House Report 104-63 - COMMON SENSE PRODUCT LIABILITY REFORM ACT

[House Report 104-63]
[From the U.S. Government Publishing Office]

104th Congress Rept. 104-63
HOUSE OF REPRESENTATIVES

1st Session Part 1
_______________________________________________________________________

COMMON SENSE PRODUCT LIABILITY REFORM ACT

_______________________________________________________________________

March 1, 1995.--Ordered to be printed

_______

Mr. Bliley, from the Committee on Commerce, submitted the following

R E P O R T

together with

MINORITY AND ADDITIONAL VIEWS

[To accompany H.R. 917]

[Including cost estimate of the Congressional Budget Office]

The Committee on Commerce, to whom was referred the bill
(H.R. 917) to establish procedures for product liability
actions, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.

CONTENTS

Page
The amendment.................................................... 2
Purpose and summary.............................................. 8
Background and need.............................................. 8
Hearings......................................................... 12
Committee consideration.......................................... 14
Rollcall votes................................................... 14
Committee oversight findings..................................... 20
Committee on Government Reform and Oversight..................... 20
Committee cost estimates......................................... 20
Congressional Budget Office estimate............................. 20
Inflationary impact statement.................................... 21
Section-by-section analysis and discussion....................... 21
Changes in existing law made by the bill, as reported............ 25
Minority and additional views.................................... 26

The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Common Sense Product
Liability Reform Act''.
(b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Preemption.
Sec. 3. Product seller liability.
Sec. 4. Alcohol and drug defense.
Sec. 5. Misuse or alteration.
Sec. 6. Statute of repose.
Sec. 7. Punitive damages.
Sec. 8. Several liability for noneconomic damages.
Sec. 9. Federal cause of action precluded.
Sec. 10. Frivolous pleadings.
Sec. 11. Definitions.
Sec. 12. Liability of biomaterials suppliers.
Sec. 13. Effective date.

SEC. 2. PREEMPTION.

(a) General Rule.--This Act governs any product liability action
brought in any State or Federal court against a manufacturer or product
seller, on any theory, for harm caused by a product. A civil action
brought against a manufacturer or product seller for commercial loss
shall be governed only by applicable commercial or contract law.
(b) State Law.--This Act supersedes State law only to the extent that
State law applies to an issue covered by this Act. Any issue that is
not covered by this Act shall be governed by otherwise applicable State
or Federal law.
(c) Construction.--Nothing in this Act shall be construed to--
(1) waive or affect any defense of sovereign immunity
asserted by any State under any law,
(2) supersede or affect any Federal law,
(3) waive or affect any defense of sovereign immunity
asserted by the United States,
(4) preempt State choice-of-law rules with respect to claims
brought by a foreign nation or a citizen of a foreign nation,
(5) 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
(6) supersede any statute or common law which creates a cause
of action for civil damages or civil penalties, cleanup costs,
injunctions, restitution, cost recovery, punitive damages, or
any other form of relief for contamination or pollution of the
environment or the threat of such contamination or pollution.
For purposes of paragraph (6), the term ``environment'' has the meaning
given to such term in section 101(8) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601(8)).
(d) Vaccine Injury.--
(1) General rule.--To the extent that title XXI of the Public
Health Service Act establishes a Federal rule of law applicable
to a civil action brought for a vaccine-related injury or
death--
(A) this Act does not affect the application of the
rule of law to such an action, and
(B) any rule of law prescribed by this Act in
conflict with a rule of law of such title XXI shall not
apply to such an action.
(2) Applicability.--If there is an aspect of a civil action
brought for a vaccine-related injury or death to which a
Federal rule of law under title XXI of the Public Health
Service Act does not apply, then this Act or otherwise
applicable law (as determined under this section) will apply to
such aspect of such action.

SEC. 3. PRODUCT SELLER LIABILITY.

(a) General Rule.--Except as provided in subsection (b), in a product
liability action, a product seller shall be liable to a claimant for
harm only if the claimant establishes that--
(1)(A) the product which allegedly caused the harm complained
of was sold by the product seller,
(B) the product seller failed to exercise reasonable care
with respect to the product, and
(C) such failure to exercise reasonable care was a proximate
cause of the claimant's harm,
(2)(A) the product seller made an express warranty applicable
to the product which allegedly caused the harm complained of,
independent of any express warranty made by the manufacturer as
to the same product,
(B) the product failed to conform to the warranty, and
(C) the failure of the product to conform to the warranty
caused the claimant's harm, or
(3) the product seller engaged in intentional wrongdoing as
determined under applicable State law and such intentional
wrongdoing was a proximate cause of the harm complained of by
the claimant.
For purposes of paragraph (1)(B), 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 a product where there
was no reasonable opportunity to inspect the product in a manner which
would, in the exercise of reasonable care, have revealed the aspect of
the product which allegedly caused the claimant's harm.
(b) Special Rule.--In a product liability action, a product seller
shall be liable for harm to the claimant caused by such product as if
the product seller were the manufacturer of such product if--
(1) the manufacturer is not subject to service of process
under the laws of the State in which the claimant brings the
action, or
(2) the court determines that the claimant would be unable to
enforce a judgment against the manufacturer.

SEC. 4. ALCOHOL AND DRUG DEFENSE.

(a) General Rule.--In any product liability action, it shall be a
complete defense to such action that--
(1) the claimant was intoxicated or was under the influence
of intoxicating alcohol or any drug, and
(2) the claimant as a result of such intoxication or the
influence of the alcohol or drug was more than 50 percent
responsible for causing the accident or event which resulted in
such claimant's harm.
(b) Construction.--For purposes of subsection (a)--
(1) the determination of whether a person was intoxicated or
was under the influence of intoxicating alcohol or any drug
shall be made pursuant to applicable State law, and
(2) the term ``drug'' means any controlled substance as
defined in the Controlled Substances Act (21 U.S.C. 802(6))
that has been taken by the claimant other than in accordance
with the terms of a lawfully issued prescription.

SEC. 5. MISUSE OR ALTERATION.

(a) General Rule.--Except as provided in subsection (c), in a product
liability action, the damages for which a manufacturer or product
seller is otherwise liable under State law shall be reduced by the
percentage of responsibility for the claimant's harm attributable to
misuse or alteration of a product by any person if the manufacturer or
product seller established by a preponderance of the evidence that such
percentage of the claimant's harm was proximately caused by--
(1) a use or alteration of a product in violation of, or
contrary to, the manufacturer's or product seller's express
warnings or instructions if the warnings or instructions are
inadequate as determined pursuant to applicable State law, or
(2) a use or alteration of a product involving a risk of harm
which was known or should have been known by the ordinary
person who uses or consumes the product with the knowledge
common to the class of persons who used or would be reasonably
anticipated to use the product.
(b) State Law.--Notwithstanding section 2(b) of this Act, subsection
(a) supersedes State law concerning misuse of alteration of a product
only to the extent that State law is inconsistent.
(c) Workplace Injury.--Notwithstanding subsection (a), the damage for
which a manufacturer or product seller is otherwise liable under State
law shall not be reduced by the percentage of responsibility for the
claimant's harm attributable to misuse or alteration of the product by
the claimant's employer or coemployees who are immune from suit by the
claimant pursuant to the State law applicable to workplace injuries.

SEC. 6. STATUTE OF REPOSE.

A product liability action for harm shall be barred unless the
complaint is served and filed within 15 years of the date of delivery
of the product involved to its first purchaser or lessee who was not
engaged in the business of selling or leasing the product or of using
the product as a component in the manufacture of another product. This
section shall apply only if--
(1) the court determines that the claimant has received or
would be eligible to receive compensation under any State or
Federal worker's compensation law for harm caused by the
product, and
(2) the harm caused by the product did not include chronic
illness.
This section does not bar a product liability action commenced at any
time involving a manufacturer or product seller who made an express
warranty in writing as to the useful safe life of the product involved
which was longer than 15 years.

SEC. 7. PUNITIVE DAMAGES.

(a) General Rule.--
(1) Standard for award of damages.--Except as provided in
paragraph (2) or subsection (d), punitive damages may, to the
extent permitted by applicable State law, be awarded against a
defendant in a product liability action if the claimant
establishes by clear and convincing evidence that the harm
suffered was the result of conduct manifesting a defendant's
conscious, flagrant indifference to the safety of those persons
who might be harmed by a product.
(2) Required proportionality.--The amount of punitive damages
that may be awarded for a claim in any civil action subject to
this section shall not exceed 3 times the amount awarded to the
claimant for the economic injury on which such claim is based,
or $250,000, whichever is greater.
(3) Exception.--
(A) Reasonable care.--A failure to exercise
reasonable care in selecting among alternative product
designs, formulations, instructions, or warnings shall
not, by itself, constitute conduct that may give rise
to punitive damages.
(B) Award of other damages.--Punitive damages may not
be awarded in a product liability action unless
compensatory damages have been awarded in such action.
For purposes of this subparagraph, nominal damages do
not constitute compensatory damages.
(b) Separate Proceeding.--At the request of the defendant, the trier
of fact shall consider in a separate proceeding (1) whether punitive
damages are to be awarded and the amount of such award, or (2) the
amount of punitive damages following a determination of liability for
such damages. If a separate proceeding is requested, evidence relevant
only to the claim of punitive damages, as determined by applicable
State law, shall be inadmissible in any proceeding to determine whether
compensatory damages are to be awarded.
(c) Consideration.--In determining the amount of punitive damages,
the trier of fact shall consider all relevant evidence, including--
(1) the severity of the harm caused by the conduct of the
defendant,
(2) the duration of the conduct or any concealment of it by
the defendant,
(3) the profitability of the conduct to the defendant,
(4) the number of products sold by the defendant of the kind
causing the harm complained of by the claimant,
(5) awards of punitive or exemplary damages to persons
similarly situated to the claimant,
(6) prospective awards of compensatory damages to persons
similarly situated to the claimant,
(7) any criminal penalties imposed on the defendant as a
result of the conduct complained of by the claimant,
(8) the amount of any civil and administrative fines and
penalties assessed against the defendant as a result of the
conduct complained of by the claimant, and
(9) whether the foregoing considerations have been presented
in any prior proceeding involving that defendant.
(d) Drugs and Devices.--
(1)(A) Punitive damages shall not be awarded against a
manufacturer or product seller of a drug (as defined in section
201(g)(1) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 321(g)(1)) or medical device (as defined in section
201(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
321(h)) which caused the claimant's harm where--
(i) such drug or device was subject to premarket
approval by the Food and Drug Administration with
respect to the safety of the formulation or performance
of the aspect of such drug or device which caused the
claimant's harm or the adequacy of the packaging or
labeling of such drug or device, and such drug was
approved by the Food and Drug Administration; or
(ii) the drug is generally recognized as safe and
effective pursuant to conditions established by the
Food and Drug Administration and applicable
regulations, including packaging and labeling
regulations.
(B) Subparagraph (A) shall not apply in any case in which the
defendant, before or after premarket approval of a drug or
device--
(i) intentionally and wrongfully withheld from or
misrepresented to the Food and Drug Administration
information concerning such drug or device required to
be submitted under the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 301 et seq.) or section 351 of the
Public Health Service Act (42 U.S.C. 262) that is
material and relevant to the harm suffered by the
claimant, or
(ii) made an illegal payment to an official or
employee of the Food and Drug Administration for the
purpose of securing or maintaining approval of such
drug or device.
(2) Packaging.--In a product liability action for harm which
is alleged to relate to the adequacy of the packaging (or
labeling relating to such packaging) of a drug which is
required to have tamper-resistant packaging under regulations
of the Secretary of Health and Human Services (including
labeling regulations related to such packaging), the
manufacturer of the drug shall not be held liable for punitive
damages unless the drug is found by the court by clear and
convincing evidence to be substantially out of compliance with
such regulations.

