[Congressional Record Volume 146, Number 111 (Tuesday, September 19, 2000)]
[Senate]
[Pages S8762-S8763]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN (for herself and Mr. Kohl):
  S. 3070. A bill to amend title 18, United States Code, to establish 
criminal penalties for distribution of defective products, to amend 
chapter 111 of title 28, United States Code, relating to protective 
orders, sealing of cases, and

[[Page S8763]]

discovery information in civil actions, and for other purposes; to the 
Committee on the Judiciary.


                     DEFECTIVE PRODUCT PENALTY ACT

  Mrs. FEINSTEIN. Mr. President, I rise with my colleague from 
Wisconsin, Senator Kohl, to introduce legislation to better protect 
American consumers from irresponsible companies who knowingly allow 
defective vehicles or vehicle parts to remain on the market.
  Our bill, the ``Defective Product Penalty Act,'' would significantly 
increase the responsibility of companies to test products for defects, 
to recall those products when necessary, and to report to authorities 
when defects are found.
  Recent news stories about Firestone tires have grabbed the headlines, 
but this bill really addresses some long-standing and serious 
deficiencies within our current laws. The Firestone case has 
highlighted the need for these overdue proposals, and it is our hope 
that this legislation receives swift and serious consideration. The 
time has come to close some loopholes and impose some real 
responsibility on company executives who ignore public safety.
  Let me describe specifically what this bill does:
  First, this legislation will increase civil penalties for failure to 
recall a defective vehicle or part or withholding information from the 
National Highway Traffic Safety Administration (NHTSA). Current 
penalties are $1,000 per violation with a maximum penalty in these 
cases of $925,000. The Defective Product Penalty Act would increase the 
penalty to $10,000 per violation, and would eliminate the maximum 
penalty altogether. A penalty of $925,000 for a multi-billion dollar, 
multinational business is not even enough to cause the company to think 
twice about releasing or recalling a defective vehicle. We need to give 
the NHTSA some real teeth.
  Second, this legislation will establish criminal penalties for 
knowingly distributing a defective vehicle or part, or for failing to 
recall or tell authorities about a defective product, if that defect 
results in death or injuries. If death results, the legislation calls 
for a penalty of up to 15 years in prison. If serious injury results, 
the legislation calls for penalties of up to 5 years.
  Third, this legislation would extend the statute of limitations for 
NHTSA to mandate recalls, from 8 to 10 years for vehicles, and from 3 
to 5 years for tires.

  Fourth, the bill would require companies to actually test vehicle 
products before self-certifying that the product is in compliance with 
NHTSA standards.
  Next, the legislation clarifies federal law to make it clear that in 
cases involving vehicle products sold in the U.S., a company must send 
the NHTSA copies of all notices sent to dealers and owners, even if the 
notices are sent only to owners and dealers in foreign countries.
  Finally, this legislation includes provisions from Senator Kohl's 
``Sunshine in Litigation Act'' (S. 957), to:
  Prohibit federal courts from issuing protective orders that prohibit 
individuals from disclosing potential defects or dangers to regulatory 
agencies; and
  Prohibit federal courts from enforcing secrecy agreements without 
first balancing the need for privacy against the public's need to know 
about potential health and safety hazards. In other words, no longer 
can a company put other consumers at risk by forcing a plaintiff to 
keep quiet about a potential threat to public safety.
  Mr. President, this legislation will send a clear signal to 
irresponsible companies and individuals who intentionally put the 
public at risk from defective products--you will now be held 
responsible for your actions. I urge my colleagues to join us in this 
effort.
  Mr. KOHL. Mr. President, I rise today to join my colleague Senator 
Feinstein in introducing the Defective Product Penalty Act of 2000.
  As the Firestone/Bridgestone tire controversy sadly demonstrates, 
current consumer protection laws do not provide sufficient incentive 
for some manufacturers to put the health and safety of consumers at the 
forefront of their business decisions. Although most of us would find 
it very difficult to believe that a company knowingly introduced a 
defective product into the marketplace, or failed to recall one once a 
defect was discovered, the families of the Firestone/Bridgestone 
casualties do not need to be reminded that it does happen. Most 
companies are responsible corporate citizens, of course--and for them 
this legislation will not affect their behavior--but for the others who 
need to be ``incentivized'' to make consumer health and safety a 
foremost priority, the Defective Product Penalty Act (``DPPA'') should 
serve as sufficient notice.
  Specifically, the DPPA creates tough criminal penalties for those who 
knowingly introduce defective products into the stream of commerce with 
the realization that the product may cause death or bodily harm to an 
unsuspecting consumer. Risking the lives of millions of Americans 
because a cost-benefit analysis suggests that profits earned from a 
product outweigh the potential costs of liability is not only wrong, 
but also criminal. And it should be treated as such. Indeed, Mr. 
President, whenever a company adheres to the bottom line instead of 
respecting the health and safety of their consumers, they deserve 
severe, immediate, and strict punishment.
  This bill also incorporates S. 957, the Sunshine in Litigation Act. 
This part of the bill ensures that consumers are better informed about 
product defects that may affect consumer health and safety. All too 
often our Federal courts allow vital information that is discovered in 
litigation--and which bears directly upon public health and safety--to 
be covered up, to be shielded from mothers, fathers and children whose 
lives are potentially at stake, and from the public officials we have 
asked to protect our public health and safety.
  All this happens because of the use of so-called ``protective 
orders''--really gag orders issued by courts--that are designed to keep 
information discovered in the course of litigation secret and 
undisclosed. Typically, injured victims agree to a defendant's request 
to keep lawsuit information secret. They agree because defendants 
threaten that, without secrecy, they will fight every document 
requested and will refuse to agree to a settlement. Victims cannot 
afford to take such chances. And while courts in these situations 
actually have the legal authority to deny requests for secrecy, 
typically they do not--because both sides have agreed.
  The problem of excessive secrecy orders in cases involving public 
health and safety has been apparent for many years. The Judiciary 
Committee first held hearings on this issue in 1990 and again in 1994. 
In 1990, Arthur Bryant, the executive director of the Trial Lawyers for 
Public Justice, told us, ``The one thing we learned .  .  . is that 
this problem is far more egregious than we ever imagined. It goes the 
length and depth of this country, and the frank truth is that much of 
civil litigation in this country is taking place in secret.''
  The Defective Product Penalty Act will go a long way to ensuring that 
the health and safety of consumers will receive the consideration it 
deserves in the boardrooms and courtrooms across our country. I urge my 
colleagues to support it.
                                 ______