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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1075 Introduced in House (IH)]

104th CONGRESS
  1st Session
                                H. R. 1075

   To establish legal standards and procedures for product liability 
                  litigation, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           February 28, 1995

 Mr. Hyde (for himself and Mr. Bliley) introduced the following bill; 
which was referred to the Committee on the Judiciary and, in addition, 
     to the Committee on Commerce, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
   To establish legal standards and procedures for product liability 
                  litigation, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Common Sense 
Product Liability and Legal Reform Act of 1995''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title and table of contents.
                   TITLE I--PRODUCT LIABILITY REFORM

Sec. 101. Findings and purposes.
Sec. 102. Applicability and preemption.
Sec. 103. Liability rules applicable to product sellers.
Sec. 104. Defense based on claimant's use of intoxicating alcohol or 
                            drugs.
Sec. 105. Misuse or alteration.
Sec. 106. Frivolous pleadings.
Sec. 107. Several liability for noneconomic loss.
Sec. 108. Statute of repose.
Sec. 109. Service of process.
Sec. 110. Definitions.
                   TITLE II--PUNITIVE DAMAGES REFORM

Sec. 201. Punitive damages.
Sec. 202. Definitions.
                   TITLE III--BIOMATERIALS SUPPLIERS

Sec. 301. Liability of biomaterials suppliers.
Sec. 302. Procedures for dismissal of civil actions against 
                            biomaterials suppliers.
Sec. 303. Definitions.
             TITLE IV--EFFECT ON OTHER LAW; EFFECTIVE DATE

Sec. 401. Effect on other law.
Sec. 402. Federal cause of action precluded.
Sec. 403. Effective date.

                   TITLE I--PRODUCT LIABILITY REFORM

SEC. 101. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) the manufacture and distribution of goods in interstate 
        commerce is to a large extent a national activity which affects 
        national interests in a variety of important ways;
            (2) in recent years, the free flow of products in 
        interstate commerce has been increasingly burdened by product 
        liability law;
            (3) as a result of this burden, consumers have been 
        adversely affected through the withdrawal of products and 
        producers from the national market, and from excessive 
        liability costs passed on to them through higher prices;
            (4) the rules of product liability law in recent years have 
        evolved rapidly and inconsistently within and among the several 
        States, such that the body of product liability law prevailing 
        in this nation today is complex, contradictory, and uncertain;
            (5) the unpredictability of product liability awards and 
        doctrines are inequitable to both plaintiffs and defendants and 
        have added considerably to the high cost of liability 
        insurance, making it difficult for producers and insurers to 
        protect their liability with any degree of confidence;
            (6) product liability actions and punitive damage awards 
        jeopardize the financial well-being of many industries and are 
        a particular threat to the viability of the nation's small 
        businesses;
            (7) the extraordinary costs of the product liability system 
        undermine the ability of American industry to compete 
        internationally, and is costing the loss of jobs and productive 
        capital; and
            (8) because of the national scope of the manufacture and 
        distribution of most products, it is not possible for the 
        individual states to enact laws that fully and effectively 
        respond to these problems.
    (b) Purposes.--Based upon the powers contained in Article I, clause 
3 of the United States Constitution, the purposes of this title are to 
promote the free flow of goods in interstate commerce--
            (1) by establishing certain uniform legal principles which 
        provide a fair balance between the interests of product users, 
        manufacturers, and product sellers,
            (2) by placing reasonable limits on product liability law,
            (3) by ensuring that product liability law operates to 
        compensate persons injured by the wrongdoing of others,
            (4) by reducing the unacceptable transactions costs and 
        delays which harm both plaintiffs and defendants,
            (5) by allocating responsibility for harm to those in the 
        best position to prevent such harm, and
            (6) by establishing greater predictability in product 
        liability actions.

SEC. 102. APPLICABILITY AND PREEMPTION.