SEC. 8. SEVERAL LIABILITY FOR NONECONOMIC DAMAGES.

(a) General Rule.--If a manufacturer or product seller is found
liable in a product liability action, the liability of each defendant
in the lawsuit shall be several only and shall not be joint for
noneconomic damages. Each defendant shall be liable only for the amount
of noneconomic damages allocated to such defendant in direct proportion
to such defendant's percentage of responsibility as determined under
subsection (b) of this section. A separate judgment shall be rendered
against such defendant for that amount.
(b) Trier of Fact.--For purposes of this section, the trier of fact
shall determine the proportion of responsibility of each party for the
claimant's harm.
(c) Noneconomic Damages.--As used in this section, the term
``noneconomic damages'' means subjective, nonmonetary losses including
pain, suffering, inconvenience, mental suffering, emotional distress,
loss of society and companionship, loss of consortium, injury to
reputation and humiliation, but does not include objectively verifiable
monetary losses including medical expenses, loss of earnings, burial
costs, loss of use of property, costs of repair or replacement, costs
of obtaining substitute domestic services, rehabilitation and training
expenses, loss of employment, or loss of business or employment
opportunities.

SEC. 9. FEDERAL CAUSE OF ACTION PRECLUDED.

The district courts of the United States shall not have jurisdiction
under section 1331 or 1337 of title 28, United States Code, over any
civil action arising under this Act.

SEC. 10. FRIVOLOUS PLEADINGS.

(a) General Rule.--
(1) Signing of pleading.--The signing or verification of a
pleading in a product liability action subject to this Act
constitutes a certificate that to the signatory's or verifier's
best knowledge, information, and belief, formed after
reasonable inquiry, the pleading is not frivolous as determined
under paragraph (2).
(2) Definitions.--
(A) For purposes of this section, a pleading is
frivolous if the pleading is--
(i) groundless and brought in bad faith;
(ii) groundless and brought for the purpose
of harassment; or
(iii) groundless and interposed for any
improper purpose, such as to cause unnecessary
delay or needless increase in the cost of
litigation.
(B) For purposes of subparagraph (A), the term
``groundless'' means--
(i) no basis in fact; or
(ii) not warranted by existing law or a good
faith argument for the extension, modification,
or reversal of existing law.
(b) Determination That Pleading Frivolous.--
(1) Motion for determination.--Not later than 60 days after
the date a pleading in a product liability action is filed, a
party to the action may make a motion that the court determine
if the pleading is frivolous.
(2) Court action.--The court in a product liability action
shall on the motion of a party or on its own motion determine
if a pleading is frivolous.
(c) Considerations.--In making its determination of whether a
pleading is frivolous, the court shall take into account--
(1) the multiplicity of parties;
(2) the complexity of the claims and defenses;
(3) the length of time available to the party to investigate
and conduct discovery; and
(4) affidavits, depositions, and any other relevant matter.
(d) Sanction.--If the court determines that a pleading is frivolous,
the court shall impose an appropriate sanction on the signatory or
verifier of the pleading. The sanction may include one or more of the
following:
(1) the striking of a pleading or the offending portion
thereof;
(2) the dismissal of a party; or
(3) an order to pay to a party who stands in opposition to
the offending pleading the amounts of the reasonable expenses
incurred because of the filing of the pleading, including
costs, reasonable attorney's fees, witness fees, fees of
experts, and deposition expenses.
(e) Construction.--For purposes of this section--
(1) a general denial does not constitute a frivolous
pleading; and
(2) the amount requested for damages does not constitute a
frivolous pleading.

SEC. 11. DEFINITIONS.

For purposes of this Act:
(1)(A) The term ``biomaterials supplier'' means an entity
that directly or indirectly supplies, or licenses another
person to supply, a component part or raw material for use in
the manufacture of a medical device--
(i) that is intended by the manufacturer of the
device--
(I) to be placed into a surgically or
naturally formed or existing cavity of the body
for a period of at least 30 days; or
(II) to remain in contact with bodily fluids
of internal human tissue through a surgically
produced opening for a period of less than 30
days; and
(ii) suture materials used in implant procedures.
(B) Notwithstanding subparagraph (A), the term ``biomaterials
supplier'' excludes any person, with respect to a medical
device which is the subject of a product liability action--
(i) who is engaged in the manufacture, preparation,
propagation, compounding, or processing (as defined in
section 510(a)(1) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360(a)(1)) of the medical
device, and has registered with the Secretary of Health
and Human Services pursuant to section 510 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360)
and the regulations issued under such section, and has
included the medical device on a list of devices filed
with the Secretary of Health and Human Services
pursuant to section 510(j) of such Act (21 U.S.C.
360(j)) and the regulations issued under such section;
or
(ii) who, in the course of a business conducted for
that purpose, has sold, distributed, leased, packaged,
labeled, or otherwise placed the implant in the stream
of commerce after it was manufactured.
(2) The term ``claimant'' means any person who brings a
product liability action and any person on whose behalf such an
action is brought, including such person's decedent if such an
action is brought through or on behalf of an estate or such
person's legal representative if it is brought through or on
behalf of a minor or incompetent.
(3) With respect to a civil action brought against a
manufacturer or product seller of a product, the term
``commercial loss'' means loss, including damage to the product
itself, which is not harm described in clause (i) or (ii) of
paragraph (4)(A) and is of a kind for which there is a remedy
under applicable contract or commercial law.
(4) The term ``harm''--
(A) means--
(i) personal physical illness, injury, or
death of the claimant,
(ii) mental anguish or emotional harm of the
claimant caused by or causing the claimant
personal physical illness or injury, or
(iii) physical damage to property other than
the product itself,
caused by a product, and
(B) does not include commercial loss.
(5) With respect to a product, the term ``manufacturer''
means--
(A) any person who is engaged in a business to
produce, create, make, or construct the product and who
designs or formulates the product or has engaged
another person to design or formulate the product,
(B) a product seller of the product who, before
placing the product in the stream of commerce--
(i) designs or formulates or has engaged
another person to design or formulate an aspect
of the product after the product was initially
made by another, and
(ii) produces, creates, makes, or constructs
such aspect of the product, or
(C) any product seller not described in subparagraph
(B) which holds itself out as a manufacturer to the
user of the product.
(6) The term ``product''--
(A) means any object, substance, mixture, or raw
material in a gaseous, liquid, or solid state--
(i) which is capable of delivery itself, in a
mixed or combined state, or as a component part
or ingredient,
(ii) which is produced for introduction into
trade or commerce,
(iii) which has intrinsic economic value, and
(iv) which is intended for sale or lease to
persons for commercial or personal use, and
(B) does not include--
(i) human tissue, human organs, human blood,
and human blood products, or
(ii) electricity, water delivered by a
utility, natural gas, or steam.
(7) The term ``product liability action'' means a civil
action brought against a manufacturer or product seller, on any
theory, for harm caused by a product.
(8) The term ``product seller''--
(A) means a person--
(i) who in the course of a business conducted
for that purpose sells, distributes, rents,
leases, prepares, blends, packages, or labels a
product or is otherwise involved in placing a
product in the stream of commerce, or
(ii) who installs, repairs, or maintains the
harm-causing aspect of a product, and
(B) does not include--
(i) a manufacturer as defined in paragraph
(4) of this section,
(ii) a seller or lessor of real property,
(iii) 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,
(iv) any person who acts only in a financial
capacity with respect to the sale of a product,
or
(v) any person who leases a product under a
lease arrangement in which the selection,
possession, maintenance, and operation of the
product are controlled by a person other than
the lessor.
(9) The term ``State'' means any State of the United States,
the District of Columbia, the Commonwealth of Puerto Rico, the
Virgin Islands, Guam, American Samoa, the Northern Mariana
Islands, the Trust Territory of the Pacific Islands, and any
other territory or possession of the United States, or any
political subdivision thereof.

SEC. 12. LIABILITY OF BIOMATERIALS SUPPLIERS.

A biomaterials supplier may, to the extent required and permitted by
any other applicable law, be liable for harm to a claimant caused by a
medical device, only if the claimant in a product liability action
shows, by a preponderance of evidence, that--
(1) the raw materials or component parts delivered by the
biomaterials supplier either--
(A) did not constitute the product described in the
contract between the biomaterials supplier and the
person who contracted for delivery of the product; or
(B) failed to meet any specifications that were--
(i) provided to the biomaterials supplier and
not expressly repudiated by the biomaterials
supplier prior to acceptance of delivery of the
raw materials or component parts:
(ii)(I) provided to the biomaterials
supplier;
(II) provided to the manufacturer by the
biomaterials supplier; or
(III) contained in a master file that was
submitted by the biomaterials supplier to the
Secretary of Health and Human Services and that
is currently maintained by the biomaterials
supplier of purposes of premarket approval of
medical devices; or
(iii)(I) included in the submissions for the
purposes of premarket approval or review by the
Secretary of Health and Human Services under
section 510, 513, 515, or 520 of the Federal
Food, Drug, and Cosmetic Act 921 U.S.C. 360,
360c, 360e, or 360j); and
(II) have received clearance from the
Secretary of Health and Human Services, if such
specifications were provided by the
manufacturer to the biomaterials supplier and
were not expressly repudiated by the
biomaterials supplier prior to the acceptance
by the raw materials or component parts; and
(2) such conduct was an actual and proximate cause of the
harm to the claimant.

SEC. 13. EFFECTIVE DATE.

This Act shall apply with respect to product liability actions which
are commenced after the date of the enactment of this Act.

