety standards. And yet firearms were outside the design 
requirements, the safety requirements, and the recall requirements.
  This issue comes before the Senate again under product liability, 
because it is my intention, with the Senator from California, Mrs. 
Feinstein, to offer an amendment to exempt gun manufacturers from the 
$250,000 punitive damages protection.
  Through all these years, the Congress has failed--by design 
requirements for safety, for distribution requirements--to ensure that 
firearms get to legitimate owners, to provide the American people with 
real protection. What the Congress has failed to do, the courts have 
begun to recognize. Suits are being filed across America by parents 
when they lose their children to weapons that get in illegitimate 
hands, by neighborhoods, by police officers, by cities, seeking damages 
caused by weapons that could have been designed more safely, with child 
restraint provisions. If, indeed, this product liability legislation is 
enacted without our amendment, those suits will not proceed.
  Yesterday at a press conference in the Senate, we heard from a Steven 
Young, a father of a murdered teenage boy in the streets of Chicago. He 
has joined with three families to sue gun manufacturers because, in his 
judgment, they knowingly allow these weapons to be sold to criminals. 
The families of the young people killed in Jonesboro, AR, in a school 
shooting are planning to file suit because those weapons had no safety 
mechanisms on them. Mayor Rendell of Philadelphia and Mayor Daley of 
Chicago are both preparing suits on behalf of the citizens of their 
cities to recover the costs from gun violence because manufacturers 
have not been responsible in design and manufacture. If this Senate 
does not enact this amendment and, indeed, tries to prohibit it by 
voting cloture shortly, the suits may never happen.
  Families and cities, the people of our country, are in a similar 
position with gun manufacturers to where we were 40 years ago with the 
tobacco companies. Congress has not acted, so people pursue the law in 
the courts. Indeed, it took 40 years and hundreds of cases before 
tobacco companies began to understand they needed to act responsibly. 
If these cases can proceed against gun manufacturers, there will be 
discovery, documents will be produced. As liability mounts, gun 
manufacturers will be careful who sells these weapons, who is able to 
buy these weapons, that the law is complied with, and that there is 
every possible safety feature built into these weapons. The liability 
of the gun manufacturers can work to protect our families. Thirty-six 
thousand people died from gun violence last year. This is the leading 
cause of death among young people in our cities. We ask the Congress to 
do nothing but to allow the courts to proceed in offering people 
protection.
  The shield that would be offered to gun manufacturers involves many 
of the weapons sold in this country. Twenty-three percent of all 38-
caliber pistols, 2 of the 10 guns most often found at crime scenes, are 
made by small manufacturers who would be protected under product 
liability. One company alone, Davis Industries, produces 50,000 
Saturday-night specials a year. In all, 20 percent of the weapons 
produced in America will be shielded from any liability above the 
$250,000 in punitive damages if we enact this product liability reform 
without our amendment.
  It has often been said by the National Rifle Association that it is 
their responsibility to protect gun owners. If the National Rifle 
Association opposes this measure, they will be taking a clear stand 
against gun owners. It is gun owners who will have the right to go to 
court if a product is improperly sold, improperly manufactured. The 
only people who will be jeopardized are people who are either victims 
of these guns or own these guns. This is a chance for the gun lobby to 
do something responsible. They claim they want to be on the side of the 
gun owner and law enforcement and innocent victims--take a stand.
  I urge my colleagues to defeat the cloture motion, allow us to 
proceed on the amendment, and offer this protection to the American 
people.
  I yield the floor.
  The PRESIDING OFFICER. The minority leader.
  Mr. DASCHLE. Mr. President, I yield 5 minutes of my leader time in 
addition to the 8 minutes that Senator Hollings has in the remaining 
part of our morning business time to Senator Hollings.
  The PRESIDING OFFICER. There is no time remaining.
  Mr. DASCHLE. As I understood it, Senator Hollings had 8 minutes 
remaining. If he does not, I yield 10 minutes to the Senator from South 
Carolina from my leader time.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized 
for 10 minutes.
  Mr. HOLLINGS. I thank the distinguished leader.
  Mr. President, what I was trying to emphasize was the particular so-
called compromise. I know the plea is, wait a minute here, we have been 
trying and trying and trying and trying, and of course as long as 
Victor Schwartz and that crowd is paid, they will continue to try.
  But the fact of the matter is, there is no need. The States object to 
this particular mode. The Republican contract objects to this 
particular thing. They are trying to put and retain things back at the 
States when it comes to crime. They want the particular States to take 
care of it. When it comes to education, they want to do away with the 
Department, let the States handle it. They want to do everything else, 
except when you get with all the lawyers and, namely, the injured 
parties in America, which are bringing this magnificent safety record.
  So what happens is that without any demand from the States, but, 
rather, the opposition of the States--I ask unanimous consent that a 
letter from the National Conference of State Legislatures dated last 
year, October 27, 1997, be printed in the Record with the updated 
letter from the National Conference of State Legislatures, June 18, 
1998.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:


[[Page S7709]]


                                            National Conference of


                                           State Legislatures,

                                 Washington, DC, October 27, 1997.
     Hon. Ernest F. Hollings,
     U.S. Senate, Washington, DC.
       Dear Senator Hollings: 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.
           Sincerely,
     Richard Finan,
       President, Ohio Senate, President, NCSL.
     Dan Blue,
       North Carolina House of Representatives, President-elect, 
     NCSL.
                                  ____