    (a) Preemption.--This title governs any product liability action 
brought in any State or Federal court, on any theory for harm caused by 
a product. A civil action brought for commercial loss shall be governed 
only by applicable commercial or contract law.
    (b) Relationship to State Law.--This title supersedes State law 
only to the extent that State law applies to an issue covered by this 
title. Any issue that is not governed by this title shall be governed 
by otherwise applicable State or Federal law.

SEC. 103. LIABILITY RULES APPLICABLE TO PRODUCT SELLERS.

    (a) General Rule.--Except as provided in subsection (b), in any 
product liability action, a product seller other than a manufacturer 
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; or
            (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 a 
        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 
the 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) Exception.--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 any State in which the action might have been 
        brought; or
            (2) the court determines that the claimant would be unable 
        to enforce a judgment against the manufacturer.

SEC. 104. DEFENSE BASED ON CLAIMANT'S USE OF INTOXICATING ALCOHOL OR 
              DRUGS.

    (a) General Rule.--In any product liability action, it shall be a 
complete defense to such action if--
            (1) the claimant was intoxicated or was under the influence 
        of intoxicating alcohol or any drug when the accident or other 
        event which resulted in such claimant's harm occurred; and
            (2) the claimant, as a result of the influence of the 
        alcohol or drug, was more than 50 percent responsible for such 
        accident or other event.
    (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. 105. MISUSE OR ALTERATION.

    (a) General Rule.--Except as provided in subsection (c), in a 
product liability action, the damages for which a defendant 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 defendant establishes 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 defendant's express warnings or instructions 
        if the warnings or instructions are adequate 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) Workplace Injury.--Notwithstanding subsection (a), the damage 
for which a defendant 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 any co-employee who is immune from suit by the claimant 
pursuant to the State law applicable to workplace injuries.

SEC. 106. FRIVOLOUS PLEADINGS.

    (a) General Rule.--
            (1) Signing of pleading.--The signing or verification of a 
        pleading in a product liability action in a State court subject 
        to this title 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 in a State 
        court 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 
        in a State court 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. 107. SEVERAL LIABILITY FOR NONECONOMIC LOSS.

    In any product liability action, the liability of each defendant 
for noneconomic loss shall be several only and shall not be joint. Each 
defendant shall be liable only for the amount of noneconomic loss 
attributable to such defendant in direct proportion to such defendant's 
proportionate share of fault or responsibility for the claimant's harm, 
as determined by the trier of fact.

SEC. 108. STATUTE OF REPOSE.

    (a) General Rule.--A product liability action shall be barred 
unless the complaint is served and filed within 15 years of the date of 
delivery of the product 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 
subsection shall apply only if the court determines that the claimant 
has received or would be eligible to receive full compensation from any 
source for medical expense losses.
    (b) Exception.--Subsection (a)--
            (1) does not bar a product liability action against a 
        defendant who made an express warranty in writing as to the 
        safety of the specific product involved which was longer than 
        15 years, but it will apply at the expiration of such warranty,
            (2) does not apply to a physical illness the evidence of 
        which does not ordinarily appear less than 15 years after the 
        first exposure to the product, and
            (3) does not affect the limitations period established by 
        the General Aviation Revitalization Act of 1994.

SEC. 109. SERVICE OF PROCESS.

    This title shall not apply to a product liability action unless the 
manufacturer of the product or component part has appointed an agent in 
the United States for service of process from anywhere in the United 
States.

SEC. 110. DEFINITIONS.