Purpose and Summary

The purpose of H.R. 917, the Common Sense Product Liability
Reform Act, is to adopt common sense legal reforms to our civil
justice system with regard to product liability litigation. It
sets forth standards for liability for product sellers;
provides a liability defense where a claimant is more than 50%
responsible for an accident causing harm as a result of
intoxication or illegal drug usage; reduces any damages for
harm attributable to a claimant's misuse or alteration of a
product; establishes a 15 year statute of repose where a
claimant is eligible for workers' compensation and has not
suffered a chronic illness; requires clear and convincing
evidence of a defendant's conscious and flagrant indifference
to safety for an award of punitive damages; imposes a required
proportionality on punitive damages of the greater of three
times the economic injury or $250,000; allows a separate
proceeding to determine punitive damages, along with the
factors which should be considered; sets forth a bar against
punitive damages for the sale or manufacture of drugs or
devices which have been approved by the Food and Drug
Administration (FDA), where there was no intentional or
wrongful withholding or misrepresentation of information or
illegal payments to the FDA; eliminates joint liability for
noneconomic damages; imposes sanctions on frivolous pleadings;
and limits the liability of biomaterials suppliers where the
supplied materials have received clearance from the Secretary
of Health and Human Services and do not fail to meet any
contract specifications.

background and need for legislation

For two decades, the Committee on Commerce has grappled
with the issue of product liability reform. After developing an
extensive record on the subject of product liability law, the
Committee has concluded that the present system places an
enormous burden on interstate commerce, inflates prices,
stifles innovation, and subjects manufacturers and sellers to a
capricious lottery where sanctions can exceed any found in
criminal law. In light of these facts, Congressional action is
long overdue.
Historically, injury caused by a defective product gave
rise to a tort action in State courts. As transportation and
communications systems developed, more products crossed State
boundaries, increasing the volume of interstate commerce
exponentially, creating more interstate product liability. From
1973 to 1988, product liability suits in Federal courts
increased 1000%; in State courts the increase was between 300%
and 500%. Meanwhile, tort doctrine in State courts evolved from
fault-based standards to strict liability for manufacturers and
sellers.
Tort costs have risen significantly as well, reaching an
estimated $132 billion in 1991.\1\ Products manufactured in one
State are now sold in another, and cause injury in yet others.
Because each State has different rules governing recovery in
tort, forum shopping is encouraged, common law is developed
unevenly, and manufacturers are found liable for conduct in one
State that would fail to give rise to a cause of action in
another.
\1\ Tillinghast. (1992) ``Tort Cost Trends: An International
Perspective.'' New York: Tillinghast.
---------------------------------------------------------------------------
American manufacturers and sellers have found that, given
the multiplicity of evidentiary standards in State tort law,
products may be found defective even after full compliance with
all applicable regulations. The vast majority of product
liability cases are filed in State courts. This leaves
manufacturers and sellers without the benefit of uniform
standards on which to base conduct in the design, manufacture
and sale of goods. Manufacturers are told that their products
must be ``safe,'' without being told what constitutes safety.
In many jurisdictions, liability on the part of a
manufacturer for economic and punitive damages is found in the
absence of negligence or malice. The doctrine of joint and
several liability often compels a defendant to pay damages far
in excess of his proportionate responsibility for the injury,
and the plaintiff's Bar has become remarkably skilled at
identifying and joining defendants with deep pockets who,
despite limited responsibility for injury, would rather settle
a case than face the costs and publicity associated with
litigation.
Because over 70% of products manufactured in any one State
cross State borders before the point of final sale, American
manufacturers must contend with the uncertainty created by 51
different product liability jurisdictions in their own domestic
market. The result is a de facto ``liability tax'' which chills
interstate commerce and deprives consumers of product choice
available to consumers in other nations throughout the world.
Unfortunately, instead of encouraging the development of safer
products, the present system often forces manufacturers to
increase product prices or withdraw products from the market
altogether. According to surveys reported to the Committee by
Pace University Professor of Law M. Stuart Madden, because of
liability costs, 36% of American manufacturers have withdrawn
products from the world market, 47% have withdrawn products
from the domestic market, 39% have decided not to introduce new
products, and 25% have discontinued new product research.
The case of Bendectin is illustrative: Bendectin is the
only prescription drug in the United States ever approved for
combatting nausea and vomiting in pregnancy. Introduced in
1956, the drug was used in over 30 million pregnancies. In
1969, allegations that Bendectin could cause birth defects
appeared in some scientific journals. Despite the fact that no
causal relationship between Bendectin and birth defects was
ever established (the Food and Drug Administration affirmed the
drug's safety), nearly 1,700 product liability suits were
brought against the manufacturer.
Almost all cases that went to court were decided in favor
of the manufacturer, yet annual revenues from the sale of the
drug barely exceeded legal fees and insurance premiums. The
manufacturer voluntarily withdrew Bendectin from the market in
1983. While the rate of birth defects has not declined since
Bendectin was withdrawn, the cost in the U.S. for treatment of
severe nausea during pregnancy is now nearly $40 million per
year.
Another example comes from the sporting goods industry. In
a 1988 Forbes magazine article, author Peter Huber noted that
product liability legal fees and insurance premiums accounted
for 55% of the price of a football helmet.\2\ In 1988, Rawlings
Sporting Goods announced that it would no longer manufacture,
distribute, or sell football helmets. Rawlings was the 18th
company in 18 years to abandon the football helmet business due
to liability exposure, joining Spaulding, MacGregor, Medalist,
Hutch, and other manufacturers. As one commentator observed:
\2\ Peter Huber. (Oct. 1988) Forbes ``The Litigation Scandal.''

This situation is not what the crafters of product
liability law intended. Product liability law was
created to improve product safety and compensate
victims of unsafe products. It was not meant to
penalize conscientious companies that provide products
and services vital to the U.S. economy.\3\
\3\ Frederick B. Sontag. (1994) Product Liability and Innovation.
``Indirect Effects of Product Liability on a Corporation.'' National
Academy of Engineering.

In addition to driving products from the marketplace,
raising prices, and draining capital, the patchwork of
liability standards throughout the nation severely inhibits the
competitiveness of U.S. industry. While it is true that a
foreign company doing business in the United States is subject
to the same liability laws as a U.S. company, most U.S.
companies have had products in the marketplace far longer than
their foreign competitors.
Since many states have no statute of repose, products which
have been in use for 15 or more years can still expose a
manufacturer to liability. The costs of insuring against
product liability and legal fees spent in liability lawsuits
are built into the cost of such products, creating a price
disadvantage for domestic producers facing well financed
foreign competition with far less liability exposure.
American industry's chief foreign competitors face no such
handicap in their domestic markets. Both the European Community
(EC) and Japan have uniform product liability regulations. The
EC Directive establishing product liability standards was
published in 1985, and differs significantly from product
liability law in the United States in the following ways:
first, a single definition of product ``defect'' applies;
second, if a product complies with mandatory regulations issued
by public authorities, the manufacturer has no liability
exposure; third, noneconomic damages (pain and suffering) are
limited; fourth, punitive damages are generally not allowed;
fifth, most EC countries limit liability to known technical
knowledge; and sixth, a 10-year statute of repose begins when
the manufacturer puts a product into the stream of commerce.
Operating under the provisions of this Directive, European
manufacturers and sellers pay, on average, twenty times less
for liability coverage than their American competitors.
The status quo also retards the ability of American firms
to create jobs. A memorandum dated November 30, 1990, from the
Office of Vice President Quayle to Members of Congressional
Committees considering product liability reform legislation
states that 40% of chief executives said product liability has
had a major impact on their business; 36% stopped some
manufacturing as a result; 15% laid off workers, and 8% closed
plants. Almost 90% of American companies will become defendants
in a product liability claim at least once according to a 1988
Rand Institute study. In the study, of 19,500 companies
surveyed, 17,000 were lead defendants in at least one product
liability suit.
In summarizing the background and need for H.R. 917, the
Committee finds itself in agreement with the observations of
Francois Castaing:

It is well understood that product liability laws have
a purpose. They are supposed to compensate for injury,
promote safety, and penalize gross negligence. If a
corporation is irresponsible, it should be held
accountable. But in the United States, the situation
has gone beyond punishing gross negligence. Now
punishment is meted out for many risks that simply
cannot be avoided when a product is produced and sold
to a public that has wide discretion in how it chooses
to use that product. When no distinctions are made in
assigning responsibility for risk and companies are
held responsible (and penalized) for all risk--from
those attributable to the vagaries of human nature to
those truly within a company's aegis--the ability to
innovate, engineer, and compete is compromised.\4\
\4\ Francois J. Castaing. (1994) Product Liability and Innovation.
``Automotive Engineering and Product Liability.'' National Academy of
Engineering.

The present product liability system in the United States
unfairly denies consumers the right of free choice in the
marketplace and inflates prices for available products. For
manufacturers and sellers, the system discourages innovation,
retards capital formation, and creates a distinct competitive
disadvantage in the world market.
The Committee has developed an extensive record on the
negative impact of product liability on commerce in the United
States, and has concluded that Congressional action is long
overdue. Support for product liability reform within the
Commerce Committee has always been bipartisan, and legislation
has been reported from the Committee to the House under both
Republican and Democratic Chairmen.

