```

[Journal of the House of Representatives, 1995]
[Friday, March 10, 1995 (42), Para 42.7 Roll No. 227]
[Pages 366-371]
[From the U.S. Government Publishing Office, www.gpo.gov]

para.42.7                    [Roll No. 227]

                                AYES--175

     Abercrombie
     Ackerman
     Andrews
     Baesler
     Baldacci
     Barcia
     Barrett (WI)
     Becerra
     Beilenson
     Bentsen
     Berman
     Bishop
     Bonior
     Borski
     Boucher
     Brewster
     Browder
     Brown (CA)
     Brown (FL)
     Brown (OH)
     Bryant (TX)
     Bunn
     Cardin
     Chapman
     Clay
     Clayton
     Clement
     Clyburn
     Coleman
     Collins (IL)
     Collins (MI)
     Condit
     Conyers
     Costello
     Coyne
     Cramer
     Danner
     de la Garza
     Deal
     DeFazio
     DeLauro
     Dellums
     Dicks
     Dingell
     Dixon
     Doggett
     Doyle
     Durbin
     Engel
     Eshoo
     Evans
     Farr
     Fattah
     Fazio
     Fields (LA)
     Filner
     Flake
     Foglietta
     Ford
     Frank (MA)
     Frost
     Furse
     Gejdenson
     Gibbons
     Gonzalez
     Gordon
     Green
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hayes
     Hefner
     Hilliard
     Hinchey
     Holden
     Hoyer
     Jackson-Lee
     Johnson (SD)
     Johnson, E.B.
     Johnston
     Kaptur
     Kennedy (MA)
     Kennedy (RI)
     Kennelly
     Kildee
     Klink
     LaFalce
     Lantos
     Laughlin
     Levin
     Lewis (GA)
     Lincoln
     Lipinski
     Lofgren
     Lowey
     Luther
     Maloney
     Manton
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy
     McDermott
     McHale
     McKinney
     Meehan
     Meek
     Menendez
     Mfume
     Miller (CA)
     Minge
     Mink
     Moakley
     Montgomery
     Moran
     Murtha
     Nadler
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pastor
     Payne (NJ)
     Pelosi
     Peterson (FL)
     Peterson (MN)
     Poshard
     Rahall
     Reed
     Reynolds
     Richardson
     Rivers
     Rose
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Schroeder
     Schumer
     Scott
     Serrano
     Skelton
     Slaughter
     Spratt
     Stark
     Stokes
     Studds
     Stupak
     Tanner
     Taylor (MS)
     Tejeda
     Thompson
     Thurman
     Torres
     Torricelli
     Traficant
     Tucker
     Velazquez

[[Page 367]]

     Vento
     Visclosky
     Volkmer
     Ward
     Waters
     Watt (NC)
     Waxman
     Wilson
     Wise
     Woolsey
     Wyden
     Wynn
     Yates

                                NOES--249

     Allard
     Archer
     Armey
     Bachus
     Baker (CA)
     Baker (LA)
     Ballenger
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Bereuter
     Bilbray
     Bilirakis
     Bliley
     Blute
     Boehlert
     Boehner
     Bonilla
     Bono
     Brownback
     Bryant (TN)
     Bunning
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Canady
     Castle
     Chabot
     Chambliss
     Chenoweth
     Christensen
     Chrysler
     Clinger
     Coble
     Coburn
     Collins (GA)
     Combest
     Cooley
     Cox
     Crane
     Crapo
     Cremeans
     Cunningham
     Davis
     DeLay
     Deutsch
     Diaz-Balart
     Dickey
     Dooley
     Doolittle
     Dornan
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Ehrlich
     Emerson
     English
     Ensign
     Everett
     Ewing
     Fawell
     Fields (TX)
     Flanagan
     Foley
     Forbes
     Fowler
     Fox
     Franks (CT)
     Franks (NJ)
     Frelinghuysen
     Frisa
     Funderburk
     Gallegly
     Ganske
     Gekas
     Geren
     Gilchrest