    As used in this title:
            (1) The term ``claimant'' means any person who brings a 
        product liability action and any person on whose behalf such an 
        action is brought. If such an action is brought through or on 
        behalf of an estate, the term includes the claimant's decedent. 
        If such action is brought through or on behalf of a minor or 
        incompetent, the term includes the claimant's legal guardian.
            (2) The term ``commercial loss'' means any loss of or 
        damage to a product itself incurred in the course of the 
        ongoing business enterprise consisting of providing goods or 
        services for compensation.
            (3) The term ``economic loss'' means any pecuniary loss 
        resulting from harm (including the loss of earnings, medical 
        expense loss, replacement services loss, loss due to death, and 
        burial costs) to the extent recovery for such loss is allowed 
        under applicable State law.
            (4) The term ``harm'' means any physical injury, illness, 
        disease, or death or damage to property caused by a product. 
        The term does not include commercial loss or loss or damage to 
        a product itself.
            (5) The term ``manufacturer'' means--
                    (A) any person who is engaged in a business to 
                produce, create, make, or construct any product (or 
                component part of a product) and who (i) designs or 
                formulates the product (or component part of the 
                product), (ii) has engaged another person to design or 
                formulate the product (or component part of the 
                product), or (iii) uses the design or formulation of 
                the product developed by another person;
                    (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, or
                            (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 ``noneconomic loss'' means subjective, 
        nonmonetary loss resulting from harm, including pain, 
        suffering, inconvenience, mental suffering, emotional distress, 
        loss of society and companionship, loss of consortium, injury 
        to reputation, and humiliation.
            (7) The term ``person'' means any individual, corporation, 
        company, association, firm, partnership, society, joint stock 
        company, or any other entity (including any governmental 
        entity).
            (8)(A) The term ``product'' means any object, substance, 
        mixture, or raw material in a gaseous, liquid, or solid state 
        which--
                    (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) The term 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.
            (9) The term ``product liability action'' means a civil 
        action brought on any theory for harm caused by a product or 
        product use.
            (10) The term ``product seller'' means a person who, in the 
        course of a business conducted for that purpose, sells, 
        distributes, rents, leases, prepares, blends, packages, labels 
        a product, is otherwise involved in placing a product in the 
        stream of commerce, or installs, repairs, or maintains the 
        harm-causing aspect of a product. The term does not include--
                    (A) a seller or lessor of real property;
                    (B) 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; or
                    (C) any person who--
                            (i) acts in only a financial capacity with 
                        respect to the sale of a product; or
                            (ii) 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.
            (11) The term ``State'' means any State of the United 
        States, the District of Columbia, Commonwealth of Puerto Rico, 
        the Northern Mariana Islands, the Virgin Islands, Guam, 
        American Samoa, and any other territory or possession of the 
        United States, or any political subdivision of any of the 
        foregoing.

                   TITLE II--PUNITIVE DAMAGES REFORM

SEC. 201. PUNITIVE DAMAGES.

    (a) General Rule.--Punitive damages may, to the extent permitted by 
applicable State law, be awarded in any civil action for harm in any 
Federal or State court against a defendant if the claimant establishes 
by clear and convincing evidence that the harm suffered was result of 
conduct--
            (1) specifically intended to cause harm, or
            (2) conduct manifesting a conscious, flagrant indifference 
        to the safety of others.
    (b) Proportional Awards.--The amount of punitive damages that may 
be awarded in any civil action subject to this title shall not exceed 3 
times the amount of damages awarded to the claimant for the economic 
loss on which the claimant's action is based, or $250,000, whichever is 
greater.
    (c) Applicability and Preemption.--Except as provided in section 
401, this title shall apply to any civil action brought in any Federal 
or State court on any theory where punitive damages are sought. This 
title does not create a cause of action for punitive damages in any 
jurisdiction that does not authorize such actions.
    (d) Bifurcation.--At the request of any party, the trier of fact 
shall consider in a separate proceeding whether punitive damages are to 
be awarded and the amount of such award. 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.
    (e) Consideration.--In determining the amount of punitive damages, 
the trier of fact shall consider all relevant, admissible 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 specific conduct that caused 
        the harm to the defendant,
            (4) the number of products sold, the frequency of services 
        provided, or the type of activities conducted by the defendant 
        of the kind causing the harm complained of by the claimant,
            (5) awards of punitive damages to persons similarly 
        situated to the claimant,
            (6) possibility of 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 a factor 
        in any prior proceeding involving the defendant.

SEC. 202. DEFINITIONS.

