Calendar No. 91

104TH CONGRESS

1ST SESSION S. 565

[Report No. 104–69]

A BILL

To regulate interstate commerce by providing for a

poses.uniform product liability law, and for other purAPRIL 18, 1995

Reported with an amendment in the nature of a

substitute
II

Calendar No. 91

104TH CONGRESS

1ST SESSION S. 565

[Report No. 104–69]

To regulate interstate commerce by providing for a uniform product liability

law, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 15, 1995

Mr. ROCKEFELLER (for himself, Mr. GORTON, Mr. MCCONNELL, Mr.

LIEBERMAN, Mr. DODD, Mr. PRESSLER, Mr. HATCH, Mr. EXON, Mr.

INHOFE, Mrs. HUTCHISON, and Mr. CHAFEE) introduced the following

bill; which was read twice and referred to the Committee on Commerce,

Science, and Transportation

APRIL 18, 1995

Reported, under authority of the order of the Senate of April 6 (legislative

day, April 5), 1995, by Mr. PRESSLER, with an amendment in the nature

of a substitute

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To regulate interstate commerce by providing for a uniform

product liability law, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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•S 565 RS

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Product Liability Fair3 ness Act of 1995’’.

4 SEC. 2. DEFINITIONS.

5 For purposes of this Act, the following definitions

6 shall apply:

7 (1) CLAIMANT.—The term ‘‘claimant’’ means

8 any person who brings a product liability action and

9 any person on whose behalf such an action is

10 brought. If an action is brought through or on be11 half of—

12 (A) an estate, the term includes the dece13 dent; or

14 (B) a minor or incompetent, the term in15 cludes the legal guardian of the minor or in16 competent.

17 (2) CLAIMANT’S BENEFITS.—The term ‘‘claim18 ant’s benefits’’ means an amount equal to the sum

19 of—

20 (A) the amount paid to an employee as

21 workers’ compensation benefits; and

22 (B) the present value of all workers’ com23 pensation benefits to which the employee is or

24 would be entitled at the time of the determina25 tion of the claimant’s benefits, as determined by

26 the appropriate workers’ compensation author-
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1 ity for harm caused to an employee by a prod2 uct.

3 (3) CLEAR AND CONVINCING EVIDENCE.—

4 (A) IN GENERAL.—Subject to subpara5 graph (A), the term ‘‘clear and convincing evi6 dence’’ is that measure of degree of proof that

7 will produce in the mind of the trier of fact a

8 firm belief or conviction as to the truth of the

9 allegations sought to be established.

10 (B) DEGREE OF PROOF.—The degree of

11 proof required to satisfy the standard of clear

12 and convincing evidence shall be—

13 (i) greater than the degree of proof

14 required to meet the standard of prepon15 derance of the evidence; and

16 (ii) less than the degree of proof re17 quired to meet the standard of proof be18 yond a reasonable doubt.

19 (4) COMMERCIAL LOSS.—The term ‘‘commercial

20 loss’’ means any loss incurred in the course of an

21 ongoing business enterprise consisting of providing

22 goods or services for compensation.

23 (5) DURABLE GOOD.—The term ‘‘durable good’’

24 means any product, or any component of any such

25 product, which has a normal life expectancy of 3 or
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1 more years or is of a character subject to allowance

2 for depreciation under the Internal Revenue Code of

3 1986, and which is—

4 (A) used in a trade or business;

5 (B) held for the production of income; or

6 (C) sold or donated to a governmental or

7 private entity for the production of goods, train8 ing, demonstration, or any other similar pur9 pose.

10 (6) ECONOMIC LOSS.—The term ‘‘economic

11 loss’’ means any pecuniary loss resulting from harm

12 (including any medical expense loss, work loss, re13 placement services loss, loss due to death, burial

14 costs, and loss of business or employment opportuni15 ties), to the extent that recovery for the loss is per16 mitted under applicable State law.

17 (7) HARM.—The term ‘‘harm’’ means any phys18 ical injury, illness, disease, or death caused by a

19 product. The term does not include commercial loss

20 or loss or damage to a product itself.

21 (8) INSURER.—The term ‘‘insurer’’ means the

22 employer of a claimant, if the employer is self-in23 sured, or the workers’ compensation insurer of an

24 employer.
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1 (9) MANUFACTURER.—The term ‘‘manufac2 turer’’ means—

3 (A) any person who is engaged in a busi4 ness to produce, create, make, or construct any

5 product (or component part of a product), and

6 who designs or formulates the product (or com7 ponent part of the product), or has engaged an8 other person to design or formulate the product

9 (or component part of the product);

10 (B) a product seller, but only with respect

11 to those aspects of a product (or component

12 part of a product) which are created or affected

13 when, before placing the product in the stream

14 of commerce, the product seller produces, cre15 ates, makes, constructs, designs, or formulates,

16 or has engaged another person to design or for17 mulate, an aspect of a product (or component

18 part of a product) made by another person; or

19 (C) any product seller that is not described

20 in subparagraph (B) that holds itself out as a

21 manufacturer to the user of the product.

22 (10) NONECONOMIC LOSS.—The term ‘‘non23 economic loss’’—

24 (A) means subjective, nonmonetary loss re25 sulting from harm, including pain, suffering, in-
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1 convenience, mental suffering, emotional dis2 tress, loss of society and companionship, loss of

3 consortium, injury to reputation, and humilia4 tion; and

5 (B) does not include economic loss.

6 (11) PERSON.—The term ‘‘person’’ means any

7 individual, corporation, company, association, firm,

8 partnership, society, joint stock company, or any

9 other entity (including any governmental entity).

10 (12) PRODUCT.—

11 (A) IN GENERAL.—The term ‘‘product’’

12 means any object, substance, mixture, or raw

13 material in a gaseous, liquid, or solid state

14 that—

15 (i) is capable of delivery itself or as an

16 assembled whole, in a mixed or combined

17 state, or as a component part or ingredi18 ent;

19 (ii) is produced for introduction into

20 trade or commerce;

21 (iii) has intrinsic economic value; and

22 (iv) is intended for sale or lease to

23 persons for commercial or personal use.

24 (B) EXCLUSION.—The term ‘‘product’’

25 does not include—
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1 (i) tissue, organs, blood, and blood

2 products used for therapeutic or medical

3 purposes, except to the extent that such

4 tissue, organs, blood, and blood products

5 (or the provision thereof) are subject,

6 under applicable State law, to a standard

7 of liability other than negligence; and

8 (ii) electricity, water delivered by a

9 utility, natural gas, or steam.

10 (13) PRODUCT LIABILITY ACTION.—The term

11 ‘‘product liability action’’ means a civil action

12 brought on any theory for harm caused by a prod13 uct.

14 (14) PRODUCT SELLER.—

15 (A) IN GENERAL.—The term ‘‘product sell16 er’’ means a person who—

17 (i) in the course of a business con18 ducted for that purpose, sells, distributes,

19 leases, prepares, blends, packages, labels,

20 or otherwise is involved in placing a prod21 uct in the stream of commerce; or

22 (ii) installs, repairs, or maintains the

23 harm-causing aspect of the product.

24 (B) EXCLUSION.—The term ‘‘product sell25 er’’ does not include—
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1 (i) a seller or lessor of real property;

2 (ii) a provider of professional services

3 in any case in which the sale or use of a

4 product is incidental to the transaction and

5 the essence of the transaction is the fur6 nishing of judgment, skill, or services; or

7 (iii) any person who—

8 (I) acts in only a financial capac9 ity with respect to the sale of a prod10 uct; and

11 (II) leases a product under a

12 lease arrangement in which the selec13 tion, possession, maintenance, and op14 eration of the product are controlled

15 by a person other than the lessor.

16 (15) STATE.—The term ‘‘State’’ means each of

17 the several States of the United States, the District

18 of Columbia, the Commonwealth of Puerto Rico, the

19 Virgin Islands, Guam, American Samoa, and the

20 Commonwealth of the Northern Mariana Islands,

21 and any other territory or possession of the United

22 States, or any political subdivision thereof.

23 (16) TIME OF DELIVERY.—The term ‘‘time of

24 delivery’’ means the time when a product is delivered

25 to the first purchaser or lessee of the product that
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1 was not involved in manufacturing or selling the

2 product, or using the product as a component part

3 of another product to be sold.

4 SEC. 3. APPLICABILITY; PREEMPTION.

5 (a) APPLICABILITY.—

6 (1) ACTIONS COVERED.—Subject to paragraph

7 (2), this Act applies to any product liability action

8 commenced on or after the date of enactment of this

9 Act, without regard to whether the harm that is the

10 subject of the action or the conduct that caused the

11 harm occurred before such date of enactment.

12 (2) ACTIONS EXCLUDED.—

13 (A) ACTIONS FOR DAMAGE TO PRODUCT

14 OR COMMERCIAL LOSS.—A civil action brought

15 for loss or damage to a product itself or for

16 commercial loss, shall not be subject to the pro17 visions of this Act governing product liability

18 actions, but shall be subject to any applicable

19 commercial or contract law.

20 (B) ACTIONS FOR NEGLIGENT ENTRUST21 MENT.—A civil action for negligent entrustment

22 shall not be subject to the provisions of this Act

23 governing product liability actions, but shall be

24 subject to any applicable State law.

25 (b) SCOPE OF PREEMPTION.—
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1 (1) IN GENERAL.—This Act supersedes a State

2 law only to the extent that State law applies to an

3 issue covered under this Act.

4 (2) ISSUES NOT COVERED UNDER THIS ACT.—

5 Any issue that is not covered under this Act, includ6 ing any standard of liability applicable to a manu7 facturer, shall not be subject to this Act, but shall

8 be subject to applicable Federal or State law.