     Gillmor
     Gilman
     Goodlatte
     Goodling
     Goss
     Graham
     Greenwood
     Gunderson
     Gutknecht
     Hall (TX)
     Hamilton
     Hancock
     Hansen
     Harman
     Hastert
     Hastings (WA)
     Hayworth
     Hefley
     Heineman
     Herger
     Hilleary
     Hobson
     Hoekstra
     Hoke
     Horn
     Hostettler
     Houghton
     Hunter
     Hutchinson
     Hyde
     Inglis
     Istook
     Johnson (CT)
     Johnson, Sam
     Jones
     Kasich
     Kelly
     Kim
     King
     Kingston
     Kleczka
     Klug
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Lightfoot
     Linder
     Livingston
     LoBiondo
     Longley
     Lucas
     Manzullo
     Martini
     McCollum
     McCrery
     McDade
     McHugh
     McInnis
     McKeon
     McNulty
     Metcalf
     Meyers
     Mica
     Miller (FL)
     Mineta
     Molinari
     Mollohan
     Moorhead
     Morella
     Myers
     Myrick
     Nethercutt
     Neumann
     Ney
     Norwood
     Nussle
     Orton
     Oxley
     Packard
     Parker
     Paxon
     Payne (VA)
     Petri
     Pickett
     Pombo
     Pomeroy
     Porter
     Portman
     Pryce
     Quillen
     Quinn
     Radanovich
     Ramstad
     Regula
     Roberts
     Roemer
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roth
     Roukema
     Royce
     Salmon
     Sanford
     Sawyer
     Saxton
     Scarborough
     Schaefer
     Schiff
     Seastrand
     Sensenbrenner
     Shadegg
     Shaw
     Shays
     Shuster
     Sisisky
     Skaggs
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Solomon
     Souder
     Spence
     Stearns
     Stenholm
     Stockman
     Stump
     Talent
     Tate
     Tauzin
     Taylor (NC)
     Thomas
     Thornberry
     Thornton
     Tiahrt
     Torkildsen
     Upton
     Vucanovich
     Waldholtz
     Walker
     Walsh
     Wamp
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     White
     Whitfield
     Wicker
     Williams
     Wolf
     Young (AK)
     Young (FL)
     Zeliff
     Zimmer

                             NOT VOTING--10

     Bevill
     Cubin
     Gephardt
     Jacobs
     Jefferson
     Kanjorski
     McIntosh
     Rangel
     Riggs
     Towns
  So the amendment was not agreed to.
  The SPEAKER pro tempore, Mr. WALKER, assumed the Chair.
  When Mr. DREIER, Chairman, pursuant to House Resolution 109, reported 
the bill back to the House with an amendment adopted by the Committee.
  The previous question having been ordered by said resolution.
  The following amendment, reported from the Committee of the Whole 
House on the state of the Union, was agreed to:

           Strike out all after the enacting clause and insert:

     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.
Sec. 2. Findings and purposes.

                   TITLE I--PRODUCT LIABILITY REFORM

Sec. 101. Applicability and preemption.
Sec. 102. Liability rules applicable to product sellers.
Sec. 103. Defense based on claimant's use of intoxicating alcohol or 
              drugs.
Sec. 104. Misuse or alteration.
Sec. 105. Frivolous pleadings.
Sec. 106. Statute of repose.
Sec. 107. Foreign products.
Sec. 108. Definitions.

    TITLE II--LIMITATION ON SPECULATIVE AND ARBITRARY DAMAGE AWARDS

Sec. 201. Punitive damages as penalty in civil actions.
Sec. 202. Fair share rule for noneconomic damage awards.
Sec. 203. Limitation on noneconomic damages in health care liability 
              actions.
Sec. 204. 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--LIMITATIONS ON APPLICABILITY; EFFECTIVE DATE

Sec. 401. Application limited to interstate commerce.
