[Weekly Compilation of Presidential Documents Volume 32, Number 18 (Monday, May 6, 1996)]
[Pages 780-781]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Message on Returning Without Approval to the House of Representatives 
the Common Sense Product Liability Legal Reform Act of 1996

May 2, 1996

To the House of Representatives:

    I am returning herewith without my approval H.R. 956, the ``Common 
Sense Product Liability Legal Reform Act of 1996.''
    I support real commonsense product liability reform. To deserve that 
label, however, legislation must adequately protect the interests of 
consumers, in addition to the interests of manufacturers and sellers. 
Further, the legislation must respect the important role of the States 
in our Federal system. The Congress could have passed such legislation, 
appropriately limited in scope and balanced in application, meeting 
these tests. Had the Congress done so, I would have signed the bill 
gladly. The Congress, however, chose not to do so, deciding instead to 
retain provisions in the bill that I made clear I could not accept.
    This bill inappropriately intrudes on State authority, and does so 
in a way that tilts the legal playing field against consumers. While 
some Federal action in this area is proper because no one State can 
alleviate nationwide problems in the tort system, the States should 
have, as they always have had, primary responsibility for tort law. The 
States traditionally have handled this job well, serving as laboratories 
for new ideas and making needed reforms. This bill unduly interferes 
with that process in products cases; moreover, it does so in a way that 
peculiarly disadvantages consumers. As a rule, this bill displaces State 
law only when that law is more favorable to consumers; it defers to 
State law when that law is more helpful to manufacturers and sellers. I 
cannot accept, absent compelling reasons, such a one-way street of 
federalism.
    Apart from this general problem of displacing State authority in an 
unbalanced manner, specific provisions of H.R. 956 unfairly disadvantage 
consumers and their families. Consumers should be able to count on the 
safety of the products they purchase. And if these products are 
defective and cause harm, consumers should be able to get adequate 
compensation for their losses. Certain provisions in this bill work 
against these goals, preventing some injured persons from recovering the 
full measure of their damages and increasing the possibility that 
defective goods will come onto the market as a result of intentional 
misconduct.
    In particular, I object to the following provisions of the bill, 
which subject consumers to too great a risk of harm.
    First, as I previously have stated, I oppose wholly eliminating 
joint liability of noneconomic damages such as pain and suffering 
because such a change would prevent many persons from receiving full 
compensation for injury. When one wrongdoer cannot pay its portion of 
the judgment, the other wrongdoers, and not the innocent victim, should 
have to shoulder that part of the award. Traditional law accomplishes 
this result. In contrast, this bill would leave the victim to bear these 
damages on his or her own. Given how often companies that manufacture 
defective products go bankrupt, this provision has potentially large 
consequences.
    This provision is all the more troubling because it unfairly 
discriminates against the most vulnerable members of our society--the 
elderly, the poor, children, and nonworking women--whose injuries often 
involve mostly noneconomic losses. There is no reason for this kind of 
discrimination. Noneconomic damages are as real and as important to 
victims as economic damages. We should not create a tort system in which 
people with the greatest need of protection stand the least chance of 
receiving it.
    Second, as I also have stated, I oppose arbitrary ceilings on 
punitive damages, because they endanger the safety of the public. 
Capping punitive damages undermines their very purpose, which is to 
punish and thereby deter egregious misconduct. The provision of the bill 
allowing judges to exceed the cap if certain factors are present helps 
to mitigate, but does not cure this problem, given the clear intent of 
the Congress, as expressed in the Statement of Managers, that judges 
should use this authority only in the most unusual cases.
    In addition, I am concerned that the Conference Report fails to fix 
an oversight in title

[[Page 781]]

II of the bill, which limits actions against suppliers of materials used 
in devices implanted in the body. In general, title II is a laudable 
attempt to ensure the supply of materials needed to make life-saving 
medical devices, such as artificial heart valves. But as I believe even 
many supporters of the bill agree, a supplier of materials who knew or 
should have known that the materials, as implanted, would cause injury 
should not receive any protection from suit. Title II's protections must 
be clearly limited to nonnegligent suppliers.
    My opposition to these Senate-passed provisions were known prior to 
the Conference on the bill. But instead of addressing these issues, the 
Conference Committee took several steps backward in the direction of the 
bill approved by the House.
    First, the Conference Report seems to expand the scope of the bill, 
inappropriately applying the limits on punitive and noneconomic damages 
to lawsuits, where, for example, a gun dealer has knowingly sold a gun 
to a convicted felon or a bar owner has knowingly served a drink to an 
obviously inebriated customer. I believe that such suits should go 
forward unhindered. Some in the Congress have argued that the change 
made in Conference is technical in nature, so that the bill still 
exempts these actions. But I do not read the change in this way--and in 
any event, I do not believe that a victim of a drunk driver should have 
to argue in court about this matter. The Congress should not have made 
this last-minute change, creating this unfortunate ambiguity, in the 
scope of the bill.
    In addition, the Conference Report makes certain changes that, 
though sounding technical, may cut off a victim's ability to sue a 
negligent manufacturer. The Report deletes a provision that would have 
stopped the statute of limitations from running when a bankruptcy court 
issues the automatic stay that prevents suits from being filed during 
bankruptcy proceedings. The effect of this seemingly legalistic change 
will be that some persons harmed by companies that have entered 
bankruptcy proceedings (as makers of defective products often do) will 
lose any meaningful opportunity to bring valid claims.
    Similarly, the Conference Report reduces the statute of repose to 15 
years (and less if States so provide) and applies the statute to a wider 
range of goods, including handguns. This change, which bars a suit 
against a maker of an older product even if that product has just caused 
injury, also will preclude some valid suits.
    In recent weeks, I have heard from many victims of defective 
products whose efforts to recover compensation would have been 
frustrated by this bill. I have heard from a woman who would not have 
received full compensatory damages under this bill for the death of a 
child because one wrongdoer could not pay his portion of the judgment. I 
have heard from women whose suits against makers of defective 
contraceptive devices--and the punitive damages awarded in those suits--
forced the products off the market, in a way that this bill's cap on 
punitives would make much harder. I have heard from persons injured by 
products more than 15 years old, who under this bill could not bring 
suit at all.
    Injured people cannot be left to suffer in this fashion; 
furthermore, the few companies that cause these injuries cannot be left, 
through lack of a deterrent, to engage in misconduct. I therefore must 
return the bill that has been presented to me. This bill would undermine 
the ability of courts to provide relief to victims of harmful products 
and thereby endanger the health and safety of the entire American 
public. There is nothing common sense about such reforms to product 
liability law.
                                            William J. Clinton
The White House,
May 2, 1996.