                                            National Conference of


                                           State Legislatures,

                                    Washington, DC, June 18, 1998.
     Hon. Ernest F. Hollings,
     U.S. Senate, Washington, DC.
       Dear Senator Hollings: I write on behalf of the National 
     Conference of State Legislatures (NCSL) in opposition to S. 
     2236, a bill that would supplant state product liability laws 
     with federal standards.
       For NCSL, 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. 2236.
       The states have made considerable progress in reforming 
     their tort 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. 2236. 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. 
     2236.
     Sincerely,
     Donna Sytek,
       Speaker, New Hampshire House of Representatives, Chair, 
     NCSL Assembly on Federal Issues.

  Mr. HOLLINGS. Mr. President, again, it is not a national problem, as 
I have emphasized.
  From July 1, 1998, I ask unanimous consent that the American Bar 
Association letter be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                         American Bar Association,


                                  Governmental Affairs Office,

                                     Washington, DC, 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 uncertainty would likely result; one defendant 
     in an action could well be treated entirely differently 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. The 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 broad federal product liability 
     legislation as it is an unwise and unnecessary intrusion on 
     the long-standing authority of the states to promulgate tort 
     law.
           Sincerely,


                                              Robert D. Evans,

                                                         Director.

  Mr. HOLLINGS. Reading one line:

       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.

  So, they are talking about the compromise, and after all this give 
and take, and it is not quite an orderly bill, but those things that 
occur in time are compromises--not to mitigate against uniformity in 
the name of uniformity where they apply punitive damages to one group 
of States and not to the other group of States, not in the name of 
small business when they apply to big business where they were sneaked 
in--oh, no, we will have cloture; you can't offer any amendments. We 
are steamrolling this thing. Here we go. We are going to have a little 
handwritten amendment, by the majority leader, sneaked in at the last 
minute.
  We saw this occur with the tobacco bill where they sneaked in an 
amendment that had been before the Agriculture Committee, the Lugar 
bill, that never was reported out of the Agriculture Committee, but 
they sneaked that in. Now they want to sneak in an amendment not just 
to take care of small business but large business. I refer to this 
morning's headline of the New York Times: ``Don't Amend This Bill, Lott 
Says,'' and then proceeds to weigh in.
  So you have a little handwritten amendment here that the majority 
leader sneaked in--he can really take and amend his own bill, but this 
is a compromise worked out with the White House. This is a conspiracy 
in the U.S. Senate. I am not part of that conspiracy. I am for the 
consumers. I am for

[[Page S7710]]

safety in America. I can tell you here and now, this is the most 
egregious conduct I have ever seen.
  Finally, with respect to the poor stay-at-home moms, because I see my 
distinguished colleague from Texas, who has got everyone sitting around 
the kitchen table time and, again, and stay-at-home moms. So the stay-
at-home mom can get at the most, $250,000 or double, or less than that, 
whatever is less. I don't know what she gets when she stays at home and 
doesn't have any economic damage.
  Or take the employee at McDonald's, a young woman who gets $15,000 or 
$17,000 a year working away, just married, taking the Dalkon Shield, 
totally injured, can't reproduce, her life is ruined. Oh, we are going 
to be liberal here. We will protect the small business and not the 
injured party and go right to the heart of the matter and give her 
twice her economic damage, twice $17,000, or $34,000, and the companies 
will write that off in a flash. We know it. You know it and I know it. 
It will just be a cost of doing business. And safety in America is 
really downgraded.
  We have the most interesting safe operating businesses in the country 
as a result of this product liability.
  There is not an explosion, Mr. President. All the reports before the 
committee say, wait a minute, there has been an explosion in business 
suing business--Pennzoil suing Texaco in Texas for a verdict of $12 
billion. But, no, that is the consummate verdicts of all the product 
liability cases put together. There are businesses suing businesses all 
over. That is fine business. But when the poor injured party comes, and 
on a contingent basis finds a lawyer willing to take her case, do the 
investigating, do the trial, appeal work, and win a percentage if 
successful, oh, that is terrible for the economy in America; it is 
terrible for international competition.
  Mr. President, in this global economy American firms contend at home 
and abroad against competitive foreign firms which operate in America. 
We have over 100 German plants, and over 50 Japanese plants. We have 
the BMWs, the Fuji Films, the Hoffman-Laroches--all these industries 
are coming to South Carolina, and not one is saying anything about 
product liability. They like what the States are doing, but we find a 
political problem because we have a representative downtown who is 
retained to get to the Chamber of Commerce, the Business Roundtable, 
the conference board, and now the National Federation of Independent 
Business, saying this is just a small business. Oh, boy, it is not for 
large injury, I can tell you that. It is not for large injury. It is 
not for the consumer, Mr. President. The whole setup here is ramroded 
through. I can personally, just in my handwriting, sneak a little 
amendment on at the desk, but the rest of us can't because we have 
cloture.
  I yield the floor.
  The PRESIDING OFFICER. There will now be 27 minutes under the control 
of the majority leader.
  Mr. LUGAR addressed the Chair.
  The PRESIDING OFFICER. The Senator from Indiana is recognized.

                          ____________________