hearings

During the 104th Congress, the Subcommittee on Commerce,
Trade, and Hazardous Materials held one day of hearings on H.R.
917, the Common Sense Product Liability Reform Act, and related
legislation, including section 103 of H.R. 10, the Common Sense
Legal Reform Act. Additionally, since the 99th Congress, the
Committee has held 12 days of hearings on the subject of
product liability reform and that record contributed
significantly to the Committee's consideration of H.R. 917.
On February 21, 1995, the Subcommittee on Commerce, Trade,
and Hazardous Materials held a hearing on H.R. 917, the Common
Sense Product Liability Reform Act and Related legislation.
Testimony was received from Mr. Paul R. Huard, Senior Vice
President, National Association of Manufacturers; Mr. Larry S.
Stewart, President, Association of Trial Lawyers of America;
Mr. Victor E. Schwartz, Esq., General Counsel, Product
Liability Coordinating Committee; Mr. Daniel E. Richardson,
Administrator, Latta Road Nursing Home, (testifying on behalf
of the National Federation of Independent Business); Mr.
Jeffery J. Teitz, Executive Committee, Vice-Chair, Assembly on
Federal Issues of the National Conference of State Legislators;
and Mr. James A. Anderson, Jr., Vice President of Government
Relations, National Association of Wholesaler-Distributors.
During the 103rd Congress, the Subcommittee on Commerce,
Consumer Protection and Competitiveness held three days of
hearings on H.R. 1910, the Fairness in Product Liability Act,
whose language is closely tracked by H.R. 917. The first
hearing was held on February 2, 1994 and focused on the impact
of product liability reform on the health care industry. The
Subcommittee received testimony from Ms. Stephanie Kanarek; Mr.
Ted R. Mannen, Executive Vice-President, Health Industry
Manufacturers Association; Mr. Calvin A. Campbell, Jr.,
President and CEO, Goodman Equipment Corporation (testifying on
behalf of the American Mining Congress); Ms. Lucinda Finley,
Professor, State University of New York at Buffalo Law School;
Mr. Victor E. Schwartz, Esq., General Counsel, Product
Liability Coordinating Committee; and Mr. Bruce Finzen, Robins,
Kaplan, Miller & Ciresi.
The second hearing sought a broad spectrum of opinion on
the bill from consumers, manufacturers, and academics and was
held on April 21, 1994. The Subcommittee received testimony
from Mr. Marcus Griffith, President, The Hairlox Company
(testifying on behalf of the National Association of
Manufacturers); Ms. Dianne Weaver, Weaver, Weaver & Lipton; Ms.
Norma Wallis, President, Livernois Engineering (testifying on
behalf of the Association of Manufacturing Technology); Mr.
Robert Creamer, Executive Director, Illinois Public Action;
Professor Stuart Madden, Pace University School of Law; and
Professor Andrew Popper, Deputy Dean, Washington College of
Law, The American University.
The Subcommittee received testimony from victims of
defective products and other interested parties on May 3, 1994,
from Janey and Lawrence Fair; Amy Goldrich for Sybil Goldrich,
Command Trust Network; Charles Ruhl (accompanied by Don Singer,
Attorney); James L. Martin, Director, State & Federal Affairs,
National Governors Association; Emmett W. McCarthy, Dreis and
Krump Manufacturing Company; James Oliphant, President, Defense
Research Institute; Liberty Magarian (testifying on behalf of
the Product Liability Coordinating Committee); and Larry R.
Rogers, Power, Rogers, & Smith.
In the 100th Congress, the Subcommittee on Commerce,
Consumer Protection, and Competitiveness held seven hearings on
federal product liability reform covering punitive damages
reform, joint and several liability, workplace safety, the
impact of product liability reform on the general aviation
industry, state-of-the-art and government standards defenses,
the effect of product liability reform on the affordability and
availability of product liability insurance, and the issue of
product liability reform in general.
Witnesses included: Representatives Jim Slattery and Al
Swift; the Honorable Malcom Baldrige, Secretary of Commerce;
The Honorable Harry L. Carrico, Chief Justice, Supreme Court of
Virginia; Mr. Robert H. Mallot, Chairman and CEO, FMC
Corporation; Mr. Victor E. Schwartz, Esq., Crowell & Moring;
Mr. John B. Curico, Chairman, President, and CEO, Mack Trucks,
Inc.; Mr. Marcus M. Griffith, Hairlox Company; Mr. Joseph
Goffman, Public Citizen; Ms. Pamela Gilbert, United States
Public Interest Research Group; Mr. Gene Kimmelman, Legislative
Director, Consumer Federation of America; Robert L. Habush,
President, Association of Trial Lawyers of America; Mr. John T.
Subak, Action Commission to Improve the Tort Liability System,
American Bar Association; Mr. Stephen Daniels, Project
Director, Punitive Damage Project, American Bar Foundation;
Professor David G. Owen, University of South Carolina School of
Law; Mr. Malcolm Wheeler, Esq., Skadden, Arps, Slate, Meagher &
Flom; Mr. Bill Wagner, Esq., Wagner, Cunningham; Mr. George S.
Frazza, Esq., General Counsel, Johnson and Johnson Products,
Inc.; Professor David Randolph Smith, Vanderbilt University
School of Law; Professor Aaron Twerski, Brooklyn Law School;
Senator Robert Frey, National Conference of State Legislators;
Mr. Alfred W. Cortese, Jr., Esq., Kirkland & Ellis
(representing Lawyers for Civil Justice); Mr. Robert Martin,
Esq., Martin, Pringle, Oliver, Tripplett & Wallace
(representing Beech Aircraft Corporation); Mr. Charles T.
Hvass, Jr.; Mr. Frederick B. Sontag, President, Unison
Industries; Mr. C.O. Miller, Safety Systems, Inc.; Mr. John S.
Yodice, Esq., General Counsel, Aircraft Owners and Pilots
Association; Mr. Jonathan Howe, President, National Business
Aircraft Association; Mr. David M. Silberman, Associate General
Counsel, AFL-CIO; Mr. John Mottley III, Director of Federal
Government Relations, National Federation of Independent
Business; Mr. Richard Duffy, Director, Department of
Occupational Health and Safety, International Association of
Firefighters (accompanied by Cheryl Gannon, Legislative
Assistant); Mr. Kent Martin, Chairman of Government Affairs
Committee, National Printing Equipment and Supply Association
(accompanied by Mr. Mark J. Nuzzaco, NPES Government Affairs
Director); Mr. James A. Mack, Public Affairs Director, National
Machine Tool Builders Association; Mr. Jonathan Reynolds, Esq.,
Cosco, Inc.; Mr. Clarence Ditlow, Executive Director, Center
for Auto Safety; Mr. Geoffry R.W. Smith, Esq., McCutchen,
Doyle, Brown, and Enerson; Dr. Sidney Wolfe, Health Research
Group; Mr. R. David Pittle, Technical Director, Consumers
Union; Professor Nicolas A. Ashford, Associate Professor of
Technology and Policy, Massachusetts Institute of Technology;
Mr. Howard M. Acosta, Esq., Rahdert, Acosta, and Dickson, P.A.;
Professor Jerry Phillips, University of Tennessee School of
Law; Richard A. Bowman, Esq., Bowman and Brook; Mr. Frank S.
Swain, Chief Counsel for Advocacy, United States Small Business
Administration; Professor Joseph A. Page, Georgetown University
Law Center; Mr. Edward H. Southton, Deputy Commissioner for
Company Supervision, Office of the Insurance Commissioner; Ms.
Linda Matson, State Director, National Federation of
Independent Business (accompanied by Ms. Mary Jane Norville,
National Federation of Independent Business); Ms. Jean Stinson,
Vice President, R.W. Summers Railroad Contractor, Inc.; Ms.
Debra Ballen, Vice President for Policy Development and
Research, American Insurance Association; and Mr. Thomas A.
O'Day, Associate Vice President, Alliance of American Insurers
(accompanied by Mavis A. Walters, Senior Vice President,
Insurance Services Office).

committee consideration

On February 21, 1995, the Subcommittee on Commerce, Trade,
and Hazardous Materials was discharged from further
consideration of H.R. 917, the Common Sense Product Liability
Reform Act.
On February 22, 1995, the Committee met in open session and
began consideration of H.R. 917. On February 23, 1995, the
Committee again met in open session and ordered reported the
bill H.R. 917, as amended, by a recorded vote of 27 to 16, a
quorum being present.

rollcall votes

Pursuant to clause 2(l)(2)(B) of rule XI of the Rules of
the House of Representatives, following are listed the recorded
votes on the motion to report H.R. 917 and on amendments
offered to the measure, including the names of those Members
voting for and against.

committee on commerce--104th congress rollcall vote no. 25

Bill: H.R. 917, Common Sense Product Liability Reform Act.
Quorum call: 35 Members answered present.

----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bliley.............. ........ ........ X Mr. Dingell............. ........ ........ X
Mr. Moorhead............ ........ ........ ......... Mr. Waxman.............. ........ ........ X
Mr. Fields.............. ........ ........ ......... Mr. Markey.............. ........ ........ X
Mr. Oxley............... ........ ........ X Mr. Tauzin.............. ........ ........ X
Mr. Bilirakis........... ........ ........ X Mr. Wyden............... ........ ........ X
Mr. Schaefer............ ........ ........ ......... Mr. Hall................
Mr. Barton.............. ........ ........ ......... Mr. Byrant..............
Mr. Hastert............. ........ ........ X Mr. Boucher.............
Mr. Upton............... ........ ........ X Mr. Manton.............. ........ ........ X
Mr. Stearns............. ........ ........ ......... Mr. Towns............... ........ ........ X
Mr. Paxon............... ........ ........ X Mr. Studds..............
Mr. Gillmor............. ........ ........ X Mr. Pallone............. ........ ........ X
Mr. Klug................ ........ ........ ......... Mr. Brown............... ........ ........ X
Mr. Franks.............. ........ ........ X Mrs. Lincoln............ ........ ........ X
Mr. Greenwood........... ........ ........ ......... Mr. Gordon.............. ........ ........ X
Mr. Crapo............... ........ ........ X Ms. Furse............... ........ ........ X
Mr. Cox................. ........ ........ X Mr. Deutsch............. ........ ........ X
Mr. Burr................ ........ ........ X Mr. Rush................ ........ ........ X
Mr. Bilbray............. ........ ........ X Ms. Eshoo............... ........ ........ X
Mr. Whitfield........... ........ ........ X Mr. Klink............... ........ ........ X
Mr. Ganske.............. ........ ........ X Mr. Stupak.............. ........ ........ X
Mr. Frisa............... ........ ........ X
Mr. Norwood............. ........ ........ X
Mr. White............... ........ ........ X
Mr. Coburn.............. ........ ........ X
----------------------------------------------------------------------------------------------------------------

COMMITTEE ON COMMERCE--104TH CONGRESS ROLLCALL VOTE No. 26

Bill: H.R. 917, Common Sense Product Liability Reform Act.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Ms. Furse re: strike provisions concerning
proportionality of punitive damages.
Disposition: Not agreed to, by a roll call vote of 17 ayes
to 19 nays.

----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bliley.............. ........ X ......... Mr. Dingell............. X ........ .........
Mr. Moorhead............ ........ X ......... Mr. Waxman.............. X ........ .........
Mr. Fields.............. ........ X ......... Mr. Markey.............. X ........ .........
Mr. Oxley............... ........ X ......... Mr. Tauzin.............. X ........ .........
Mr. Bilirakis........... ........ ........ ......... Mr. Wyden............... X ........ .........
Mr. Schaefer............ ........ X ......... Mr. Hall................ ........ ........ .........
Mr. Barton.............. ........ X ......... Mr. Byrant.............. X ........ .........
Mr. Hastert............. ........ ........ ......... Mr. Boucher............. ........ ........ .........
Mr. Upton............... ........ X ......... Mr. Manton.............. X ........ .........
Mr. Stearns............. ........ X ......... Mr. Towns............... ........ ........ .........
Mr. Paxon............... ........ ........ ......... Mr. Studds.............. ........ ........ .........
Mr. Gillmor............. ........ X ......... Mr. Pallone............. X ........ .........
Mr. Klug................ ........ X ......... Mr. Brown............... X ........ .........
Mr. Franks.............. ........ X ......... Mrs. Lincoln............ X ........ .........
Mr. Greenwood........... ........ X ......... Mr. Gordon.............. X ........ .........
Mr. Crapo............... ........ X ......... Ms. Furse............... X ........ .........
Mr. Cox................. ........ X ......... Mr. Deutsch............. X ........ .........
Mr. Burr................ ........ X ......... Mr. Rush................ X ........ .........
Mr. Bilbray............. ........ ........ ......... Mrs. Eshoo.............. X ........ .........
Mr. Whitfield........... ........ X ......... Mr. Klink............... X ........ .........
Mr. Ganske.............. ........ ........ ......... Mr. Stupak.............. X ........ .........
Mr. Frisa............... ........ X .........
Mr. Norwood............. ........ X .........
Mr. White............... ........ X .........
Mr. Coburn.............. ........ ........ .........
----------------------------------------------------------------------------------------------------------------

COMMITTEE ON COMMERCE--104TH CONGRESS ROLLCALL VOTE NO. 27

Bill: H.R. 917, Common Sense Product Liability Reform Act.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. Dingell re: strike FDA defense for
punitive damages.
Disposition: Not agreed to, by a rollcall vote of 15 ayes
to 25 nays.