9 (c) STATUTORY CONSTRUCTION.—Nothing in this

10 Act may be construed to—

11 (1) waive or affect any defense of sovereign im12 munity asserted by any State under any law;

13 (2) supersede any Federal law, except the Act

14 of April 22, 1908 (35 Stat. 65 et seq., chapter 149;

15 45 U.S.C. 51 et seq.) (commonly known as the

16 ‘‘Federal Employers’ Liability Act’’) and the

17 Longshore and Harbor Workers’ Compensation Act

18 (33 U.S.C. 901 et seq.);

19 (3) waive or affect any defense of sovereign im20 munity asserted by the United States;

21 (4) affect the applicability of any provision of

22 chapter 97 of title 28, United States Code;

23 (5) preempt State choice-of-law rules with re24 spect to claims brought by a foreign nation or a citi25 zen of a foreign nation;
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1 (6) affect the right of any court to transfer

2 venue or to apply the law of a foreign nation or to

3 dismiss a claim of a foreign nation or of a citizen

4 of a foreign nation on the ground of inconvenient

5 forum; or

6 (7) supersede any statutory or common law, in7 cluding any law providing for an action to abate a

8 nuisance, that authorizes a State or person to insti9 tute an action for civil damages or civil penalties,

10 cleanup costs, injunctions, restitution, cost recovery,

11 punitive damages, or any other form of relief relat12 ing to contamination or pollution of the environment

13 (as defined in section 101(8) of the Comprehensive

14 Environmental Response, Compensation, and Liabil15 ity Act of 1980, 42 U.S.C. 9601(8)) or the threat

16 of such contamination or pollution.

17 (d) CONSTRUCTION.—To promote uniformity of law

18 in the various jurisdictions, this Act shall be construed and

19 applied after consideration of its legislative history.

20 (e) EFFECT OF COURT OF APPEALS DECISIONS.—

21 Notwithstanding any other provision of law, any decision

22 of a circuit court of appeals interpreting a provision of

23 this Act (except to the extent that the decision is overruled

24 or otherwise modified by the Supreme Court) shall be con25 sidered a controlling precedent with respect to any subse-
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1 quent decision made concerning the interpretation of such

2 provision by any Federal or State court within the geo3 graphical boundaries of the area under the jurisdiction of

4 the circuit court of appeals.

5 SEC. 4. ALTERNATIVE DISPUTE RESOLUTION PROCE6 DURES.

7 (a) IN GENERAL.—

8 (1) SERVICE OF OFFER.—A claimant or a de9 fendant in a product liability action that is subject

10 to this Act may, not later than 60 days after the

11 service of the initial complaint of the claimant or the

12 applicable deadline for a responsive pleading (which13 ever is later), serve upon an adverse party an offer

14 to proceed pursuant to any voluntary, nonbinding al15 ternative dispute resolution procedure established or

16 recognized under the law of the State in which the

17 product liability action is brought or under the rules

18 of the court in which such action is maintained.

19 (2) WRITTEN NOTICE OF ACCEPTANCE OR RE20 JECTION.—Except as provided in paragraph (3), not

21 later than 10 days after the service of an offer to

22 proceed under paragraph (1), an offeree shall file a

23 written notice of acceptance or rejection of the offer.

24 (3) EXTENSION.—The court may, upon motion

25 by an offeree made prior to the expiration of the 10-
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1 day period specified in paragraph (2), extend the pe2 riod for filing a written notice under such paragraph

3 for a period of not more than 60 days after the date

4 of expiration of the period specified in paragraph

5 (2). Discovery may be permitted during such period.

6 (b) DEFENDANT’S PENALTY FOR UNREASONABLE

7 REFUSAL.—

8 (1) IN GENERAL.—The court shall assess rea9 sonable attorney’s fees (calculated in accordance

10 with paragraph (2)) and costs against the offeree,

11 if—

12 (A) a defendant as an offeree refuses to

13 proceed pursuant to the alternative dispute res14 olution procedure referred to subsection (a)(1);

15 (B) final judgment is entered against the

16 defendant for harm caused by the product that

17 is the subject of the action; and

18 (C) the refusal by the defendant to proceed

19 pursuant to such alternative dispute resolution

20 was unreasonable or not made in good faith.

21 (2) REASONABLE ATTORNEY’S FEES.—For pur22 poses of this subsection, a reasonable attorney’s fee

23 shall be calculated on the basis of an hourly rate,

24 which shall not exceed the hourly rate that is consid25 ered acceptable in the community in which the attor-
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1 ney practices law, taking into consideration the

2 qualifications and experience of the attorney and the

3 complexity of the case.

4 (c) GOOD FAITH REFUSAL.—In determining whether

5 the refusal of an offeree to proceed pursuant to the alter6 native dispute procedure referred to in subsection (a)(1)

7 was unreasonable or not made in good faith, the court

8 shall consider such factors as the court considers appro9 priate.

10 SEC. 5. LIABILITY RULES APPLICABLE TO PRODUCT SELL11 ERS.

12 (a) GENERAL RULE.—

13 (1) IN GENERAL.—In any product liability ac14 tion that is subject to this Act filed by a claimant

15 for harm caused by a product, a product seller other

16 than a manufacturer shall be liable to a claimant,

17 only if the claimant establishes—

18 (A) that—

19 (i) the product that allegedly caused

20 the harm that is the subject of the com21 plaint was sold by the product seller;

22 (ii) the product seller failed to exer23 cise reasonable care with respect to the

24 product; and
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1 (iii) the failure to exercise reasonable

2 care was a proximate cause of harm to the

3 claimant;

4 (B) that—

5 (i) the product seller made an express

6 warranty applicable to the product that al7 legedly caused the harm that is the subject

8 of the complaint, independent of any ex9 press warranty made by a manufacturer as

10 to the same product;

11 (ii) the product failed to conform to

12 the warranty; and

13 (iii) the failure of the product to con14 form to the warranty caused harm to the

15 claimant; or

16 (C) that—

17 (i) the product seller engaged in in18 tentional wrongdoing, as determined under

19 applicable State law; and

20 (ii) such intentional wrongdoing was a

21 proximate cause of the harm that is the

22 subject of the complaint.

23 (2) REASONABLE OPPORTUNITY FOR INSPEC24 TION.—For purposes of paragraph (1)(A)(ii), a

25 product seller shall not be considered to have failed
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1 to exercise reasonable care with respect to a product

2 based upon an alleged failure to inspect a product

3 if the product seller had no reasonable opportunity

4 to inspect the product that allegedly caused harm to

5 the claimant.

6 (b) SPECIAL RULE.—A product seller shall be

7 deemed to be liable as a manufacturer of a product for

8 harm caused by the product if—

9 (1) the manufacturer is not subject to service of

10 process under the laws of any State in which the ac11 tion may be brought; or

12 (2) the court determines that the claimant

13 would be unable to enforce a judgment against the

14 manufacturer.

15 SEC. 6. DEFENSES INVOLVING INTOXICATING ALCOHOL OR

16 DRUGS.

17 (a) GENERAL RULE.—Notwithstanding any other

18 provision of law, a defendant in a product liability action

19 that is subject to this Act shall have a complete defense

20 in the action if the defendant proves that—

21 (1) the claimant was under the influence of in22 toxicating alcohol or any drug that may not lawfully

23 be sold over-the-counter without a prescription, and

24 was not prescribed by a physician for use by the

25 claimant; and
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1 (2) the claimant, as a result of the influence of

2 the alcohol or drug, was more than 50 percent re3 sponsible for the accident or event which resulted in

4 the harm to the claimant.

5 (b) CONSTRUCTION.—For purposes of this section,

6 the determination of whether a person was intoxicated or

7 was under the influence of intoxicating alcohol or any drug

8 shall be made pursuant to applicable State law.

9 SEC. 7. REDUCTION FOR MISUSE OR ALTERATION OF

10 PRODUCT.

11 (a) GENERAL RULE.—

12 (1) IN GENERAL.—Except as provided in sub13 section (c), in a product liability action that is sub14 ject to this Act, the damages for which a defendant

15 is otherwise liable under applicable State law shall

16 be reduced by the percentage of responsibility for

17 the harm to the claimant attributable to misuse or

18 alteration of a product by any person if the defend19 ant establishes that such percentage of the harm

20 was proximately caused by a use or alteration of a

21 product—

22 (A) in violation of, or contrary to, the ex23 press warnings or instructions of the defendant

24 if the warnings or instructions are determined
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1 to be adequate pursuant to applicable State

2 law; or

3 (B) involving a risk of harm which was

4 known or should have been known by the ordi5 nary person who uses or consumes the product

6 with the knowledge common to the class of per7 sons who used or would be reasonably antici8 pated to use the product.

9 (2) USE INTENDED BY A MANUFACTURER IS

10 NOT MISUSE OR ALTERATION.—For the purposes of

11 this Act, a use of a product that is intended by the

12 manufacturer of the product does not constitute a

13 misuse or alteration of the product.

14 (b) STATE LAW.—Notwithstanding section 3(b), sub15 section (a) of this section shall supersede State law con16 cerning misuse or alteration of a product only to the ex17 tent that State law is inconsistent with such subsection.

18 (c) WORKPLACE INJURY.—Notwithstanding sub19 section (a), the amount of damages for which a defendant

20 is otherwise liable under State law shall not be reduced

21 by the application of this section with respect to the con22 duct of any employer or coemployee of the plaintiff who

23 is, under applicable State law concerning workplace inju24 ries, immune from being subject to an action by the claim25 ant.
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1 SEC. 8. UNIFORM STANDARDS FOR AWARD OF PUNITIVE

2 DAMAGES.

3 (a) GENERAL RULE.—Punitive damages may, to the

4 extent permitted by applicable State law, be awarded

5 against a defendant in a product liability action that is

6 subject to this Act if the claimant establishes by clear and

7 convincing evidence that the harm that is the subject of

8 the action was the result of conduct that was carried out

9 by the defendant with a conscious, flagrant indifference

10 to the safety of others.

11 (b) LIMITATION ON AMOUNT.—The amount of puni12 tive damages that may be awarded for a claim in any prod13 uct liability action that is subject to this Act shall not ex14 ceed 3 times the amount awarded to the claimant for the

15 economic injury on which the claim is based, or $250,000,

16 whichever is greater. This subsection shall be applied by

17 the court and the application of this subsection shall not

18 be disclosed to the jury.

