[Congressional Record Volume 146, Number 15 (Wednesday, February 16, 2000)]
[House]
[Pages H463-H486]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL BUSINESS LIABILITY REFORM ACT OF 2000
The SPEAKER pro tempore. Pursuant to House Resolution 423 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the State of the Union for the consideration of the bill, H.R. 2366.
{time} 1131
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the State of the Union for the
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consideration of the bill (H.R. 2366) to provide small businesses
certain protections from litigation excesses and to limit the product
liability of nonmanufacturer product sellers, with Mr. Thornberry in
the Chair.
The Clerk read the title of the bill.
The CHAIRMAN. Pursuant to the rule, the bill is considered as having
been read the first time.
Under the rule, the gentleman from California (Mr. Rogan) and the
gentleman from Michigan (Mr. Conyers) each will control 30 minutes.
The Chair recognizes the gentleman from California (Mr. Rogan).
Mr. ROGAN. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I introduced the Small Business Liability Reform Act
last summer, along with the gentleman from Pennsylvania (Mr. Holden),
the gentleman from Virginia (Mr. Moran), and the gentleman from North
Carolina (Mr. Burr) with the express intent of advancing the cause of
small business owners across the Nation. Its provisions are designed to
improve the fairness of the civil justice system, to enhance its
predictability, and to eliminate the wasteful and excessive costs of
the legal system by reducing unnecessary litigation.
In H.R. 2366, my colleagues and I have attempted to approach this
goal in an incremental and pragmatic way by focusing on a few narrowly
crafted reforms that have won the bipartisan support of Members in this
Chamber in recent years.
This bill was crafted with an eye toward helping America's small
businesses become more competitive, more profitable, and better able to
resist the single greatest threat to their existence, a frivolous
lawsuit that can ruin a small business overnight and crush the American
dream for those men and women who are driving our Nation's economic
expansion.
For the smallest of America's businesses, those with fewer than 25
full-time employees, this bill limits punitive damages that may be
awarded against a small business to the lesser of three times the
claimant's compensatory damages, or $250,000. Punitive damages would be
allowed in cases where the plaintiff shows by clear and convincing
evidence that the defendant engaged in particularly egregious
misconduct.
It is important to note that this cap on punitive damages does not
cap or diminish a claimant's right to sue for both economic and
noneconomic losses, such as lost wages, medical bills and pain and
suffering.
Similarly, the bill provides that a small business shall be liable
for noneconomic damages in proportion to their responsibility for
causing a claimant's harm. As such, our bill borrows from the
California model enacted overwhelmingly by referendum in 1986, which
abolished joint liability for these kind of damages.
Title II of the bill provides that product sellers other than
manufacturers will be liable in product liability cases when they are
responsible for the claimant's harm. Innocent sellers finally will find
protection from frivolous lawsuits.
The bill would not change the current liability rules if the
manufacturer is not subject to judicial process or is judgment-proof.
In either of those cases, the seller would still be liable for the
harm. This provision will protect innocent claimants from being left
with no redress in the courts if they are harmed. It simply focuses
liability on the party where it is most appropriately targeted.
Furthermore, it shields renters and lessors from being held liable
for someone else's wrongful conduct simply due to product ownership.
An amendment that my good friend, the gentleman from Arkansas (Mr.
Hutchinson), will offer later is the result of continuing discussions
that began during our committee deliberations as to whether there
should be some exception to the punitive damage cap when a small
business defendant has acted with the intent to commit a specific harm.
In that case, an exception is appropriate.
These issues are familiar to many of our colleagues. In the 104th
Congress, this House passed legislation, including similar, more
broadly applied punitive damage and joint liability reforms, as well as
the product seller liability standard. More recently, provisions
similar to the latter two were included in product liability litigation
that was debated in the Senate during the 105th Congress, which the
President then indicated he would sign if given the opportunity.
Further, Title II's joint liability reforms borrow from those enacted
by the Congress in 1997 as part of the Volunteer Protection Act.
Mr. Chairman, this bill presented before our colleagues today is
supported by the United States Chamber of Commerce, National Federation
of Independent Businesses, the National Association of Manufacturers,
the Association of Builders and Contractors, the National Association
of Wholesale Distributors, the National Restaurant Association, and
millions of small business-owning men and women around our country who
are looking to Congress for fairness in the court system.
Mr. Chairman, the purpose of this legislation is to reduce needless
litigation that unfairly burdens and easily can cripple small
businesses with wasteful legal costs. I look forward to the support of
our colleagues on this vital measure to protect every American, small
business owner, from the threat of back-breaking litigation.
Mr. Chairman, I reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
(Mr. CONYERS asked and was given permission to revise and extend his
remarks.)
Mr. CONYERS. Mr. Chairman, we are now confronted with a measure that
ought to begin with the observation of the necessity for truth in
labeling. The sponsors of this bill have had the courage to put small
business liability, to put ``small'' in the title. They have been bold
enough to include this phrase in the title.
The problem, of course, is on any reading of this, this measure is in
no way limited to small business. Title II, which limits the liability
of product sellers, contains no size limitation whatsoever. The fact
that we talk about 25 employees or less ignores the simple fact that
there is no constraint on the amount the business is doing in terms of
revenues.
Hundreds of millions, if not billions of dollars, could be included,
as we know, in financial organizations that frequently have far less
than 25 employees. So this is not a small business bill.
Of course, to fundamentally limit victims' rights when it comes to
dangerous products, negligence and other misconduct is, to me, going in
the wrong direction, because it follows the form of other liability
legislation we passed that is already going in the wrong direction.
This bill has to stand next to the class action bill that federalized
most class actions; the statute of repose bill that created an 18-year
limit on durable goods and machinery and equipment. And now we come up
with a bill misnamed a small business bill, which puts a cap on
punitive damages, limits joint and several liability and exempts a
number of corporations from the doctrines of strict liability, failure
to warn, and breach of an implied contract.
This is a serious move in the wrong direction. It is not just an
unnecessary bill; it is moving way, way in a direction that I do not
think most of the Members here, once they recognize what is in this
bill, will support.
First, the bill imposes severe evidentiary restrictions and an
overall cap of $250,000 in punitive damages in every civil case against
businesses with fewer than 25 employees. Collectively, these
restrictions are likely to eliminate not only the incentive for seeking
punitive damages but it also eliminates any realistic possibility of
obtaining them. It sends exactly the wrong message to people with
deliberate intent to do wrong, people who are not concerned with the
considerations of safety in the workplace. They are being told it does
not matter how harmful or malicious their action or behavior is, they
will never be realistically subject to significant punitive damages,
which erodes the whole concept of punitive damages.
When we eliminate joint and several liability for noneconomic
damages, we are eliminating in those few cases the right to pain and
suffering recovery and loss of life and limb that so frequently is
important in the cases where those theories would apply.
This has the effect of making innocent victims bear the risk of loss
when
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a co-defendant is judgment-proof and would severely discriminate
against seniors and women who bear the greatest portion of noneconomic
damages in our society.
To take one class of defendants and relieve them of responsibility
from the doctrines of strict liability, the failure to warn or breach
of implied warranty, is unbelievable, leaving only a plaintiff with
negligence as a cause of action.
So, in my view, the legislation is not just unnecessary, it is
misleading and it is reckless and it should be turned aside.
Mr. Chairman, I reserve the balance of my time.
Mr. ROGAN. Mr. Chairman, I yield 3 minutes to the gentlewoman from
New York (Mrs. Kelly).
Mrs. KELLY. Mr. Chairman, I rise today in support of this legislation
which seeks to enact reasonable reforms to liability laws affecting
America's small businesses. Through passage of this legislation today,
this body makes clear its dedication to promoting sensible policies
which acknowledge the importance of our small businesses.
As vice chairman of the Committee on Small Business, I can attest
that it is the work and energy of small business enterprises that
comprise a driving force behind our Nation's economy. It is essential
that we continually work to ensure that they are able to operate in a
free and fair marketplace.
In supporting this bill, we also make clear today our reproach for
those who seek to exploit shortcomings in current liability statutes.
Approval of this measure will mark an important stride in removing
the onerous and unreasonable threat of litigation which serves to
stifle the growth and entrepreneurial spirit of small businesses.
Current liability law encourages many of these businesses to impose
limitations on their own promise, to bypass opportunities to improve
and expand. This not only conflicts fundamentally with our American
character, but it is an unnecessary restraint on the livelihood of the
millions of Americans who work for these businesses. This simply is not
right, and this Congress ought to do what it can to change it.
I ask my colleagues to join me in doing so today, by voting in favor
of this sensible reform measure.
Mr. CONYERS. Mr. Chairman, I yield 4 minutes to the gentleman from
Virginia (Mr. Scott).
Mr. SCOTT. Mr. Chairman, I thank the gentleman from Michigan (Mr.
Conyers) for yielding me this time.
Mr. Chairman, I rise to speak in strong opposition to the Small
Business Liability Reform Act and speak in support of the Conyers-Scott
amendment when I speak later on.
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Mr. Chairman, there are numerous problems with the bill. The
gentleman from Michigan (Mr. Conyers), the ranking member and chairman
to be, will be introducing that amendment later. But there are some
false inferences represented in the bill's title.
The title is Small Business Liability Reform Act. While the bill
purports to protect small businesses which presumably do not possess
the resources to defend themselves against supposedly frivolous and
costly lawsuits, the truth about the Small Business Liability Reform
Act is that it rewards all businesses, big and small, with broad and
sweeping legal protections when they cause personal and financial
injury due to defective products.
With those parts of the bill which actually pertain to small
business, the small business in this bill contains no qualifier that
limits their revenues. So even billion-dollar corporations can still
qualify for small business protection.
While the bill purports to constitute liability reform, the language
is overbroad and covers contract law, antitrust law, trademark
protection, and other areas not properly considered by the committee.
Although the Conyers/Scott amendment seeks to inject some truth in
advertising into the legislation, there are other problematic
provisions. For example, the bill will raise the bar for awarding
punitive damages, capping the damages at a maximum of $250,000 and
making it more difficult to get punitive damages. While the proponents
of caps on punitive damages claim that those caps would discourage
frivolous lawsuits, those Draconian caps and arbitrary caps would
actually apply to least frivolous lawsuits, those which in fact can get
the larger damages.
In fact, punitive damages are rare and available only when a
defendant is engaged in the worst misconduct. This bill would
effectively give businesses licenses to engage in reckless behavior as
long as they are willing to pay the $250,000 price tag. Because the
bill does not define a small business in terms of revenue, this may be
a small price to pay for those companies who have revenues in the
millions and even billions of dollars.
The bill eliminates joint and several liability for non-economic
damages, thus preventing many injured persons from full compensation
for their injury. This bill would preempt laws in most States where
injured persons are permitted to collect damages from any of the people
that are found responsible.
The rationale is that injured parties should not suffer because one
or more of the wrongful actors cannot compensate them for a number of
reasons. For example, that party might not even be a party to the
lawsuit, they may be a foreign company, they may have gone bankrupt.
And the non-economic damages, including the loss of a spouse or child,
the loss of fertility, the loss of a limb, disfigurement, or chronic
pain, those losses go uncompensated when defendants cannot be held
jointly responsible for non-economic damages.
Unfortunately, the burden of uncompensated non-economic loss is most
likely to fall on those least likely to protect themselves: the poor,
the elderly, the disabled. And because these persons make limited
incomes and do not work, they are least likely to collect large sums in
economic damages and, therefore, must depend on awards of non-economic
loss if they are to recover any significant compensation at all.
Again, there are numerous reasons to oppose the bill, but in its
entirety, the bill sets a dangerous precedent in law. It encourages
corporate misconduct, endangers health and safety, and leaves injured
people with little compensation for their pain and suffering.
So I ask my colleagues to vote no on this anti-consumer legislation.
Mr. ROGAN. Mr. Chairman, I yield 3 minutes to our friend and
colleague, the gentleman from Pennsylvania (Mr. Holden).
Mr. HOLDEN. Mr. Chairman, I am pleased to join my colleague from
California in cosponsoring H.R. 2366, the Small Business Liability
Reform Act of 1999.
Like the other pieces of civil justice reform legislation that have
recently been enacted into Federal law, this bill departs from the
comprehensive approach that advocates of broad product liability and
tort reform have taken in the past.
Instead, this bill focuses on a few key specific liability issues:
the exposure of small business with fewer than 25 full-time employees
to joint liability for non-economic damages and punitive damages, and
the exposures of retailers, wholesalers, distributors, and other non-
manufacturing product sellers to product liability lawsuits for harms
they did not cause.
Mr. Chairman, I have many small businesses in my Congressional
district that stand to benefit greatly from this legislation. Many of
these businesses have been family run for several generations, and this
bill will protect them from the type of frivolous litigation that
threatens their existence.
Let me emphasize that the bill we are considering here today is
careful not to overreach. As I previously indicated, this is a narrowly
crafted, tightly focused bill. The provisions restraining joint
liability and punitive damages do not apply to civil cases that may
arise from certain violations of criminal law or gross misconduct. Nor
do they apply in States that elect to opt out with respect to cases
brought in State court in which parties are citizens of that State.
The product seller liability provisions are strictly confined to
product liability actions and protect the ability of innocent victims
of defective products to fully recover damage awards which they are
entitled.
Mr. Chairman, some of my colleagues who oppose this legislation might
say
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the bill is unnecessary. They may say this last year there were only 14
cases where punitive damages were awarded in the entire United States.
That may be true, Mr. Chairman, but it is irrelevant. It is
irrelevant because it does not take into account the countless
incidences where cases were filed that seek such extraordinarily high
punitive damages that defendants are frightened into settlement rather
than risking what might happen in a court of law. This bill tries to
put an end to this abuse.
Lastly, Mr. Chairman, the provisions of this legislation have
previously won bipartisan support in this chamber as well as the other
body. Although limited in scope, their enactment into law will reduce
unnecessary litigation and wasteful legal costs and improve the
administration of civil justice across this country.
I urge my colleagues on both sides of the aisle to vote yes and pass
this limited but meaningful civil justice reform bill.
Mr. CONYERS. Mr. Chairman, I am pleased to yield 4\1/2\ minutes to
the gentleman from Massachusetts (Mr. Delahunt), a member of the
committee.
Mr. DELAHUNT. Mr. Chairman, well, here we go again. We have a bill
before us now that would sweep aside generations of State laws that
protect consumers so that corporations can evade their responsibilities
for wrongs that they commit.
Forget about States' rights. Federalism as a core Democratic
principle is withering away in this institution, and this proposal is
an example of that.
Earlier today, the Committee on the Judiciary was to consider a
proposal which would shift to the Federal courts local zoning issues.
And those that speak and preach States' rights and de-evolution I
suggest should revisit their words.
Let me join with others who have stressed that we are not talking
about small businesses here. I mean, if we read the bill, that simply
is inaccurate. It is absurd in fact. There are no revenue caps in this
legislation. The bill would permit large, prosperous businesses making
enormous profits to escape liability so long as they maintain a small
employee base.
A corporation could have millions of dollars of revenue, tens of
millions of dollars in revenue, hundreds of millions of dollars in
revenue, and they could evade their responsibility under the parameters
of this bill.
But, of course, while the bill does not put caps on revenues of
profits, it does cap punitive damages, punitive damages that would
apply to conduct that is so egregious it would border on the criminal.
Now, the proponents of the bill claim that a cap is necessary to
prevent juries, juries made up of American citizens, people in the
community, from awarding appropriate punitive damages. Of course, there
is no evidence that there is a problem. In fact, it was the previous
speaker who spoke in support of the bill that, last year, in the entire
United States, there were 14 cases where juries awarded punitive
damages. But the proponents would suggest there is a problem. There is
no evidence and there is no data to that effect.
The real problem is that this negates the entire purpose of punitive
damages. And the purpose of punitive damages is to deter misconduct,
wanton and willful and egregious misconduct. The rationale for punitive
damages is to induce companies to spend the money to safeguard workers
and protect consumers rather than take the risk of being hit with
substantial damages down the road.
This bill will fail to deter misconduct. It will fail and will allow
for injuries that were fully foreseeable and preventable from
happening.
This bill is nothing more than a warrant for corporate recklessness.
And, of course, the bill overreaches in this and many other ways. It
eviscerates the traditional product liability law in this country. It
exempts all product sellers, renters, and lessors regardless of their
size.
Again, no, it is not about small business. This bill should be
defeated.
Mr. ROGAN. Mr. Chairman, I reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I yield 3 minutes to the gentleman from
Ohio (Mr. Kucinich).
Mr. KUCINICH. Mr. Chairman, I thank the gentleman for yielding me the
time. I also want to thank the gentleman and the gentlewoman for their
indulgence.
Mr. Chairman, I rise today in opposition to H.R. 2366. This bill
would strip society of the important tools it uses to deter bad
behavior by corporations. At stake is a wall of legal safeguards that
protect people from malicious conduct by businesses.
Title I of this bill encourages a company to act egregiously and to
act with flagrant disregard to the rights and safety of American
consumers. Additionally, despite the title's deceptive suggestion,
Title II unfairly exempts from liability both small and large business
retailers for the sale of defective products.
Title I of H.R. 2366 takes the bite out of monetary damages imposed
for malicious corporate conduct. The punitive damages are designed to
punish corporations for willful misconduct and it deters future
reckless behavior. This bill caps punitive damages to the arbitrary
amount of a quarter of a million dollars.
H.R. 2366 takes away the deterring effect of punitive damages and
sets a price at which companies can figure in the expense of conducting
business maliciously. This bill deprives the jury from the ability to
hold a company morally responsible for their willful misconduct.
Title II of H.R. 2366 unfairly protects all business retailers in
their ability to profit from dangerous products. Under current law, a
seller warrants that the product it sells is safe. The consumer then
has the confidence of being able to use the product without risking
injury. H.R. 2366 takes away the only legal reason a consumer would
have confidence. It changes the law and allows the retailer to sell and
make money from a defective product that the retailer knows or should
have known is dangerous. If the seller gets a benefit, they should also
pay when consumers are hurt.
In conclusion, H.R. 2366 takes away corporate incentives to produce
and sell safe products. This bill puts profit before product safety.
Mr. Chairman, I strongly urge my colleagues to vote no on H.R. 2366.
Mr. ROGAN. Mr. Chairman, I yield 3 minutes to my patient friend and
colleague, the gentlewoman from Illinois (Mrs. Biggert).
(Mrs. BIGGERT asked for and was given permission to revise and extend
her remarks.)
Mrs. BIGGERT. Mr. Chairman, I rise today in support of H.R. 2366, and
I commend my colleague, the gentleman from California (Mr. Rogan), for
his sponsorship of this legislation.
The Small Business Liability Reform Act will help alleviate the
abusive and frivolous lawsuits filed against the smallest of America's
smallest businesses.
{time} 1200
I have long been a supporter, a strong supporter, of tort reform. As
a State representative, I sponsored legal reforms to ensure that
businesses in Illinois could operate and compete on a fair, flexible,
and equal opportunity in the marketplace. I am proud to continue these
efforts here in Congress. Small businesses create the bulk of our
Nation's jobs. Yet a recent survey of more than 1200 small businesses
found that one in three have been sued, and more than half have been
threatened with a lawsuit in the last 5 years. Our small businesses are
being victimized by the litigiousness of our society and they
desperately need relief.