Sec. 402. Effect on other law.
Sec. 403. Federal cause of action precluded.
Sec. 404. Effective date.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) the civil justice system, which is designed to 
     safeguard our most cherished rights, to remedy injustices, 
     and to defend our liberty, is increasingly being deployed to 
     abridge our rights, create injustice, and destroy our 
     liberty;
       (2) our Nation is overly litigious, the civil justice 
     system is overcrowded, sluggish, and excessively costly, and 
     the costs of lawsuits, both direct and indirect, are 
     inflicting serious and unnecessary injury on the national 
     economy;
       (3) excessive, unpredictable, and often arbitrary damage 
     awards and unfair allocations of liability have a direct and 
     undesirable effect on interstate commerce by increasing the 
     cost and decreasing the availability of goods and services;
       (4) the rules of law governing product liability actions, 
     damage awards, and allocations of liability have evolved 
     inconsistently within and among the several States, resulting 
     in a complex, contradictory, and uncertain regime that is 
     inequitable to both plaintiffs and defendants and unduly 
     burdens interstate commerce;
       (5) as a result of excessive, unpredictable, and often 
     arbitrary damage awards and unfair allocations of liability, 
     consumers have been adversely affected through the withdrawal 
     of products, producers, services, and service providers from 
     the national market, and from excessive liability costs 
     passed on to them through higher prices;
       (6) excessive, unpredictable, and often arbitrary damage 
     awards and unfair allocations of liability jeopardize the 
     financial well-being of many individuals as well as entire 
     industries, particularly the Nation's small businesses, and 
     adversely affects governments, taxpayers, nonprofit entities 
     and volunteer organizations;
       (7) the excessive costs of the civil justice system 
     undermine the ability of American companies to compete 
     internationally, and serve to decrease the number of jobs and 
     the amount of productive capital in the national economy;
       (8) the unpredictability of damage awards is inequitable to 
     both plaintiffs and defendants and has added considerably to 
     the high cost of liability insurance, making it difficult for 
     producers, consumers, and individuals to protect their 
     liability with any degree of confidence and at a reasonable 
     cost;
       (9) because of the national scope of the problems created 
     by the defects in the civil justice system, it is not 
     possible for the several States to enact laws that fully and 
     effectively respond to those problems;
       (10) it is the constitutional role of the national 
     government to remove barriers to interstate commerce; and
       (11) there is a need to restore rationality, certainty, and 
     fairness to the civil justice system in order to protect 
     against excessive, arbitrary, and uncertain damage awards and 
     to reduce the volume, costs, and delay of litigation.
       (b) Purposes.--Based upon the powers contained in Article 
     I, Section 8, Clause 3 of the United States Constitution, the 
     purposes of this Act are to promote the free flow of goods 
     and services and to lessen burdens on interstate commerce 
     by--
       (1) establishing certain uniform legal principles of 
     product liability which provide a fair balance among the 
     interests of product users, manufacturers, and product 
     sellers;
       (2) placing reasonable limits on damages over and above the 
     actual damages suffered by a claimant;
       (3) ensuring the fair allocation of liability in civil 
     actions;
       (4) reducing the unacceptable costs and delays of our civil 
     justice system caused by excessive litigation which harm both 
     plaintiffs and defendants; and
       (5) establishing greater fairness, rationality, and 
     predictability in the civil justice system.
                   TITLE I--PRODUCT LIABILITY REFORM

     SEC. 101. 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. 102. 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

[[Page 368]]

     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.
       (c) Rental and Leases.--Notwithstanding any other provision 
     of law, any person, except a person excluded from the 
     definition of product seller, engaged in the business of 
     renting or leasing a product shall be subject to liability 
     pursuant to subsection (a) of this section, but shall not be 
     liable to a claimant for the tortious act of another solely 
     by reason of ownership of such product.

     SEC. 103. 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. 104. MISUSE OR ALTERATION.

       (a) General Rule.--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, a 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. 105. 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. 106. 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.