19 (c) BIFURCATION AT REQUEST OF EITHER PARTY.—

20 (1) IN GENERAL.—At the request of either

21 party, the trier of fact in a product liability action

22 that is subject to this Act shall consider in a sepa23 rate proceeding whether punitive damages are to be

24 awarded for the harm that is the subject of the ac25 tion and the amount of the award.

26 (2) ADMISSIBLE EVIDENCE.—
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1 (A) INADMISSIBILITY OF EVIDENCE REL2 ATIVE ONLY TO A CLAIM OF PUNITIVE DAM3 AGES IN A PROCEEDING CONCERNING COMPEN4 SATORY DAMAGES.—If either party requests a

5 separate proceeding under paragraph (1), in

6 any proceeding to determine whether the claim7 ant may be awarded compensatory damages,

8 any evidence that is relevant only to the claim

9 of punitive damages, as determined by applica10 ble State law, shall be inadmissible.

11 (B) PROCEEDING WITH RESPECT TO PUNI12 TIVE DAMAGES.—Evidence that is admissible in

13 the separate proceeding under paragraph (1)—

14 (i) may include evidence of the profits

15 of the defendant, if any, from the alleged

16 wrongdoing; and

17 (ii) shall not include evidence of the

18 overall assets of the defendant.

19 SEC. 9. UNIFORM TIME LIMITATIONS ON LIABILITY.

20 (a) STATUTE OF LIMITATIONS.—

21 (1) IN GENERAL.—Except as provided in para22 graph (2) and subsection (b), a product liability ac23 tion that is subject to this Act may be filed not later

24 than 2 years after the date on which the claimant

25 discovered or, in the exercise of reasonable care,
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1 should have discovered, the harm that is the subject

2 of the action and the cause of the harm.

3 (2) EXCEPTIONS.—

4 (A) PERSON WITH A LEGAL DISABILITY.—

5 A person with a legal disability (as determined

6 under applicable law) may file a product liabil7 ity action that is subject to this Act not later

8 than 2 years after the date on which the person

9 ceases to have the legal disability.

10 (B) EFFECT OF STAY OR INJUNCTION.—If

11 the commencement of a civil action that is sub12 ject to this Act is stayed or enjoined, the run13 ning of the statute of limitations under this sec14 tion shall be suspended until the end of the pe15 riod that the stay or injunction is in effect.

16 (b) STATUTE OF REPOSE.—

17 (1) IN GENERAL.—Subject to paragraphs (2)

18 and (3), no product liability action that is subject to

19 this Act concerning a product that is a durable good

20 alleged to have caused harm (other than toxic harm)

21 may be filed after the 20-year period beginning at

22 the time of delivery of the product.

23 (2) STATE LAW.—Notwithstanding paragraph

24 (1), if pursuant to an applicable State law, an action

25 described in such paragraph is required to be filed
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1 during a period that is shorter than the 20-year pe2 riod specified in such paragraph, the State law shall

3 apply with respect to such period.

4 (3) EXCEPTION.—A motor vehicle, vessel, air5 craft, or train that is used primarily to transport

6 passengers for hire shall not be subject to this sub7 section.

8 (c) TRANSITIONAL PROVISION RELATING TO EXTEN9 SION OF PERIOD FOR BRINGING CERTAIN ACTIONS.—If

10 any provision of subsection (a) or (b) shortens the period

11 during which a product liability action that could be other12 wise brought pursuant to another provision of law, the

13 claimant may, notwithstanding subsections (a) and (b),

14 bring the product liability action pursuant to this Act not

15 later than 1 year after the date of enactment of this Act.

16 SEC. 10. SEVERAL LIABILITY FOR NONECONOMIC LOSS.

17 (a) GENERAL RULE.—In a product liability action

18 that is subject to this Act, the liability of each defendant

19 for noneconomic loss shall be several only and shall not

20 be joint.

21 (b) AMOUNT OF LIABILITY.—

22 (1) IN GENERAL.—Each defendant shall be lia23 ble only for the amount of noneconomic loss allo24 cated to the defendant in direct proportion to the

25 percentage of responsibility of the defendant (deter-
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1 mined in accordance with paragraph (2)) for the

2 harm to the claimant with respect to which the de3 fendant is liable. The court shall render a separate

4 judgment against each defendant in an amount de5 termined pursuant to the preceding sentence.

6 (2) PERCENTAGE OF RESPONSIBILITY.—For

7 purposes of determining the amount of noneconomic

8 loss allocated to a defendant under this section, the

9 trier of fact shall determine the percentage of re10 sponsibility of each person responsible for the

11 amount of noneconomic loss caused to the claimant,

12 whether or not such person is a party to the action.

13 SEC. 11. WORKERS’ COMPENSATION SUBROGATION STAND14 ARDS.

15 (a) GENERAL RULE.—

16 (1) RIGHT OF SUBROGATION.—

17 (A) IN GENERAL.—An insurer shall have a

18 right of subrogation against a manufacturer or

19 product seller to recover any claimant’s benefits

20 relating to harm that is the subject of a product

21 liability action that is subject to this Act.

22 (B) WRITTEN NOTIFICATION.—To assert a

23 right of subrogation under subparagraph (A),

24 the insurer shall provide written notice to the
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1 court in which the product liability action is

2 brought.

3 (C) INSURER NOT REQUIRED TO BE A

4 PARTY.—An insurer shall not be required to be

5 a necessary and proper party in a product li6 ability action covered under subparagraph (A).

7 (2) SETTLEMENTS AND OTHER LEGAL PRO8 CEEDINGS.—

9 (A) IN GENERAL.—In any proceeding re10 lating to harm or settlement with the manufac11 turer or product seller by a claimant who files

12 a product liability action that is subject to this

13 Act, an insurer may participate to assert a

14 right of subrogation for claimant’s benefits with

15 respect to any payment made by the manufac16 turer or product seller by reason of such harm,

17 without regard to whether the payment is

18 made—

19 (i) as part of a settlement;

20 (ii) in satisfaction of judgment;

21 (iii) as consideration for a covenant

22 not to sue; or

23 (iv) in another manner.

24 (B) WRITTEN CONSENT.—Except as pro25 vided in subparagraph (C)—
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1 (i) an employee shall not make any

2 settlement with or accept any payment

3 from the manufacturer or product seller

4 without the written consent of the insurer;

5 and

6 (ii) no release to or agreement with

7 the manufacturer or product seller de8 scribed in clauses (i) through (iv) of sub9 paragraph (A) shall be valid or enforceable

10 for any purpose without the consent of the

11 insurer.

12 (C) EXEMPTION.—Subparagraph (B) shall

13 not apply in any case in which the insurer has

14 been compensated for the full amount of the

15 claimant’s benefits.

16 (3) HARM RESULTING FROM ACTION OF EM17 PLOYER OR COEMPLOYEE.—

18 (A) IN GENERAL.—If, with respect to a

19 product liability action that is subject to this

20 Act, the manufacturer or product seller at21 tempts to persuade the trier of fact that the

22 harm to the claimant was caused by the fault

23 of the employer of the claimant or any

24 coemployee of the claimant, the issue of that

25 fault shall be submitted to the trier of fact, but
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1 only after the manufacturer or product seller

2 has provided timely written notice to the em3 ployer.

4 (B) RIGHTS OF EMPLOYER.—

5 (i) IN GENERAL.—Notwithstanding

6 any other provision of law, with respect to

7 an issue of fault submitted to a trier of

8 fact pursuant to subparagraph (A), an em9 ployer shall, in the same manner as any

10 party in the action (even if the employer is

11 not a named party in the action), have the

12 right to—

13 (I) appear;

14 (II) be represented;

15 (III) introduce evidence;

16 (IV) cross-examine adverse wit17 nesses; and

18 (V) present arguments to the

19 trier of fact.

20 (ii) LAST ISSUE.—The issue of harm

21 resulting from an action of an employer or

22 coemployee shall be the last issue that is

23 presented to the trier of fact.

24 (C) REDUCTION OF DAMAGES.—If the trier

25 of fact finds by clear and convincing evidence
27

•S 565 RS

1 that the harm to the claimant that is the sub2 ject of the product liability action was caused

3 by the fault of the employer or a coemployee of

4 the claimant—

5 (i) the court shall reduce by the

6 amount of the claimant’s benefits—

7 (I) the damages awarded against

8 the manufacturer or product seller;

9 and

10 (II) any corresponding insurer’s

11 subrogation lien; and

12 (ii) the manufacturer or product seller

13 shall have no further right by way of con14 tribution or otherwise against the em15 ployer.

16 (D) CERTAIN RIGHTS OF SUBROGATION

17 NOT AFFECTED.—Notwithstanding a finding by

18 the trier of fact described in subparagraph (C),

19 the insurer shall not lose any right of subroga20 tion related to any—

21 (i) intentional tort committed against

22 the claimant by a coemployee; or

23 (ii) act committed by a coemployee

24 outside the scope of normal work practices.
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•S 565 RS

1 (b) ATTORNEY’S FEES.—If, in a product liability ac2 tion that is subject to this section, the court finds that

3 harm to a claimant was not caused by the fault of the

4 employer or a coemployee of the claimant, the manufac5 turer or product seller shall reimburse the insurer for rea6 sonable attorney’s fees and court costs incurred by the in7 surer in the action, as determined by the court.

8 SEC. 12. FEDERAL CAUSE OF ACTION PRECLUDED.

9 The district courts of the United States shall not

10 have jurisdiction under section 1331 or 1337 of title 28,

11 United States Code, over any product liability action cov12 ered under this Act.

13 SECTION 1. SHORT TITLE.

14 This Act may be cited as the ‘‘Product Liability Fair15 ness Act of 1995’’.

16 TITLE I—PRODUCT LIABILITY

17 SEC. 101. DEFINITIONS.

18 For purposes of this Act, the following definitions shall

19 apply:

20 (1) CLAIMANT.—The term ‘‘claimant’’ means

21 any person who brings a product liability action and

22 any person on whose behalf such an action is brought.