Small business owners face rising costs for liability insurance, not
to mention the crippling cost of defending themselves should they be
named in a lawsuit. Innocent or not, defending oneself is costly. The
estimated cost of a business owner's defense in the average lawsuit is
$100,000. Considering that the actual salary of a typical small
business owner is between $40,000 and $50,000, it is easy to see that
just one frivolous lawsuit can easily put a small firm out of business.
H.R. 2366 provides crucial limits on the lawsuits by capping punitive
damages at $250,000, or three times noneconomic damages, for businesses
only with fewer than 25 employees. I would like to see how many small
mom and pop stores would ever dream of having revenues of $100,000,
$200,000, $300,000 and the riches that the Members across the aisle
seem to imply.
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It also abolishes joint liability for noneconomic damages, ensuring
that small business owners are only liable for damages in proportion to
their fault. H.R. 2366 embodies key legal reforms that this House has
overwhelmingly supported in the past. This bill is good business and
good law. I urge my colleagues to support H.R. 2366 to enact small
business legal reform that is long overdue.
Mr. CONYERS. Mr. Chairman, I yield 5 minutes to the gentlewoman from
California (Ms. Lofgren), a distinguished member of the Committee on
the Judiciary who has worked very hard on the measure.
Ms. LOFGREN. Mr. Chairman, I oppose the bill before us today, and I
think it is worth pointing out that I am joined in this opposition by
the Violence Policy Center, the National Conference of State
Legislatures, Handgun Control, as well as the attorney general of the
State of California.
This so-called small business liability reform bill offered by the
gentleman from California (Mr. Rogan) is not really about small
businesses at all. In fact, the businesses may be quite big, making
millions and millions of dollars and still be protected by this bill.
It is only judged small by the number of employees.
Interestingly enough, it turns out that the manufacturers of most of
the guns that have caught our attention in the tragedies that have
beset this Nation, for example, the horrible shootings in Columbine,
were in fact manufactured by gun companies that fall below the 25-
employee limit, who would be, if this bill were to pass, immune from
liability.
That liability is now being pursued by a number of local governments.
For example, back home, the county of San Mateo and the city of Los
Angeles are pursuing lawsuits against gun manufacturers and dealers to
try and assess the responsibility for wrong behavior. Unfortunately,
this bill would put those lawsuits out of court. I do not think that is
the right thing to do. I do not think that is the right thing for this
Congress to do.
Now, it may be true that the causes of action being pursued by these
local governments to hold these gun manufacturers responsible for
misbehavior, it may be that these causes of action will not be
sustained. But I do not believe it is proper for Congress to intervene
in that judicial process. I do not think we should be giving a court
holiday to the manufacturer of the Tec DC-9 that tried to evade the
rules and the laws that Congress adopted against assault weapons. We
know the result of that evasion was that young people in Columbine High
School lost their lives.
I am a member of the Juvenile Justice Conference Committee. I am
mindful that we have met only once. We met on August 3 of last year.
There was a lot of talk at that time that we would come together and
address the gun safety issues that the Senate had passed, that we would
do that in time for the beginning of this school year. Time is a-
wasting. My daughter is now preparing for her high school graduation,
not the onset of high school, and yet we have done nothing, to do
nothing except propose to take away the only tool that exists for local
government to try and get control of this out-of-control gun violence
issue. I think what we are doing is shameful.
I would hope that we would listen to the Council of State Governments
and butt out of this litigation issue, that we would not create a web
of safety for gun manufacturers who have acted improperly. I would add
that we offered an amendment at the Committee on Rules, myself and the
gentlewoman from New York (Mrs. McCarthy) and the gentlewoman from
Colorado (Ms. DeGette) and the gentlewoman from Connecticut (Ms.
DeLauro) and some others. That amendment was not put in order. I think
that was a real shame, that we would not have an opportunity to exempt
gun dealers and manufacturers from the protections that this bill would
provide.
Because of that and many other reasons, I would hope that people who
want to do something about gun violence, people who feel that we owe
something to the mothers and fathers of this country to make their
children a little bit safer in school from gun violence, that we will
vote against this measure. That is all that we can do in decency.
Mr. Chairman, I oppose the bill before us today. I think it is worth
pointing out that I am joined in this opposition by the Violence Policy
Center, the National Conference of State Legislatures, Handgun Control,
as well as the Attorney General of the State of California.
This so-called small business liability reform bill, offered by the
gentleman from California (Mr. Rogan), is not really about small
businesses at all. In fact, the businesses may be quite big, making
millions and millions of dollars and still be protected by this bill
for small businesses. It is only judged small by the number of
employees.
Interestingly enough, it turns out that the manufacturers of most of
the guns that have caught our attention in the tragedies that have
beset this Nation, including the horrible shootings in Columbine, were
gun manufacturers that fall below the 25-employee limit and who would
be, if this bill were to pass, immune from liability for the damage
they've done.
Liability for wrong doing by these manufacturers is now being pursued
by a number of local governments. For example, back home in California,
the county of San Mateo and the city of Los Angeles are suing gun
manufacturers and dealers for wrong behavior, to try and assess their
irresponsibility. Unfortunately, this bill would put such lawsuits out
of court and on the street. I do not think that is the right thing for
this Congress to do.
Now, of course, it may be true that the causes of action being
pursued in court by these local governments, seeking to hold these gun
manufacturers responsible for misbehavior, may not be upheld. But I do
not believe it is proper for Congress to intervene in such judicial
processes and determine the issue this way. I do not think we should be
giving a court holiday to the manufacturer of the Tec DC-9. That gun
manufacturer tried to evade the rules and the laws that Congress
adopted against assault weapons by slight modifications to their
weapons to evade our proscriptions. We know the result of that evasion
was that their weapon was available and young people in Columbine High
School lost their lives.
I am a member of the Juvenile Justice Conference Committee. I am
mindful that we have met only once and that was on August 3rd of last
year. There was a lot of talk at that time by the majority about how we
would come together and address the gun safety issues that the Senate
had passed, that we would do that in time for the beginning of the
school year, that is, the school year that began last September. Well,
time is a-wasting. My daughter is now preparing not for the beginning
of the year but for her high school graduation. Yet we have done
nothing--nothing except propose to take away the only tool that exists
for local government to try to get control of this out-of-control gun
violence issue. I think what we are doing is shameful.
I would hope that we would listen to the Council of State Governments
who believe this is their business, not ours, and butt out of this
litigation issue. I would hope that we would not create a safety shield
that protects gun manufacturers who have acted improperly. It is not
like we haven't tried to avoid this miscarriage. I argued against this
in an amendment offered in the Judiciary Committee. We offered the same
amendment before the Committee on Rules, myself, the gentlewoman from
New York (Mrs. McCarthy), the gentlewoman from Colorado (Ms. DeGette),
and the gentlewoman from Connecticut (Ms. DeLauro). That amendment was
ruled out of order even though it was germane and voted upon in the
Judiciary Committee. It was ruled out of order for a vote by the full
House. I think that was a real shame, that we would not have an
opportunity for the members of this House to exempt gun dealers and
manufacturers from the protections that this bill would provide.
For this and many other reasons, I would hope that people who want to
do something about gun violence, people who feel that they owe
something to the mothers and fathers of this country to make their
children a little bit safer in school from gun violence, that they will
vote against this measure. That is all that they can do in decency and
justice.
Mr. ROGAN. Mr. Chairman, I yield myself such time as I may consume.
Just briefly in response to the comments of my friend and colleague
from California, I think it is wholly unfortunate that she wishes to
hold up this bill, which is so necessary for small businesses, in the
mistaken attempt of turning this into somehow some gun control bill.
The fact is, Mr. Chairman, her claim that some of these lawsuits or all
of these lawsuits would be thrown out of court simply misses the mark.
As I indicated in my opening statement, this bill would do nothing to
preclude a claimant from obtaining economic damages which include
wages, medical expenses, and business loss. It
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would do nothing to preclude a claimant from receiving noneconomic
damages, such as pain and suffering, disfigurement, loss of enjoyment
or companionship and other recognized damages. Finally, Mr. Chairman,
this bill again would do nothing under the amendment that I contemplate
will be accepted if in fact there was an intentional wrong done by a
small businessperson who happened to be a gun manufacturer.
I hate to see this bill held up by those attempting to pursue a gun
control agenda. This is not about gun control. This is about small
businesspeople being given the protection of law that they so
desperately need to keep their small businesses afloat.
Mr. Chairman, I yield such time as he may consume to my good friend,
the gentleman from Virginia (Mr. Goodlatte).
Mr. GOODLATTE. Mr. Chairman, I thank the gentleman for yielding me
this time, and I congratulate him for his outstanding work on this
issue which is so important to small businesspeople across this country
but to others as well. Small businesses create more new jobs in this
country than all of the large corporations in America combined. Small
business, the millions of small businesses we have, are the engine that
drives our economy. They are so often the ones that create the new
jobs, new enterprises that grow later into larger businesses that
provide more jobs. But for a company that provides 10, 15, 20 jobs, it
is the employees of those businesses as well as the businessmen and
women who own them that will find this legislation important, and also
consumers will benefit from this legislation as well because it will
help to hold down the cost of goods and services provided by those
small businesses.
Many small businesses are in some of the most competitive industries
that there are. When they are faced with unfair legal costs, it often
either puts them out of business or forces them to raise their prices
and make themselves uncompetitive or to pass those charges on to the
consumers that do business with them. Putting a cap on punitive damages
for small businesses, this is something that I think we should provide
in every lawsuit, no matter what the size of the corporation or
business or individual who is in business; but we certainly should do
it for small businesses, for companies with fewer than 25 employees.
To face a fine of more than $250,000 could easily put 10, 15, or 20
people out of work when a small company or an individual employing them
cannot meet that kind of punitive damage liability, and joint
liability. Again, so many instances where lawsuits are filed against a
whole host of people. The small businessperson who might be the
distributor, the manufacturer's representative, might be engaged in a
part of a transaction but have only a small amount of the
responsibility for the damages that are caused; and if the manufacturer
has gone out of business or somebody who misused the product in
installing it or some other involvement in it goes out of business,
that small businessperson can be left with an enormous amount of
liability and should not face that if they only cause a small portion
of the damages involved.
And then finally, we know about all of these lawsuits that are filed
where a shotgun approach is used where a whole host of defendants are
made a party to the suit and somebody is brought in as a defendant in a
suit and they really have a very limited liability for it; but there is
not a clear definition of what that liability might be.
And so when we have the provision in title II that establishes a
uniform liability standard that would be applied to nonmanufacturers or
product sellers in product liability cases, a standard that would allow
the product sellers to be liable only for the harms caused by their own
negligence, intentional misconduct or when the manufacturing supplier
is culpable but judgment-proof, it seems to me that setting a definite
national standard when so many of these transactions involve interstate
commerce is entirely appropriate for the Congress to do.
I commend the gentleman for his support for this legislation. I
commend him for garnering the kind of bipartisan support that he has
and support from a whole host of organizations concerned about small
businesses like the National Federation of Independent Businesses. This
is truly good legislation. I would call upon my colleagues on the other
side of the aisle to join with us in giving some relief to the people
who do the most for job creation in this country.
Mr. CONYERS. Mr. Chairman, I yield myself 1 minute, because the
author of this bill, the gentleman from California (Mr. Rogan), knows
what I know, namely, that the 70,000 gun dealers in this country are
happy to assume that they would enjoy the protection of H.R. 2366's
restriction on the liability of product sellers.
We had this amendment debated in Judiciary. The bill attempts to
exempt some legal theories that apply to the negligent sale of
firearms, such as negligent entrustment and negligence per se. But
there are many numerous other theories that have been successfully used
against firearm retailers and proprietors of gun clubs or target ranges
to recover damages caused by the sale or rental of a firearm. This is a
cover for gun dealers against lawsuits that are coming up that are
using theories such as public nuisance, negligent marketing, and unfair
and fraudulent business practices. We cannot give the gun dealers a
free ride in this bill.
Mr. ROGAN. Mr. Chairman, I am pleased to yield 3 minutes to my good
friend, the gentleman from Ohio (Mr. Chabot).
{time} 1215
Mr. CHABOT. Mr. Chairman, I rise today as both a Member of the
Committee on the Judiciary and Committee on Small Business to urge my
colleagues to support H.R. 2366, the Small Business Liability Reform
Act of 1999, and I would like to commend my colleague from the
Committee on the Judiciary, the gentleman from California (Mr. Rogan),
for his leadership in this area.
Small businesses with 25 or fewer full-time workers employ nearly 60
percent of the American workforce. Their continued vitality is
essential to our strong economy. However, just one lawsuit, frivolous
or not, can easily destroy a small business.
Today, small businesses operate in constant fear that they will be
named as a defendant in a lawsuit, be found minimally responsible for
the claimant's harm, and be financially crushed under the weight of
damages and attorneys' fees and the rest.
According to a recent Gallop survey, one out of every five small
businesses decides not to hire more employees, not to expand its
business, not to introduce a new product or not to improve an existing
product out of fear of litigation.
Mr. Chairman, H.R. 2366 would help alleviate the tremendous burden
and fear of unlimited liability on businesses that employ less than 25
people by making two modest changes to existing tort law, while still
steadfastly protecting injured plaintiffs' rights to sue.
First, H.R. 2366 would raise the burden of proof to a clear and
convincing evidence standard for a plaintiff suing for punitive damages
and place reasonable caps on these damages, up to three times the total
amount awarded for economic and non-economic loss or $250,000. This
provision is vitally important, because businesses cannot be insured to
cover these types of judgments.
H.R. 2366 would also eliminate joint and several liability for non-
economic damages for small businesses. In the States that have joint
and several liability in place, a defendant who is found only 1 percent
responsible for an injury can be stuck paying 100 percent of the
damages. Such a judgment could easily bankrupt a small business that is
only minimally responsible for a non-economic harm. If that happens,
workers lose their jobs.
I want to emphasize that real economic damages, including medical
costs, are not limited by this bill, and plaintiffs remain free to sue
more responsible parties.
Mr. Chairman, more than 60 percent of small business owners make no
more than $50,000 a year. Litigation costs and excessive judgments can
put them out of business in a heartbeat, causing employees, again, to
lose their jobs and impacting the community that has come to rely upon
the services of that particular business.
[[Page H469]]
This is a commonsense tort reform bill, and I encourage Members to
vote yes on H.R. 2366.
I again commend the gentleman from California (Mr. Rogan) for showing
his leadership in proposing this important legislation.
Mr. CONYERS. Mr. Chairman, I am happy to yield 4 minutes to the
gentlewoman from Texas (Ms. Jackson-Lee), a distinguished member of the
Committee on the Judiciary.
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the ranking member
for his leadership on this issue.
I appreciate the desire of the gentleman from California (Mr. Rogan)
to be helpful in the enhancement of small businesses in the United
States of America. I think, unfortunately, I need to disabuse those who
have debated this bill of any suggestion that they are supporting a
small business protection bill. This is not.
This is, again, a back-door attempt to do tort reform when the
members of the other party fully recognize that we have been
unsuccessful in doing such and there have been no calls for these kinds
of major changes in tort reform or product liability.
In particular, I will be supporting the Conyers amendment, that
really speaks to small businesses, and that is to narrow the protection
of this bill to businesses earning $5 million or less. That is a small
business. The only thing we have in this bill is to suggest that if you
have 25 employees. But we well know that in the trucking industry,
where, unfortunately, we have suffered over 440,000 large trucks
involved in accidents, including 4,871 fatal crashes, we realize that
those can be considered small businesses.
So this is a farce. This is a farce as it relates to the very
important issue that we have discussed about the enormous gun violence
that is going on in America, and, I might add, the very important
litigation that has been going on.
This bill fails to exempt several well-known causes of action: Public
nuisance, negligent marketing and unfair and fraudulent business
practices, the cornerstone of many cases dealing with gun violence.
I cannot say to the gentleman from California (Mr. Rogan) that every
mayor of every city is wrong about their attempt to protect their
cities from gun violence by the lawsuits that they have filed. Their
communities want them to file them; their communities want gun violence
to stop; their communities want the proliferation of guns to stop; and
we want our children to stop dying. This bill is a farce as it relates
to providing the protection of that these litigants need to address
their grievances.
The other point is why is this bill protecting the actor of the act,
meaning the one who has negligently acted, and has no concern about the
victim, by capping punitive damages? The gentleman from California (Mr.
Rogan) fully knows that the courts rarely give punitive damages, and it
is only in egregious circumstances that such is given. Now he is
suggesting he is going to fall on the side of the negligent actor, as
opposed to the victim.
Secondly, in the Committee on Rules they refused to listen when we
offered a hate crimes amendment, because the hate crimes provision in
this bill is benign, at best. We wanted to put language in that
reflects an intentional act, when some business, a KKK-run business
would intentionally burn a synagogue or, if you will, to refuse service
or to do something violent to an individual, and it is a business, an
intentional act, we could not get the committee on rules to accept that
or even in the committee.
I ask where the seriousness behind this legislation is, if we are not
willing to protect people from hateful, intentional acts?
In addition, this bill does not protect children whose parents may
not file an action before they reach the age of majority. It is well
known that many times children are in fact the victims of a negligent
act. At Lincoln Park Daycare, Danny Kasar died in a collapsed crib in a
daycare center. That crib may have been sold by a small business, and
the idea is if there is an egregious act through the manufacturer and
the seller, then this legislation keeps poor Danny, if, for example, in
this instance, he died, it keeps any case that may happen if the child
had not died to be able to be reached in majority.
Let me conclude, Mr. Chairman, by saying this is a bad bill, it is
not a small business bill, and I wish the gentleman from California
(Mr. Rogan) would take it back so we can work in a bipartisan manner,
and I ask my colleagues to defeat it.
Mr. Chairman, I rise in strong opposition to H.R. 2366, the Small
Business Liability Reform Act of 1999. This bill is not a small
business bill--it is a measure to insulate potentially large
corporations from the most egregious misconduct.
This bill seeks to limit injured parties' punitive damages to
$250,000 or 3 times compensatory damages, whichever is less for any
business with 25 or fewer employees regardless of the company's actual
financial earnings. In today's Internet economy it is likely that a
company with 25 or fewer employees is flush with income--why should
this Congress limit their punitive damages to such a low level?
Punitive damages are often awarded to deter those companies who
engage in behavior that is deemed grossly negligent. The fear of a jury
awarding punitive damages is our legal system's way of saying to
Corporate America that we will not tolerate willful and wanton conduct
that may injure our citizens.
For example, a little girl whose hand was caught in an exposed
rotating chain saw and lost three fingers was awarded $420,100 in
damages. If this bill becomes law the manufacturer of this chainsaw
with 25 or fewer employees would cap this girl's compensation to
$250,000 for a product that endangered this child's life. Our children
and our loved ones will be adversely affected by this bill. Why should
the Nation's most egregious corporate wrongdoers be protected at the
expense of innocent victims.
As you may be aware, tort law has evolved over the centuries to
reflect societal values and needs. Because it is common law--or judge-
made law--State tort law has developed from generation to generation in
the form of reported cases: ``In theory, the judges [draw] their
decision from existing principles of law; ultimately, these principles
[reflect] the living values, attitudes and ethical ideas of the
people.''