----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bliley.............. ........ X ......... Mr. Dingell............. X ........ .........
Mr. Moorhead............ ........ X ......... Mr. Waxman.............. X ........ .........
Mr. Fields.............. ........ X ......... Mr. Markey.............. X ........ .........
Mr. Oxley............... ........ X ......... Mr. Tauzin.............. ........ X .........
Mr. Bilirakis........... ........ X ......... Mr. Wyden............... X ........ .........
Mr. Schaefer............ ........ X ......... Mr. Hall................ ........ X .........
Mr. Barton.............. ........ X ......... Mr. Byrant.............. X ........ .........
Mr. Hastert............. ........ X ......... Mr. Boucher............. ........ X .........
Mr. Upton............... ........ X ......... Mr. Manton.............. X ........ .........
Mr. Stearns............. ........ ........ ......... Mr. Towns............... X ........ .........
Mr. Paxon............... ........ X ......... Mr. Studds.............. ........ ........ .........
Mr. Gillmor............. ........ X ......... Mr. Pallone............. X ........ .........
Mr. Klug................ ........ ........ ......... Mr. Brown............... X ........ .........
Mr. Franks.............. ........ X ......... Mrs. Lincoln............ X ........ .........
Mr. Greenwood........... ........ X ......... Mr. Gordon.............. X ........ .........
Mr. Crapo............... ........ X ......... Ms. Furse............... X ........ .........
Mr. Cox................. ........ ........ ......... Mr. Deutsch............. X ........ .........
Mr. Burr................ ........ X ......... Mr. Rush................ X ........ .........
Mr. Bilbray............. ........ X ......... Ms. Eshoo............... X ........ .........
Mr. Whitfield........... ........ X ......... Mr. Klink............... ........ ........ .........
Mr. Ganske.............. ........ X ......... Mr. Stupak.............. ........ ........ .........
Mr. Frisa............... ........ X .........
Mr. Norwood............. ........ X .........
Mr. White............... ........ X .........
Mr. Coburn.............. ........ X .........
----------------------------------------------------------------------------------------------------------------

COMMITTEE ON COMMERCE--104TH CONGRESS ROLLCALL VOTE NO. 28

Bill: H.R. 917, Common Sense Product Liability Reform Act.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Ms. Eshoo re: strike provisions limiting
liability for non-economic damages.
Disposition: Not agreed to, by a rollcall vote of 17 ayes
to 28 nays.

----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bliley.............. ........ X ......... Mr. Dingell............. X
Mr. Moorhead............ ........ X ......... Mr. Waxman.............. X
Mr. Fields.............. ........ X ......... Mr. Markey.............. X
Mr. Oxley............... ........ X ......... Mr. Tauzin.............. ........ X
Mr. Bilirakis........... ........ X ......... Mr. Wyden............... X
Mr. Schaefer............ ........ X ......... Mr. Hall................ ........ X
Mr. Barton.............. ........ X ......... Mr. Byrant.............. X
Mr. Hastert............. ........ X ......... Mr. Boucher............. ........ X
Mr. Upton............... ........ X ......... Mr. Manton.............. X
Mr. Stearns............. ........ X ......... Mr. Towns............... X
Mr. Paxon............... ........ X ......... Mr. Studds..............
Mr. Gillmor............. ........ X ......... Mr. Pallone............. X
Mr. Klug................ ........ X ......... Mr. Brown............... X
Mr. Franks.............. ........ X ......... Mrs. Lincoln............ X
Mr. Greenwood........... ........ X ......... Mr. Gordon.............. X
Mr. Crapo............... ........ X ......... Ms. Furse............... X
Mr. Cox................. ........ X ......... Mr. Deutsch............. X
Mr. Burr................ ........ X ......... Mr. Rush................ X
Mr. Bilbray............. ........ X ......... Ms. Eshoo............... X
Mr. Whitfield........... ........ X ......... Mr. Klink............... X
Mr. Ganske.............. ........ X ......... Mr. Stupak.............. X
Mr. Frisa............... ........ X .........
Mr. Norwood............. ........ X .........
Mr. White............... ........ X .........
Mr. Coburn.............. ........ X .........
----------------------------------------------------------------------------------------------------------------

COMMITTEE ON COMMERCE--104TH CONGRESS ROLLCALL VOTE No. 29

Bill: H.R. 917, Common Sense Product Liability Reform Act.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. White re: limit amount of damages
resulting from a misuse or alteration of a product.
Disposition: Agreed to, by a rollcall vote of 26 ayes to 9
nays.

----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bliley.............. X ........ ......... Mr. Dingell............. ........ X .........
Mr. Moorhead............ X ........ ......... Mr. Waxman.............. ........ X .........
Mr. Fields.............. X ........ ......... Mr. Markey.............. ........ X .........
Mr. Oxley............... X ........ ......... Mr. Tauzin.............. ........ ........ .........
Mr. Bilirakis........... X ........ ......... Mr. Wyden............... ........ ........ .........
Mr. Schaefer............ X ........ ......... Mr. Hall................ X ........ .........
Mr. Barton.............. ........ ........ ......... Mr. Byrant.............. ........ X .........
Mr. Hastert............. ........ ........ ......... Mr. Boucher............. X ........ .........
Mr. Upton............... X ........ ......... Mr. Manton.............. ........ X .........
Mr. Stearns............. ........ ........ ......... Mr. Towns............... X ........ .........
Mr. Paxon............... ........ ........ ......... Mr. Studds.............. ........ ........ .........
Mr. Gillmor............. ........ ........ ......... Mr. Pallone............. X ........ .........
Mr. Klug................ X ........ ......... Mr. Brown............... ........ X .........
Mr. Franks.............. X ........ ......... Mrs. Lincoln............ ........ ........ .........
Mr. Greenwood........... X ........ ......... Mr. Gordon.............. X ........ .........
Mr. Crapo............... X ........ ......... Ms. Furse............... X ........ .........
Mr. Cox................. ........ ........ ......... Mr. Deutsch............. ........ X .........
Mr. Burr................ X ........ ......... Mr. Rush................ X ........ .........
Mr. Bilbray............. X ........ ......... Ms. Eshoo............... X ........ .........
Mr. Whitfield........... X ........ ......... Mr. Klink............... ........ X .........
Mr. Ganske.............. X ........ ......... Mr. Stupak.............. ........ X .........
Mr. Frisa............... X ........ .........
Mr. Norwood............. ........ ........ .........
Mr. White............... X ........ .........
Mr. Coburn.............. X ........ .........
----------------------------------------------------------------------------------------------------------------

COMMITTEE ON COMMERCE--104TH CONGRESS ROLLCALL VOTE NO. 30

Bill: H.R. 917, Common Sense Product Liability Reform Act.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. Markey re: expanding scope of bill to
cover commercial losses.
Disposition: Not agreed to, by a rollcall vote of 19 ayes
to 24 nays.

----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bliley.............. ........ X ......... Mr. Dingell............. X ........ .........
Mr. Moorhead............ ........ X ......... Mr. Waxman.............. X ........ .........
Mr. Fields.............. ........ X ......... Mr. Markey.............. X ........ .........
Mr. Oxley............... ........ X ......... Mr. Tauzin.............. X ........ .........
Mr. Bilirakis........... ........ X ......... Mr. Wyden............... X ........ .........
Mr. Schaefer............ ........ X ......... Mr. Hall................ X ........ .........
Mr. Barton.............. ........ ........ ......... Mr. Byrant.............. ........ ........ .........
Mr. Hastert............. ........ X ......... Mr. Boucher............. X ........ .........
Mr. Upton............... ........ X ......... Mr. Manton.............. X ........ .........
Mr. Stearns............. ........ X ......... Mr. Towns............... X ........ .........
Mr. Paxon............... ........ X ......... Mr. Studds.............. ........ ........ .........
Mr. Gillmor............. ........ X ......... Mr. Pallone............. X ........ .........
Mr. Klug................ ........ X ......... Mr. Brown............... X ........ .........
Mr. Franks.............. ........ X ......... Mrs. Lincoln............ X ........ .........
Mr. Greenwood........... ........ X ......... Mr. Gordon.............. X ........ .........
Mr. Crapo............... ........ X ......... Ms. Furse............... X ........ .........
Mr. Cox................. ........ X ......... Mr. Deutsch............. X ........ .........
Mr. Burr................ ........ X ......... Mr. Rush................ X ........ .........
Mr. Bilbray............. ........ X ......... Ms. Eshoo............... X ........ .........
Mr. Whitfield........... ........ X ......... Mr. Klink............... X ........ .........
Mr. Ganske.............. ........ X ......... Mr. Stupak.............. X ........ .........
Mr. Frisa............... ........ X .........
Mr. Norwood............. ........ X .........
Mr. White............... ........ X .........
Mr. Coburn.............. ........ X .........
----------------------------------------------------------------------------------------------------------------

COMMITTEE ON COMMERCE--104TH CONGRESS ROLLCALL VOTE No. 31

Bill: H.R. 917, Common Sense Product Liability Reform Act.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. Stupak re: require the Secretary of
Commerce to report to Congress on the effect of the
implementation of this Act.
Disposition: Not agreed to, by a rollcall vote of 20 ayes
to 24 nays.

----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bliley.............. ........ X ......... Mr. Dingell............. X ........ .........
Mr. Moorhead............ ........ X ......... Mr. Waxman.............. X ........ .........
Mr. Fields.............. ........ X ......... Mr. Markey.............. X ........ .........
Mr. Oxley............... ........ X ......... Mr. Tauzin.............. ........ ........ .........
Mr. Bilirakis........... ........ X ......... Mr. Wyden............... X ........ .........
Mr. Schaefer............ ........ X ......... Mr. Hall................ X ........ .........
Mr. Barton.............. ........ ........ ......... Mr. Byrant.............. X ........ .........
Mr. Hastert............. ........ X ......... Mr. Boucher............. X ........ .........
Mr. Upton............... ........ X ......... Mr. Manton.............. X ........ .........
Mr. Stearns............. ........ X ......... Mr. Towns............... X ........ .........
Mr. Paxon............... ........ X ......... Mr. Studds.............. X ........ .........
Mr. Gillmor............. ........ X ......... Mr. Pallone............. X ........ .........
Mr. Klug................ ........ X ......... Mr. Brown............... X ........ .........
Mr. Franks.............. ........ X ......... Mrs. Lincoln............ X ........ .........
Mr. Greenwood........... ........ X ......... Mr. Gordon.............. X ........ .........
Mr. Crapo............... ........ X ......... Ms. Furse............... X ........ .........
Mr. Cox................. ........ X ......... Mr. Deutsch............. X ........ .........
Mr. Burr................ ........ X ......... Mr. Rush................ X ........ .........
Mr. Bilbray............. ........ X ......... Ms. Eshoo............... X ........ .........
Mr. Whitfield........... ........ X ......... Mr. Klink............... X ........ .........
Mr. Ganske.............. ........ X ......... Mr. Stupak.............. X ........ .........
Mr. Frisa............... ........ X .........
Mr. Norwood............. ........ X .........
Mr. White............... ........ X .........
Mr. Coburn.............. ........ X .........
----------------------------------------------------------------------------------------------------------------

Bill: H.R. 917, Common Sense Product Liability Reform Act.
Motion: Motion by Mr. Oxley to order H.R. 917 reported to
the House, as amended.
Disposition: Agreed to, by a rollcall vote of 26 ayes to 17
nays.

