[House Report 106-498]
[From the U.S. Government Publishing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 106-498
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PROVIDING FOR THE CONSIDERATION OF H.R. 2366, THE SMALL BUSINESS
LIABILITY REFORM ACT OF 2000
_______
February 15, 2000.--Referred to the House Calendar and ordered to be
printed
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Mr. Linder, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 423]
The Committee on Rules, having had under consideration
House Resolution 423, by a nonrecord vote, report the same to
the House with the recommendation that the resolution be
adopted.
summary of provisions of the resolution
The resolution provides for the consideration of H.R. 2366,
the Small Business Liability Reform Act of 2000, under a
structured rule. The rule provides one hour of general debate
dividing equally between the chairman and ranking minority
member of the Committee on the Judiciary.
The rule makes in order the Committee on the Judiciary
amendment in the nature of a substitute now printed in the bill
as an original bill for the purpose of amendment. The rule
makes in order only those amendments printed in this report.
The rule provides that the amendments made in order may be
offered only in the order printed in this report, may be
offered only by a Member designated in this report, shall be
considered as read, shall be debatable for the time specified
in this report equally divided and controlled by the proponent
and an opponent, shall not be subject to amendment, and shall
not be subject to a demand for a division of the question in
the House or in the Committee of the Whole. The rule waives all
points of order against the amendments printed in this report,
which is necessary only for technical reasons.
The rule allows the Chairman of the Committee of the Whole
to postpone votes during consideration of the bill, and to
reduce voting time to five minutes on a postponed question if
the vote follows a fifteen minute vote. Finally, the rule
provides for one motion to recommit, with or without
instructions.
committee votes
Pursuant to clause 3(b) of House rule XIII the results of
each record vote on an amendment or motion to report, together
with the names of those voting for and against, are printed
below:
Rules Committee record vote No. 67
Date: February 15, 2000.
Measure: H.R. 2366, the Small Business Liability Reform Act
of 2000.
Motion By: Mrs. Slaughter.
Summary of Motion: Make in order the Lofgren/McCarthy(NY)/
DeLauro/DeGette/Carson amendment that preserved several causes
of action that are being used by cities and counties to hold
manufacturers of cheap Saturday-night specials and bad-apple
gun dealers accountable by exempting those causes of action
from the manufacturer and product seller titles of the bill.
Results: Defeated 3 to 6.
Vote by Member: Goss--Nay; Pryce--Nay; Hastings--Nay;
Sessions--Nay; Reynolds--Nay; Moakley--Yea; Hall--Yea;
Slaughter--Yea; Dreier--Nay.
Amendments made in order under the rule to H.R. 2366--The Small
Business Liability Reform Act
Rogan/Hutchinson: Replaces section 103 (limitations on
punitive damages) to allow a court to exceed the punitive
damage caps in the event it finds by clear and convincing
evidence that the defendant acted with specific intent to cause
the type of harm for which the action was brought. (10 minutes)
Moran (VA): Adds a definition of ``punitive damages'' to
Title I to clarify that the term does not include civil
penalties, civil fines, or treble damages assessed or enforced
by a government agency under federal or state statute. (10
minutes)
Watt #2: Strikes the part of the bill which precludes
federal court jurisdiction under section 1337 of title 28, U.S.
Code. (10 minutes)
Conyers/Scott: Narrows the definition of ``small business''
in Title I to include businesses which had revenues in each of
the last two years of $5,000,000 or less; limits Title II's
application to ``small businesses''; limits Title I to product
liability actions; revises the definition of Hate Crimes in
Title I to mean ``a crime in which the defendant intentionally
selects a victim, or in the case of property crime, the
property that is the object of the crime, because of the actual
or perceived race, color, religion, national origin, ethnicity,
gender, disability, or sexual orientation of any person'';
creates True Two Way preemption in Title I by allowing the bill
to create actions for punitive damages in states for which they
do not exist today; Creates True State Opt-Out in Title I by
allowing it to apply to statutes as well as ``initiatives of
referendum,'' and by deleting the requirement that this be the
only item described in such law; and, adds a similar State opt-
out in Title II. (40 minutes)
1. An Amendment To Be Offered by Representative Rogan of California, or
Representative Hutchinson of Arkansas, or a Designee, Debatable for 10
Minutes
Page 7, strike line 13 through line 6 on page 8 and insert
the following:
SEC. 103. LIMITATION ON PUNITIVE DAMAGES FOR SMALL BUSINESSES.
(a) General Rule.--Except as provided in section 105, in any
civil action against a small business, punitive damages may, to
the extent permitted by applicable Federal or State law, be
awarded against the small business only if the claimant
establishes by clear and convincing evidence that conduct
carried out by that defendant with a conscious, flagrant
indifference to the rights or safety of others was the
proximate cause of the harm that is the subject of the action.