23 If an action is brought through or on behalf of—

24 (A) an estate, the term includes the dece25 dent; or
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•S 565 RS

1 (B) a minor or incompetent, the term in2 cludes the legal guardian of the minor or incom3 petent.

4 (2) CLAIMANT’S BENEFITS.—The term ‘‘claim5 ant’s benefits’’ means an amount equal to the sum

6 of—

7 (A) the amount paid to an employee as

8 workers’ compensation benefits; and

9 (B) the present value of all workers’ com10 pensation benefits to which the employee is or

11 would be entitled at the time of the determina12 tion of the claimant’s benefits, as determined by

13 the appropriate workers’ compensation authority

14 for harm caused to an employee by a product.

15 (3) CLEAR AND CONVINCING EVIDENCE.—

16 (A) IN GENERAL.—Subject to subparagraph

17 (A), the term ‘‘clear and convincing evidence’’ is

18 that measure of degree of proof that will produce

19 in the mind of the trier of fact a firm belief or

20 conviction as to the truth of the allegations

21 sought to be established.

22 (B) DEGREE OF PROOF.—The degree of

23 proof required to satisfy the standard of clear

24 and convincing evidence shall be—
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•S 565 RS

1 (i) greater than the degree of proof re2 quired to meet the standard of preponder3 ance of the evidence; and

4 (ii) less than the degree of proof re5 quired to meet the standard of proof beyond

6 a reasonable doubt.

7 (4) COMMERCIAL LOSS.—The term ‘‘commercial

8 loss’’ means any loss or damage to a product itself,

9 loss relating to a dispute over its value, or consequen10 tial economic loss the recovery of which is governed by

11 the Uniform Commercial Code or analogous State

12 commercial law, not including harm.

13 (5) DURABLE GOOD.—The term ‘‘durable good’’

14 means any product, or any component of any such

15 product, which has a normal life expectancy of 3 or

16 more years or is of a character subject to allowance

17 for depreciation under the Internal Revenue Code of

18 1986, and which is—

19 (A) used in a trade or business;

20 (B) held for the production of income; or

21 (C) sold or donated to a governmental or

22 private entity for the production of goods, train23 ing, demonstration, or any other similar pur24 pose.
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•S 565 RS

1 (6) ECONOMIC LOSS.—The term ‘‘economic loss’’

2 means any pecuniary loss resulting from harm (in3 cluding any medical expense loss, work loss, replace4 ment services loss, loss due to death, burial costs, and

5 loss of business or employment opportunities), to the

6 extent that recovery for the loss is permitted under

7 applicable State law.

8 (7) HARM.—The term ‘‘harm’’ means any phys9 ical injury, illness, disease, or death, or damage to

10 property, caused by a product. The term does not in11 clude commercial loss or loss or damage to a product

12 itself.

13 (8) INSURER.—The term ‘‘insurer’’ means the

14 employer of a claimant, if the employer is self-in15 sured, or the workers’ compensation insurer of an em16 ployer.

17 (9) MANUFACTURER.—The term ‘‘manufacturer’’

18 means—

19 (A) any person who is engaged in a busi20 ness to produce, create, make, or construct any

21 product (or component part of a product), and

22 who designs or formulates the product (or compo23 nent part of the product), or has engaged another

24 person to design or formulate the product (or

25 component part of the product);
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•S 565 RS

1 (B) a product seller, but only with respect

2 to those aspects of a product (or component part

3 of a product) which are created or affected when,

4 before placing the product in the stream of com5 merce, the product seller produces, creates,

6 makes, constructs, designs, or formulates, or has

7 engaged another person to design or formulate,

8 an aspect of a product (or component part of

9 a product) made by another person; or

10 (C) any product seller that is not described

11 in subparagraph (B) that holds itself out as a

12 manufacturer to the user of the product.

13 (10) NONECONOMIC LOSS.—The term ‘‘non14 economic loss’’—

15 (A) means subjective, nonmonetary loss re16 sulting from harm, including pain, suffering, in17 convenience, mental suffering, emotional distress,

18 loss of society and companionship, loss of consor19 tium, injury to reputation, and humiliation;

20 and

21 (B) does not include economic loss.

22 (11) PERSON.—The term ‘‘person’’ means any

23 individual, corporation, company, association, firm,

24 partnership, society, joint stock company, or any

25 other entity (including any governmental entity).
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•S 565 RS

1 (12) PRODUCT.—

2 (A) IN GENERAL.—The term ‘‘product’’

3 means any object, substance, mixture, or raw

4 material in a gaseous, liquid, or solid state

5 that—

6 (i) is capable of delivery itself or as an

7 assembled whole, in a mixed or combined

8 state, or as a component part or ingredient;

9 (ii) is produced for introduction into

10 trade or commerce;

11 (iii) has intrinsic economic value; and

12 (iv) is intended for sale or lease to per13 sons for commercial or personal use.

14 (B) EXCLUSION.—The term ‘‘product’’ does

15 not include—

16 (i) tissue, organs, blood, and blood

17 products used for therapeutic or medical

18 purposes, except to the extent that such tis19 sue, organs, blood, and blood products (or

20 the provision thereof) are subject, under ap21 plicable State law, to a standard of liability

22 other than negligence; and

23 (ii) electricity, water delivered by a

24 utility, natural gas, or steam.
34

•S 565 RS

1 (13) PRODUCT LIABILITY ACTION.—The term

2 ‘‘product liability action’’ means a civil action

3 brought on any theory for harm caused by a product.

4 (14) PRODUCT SELLER.—

5 (A) IN GENERAL.—The term ‘‘product sell6 er’’ means a person who—

7 (i) in the course of a business con8 ducted for that purpose, sells, distributes,

9 rents, leases, prepares, blends, packages, la10 bels, or otherwise is involved in placing a

11 product in the stream of commerce; or

12 (ii) installs, repairs, refurbishes, recon13 ditions, or maintains the harm-causing as14 pect of the product.

15 (B) EXCLUSION.—The term ‘‘product seller’’

16 does not include—

17 (i) a seller or lessor of real property;

18 (ii) a provider of professional services

19 in any case in which the sale or use of a

20 product is incidental to the transaction and

21 the essence of the transaction is the furnish22 ing of judgment, skill, or services; or

23 (iii) any person who—
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•S 565 RS

1 (I) acts in only a financial capac2 ity with respect to the sale of a prod3 uct; or

4 (II) leases a product under a lease

5 arrangement in which the lessor does

6 not initially select the leased product

7 and does not during the lease term or8 dinarily control the daily operations

9 and maintenance of the product.

10 (15) STATE.—The term ‘‘State’’ means each of

11 the several States of the United States, the District of

12 Columbia, the Commonwealth of Puerto Rico, the Vir13 gin Islands, Guam, American Samoa, and the Com14 monwealth of the Northern Mariana Islands, and any

15 other territory or possession of the United States, or

16 any political subdivision thereof.

17 (16) TIME OF DELIVERY.—The term ‘‘time of de18 livery’’ means the time when a product is delivered

19 to the first purchaser or lessee of the product that was

20 not involved in manufacturing or selling the product,

21 or using the product as a component part of another

22 product to be sold.

23 SEC. 102. APPLICABILITY; PREEMPTION.

24 (a) APPLICABILITY.—
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•S 565 RS

1 (1) ACTIONS COVERED.—Subject to paragraph

2 (2), this title applies to any product liability action

3 commenced on or after the date of enactment of this

4 Act, without regard to whether the harm that is the

5 subject of the action or the conduct that caused the

6 harm occurred before such date of enactment.

7 (2) ACTIONS EXCLUDED.—

8 (A) ACTIONS FOR DAMAGE TO PRODUCT OR

9 COMMERCIAL LOSS.—A civil action brought for

10 loss or damage to a product itself or for commer11 cial loss, shall not be subject to the provisions of

12 this title governing product liability actions, but

13 shall be subject to any applicable commercial or

14 contract law.

15 (B) ACTIONS FOR NEGLIGENT ENTRUST16 MENT.—A civil action for negligent entrustment

17 shall not be subject to the provisions of this title

18 governing product liability actions, but shall be

19 subject to any applicable State law.

20 (b) SCOPE OF PREEMPTION.—

21 (1) IN GENERAL.—This Act supersedes a State

22 law only to the extent that State law applies to an

23 issue covered under this title.

24 (2) ISSUES NOT COVERED UNDER THIS ACT.—

25 Any issue that is not covered under this title, includ-
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•S 565 RS

1 ing any standard of liability applicable to a manu2 facturer, shall not be subject to this title, but shall be

3 subject to applicable Federal or State law.

4 (c) STATUTORY CONSTRUCTION.—Nothing in this title

5 may be construed to—

6 (1) waive or affect any defense of sovereign im7 munity asserted by any State under any law;

8 (2) supersede any Federal law;

9 (3) waive or affect any defense of sovereign im10 munity asserted by the United States;

11 (4) affect the applicability of any provision of

12 chapter 97 of title 28, United States Code;

13 (5) preempt State choice-of-law rules with re14 spect to claims brought by a foreign nation or a citi15 zen of a foreign nation;

16 (6) affect the right of any court to transfer venue

17 or to apply the law of a foreign nation or to dismiss

18 a claim of a foreign nation or of a citizen of a foreign

19 nation on the ground of inconvenient forum; or

20 (7) supersede or modify any statutory or com21 mon law, including any law providing for an action

22 to abate a nuisance, that authorizes a person to insti23 tute an action for civil damages or civil penalties,

24 cleanup costs, injunctions, restitution, cost recovery,

25 punitive damages, or any other form of relief for re-
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•S 565 RS

1 mediation of the environment (as defined in section

2 101(8) of the Comprehensive Environmental Re3 sponse, Compensation, and Liability Act of 1980, 42

4 U.S.C. 9601(8)) or the threat of such remediation.

5 (d) CONSTRUCTION.—To promote uniformity of law in

6 the various jurisdictions, this title shall be construed and

7 applied after consideration of its legislative history.