The tort system provides a number of benefits to society: it (1)
compensates injured victims; (2) deters misconduct that may cause
perceived injury and punishes wrongdoers who inflict injury; (3)
prevents injury by removing dangerous products and practices from the
marketplace; (4) forces public disclosure of information on dangerous
products and practices otherwise kept secret; and (5) expands public
health and safety rights in a world of increasingly complex technology.
The tort system is intended to effect behavior through the forces of
the private market. The ``invisible hand'' of the tort system alters
behavior so as to prevent dangerous and reckless conduct, which is
often not prohibited by any governmental regulation.
Product liability law, in particular, typically refers to the
liability of a manufacturer, seller or other supplier of products to a
person who suffers physical harm caused by the product. The legal
liability of the defendant may rest on five theories: (1) intent; (2)
negligence; (3) strict liability; (4) implied warranties of
merchantability and fitness for a particular purpose; and (5)
representation theories (express warranty and misrepresentation).
Historically, if the courts upset the liability rules that balance
the interests of injured citizens and wrongdoers, the State
legislatures are able to respond by either strengthening or weakening
the laws. For example, during the 1980's, a majority of States adopted
a number of product liability reforms involving such areas as punitive
damages, joint and several liability and strict liability in reaction
to a perceived ``insurance crisis.'' Each State has developed its own
tort system and considered and adopted reforms based on the needs of
its citizens and its desires to attract commerce. Restatements of law,
written by legal scholars, can indicate areas suitable for nationwide
uniformity if the states consider it to be in their own best interests.
Congress has been considering product liability legislation since as
early as 1979 when Representative Dingell introduced legislation which
would have federalized a number of areas of State liability law.
Proponents of such reforms have argued, inter alia, that State laws
have led to excessive product liability damage awards and that the
unpredictable and ``patchwork'' nature of the State product liability
system harms the competitiveness of domestic manufacturing firms. After
being unable to bring a product liability reform bill to either the
House or Senate floor for a number of years, during the 104th Congress
the House and Senate agreed to product liability legislation which
would have, inter alia,
[[Page H470]]
capped punitive damages for large and small businesses and narrowed the
standards for awarding such damages; eliminated joint and several
liability for non-economic damages; created a fifteen-year statute of
repose and a two-year statute of limitations; limited seller liability;
and limited liability for medical implant suppliers. President Clinton
subsequently vetoed the legislation.
In the wake of President Clinton's veto, the White House entered into
negotiations with Senators Rockefeller and Gorton, which culminated in
a somewhat narrower form of product liability legislation (the ``Senate
Product Liability Proposal''). The Senate Product Liability Proposal
was brought directly to the Senate floor but its proponents were unable
to obtain cloture to cut off debate.
The Senate Product Liability Proposal, among other things, capped the
maximum amount of punitive damages which may be awarded against ``small
businesses;'' narrowed the ground for the award of punitive damages to
those cases where there is a ``conscious, flagrant, indifference to the
rights or safety of others'' which can be established by ``clear and
convincing evidence;'' provided for a national statute of limitations
and statute or repose; and offered relief to product sellers, lessors,
and renters by specifying that they may only be subject to product
liability suit where they (1) failed to exercise reasonable care, (2)
violated an express warranty, or (3) engaged in intentional wrongdoing.
H.R. 2366 is similar to the 1998 Senate Product Liability Proposal,
however, it is broader in that it is not limited entirely to product
liability actions and it is narrower in that it excludes (1) the
statute of repose provision and (2) potential pro-victim provisions
such as a two-way preemptive federal statute of limitations running
from the time the harm was actually discovered.
I am skeptical of the need for this bill, as there is no credible
empirical evidence to support the notion that there is currently a
litigation explosion in the state and federal courts. Additionally,
punitive damages tend to be awarded in only the most egregious cases.
Furthermore, Congress should not be in the business of protecting the
rogue small business from reckless or harmful behavior, particularly
legislation such as this that rewards businesses that hire temporary
employees rather than full time employees. Yet again, the Majority is
attempting to undermine the principles of federalism by the federal
preemption of the state-based liability system. Given my concerns, I
will not support this bill which jeopardizes the right of innocent
victims to recover for corporate wrongdoing. We must continue to
protect our children, our loved ones, and to encourage the deterrence
of corporate misconduct.
Mr. ROGAN. Mr. Chairman, I am pleased to yield such time as he may
consume to my friend the gentleman from Arkansas (Mr. Hutchinson).
Mr. HUTCHINSON. Mr. Chairman, I thank the gentleman for yielding me
time. I want to congratulate him for his outstanding work on this
legislation and the spirit in which he worked with the different
members on the committee.
I also want to express my appreciation to the minority, because I
believe their participation in the Committee on the Judiciary improved
the entire process and the bill, and we have a very good product here.
To the gentlewoman from Texas, she just raised a question about the
instances of intentional conduct and she cited some examples. I believe
she used the KKK, if they engage in some intentional conduct, that
there would be caps on damages.
There is an amendment, I would say to my friend the gentlewoman from
Texas, that will be offered subsequently to this that would remove the
cap on intentional conduct that causes harm. So, with that, which we
will offer at a later time, it improves this bill even more. It makes
sure everyone is protected.
It is very important that litigants have access to the court. We
wanted to make sure that is accomplished and preserved. It is an
important right in America.
But, at the same time, we want to have a balance, so that in those
rare cases where the damages go out of whack, and that is what puts the
chilling effect on small businesses, that that is brought back into
scale and in line with the American system of justice.
This bill does very simple things: It eliminates joint and several
liability for the pain and suffering aspect of it, and then it puts
some reasonable caps on punitive damages. It applies this to small
business.
Now, I am a trial lawyer. I made my living after I was a Federal
prosecutor trying cases, going to court, representing litigants in
personal injury cases.
There is the rare case there is an abuse. I was with another lawyer
friend of mine, and I said, ``Can you tell me a moral justification to
defend joint and several liability?'' He tries more cases in Arkansas
than probably anyone. He said, ``No, I can't.'' It was an honest
answer. I believe this is good reform for the legal system.
So I very much congratulate my friend the gentleman from California
(Mr. Rogan) who has worked so hard on this legislation. What it does is
that it makes sure that the plaintiff will get economic damages, first
of all. That is the medical bills, the lost wages, the future lost
wages, those are those out-of-pocket expenses that you can itemize for
the jury. Those he can get without any limitation whatsoever. Pain and
suffering, there is absolutely no limitation on pain and suffering. I
think that is reasonable.
The joint and several liability limitation only applies to the pain
and suffering aspect. The punitive damages is what is capped. It is a
very reasonable cap on punitive damages, and that is what is intended
to punish, not intended to reward a plaintiff, and that is what we keep
in scope. There should be a limitation on punishment.
Again, with the amendment I am offering shortly, if there is
intentional conduct, extremely egregious conduct, the judge can
override that cap even at that instance so that justice can continue to
be done. It applies only to small business, less than 25 employees.
There are some amendments that I believe will be offered that will
change the definition of that, but this is a good, simple, fair
definition, less than 25 employees. It is easy to quantify. It is
similar to the civil rights statutes in that regard.
Again, I would ask my colleagues to support this bill. It is a good
bill for small business, but it is also a good and fair bill for the
legal system, which I cherish and honor and want to strengthen.
Mr. CONYERS. Mr. Chairman, I yield myself 1 minute to discuss this
lawyer's discussion that the gentleman from Arkansas has been having
with other lawyers who think this is a fine bill.
Well, maybe some of them do, but the fact of the matter is that as
this measure stands now, we are going to eliminate joint and several
liability for non-economic damages, and this is going to have a very
harmful effect on the victims. You do not have to be a lawyer to figure
that out. That is what the bill accomplishes, whether lawyers like it
or not. The bill imposes severe evidentiary restrictions and an overall
$250,000 cap on punitive damages in all civil cases.
Now, 25 employees or less, you must know that there are businesses
doing hundreds of millions of dollars of business with less than 25
employees. Yes, it protects ``mom and pops,'' but it lets in at the
other end these huge companies that are going to be so happy to know
that you have got this provision on the floor.
Mr. ROGAN. Mr. Chairman, I am pleased to yield 3 minutes to my good
friend, the gentleman from Virginia (Mr. Davis).
Mr. DAVIS of Virginia. Mr. Chairman, I thank my friend for yielding
me time.
Mr. Chairman, just to respond to the gentleman from Michigan, victims
are not hurt by capping punitive damages. They still get all their
actual damages. They get economic damages. Punitive damages are to
punish defendants who behave in the wrong way, not to reward the
victims. This does not touch what the victims can get from actual
damages.
But I support this legislation. Small businesses are the engine that
drives our economy. Small businesses account for 99.7 percent of the
nation's employers, employing 53 percent of the private workforce,
contributing 47 percent of all sales in this country and responsible
for 50 percent of the private gross domestic product.
In a recent Gallop survey, one out of every 5 small businesses
claimed they do not hire more employees or expand their business or
introduce a new product or improve an existing product out of fear of
litigation.
[[Page H471]]
The facts show that nationwide liability reform is what our small
businesses need. For example, there was an increase of 28 percent in
civil filings in State courts since 1984, and the median awards in
product liability cases increased 227 percent between 1997 and 1998.
Small businesses simply cannot afford to stay in business if they spend
their time, energy, and resources fighting lawsuits that are without
merit.
Small businesses are often severely burdened by frivolous lawsuits.
Since 1960, the number of such lawsuits have tripled and unwarranted
lawsuits have cost them billions of dollars, and in effect cost
American consumers that same amount. Many small businesses are being
forced to settle lawsuits, rather than bear the expense of litigation.
{time} 1230
In an effort to counter this growing trend, H.R. 2366 seeks to
protect small businesses by reducing their exposure to frivolous
litigation. I believe this is much-needed legislation because it
includes strategically targeted reforms which have strong bicameral,
bipartisan support.
This measure comprises several measures that will limit product
liability in small businesses. Those businesses are defined as having
fewer than 25 employees. This legislation will cap punitive damages at
$250,000 or three times compensatory damages, whichever is less, in any
civil lawsuit against small business. In order to receive damages,
plaintiffs must meet the ``clear and convincing evidence'' standard
that the defendant acted with willful misconduct and was flagrantly
indifferent to the rights and safety of others.
In addition, H.R. 2366 exempts small business defendants from joint
and several liability for noneconomic damages, such as pain and
suffering. Under this legislation, defendants will only be liable for
the proportion of the judgment that corresponds to their percentage of
the actual fault.
Mr. Chairman, H.R. 2366 exempts retailers, renters, and lessors from
legal responsibility for products that they receive from manufacturers,
but did not alter, and which subsequently malfunctioned or caused
damages, which makes perfect sense. I believe the uniform standard for
awarding punitive damages outlined in this legislation is a vital and
necessary part of tort reform. This is a fair and sensible solution to
the high number of frivolous lawsuits clogging up our court today.
Given that nearly 60 percent of the American workforce is employed by
small business with 25 or fewer full-time employees, I think it is
essential that we pass this legislation so our small businesses may
become more innovative and competitive in today's global marketplace.
I thank the gentleman for introducing this legislation, and I urge my
colleagues to support it.
Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentleman from
Wisconsin (Mr. Kind).
Mr. KIND. Mr. Chairman, I thank the ranking member for yielding me
this time.
Mr. Chairman, I rise in strong opposition to this legislation. I
would encourage the rest of my colleagues to oppose it as well if, for
no other reason, than because of the Federal preemption implications
over State law and the work that many State legislatures throughout the
country have put into this issue. This is another classic example of
``Washington-knows-best'' when it comes to our system of justice in
this country.
This is not just a concern and a belief that I have, but even the
Republican governor from my home State of Wisconsin has expressed this
concern in a letter to our ranking member on the committee in which he,
along with the chairman of the Council of State Governments, State
Senator Kenneth McClintock, expressed their severe reservations to this
legislation.
In the letter they wrote, ``We are very concerned about the following
preemption aspects of this bill:
``The bill establishes new evidentiary tests for punitive damages
that would negate State laws for punitive damages, even though every
State already requires that a plaintiff prove that a defendant acted in
some particularly deliberate or egregious way to receive punitive
damages.
``The bill overturns the doctrine utilized in many States of joint
and several liability.
``The bill makes a dramatic and unacceptable change that alters the
theory of strict product liability that is accepted and practiced in
most States.
``The bill only preempts the laws of those States that offer greater
protections to consumers, which we challenge from an equity
perspective.''
They went on to state, ``Protecting small business in this Nation is
a laudable goal. We, as State officials, have a vested interest in the
economic growth spawned by small business development, and to this end
we are excited to join with you in creating effective and sound
legislative solutions.
``We are very concerned with the seeming eagerness of Congress to
attempt to preempt State law. We urge you to reconsider your approach
to this issue.''
Again, this is a Republican governor from the State of Wisconsin,
Tommy Thompson, in opposition to H.R. 2366.
I have another letter from the National Conference of State
Legislatures in which Executive Director William Pound wrote that they
oppose H.R. 2366 ``because of the damage it would due to our system of
constitutional federalism. The tort law and its reform historically and
appropriately have been matters within the jurisdiction of States.''
So, Mr. Chairman, I think the attempt here may be laudable, but I
hope it is not just an election-year gimmick to try to make some
Members appear weak in their support of small businesses when, in fact,
we are talking about the very serious issue of Federal preemption over
State jurisdiction.
The CHAIRMAN. The Chair would inform Members that the gentleman from
California (Mr. Rogan) has 2 minutes remaining; the gentleman from
Michigan (Mr. Conyers) has 1\1/2\ minutes remaining.
Mr. CONYERS. Mr. Chairman, I yield our remaining time to the
gentlewoman from Connecticut (Ms. DeLauro).
The CHAIRMAN. The gentlewoman from Connecticut (Ms. DeLauro) is
recognized for 1\1/2\ minutes.
Ms. DeLAURO. Mr. Chairman, I rise in opposition to this misnamed and
misguided piece of legislation under the guise of helping small
businesses succeed, which is a goal that we can all support. This bill
gives cover to businesses that make faulty products, that injure and
even kill. This bill would protect companies that make cheap, poorly
made firearms. These are weapons that are not made for hunting or for
home protection; they are made to give criminals more bang for the
buck.
Let me give my colleagues an example. Intratec is best known for its
inexpensive assault pistols, notably, the TEC-9, the TEC-DC9 and the
AB-10. The TEC-DC9 was one of the guns used in the 1999 massacre at
Columbine High School in Colorado.
This is also the company that markets Saturday night special handguns
or what they call junk guns. Their advertising copy brags, and I quote,
``that our guns are as tough as your toughest customers.'' In fact,
this legislation, my friends, would provide cover to the makers of the
weapons that were used at Columbine.
I am dismayed that the Republican majority would not allow this House
to consider an amendment that the gentlewoman from California (Ms.
Lofgren) offered, which would have removed the protection from just the
gun makers.
This is wrong. We ought to be in the business of encouraging
responsibility across the board, including small businesses; but this
bill takes us in the wrong direction. It puts consumers, it puts our
kids at undue risk by weakening key protections.
Mr. ROGAN. Mr. Chairman, I yield myself the remainder of the time.
I want to thank all of my colleagues who joined in this debate today.
I appreciate their comments.
I must say that I deeply regret hearing some of the characterizations
of this bill and the way it has been twisted. I have sat here for the
last hour listening to the fact that if we give a limitation of
liability on punitive damages to small businesses, that people will be
killed in the streets and that greedy corporate officers will rake in
millions of dollars at the expense of working people; and that just
simply is not the case, Mr. Chairman.
[[Page H472]]
When we talk about small business protection, who are these small
businesses that we are addressing and that we are trying to demonstrate
some protection for in this bill? Mr. Chairman, in our country today,
fully 60 percent of every business would be characterized as a small
business under the definition of this bill, 24 employees or less, and
more than half of those businesses, Mr. Chairman, take in less than
$50,000 per year. These are not rich corporate megamerger giant
businesses that this bill protects.
The Republican majority is attempting to protect those men and women
who are out there trying to create jobs who are risking their capital
and are attempting to provide an economic engine for our country. In
fact, Mr. Chairman, median business earnings in 1996 were $25,000;
about 25 percent of the self-employed earned less than $12,500, and
about 25 percent earned more than $50,000. Only 9 percent of small
business owners took over $100,000 from their business when these
statistics were taken. That is the people that this bill is attempting
to protect, those small businessmen and women who are investing their
lives and their capital into making this country's economic engine run.
The Congress of the United States has a moral obligation to protect
them from frivolous lawsuits so that their livelihood, their families,
their homes, and their businesses are not taken by greedy trial lawyers
in frivolous lawsuits or worse, be forced to settle a case that has no
merit because the gun of punitive damages has been cocked and put to
their head and that threat is so great that they cannot afford to
defend themselves.
I urge support for this bill.
Mr. Chairman, on behalf of the gentleman from Illinois (Mr. Hyde),
the chairman of the Committee on the Judiciary, and the gentleman from
Virginia (Mr. Bliley), the chairman of the Committee on Commerce, I
submit the following exchange of letters:
U.S. House of Representatives,
Committee on Commerce,
Washington, DC, February 10, 2000.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary, Rayburn House Office
Building, Washington, DC.
Dear Henry: Please find enclosed my recent letter to the
Speaker agreeing to be discharged from further consideration
of the bill, H.R. 2366, the Small Business Liability Reform
Act. As you know, the Committee on Commerce's referral was
recently extended to February 14, 2000. I am agreeing to have
the Committee discharged without taking action on the bill in
light of the need to bring this important product liability
legislation to the floor in an expeditious manner.
By agreeing to waive its consideration of the bill, the
Commerce Committee does not waive its jurisdiction over H.R.
2366 or similar bills. In addition, the Commerce Committee
reserves its authority to seek the appointment of an
appropriate number of conferees on this bill or similar
legislation that may be the subject of a House-Senate
conference. I ask for your commitment to support any request
by the Commerce Committee for conferees on H.R. 2366 or
similar legislation.
I also ask that you include a copy of this letter and your
response as part of the Record during consideration of this
legislation on the House floor. Thank you for your assistance
and cooperation in this matter. I remain,
Sincerely,
Tom Bliley,
Chairman.
____
U.S. House of Representatives,
Committee on Commerce,
Washington, DC, February 10, 2000.
Hon. J. Dennis Hastert,
Speaker, U.S. House of Representatives, the Capitol,
Washington, DC.
Dear Mr. Speaker: On February 7, 2000, you extended the
Committee on Commerce's referral of H.R. 2366, the Small
Business Liability Reform Act, for a period ending not later
than February 14, 2000. Recognizing the need to bring this
important product liability legislation to the floor as soon
as possible, I will agree to have the Committee on Commerce
discharged from further consideration of H.R. 2366. By
agreeing to be discharged, I am not waiving the Committee's
jurisdiction over H.R. 2366 or other similar legislation, and
I will seek the appointment of an appropriate number of
conferees should this legislation be the subject of a House-
Senate conference.
Thank you for your assistance and understanding in this
matter. I remain.
Sincerely,
Tom Bliley,
Chairman.