(b) Limitation on Amount.--In any civil action against a
small business, punitive damages awarded against a small
business shall not exceed the lesser of--
(1) 3 times the total amount awarded to the claimant
for economic and noneconomic losses, or
(2) $250,000,
except that the court may make this subsection inapplicable if
the court finds that the plaintiff established by clear and
convincing evidence that the defendant acted with specific
intent to cause the type of harm for which the action was
brought.
(c) Application by the Court.--The limitation prescribed by
this section shall be applied by the court and shall not be
disclosed to the jury.
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2. An Amendment To Be Offered by Representative Moran of Virginia, or a
Designee, Debatable for 10 Minutes
Page 6, insert after line 15 the following:
(9) Punitive damages.--The term ``punitive damages''
means damages awarded against any person or entity to
punish or deter such person, entity, or others from
engaging in similar behavior in the future. Such term
does not include any civil penalties, fines, or treble
damages that are assessed or enforced by an agency of
State or Federal government pursuant to a State or
Federal statute.
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3. An Amendment To Be Offered by Representative Watt of North Carolina,
or a Designee, Debatable for 10 Minutes
Page 24, line 11, strike ``or 1337''.
4. An Amendment To Be Offered by Representative Conyers of Michigan, or
Representative Scott of Virginia, or a Designee, Debatable for 40
Minutes
(Small Business Definition)
Page 6, line 23, insert before the period the following:
``and had revenues in each of the last 2 years of $5,000,000 or
less''.
Page 19, line 10, strike ``(14)'' and insert ``(15)'' and
after line 9 insert the following:
(14) Small business.--
(A) In general.--The term ``small business''
means any unincorporated business, or any
partnership, corporation, association, unit of
local government, or organization that has
fewer than 25 full-time employees as determined
on the date the civil action involving the
small business is filed and had revenues in
each of the last 2 years of $5,000,000 or less.
(B) Calculation of number of employees.--For
purposes of subparagraph (A), the number of
employees of a subsidiary of a wholly owned
corporation includes the employees of--
(i) a parent corporation; and
(ii) any other subsidiary corporation
of that parent corporation.
(Title II Applicable to Small Business)
Page 21, line 12, insert after ``title'' the following:
``brought against a small business''.
(Definition of Product and Product Liability Action)
Page 6, beginning in line 16 redesignate paragraphs (9) and
(10) as paragraphs (11) and (12), respectively, and add after
line 15 the following:
(9) Product.--
(A) In general.--The term ``product'' means
any object, substance, mixture, or raw material
in a gaseous, liquid, or solid state that--
(i) is capable of delivery itself or
as an assembled whole, in a mixed or
combined state, or as a component part
or ingredient;
(ii) is produced for introduction
into trade or commerce;
(iii) has intrinsic economic value;
and
(iv) is intended for sale or lease to
persons for commercial or personal use.
(B) Exclusion.--The term ``product'' does not
include--
(i) tissue, organs, blood, and blood
products used for therapeutic or
medical purposes, except to the extent
that such tissue, organs, blood, and
blood products (or the provision
thereof) are subject, under applicable
State law, to a standard of liability
other than negligence; or
(ii) electricity, water delivered by
a utility, natural gas, or steam.
(10) Product liability action.--
(A) General rule.--Except as provided in
subparagraph (B), the term ``product liability
action'' means a civil action brought on any
theory for a claim for any physical injury,
illness, disease, death, or damage to property
that is caused by a product.
(B) The following claims are not included in
the term ``product liability action'':
(i) Negligent entrustment.--A claim
for negligent entrustment.
(ii) Negligence per se.--A claim
brought under a theory of negligence
per se.
(iii) Dram-shop.--A claim brought
under a theory of dram-shop or third-
party liability arising out of the sale
or providing of an alcoholic product to
an intoxicated person or minor.
(Making Title I Applicable to only Product Liability Actions)
Page 6, line 22 and page 8, lines 1, 11, and 16, strike
``civil action'' and insert ``product liability action''.
(Definition of Hate Crime)
Page 5, strike lines 23 through 25 and insert the following:
(5) Hate crime.--The term ``hate crime'' means a
crime in which the defendant intentionally selects a
victim, or in the case of property crime, the property
that is the object of the crime, because of the actual
or perceived race, color, religion, national origin,
ethnicity, gender, disability, or sexual orientation of
the victim or owner of the property.
(Making Section 103 Applicable to Punitive Damages Irrespective of
State Law)
Page 7, beginning in line 17, strike ``, to the extent
permitted by applicable State law,''.
(Allowing State to Elect Nonapplicability by Enacting a Referendum or
Initiative)
Page 11, line 9, after ``a statute'' insert ``, an
initiative, or referendum'', add ``and'' at the end of line 10,
in line 13, strike ``; and'' and insert a period, and strike
line 14
Page 21, insert after line 7 the following:
(d) Election of State Regarding Nonapplicability.--This title
does not apply to any action in a State court against a small
business in which all parties are citizens of the State, if the
State enacts a statute, an initiative, or referendum--
(1) citing the authority of this subsection; and
(2) declaring the election of such State that this
title does not apply as of a date certain to such
actions in the State.