8 (e) EFFECT OF COURT OF APPEALS DECISIONS.—Not9 withstanding any other provision of law, any decision of

10 a circuit court of appeals interpreting a provision of this

11 title (except to the extent that the decision is overruled or

12 otherwise modified by the Supreme Court) shall be consid13 ered a controlling precedent with respect to any subsequent

14 decision made concerning the interpretation of such provi15 sion by any Federal or State court within the geographical

16 boundaries of the area under the jurisdiction of the circuit

17 court of appeals.

18 SEC. 103. ALTERNATIVE DISPUTE RESOLUTION PROCE19 DURES.

20 (a) IN GENERAL.—

21 (1) SERVICE OF OFFER.—A claimant or a de22 fendant in a product liability action that is subject

23 to this title may, not later than 60 days after the

24 service of the initial complaint of the claimant or the

25 applicable deadline for a responsive pleading (which-
39

•S 565 RS

1 ever is later), serve upon an adverse party an offer

2 to proceed pursuant to any voluntary, nonbinding al3 ternative dispute resolution procedure established or

4 recognized under the law of the State in which the

5 product liability action is brought or under the rules

6 of the court in which such action is maintained.

7 (2) WRITTEN NOTICE OF ACCEPTANCE OR REJEC8 TION.—Except as provided in paragraph (3), not

9 later than 10 days after the service of an offer to pro10 ceed under paragraph (1), an offeree shall file a writ11 ten notice of acceptance or rejection of the offer.

12 (3) EXTENSION.—The court may, upon motion

13 by an offeree made prior to the expiration of the 10-

14 day period specified in paragraph (2), extend the pe15 riod for filing a written notice under such paragraph

16 for a period of not more than 60 days after the date

17 of expiration of the period specified in paragraph (2).

18 Discovery may be permitted during such period.

19 (b) DEFENDANT’S PENALTY FOR UNREASONABLE RE20 FUSAL.—

21 (1) IN GENERAL.—The court shall assess reason22 able attorney’s fees (calculated in accordance with

23 paragraph (2)) and costs against the offeree, incurred

24 by the offeror during trial if—
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•S 565 RS

1 (A) a defendant as an offeree refuses to pro2 ceed pursuant to the alternative dispute resolu3 tion procedure referred to subsection (a)(1);

4 (B) final judgment is entered against the

5 defendant for harm caused by the product that is

6 the subject of the action; and

7 (C) the refusal by the defendant to proceed

8 pursuant to such alternative dispute resolution

9 was unreasonable or not made in good faith.

10 (2) REASONABLE ATTORNEY’S FEES.—For pur11 poses of this subsection, a reasonable attorney’s fee

12 shall be calculated on the basis of an hourly rate,

13 which shall not exceed the hourly rate that is consid14 ered acceptable in the community in which the attor15 ney practices law, taking into consideration the

16 qualifications and experience of the attorney and the

17 complexity of the case.

18 (c) GOOD FAITH REFUSAL.—In determining whether

19 the refusal of an offeree to proceed pursuant to the alter20 native dispute procedure referred to in subsection (a)(1)

21 was unreasonable or not made in good faith, the court shall

22 consider—

23 (1) whether the case involves potentially com24 plicated questions of fact;
41

•S 565 RS

1 (2) whether the case involves potentially disposi2 tive issues of law;

3 (3) the potential expense faced by the offeree in

4 retaining counsel for both the alternative dispute reso5 lution procedure and to litigate the matter for trial;

6 (4) the professional capacity of available medi7 ators within the applicable geographic area; and

8 (5) such other factors as the court considers ap9 propriate.

10 SEC. 104. LIABILITY RULES APPLICABLE TO PRODUCT SELL11 ERS.

12 (a) GENERAL RULE.—

13 (1) IN GENERAL.—In any product liability ac14 tion that is subject to this title filed by a claimant

15 for harm caused by a product, a product seller other

16 than a manufacturer shall be liable to a claimant,

17 only if the claimant establishes—

18 (A) that—

19 (i) the product that allegedly caused

20 the harm that is the subject of the complaint

21 was sold, rented, or leased by the product

22 seller;

23 (ii) the product seller failed to exercise

24 reasonable care with respect to the product;

25 and
42

•S 565 RS

1 (iii) the failure to exercise reasonable

2 care was a proximate cause of harm to the

3 claimant; or

4 (B) that—

5 (i) the product seller made an express

6 warranty applicable to the product that al7 legedly caused the harm that is the subject

8 of the complaint, independent of any ex9 press warranty made by a manufacturer as

10 to the same product;

11 (ii) the product failed to conform to the

12 warranty; and

13 (iii) the failure of the product to con14 form to the warranty caused harm to the

15 claimant; or

16 (C) that—

17 (i) the product seller engaged in inten18 tional wrongdoing, as determined under ap19 plicable State law; and

20 (ii) such intentional wrongdoing was a

21 proximate cause of the harm that is the sub22 ject of the complaint.

23 (2) REASONABLE OPPORTUNITY FOR INSPEC24 TION.—For purposes of paragraph (1)(A)(ii), a prod25 uct seller shall not be considered to have failed to ex-
43

•S 565 RS

1 ercise reasonable care with respect to a product based

2 upon an alleged failure to inspect a product if the

3 product seller had no reasonable opportunity to in4 spect the product that allegedly caused harm to the

5 claimant.

6 (b) SPECIAL RULE.—A product seller shall be deemed

7 to be liable as a manufacturer of a product for harm caused

8 by the product if—

9 (1) the manufacturer is not subject to service of

10 process under the laws of any State in which the ac11 tion may be brought; or

12 (2) the court determines that the claimant would

13 be unable to enforce a judgment against the manufac14 turer.

15 (c) RENTED OR LEASED PRODUCTS.—

16 (1) Notwithstanding any other provision of law,

17 any person engaged in the business of renting or leas18 ing a product (other than a person excluded from the

19 definition of product seller under section 101(14)(B))

20 shall be subject to liability in a product liability ac21 tion under subsection (a), but shall not be liable to a

22 claimant for the tortious act of another solely by rea23 son of ownership of such product.

24 (2) For purposes of paragraph (1), and for deter25 mining the applicability of this title to any person
44

•S 565 RS

1 subject to paragraph (1), the term ‘‘product liability

2 action’’ means a civil action brought on any theory

3 for harm caused by a product or product use.

4 SEC. 105. DEFENSES INVOLVING INTOXICATING ALCOHOL

5 OR DRUGS.

6 (a) GENERAL RULE.—Notwithstanding any other pro7 vision of law, a defendant in a product liability action that

8 is subject to this title shall have a complete defense in the

9 action if the defendant proves that—

10 (1) the claimant was under the influence of in11 toxicating alcohol or any drug that may not lawfully

12 be sold over-the-counter without a prescription, and

13 was not prescribed by a physician for use by the

14 claimant; and

15 (2) the claimant, as a result of the influence of

16 the alcohol or drug, was more than 50 percent respon17 sible for the accident or event which resulted in the

18 harm to the claimant.

19 (b) CONSTRUCTION.—For purposes of this section, the

20 determination of whether a person was intoxicated or was

21 under the influence of intoxicating alcohol or any drug shall

22 be made pursuant to applicable State law.

23 SEC. 106. REDUCTION FOR MISUSE OR ALTERATION OF

24 PRODUCT.

25 (a) GENERAL RULE.—
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•S 565 RS

1 (1) IN GENERAL.—Except as provided in sub2 section (c), in a product liability action that is sub3 ject to this title, the damages for which a defendant

4 is otherwise liable under applicable State law shall be

5 reduced by the percentage of responsibility for the

6 harm to the claimant attributable to misuse or alter7 ation of a product by any person if the defendant es8 tablishes that such percentage of the harm was proxi9 mately caused by a use or alteration of a product—

10 (A) in violation of, or contrary to, the ex11 press warnings or instructions of the defendant

12 if the warnings or instructions are determined to

13 be adequate pursuant to applicable State law; or

14 (B) involving a risk of harm which was

15 known or should have been known by the ordi16 nary person who uses or consumes the product

17 with the knowledge common to the class of per18 sons who used or would be reasonably antici19 pated to use the product.

20 (2) USE INTENDED BY A MANUFACTURER IS NOT

21 MISUSE OR ALTERATION.—For the purposes of this

22 title, a use of a product that is intended by the manu23 facturer of the product does not constitute a misuse

24 or alteration of the product.
46

•S 565 RS

1 (b) STATE LAW.—Notwithstanding section 3(b), sub2 section (a) of this section shall supersede State law concern3 ing misuse or alteration of a product only to the extent that

4 State law is inconsistent with such subsection.

5 (c) WORKPLACE INJURY.—Notwithstanding subsection

6 (a), the amount of damages for which a defendant is other7 wise liable under State law shall not be reduced by the ap8 plication of this section with respect to the conduct of any

9 employer or coemployee of the plaintiff who is, under appli10 cable State law concerning workplace injuries, immune

11 from being subject to an action by the claimant.

12 SEC. 107. UNIFORM STANDARDS FOR AWARD OF PUNITIVE

13 DAMAGES.

14 (a) GENERAL RULE.—Punitive damages may, to the

15 extent permitted by applicable State law, be awarded

16 against a defendant in a product liability action that is

17 subject to this title if the claimant establishes by clear and

18 convincing evidence that the harm that is the subject of the

19 action was the result of conduct that was carried out by

20 the defendant with a conscious, flagrant indifference to the

21 safety of others.

22 (b) LIMITATION ON AMOUNT.—The amount of punitive

23 damages that may be awarded to a claimant in any prod24 uct liability action that is subject to this title shall not ex25 ceed 3 times the amount awarded to the claimant for the
47

•S 565 RS

1 economic loss on which the claim is based, or $250,000,

2 whichever is greater. This subsection shall be applied by the

3 court and the application of this subsection shall not be dis4 closed to the jury.