____
House of Representatives,
Committee on the Judiciary,
Washington, DC, February 11, 2000.
Hon. Tom Bliley,
Chairman, Committee on Commerce, House of Representatives,
Washington, DC.
Dear Tom: Thank you for your letter regarding your
committee's jurisdictional interest in H.R. 2366, the ``Small
Business Liability Reform Act of 2000.''
I acknowledge your committee's jurisdiction over title II
of this legislation and appreciate your cooperation in moving
the bill to the House floor expeditiously. As you are well
aware, your decision to forgo further action on the bill will
not prejudice the Commerce Committee with respect to its
jurisdictional prerogatives on this or similar legislation. I
will be happy to support your request for conferees on those
provisions within the Committee on the Commerce's
jurisdiction should they be the subject of a House-Senate
conference. I will also include a copy of your letter and
this response in the Congressional Record when the
legislation is considered by the House.
Thank you again for your cooperation.
Sincerely,
Henry Hyde,
Chairman.
____
Congressional Budget Office,
U.S. Congress,
Washington, DC, February 16, 2000.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary, U.S. House of
Representatives, Washington, DC.
Dear Mr. Chairman: In the cost estimate for the Small
Business Liability Reform Act of 2000 (H.R. 2366), as ordered
reported by the House Committee on the Judiciary on February
1, 2000, the Congressional Budget Office (CBO) stated that an
estimate of the bill's impact on the private sector would be
provided in a separate statement. CBO has now completed its
review of this bill.
CBO finds that H.R. 2366 would impose no new private-sector
mandates as defined in the Unfunded Mandates Reform Act of
1995.
If you wish further details on this analysis, we will be
pleased to provide them. The CBO staff contact is John Harris
(202-226-2949).
Sincerely,
Barry B. Anderson,
(For Dan L. Crippen, Director).
Mr. POMEROY. Mr. Chairman, I rise in opposition to H.R. 2366, the
Small Business Liability Reform Act of 1999. I believe strongly that
action must be taken to protect small businesses from the financial
burdens imposed by frivolous lawsuits. In trying to address this issue,
however, H.R. 2366 would supersede State tort law, including important
statutes enacted in my own State of North Dakota. The preemptive
provisions in H.R. 2366 would deny States the right to determine tort
law free from Federal intrusion and thereby undermine the principle of
federalism upon which our form of government rests.
Mr. Chairman, there is little dispute that small businesses in this
country deserve protection from frivolous lawsuits and the resulting
increase in insurance costs. In North Dakota, small businesses are the
cornerstone of our communities and have helped diversify and stimulate
our rural economy. Although these businesses are critically important
to the future of States like North Dakota, many have been unfairly
disadvantaged by costly lawsuits. Unfortunately, small businesses are
often compelled to settle these lawsuits even if they would have
prevailed in court, simply in order to avoid the costs of litigation. I
believe, as do many of my colleagues, that States should reexamine
their tort laws to address this problem.
I also believe, however, that H.R. 2366 does not represent the
appropriate Federal response to the issue of frivolous lawsuits.
Historically, determination of tort law as well as its reform have
fallen within the jurisdiction of the States. Over the past 15 years,
several States have substantially reformed tort laws to provide
manufacturers and retailers greater protection from liability. My own
State of North Dakota, for example, has enacted a statute on punitive
damages that is more protective of businesses than the punitive damages
provision in this bill. H.R. 2366 would interfere with North Dakota's
right, and the right of every State, to determine its own tort law.
Because they recognize the potential threat H.R. 2366 poses to our
system of federalism, I am joined in my opposition to this bill both by
the Council on State Governments and the National Conference of State
Legislatures.
Mr. Chairman, although I do not support this particular vehicle for
tort reform, I remain committed to protecting small businesses from
excessive litigation. I also look forward to working with my colleagues
on both sides of the aisle on legislative strategies to encourage small
business development in all 50 States.
Mr. DINGELL. Mr. Chairman, I rise in opposition to H.R. 2366, the
Small Business Liability Reform Act of 2000. This legislation is very
poorly drafted and unclear in its terms and application. It does not
simply apply to reform of the product liability laws, which I support.
Instead, H.R. 2366 exempts what it defines as small businesses from a
broad and unspecified range of civil liability.
There are provisions of this legislation which I have supported, such
as the product seller protections in title II. However, I am extremely
concerned that no one seems to have a clear and full understanding of
all the circumstances
[[Page H473]]
in which this bill would limit the rights victims have to be
compensated for the fraud and deception they suffer. The proponents of
this legislation are asking for our support without identifying all the
existing rights victims have that the bill may preempt.
The sponsors have offered amendments they claim fix a lot of the
bill's problems, but I am not at all sure they are right, and
furthermore I am very sure we have not yet identified all the problems
this legislation creates. For example, the Securities and Exchange
Commission (SEC) staff say H.R. 2366 would still limit punitive damages
that a victim of a securities ``boiler room'' scam could recover in a
case he or she brings in State court. The SEC openly admits that it is
not capable of taking on total responsibility for making sure the
securities market is free of fraud and deception. Instead, the SEC says
that private plaintiffs are a vital supplement to the Commission's
enforcement program.
Suing for fraud is the only way a securities ``boiler room'' victim
can recoup his or her losses, other than commissions paid. With more
and more Americans investing in securities every day, do the sponsors
of this legislation really want to arbitrarily limit punitive damage
awards that senior citizens and others may receive from State courts in
cases of fraud perpetrated by securities ``boiler rooms''?
That's definitely not the kind of litigation reform I support, and I
seriously doubt if it's what many of my colleagues want, either. The
threat of substantial and meaningful liability is a very important tool
needed to keep securities fraud at a minimum. If that liability is
reduced by this bill to a point that unscrupulous securities dealers
are willing to absorb their reduced liability as a cost of doing
business, investors, particularly the least sophisticated investors,
will be victimized, and they will suffer.
I cannot vote for a bill that so clearly increases, rather than
reduces, the chance that innocent investors will be the victims of
fraud and deception in the securities market. I would hope that my
colleagues would also find that to be a totally unacceptable and
dangerous outcome. Nor can I vote for a bill that is so ambiguous and
potentially sweeping in its scope. For these reasons, I urge my
colleagues to vote ``no'' on H.R. 2366. It is a fundamentally flawed
piece of legislation that does not deserve your support.
Mr. SENSENBRENNER. Mr. Chairman, I rise in strong support of H.R.
2366, the Small Business Liability Reform Act of 2000. In my view, the
American tort system is a disaster. It resembles a wealth
redistribution lottery more than an efficient system designed to
compensate those injured by the wrongful acts of others. Our current
system raises the prices of goods made in America, forces State and
local governments to expend precious resources, and causes unwarranted
personal anguish and damages reputations. Companies should be held
responsible for truly negligent behavior resulting in actual harm. But
a civil justice system that perpetuates the concept of ``joint and
several liability'' and has no effective mechanism, such as a loser
pays rule, to deter frivolous lawsuits is simply not just. I am pleased
that H.R. 2366 takes the first step toward alleviating this problem.
H.R. 2366 would eliminate joint and several liability of small business
defendants for non-economic damages, such as pain and suffering, but
would retain if for economic damages, such as medical expenses. This
would partially relieve the situation where a small business defendant
is held liable for damages far in excess of its actual responsibility.
I have been a longtime supporter of legislation to set uniform
standards for product liability actions brought in State and Federal
court. Inconsistencies within and among the States in rules of law
governing product liability actions result in differences in State laws
that may be inequitable with respect to plaintiffs and defendants,
which, in turn, impose burdens on interstate commerce. Establishing
uniform legal principles of liability for product seller, lessors, and
renters will provide a fair balance among the interest of all parties
in the chain of product manufacturing, distribution, and use, reduce
costs and delays in product liability actions, and reduce the burdens
on interstate commerce.
Mr. Chairman, I urge passage of this long overdue legislation.
Mrs. MINK of Hawaii. Mr. Chairman, I rise today in opposition to H.R.
2366, the Small Business Liability Reform Act of 1999. H.R. 2366 takes
away rights of victims to be compensated for injuries they suffer due
to the negligence of manufacturers and retailers and in doing so,
encourages corporations to evade their responsibility to provide
consumers with safe products.
This bill masquerades as an attempt to assist our Nation's small
businesses. In reality however, only title I applies to small
businesses, title II of the bill, the products liability provisions,
applies to all businesses, despite H.R. 2366's title.
H.R. 2366 will cap punitive damages at $250,000 and will eliminate
joint and several liability for noneconomic damages like pain and
suffering, loss of limb, loss of fertility, permanent disfigurement,
and loss of a child. In doing so, this bill attempts to change a
multitude of areas of law and does not solely concentrate on pure
liability reform. Beyond that, this bill discriminates against women
and our Nation's seniors who bear the greatest portion of noneconomic
damages.
If H.R. 2366 becomes law, our Nation's consumers will be left with
very limited avenues of recourse if they suffer damages. This bill will
set damage caps on liability suits at $250,000 for all businesses with
fewer than 25 employees regardless of how much revenue the business
generates. It will allow product liability suits in three instances
only: when there is a failure to exercise reasonable care, when there
is a violation of a manufacturer's express warranty, and when there is
intentional wrong doing by the company.
By eliminating joint and several liability, this bill makes unknowing
and innocent members of the public bear the burden of their damages as
small businesses will, under this bill, be considered judgment proof.
It is no surprise that the National Conference of State Legislators
are against this bill. First, this bill does not meet its goal of
creating uniformity among our Nation's laws because of its unequal
treatment of the issue of punitive damages. This bill does not create
punitive damages in States where it does not exist, but it does cap
punitive damages for the States that already have punitive damage
awards.
Second, H.R. 2366 will eliminate the rights of States and cities to
sue gun manufacturers as most of them are considered small businesses
under the definition of the bill and therefore are exempt from suit.
This robs our States of the autonomy of deciding for themselves how to
handle suits against gun manufacturers and retailers. Also, H.R. 2366
raises serious federalism problems. This bill totally disregards States
from exercising jurisdiction over their own tort laws, an area of law
which has historically been reserved for them to exercise their own
jurisdiction over. Many States have already set laws which require that
higher standards be met before punitive damages can be awarded but no
State has limited punitive damages for intentional injury. This bill
would require States to do so. H.R. 2366 dictates to the States what
recourse their own citizens have in their own State courts when they
are injured by manufacturers and retailers. It is curious to note that
this bill affects our Nation's State courts but denies our Federal
district courts the right to hear cases that would fall under this
bill.
I urge my colleagues to vote against this bill and not allow the
victims of dangerous products to be robbed of their right to recourse.
We need to vote against this bill and help our States decide for
themselves how best to protect their own consumers.
Mr. WAXMAN. Mr. Chairman, I rise in opposition to H.R. 2366. This
bill would jeopardize the enforcement of the laws which protect our
health and our environment, and undermine the responsibility of
companies to make product safety a priority.
It is wrong to assume that a company should be less accountable for
damage it causes simply because it has fewer employees, or to pretend
that a company's smaller size in any way mitigates the extent of the
damage it can cause. Think of the far reaching impact of a biotech
company that markets a faulty vaccine; a small chemical company that
pollutes groundwater; or a small business gun dealer that sold weapons
used in a school shooting.
Furthermore, the $250,000 cap on punitive damages is not only an
arbitrary slap in the face of the innocent individuals who suffer, it
is a dangerous green light for corporate irresponsibility. Placing a
quantitative limit on damages turns liability into a cost-benefit
business equation where product safety becomes a choice rather than an
imperative.
Let me give you a very serious example of how this legislation could
interfere with important efforts to deter environmental degradation. In
literally thousands of locations throughout California, the fuel
additive MTBE is showing up in groundwater.
In my district, for example, the city of Santa Monica has faced the
most serious MTBE contamination of any community in the country. Before
MTBE contaminated Santa Monica's drinking water, groundwater provided
70 percent of the city's water supply. Now, after the contamination,
the city imports more than 80 percent of its drinking water from
northern California and the Colorado River. In short, MTBE from leaking
underground storage tanks has shut down our drinking water well fields,
making the drinking water taste and smell like turpentine.
This is not an isolated problem. It seems each week more MTBE
contamination is found in California--as well as in the northeastern
States. And in Santa Monica the cleanup could cost as much as $200
million.
[[Page H474]]
Congress should be working to address this serious problem. We should
be moving to prevent further contamination and working to aggressively
clean up MTBE contamination. However, this legislation takes us in the
opposite direction by shielding negligent polluters from punitive
damages under State tort claims.
Recently, the TV show ``60 minutes'' documented a small town in
California which has been turned into a ghost town due to MTBE
contamination from a single gas station. When the city lost their
drinking water, the businesses shut down, the residents lost their
livelihoods, and the few residents who remain are drinking contaminated
drinking water. It makes no sense for Congress to move to protect this
gas station owner from State tort claims, in any way, when their
leaking underground storage tanks have decimated a small town.
This bill would create a giant loophole for small companies to
subvert Federal and State health and environmental laws, and severely
weaken their deterrence against faulty business practices. If you want
strong deterrence against MTBE contamination of groundwater, oppose
this ill-considered legislation.
I also want the record to be clear that the amendment offered by
Representatives Rogan and Hutchinson does not address the critical
problems with this legislation.
Even with the adoption of their amendment, punitive damages awarded
under State tort claims and citizen suits under environmental laws are
severely limited.
The Rogan-Hutchinson amendment would allow the $250,000 cap to be
exceeded if the defendant acted with specific intent to cause the type
of harm for which the action was brought. In the case of MTBE
contamination, no business has acted with the intent to contaminate
groundwater. However, some businesses may have acted so irresponsibly
that we should send a clear signal that we cannot tolerate this
behavior. Especially, when the cost is so great on our communities.
With MTBE contamination showing up all over the country, why should
we be establishing a safe harbor for polluters?
I urge all members to oppose this bill, regardless of whether or not
this amendment passes.
The CHAIRMAN. All time for general debate has expired.
Pursuant to the rule, the committee amendment in the nature of a
substitute printed in the bill shall be considered as an original bill
for the purpose of amendment under the 5-minute rule and shall be
considered read.
The text of the committee amendment in the nature of a substitute is
as follows:
H.R. 2366
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Small
Business Liability Reform Act of 2000''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--SMALL BUSINESS LAWSUIT ABUSE PROTECTION
Sec. 101. Findings.
Sec. 102. Definitions.
Sec. 103. Limitation on punitive damages for small businesses.
Sec. 104. Limitation on joint and several liability for noneconomic
loss for small businesses.
Sec. 105. Exceptions to limitations on liability.
Sec. 106. Preemption and election of State nonapplicability.
TITLE II--PRODUCT SELLER FAIR TREATMENT
Sec. 201. Findings; purposes.
Sec. 202. Definitions.
Sec. 203. Applicability; preemption.
Sec. 204. Liability rules applicable to product sellers, renters, and
lessors.
Sec. 205. Federal cause of action precluded.
TITLE III--EFFECTIVE DATE
Sec. 301. Effective date.
TITLE I--SMALL BUSINESS LAWSUIT ABUSE PROTECTION
SEC. 101. FINDINGS.
Congress finds that--
(1) the defects in the United States civil justice system
have a direct and undesirable effect on interstate commerce
by decreasing the availability of goods and services in
commerce;
(2) there is a need to restore rationality, certainty, and
fairness to the legal system;
(3) the spiralling costs of litigation and the magnitude
and unpredictability of punitive damage awards and
noneconomic damage awards have continued unabated for at
least the past 30 years;
(4) the Supreme Court of the United States has recognized
that a punitive damage award can be unconstitutional if the
award is grossly excessive in relation to the legitimate
interest of the government in the punishment and deterrence
of unlawful conduct;
(5) just as punitive damage awards can be grossly
excessive, so can it be grossly excessive in some
circumstances for a party to be held responsible under the
doctrine of joint and several liability for damages that
party did not cause;
(6) as a result of joint and several liability, entities
including small businesses are often brought into litigation
despite the fact that their conduct may have little or
nothing to do with the accident or transaction giving rise to
the lawsuit, and may therefore face increased and unjust
costs due to the possibility or result of unfair and
disproportionate damage awards;
(7) the costs imposed by the civil justice system on small
businesses are particularly acute, since small businesses
often lack the resources to bear those costs and to challenge
unwarranted lawsuits;
(8) due to high liability costs and unwarranted litigation
costs, small businesses face higher costs in purchasing
insurance through interstate insurance markets to cover their
activities;
(9) liability reform for small businesses will promote the
free flow of goods and services, lessen burdens on interstate
commerce, and decrease litigiousness; and
(10) legislation to address these concerns is an
appropriate exercise of the powers of Congress under clauses
3, 9, and 18 of section 8 of article I of the Constitution of
the United States, and the 14th amendment to the Constitution
of the United States.
SEC. 102. DEFINITIONS.
In this title:
(1) Crime of violence.--The term ``crime of violence'' has
the same meaning as in section 16 of title 18, United States
Code.
(2) Drug.--The term ``drug'' means any controlled substance
(as defined in section 102 of the Controlled Substances Act
(21 U.S.C. 802)) that was not legally prescribed for use by
the defendant or that was taken by the defendant other than
in accordance with the terms of a lawfully issued
prescription.
(3) Economic loss.--The term ``economic loss'' means any
pecuniary loss resulting from harm (including the loss of
earnings or other benefits related to employment, medical
expense loss, replacement services loss, loss due to death,
burial costs, and loss of business or employment
opportunities) to the extent recovery for such loss is
allowed under applicable State law.
(4) Harm.--The term ``harm'' means any physical injury,
illness, disease, or death or damage to property.
(5) Hate crime.--The term ``hate crime'' means a crime
described in section 1(b) of the Hate Crime Statistics Act
(28 U.S.C. 534 note).
(6) International terrorism.--The term ``international
terrorism'' has the same meaning as in section 2331 of title
18, United States Code.
(7) Noneconomic loss.--The term ``noneconomic loss'' means
loss for physical or emotional pain, suffering,
inconvenience, physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of
domestic service), injury to reputation, or any other
nonpecuniary loss of any kind or nature.
(8) Person.--The term ``person'' means any individual,
corporation, company, association, firm, partnership,
society, joint stock company, or any other entity (including
any governmental entity).
(9) Small business.--
(A) In general.--The term ``small business'' means any
unincorporated business, or any partnership, corporation,
association, unit of local government, or organization that
has fewer than 25 full-time employees as determined on the
date the civil action involving the small business is filed.
(B) Calculation of number of employees.--For purposes of
subparagraph (A), the number of employees of a subsidiary of
a wholly owned corporation includes the employees of--
(i) a parent corporation; and
(ii) any other subsidiary corporation of that parent
corporation.
(10) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, any other territory or possession of the
United States, or any political subdivision of any such
State, commonwealth, territory, or possession.
SEC. 103. LIMITATION ON PUNITIVE DAMAGES FOR SMALL
BUSINESSES.
(a) General Rule.--Except as provided in section 105, in
any civil action against a small business, punitive damages
may, to the extent permitted by applicable State law, be
awarded against the small business only if the claimant
establishes by clear and convincing evidence that conduct
carried out by that defendant through willful misconduct or
with a conscious, flagrant indifference to the rights or
safety of others was the proximate cause of the harm that is
the subject of the action.