    As used in this title:
            (1) The term ``claimant'' means any person who brings a 
        civil action and any person on whose behalf such an action is 
        brought. If such action is brought through or on behalf of an 
        estate, the term includes the claimant's decedent. If such 
        action is brought through or on behalf of a minor or 
        incompetent, the term includes the claimant's legal guardian.
            (2) The term ``clear and convincing evidence'' is that 
        measure or degree of proof that will produce in the mind of the 
        trier of fact a firm belief or conviction as to the truth of 
        the allegations sought to be established. The level of proof 
        required to satisfy such standard is more than that required 
        under preponderance of the evidence, but less than that 
        required for proof beyond a reasonable doubt.
            (3) The term ``economic loss'' means any pecuniary loss 
        resulting from harm (including the loss of earnings, medical 
        expense loss, replacement services loss, loss due to death, and 
        burial costs), to the extent recovery for such loss is allowed 
        under applicable State law.
            (4) The term ``harm'' means any legally cognizable wrong or 
        injury for which punitive damages may be imposed.
            (5) The term ``punitive damages'' means damages awarded 
        against any person or entity to punish or deter such person or 
        entity, or others, from engaging in similar behavior in the 
        future.
            (6) The term ``State'' means any State of the United 
        States, the District of Columbia, Commonwealth of Puerto Rico, 
        the Northern Mariana Islands, the Virgin Islands, Guam, 
        American Samoa, and any other territory or possession of the 
        United States, or any political subdivision of any of the 
        foregoing.

                   TITLE III--BIOMATERIALS SUPPLIERS

SEC. 301. 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 that the conduct of the biomaterials supplier was an actual and 
proximate cause of the harm to the claimant and--
            (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 (21 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;
            (2) the biomaterials supplier intentionally and wrongfully 
        withheld or misrepresented information that is material and 
        relevant to the harm suffered by the claimant; or
            (3) the biomaterials supplier had actual knowledge of 
        prospective fraudulent or malicious activities in the use of 
        its supplies where such activities are relevant to the harm 
        suffered by the claimant.

SEC. 302. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS AGAINST 
              BIOMATERIALS SUPPLIERS.