5 (c) BIFURCATION AT REQUEST OF EITHER PARTY.—

6 (1) IN GENERAL.—At the request of either party,

7 the trier of fact in a product liability action that is

8 subject to this title shall consider in a separate pro9 ceeding whether punitive damages are to be awarded

10 for the harm that is the subject of the action and the

11 amount of the award. 

12 (2) ADMISSIBLE EVIDENCE.—

13 (A) INADMISSIBILITY OF EVIDENCE REL14 ATIVE ONLY TO A CLAIM OF PUNITIVE DAMAGES

15 IN A PROCEEDING CONCERNING COMPENSATORY

16 DAMAGES.—If either party requests a separate

17 proceeding under paragraph (1), in any proceed18 ing to determine whether the claimant may be

19 awarded compensatory damages, any evidence

20 that is relevant only to the claim of punitive

21 damages, as determined by applicable State law,

22 shall be inadmissible.

23 (B) PROCEEDING WITH RESPECT TO PUNI24 TIVE DAMAGES.—Evidence that is admissible in

25 the separate proceeding under paragraph (1)—
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1 (i) may include evidence of the profits

2 of the defendant, if any, from the alleged

3 wrongdoing; and

4 (ii) shall not include evidence of the

5 overall assets of the defendant.

6 SEC. 108. UNIFORM TIME LIMITATIONS ON LIABILITY.

7 (a) STATUTE OF LIMITATIONS.—

8 (1) IN GENERAL.—Except as provided in para9 graph (2) and subsection (b), a product liability ac10 tion that is subject to this title may be filed not later

11 than 2 years after the date on which the claimant dis12 covered or, in the exercise of reasonable care, should

13 have discovered, the harm that is the subject of the ac14 tion and the cause of the harm.

15 (2) EXCEPTIONS.—

16 (A) PERSON WITH A LEGAL DISABILITY.—A

17 person with a legal disability (as determined

18 under applicable law) may file a product liabil19 ity action that is subject to this title not later

20 than 2 years after the date on which the person

21 ceases to have the legal disability.

22 (B) EFFECT OF STAY OR INJUNCTION.—If

23 the commencement of a civil action that is sub24 ject to this title is stayed or enjoined, the run25 ning of the statute of limitations under this sec-
49

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1 tion shall be suspended until the end of the pe2 riod that the stay or injunction is in effect.

3 (b) STATUTE OF REPOSE.—

4 (1) IN GENERAL.—Subject to paragraphs (2) and

5 (3), no product liability action that is subject to this

6 title concerning a product that is a durable good al7 leged to have caused harm (other than toxic harm)

8 may be filed after the 20-year period beginning at the

9 time of delivery of the product.

10 (2) STATE LAW.—Notwithstanding paragraph

11 (1), if pursuant to an applicable State law, an action

12 described in such paragraph is required to be filed

13 during a period that is shorter than the 20-year pe14 riod specified in such paragraph, the State law shall

15 apply with respect to such period.

16 (3) EXCEPTIONS.—

17 (A) A motor vehicle, vessel, aircraft, or

18 train that is used primarily to transport pas19 sengers for hire shall not be subject to this sub20 section.

21 (B) Paragraph (1) does not bar a product

22 liability action against a defendant who made

23 an express warranty in writing as to the safety

24 of the specific product involved which was longer
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1 than 20 years, but it will apply at the expira2 tion of that warranty.

3 (c) TRANSITIONAL PROVISION RELATING TO EXTEN4 SION OF PERIOD FOR BRINGING CERTAIN ACTIONS.—If any

5 provision of subsection (a) or (b) shortens the period during

6 which a product liability action that could be otherwise

7 brought pursuant to another provision of law, the claimant

8 may, notwithstanding subsections (a) and (b), bring the

9 product liability action pursuant to this title not later than

10 1 year after the date of enactment of this Act.

11 SEC. 109. SEVERAL LIABILITY FOR NONECONOMIC LOSS.

12 (a) GENERAL RULE.—In a product liability action

13 that is subject to this title, the liability of each defendant

14 for noneconomic loss shall be several only and shall not be

15 joint.

16 (b) AMOUNT OF LIABILITY.—

17 (1) IN GENERAL.—Each defendant shall be liable

18 only for the amount of noneconomic loss allocated to

19 the defendant in direct proportion to the percentage

20 of responsibility of the defendant (determined in ac21 cordance with paragraph (2)) for the harm to the

22 claimant with respect to which the defendant is liable.

23 The court shall render a separate judgment against

24 each defendant in an amount determined pursuant to

25 the preceding sentence.
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1 (2) PERCENTAGE OF RESPONSIBILITY.—For pur2 poses of determining the amount of noneconomic loss

3 allocated to a defendant under this section, the trier

4 of fact shall determine the percentage of responsibility

5 of each person responsible for the claimant’s harm,

6 whether or not such person is a party to the action.

7 SEC. 110. WORKERS’ COMPENSATION SUBROGATION STAND8 ARDS.

9 (a) GENERAL RULE.—

10 (1) RIGHT OF SUBROGATION.—

11 (A) IN GENERAL.—An insurer shall have a

12 right of subrogation against a manufacturer or

13 product seller to recover any claimant’s benefits

14 relating to harm that is the subject of a product

15 liability action that is subject to this title.

16 (B) WRITTEN NOTIFICATION.—To assert a

17 right of subrogation under subparagraph (A), the

18 insurer shall provide written notice to the court

19 in which the product liability action is brought.

20 (C) INSURER NOT REQUIRED TO BE A

21 PARTY.—An insurer shall not be required to be

22 a necessary and proper party in a product li23 ability action covered under subparagraph (A).

24 (2) SETTLEMENTS AND OTHER LEGAL PROCEED25 INGS.—
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1 (A) IN GENERAL.—In any proceeding relat2 ing to harm or settlement with the manufacturer

3 or product seller by a claimant who files a prod4 uct liability action that is subject to this title, an

5 insurer may participate to assert a right of sub6 rogation for claimant’s benefits with respect to

7 any payment made by the manufacturer or

8 product seller by reason of such harm, without

9 regard to whether the payment is made—

10 (i) as part of a settlement;

11 (ii) in satisfaction of judgment;

12 (iii) as consideration for a covenant

13 not to sue; or

14 (iv) in another manner.

15 (B) WRITTEN CONSENT.—Except as pro16 vided in subparagraph (C)—

17 (i) an employee shall not make any

18 settlement with or accept any payment from

19 the manufacturer or product seller without

20 the written consent of the insurer; and

21 (ii) no release to or agreement with the

22 manufacturer or product seller described in

23 clauses (i) through (iv) of subparagraph (A)

24 shall be valid or enforceable for any purpose

25 without the consent of the insurer.
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•S 565 RS

1 (C) EXEMPTION.—Subparagraph (B) shall

2 not apply in any case in which the insurer has

3 been compensated for the full amount of the

4 claimant’s benefits.

5 (3) HARM RESULTING FROM ACTION OF EM6 PLOYER OR COEMPLOYEE.—

7 (A) IN GENERAL.—If, with respect to a

8 product liability action that is subject to this

9 title, the manufacturer or product seller attempts

10 to persuade the trier of fact that the harm to the

11 claimant was caused by the fault of the employer

12 of the claimant or any coemployee of the claim13 ant, the issue of that fault shall be submitted to

14 the trier of fact, but only after the manufacturer

15 or product seller has provided timely written no16 tice to the employer.

17 (B) RIGHTS OF EMPLOYER.—

18 (i) IN GENERAL.—Notwithstanding

19 any other provision of law, with respect to

20 an issue of fault submitted to a trier of fact

21 pursuant to subparagraph (A), an employer

22 shall, in the same manner as any party in

23 the action (even if the employer is not a

24 named party in the action), have the right

25 to—
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1 (I) appear;

2 (II) be represented;

3 (III) introduce evidence;

4 (IV) cross-examine adverse wit5 nesses; and

6 (V) present arguments to the trier

7 of fact.

8 (ii) LAST ISSUE.—The issue of harm

9 resulting from an action of an employer or

10 coemployee shall be the last issue that is

11 presented to the trier of fact.

12 (C) REDUCTION OF DAMAGES.—If the trier

13 of fact finds by clear and convincing evidence

14 that the harm to the claimant that is the subject

15 of the product liability action was caused by the

16 fault of the employer or a coemployee of the

17 claimant—

18 (i) the court shall reduce by the

19 amount of the claimant’s benefits—

20 (I) the damages awarded against

21 the manufacturer or product seller; and

22 (II) any corresponding insurer’s

23 subrogation lien; and
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•S 565 RS

1 (ii) the manufacturer or product seller

2 shall have no further right by way of con3 tribution or otherwise against the employer.

4 (D) CERTAIN RIGHTS OF SUBROGATION NOT

5 AFFECTED.—Notwithstanding a finding by the

6 trier of fact described in subparagraph (C), the

7 insurer shall not lose any right of subrogation

8 related to any—

9 (i) intentional tort committed against

10 the claimant by a coemployee; or

11 (ii) act committed by a coemployee

12 outside the scope of normal work practices.

13 (b) ATTORNEY’S FEES.—If, in a product liability ac14 tion that is subject to this section, the court finds that harm

15 to a claimant was not caused by the fault of the employer

16 or a coemployee of the claimant, the manufacturer or prod17 uct seller shall reimburse the insurer for reasonable attor18 ney’s fees and court costs incurred by the insurer in the

19 action, as determined by the court.