(b) Limitation on Amount.--In any civil action against a
small business, punitive damages shall not exceed the lesser
of--
(1) 3 times the total amount awarded to the claimant for
economic and noneconomic losses; or
(2) $250,000.
SEC. 104. LIMITATION ON JOINT AND SEVERAL LIABILITY FOR
NONECONOMIC LOSS FOR SMALL BUSINESSES.
(a) General Rule.--Except as provided in section 105, in
any civil action against a small business, the liability of
each defendant that is a small business, or the agent of a
small business, for noneconomic loss shall be determined in
accordance with subsection (b).
(b) Amount of Liability.--
(1) In general.--In any civil action described in
subsection (a)--
(A) each defendant described in that subsection shall be
liable only for the amount of noneconomic loss allocated to
that defendant in direct proportion to the percentage of
responsibility of that defendant (determined in accordance
with paragraph (2)) for the harm to the claimant with respect
to which that defendant is liable; and
[[Page H475]]
(B) the court shall render a separate judgment against each
defendant described in that subsection in an amount
determined under subparagraph (A).
(2) Percentage of responsibility.--For purposes of
determining the amount of noneconomic loss allocated to a
defendant under this section, the trier of fact shall
determine the percentage of responsibility of each person
responsible for the harm to the claimant, regardless of
whether or not the person is a party to the action.
SEC. 105. EXCEPTIONS TO LIMITATIONS ON LIABILITY.
The limitations on liability under sections 103 and 104 do
not apply--
(1) to any defendant whose misconduct--
(A) constitutes--
(i) a crime of violence;
(ii) an act of international terrorism; or
(iii) a hate crime;
(B) results in liability for damages relating to the injury
to, destruction of, loss of, or loss of use of, natural
resources described in--
(i) section 1002(b)(2)(A) of the Oil Pollution Act of 1990
(33 U.S.C. 2702(b)(2)(A)); or
(ii) section 107(a)(4)(C) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9607(a)(4)(C));
(C) involves--
(i) a sexual offense, as defined by applicable State law;
or
(ii) a violation of a Federal or State civil rights law;
(D) occurred at the time the defendant was under the
influence (as determined under applicable State law) of
intoxicating alcohol or a drug, and the fact that the
defendant was under the influence was the cause of any harm
alleged by the plaintiff in the subject action; or
(2) to any cause of action which is brought under the
provisions of title 31, United States Code, relating to false
claims (31 U.S.C. 3729-3733) or to any other cause of action
brought by the United States relating to fraud or false
statements.
SEC. 106. PREEMPTION AND ELECTION OF STATE NONAPPLICABILITY.
(a) Preemption.--Subject to subsection (b), this title
preempts the laws of any State to the extent that State laws
are inconsistent with this title.
(b) Election of State Regarding Nonapplicability.--This
title does not apply to any action in a State court against a
small business in which all parties are citizens of the
State, if the State enacts a statute--
(1) citing the authority of this subsection;
(2) declaring the election of such State that this title
does not apply as of a date certain to such actions in the
State; and
(3) containing no other provision.
TITLE II--PRODUCT SELLER FAIR TREATMENT
SEC. 201. FINDINGS; PURPOSES.
(a) Findings.--Congress finds that--
(1) although damage awards in product liability actions may
encourage the production of safer products, they may also
have a direct effect on interstate commerce and consumers of
the United States by increasing the cost of, and decreasing
the availability of, products;
(2) some of the rules of law governing product liability
actions are inconsistent within and among the States,
resulting in differences in State laws that may be
inequitable with respect to plaintiffs and defendants and may
impose burdens on interstate commerce;
(3) product liability awards may jeopardize the financial
well-being of individuals and industries, particularly the
small businesses of the United States;
(4) because the product liability laws of a State may have
adverse effects on consumers and businesses in many other
States, it is appropriate for the Federal Government to enact
national, uniform product liability laws that preempt State
laws; and
(5) under clause 3 of section 8 of article I of the United
States Constitution, it is the constitutional role of the
Federal Government to remove barriers to interstate commerce.
(b) Purposes.--The purposes of this title, based on the
powers of the United States under clause 3 of section 8 of
article I of the United States Constitution, are to promote
the free flow of goods and services and lessen the burdens on
interstate commerce, by--
(1) establishing certain uniform legal principles of
product liability that provide a fair balance among the
interests of all parties in the chain of production,
distribution, and use of products; and
(2) reducing the unacceptable costs and delays in product
liability actions caused by excessive litigation that harms
both plaintiffs and defendants.
SEC. 202. DEFINITIONS.
In this title:
(1) Alcohol product.--The term ``alcohol product'' includes
any product that contains not less than \1/2\ of 1 percent of
alcohol by volume and is intended for human consumption.
(2) Claimant.--The term ``claimant'' means any person who
brings an action covered by this title and any person on
whose behalf such an action is brought. If such an action is
brought through or on behalf of an estate, the term includes
the claimant's decedent. If such an action is brought through
or on behalf of a minor or incompetent, the term includes the
claimant's legal guardian.
(3) Commercial loss.--The term ``commercial loss'' means--
(A) any loss or damage solely to a product itself;
(B) loss relating to a dispute over the value of a product;
or
(C) consequential economic loss, the recovery of which is
governed by applicable State commercial or contract laws that
are similar to the Uniform Commercial Code.
(4) Compensatory damages.--The term ``compensatory
damages'' means damages awarded for economic and noneconomic
losses.
(5) Dram-shop.--The term ``dram-shop'' means a drinking
establishment where alcoholic beverages are sold to be
consumed on the premises.
(6) Economic loss.--The term ``economic loss'' means any
pecuniary loss resulting from harm (including the loss of
earnings or other benefits related to employment, medical
expense loss, replacement services loss, loss due to death,
burial costs, and loss of business or employment
opportunities) to the extent recovery for that loss is
allowed under applicable State law.
(7) Harm.--The term ``harm'' means any physical injury,
illness, disease, or death or damage to property caused by a
product. The term does not include commercial loss.
(8) Manufacturer.--The term ``manufacturer'' means--
(A) any person who--
(i) is engaged in a business to produce, create, make, or
construct any product (or component part of a product); and
(ii)(I) designs or formulates the product (or component
part of the product); or
(II) has engaged another person to design or formulate the
product (or component part of the product);
(B) a product seller, but only with respect to those
aspects of a product (or component part of a product) that
are created or affected when, before placing the product in
the stream of commerce, the product seller--
(i) produces, creates, makes, constructs and designs, or
formulates an aspect of the product (or component part of the
product) made by another person; or
(ii) has engaged another person to design or formulate an
aspect of the product (or component part of the product) made
by another person; or
(C) any product seller not described in subparagraph (B)
that holds itself out as a manufacturer to the user of the
product.
(9) Noneconomic loss.--The term ``noneconomic loss'' means
loss for physical or emotional pain, suffering,
inconvenience, physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of
domestic service), injury to reputation, or any other
nonpecuniary loss of any kind or nature.
(10) Person.--The term ``person'' means any individual,
corporation, company, association, firm, partnership,
society, joint stock company, or any other entity (including
any governmental entity).
(11) Product.--
(A) In general.--The term ``product'' means any object,
substance, mixture, or raw material in a gaseous, liquid, or
solid state that--
(i) is capable of delivery itself or as an assembled whole,
in a mixed or combined state, or as a component part or
ingredient;
(ii) is produced for introduction into trade or commerce;
(iii) has intrinsic economic value; and
(iv) is intended for sale or lease to persons for
commercial or personal use.
(B) Exclusion.--The term ``product'' does not include--
(i) tissue, organs, blood, and blood products used for
therapeutic or medical purposes, except to the extent that
such tissue, organs, blood, and blood products (or the
provision thereof) are subject, under applicable State law,
to a standard of liability other than negligence; or
(ii) electricity, water delivered by a utility, natural
gas, or steam.
(12) Product liability action.--
(A) General rule.--Except as provided in subparagraph (B),
the term ``product liability action'' means a civil action
brought on any theory for a claim for any physical injury,
illness, disease, death, or damage to property that is caused
by a product.
(B) The following claims are not included in the term
``product liability action'':
(i) Negligent entrustment.--A claim for negligent
entrustment.
(ii) Negligence per se.--A claim brought under a theory of
negligence per se.
(iii) Dram-shop.--A claim brought under a theory of dram-
shop or third-party liability arising out of the sale or
providing of an alcoholic product to an intoxicated person or
minor.
(13) Product seller.--
(A) In general.--The term ``product seller'' means a person
who in the course of a business conducted for that purpose--
(i) sells, distributes, rents, leases, prepares, blends,
packages, labels, or otherwise is involved in placing a
product in the stream of commerce; or
(ii) installs, repairs, refurbishes, reconditions, or
maintains the harm-causing aspect of the product.
(B) Exclusion.--The term ``product seller'' does not
include--
(i) a seller or lessor of real property;
(ii) a provider of professional services in any case in
which the sale or use of a product is incidental to the
transaction and the essence of the transaction is the
furnishing of judgment, skill, or services; or
(iii) any person who--
(I) acts in only a financial capacity with respect to the
sale of a product; or
(II) leases a product under a lease arrangement in which
the lessor does not initially select the leased product and
does not during the lease term ordinarily control the daily
operations and maintenance of the product.
(14) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, any other territory or possession of the
United States, or any political subdivision of any such
State, commonwealth, territory, or possession.
[[Page H476]]
SEC. 203. APPLICABILITY; PREEMPTION.
(a) Applicability.--
(1) In general.--Except as provided in paragraph (2), this
title governs any product liability action brought in any
Federal or State court.
(2) Actions for commercial loss.--A civil action brought
for commercial loss shall be governed only by applicable
State commercial or contract laws that are similar to the
Uniform Commercial Code.
(b) Relationship to State Law.--This title supersedes a
State law only to the extent that the State law applies to an
issue covered by this title. Any issue that is not governed
by this title, including any standard of liability applicable
to a manufacturer, shall be governed by any applicable
Federal or State law.
(c) Effect on Other Law.--Nothing in this title shall be
construed to--
(1) waive or affect any defense of sovereign immunity
asserted by any State under any State law;
(2) supersede or alter any Federal law;
(3) waive or affect any defense of sovereign immunity
asserted by the United States;
(4) affect the applicability of any provision of chapter 97
of title 28, United States Code;
(5) preempt State choice-of-law rules with respect to
claims brought by a foreign nation or a citizen of a foreign
nation;
(6) affect the right of any court to transfer venue or to
apply the law of a foreign nation or to dismiss a claim of a
foreign nation or of a citizen of a foreign nation on the
ground of inconvenient forum; or
(7) supersede or modify any statutory or common law,
including any law providing for an action to abate a
nuisance, that authorizes a person to institute an action for
civil damages or civil penalties, cleanup costs, injunctions,
restitution, cost recovery, punitive damages, or any other
form of relief, for remediation of the environment (as
defined in section 101(8) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9601(8))).
SEC. 204. LIABILITY RULES APPLICABLE TO PRODUCT SELLERS,
RENTERS, AND LESSORS.
(a) General Rule.--
(1) In general.--In any product liability action covered
under this title, a product seller other than a manufacturer
shall be liable to a claimant only if the claimant
establishes that--
(A)(i) the product that allegedly caused the harm that is
the subject of the complaint was sold, rented, or leased by
the product seller;
(ii) the product seller failed to exercise reasonable care
with respect to the product; and
(iii) the failure to exercise reasonable care was a
proximate cause of the harm to the claimant;
(B)(i) the product seller made an express warranty
applicable to the product that allegedly caused the harm that
is the subject of the complaint, independent of any express
warranty made by a manufacturer as to the same product;
(ii) the product failed to conform to the warranty; and
(iii) the failure of the product to conform to the warranty
caused the harm to the claimant; or
(C)(i) the product seller engaged in intentional
wrongdoing, as determined under applicable State law; and
(ii) the intentional wrongdoing caused the harm that is the
subject of the complaint.
(2) Reasonable opportunity for inspection.--For purposes of
paragraph (1)(A)(ii), a product seller shall not be
considered to have failed to exercise reasonable care with
respect to a product based upon an alleged failure to inspect
the product, if--
(A) the failure occurred because there was no reasonable
opportunity to inspect the product; or
(B) the inspection, in the exercise of reasonable care,
would not have revealed the aspect of the product that
allegedly caused the claimant's harm.
(b) Special Rule.--
(1) In general.--A product seller shall be deemed to be
liable as a manufacturer of a product for harm caused by the
product, if--
(A) the manufacturer is not subject to service of process
under the laws of any State in which the action may be
brought; or
(B) the court determines that the claimant is or would be
unable to enforce a judgment against the manufacturer.
(2) Statute of limitations.--For purposes of this
subsection only, the statute of limitations applicable to
claims asserting liability of a product seller as a
manufacturer shall be tolled from the date of the filing of a
complaint against the manufacturer to the date that judgment
is entered against the manufacturer.
(c) Rented or Leased Products.--
(1) Definition.--For purposes of paragraph (2), and for
determining the applicability of this title to any person
subject to that paragraph, the term ``product liability
action'' means a civil action brought on any theory for harm
caused by a product or product use.
(2) Liability.--Notwithstanding any other provision of law,
any person engaged in the business of renting or leasing a
product (other than a person excluded from the definition of
product seller under section 202(13)(B)) shall be subject to
liability in a product liability action under subsection (a),
but any person engaged in the business of renting or leasing
a product shall not be liable to a claimant for the tortious
act of another solely by reason of ownership of that product.
SEC. 205. FEDERAL CAUSE OF ACTION PRECLUDED.
The district courts of the United States shall not have
jurisdiction under this title based on section 1331 or 1337
of title 28, United States Code.
TITLE III--EFFECTIVE DATE
SEC. 301. EFFECTIVE DATE.
This Act shall take effect with respect to any civil action
commenced after the date of enactment of this Act without
regard to whether the harm that is the subject of the action
occurred before such date.
The CHAIRMAN. No amendment to the committee amendment in the nature
of a substitute is in order, except those printed in House Report 106-
498. Each amendment may be offered only in the order printed in the
report, by a Member designated in the report, shall be considered read,
shall be debatable for the time specified in the report, equally
divided and controlled by the proponent and an opponent, shall not be
subject to amendment, and shall not be subject to a demand for division
of the question.
The Chairman of the Committee of the Whole may postpone a request for
a recorded vote on any amendment and may reduce to a minimum of 5
minutes the time for voting on any postponed question that immediately
follows another vote, provided that the time for voting on the first
question shall be a minimum of 15 minutes.
It is in order to consider Amendment No. 1 printed in House Report
106-498.
Amendment No. 1 Offered by Mr. Hutchinson
Mr. HUTCHINSON. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 1 offered by Mr. Hutchinson:
Page 7, strike line 13 through line 6 on page 8 and insert
the following:
SEC. 103. LIMITATION ON PUNITIVE DAMAGES FOR SMALL
BUSINESSES.
(a) General Rule.--Except as provided in section 105, in
any civil action against a small business, punitive damages
may, to the extent permitted by applicable Federal or State
law, be awarded against the small business only if the
claimant establishes by clear and convincing evidence that
conduct carried out by that defendant with a conscious,
flagrant indifference to the rights or safety of others was
the proximate cause of the harm that is the subject of the
action.
(b) Limitation on Amount.--In any civil action against a
small business, punitive damages awarded against a small
business shall not exceed the lesser of--
(1) 3 times the total amount awarded to the claimant for
economic and noneconomic losses, or
(2) $250,000,
except that the court may make this subsection inapplicable
if the court finds that the plaintiff established by clear
and convincing evidence that the defendant acted with
specific intent to cause the type of harm for which the
action was brought.
(c) Application by the Court.--The limitation prescribed by
this section shall be applied by the court and shall not be
disclosed to the jury.
The CHAIRMAN. Pursuant to House Resolution 423, the gentleman from
Arkansas (Mr. Hutchinson) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Arkansas (Mr. Hutchinson).
Mr. HUTCHINSON. Mr. Chairman, I yield myself such time as I may
consume.
Mr. Chairman, I am pleased to rise in support of this carefully
drafted and well-balanced legislation. I do believe that balanced tort
reform can be achieved, and this bill takes us in the right direction
to do that. I want to thank the gentleman from California (Mr. Rogan)
again for his work and leadership on this.
With the language that we have developed in this amendment, I am now
able to lend my enthusiastic support to the legislation.
Small businesses across the country operate in fear of being named as
a defendant in a liability case. Though they may be found minimally
responsible in the case, the weight of the legal expenses can crush a
small enterprise. According to a Gallup survey, one out of every five
small businesses do not hire more employees, expand their business,
improve their existing products, or introduce new products out of fear
of litigation. This legislation addresses the situation by reforming
joint and several liability, which ensures that defendants are held
liable only for the portion of the harm that they cause. It limits
punitive damages in routine cases and establishes uniform liability
standards.
Over the last several weeks, after the Committee on the Judiciary
passed this bill out, the gentleman from California and I have worked
on language that I was very concerned about which would provide an
override for the cap on punitive damages. As originally
[[Page H477]]
drafted, the bill capped punitive damages awards at $250,000, or three
times the total compensatory award, whichever is less, with no
provision for departure in cases of extreme misconduct. I was
specifically concerned that the bill did not include a judicial
override provision allowing judges to respond to the most egregious
cases, and some of the Members have raised this issue even in the
debate today.
The amendment that I offer today provides an opportunity for judges
to exceed the punitive damages cap if the plaintiff establishes by
clear and convincing evidence that the defendant acted with specific
intent to cause the type of harm for which the action was brought. I
think we can all agree that intentional behavior demonstrates such a
callousness on the part of a defendant that merits application of the
full punitive damage award as approved by the jury. This concept of a
judicial override has manifested itself previously, but I believe that
this language is even better than what has been offered before. The
provision is carefully crafted to achieve a balance that provides full
punitives in the most egregious cases, while not creating a loophole
that undermines the concept of a cap.
There have been a number of discussions as to exactly what a
plaintiff has to prove under this language. Let me first say what the
plaintiff does not have to prove. The plaintiff will not have to prove
that the defendant intended to harm that particular plaintiff or that
the defendant intended to cause the harm that occurred. In other words,
the plaintiff can prove by clear and convincing evidence that the
defendant intended to cause harm to people. He or she does not have to
prove that the defendant set out to harm the person specifically.
In addition, if a plaintiff can prove that the defendant intended to
cause physical injury, illness, disease, death or property damage, he
or she does not have to prove that the defendant meant to cause a
specific injury such as a broken leg, dislocated back, or a particular
strain of disease. Proving that a defendant intentionally set out to
harm others, regardless of who was ultimately hurt or what particular
harm resulted, is sufficient to activate this judicial override
provision.
So I would like to note for my colleagues that in the 104th Congress,
the President vetoed comprehensive tort reform legislation because he
was concerned that there was not an adequate judicial override. This
addresses his concern. I believe it will lead to the President's
signature hopefully on this bill.