----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bliley.............. X ........ ......... Mr. Dingell............. X ........ .........
Mr. Moorhead............ X ........ ......... Mr. Waxman.............. ........ X .........
Mr. Fields.............. ........ ........ ......... Mr. Markey.............. ........ X .........
Mr. Oxley............... X ........ ......... Mr. Tauzin.............. ........ ........ .........
Mr. Bilirakis........... X ........ ......... Mr. Wyden............... ........ X .........
Mr. Schaefer............ X ........ ......... Mr. Hall................ X ........ .........
Mr. Barton.............. ........ ........ ......... Mr. Byrant.............. ........ X .........
Mr. Hastert............. X ........ ......... Mr. Boucher............. ........ ........ .........
Mr. Upton............... X ........ ......... Mr. Manton.............. ........ X .........
Mr. Stearns............. X ........ ......... Mr. Towns............... ........ X .........
Mr. Paxon............... X ........ ......... Mr. Studds.............. ........ X .........
Mr. Gillmor............. X ........ ......... Mr. Pallone............. ........ X .........
Mr. Klug................ X ........ ......... Mr. Brown............... ........ X .........
Mr. Franks.............. X ........ ......... Mrs. Lincoln............ ........ X .........
Mr. Greenwood........... X ........ ......... Mr. Gordon.............. ........ X .........
Mr. Crapo............... X ........ ......... Ms. Furse............... ........ X .........
Mr. Cox................. X ........ ......... Mr. Deutsch............. ........ X .........
Mr. Burr................ X ........ ......... Mr. Rush................ ........ X .........
Mr. Bilbray............. X ........ ......... Ms. Eshoo............... ........ X .........
Mr. Whitfield........... X ........ ......... Mr. Klink............... ........ X .........
Mr. Ganske.............. X ........ ......... Mr. Stupak.............. ........ X .........
Mr. Frisa............... X
Mr. Norwood............. X
Mr. White............... X
Mr. Coburn.............. X
----------------------------------------------------------------------------------------------------------------

committee on commerce--104th congress voice votes

Bill: H.R. 917, Common Sense Product Liability Reform Act

Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. Barton re: adds the word ``rents'' to
the product seller definition.
Disposition: Agreed to, by a voice vote.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. Waxman re: exclude cases involving
tobacco products.
Disposition: Not agreed to, by a voice vote.
Amendment: En bloc Amendment to the Oxley Amendment in the
Nature of a Substitute by Mr. White re: strike the definitions
of economic damages and punitive damages.
Disposition: Agreed to, by a voice vote.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. White re: broaden the scope of parties
subject to reduced liability.
Disposition: Agreed to, by a voice vote.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. Hall, as amended by unanimous consent,
re: frivolous pleadings.
Disposition: Agreed to, by a voice vote.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. Hastert re: liability of biomaterials
suppliers.
Disposition: Agreed to, by a voice vote
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Ms. Furse re: deletes reference to the
Federal Employees Compensation Act and the Longshoremen's and
Harborworkers' Compensation Act.
Disposition: Agreed to, by a voice vote.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. Deutsch re: exclusion for express
warranties for the useful safe life of a product which are
longer than 15 years.
Disposition: Agreed to, by a voice vote.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. Deutsch re: allows punitive damages in
States that have eliminated punitive damages and requires joint
liability for economic damages.
Disposition: Withdrawn.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. Hall re: allocation of portion of
punitive damages to State or Federal treasury.
Disposition: Withdrawn.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mrs. Lincoln re: increase limit on punitive
damages.
Disposition: Withdrawn.
Amendment: Amendment to the Oxley Amendment in the Nature
of a Substitute by Mr. Deutsch re: allows punitive damages in
States that have eliminated punitive damages and requires joint
liability for economic damages.
Disposition: Not agreed to, by a voice vote.
Amendment: Oxley Amendment in the Nature of a Substitute,
as amended.
Disposition: Agreed to, by a voice vote.

Committee Oversight Findings

Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of
the House of Representatives, the Subcommittee on Commerce,
Trade, and Hazardous Materials and the Subcommittee on
Commerce, Consumer Protection, and Competitiveness held
oversight and legislative hearings and made findings that are
reflected in this report.

Committee on Government Reform and Oversight

Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of
the House of Representatives, no oversight findings have been
submitted to the Committee by the Committee on Government
Reform and Oversight.

Committee Cost Estimate

In compliance with clause 7(a) of rule XIII of the Rules of
the House of Representatives, the Committee believes that
enactment of H.R. 917 would result in no additional costs to
the Federal Government.

Congressional Budget Office Estimate

Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of
the House of Representatives, following is the cost estimate
provided by the Congressional Budget Office pursuant to section
403 of the Congressional Budget Act of 1974:

U.S. Congress,
Congressional Budget Office,
Washington, DC, March 1, 1995.
Hon. Thomas J. Bliley, Jr.,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
reviewed H.R. 917, the Common Sense Product Liability Reform
Act of 1995, as ordered reported by the House Committee on
Commerce on February 23, 1995. CBO estimates that enacting H.R.
917 would not result in any significant cost to the federal
government. Because enactment of H.R. 917 would not affect
direct spending or receipts, pay-as-you-go procedures would not
apply to the bill.
This bill would set new standards for federal and state
product liability cases and would limit the amount of punitive
damages that may be awarded in product liability cases to three
times the claimant's economic award or $250,000, whichever
would be larger. The new standards included in H.R. 917 would
establish when a product seller or biomaterials supplier would
be liable for damages, when a defense based on a claimant's use
of drugs or alcohol could be used, and how several liability
for non-economic loss would be determined. In addition, the
bill would prohibit the filing of product liability law suits
unless the complaint is filed within 15 years after the product
was first delivered and would enable judges, upon determining
that an attorney has filed a frivolous product liability suit,
to impose sanctions against the attorney. These sanctions,
which would be at the discretion of judges, could include the
payment of the opposing party's attorney's fees or other
expenses to compensate the parties injured by such conduct.
Because product liability cases are handled primarily in
state courts, CBO estimates that enacting this bill would have
no significant budgetary impact on federal courts. State courts
could initially incur additional costs if potential plaintiffs
attempted to file their cases before the existing state laws
are superseded. Also, the number of hearings held to consider
imposing sanctions on attorneys would most likely increase
under this bill. In the longer run, savings could be realized
if potential plaintiffs were discouraged from filing product
liability suits. Based on information from the National Center
for State Courts, CBO estimates that the amount of such costs
or savings would be insignificant.
Previous CBO Estimate. On February 23, 1995, CBO
transmitted a cost estimate for H.R. 956, the Common Sense
Product Liability Act of 1995, as ordered reported by the House
Committee on the Judiciary on February 22, 1995. On February
28, 1995, CBO transmitted a cost estimate for H.R. 988, the
Attorney Accountability Act of 1995, as ordered reported by the
House Committee on the Judiciary on February 22, 1995.
Together, H.R. 956 and H.R. 988 are similar in substance and
cost to H.R. 917.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susanne S.
Mehlman.
Sincerely,
June E. O'Neill, Director.

inflationary impact statement

Pursuant to clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee finds that the bill
would have no inflationary impact.

Section-by-section analysis of the legislation

Section 1. Short title; Table of Contents

This section provides the title of the Act and a table of
contents.

Section 2. Preemption

This section establishes the scope of the Common Sense
Product Liability Reform Act, governing any product liability
action in any State or Federal court brought against a
manufacturer or product seller, on any theory, for harm caused
by a product. It does not include actions for commercial loss.
State law is only superseded to the extent that State law
applies to the same issue. The Act does not affect the
sovereign immunity of the States, choice-of-law rules, venue,
or environmental laws.

Section 3. Product seller liability

This section sets forth the standard of liability for
product sellers. A product seller is only liable for harm
caused by its product where (1) the claimant establishes that
the product was sold by the seller, that the seller failed to
exercise reasonable care regarding the product, and that such
failure was a proximate cause of the claimant's harm; (2) the
seller made an independent express warranty, the product failed
to conform to the warranty, and such failure caused the
claimant's harm; or (3) the seller was engaged in intentional
wrongdoing as determined under State law, and such wrongdoing
was the proximate cause of the claimant's harm. Sellers are not
required to inspect a product where there is no reasonable
opportunity to inspect such product in a manner which would
reasonably have revealed the aspect of the product which caused
the claimant's harm. A seller would become liable, however, by
stepping into the shoes of the manufacturer if the State where
the action is filed would not be able to serve process against
the manufacturer, or if the State determines that the claimant
would be unable to enforce a judgment against the manufacturer.

Section 4. Alcohol and drug defense

This section provides a defense to a liability action where
a claimant is more than 50% responsible for the accident
causing harm as a result of being under the influence of
intoxicating alcohol or illegal drug. The determination of
intoxication or whether the claimant is under the influence of
alcohol or drugs shall be made according to the relevant State
law. Illegal drugs include any controlled substances according
to federal law.

Section 5. Misuse or alteration

This section allows a manufacturer or product seller to
establish that a percentage of a claimant's harm was
proximately caused by the misuse or alteration of a product in
violation of an express warning or instructions, or by the
misuse or alteration of a product involving a risk of harm
which would be known by the typical consumer. The award of
damages against the manufacturer or product seller would be
reduced by such percentage of claimant's misuse or alteration.
The manufacturer's or product seller's liability shall not,
however, be reduced by the percentage of responsibility for the
harm attributable to the misuse or alteration of a product by
the claimant's employer or coemployees who are immune from suit
by the claimant pursuant to State law applicable to workplace
injuries. These provisions only supersede State law to the
extent that State laws are inconsistent.

Section 6. Statute of repose

This section bars liability for a product liability action
unless the complaint is served and filed within 15 years of the
time of first retail purchase. This bar will only apply,
however, if the claimant is eligible for workers' compensation
for the harm, if the harm did not cause a chronic illness, and
if the manufacturer or seller did not include an express
written warranty as to the useful safe life of the product
which was longer than 15 years.