20 SEC. 111. FEDERAL CAUSE OF ACTION PRECLUDED.

21 The district courts of the United States shall not have

22 jurisdiction under section 1331 or 1337 of title 28, United

23 States Code, over any product liability action covered under

24 this title.
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•S 565 RS

1 TITLE II—BIOMATERIALS ACCESS

2 ASSURANCE

3 SEC. 201. SHORT TITLE.

4 This title may be cited as the ‘‘Biomaterials Access As5 surance Act of 1995’’.

6 SEC. 202. FINDINGS.

7 Congress finds that—

8 (1) each year millions of citizens of the United

9 States depend on the availability of lifesaving or life10 enhancing medical devices, many of which are perma11 nently implantable within the human body;

12 (2) a continued supply of raw materials and

13 component parts is necessary for the invention, devel14 opment, improvement, and maintenance of the supply

15 of the devices;

16 (3) most of the medical devices are made with

17 raw materials and component parts that—

18 (A) are not designed or manufactured spe19 cifically for use in medical devices; and

20 (B) come in contact with internal human

21 tissue;

22 (4) the raw materials and component parts also

23 are used in a variety of nonmedical products;

24 (5) because small quantities of the raw materials

25 and component parts are used for medical devices,
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•S 565 RS

1 sales of raw materials and component parts for medi2 cal devices constitute an extremely small portion of

3 the overall market for the raw materials and medical

4 devices;

5 (6) under the Federal Food, Drug, and Cosmetic

6 Act (21 U.S.C. 301 et seq.), manufacturers of medical

7 devices are required to demonstrate that the medical

8 devices are safe and effective, including demonstrating

9 that the products are properly designed and have ade10 quate warnings or instructions;

11 (7) notwithstanding the fact that raw materials

12 and component parts suppliers do not design,

13 produce, or test a final medical device, the suppliers

14 have been the subject of actions alleging inadequate—

15 (A) design and testing of medical devices

16 manufactured with materials or parts supplied

17 by the suppliers; or

18 (B) warnings related to the use of such med19 ical devices;

20 (8) even though suppliers of raw materials and

21 component parts have very rarely been held liable in

22 such actions, such suppliers have ceased supplying

23 certain raw materials and component parts for use in

24 medical devices because the costs associated with liti25 gation in order to ensure a favorable judgment for the
58

•S 565 RS

1 suppliers far exceeds the total potential sales revenues

2 from sales by such suppliers to the medical device in3 dustry;

4 (9) unless alternate sources of supply can be

5 found, the unavailability of raw materials and com6 ponent parts for medical devices will lead to unavail7 ability of lifesaving and life-enhancing medical de8 vices;

9 (10) because other suppliers of the raw materials

10 and component parts in foreign nations are refusing

11 to sell raw materials or component parts for use in

12 manufacturing certain medical devices in the United

13 States, the prospects for development of new sources of

14 supply for the full range of threatened raw materials

15 and component parts for medical devices are remote;

16 (11) it is unlikely that the small market for such

17 raw materials and component parts in the United

18 States could support the large investment needed to

19 develop new suppliers of such raw materials and com20 ponent parts;

21 (12) attempts to develop such new suppliers

22 would raise the cost of medical devices;

23 (13) courts that have considered the duties of the

24 suppliers of the raw materials and component parts
59

•S 565 RS

1 have generally found that the suppliers do not have

2 a duty—

3 (A) to evaluate the safety and efficacy of the

4 use of a raw material or component part in a

5 medical device; and

6 (B) to warn consumers concerning the safe7 ty and effectiveness of a medical device;

8 (14) attempts to impose the duties referred to in

9 subparagraphs (A) and (B) of paragraph (13) on

10 suppliers of the raw materials and component parts

11 would cause more harm than good by driving the sup12 pliers to cease supplying manufacturers of medical

13 devices; and

14 (15) in order to safeguard the availability of a

15 wide variety of lifesaving and life-enhancing medical

16 devices, immediate action is needed—

17 (A) to clarify the permissible bases of liabil18 ity for suppliers of raw materials and compo19 nent parts for medical devices; and

20 (B) to provide expeditious procedures to dis21 pose of unwarranted suits against the suppliers

22 in such manner as to minimize litigation costs.

23 SEC. 203. DEFINITIONS.

24 As used in this title:

25 (1) BIOMATERIALS SUPPLIER.—
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•S 565 RS

1 (A) IN GENERAL.—The term ‘‘biomaterials

2 supplier’’ means an entity that directly or indi3 rectly supplies a component part or raw mate4 rial for use in the manufacture of an implant.

5 (B) PERSONS INCLUDED.—Such term in6 cludes any person who—

7 (i) has submitted master files to the

8 Secretary for purposes of premarket ap9 proval of a medical device; or

10 (ii) licenses a biomaterials supplier to

11 produce component parts or raw materials.

12 (2) CLAIMANT.—

13 (A) IN GENERAL.—The term ‘‘claimant’’

14 means any person who brings a civil action, or

15 on whose behalf a civil action is brought, arising

16 from harm allegedly caused directly or indirectly

17 by an implant, including a person other than

18 the individual into whose body, or in contact

19 with whose blood or tissue, the implant is placed,

20 who claims to have suffered harm as a result of

21 the implant.

22 (B) ACTION BROUGHT ON BEHALF OF AN

23 ESTATE.—With respect to an action brought on

24 behalf or through the estate of an individual into

25 whose body, or in contact with whose blood or
61

•S 565 RS

1 tissue the implant is placed, such term includes

2 the decedent that is the subject of the action.

3 (C) ACTION BROUGHT ON BEHALF OF A

4 MINOR.—With respect to an action brought on

5 behalf or through a minor, such term includes

6 the parent or guardian of the minor.

7 (D) EXCLUSIONS.—Such term does not in8 clude—

9 (i) a provider of professional services,

10 in any case in which—

11 (I) the sale or use of an implant

12 is incidental to the transaction; and

13 (II) the essence of the transaction

14 is the furnishing of judgment, skill, or

15 services; or

16 (ii) a manufacturer, seller, or

17 biomaterials supplier.

18 (3) COMPONENT PART.—

19 (A) IN GENERAL.—The term ‘‘component

20 part’’ means a manufactured piece of an im21 plant.

22 (B) CERTAIN COMPONENTS.—Such term in23 cludes a manufactured piece of an implant

24 that—
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•S 565 RS

1 (i) has significant nonimplant appli2 cations; and

3 (ii) alone, has no implant value or

4 purpose, but when combined with other

5 component parts and materials, constitutes

6 an implant.

7 (4) HARM.—

8 (A) IN GENERAL.—The term ‘‘harm’’

9 means—

10 (i) any injury to or damage suffered

11 by an individual;

12 (ii) any illness, disease, or death of

13 that individual resulting from that injury

14 or damage; and

15 (iii) any loss to that individual or any

16 other individual resulting from that injury

17 or damage.

18 (B) EXCLUSION.—The term does not in19 clude any commercial loss or loss of or damage

20 to an implant.

21 (5) IMPLANT.—The term ‘‘implant’’ means—

22 (A) a medical device that is intended by the

23 manufacturer of the device—
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•S 565 RS

1 (i) to be placed into a surgically or

2 naturally formed or existing cavity of the

3 body for a period of at least 30 days; or

4 (ii) to remain in contact with bodily

5 fluids or internal human tissue through a

6 surgically produced opening for a period of

7 less than 30 days; and

8 (B) suture materials used in implant proce9 dures.

10 (6) MANUFACTURER.—The term ‘‘manufacturer’’

11 means any person who, with respect to an implant—

12 (A) is engaged in the manufacture, prepara13 tion, propagation, compounding, or processing

14 (as defined in section 510(a)(1) of the Federal

15 Food, Drug, and Cosmetic Act (21 U.S.C.

16 360(a)(1)) of the implant; and

17 (B) is required—

18 (i) to register with the Secretary pur19 suant to section 510 of the Federal Food,

20 Drug, and Cosmetic Act (21 U.S.C. 360)

21 and the regulations issued under such sec22 tion; and

23 (ii) to include the implant on a list of

24 devices filed with the Secretary pursuant to

25 section 510(j) of such Act (21 U.S.C. 360(j))
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•S 565 RS

1 and the regulations issued under such sec2 tion.

3 (7) MEDICAL DEVICE.—The term ‘‘medical de4 vice’’ means a device, as defined in section 201(h) of

5 the Federal Food, Drug, and Cosmetic Act (21 U.S.C.

6 321(h)).

7 (8) QUALIFIED SPECIALIST.—With respect to an

8 action, the term ‘‘qualified specialist’’ means a person

9 who is qualified by knowledge, skill, experience, train10 ing, or education in the specialty area that is the sub11 ject of the action.

12 (9) RAW MATERIAL.—The term ‘‘raw material’’

13 means a substance or product that—

14 (A) has a generic use; and

15 (B) may be used in an application other

16 than an implant.

17 (10) SECRETARY.—The term ‘‘Secretary’’ means

18 the Secretary of Health and Human Services.

19 (11) SELLER.—

20 (A) IN GENERAL.—The term ‘‘seller’’ means

21 a person who, in the course of a business con22 ducted for that purpose, sells, distributes, leases,

23 packages, labels, or otherwise places an implant

24 in the stream of commerce.
65

•S 565 RS

1 (B) EXCLUSIONS.—The term does not in2 clude—

3 (i) a seller or lessor of real property;

4 (ii) a provider of professional services,

5 in any case in which the sale or use of an

6 implant is incidental to the transaction and

7 the essence of the transaction is the furnish8 ing of judgment, skill, or services; or

9 (iii) any person who acts in only a fi10 nancial capacity with respect to the sale of

11 an implant.

12 SEC. 204. GENERAL REQUIREMENTS; APPLICABILITY; PRE13 EMPTION.

14 (a) GENERAL REQUIREMENTS.—

15 (1) IN GENERAL.—In any civil action covered by

16 this title, a biomaterials supplier may raise any de17 fense set forth in section 205.

18 (2) PROCEDURES.—Notwithstanding any other

19 provision of law, the Federal or State court in which

20 a civil action covered by this title is pending shall,

21 in connection with a motion for dismissal or judg22 ment based on a defense described in paragraph (1),

23 use the procedures set forth in section 206.