There were a number of other technical corrections that were made,
including clarifying that the limitation on punitive damages applies
only to punitive damages against small businesses. This is very
important. The original bill was not clear as to how multidefendant
cases where some defendants who did not qualify as a small business
would be treated under the bill. This change makes it clear that only
small business defendants will enjoy the provisions of this
legislation.
So I believe it is a good amendment; it improves the bill. I
appreciate my friend and colleague working with me to come up with this
language, and I would ask my colleagues to support it.
{time} 1245
Mr. ROGAN. Mr. Chairman, will the gentleman yield?
Mr. HUTCHINSON. I am happy to yield to the gentleman from California.
Mr. ROGAN. Mr. Chairman, first I want to congratulate and commend my
colleague, the gentleman from Arkansas, for his exceptional work on
this. We spent many long and arduous hours during the committee, both
in committee and after hours, trying to perfect this amendment.
I believe that through this amendment we are increasing the scope of
fairness to a fundamentally important area. Once again, I want to thank
my colleague for his sensitivity, his hard work and his commitment. I
enthusiastically support this amendment.
The CHAIRMAN. Does the gentleman from Michigan (Mr. Conyers) seek to
control the time in opposition?
Mr. CONYERS. Yes, I do, Mr. Chairman.
The CHAIRMAN. The gentleman from Michigan (Mr. Conyers) is recognized
for 5 minutes.
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I want to commend our distinguished colleague, the
gentleman from Arkansas (Mr. Hutchinson), for his effort. If he thinks
that the president is not going to continue his veto over this
legislation because of this amendment, then I am afraid he has another
thought coming, because this is too little and too late. This amendment
falls well short and offers far too much protection for drug dealers,
polluters, copyright infringers, and other types of misconduct.
I am going to explain how and why that is. First of all, the carve-
out is purely discretionary with the court. The court does not have to
do this, I say to the gentleman from California (Mr. Rogan), it is up
to them, so the damage cap may apply or the damage cap may not apply. A
judge that may be considered pro-defendant in legal circles would have
total discretion to render the Rogan-Hutchinson amendment to be a
nullity.
Second, the amendment fails to safeguard the wide variety of civil
statutes on the books which authorize punitive damages and which are
based on far less stringent evidentiary requirements than set forth in
the amendment. State laws frequently permit award of punitive damages
against businesses based on more lenient evidence standards.
So in some areas we may be of marginal help, but in other areas we
are not helping at all. For example, in Illinois, the Drug Dealer
Liability Act authorizes punitive damages against corporations
participating in illegal drug markets, which would be overturned by the
legislation. Florida has an environmental liability law which provides
for treble damages in private actions against unlawful pollution or
discharge, which would also be overturned by this bill.
The last thing we would want to be doing is creating further legal
obstruction to bring drug dealers and corporate polluters to justice. I
do not think that this is intentionally set about as an objective, but
still, this is the result. It is another example of intent to do well
versus the results of what happens when this measure is put into
practice.
The copyright law, let us look at this. Plaintiffs are entitled to
receive up to $150,000 in penalties where the defendant acted
willfully, which is a much lower standard than is put forth in the
Hutchinson amendment. The standard for Hutchinson is ``specific
intent,'' so the gentleman is making it harder to get those people that
may be acting in violation of copyright law.
This is a current major issue in litigation over the I Crave TV web
site, a foreign firm which is accused of stealing copyrighted
television signals and airing them on the Internet. Unfortunately, the
legislation continues to severely minimize liability for copyright
theft and harm of all our Nation's intellectual property owners.
Finally, even in the ordinary tort context there are numerous
examples of misconduct which should be subject to punitive damages, but
which will never meet the ``specific intent'' standard set forth in the
amendment. Example: What about the trucking companies? Three hundred
thousand trucking companies, most of which have less than 25 employees,
would be shielded for punitive damages for flagrant highway accidents,
even if they violate State regulations and injure or kill drivers or
passengers. This is of particular concern to all of us who are
concerned about highway safety.
So I sympathize, I say to the gentleman from Arkansas, with what the
gentleman is trying to do with the amendment, but it falls short. It
does not go far enough. It will not protect us from a presidential
veto, which has happened before in this kind of case, and it is not the
kind of thing that we would want to have happen in terms of giving
protection to drug dealers, polluters, copyright infringers, and other
types of misconduct.
The CHAIRMAN. All time has expired on the amendment.
The question is on the amendment offered by the gentleman from
Arkansas (Mr. Hutchinson).
The amendment was agreed to.
The CHAIRMAN. It is now in order to consider amendment No. 2 printed
in House Report 106-498.
[[Page H478]]
Amendment No. 2 Offered by Mr. MORAN of Virginia
Mr. MORAN of Virginia. Mr. Chairman, I offer an amendment made in
order by the rule.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 2 offered by Mr. Moran of Virginia:
Page 6, insert after line 15 the following:
(9) Punitive damages.--The term ``punitive damages'' means
damages awarded against any person or entity to punish or
deter such person, entity, or others from engaging in similar
behavior in the future. Such term does not include any civil
penalties, fines, or treble damages that are assessed or
enforced by an agency of State or Federal government pursuant
to a State or Federal statute.
The CHAIRMAN. Pursuant to House Resolution 423, the gentleman from
Virginia (Mr. Moran) and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Virginia (Mr. Moran).
Mr. MORAN of Virginia. Mr. Chairman, I yield myself such time as I
may consume.
Mr. Chairman, H.R. 2366 in my mind is a focused, tightly-crafted bill
that will reduce unnecessary litigation and legal costs. It is careful
not to overreach, and as such, gives us the opportunity to respond on a
bipartisan basis to the concerns we have been hearing year after year
from smaller employers about our civil justice system.
For the smallest of the Nation's businesses, those with less than 25
employees, Title I will abolish joint liability for noneconomic damages
and to limit punitive damages. States may elect to opt out and instead
apply their own joint liability and punitive damages rules in cases
brought in State court when the parties are all citizens of the same
State.
Further, these provisions do not apply to civil cases that may arise
from certain violations of criminal law or egregious misconduct.
Today our smallest enterprises operate in fear that they will be
named as a defendant in a lawsuit, be found minimally responsible for
the claimant's harm, but be maximally crushed under the weight of all
the damages as a result of the application of joint or deep pockets
liability. Most States have recognized the inequity of the unfettered
application of joint liability and have acted to abolish or restrain it
in some way.
The Small Business Liability Reform Act adopts a fair, balanced
approach by limiting the noneconomic damages exposure of a small
business defendant to its own proportionate share. Similarly, the
owners and employees of a very small commercial enterprise know their
business could be destroyed by the legal costs associated with simply
defending against a civil action in a jurisdiction where punitive
damages are unrestrained.
Rather than face that prospect, small business defendants are coerced
into inflated settlements of marginal, sometimes even meritless,
lawsuits.
Title II holds non-manufacturer product sellers, lessors, and renters
liable for their own negligence and intentional wrongdoing, but it only
holds them responsible for the supplier manufacturer's liability when
that manufacturer is judgment-proof.
This policy has been a noncontroversial part of Federal product
liability legislation since the Carter administration published the
model Uniform Product Liability Act 21 years ago.
Most recently, the product seller liability standard in title II was
included in the 1998 product liability compromise that President
Clinton had agreed to sign. This provision will reduce the exposure of
retailers and distributors to meritless product liability claims and
unnecessary costs, while meticulously preserving the ability of injured
persons to recover their full damages.
Mr. Chairman, this modest but meaningful legislation will improve the
administration of civil justice in the United States, and I urge my
colleagues to support it.
The amendment that I am offering today addresses the legitimate
concerns raised by the White House in their statement of administration
policy. The administration is concerned that without a specific
definition of punitive damages, provisions of the bill may be read to
cap the government's ability to impose civil penalties, civil fines, or
treble damages, all of which are punitive in purpose.
This amendment would define ``punitive damages'' in the bill as
damages awarded against any person or entity to punish or deter such
person, entity, or others from engaging in similar behavior in the
future. That is the purpose of punitive damages.
The amendment also makes clear that punitive damages, as defined in
the bill, will not include any civil penalties, fines, or treble
damages that are assessed or enforced by an agency of State or Federal
Government pursuant to a State or Federal statute.
I can tell the Members, as an original cosponsor of the underlying
legislation, none of the sponsors of this legislation intended for the
bill to include such actions. I do applaud the administration for
suggesting the clarifying language in this amendment.
Mr. ROGAN. Mr. Chairman, will the gentleman yield?
Mr. MORAN of Virginia. I yield to the gentleman from California.
Mr. ROGAN. Mr. Chairman, I thank the gentleman for yielding to me. I
simply want to commend the gentleman, both for his amendment, which I
think makes a good bill much better, and secondly, from the bottom of
my heart I thank the gentleman for not just his leadership on this
bill, but for the pleasure of working with him on it. I am proud to
have had him as an original cosponsor.
Once again, I thank the gentleman for the impending success of a good
piece of legislation.
Mr. MORAN of Virginia. Mr. Chairman, I thank the gentleman very much
for his remarks, and I yield back the balance of my time.
The CHAIRMAN. Does the gentleman from Michigan (Mr. Conyers) seek to
control time in opposition?
Mr. CONYERS. Yes, Mr. Chairman.
The CHAIRMAN. The gentleman from Michigan (Mr. Conyers) is recognized
for 5 minutes.
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
I want to start off, Mr. Chairman, by letting everyone know how much
I think of the gentleman from Virginia (Mr. Moran). He is a good friend
of mine.
I suppose, in the final analysis, he has added a marginal benefit to
the bill. What he has done is say that the government, that is, the
Federal system and the States, should not be caught by the strictures
of this bill, and we should allow them to move forward and be able to
bring lawsuits in some range not encumbered by the limitations that we
are placing on everybody else.
In other words, a citizen or private environmental groups are not
affected by the Moran Amendment. The governments are going to be given
an exclusion, Federal and State, but not individual citizens and
environmental suits.
That is what we are trying to do in the environmental sector of
improving our society. We are trying to encourage citizens and
environmental organizations which are not within the purview of this
bill.
For example, the bill would continue to wipe out incentives for
private citizens to enforce environmental laws by bringing private and
whistleblower acts under the Clean Water Act. They would be caught by
this bill, even with the Moran Amendment. That is why my praise for the
gentleman from Virginia is so limited this afternoon. I really hate to
go through this long list of things that are not accomplished by the
Moran Amendment.
Yet, it is a modest improvement, but it does not help anybody
bringing a whistleblower action. It will not help any citizen suing
under the Clean Water Act, the Solid Waste Disposal Act, the Clean Air
Act, the Superfund, the Safe Drinking Water Act, the Toxic Substance
Control Act, the Lead-Based Paint Hazard Reduction Act. Those and other
cases brought by citizens or environmental organizations, these people
will wave the Moran Amendment to their dismay when they find out that
it only applies to State and local governments.
Another problem with the amendment is that it fails to deal with the
problems of the bill's overturning a wide variety of joint and several
liability standards designed to deter misconduct. Now, in this area,
the bill does not do anything for anybody. At least the gentleman is
treating the citizens and the government fairly.
[[Page H479]]
This is a particular problem in the context, again, of environmental
claims, which are frequently brought by State and Federal governments,
as well as private individuals. There are numerous Federal
environmental statutes which provide for joint and several liability
for noneconomic damages by perpetrators, and are not carved out from
the bill's protection.
{time} 1300
These include the Clean Water Act, the National Marine Sanctuaries
Act, the Park System Resource Protection Act, and other measures that
would be overturned by this legislation with the Moran amendment.
I cannot vote for an amendment that continues to protect corporations
from oil spills which destroy natural sanctuaries and which damage our
natural parks.
So what can I say? The only way to truly fix this problem is to limit
the bill's provisions to product liability cases as an amendment
offered by myself and another gentleman from Virginia (Mr. Scott),
which our amendment would do.
Mr. MORAN of Virginia. Mr. Chairman, will the gentleman yield?
Mr. CONYERS. I yield to the gentleman from Virginia.
Mr. MORAN of Virginia. Mr. Chairman, I would say to the distinguished
gentleman from Michigan (Mr. Conyers), an ardent leader of the full
committee, that the purpose of the amendment was to address what was in
the statement of administration policy, and I think the amendment does
that.
In terms of private rights of action, I suspect that may be addressed
in conference and in the Senate as well, but I can understand the
gentleman's concerns. I just do not necessarily share them as strongly
as the gentleman does.
Mr. CONYERS. Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN. The question is on the amendment offered by the
gentleman from Virginia (Mr. Moran).
The amendment was agreed to.
The CHAIRMAN. It is now in order to consider amendment No. 3 printed
in House Report 106-498.
Amendment No. 3 Offered by Mr. Watt of North Carolina
Mr. WATT of North Carolina. Mr. Chairman, I offer amendment No. 3.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 3 offered by Mr. Watt of North Carolina:
Page 24, line 11, strike ``or 1337''.
The CHAIRMAN. Pursuant to House Resolution 423, the gentleman from
North Carolina (Mr. Watt) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from North Carolina (Mr. Watt).
Mr. WATT of North Carolina. Mr. Chairman, I yield myself such time as
I may consume.
Mr. Chairman, my amendment deals solely with title II, the products
liability part of the bill, a part of the bill which I would point out
to my colleagues has no limitation to small businesses and is a
complete usurpation of State law on products liability. It preempts all
State law in this area to the extent that State laws are inconsistent
with title II.
I would point out to my colleagues that this is absolutely contrary
to everything that my Republican colleagues say that they stand for.
They tell us day after day after day that they believe in States'
rights; they believe in moving government closer to the people, sending
it back to the local level. This runs absolutely counter to that stated
proposition. They have had to go out of their way to justify doing it,
and I want to read specifically how they have done it.
They have said products liability cases fall under the commerce
clause of the United States. This is what they say in the findings
leading into title II. ``Although damage awards in product liability
actions may encourage the production of safer products, they may also
have a direct effect on interstate commerce.''
They go on to say, ``Some of the rules of law governing product
liability actions are inconsistent within and among the States,
resulting in differences in State laws that may be inequitable with
respect to plaintiffs and defendants and may impose burdens on
interstate commerce.''
They go on to say, ``Under clause 3 of Section 8 of article I of the
United States Constitution, it is the constitutional role of the
Federal Government to remove barriers to interstate commerce.''
These are their findings, and in the purpose of this section, this is
what they say and I am quoting, ``The purposes of this title, based on
the powers of the United States under clause 3 of Section 8 of article
I of the United States Constitution, are to promote the free flow of
goods and services and lessen the burdens on interstate commerce.''
They have tried to take over this area of the law because they say
there is a compelling Federal Government interest under the interstate
commerce clause, but, Mr. Chairman, beware because then we get to the
end of the bill. What do they say at the end of the bill? Despite this
compelling Federal interest, they then say, ``The district courts of
the United States,'' the Federal courts, ``shall not,'' shall not,
shall not, Mr. Chairman, ``have jurisdiction under'' the commerce
clause of the Constitution.
So Big Brother is saying to the States, we know how to say what the
law ought to be in this area, but Big Brother is also saying to the
States and to the individual people, despite the compelling Federal
interest that we have at the Federal level, we are not going to give
access to the Federal courts to litigate these cases.
Is there not something sinister and outrageous and unfair about that?
All my amendment would do is say to them, if there is a compelling
Federal reason for doing this, and I do not believe there is, but if
there is, as they say there is, at least we ought to allow the citizens
of our country to come to the Federal court to talk about and litigate
about this supposed Federal remedy that we are giving to them under the
statute.
Mr. Chairman, I reserve the balance of my time.
Mr. ROGAN. Mr. Chairman, would the gentleman yield for 15 seconds?
The CHAIRMAN. The gentleman from North Carolina reserves the balance
of his time.
Does the gentleman from California seek to control the time in
opposition?
Mr. ROGAN. No, Mr. Chairman. I am in support of the amendment.
Mr. WATT of North Carolina. Mr. Chairman, I yield myself such time as
I may consume.
Mr. Chairman, I am delighted and I want to express my absolute
delight that despite the fact that they have fought this amendment all
the way through the committee process, they have finally come to the
light that if there is a Federal right here involved, there ought to at
least be access to the Federal courts and I express my appreciation to
the gentleman from California (Mr. Rogan).
The CHAIRMAN. The question is on the amendment offered by the
gentleman from North Carolina (Mr. Watt).
The amendment was agreed to.
The CHAIRMAN. It is now in order to consider amendment No. 4 printed
in House Report 106-498.
Amendment No. 4 Offered by Mr. Conyers
Mr. CONYERS. Mr. Chairman, I offered amendment No. 4.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 4 offered by Mr. Conyers:
Page 6, line 23, insert before the period the following:
``and had revenues in each of the last 2 years of $5,000,000
or less''.
Page 19, line 10, strike ``(14)'' and insert ``(15)'' and
after line 9 insert the following:
(14) Small business.--
(A) In general.--The term ``small business'' means any
unincorporated business, or any partnership, corporation,
association, unit of local government, or organization that
has fewer than 25 full-time employees as determined on the
date the civil action involving the small business is filed
and had revenues in each of the last 2 years of $5,000,000 or
less.
(B) Calculation of number of employees.--For purposes of
subparagraph (A), the number of employees of a subsidiary of
a wholly owned corporation includes the employees of--
(i) a parent corporation; and
(ii) any other subsidiary corporation of that parent
corporation.
(Title II Applicable to Small Business)
Page 21, line 12, insert after ``title'' the following:
``brought against a small business''.
[[Page H480]]
(Definition of Product and Product Liability Action)
Page 6, beginning in line 16 redesignate paragraphs (9) and
(10) as paragraphs (11) and (12), respectively, and add after
line 15 the following:
(9) Product.--
(A) In general.--The term ``product'' means any object,
substance, mixture, or raw material in a gaseous, liquid, or
solid state that--
(i) is capable of delivery itself or as an assembled whole,
in a mixed or combined state, or as a component part or
ingredient;
(ii) is produced for introduction into trade or commerce;
(iii) has intrinsic economic value; and
(iv) is intended for sale or lease to persons for
commercial or personal use.
(B) Exclusion.--The term ``product'' does not include--
(i) tissue, organs, blood, and blood products used for
therapeutic or medical purposes, except to the extent that
such tissue, organs, blood, and blood products (or the
provision thereof) are subject, under applicable State law,
to a standard of liability other than negligence; or
(ii) electricity, water delivered by a utility, natural
gas, or steam.
(10) Product liability action.--
(A) General rule.--Except as provided in subparagraph (B),
the term ``product liability action'' means a civil action
brought on any theory for a claim for any physical injury,
illness, disease, death, or damage to property that is caused
by a product.
(B) The following claims are not included in the term
``product liability action'':
(i) Negligent entrustment.--A claim for negligent
entrustment.
(ii) Negligence per se.--A claim brought under a theory of
negligence per se.
(iii) Dram-shop.--A claim brought under a theory of dram-
shop or third-party liability arising out of the sale or
providing of an alcoholic product to an intoxicated person or
minor.
(Making Title I Applicable to only Product Liability Actions)
Page 6, line 22 and page 8, lines 1, 11, and 16, strike
``civil action'' and insert ``product liability action''.