       (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. 107. FOREIGN PRODUCTS.

       (a) General Rule.--In any product liability action for 
     injury that was sustained in the United States and that 
     relates to the purchase or use of a product manufactured 
     outside the United States by a foreign manufacturer, the 
     Federal court in which such action is brought shall have 
     jurisdiction over such manufacturer if the manufacturer knew 
     or reasonably should have known that the product would be 
     imported for sale or use in the United States.
       (b) Admission.--If in any product liability action a 
     foreign manufacturer of the product involved in such action 
     fails to furnish any testimony, document, or other thing upon 
     a duly issued discovery order by the court in such action, 
     such failure shall be deemed an admission of any fact with 
     respect to which the discovery order relates.
       (c) Process.--Process in an action described in subsection 
     (a) may be served wherever the foreign manufacturer is 
     located, has an agent, or transacts business.

     SEC. 108. 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;

[[Page 369]]

       (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--LIMITATION ON SPECULATIVE AND ARBITRARY DAMAGE AWARDS

     SEC. 201. PUNITIVE DAMAGES AS PENALTY IN CIVIL ACTIONS.

       (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 rights or 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 economic loss, or $250,000, whichever is 
     greater. This section shall be applied by the court and shall 
     not be disclosed to the jury.
       (c) Applicability.--Except as provided in section 401, this 
     section shall apply to any civil action brought in any 
     Federal or State court on any theory where punitive damages 
     are sought. This section does not create a cause of action 
     for punitive damages. This section does not preempt or 
     supersede any State or Federal law to the extent that such 
     law would further limit the award of punitive damages.
       (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) Considerations.--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.
       (f) 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. 202. FAIR SHARE RULE FOR NONECONOMIC DAMAGE AWARDS.

       (a) Fair Share of Liability Imposed According to Share of 
     Fault.--In any product liability or other civil action 
     brought in State or Federal court, a defendant shall be 
     liable only for the amount of noneconomic damages 
     attributable to such defendant in direct proportion to such 
     defendant's share of fault or responsibility for the 
     claimant's actual damages, as determined by the trier of 
     fact. In all such cases, the liability of a defendant for 
     noneconomic damages shall be several and not joint.
       (b) Applicability.--Except as provided in section 402, this 
     section shall apply to any product liability or other civil 
     action brought in any Federal or State court on any theory 
     where noneconomic damages are sought. This section does not 
     preempt or supersede any State or Federal law to the extent 
     that such law would further limit the application of the 
     theory of joint liability to any kind of damages.

     SEC. 203. LIMITATION ON NONECONOMIC DAMAGES IN HEALTH CARE 
                   LIABILITY ACTIONS.

       (a) Maximum Award of Noneconomic Damages.--In any health 
     care liability action, in addition to actual damages or 
     punitive damages, or both, a claimant may also be awarded 
     noneconomic damages, including damages awarded to compensate 
     injured feelings, such as pain and suffering and emotional 
     distress. The maximum amount of such damages that may be 
     awarded to a claimant shall be $250,000. Such maximum amount 
     shall apply regardless of the number of parties against whom 
     the action is brought, and regardless of the number of claims 
     or actions brought with respect to the health care injury. An 
     award for future noneconomic damages shall not be discounted 
     to present value. The jury shall not be informed about the 
     limitation on noneconomic damages, but an award for 
     noneconomic damages in excess of $250,000 shall be reduced 
     either before the entry of judgment or by amendment of the 
     judgment after entry. An award of damages for noneconomic 
     losses in excess of $250,000 shall be reduced to $250,000 
     before accounting for any other reduction in damages required 
     by law. If separate awards of damages for past and future 
     noneconomic damages are rendered and the combined award 
     exceeds $250,000, the award of damages for future noneconomic 
     losses shall be reduced first.