Section 7. Punitive damages

This section provides that where states allow punitive
damages, such damages may be awarded where a claimant
establishes by clear and convincing evidence that the harm
suffered was the result of conduct manifesting a conscious,
flagrant indifference to the safety of those persons who might
be harmed by the product. The punitive damages awarded shall
not exceed the greater of $250,000 or three times the economic
injury.
A failure to exercise reasonable care in selecting among
alternative product designs or warnings shall not by itself
constitute conduct meriting punitive damages, and punitive
damages may not be awarded unless compensatory damages have
been awarded which are not merely nominal damages. A defendant
may request a separate proceeding to determine an award of
punitive damages, in which case evidence related only to the
claim of punitive damages shall not be admissible in the
proceedings to determine compensatory damages.
The trier of fact shall consider all relevant evidence in
determining a punitive damage award, including the severity of
harm, the duration, concealment, or profitability of the
defendant's conduct, the number of products sold by the
defendant which can cause such harm, previous punitive awards
to similar claimants, prospective compensatory awards to other
claimants, the criminal or civil penalties imposed on the
defendant for the complained of conduct, and whether any of the
foregoing have been presented in a prior proceeding involving
the defendant.
Punitive damages shall not be awarded against a
manufacturer or seller of a drug or device which caused the
claimant's harm where such product was preapproved by the Food
and Drug Administration (FDA) with respect to its formulation,
performance, or adequacy of packaging or labeling, or where it
is generally recognized as safe and effective pursuant to
conditions established by the FDA. This bar on punitive damages
shall not apply where the defendant, before or after FDA
approval, intentionally and wrongfully withheld from or
misrepresented to the FDA information which is required to be
submitted concerning the drug or device, or if any illegal
payment to FDA employees were made for the purpose of securing
or maintaining drug or device approval.
The manufacturer and seller of a drug shall not be held
liable for punitive damages for a product liability action for
harm relating to the adequacy of the drug packaging or
labeling, where the drug is required to have tamper-resistant
packaging (and labeling) under regulations of the Secretary of
Health and Human Services, unless the claimant establishes by
clear and convincing evidence that the drug product is
substantially out of compliance with such regulations.

Section 8. Several liability for noneconomic damages

This section provides that joint liability for noneconomic
damages shall not be recognized. A separate judgment shall be
rendered against each defendant for their several liability for
noneconomic damages, which shall be in direct proportion to
their individual percentage of responsibility for the
claimant's harm, as determined by the trier of fact.

Section 9. Federal cause of action precluded

This section precludes any new Federal cause of action
pursuant to a Federal question or Act Congress regulating
commerce. It is intended to ensure that no additional
jurisdiction is granted under this Act to the Federal courts.

Section 10. Frivolous pleadings

This section provides that the signing or verification of a
pleading in a product liability action shall be considered a
certification that to the signor's or verifor's best knowledge,
information, and belief, formed after reasonable inquiry, the
pleading is not frivolous. A pleading is defined as frivolous
if the pleading is groundless and brought in bad faith or for
the purpose of harassment or other improper purpose such as to
cause unnecessary delay or needless increase in the cost of
litigation. Groundless is defined as having no basis in fact or
unwarranted by existing law or a good faith argument for the
extension, modification, or reversal of existing law.
Within 60 days after a pleading in a product action is
filed, a party may petition the court to determine the pleading
is frivolous. In making this determination, the court shall
consider the multiplicity of parties, the complexity of the
claims and defenses, the length of time available to the party
to investigate and conduct discovery, and the affidavits,
depositions, and other relevant matters. If the court
determines that a pleading is indeed frivolous, the court shall
impose an appropriate sanction on the signatory or verifier of
the pleading, which may include the striking of the offending
portion or the entire pleading, the dismissal of a party, or an
order to pay the reasonable expenses of an opposition party
incurred because of the filing of the pleading, including
costs, fees of attorneys, witnesses and experts, and deposition
expenses. A general denial and the amount requested for damages
shall not constitute a frivolous pleading.

Section 11. Liability of biomaterials suppliers

This section provides that a biomaterials supplier is
liable for harm caused by a medical device only if the claimant
establishes that the biomaterials supplier's failure to meet
contract specifications as set forth below was an actual and
proximate cause of harm to the plaintiff. The biomaterials
supplier is deemed to have failed to meet contract
specifications if the raw materials or component parts
delivered by the biomaterials supplier did not constitute the
product described in the contract between the biomaterials
supplier and purchaser, or they fail to meet any specifications
that were provided to the biomaterials supplier and not
expressly repudiated prior to acceptance of delivery of the
supplies, or that were provided to the biomaterials supplier or
to the manufacturer by the biomaterials supplier, or which are
contained in a master file submitted by the biomaterials
supplier to the Secretary of Health and Human Services (HHS)
that is currently maintained by the biomaterials supplier for
the purposes of premarket approval of medical devices, or
specifications that were included in the submissions for the
purposes of premarket approval or review by the Secretary of
HHS and which have received such clearance and were not
expressly repudiated by the biomaterials supplier prior to
acceptance.

Section 12. Definitions

This section provides definitions for the following terms:
``biomaterials supplier,'' ``claimant,'' ``commercial loss,''
``harm,'' ``manufacturer,'' ``product,'' ``product liability
action,'' ``product seller,'' and ``State.''

Section 13. Effective date

This section provides that the Act shall apply to actions
which are commenced after the date of its enactment.

Changes in existing law made by the bill, as reported

This legislation does not amend any existing Federal
statute.
MINORITY VIEWS

We believe the rush to judgment on H.R. 917, the so-called
``Common Sense Product Liability Reform Act,'' produced an
unnecessary bill that severely and adversely affects the
citizens we were elected to serve.
Members of the Committee were given no meaningful
opportunity to review the bill prior to markup. The author of
the bill produced three different versions of it in the forty-
eight hours prior to its approval. All versions differed
significantly from each other and from the original bill
introduced a week earlier. Many serious problems resulting from
the lack of meaningful consideration by the Committee were
noted at the markup. Many of the glaring defects,
inconsistencies, and extreme measures uncovered during the
markup resulted from the unfair and undesirable process in
which this bill was hurriedly approved.

there is no national crisis of product liability litigation

The proponents of this legislation claim that a virtual
``explosion'' of product liability cases and associated
punitive damage awards is stifling American ingenuity and
hurting American corporations. But the evidence clearly shows
there is no product liability litigation explosion. According
to the March 1994 report by the National Center for State
Courts, the number of product liability cases filed in State
courts (where the vast majority of such cases are filed) make
up an extremely small percentage of all civil filings (.36%).
The evidence also shows these cases are on the decline. State
tort cases have declined by 2 percent since 1990 on a national
basis. Excluding asbestos cases, the number of product
liability cases in Federal court declined 36 percent between
1985 and 1991.
Nor is there any epidemic of punitive damage awards. Only
355 such awards in all product liability cases nationwide were
found over a 25-year period, according to research that the
United States Supreme Court last year called ``the most
exhaustive study'' ever of punitive damages. See, Rustad, In
Defense of Punitive Damages in Products Liability: Testing Tort
Anecdotes with Empirical Data, 78 Iowa L. Rev. 1 (1992). The
median of all such awards was $565,000. Only 13% of all such
awards were 4 times compensatory damages or greater. Half of
these awards were reduced by a judge, in settlement, or on
appeal.
The need for this legislation, as claimed by its
proponents, simply does not exist. To the contrary, the facts
demonstrate our current State-based product liability system
works well. It allows individuals to hold wrongdoers
accountable when they manufacture or sell defective products
that cause harm. The current system affirms the virtue of
personal responsibility and fairly compensates injured
citizens, all without Federal regulation and without publicly-
funded government programs.

the legislation is contrary to proper notions of federalism and will
not create uniformity

The bill is the ultimate display of a ``Washington Knows
Best'' philosophy. It is an irony, if not a bizarre
inconsistency, that those who signed the so-called ``Contract
With America'' and campaigned on a pledge to reduce the role of
the Federal Government and give more authority back to the
States are now proposing this unprecedented grab of Federal
control. The majority is taking an entire area of law that for
200 years has been the sovereign responsibility of the States
and imposing standards and controls from Washington.
Nor will the legislation achieve what its proponents claim
is one of its most important objectives--to achieve uniformity.
Testimony by the National Conference of State Legislatures
notes that: the bill's preemption applies only to the extent
that State law applies to a subject covered by the bill,
provisions of the bill will be interpreted by 50 separate State
courts, and the bill will create immediate and lasting turmoil
over concepts, procedures, and standards that have been subject
to State control for many years.
Most States have enacted changes to their product liability
laws in the last 15 years, demonstrating they are willing and
able to adapt their laws to changing needs and circumstances.
But H.R. 917 will alter or undo reforms State legislatures have
enacted and will replace the judgment of Washington for the
judgment of State legislatures.

the legislation discriminates against injured women, the elderly, the
young, the poor, and the vulnerable

The bill is extreme, mean-spirited, and unfair. It favors
powerful corporations at the expense of women, the elderly, the
young, the poor, and indeed, at the expense of ordinary middle
class Americans who simply ask of their national leaders that
we not interfere with their individual rights to hold
wrongdoers fully accountable under State law. Several notable
provisions discriminate against injured women and others:
elimination of the doctrine of joint liability for noneconomic
damages; caps on punitive damages; and immunity from punitive
damages for products approved by the Food and Drug
Administration (FDA).

eliminating joint liability for noneconomic damages is unfair

Joint liability requires multiple tortfeasors--those who
have been found to be at fault and who have caused part of the
claimant's injuries--to apportion responsibility among
themselves. The doctrine assumes these wrongdoers have greater
knowledge as to responsibility for loss. At the heart of the
doctrine is the protection of the innocent injured person from
bearing responsibility for her injuries. The doctrine requires
even a ``marginally'' responsible defendant (say less than 10%)
to pay damages if other defendants are insolvent or unable to
be found. While this may be less than a perfect result, it is
far preferable to require such a wrongdoer to pay than
requiring the innocent victim to go without full compensation.
Eliminating joint liability, as section 7 of the bill does
with respect to noneconomic damages, shifts responsibility from
wrongdoers to the victim. Its effect is particularly insidious
for women, the elderly, the young, the poor, and other
vulnerable persons. It says that a CEO's six-figure income loss
is more important than the homemaker's injuries for pain and
suffering. Even if they suffer the same injury in the same
incident, the bill will prevent full recovery for only one type
of victim--the one who makes less money.
A majority of the Committee rejected an amendment offered
at markup to delete section 7. There was discussion during the
markup of limiting the bill's elimination of joint liability
for noneconomic damages to apply solely to defendants adjudged
to be less than 10% at fault, but no amendment was approved to
accomplish this.
The injuries women suffer when they are made sterile by a
dangerous contraceptive device, when they are disabled by
dangerous and defective medical implants, or when they are
grossly disfigured by defective household products, are very
real losses. The loss of vision due to defective implanted
intra-ocular lenses in an elderly retiree costs nothing but the
patient's enjoyment of her last golden years. The loss of a
husband to an unsafe machine tool is at least as significant as
the loss of a breadwinner. Yet this bill will say to these
victims that their losses are valueless, because they are not
losses of dollars and cents.