(Definition of Hate Crime)
Page 5, strike lines 23 through 25 and insert the
following:
(5) Hate crime.--The term ``hate crime'' means a crime in
which the defendant intentionally selects a victim, or in the
case of property crime, the property that is the object of
the crime, because of the actual or perceived race, color,
religion, national origin, ethnicity, gender, disability, or
sexual orientation of the victim or owner of the property.
(Making Section 103 Applicable to Punitive Damages Irrespective of
State Law)
Page 7, beginning in line 17, strike ``, to the extent
permitted by applicable State law,''.
(Allowing State to Elect Nonapplicability by Enacting a Referendum or
Initiative)
Page 11, line 9, after ``a statute'' insert ``, an
initiative, or referendum'', add ``and'' at the end of line
10, in line 13, strike ``; and'' and insert a period, and
strike line 14
Page 21, insert after line 7 the following:
(d) Election of State Regarding Nonapplicability.--This
title does not apply to any action in a State court against a
small business in which all parties are citizens of the
State, if the State enacts a statute, an initiative, or
referendum--
(1) citing the authority of this subsection; and
(2) declaring the election of such State that this title
does not apply as of a date certain to such actions in the
State.
The CHAIRMAN. Pursuant to House Resolution 423, the gentleman from
Michigan (Mr. Conyers) and a Member opposed each will control 20
minutes.
The Chair recognizes the gentleman from Michigan (Mr. Conyers).
Mr. CONYERS. Mr. Chairman, I yield 4 minutes to the gentleman from
Virginia (Mr. Scott), my cosponsor.
Mr. SCOTT. Mr. Chairman, I thank the gentleman from Michigan (Mr.
Conyers) for yielding me this time.
Mr. Chairman, I rise to speak in support of the Conyers-Scott
amendment which will simply conform the bill to its title and provide
some truth in advertising and legislation. Despite its name, the truth
about the Small Business Liability Reform Act is that it will reward
all businesses, big and small, with broad and sweeping legal
protections when they cause personal or financial harm, even
intentionally due to defective products.
For those parts of the bill which actually pertain to small
businesses, the definition of small business in this bill contains no
qualifiers pertaining to annual revenues, so even a billion dollar
corporation, with relatively few employees, can still qualify for
special protection as a small business.
Furthermore, while this bill purports to constitute liability reform,
the language is overbroad and covers contract law and other areas of
the law not properly considered by the committee. So this amendment
will first define a small business as one with fewer than 25 employees,
as it has in the bill, but also one with under $5 million in annual
revenues.
Without this amendment, a company with less than 25 employees with
revenues in the billions, an Internet corporation, for example, or a
brokerage firm, could still be designated as a small business; and they
could rip off millions of people for billions of dollars and still get
protection under this bill.
Second, this amendment would truly limit the bill to suits against
small businesses. As it presently exists, the second part of the bill
is a general products liability bill which notwithstanding the title of
the bill applies to all businesses, large and small.
Third, this bill would limit the scope of part one of the bill to
product liability rather than civil action as the bill does. So the
bill protects wrongdoers involving contract law, antitrust law,
trademark protection and everything else. The scope of this title is
unreasonably broad and expansive and should be narrowed to conform to
the title Small Business Liability Reform Act.
Fourth, this amendment would create consistency and uniformity in
that all States would be required to provide for punitive damages under
limited conditions set forth in the bill. As presently written, the
bill unfairly disadvantages consumers, as it preempts any State law
more favorable to consumers while leaving intact State laws more
favorable to businesses in the area of punitive damages.
Fifth, the bill allows an opt-out by States by statute. This
amendment would allow the State to opt out by initiative and referendum
for those States which also allow initiative and referendum in enacting
laws.
Sixth, this amendment expands the hate crime exclusion to include
victims of gender discrimination. A hate crime based on gender
discrimination is just as despicable as one based on race, religion, or
national origin; and it should, therefore, be included in a definition
of a hate crime and not protected by this bill.
In closing, this bill sets some dangerous precedents as also it is
dangerous to public health and safety. I strongly urge my colleagues to
vote yes on this amendment which seeks to both conform the bill to its
title, as well as provide a remedy for some of the most egregious
aspects of the legislation.
Mr. ROGAN. Mr. Chairman, I rise in opposition to the amendment, and I
yield myself such time as I may consume.
Mr. Chairman, this amendment would use the word ``revenue'' to define
a small business rather than the current definition of 24 or fewer
employees. Under the gentleman's suggested change, a small business
would have to have revenues in each of the prior 2 years of $5 million
or less.
First, we know, Mr. Chairman, from what has been presented here
today, that the bulk of small businesses do not make $5 million. The
amendment is not sufficiently defined. For instance, is it proposing to
use gross revenues or net?
The simple statement that revenues should be used is not sufficient.
Net revenue is more difficult to determine than the number of full-time
employees. Full-time employees is a more constant measure of a small
business. Revenue is more volatile year to year, whereas the number of
full-time employees can easily be determined by looking at a company's
W-2 form.
Using gross revenues instead of the number of employees offers a very
narrow view of small business. A small business' gross revenue can
change dramatically over a period of time.
I remind my colleagues that the Y2K Act approved by Congress and
signed into law last year by the President capped punitive damages and
defined a small business as fewer than 50 full-time employees, with no
revenue limits.
The standard in the underlying bill before this Chamber today, that
is under 25 employees, ensures that only the smallest of America's
small businesses will be covered.
Further, litigation could end up focusing upon the sole issue of the
period of gross revenue in question.
Finally, defining a small business by any revenue sends a disturbing
policy message that discourages owners and employees from achieving
greater revenues.
[[Page H481]]
{time} 1315
Next, the amendment would substantially abbreviate the effect of
Title I by limiting the applicability of its provisions to non-
manufacturing product sellers that are also small businesses as defined
by Title I.
This amendment would further complicate product liability law.
Because product liability affects interstate commerce, the rules of the
road governing the liability of product sellers for compensatory
damages to claimants due to harms caused by defective products should
be a uniform Federal standard applicable to all product sellers.
Defeating this amendment and enacting Title II as presented in the
underlying bill will reduce unnecessary lawsuits against blameless
product sellers and reduce the wasteful legal and litigation-related
costs that go hand in hand with them. Neither the content nor the
effect of Title II is business-size sensitive.
Because the practical effect of Title I will be to focus litigation
on the parties alleged to have been truly responsible for causing the
claimant's harm rather than to change outcomes, neither claimant nor
consumers have anything whatsoever to gain by limiting the scope of
Title II to product sellers which are small businesses.
Next, the gentleman seeks to apply limitations on punitive damages to
only product liability actions and not civil actions against a small
business.
The fear of having to settle a frivolous lawsuit is not just limited
to product liability cases but to all civil actions. Many business
owners are forced to settle out of court for significant awards due to
the fear of unlimited punitive damages and civil actions even if the
claim is unwarranted.
Testimony submitted by Mr. David Harker before the House Committee on
the Judiciary last year confirmed his frivolous suit was not over a
product but over damages incurred to property. There are legions of
other examples of such frivolous suits in the record of the committee.
H.R. 2366 does not cap compensatory damages, that is economic and
non-economic damages, for civil actions. Although compensatory damages
in civil actions may be covered by liability insurance, punitive
damages frequently are not covered and defendants must cover those out
of pocket.
Next, this amendment would create punitive damage awards in those
States that do not recognize punitive damages. Under the current bill,
punitive damages are only available if the State already has them. The
intent of the legislation is to reduce frivolous litigation and legal
costs. This amendment would significantly expand the number of States
in which punitive damages are available and the potential for more
widespread abuse.
The punitive damage cap in the underlying bill is consistent with the
Y2K act that was, again, signed into law by the President last year.
Another section of this amendment would undermine the intent of Title
II to create a uniform standard of liability for all non-manufacturing
product sellers in product liability cases.
Section 204, subsections (a) and (b), establish a uniform standard of
liability for all non-manufacturing product sellers in product
liability cases. A seller would be liable to the claimant for harm
caused by a defective product when the harm is caused by the seller's
own negligence, breach of an express warranty, or a seller's
intentional wrongdoing.
Under Title II, product sellers who injure consumers due to their
failure to exercise reasonable care are liable. The failure to
recognize reasonable care is neither driven nor affected in any way by
the size of a business.
Under Title II, if a claimant's injury was caused by a breach of the
product seller's own express warranty, the seller is liable. Breaches
of express warranties are neither caused nor in any way affected by the
mere size of a business.
Under Title II, product sellers are liable and will pay if the
manufacturer is not subject to service of legal process or if the court
determines that the claimant would not be able to enforce the judgment
against a liable manufacturer. The relevant status of a culpable
manufacturer is not in any way dependent upon the size of the product
seller.
The standard of product seller liability has nothing whatsoever to do
with business size, and the two should not be linked to this bill.
It is for those reasons, Mr. Chairman, that I urge a no vote on this
amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I would point out a couple of items here made in the
statement of the author of this bill against the amendment that I think
we might want to review more carefully.
First, the most commonsense response to whether this is a small
business bill or not would be to put some limit on the revenues in each
of the last 2 years of less than $5 million each year. That would solve
all of the discussion about whether or not this is a bill in which a
lot of large businesses in terms of their annual revenue are crowding
under the umbrella of mom-and-pop stores.
Here is an example of a wonderful intent demonstrated by the
gentleman from California (Mr. Rogan) with no conception of the effect
of what he is doing here. This would allow businesses with hundreds of
millions of dollars of annual revenue to come under the umbrella.
We do not want that, I say to the gentleman from California (Mr.
Rogan), let me help. Let me help by amending his definition of ``small
business'' not just to 25 employers or less. He knows that the high-
tech industries have people working in lofts in their own homes with
only a few other people that are commanding much more than millions of
dollars' worth of revenue every year.
Why does my colleague not accept the limitation of small business, if
that is what he is really concerned about, to those businesses that
have revenues of less than $5 million a year?
Most mom-and-pops do not come anywhere near $5 million a year. Most
mom-and-pops are happy to get $100,000 or $200,000 or $300,000 worth of
business a year. The gentleman told me himself, and I know it already.
But why not a $5 million, $4 million, $6 million limitation? Those
cannot be called mom-and-pop businesses.
I think it is because the gentleman knows the effect of that unusual
distorted definition that he is going to let in trucking companies, big
businesses, people who certainly do not fit into the mom-and-pop
category.
Now, the gentleman says that this bill of his tracks the Y2K bill in
terms of limiting punitive damages. Sorry. The Y2K bill limits punitive
damages to the greater of three times compensatory damages. His bill
limits the damages to the lesser of three times the compensatory
damages, or $250,000, whichever is less.
I know the gentleman from California (Mr. Rogan) just inadvertently
thought that he was moving along the lines that the other bill
supported by the administration was doing.
So the argument that I present here in terms of the amendment that I
and the gentleman from Virginia (Mr. Scott) offer is about truth in
labeling. We are not limited to small businesses. There is no reason
this Congress should shield from liability large businesses, and our
amendment fixes it by a $5 million revenue limitation, rather high.
In addition, Title II of the bill limits the liability of product
sellers and contains no size limitation at all, whether based on
employees or revenues. This means that Wal-Mart, Hertz Rent-A-Car, and
other huge corporations could achieve multi-million-dollar windfalls,
not to mention all the reckless gun sellers that have been referenced
earlier whose carelessness and extended negligence lead to thousands of
deaths or injury.
Now, I am afraid that that, I say to the author of the bill, cannot
be considered a harmless error or a mistake. I think that that is what
he meant it to do. That is what the effect is, and that is the result
that will occur if this measure is passed in the form, even with all
the amendments that have been added to it so far today.
Now, there is a misperception about the measure that this is somehow
limited to product liability. It is not. Title 1 is truly breathtaking
in its scope to any civil action, to any civil action, whether it
relates to a contract claim, a copyright claim, environmental claim, a
securities claim, civil RICO, a bankruptcy action, even a reckless
driving claim or a malpractice claim.
[[Page H482]]
Now, I think this is changing the direction that we are going in in
this legislation when we incorporate something of this magnitude in
this bill. Why do we not limit it to product liability, as the
discussion began, rather than protecting businesses against frivolous
product liability suits. They have now taken the huge step forward to
say that they would serve to protect businesses involved in criminal
misconduct, foreign companies stealing U.S. copyrights, as well as
careless corporate polluters.
I do not buy that wide provision of insulating liability under the
rubric of protecting small businesses in product liabilities cases.
They have gone a bit too far this time. They have gone too far.
And so, I am well aware that the body has tried to deal with the
Rogan and Moran amendments to improve the situation, but the problems
still remain. We are still protecting gun manufacturers, drug dealers,
and polluters.
Our amendment responds to this. This is the most important amendment
that my colleagues may ever see on this bill. And I am stunned that, in
their generous conduct on the floor today, they have accepted or
supported every amendment but this one, the one that might take care of
the problems and make it reasonable in the eyes of many people and
organizations and the administration, as well.
We are trying only to clarify the misleading provisions of the bill.
My colleagues purport to have a hate crimes carve-out. But did they
accidentally leave out gender-based hate crimes or did they
deliberately leave out gender-based hate crimes? Nobody knows. But let
us put it in. They are not, apparently, willing to do that.
They want to claim that they are two-way preemptive, but they only
preempt State laws in which punitive damages are more favorable to the
victims. The bill appears to allow State opt-outs but limits it to
legislative statutes.
Might I ask why a referendum might not be acceptable and that they
require just to pass through the House, as well? There are other ways
for citizens to indicate their support. What about a referendum?
Our amendment fixes these problems, providing for a real hate crimes
carve-out, providing for a real two-way preemption, providing for a
hate crimes provision that includes gender.
And so, if we are going to vote on a bill to protect small
businesses, we ought to be clear and honest enough to limit the bill to
actual small businesses. And so, for that reason, I hope this bill may
be made viable and whole by supporting our amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. ROGAN. Mr. Chairman, may I inquire how much time remains on both
sides?
The CHAIRMAN. The gentleman from California (Mr. Rogan) has 13\1/2\
minutes remaining, and the gentleman from Michigan (Mr. Conyers) has 7
minutes remaining.
Mr. ROGAN. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, first I say to my dear friend, my senior colleague, the
gentleman from Michigan (Mr. Conyers), may I say that, although we
differ philosophically on the concept of lawsuit abuse reform, I have a
great deal of respect both for his talents and his seniority, as well
as his acts.
{time} 1330
I am sorry that I cannot accept his amendment because his amendment
would undermine and gut the entire purpose of the underlying bill. I
just want to take a moment if I may to correct the record and I think
the gentleman may have misspoken. In my remarks, I talked about the
liability aspects of the Y2K bill which currently now are law and how
we attempted to track that in our bill. I believe the gentleman said
that it did not track it. I invite the gentleman's attention to section
5, subsection B, subsection 1, captioned Punitive Damages Limitation
from the Y2K bill. It says that a Y2K action may not exceed the lesser
of three times the amount awarded for compensatory damages or $250,000.
Mr. Chairman, that is the standard that is now a part of the
underlying bill, and so it does track the Y2K litigation reform that
has passed both houses of Congress and the President signed last year.
There is a fundamental difference between the Y2K standard and the
standard of the underlying bill. In the Y2K standard that currently is
law, small business is defined as 50 employees or less. In the
underlying bill before us today, that standard has been cut in half,
more than half, to 24 employees or less. The purpose of doing that was
to ensure as faithfully as possible that this bill would impact the
smallest of American businesses.
Now, it is a tempting invitation from the gentleman to go on a
revenue-based standard of what constitutes a small business rather than
an employee-based standard; but for all of the reasons that I outlined
in my opening remarks, Mr. Chairman, I think that it is unworkable.
There are exceptions, certainly, to small businesses who have 24 or
less employees that are doing very well. I know of some up in the
Silicon Valley myself. But I would submit to the gentleman, and
statistics prove it out, that those are the very rare exception and not
the rule.
The question before this House is will we allow the very small
exception to upset and overturn the opportunity to provide needed
relief to the millions and millions of men and women who comprise
America's small business owners? I think not. The cosponsors of this
bill have joined with me to ensure that those protections are adequate
and fair. It is for those reasons and the reasons articulated in my
previous statements, Mr. Chairman, that I am regrettably unable to join
with my friend from Michigan in support of his amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
I would like to point out that there are some companies that we may
or may not want to be included in the provisions of the bill, and that
is why this amendment exists. Take the famous American Derringer
Company that has less than 25 employees but manufactures as many as
10,000 cheap pistols a year, which will now be protected as a small
business under the Rogan bill. Is that a small business? Is this a mom
and pop?
What about Davis Industries? It has 15 employees. It is in the home
State of the author of this bill, of California, and is known for
manufacturing the majority of Saturday night specials in this country.
As many as 180,000 pistols a year. Is this a small business that we
want to protect? And may I point out that the Conyers-Scott amendment
limitation would stop this ridiculous assumption that businesses that
are bringing in hundreds and hundreds of thousands of dollars, millions
of dollars, are, in effect, small businesses, that we are concerned
about the mom and pop effect.
Again, it is a matter of Rogan intent versus the bill's effect. The
effect is, you are giving an umbrella to those that do not deserve it.
Intratec, the manufacturer of the infamous TEC-DC9 used at Columbine
High School, has less than 25 employees but sells as many as 100,000 of
these awful weapons a year. Is this a small business that we want to
protect, or do we want the Conyers-Scott amendment to make sure that it
will not reside under the protection of the Rogan bill?
I say we should exclude all of these gun manufacturers from the
provisions of the bill, not because of the death-dealing weapons they
manufacture, but because they are not small businesses in the true
sense of the definition. We need a revenue cap on the definition of
small business. Thanks to the gentleman from California, American
Derringer, Davis Industries, and Intratec all will be very grateful to
know that you are refusing a cap that would catch them. The Rogan bill
says that all of these are small businesses. Do we really want to
protect them? I think not.
I urge all of the Members in this body to support the Conyers-Scott
amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. ROGAN. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I must respectfully again take issue with my dear
friend from Michigan. He says in his remarks that small business gun
manufacturers are now automatically protected under
[[Page H483]]
the Rogan bill. First, that is not a correct statement. Secondly, the
statement itself and the arguments preceding the statement from some of
our other colleagues appear to make the suggestion that there is
something inherently evil about an otherwise lawful gun manufacturer
being able to sell guns to law-abiding citizens. I would respectfully
suggest to my colleague and to those who seem to take that same
position that if it is really their intention to override the second
amendment protection for law-abiding citizens to defend themselves in
their homes or in their place of business, and abolish the private
ownership of all handguns, then let them introduce their constitutional
amendment to overturn the second amendment, let them introduce their
legislation to preclude law-abiding citizens from being able to defend
themselves, and let us then debate the merits of that bill up or down.
But let us not destroy the protections of small business owners through
America, millions and millions of men and women, who have nothing to do
with guns, who have nothing to do with gun manufacturing, who have
everything to do with driving our economic engine.
By the way, I would just also suggest to my colleague that there are
many poor people in this country who do not have the Secret Service
protection that some of our top leaders in government have, who do not
have a bevy of staff around them at all times to ease their comfort and
pain, who live in the poorest neighborhoods, and the only protection
they have when a dope addict or a murderer or a rapist is coming
through their window is the protection that they find in their drawer.