       (b) Applicability.--Except as provided in section 401, this 
     section shall apply to any health care liability action 
     brought in any Federal or State court on any theory or 
     pursuant to any alternative dispute resolution process where 
     noneconomic damages are sought. This section does not create 
     a cause of action for noneconomic damages. This section does 
     not preempt or supersede any

[[Page 370]]

     State or Federal law to the extent that such law would 
     further limit the award of noneconomic damages. This section 
     does not preempt any State law enacted before the date of the 
     enactment of this Act that places a cap on the total 
     liability in a health care liability action.
       (c) Definitions.--As used in this section:
       (1) The term ``claimant'' means any person who asserts a 
     health care liability claim or brings a health care liability 
     action, including a person who asserts or claims a right to 
     legal or equitable contribution, indemnity or subrogation, 
     arising out of a health care liability claim or action, and 
     any person on whose behalf such a claim is asserted or such 
     an action is brought, whether deceased, incompetent or a 
     minor.
       (2) The term ``economic loss'' has the same meaning as 
     defined at section 204(4).
       (3) The term ``health care liability action'' means a civil 
     action brought in a State or Federal court or pursuant to any 
     alternative dispute resolution process, against a health care 
     provider, an entity which is obligated to provide or pay for 
     health benefits under any health plan (including any person 
     or entity acting under a contract or arrangement to provide 
     or administer any health benefit), or the manufacturer, 
     distributor, supplier, marketer, promoter, or seller of a 
     medical product, in which the claimant alleges a claim 
     (including third party claims, cross claims, counter claims, 
     or distribution claims) based upon the provision of (or the 
     failure to provide or pay for) health care services or the 
     use of a medical product, regardless of the theory of 
     liability on which the claim is based, or the number of 
     plaintiffs, or defendants or causes of action.

     SEC. 204. DEFINITIONS.

       As used in this title:
       (1) The term ``actual damages'' means damages awarded to 
     pay for economic loss.
       (2) 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.
       (3) 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.
       (4) 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.
       (5) The term ``harm'' means any legally cognizable wrong or 
     injury for which punitive damages may be imposed.
       (6) The term ``noneconomic damages'' means damages other 
     than punitive damages or actual damages.
       (7) 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.
       (8) 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.

[[Page 371]]

     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 or 
     should have 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 or should have 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--LIMITATIONS ON APPLICABILITY; EFFECTIVE DATE

     SEC. 401. APPLICATION LIMITED TO INTERSTATE COMMERCE.

       Titles I, II, and III shall apply only to product liability 
     or other civil actions affecting interstate commerce. For 
     purposes of the preceding sentence, the term ``interstate 
     commerce'' means commerce among the several States or with 
     foreign nations, or in any territory of the United States or 
     in the District of Columbia, or between any such territory 
     and another, or between any such territory and any State or 
     foreign nation, or between the District of Columbia and any 
     State or territory or foreign nation.

     SEC. 402. 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. 403. 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. 404. 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.

  The bill, as amended, was ordered to be engrossed and read a third 
time, was read a third time by title.
  Mr. GORDON moved to recommit the bill to the Committee on the 
Judiciary with instructions to report the bill back to the House 
forthwith with the following amendment:

       Add at the end of the bill the following:

     SEC. 404. SERVICE OF PROCESS.

       This Act 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.
       Change the limit in section 201 on punitive damages to the 
     following: ``3 times the amount of damages awarded to the 
     claimant for the economic loss on which the claimant's action 
     is based, or $1,000,000, whichever is greater''.

  After debate,
  By unanimous consent, the previous question was ordered on the motion 
to recommit with instructions.
  The question being put, viva voce,
  Will the House recommit said bill with instructions?
  The SPEAKER pro tempore, Mr. WALKER, announced that the nays had it.
  Mr. GORDON demanded a recorded vote on agreeing to said motion, which 
demand was supported by one-fifth of a quorum, so a recorded vote was 
ordered.
  The vote was taken by electronic device.

It was decided in the

Yeas

195

negative

Nays

231
```