SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Trade and Professional Association 
Free Flow of Information Act of 1997''.

SEC. 2. FINDINGS; PURPOSES.

    (a) Findings.--Congress finds that--
            (1) trade and professional associations serve the public 
        interest by conducting research, collecting and distributing 
        information, and otherwise providing services to their members 
        with regard to products and materials purchased and used by 
        those members;
            (2) in the decade preceding the date of enactment of this 
        Act, many large class action lawsuits have been filed against 
        manufacturers for allegedly defective products;
            (3) as a result of the lawsuits referred to in paragraph 
        (2), many members of trade and professional associations who 
        are consumers of those products have relied increasingly on 
        trade and professional associations for information concerning 
        those products, including information concerning--
                    (A) the conditions under which such a product may 
                be used effectively;
                    (B) whether it is necessary to repair or replace 
                such a product, and if such a repair or replacement is 
                necessary, the appropriate means of accomplishing that 
                repair or replacement; and
                    (C) any litigation concerning such a product;
            (4) trade and professional associations have, with an 
        increasing frequency, been served broad and burdensome third-
        party subpoenas from litigants in product defect lawsuits, 
        including class action lawsuits;
            (5) members of trade and professional associations are 
        seeking potentially beneficial information relating to product 
        defects, quality, or performance from the trade and 
        professional associations;
            (6) trade and professional associations have been subject 
        to lawsuits concerning methods of collection and dissemination 
        of that information;
            (7) the burden of responding to third-party subpoenas in 
        product defect lawsuits and the threat of litigation have had a 
        substantial chilling effect on the ability and willingness of 
        trade and professional associations to disseminate information 
        described in paragraph (5) to members, and the threat that 
        information provided on a confidential basis to members could 
        be subject to discovery in a civil action also has a chilling 
        effect;
            (8) because of the national scope of the problems described 
        in paragraphs (1) through (7), it is not possible for States to 
        fully address the problems by enacting State laws; and
            (9) the Federal Government has the authority under the 
        United States Constitution (including article I, section 8, 
        clause 3 of the Constitution and the 14th amendment to the 
        Constitution) to remove barriers to interstate commerce and 
        protect due process rights.
    (b) Purposes.--The purposes of this Act are to promote the free 
flow of goods and services and lessen burdens on interstate commerce in 
accordance with the authorities referred to in subsection (a)(9) by 
ensuring the free flow of information concerning product defects, 
quality, or performance among trade and professional associations and 
their members.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) 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, 
                        including improvements to real property and 
                        fixtures that are affixed or incorporated into 
                        those improvements.
                    (B) Exclusions.--The term 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, natural gas, or steam.
            (2) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, and any 
        commonwealth, territory, or possession of the United States.
            (3) Trade or professional association.--The term ``trade or 
        professional association'' means an organization described in 
        paragraph (3), (4), (5), or (6) of section 501(c) of the 
        Internal Revenue Code of 1986 that is exempt from taxation 
        under section 501(a) of such Code.

SEC. 3. QUALIFIED EXEMPTION FROM CIVIL LIABILITY.

    (a) In General.--
            (1) In general.--Except as provided in subsection (b), a 
        trade or professional association shall not be subject to civil 
        liability relating to harm caused by the provision of 
        information described in paragraph (2) by the trade or 
        professional association to a member of the trade or 
        professional association.
            (2) Information.--The information described in this 
        paragraph is information relating to a product concerning--
                    (A) the quality of the product;
                    (B) the performance of the product; or
                    (C) any defect of the product.
            (3) Applicability.--This subsection applies with respect to 
        civil liability under Federal or State law.
    (b) Exception for Liability.--Subsection (a) shall not apply with 
respect to harm caused by an act of a trade or professional association 
that a court determines, on the basis of clear and convincing evidence, 
to have been caused by the trade or professional association by the 
provision of information described in subsection (a)(2) that the trade 
or professional association--
            (1) knew to be false; or
            (2) provided a reckless indifference to the truth or 
        falsity of that information.

SEC. 4. SPECIAL MOTION TO STRIKE.

    A trade or professional association may file a special motion to 
strike any claim in any judicial proceeding against the trade or 
professional association on the ground that the claim is based on an 
act with respect to which the association is exempt from liability 
under section 3.

SEC. 5. REQUIRED PROCEDURES REGARDING SPECIAL MOTION TO STRIKE.

    (a) Treatment of Motion.--Upon the filing of any motion under 
section 4--
            (1) to the extent consistent with this section, the motion 
        shall be treated as a motion for summary judgment under Rule 56 
        of the Federal Rules of Civil Procedure (or an equivalent 
        motion under applicable State law); and
            (2) the trial court shall hear the motion within a period 
        of time that is appropriate for preferred or expedited motions.
    (b) Suspension of Discovery.--Upon the filing of a motion under 
section 4, discovery requests to or from the moving party shall be 
suspended pending a decision on--
            (1) the motion; and
            (2) any appeal on the ruling on the motion.
    (c) Burden of Proof.--The responding party shall have the burden of 
proof in presenting evidence that a motion filed under section 4 should 
be denied.
    (d) Basis of Determination.--A court shall make a determination on 
a motion filed under section 4 on the basis of the facts contained in 
the pleadings and affidavits filed in accordance with this section.
    (e) Dismissal.--With respect to a claim that is the subject of a 
motion filed under section 4, the court shall grant the motion and 
dismiss the claim, unless the responding party has produced evidence 
that would be sufficient for a reasonable finder of fact to conclude, 
on the basis of clear and convincing evidence, that the moving party is 
not exempt from liability for that claim under section 3.
    (f) Costs.--If a moving party prevails in procuring the dismissal 
of a claim as a result of a motion made under section 4, the court 
shall award that party the costs incurred by the party in connection 
with making the motion, including reasonable attorney and expert 
witness fees.