the bill's cap on punitive damages is discriminatory and threatens
public safety

Punitive damages are an effective tool to punish and deter
corporate misconduct. By limiting punitive damages to the
greater of $250,000 or three times the amount of economic
damages, the bill destroys a characteristic of punitive damages
that is critical to their effectiveness--that the penalty for
egregious misconduct is indeterminate. With this change,
companies that consider only their own profitability, rather
than their responsibility to the community, will find it easier
to quantify the risk of loss from decisions to forego testing,
warning, redesigning, or recalling of defective products,
making it much more likely that public safety will be
imperiled.
The potential for punitive damages is a powerful incentive
for safety. A large number of companies report they made safety
improvements after imposition of punitive damages. But if
companies can count on paying as little as $250,000 for
intentional or knowing misconduct, they simply will add this to
the cost of their products. H.R. 917 will result in Americans
being surrounded by hazardous machines, drugs, cars, and toys.
It will not have the same effect as State laws have had on
manufacturers or sellers who pulled dangerous products off the
market, such as the Ford Pinto, the Dalkon Shield, silicone
breast implants, asbestos, and super-absorbent tampons.
A punitive damage award of as little as $250,000 does not
serve as an effective deterrent in many cases. The $5 billion
punitive damage award against the Exxon Valdez represents 3
weeks of income for the company. The Ford Pinto represented
tens of millions of dollars in profit. Even the much-
misrepresented ``coffee case'' against McDonald's (reduced by
the court and again by agreement of the parties) was originally
$2.7 million, or just two days' worth of coffee sales for
McDonald's.
Proponents of the bill argue that $250,000 is just a floor
and that punitive damages could go above that level where there
are significant economic losses (i.e., monetary losses). But
this calculation discriminates against women and others who may
not have large incomes. Economic damages generally were not
high in the cases of women who developed endometriosis, pelvic
inflammatory disease, toxic shock syndrome, and other illnesses
that left them sterile when they used Copper-7 intrauterine
devices, Dalkon Shields, or super-absorbency tampons. Nor were
they high in cases of women who bore disfigured children
because of Accutane or in cases where elderly women died of
liver-kidney disease after taking Oraflex.
The cap on punitive damages is a slap in the face to normal
American wage earners. Those who have spent their lives
supporting their families on modest incomes should be able to
recover fully and to punish those who knowingly made extremely
dangerous raw asbestos fibers. A worker making the minimum wage
should not be forced to receive a lower punitive damage award
than a Member of Congress for deaths or serious injuries caused
by wrongful conduct. H.R. 917 rewards successful professionals
working at the height of their careers while ignoring the harms
suffered by nonworking or low-wage Americans.
We believe juries are better suited than Congress to
determine the appropriate level of damages, based on the
particular facts proven in each case. The current system allows
juries flexibility to fashion appropriate punishment for
egregious corporate conduct, instead of allowing Washington to
dictate the upper limits of how corporate wrongdoers will be
punished in each and every instance.

the fda defense is overbroad and discriminates against women

The bill includes a provision (section 6(d)) that was
expressly rejected by Chairman Hyde and other Members of the
Judiciary Committee. The so-called FDA defense will eliminate
punitive damage awards in cases where a drug or medical device
is approved by the FDA, so long as the manufacturer or product
seller has not withheld or misrepresented information required
to be submitted to the FDA, or has not bribed an FDA official.
Mr. Dingell's amendment to delete section 6(d) was rejected
at the markup. Mr. Dingell argued the effect of the provision
is unclear, particularly in light of statements made by the
Republican leadership indicating its desire to restructure,
privatize, or even eliminate the FDA. He argued the defense is
premised on the notion that FDA approval has to be meaningful
and effective or otherwise no limitation of liability should be
considered.
We believe the provision has other major defects. The
record is replete with instances where drugs and devices have
been approved or under-regulated by the FDA. The FDA approved
the Copper-7 intrauterine device, which caused sterility in
young childless women. It approved high-estrogen birth control
pills, which caused renal failure. The FDA was unable to
convince the manufacturer of the Dalkon Shield to withdraw its
dangerous product. It failed to act on silicone gel breast
implants--which were never proven to be safe--for decades.
To overcome the FDA defense (once a drug or medical device
has been approved by the FDA), the bill sets an evidentiary
standard that is virtually impossible to prove. First, the
injured person must show clear and compelling evidence, not
just the usual preponderance of evidence applied to most civil
case issues. Second, the injured person must prove the
corporation that made or sold the drug or device withheld or
misrepresented information to the FDA. Even if the injured
party can prove this very difficult standard, the manufacturer
or seller can counter by showing that it did not withhold or
misrepresent information required to be submitted by the FDA.
Under H.R. 917, a drug manufacturer that learns its product
causes death after approval can report this to the FDA but
still embark on a huge sales campaign before any regulatory
action is taken--as did the manufacturer of Zomax. It means
that no punitive damages can be sought for these actions. It
means that punitive damages cannot be imposed to force
manufacturers to put safety ahead of profits. It means that
women will continue to die and suffer needlessly.

the bill favors corporations and hurts individuals

During the markup, the Republicans rejected the Markey/
Wyden amendment to impose the same rules on commercial cases as
the bill provides for cases brought by individuals. They did so
despite the fact that the proponents of the bill are supposedly
seeking to achieve uniformity and despite the fact that, unlike
product liability cases brought by ordinary people, there truly
is an explosion in commercial litigation.
The bill unfairly reduces rights of injured working men and
women while doing nothing to rein in or penalize irresponsible
businesses. A worker injured by an unguarded, unsafe machine
tool will be barred from bringing a case if the tool was sold
to his employer more than 15 years ago. But the bill has no
effect on the company that bought the machine to bring a case
to recover commercial losses based on any defect, including
loss of use, replacement costs, and lost profits. Or consider
the case where a company wrongfully buys a household drain
cleaner for use in its power plant. The cleaner explodes,
causing damage to the power plant. The utility that owns the
plant is entitled to full recovery for the cost of repairing
the damage under State law. A visitor to the plant, a homemaker
visiting her husband on his lunch hour, is blinded in the
explosion. Her recovery is limited to that allowed under H.R.
917, no matter what State law says.
The bill approved by the Committee is friendly to business
and industry while it reduces the rights of ordinary Americans
to get full recovery in court.

conclusion

H.R. 917, as reported by the Committee, shields corporate
wrongdoers and limits their accountability for even the most
egregious misconduct. During the markup, proponents conceded
the bill will not produce uniformity--even though that is what
they have been arguing for years. Instead, this legislation is
about Washington usurping the authority of States so that
corporations who make and sell defective products can shield
themselves from cases brought by consumers who are harmed by
those products. That is precisely what H.R. 917 will achieve
and why we are compelled to strenuously oppose this extreme
piece of legislation.

Henry A. Waxman.
Edward J. Markey.
John Bryant.
Thomas J. Manton.
Edolphus Towns.
Gerry E. Studds.
Frank Pallone, Jr.
Sherrod Brown.
Elizabeth Furse.
Peter Deutsch.
Bobby L. Rush.
Anna G. Eshoo.
Ron Klink.
Bart Stupak.
ADDITIONAL VIEWS

I support product liability reform and voted to report H.R.
917, the Common Sense Product Liability Reform Act, as amended.
Given the severe and unusual ``external'' time constraints
driving the schedule, I appreciate the manner in which Chairman
Bliley and Chairman Oxley conducted the markup. But the manner
in which this legislation is being considered remains
counterproductive and dangerous. It is not about common sense.
It is the herd mentality in action.
Members who have served on this Committee know that a rush
to judgment is dangerous. It is at best ill-advised and
contrary to democratic principles. At worst, it creates sloppy
legislation that adversely affects those whom we were elected
to serve. Following are a few examples of problems that we know
were created by the rash and overzealous schedule:
1. Both the original bill (H.R. 917, introduced February
13) and the original version of the Oxley substitute (dated
February 17) provided that proof of the so-called FDA defense
would act as a complete bar to any recovery for harm caused by
drugs or medical devices. Some Republican Members might have
voted blindly for such an extreme provision, though I and other
Members who have worked on these issues for years would have
been forced to oppose any such bill. When we pointed out the
effect of the provision, we were told it was a ``drafting
error'' and that the defense was intended to apply solely to
punitive damage awards.
2. During the markup, we discovered major inconsistencies
in the substitute offered--the third revision of the Oxley
substitute. For example, it provided two very different
evidentiary standards for punitive damage awards: ``malice''
(in the definition of punitive damages) and ``conscious,
flagrant indifference'' (in another section of the bill). The
new definition of ``economic damages'' had similar problems.
Again, we were told these were ``drafting errors'' and
amendments later were adopted to correct these defects. Written
materials provided to Members at the markup describing the
substitute were inaccurate or misleading in other respects, for
example, in reflecting that the statute of repose was 25 years
(when the substitute provided for 15 years) and failing to note
that it applies to all products instead of just to ``capital
goods,'' as with previous bipartisan bills.
3. During the markup, Mr. Hastert offered an amendment to
limit the liability of biomaterials suppliers. In response to
my questions, Mr. Hastert and counsel admitted that protections
of the amendment would apply even to a biomaterials supplier
who intentionally had withheld or misrepresented information to
the FDA or the manufacturer of the drug or medical device! Such
an extreme approach evidently was not intended by the author of
the amendment and would be difficult to justify on any rational
public policy basis. The amendment contained other provisions I
assume are erroneous (for example, section 10(a)(A) refers to
materials that ``did not constitute the product described in
the contrast [sic] between the biomaterials supplier and the
person who contracted for delivery of the product'', and
section 10(1)(B)(iii)(II) refers to materials that ``were not
expressly repudiated by the biomaterials supplier prior to the
acceptance by [sic] the raw materials or component parts'').
Democrats voted for the Hastert amendment with the
understanding that these and other problems would be addressed
before considering the bill on the floor. Unfortunately,
amendments offered by Democrats (such as Mr. Hall's amendment
to eliminate the cap on punitive damages and to allocate one-
half of the punitive damage awards to Federal or State
treasuries) were voted down, even when Republicans indicated
support for the concept but felt there were ``drafting
problems'' that needed to be worked out.
The objections and cautions I have raised concerning the
Committee's lack of appropriate process are not meant to make
headlines. Neither the media nor the public generally
understand or care about the process by which legislation is
crafted. My objections and cautions have not been made for the
purpose of delaying action on this or other legislation,
although more time certainly has been needed. Had I or other
Members of the Committee wanted to engage in pure dilatory or
delaying tactics, the rules of the House and the Committee
provide alternatives that would have served this purpose. Nor
have I made my objections and cautions to embarrass any of my
colleagues. As the record shows, I have worked for many years
in a bipartisan way in support of product liability reform.
The process is important for many reasons: to allow for
full and appropriate participation by all Members, including
the minority; to assure that an appropriate level of factual
evidence underpins the legislation; and to ensure that the
legislative ``product'' is well-crafted and does precisely what
it is intended to accomplish. By forcing this and other
legislation through the Committee and the House at a breakneck
pace, the Republican leadership has eroded all of these
principles. They have forgotten or ignored what all of us who
have served on this great Committee know: we are here to
legislate, not to punch holes in laminated cards.
The lack of meaningful and appropriate process does not
merely threaten to produce sloppy law and unintended
consequences. It also threatens to diminish bipartisan efforts
to craft fair and balanced legislation. For example, no one can
challenge my record of support for product liability reform
during more than a decade. But the process, along with the
extreme agenda of the new Republican leadership, commands me to
reevaluate my support for provisions and legislation I long
have supported. Before this legislation goes to the full House,
I intend to examine it carefully to make sure that it does not
contain further defects or extreme provisions.
During the markup, some of my Republican colleagues
indicated they understood my concerns. I sincerely hope we can
work in a bipartisan way in the future to consider and craft
legislation that we fully understand, in which we can take
pride, and which we may defend without reservation.
John D. Dingell.