These are not evil people. These are law-abiding citizens trying to
defend their families. There are a lot of single mothers in my district
and I would suspect in the gentleman from Michigan's district who fall
within that category. If it is the desire of my colleagues on the left
to preclude them from being able to protect themselves, to sue out of
business manufacturers of lawful handguns that which they cannot
accomplish by way of legislation, then let them bring that bill
forward. Even assuming that that was the case, that the manufacturing
of handguns in this country was an inherently evil proposition, I would
respectfully suggest to my colleague that the Rogan bill does not do
what he suggests, that it protects them from liability for any harm
that they cause.
Nothing in this bill to a small business gun manufacturer would
preclude an injured person from receiving economic damages. Nothing in
this bill would preclude an injured victim from receiving lost wages,
medical compensation, loss of business. Nothing in this bill would
preclude them from receiving noneconomic damages. Nothing would
preclude them from receiving payment for pain and suffering, for
disfigurement, for loss of companionship or the bevy of other
noneconomic damages that are available to them. And nothing in this
bill as amended would preclude a victim from having punitive damages
assessed on one of those manufacturers if the manufacturer intended a
harm to occur and was found to come within that intentional conduct
that was amended into the bill by our friend from Arkansas.
So this claim that gun manufacturers are going to be able to run
rampant under this bill and put in the hands of murderers and killers
inherently dangerous weapons that are inherently faulty, that have no
legitimate social purpose and that this is somehow some disguised bill
to protect them under cover of small business, I would suggest to my
colleague is not a fair statement.
Mr. Chairman, I reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
I want to tell the gentleman from California how shocked I am to hear
the last statements that he has uttered. He has been very calm and
polite and generous in his discussion. But to say that we are naming
gun manufacturers as evil and giving me instructions to go to a
constitutional amendment to stop them is, of course, deliberately
missing the point. We are not trying to hurt gun manufacturers. The
Saturday night special is a faulty weapon. The gentleman is on the
Committee on the Judiciary. He is a former member of the court. He is
an attorney who has practiced law. The Saturday night special is not a
protected weapon. It frequently is found to be a malfunctioning,
dangerous weapon. We are not trying to put the gun dealers out of
business.
But for him to stand here and tell me that he is not going to help
them by limiting their liability where they may be negligent is an
incredible statement on his part. He imposes the cap on punitive
recovery. He imposes the elimination of joint and several liability for
everybody that comes under the definition of this bill. Davis
Industries may not be evil, but they are the ones manufacturing the
Saturday night specials. Intratec, I am not sure they are not evil
people, there may be some nice ones there, but they are the ones who
manufacture the TEC-DC9 used at Columbine. It is his State and cities
and counties in California suing Davis Industries. We are not trying to
put them out of business. We are trying to make them vulnerable to
legal action, and he is protecting them. He is protecting them. Why
does he disagree, I might ask, to the lawsuits that are being brought
in California at this present moment?
Mr. SCOTT. Mr. Chairman, will the gentleman yield?
Mr. CONYERS. I yield to the gentleman from Virginia.
Mr. SCOTT. I would ask the gentleman if he will notice in the bill
where crimes of violence are exempted, so if a defendant whose
misconduct constitutes a crime of violence, that would not be covered.
But any other crime, an actual crime or criminal enterprise, would be
covered. So if we have a business perpetrating actual criminal
activity, stealing people's money, that that would be protected because
it is not a crime of violence; and they would have the benefits under
the bill, limits of punitive damages, and if you are not stealing much
from everybody, you would be limited to the actual damage, the little
bit of money, and three times that of punitive damages against each
employee, even if you are committing a crime. Would those people be
protected under this bill?
Mr. CONYERS. Of course they would. Criminal sales of guns to felons
would be caught by the protective provisions supposedly going to
protect small businesses, mom and pop stores. We have heard mom and pop
all day. These gun manufacturers are not mom and pop stores. Our
definition would not put them out of business. All it would do is it
would apply to all of those that have revenues in excess of $5 million
a year. If they have revenues smaller than $5 million a year, they
would enjoy the protections. So this is not an antigun, all-guns-are-
evil argument in which I have to refer to a constitutional provision. I
am merely trying to take these gun manufacturers out of the protections
that the gentleman from California is inadvertently giving them in
trying to protect so-called small business.
Mr. Chairman, I include the following letter for the Record:
Natural Resources Defense Council,
Washington, DC, February 16, 2000.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives.
Hon. John Conyers, Jr.,
Ranking Minority Member, Committee on the Judiciary, House of
Representatives.
Dear Chairman Hyde and Ranking Member Conyers: On behalf of
the Natural Resources Defense Council's over 400,000 members,
I am writing to you to ask you to oppose passage of H.R.
2366, the ``Small Business Liability Reform Act of 2000,''
because of the adverse effects that it would have on
enforcement of environmental protection statutes and private
causes of action against those who violate the law. The bill
is objectionable in its current form and would remain
objectionable even if the two proposed Rogan amendments are
approved.
While the purpose of the bill appears to be to limit the
liability of small businesses for ``punitive damages'' in
personal injury and other tort lawsuits, the language is
sufficiently broad to impact federal, state, and citizen
environmental enforcement actions. For example, the
definition of ``noneconomic loss'' in Section 102 is broad
enough to include environmental degradation or even
environmental catastrophes. There is no definition of
``punitive damages'' in the bill, and that term could be
interpreted to apply to civil penalties or fines, and even
treble damages--all of which are punitive in nature. Thus,
this bill could allow companies and individuals to violate
environmental laws with impunity, encouraging recalcitrant
behavior.
[[Page H484]]
It could be interpreted to supersede specifically-enacted
provisions designed to ensure adequate punishment and
deterrence for serious environmental violations, including
long-term noncompliance with statutes protecting public
health and the environment resulting in serious environmental
harm. Moreover, it could prohibit federal and state trustees
from recovering natural resource damages under a number of
environmental statutes. The bill also could prevent whistle-
blowers from recovering damages under certain federal
environmental laws, including those that ensure safe drinking
water. In addition, victims of lead paint poisoning will be
less able to protect themselves.
It would also restrict punitive damage recovery for
violations of clean up orders under Section 107(c)(3) of
CERCLA, which specifically provides for a punitive damage
recovery against those who fail to comply with such orders.
Removing the possibility of treble damages for failure to
comply with such orders would encourage companies to delay
compliance and instead hire attorneys to challenge those
orders. Delay and wasteful litigation would result.
This bill would not only interfere with citizen's right to
bring enforcement actions to clean up their local waters and
air and prevent future violations, but could also stop
families from obtaining adequate compensation from severe
pollution that makes them sick. The bill does not even
contain an exemption for conduct that results in death.
Families should be able to obtain all the damages to which
they are entitled under current law when their health is
destroyed by the negligence of a small business as well as by
a large one. This bill could end up protecting small
businesses at the expense of injured families.
For these reasons, the proposed amendments cannot repair
the harm that would result from this bill, and I respectfully
urge you to oppose this bill.
Sincerely,
Nancy Stoner,
Senior Staff Attorney,
Natural Resources Defense Council.
The CHAIRMAN. The time of the gentleman from Michigan (Mr. Conyers)
has expired. The gentleman from California (Mr. Rogan) has 6\1/2\
minutes remaining.
{time} 1345
Mr. ROGAN. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, first, I certainly hope that my dear friend from
Michigan does not mistake a serious policy difference in any way with a
lack of respect or affection for him. I take a back seat to no one in
this Chamber in admiration, both for his service and the strength of
his positions. We do have a fundamental policy difference with respect
to liability limitations as advocated in this bill. The gentleman sees
it one way; certainly I see it another.
I do not view this bill, Mr. Chairman, as giving protection to people
who have violated the law, and in fact we have tried to craft it very
carefully to ensure that if there is some intentional wrongdoing, even
by a business that would qualify as a small business, they would not
come under any cap of punitive damages, and under any event there is no
cap on the other damages.
I do believe from a policy perspective, I would say to my friend,
that the concept of joint and several liability as currently upon the
books is inherently unfair. The idea that somebody could have a very
minuscule involvement in a harm, say, 1 percent, but could be required
to have to pay 100 percent of the damages, is not a fair concept. I
think a tort system where liability was based on percentage of fault
would be a much better way in which to go.
Mr. Chairman, again I want to thank my colleagues on both sides of
the aisle for their participation in this debate. It is through the
bipartisan effort that we have developed this important bill, and we
hope that the spirit of consensus will carry this bill quickly through
the House and on to the other body.
Although this amendment should be defeated, I am pleased that today
the House of Representatives will have an historic opportunity. With
the defeat of this amendment and passage of the underlying bill, the
House of Representatives will stand behind the 2 million small business
owners in my State of California alone and the millions and millions
more across the Nation.
The message we will send to these small business owners is clear:
frivolous and meritless lawsuits, or the threat of a frivolous and
meritless lawsuit, are crippling the lifeblood of America's economy and
they must be stopped.
The Small Business Liability Reform Act will limit product liability
for a product seller when their negligence is the responsibility of the
product manufacturer.
As we all know, some 20 percent of America's small businesses will
not expand services, they will not increase employee benefits, they
will not hire more workers, they will not create more jobs and they
will not cut consumer costs out of fear of being saddled with a
frivolous or crippling lawsuit and having to pay its debilitating
costs.
In addition, this legislation will bring fairness and justice to
millions of small business owners by bringing relief from the
destructive threat of frivolous lawsuits that threaten to close their
doors, put workers on the unemployment line and severely damage our
economy. We owe America's small businesses and their employers nothing
less.
Mr. Chairman, I again thank my cosponsors and colleagues for their
valuable support in bringing forward this bill.
Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN. The question is on the amendment offered by the
gentleman from Michigan (Mr. Conyers).
The question was taken; and the Chairman announced that the noes
appeared to have it.
Recorded Vote
Mr. CONYERS. Mr. Chairman, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 178,
noes 237, not voting 19, as follows:
[Roll No. 24]
AYES--178
Abercrombie
Ackerman
Allen
Andrews
Baldwin
Barrett (WI)
Becerra
Bentsen
Berkley
Berman
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Brady (PA)
Brown (FL)
Capuano
Cardin
Carson
Clayton
Clyburn
Conyers
Costello
Coyne
Crowley
Cummings
Davis (FL)
Davis (IL)
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Dixon
Doggett
Doyle
Duncan
Edwards
Engel
English
Eshoo
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Frost
Gejdenson
Gephardt
Gonzalez
Green (TX)
Gutierrez
Hall (OH)
Hastings (FL)
Hill (IN)
Hilliard
Hinchey
Hinojosa
Hoeffel
Holt
Hooley
Hoyer
Inslee
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind (WI)
Kleczka
Klink
Kucinich
LaFalce
Lampson
Lantos
Larson
Lazio
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Luther
Maloney (CT)
Maloney (NY)
Markey
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McDermott
McGovern
McIntyre
McKinney
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Minge
Mink
Moakley
Mollohan
Moore
Morella
Murtha
Nadler
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Phelps
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Scott
Serrano
Sherman
Slaughter
Smith (WA)
Spratt
Stabenow
Stark
Strickland
Stupak
Tauscher
Thompson (CA)
Thompson (MS)
Thurman
Tierney
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watt (NC)
Waxman
Weiner
Wexler
Weygand
Wise
Woolsey
Wu
Wynn
NOES--237
Aderholt
Archer
Armey
Baca
Bachus
Baker
Ballenger
Barcia
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bereuter
Berry
Biggert
Bilbray
Bilirakis
Bliley
Blunt
Boehlert
Boehner
Bonilla
Bono
Boyd
Brady (TX)
Bryant
Burr
Burton
Buyer
Calvert
Camp
Canady
Cannon
Castle
Chabot
Chambliss
Chenoweth-Hage
Clement
Coble
Coburn
Collins
Combest
Condit
Cook
Cox
Cramer
Crane
Cubin
Cunningham
Danner
Davis (VA)
Deal
DeLay
DeMint
Diaz-Balart
Dickey
Dooley
Doolittle
Dreier
Dunn
Ehlers
Ehrlich
Emerson
Etheridge
Ewing
Fletcher
Foley
Forbes
Fossella
Fowler
Franks (NJ)
Frelinghuysen
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goode
Goodlatte
Goodling
Gordon
Goss
Granger
Green (WI)
Greenwood
Gutknecht
Hall (TX)
Hansen
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (MT)
Hilleary
Hobson
Hoekstra
Holden
[[Page H485]]
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Istook
Jenkins
John
Johnson (CT)
Johnson, Sam
Jones (NC)
Kasich
Kelly
King (NY)
Kingston
Knollenberg
Kolbe
Kuykendall
LaHood
Largent
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
McCrery
McHugh
McInnis
McIntosh
McKeon
McNulty
Metcalf
Mica
Miller (FL)
Miller, Gary
Moran (KS)
Moran (VA)
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Ose
Oxley
Packard
Paul
Pease
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pickett
Pitts
Pombo
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Ramstad
Regula
Reynolds
Riley
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Salmon
Saxton
Scarborough
Schaffer
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shows
Shuster
Simpson
Sisisky
Skeen
Skelton
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Spence
Stearns
Stenholm
Stump
Sununu
Sweeney
Talent
Tancredo
Tanner
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thornberry
Thune
Tiahrt
Toomey
Upton
Vitter
Walden
Walsh
Wamp
Watkins
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson
Wolf
Young (AK)
Young (FL)
NOT VOTING--19
Baird
Baldacci
Bishop
Brown (OH)
Callahan
Campbell
Capps
Clay
Cooksey
DeFazio
Everett
Graham
Lowey
Martinez
McCollum
Sanford
Snyder
Vento
Watts (OK)
{time} 1412
Messrs. GOODLING, SMITH of Michigan, KUYKENDALL, LEWIS of California,
SIMPSON, SHUSTER, SESSIONS, RILEY, FORBES, TAUZIN, and Ms. DUNN changed
their vote from ``aye'' to ``no.''
Mr. GEPHARDT changed his vote from ``no'' to ``aye.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
The CHAIRMAN. The question is on the committee amendment in the
nature of a substitute, as amended.
The committee amendment in the nature of a substitute, as amended,
was agreed to.
The CHAIRMAN. Under the rule, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Sununu) having assumed the chair, Mr. Thornberry, Chairman of the
Committee of the Whole House on the State of the Union, reported that
that Committee, having had under consideration the bill (H.R. 2366), to
provide small businesses certain protections from litigation excesses
and to limit the product liability of nonmanufacturer product sellers,
pursuant to House Resolution 423, he reported the bill back to the
House with an amendment adopted by the Committee of the Whole.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
Is a separate vote demanded on any amendment to the committee
amendment in the nature of a substitute adopted by the Committee of the
Whole? If not, the question is on the amendment.
The amendment was agreed to.
The SPEAKER pro tempore. The question is on engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. CONYERS. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 221,
noes 193, not voting 20, as follows:
[Roll No. 25]
AYES--221
Aderholt
Archer
Armey
Bachus
Baker
Ballenger
Barcia
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bereuter
Biggert
Bilbray
Bilirakis
Bliley
Blunt
Boehlert
Boehner
Bonilla
Bono
Boyd
Brady (TX)
Bryant
Burr
Burton
Buyer
Calvert
Camp
Canady
Cannon
Castle
Chabot
Chambliss
Chenoweth-Hage
Clement
Collins
Combest
Condit
Cook
Cox
Cramer
Crane
Cubin
Cunningham
Danner
Davis (VA)
Deal
DeLay
DeMint
Dickey
Dooley
Dreier
Duncan
Dunn
Ehlers
Emerson
Ewing
Fletcher
Foley
Ford
Fossella
Fowler
Frank (MA)
Franks (NJ)
Frelinghuysen
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Gillmor
Goode
Goodlatte
Goodling
Gordon
Goss
Granger
Green (WI)
Greenwood
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (MT)
Hilleary
Hobson
Hoekstra
Holden
Horn
Hostettler
Houghton
Hulshof
Hutchinson
Hyde
Isakson
Jenkins
John
Johnson (CT)
Johnson, Sam
Jones (NC)
Kasich
Kelly
Kingston
Knollenberg
Kolbe
Kuykendall
LaHood
Largent
Latham
LaTourette
Lazio
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
McCrery
McHugh
McInnis
McIntosh
McKeon
McNulty
Metcalf
Mica
Miller (FL)
Miller, Gary
Moran (KS)
Moran (VA)
Myrick
Ney
Northup
Norwood
Nussle
Ose
Oxley
Packard
Pease
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Pombo
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Ramstad
Regula
Reynolds
Riley
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Salmon
Saxton
Scarborough
Schaffer
Sensenbrenner
Sessions
Shaw
Shays
Sherwood
Shimkus
Shuster
Simpson
Sisisky
Skeen
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Spence
Stearns
Stenholm
Stump
Sweeney
Talent
Tancredo
Tanner
Tauzin
Taylor (MS)
Taylor (NC)
Thomas
Thornberry
Thune
Tiahrt
Upton
Vitter
Walden
Walsh
Wamp
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson
Wolf
Young (AK)
Young (FL)
NOES--193
Abercrombie
Ackerman
Allen
Andrews
Baca
Baldwin
Barrett (WI)
Becerra
Bentsen
Berkley
Berman
Berry
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Brady (PA)
Brown (FL)
Capuano
Cardin
Carson
Clayton
Clyburn
Coble
Coburn
Conyers
Costello
Coyne
Crowley
Cummings
Davis (FL)
Davis (IL)
DeGette
Delahunt
DeLauro
Deutsch
Diaz-Balart
Dicks
Dingell
Dixon
Doggett
Doolittle
Doyle
Edwards
Ehrlich
Engel
English
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Forbes
Frost
Gejdenson
Gephardt
Gilman
Gonzalez
Green (TX)
Hastings (FL)
Hill (IN)
Hilliard
Hinchey
Hinojosa
Hoeffel
Holt
Hooley
Hoyer
Hunter
Inslee
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson, E.B.
Jones (OH)
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kleczka
Klink
Kucinich
LaFalce
Lampson
Lantos
Larson
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Luther
Maloney (CT)
Maloney (NY)
Markey
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McDermott
McGovern
McIntyre
McKinney
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Minge
Mink
Moakley
Mollohan
Moore
Morella
Murtha
Nadler
Napolitano
Neal
Nethercutt
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Paul
Payne
Pelosi
Phelps
Pickett
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Scott
Serrano
Shadegg
Sherman
Shows
Skelton
Slaughter
Smith (WA)
Spratt
Stabenow
Stark
Strickland
Stupak
Sununu
Tauscher
Terry
Thompson (CA)
Thompson (MS)
Thurman
Tierney
Toomey
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watt (NC)
Waxman
Weiner
Wexler
Weygand
Wise
Woolsey
Wu
Wynn
NOT VOTING--20
Baird
Baldacci
Bishop
Brown (OH)
Callahan
Campbell
Capps
Clay
Cooksey
DeFazio
Everett
Graham
Gutierrez
Lowey
Martinez
McCollum
Oberstar
Sanford
Snyder
Vento
{time} 1432
Mr. HUNTER changed his vote from ``aye'' to ``no.''
So the bill was passed.
The result of the vote was announced as above recorded.
[[Page H486]]
A motion to reconsider was laid on the table.
____________________