SEC. 6. QUALIFIED EXEMPTION FROM THIRD-PARTY DISCOVERY.

    (a) In General.--Notwithstanding any other provision of law, a 
trade or professional association may only be served with a subpoena in 
a civil action described in subsection (b) if the party that serves the 
subpoena first establishes to the court, by clear and convincing 
evidence that--
            (1) the materials or information sought by the subpoena are 
        directly relevant to the civil action; and
            (2) the party serving the subpoena has a compelling need 
        for the materials or information because the materials or 
        information are not otherwise available.
    (b) Civil Actions Described.--A civil action described in this 
subsection is a civil action--
            (1) relating to the quality, performance, or defect of a 
        product; and
            (2) to which the trade or professional association involved 
        is not a party.

SEC. 7. SPECIAL MOTION TO QUASH A SUBPOENA.

    A trade or professional association may file a special motion to 
quash a subpoena on the grounds that the trade or professional 
association is exempt from any third-party discovery request under 
section 6.

SEC. 8. REQUIRED PROCEDURES REGARDING SPECIAL MOTION TO QUASH.

    (a) In General.--Upon the filing of any motion under section 7, the 
trial court shall hear the motion within the period of time that is 
appropriate for preferred or expedited motions.
    (b) Suspension of Compliance.--Upon the filing of a motion under 
section 7, the court shall not compel compliance with the subpoena 
during the period during which--
            (1) the motion is under consideration; or
            (2) an appeal on the determination by the court to deny the 
        motion has not resulted in a final ruling by the court on the 
        appeal.
    (c) Burden of Proof.--The responding party shall have the burden of 
proof in presenting evidence that a motion filed under section 7 should 
be denied.
    (d) Basis of Determination.--A court shall make a determination on 
a motion filed under section 7 on the basis of the facts contained in 
the pleadings and affidavits filed in accordance with this section.
    (e) Quashing a Subpoena.--The court shall grant a motion filed 
under section 7 and quash the subpoena that is the subject of the 
motion, unless the responding party proves, by clear and convincing 
evidence, that the trade or professional association that received the 
subpoena is not exempt from responding to the subpoena under section 6.
    (f) Costs.--If a trade or professional association prevails in 
procuring the quashing of a subpoena as a result of a motion made under 
section 7, the court shall award the trade or professional association 
the costs incurred by that trade or professional association in 
connection with making the motion, including reasonable attorney and 
expert witness fees.

SEC. 9. RIGHT TO OBJECT UNDER RULE 45 OF THE FEDERAL RULES OF CIVIL 
              PROCEDURE.

    Nothing in this Act may be construed to impair the right of a trade 
or professional association to serve written objections under rule 
45(c)(2)(B) of the Federal Rules of Civil Procedure, or any similar 
rule or procedure under applicable State law.

SEC. 10. QUALIFIED ASSOCIATION-MEMBER PRIVILEGE.

    (a) In General.--Except as provided in subsection (b), a member of 
a trade or professional association shall not be required to disclose 
any information described in section 3(a)(2), including any materials 
containing that information, that--
            (1) relates to actual or anticipated litigation involving 
        the quality, performance, or defect of a product;
            (2) is considered to be confidential by the trade or 
        professional association and that member; and
            (3) is communicated by the trade or professional 
        association with the reasonable expectation that the 
        information will--
                    (A) be used in connection with actual or 
                anticipated litigation; and
                    (B) be maintained in confidence.
    (b) Exception.--Subsection (a) does not apply in any action in 
which a party seeking information described in that subsection has 
established to a court, by clear and convincing evidence, that--
            (1) the materials or information sought are directly 
        relevant to an action filed by that party; and
            (2) the party has a compelling need for the information 
        because the information is not otherwise obtainable.

SEC. 11. ELECTION OF STATE REGARDING NONAPPLICABILITY.

    This Act shall not apply to any civil action in a State court with 
respect to which all of the parties are citizens of that State, if that 
State enacts, pursuant to applicable State law, a State statute that--
            (1) cites the authority of this section;
            (2) specifies that the State elects to be exempt from the 
        requirements of this Act pursuant to this section; and
            (3) contains no other provisions.

SEC. 12. PREEMPTION; APPLICABILITY.

    (a) Preemption.--This Act supersedes the laws of any State to the 
extent such State laws apply to matters to which this Act applies.
    (b) Applicability.--Except as provided in section 11, and subject 
to subsection (a), this Act applies to any civil action commenced in a 
Federal or State court, on or after the date of enactment of this Act.
Trade and Professional Association Free Flow of Information Act of 1997 - Exempts a trade or professional association from civil liability relating to harm caused by the provision of specified information by the trade or professional association to a member of the trade or professional association. 
Authorizes a trade or professional association to file a special motion to strike any claim in a judicial proceeding against the trade or professional association on the ground that the claim is based on an act with respect to which the association is exempt from liability under this Act. 
Sets forth provisions regarding:  (1) procedures with respect to a special motion to strike; (2) qualified exemption of such associations from third-party discovery; (3) a special motion to quash a subpoena on the grounds that the trade or professional association is exempt from any third-party discovery request; (4) procedures with respect to a special motion to quash; (5) the right of such associations to object under rule 45 of the Federal Rules of Procedure or any similar rule or procedure under applicable State law; (6) a qualified association member privilege not to disclose confidential information received from the association relating to litigation involving the quality, performance, or defect of a product; (7) election of a State to be exempt from the requirements of this Act with respect to any civil action in a State court in which all of the parties are citizens of that State; and (8) preemption of State laws.
Trade and Professional Association Free Flow of Information Act of 1997