    (a) Motion To Dismiss.--
            (1) General rule.--Any biomaterials supplier who is a 
        defendant in any product liability action involving a medical 
        device which allegedly caused the harm for which the action is 
        brought and who did not take part in the design, manufacture, 
        or sale of such medical device may, at any time during which a 
        motion to dismiss may be filed under an applicable law, move to 
        dismiss the action on the grounds that--
                    (A) the claimant has failed to establish that the 
                supplier furnished raw materials or component parts in 
                violation of applicable contractual requirements or 
                specifications agreed to by the biomaterials supplier; 
                or
                    (B) the claimant has failed to comply with the 
                requirements of subsection (b).
            (2) Exception.--The biomaterials supplier may not move to 
        dismiss the action if--
                    (A) the biomaterials supplier intentionally and 
                wrongfully withheld or misrepresented information that 
                is material and relevant to the harm suffered by the 
                claimant; or
                    (B) the biomaterials supplier had actual knowledge 
                of prospective fraudulent or malicious activities in 
                the use of its supplies where such activities are 
                relevant to the harm suffered by the claimant.
    (b) Manufacturer of Medical Device Shall Be Named a Party.--The 
claimant shall be required to name the manufacturer of the medical 
device to which the biomaterials supplier furnished raw materials or 
component parts as a party to the product liability action, unless--
            (1) the manufacturer is subject to service of process 
        solely in a jurisdiction in which the biomaterials supplier is 
        not domiciled or subject to a service of process; or
            (2) an action against the manufacturer is barred by 
        applicable law.
    (c) Proceedings on Motion to Dismiss.--The following rules shall 
apply to any proceeding on a motion to dismiss filed under this 
section:
            (1) Affidavits relating to status of defendant.--
                    (A) Defendant affidavit.--The defendant in the 
                action may support a motion to dismiss by filing an 
                affidavit demonstrating that defendant is a 
                biomaterials supplier and that it is neither the 
                manufacturer nor the product seller of the medical 
                device which caused the harm alleged by the claimant.
                    (B) Response to motion to dismiss.--In response to 
                a motion to dismiss described in this section, the 
                claimant may submit an affidavit demonstrating why it 
                asserts that--
                            (i) the defendant who filed the motion to 
                        dismiss is not a biomaterials supplier with 
                        respect to the medical device which caused the 
                        harm alleged by the claimant;
                            (ii) on what basis it asserts that the 
                        supplier furnished raw materials or component 
                        parts in violation of applicable contractual 
                        requirements or specifications agreed to by the 
                        biomaterials supplier;
                            (iii) the biomaterials supplier 
                        intentionally and wrongfully withheld or 
                        misrepresented information that is material and 
                        relevant to the harm suffered by the claimant; 
                        or
                            (iv) the biomaterials supplier had actual 
                        knowledge of prospective fraudulent or 
                        malicious activities in the use of its supplies 
                        where such activities are relevant to the harm 
                        suffered by the claimant.
            (2) Effect of motion to dismiss on discovery.--If a 
        defendant files a motion to dismiss, no discovery shall be 
        permitted in connection with the action that is the subject of 
        the motion, unless the affidavits submitted in accordance with 
        this section raise material issues of fact concerning whether--
                    (A) the supplier furnished raw materials or 
                component parts in violation of applicable contractual 
                requirements or specifications agreed to by the 
                biomaterials supplier;
                    (B) the biomaterials supplier intentionally and 
                wrongfully withheld or misrepresented information that 
                is material and relevant to the harm suffered by the 
                claimant; or
                    (C) the biomaterials supplier had actual knowledge 
                of prospective fraudulent or malicious activities in 
                the use of its supplies where such activities are 
                relevant to the harm suffered by the claimant.
        Any such discovery shall be limited solely to such material 
        facts.
            (3) Response to motion to dismiss.--The court shall rule on 
        the motion to dismiss solely on the basis of the affidavits 
        filed under this section and on the basis of any evidence 
        developed in the course of discovery under paragraph (2) and 
        subsequently submitted to the court in accordance with 
        applicable rules of evidence.
    (d) Attorney Fees.--The court shall require the claimant to 
compensate the biomaterials supplier for attorney fees and costs, if--
            (1) the claimant named or joined the biomaterials supplier; 
        and
            (2) the court found the claim against the biomaterials 
        supplier to be without merit and frivolous.

SEC. 303. DEFINITIONS.

    For purposes of this title:
            (1) 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--
                    (A) 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
                    (B) suture materials used in implant procedures.
            (2) Notwithstanding paragraph (1), the term ``biomaterials 
        supplier'' excludes any person, with respect to a medical 
        device which is the subject of a product liability action--
                    (A) 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
                    (B) 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.
            (3) The term ``harm'' means any physical injury, illness, 
        disease, or death or damage to property caused by a product. 
        The term does not include commercial loss or loss or damage to 
        a product itself.
            (4) The term ``product liability action'' means a civil 
        action brought on any theory for harm caused by a product or 
        product use.

             TITLE IV--EFFECT ON OTHER LAW; EFFECTIVE DATE

SEC. 401. EFFECT ON OTHER LAW.

    Nothing in title I, II, or III shall be construed to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any law;
            (2) supersede any Federal law;
            (3) waive or affect any defense of sovereign immunity 
        asserted by the United States;
            (4) affect the applicability of any provision of chapter 97 
        of title 28, United States Code;
            (5) preempt State choice-of-law rules with respect to 
        claims brought by a foreign nation or a citizen of a foreign 
        nation; or
            (6) 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.

SEC. 402. FEDERAL CAUSE OF ACTION PRECLUDED.

    The district courts of the United States shall not have 
jurisdiction pursuant to this Act based on section 1331 or 1337 of 
title 28, United States Code.

SEC. 403. EFFECTIVE DATE.

    Titles I, II, and III shall apply with respect to actions which are 
commenced after the date of the enactment of this Act.
                                 <all>
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