24 (b) APPLICABILITY.—
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•S 565 RS

1 (1) IN GENERAL.—Except as provided in para2 graph (2), notwithstanding any other provision of

3 law, this title applies to any civil action brought by

4 a claimant, whether in a Federal or State court,

5 against a manufacturer, seller, or biomaterials sup6 plier, on the basis of any legal theory, for harm alleg7 edly caused by an implant.

8 (2) EXCLUSION.—A civil action brought by a

9 purchaser of a medical device for use in providing

10 professional services against a manufacturer, seller, or

11 biomaterials supplier for loss or damage to an im12 plant or for commercial loss to the purchaser—

13 (A) shall not be considered an action that

14 is subject to this title; and

15 (B) shall be governed by applicable commer16 cial or contract law.

17 (c) SCOPE OF PREEMPTION.—

18 (1) IN GENERAL.—This Act supersedes any State

19 law regarding recovery for harm caused by an im20 plant and any rule of procedure applicable to a civil

21 action to recover damages for such harm only to the

22 extent that this title establishes a rule of law applica23 ble to the recovery of such damages.

24 (2) APPLICABILITY OF OTHER LAWS.—Any issue

25 that arises under this title and that is not governed
67

•S 565 RS

1 by a rule of law applicable to the recovery of damages

2 described in paragraph (1) shall be governed by ap3 plicable Federal or State law.

4 (d) STATUTORY CONSTRUCTION.—Nothing in this title

5 may be construed—

6 (1) to affect any defense available to a defendant

7 under any other provisions of Federal or State law in

8 an action alleging harm caused by an implant; or

9 (2) to create a cause of action or Federal court

10 jurisdiction pursuant to section 1331 or 1337 of title

11 28, United States Code, that otherwise would not exist

12 under applicable Federal or State law.

13 SEC. 205. LIABILITY OF BIOMATERIALS SUPPLIERS.

14 (a) IN GENERAL.—

15 (1) EXCLUSION FROM LIABILITY.—Except as

16 provided in paragraph (2), a biomaterials supplier

17 shall not be liable for harm to a claimant caused by

18 an implant.

19 (2) LIABILITY.—A biomaterials supplier that—

20 (A) is a manufacturer may be liable for

21 harm to a claimant described in subsection (b);

22 (B) is a seller may be liable for harm to a

23 claimant described in subsection (c); and

24 (C) furnishes raw materials or component

25 parts that fail to meet applicable contractual re-
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•S 565 RS

1 quirements or specifications may be liable for a

2 harm to a claimant described in subsection (d).

3 (b) LIABILITY AS MANUFACTURER.—

4 (1) IN GENERAL.—A biomaterials supplier may,

5 to the extent required and permitted by any other ap6 plicable law, be liable for harm to a claimant caused

7 by an implant if the biomaterials supplier is the

8 manufacturer of the implant.

9 (2) GROUNDS FOR LIABILITY.—The biomaterials

10 supplier may be considered the manufacturer of the

11 implant that allegedly caused harm to a claimant

12 only if the biomaterials supplier—

13 (A)(i) has registered with the Secretary

14 pursuant to section 510 of the Federal Food,

15 Drug, and Cosmetic Act (21 U.S.C. 360) and the

16 regulations issued under such section; and

17 (ii) included the implant on a list of devices

18 filed with the Secretary pursuant to section

19 510(j) of such Act (21 U.S.C. 360(j)) and the

20 regulations issued under such section; or

21 (B) is the subject of a declaration issued by

22 the Secretary pursuant to paragraph (3) that

23 states that the supplier, with respect to the im24 plant that allegedly caused harm to the claim25 ant, was required to—
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•S 565 RS

1 (i) register with the Secretary under

2 section 510 of such Act (21 U.S.C. 360),

3 and the regulations issued under such sec4 tion, but failed to do so; or

5 (ii) include the implant on a list of de6 vices filed with the Secretary pursuant to

7 section 510(j) of such Act (21 U.S.C. 360(j))

8 and the regulations issued under such sec9 tion, but failed to do so.

10 (3) ADMINISTRATIVE PROCEDURES.—

11 (A) IN GENERAL.—The Secretary may issue

12 a declaration described in paragraph (2)(B) on

13 the motion of the Secretary or on petition by

14 any person, after providing—

15 (i) notice to the affected persons; and

16 (ii) an opportunity for an informal

17 hearing.

18 (B) DOCKETING AND FINAL DECISION.—Im19 mediately upon receipt of a petition filed pursu20 ant to this paragraph, the Secretary shall docket

21 the petition. Not later than 180 days after the

22 petition is filed, the Secretary shall issue a final

23 decision on the petition.

24 (C) APPLICABILITY OF STATUTE OF LIMITA25 TIONS.—Any applicable statute of limitations
70

•S 565 RS

1 shall toll during the period during which a

2 claimant has filed a petition with the Secretary

3 under this paragraph.

4 (c) LIABILITY AS SELLER.—A biomaterials supplier

5 may, to the extent required and permitted by any other ap6 plicable law, be liable as a seller for harm to a claimant

7 caused by an implant if the biomaterials supplier—

8 (1) held title to the implant that allegedly caused

9 harm to the claimant as a result of purchasing the

10 implant after—

11 (A) the manufacture of the implant; and

12 (B) the entrance of the implant in the

13 stream of commerce; and

14 (2) subsequently resold the implant.

15 (d) LIABILITY FOR VIOLATING CONTRACTUAL RE16 QUIREMENTS OR SPECIFICATIONS.—A biomaterials sup17 plier may, to the extent required and permitted by any

18 other applicable law, be liable for harm to a claimant

19 caused by an implant, if the claimant in an action shows,

20 by a preponderance of the evidence, that—

21 (1) the raw materials or component parts deliv22 ered by the biomaterials supplier either—

23 (A) did not constitute the product described

24 in the contract between the biomaterials supplier
71

•S 565 RS

1 and the person who contracted for delivery of the

2 product; or

3 (B) failed to meet any specifications that

4 were—

5 (i) provided to the biomaterials sup6 plier and not expressly repudiated by the

7 biomaterials supplier prior to acceptance of

8 delivery of the raw materials or component

9 parts;

10 (ii)(I) published by the biomaterials

11 supplier;

12 (II) provided to the manufacturer by

13 the biomaterials supplier; or

14 (III) contained in a master file that

15 was submitted by the biomaterials supplier

16 to the Secretary and that is currently main17 tained by the biomaterials supplier for pur18 poses of premarket approval of medical de19 vices; or

20 (iii)(I) included in the submissions for

21 purposes of premarket approval or review

22 by the Secretary under section 510, 513,

23 515, or 520 of the Federal Food, Drug, and

24 Cosmetic Act (21 U.S.C. 360, 360c, 360e, or

25 360j); and
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•S 565 RS

1 (II) have received clearance from the

2 Secretary,

3 if such specifications were provided by the man4 ufacturer to the biomaterials supplier and were

5 not expressly repudiated by the biomaterials sup6 plier prior to the acceptance by the manufac7 turer of delivery of the raw materials or compo8 nent parts; and

9 (2) such conduct was an actual and proximate

10 cause of the harm to the claimant.

11 SEC. 206. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS

12 AGAINST BIOMATERIALS SUPPLIERS.

13 (a) MOTION TO DISMISS.—In any action that is sub14 ject to this title, a biomaterials supplier who is a defendant

15 in such action may, at any time during which a motion

16 to dismiss may be filed under an applicable law, move to

17 dismiss the action on the grounds that—

18 (1) the defendant is a biomaterials supplier; and

19 (2)(A) the defendant should not, for the purposes

20 of—

21 (i) section 205(b), be considered to be a

22 manufacturer of the implant that is subject to

23 such section; or
73

•S 565 RS

1 (ii) section 205(c), be considered to be a

2 seller of the implant that allegedly caused harm

3 to the claimant; or

4 (B)(i) the claimant has failed to establish, pur5 suant to section 205(d), that the supplier furnished

6 raw materials or component parts in violation of con7 tractual requirements or specifications; or

8 (ii) the claimant has failed to comply with the

9 procedural requirements of subsection (b).

10 (b) PROCEDURAL REQUIREMENTS.—

11 (1) IN GENERAL.—The procedural requirements

12 described in paragraphs (2) and (3) shall apply to

13 any action by a claimant against a biomaterials sup14 plier that is subject to this title.

15 (2) MANUFACTURER OF IMPLANT SHALL BE

16 NAMED A PARTY.—The claimant shall be required to

17 name the manufacturer of the implant as a party to

18 the action, unless—

19 (A) the manufacturer is subject to service of

20 process solely in a jurisdiction in which the

21 biomaterials supplier is not domiciled or subject

22 to a service of process; or

23 (B) an action against the manufacturer is

24 barred by applicable law.
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•S 565 RS

1 (3) AFFIDAVIT.—At the time the claimant brings

2 an action against a biomaterials supplier the claim3 ant shall be required to submit an affidavit that—

4 (A) declares that the claimant has consulted

5 and reviewed the facts of the action with a quali6 fied specialist, whose qualifications the claimant

7 shall disclose;

8 (B) includes a written determination by a

9 qualified specialist that the raw materials or

10 component parts actually used in the manufac11 ture of the implant of the claimant were raw

12 materials or component parts described in sec13 tion 205(d)(1), together with a statement of the

14 basis for such a determination;

15 (C) includes a written determination by a

16 qualified specialist that, after a review of the

17 medical record and other relevant material, the

18 raw material or component part supplied by the

19 biomaterials supplier and actually used in the

20 manufacture of the implant was a cause of the

21 harm alleged by claimant, together with a state22 ment of the basis for the determination; and

23 (D) states that, on the basis of review and

24 consultation of the qualified specialist, the claim25 ant (or the attorney of the claimant) has con-
75

•S 565 RS

1 cluded that there is a reasonable and meritorious

2 cause for the filing of the action against the

3 biomaterials supplier.

4 (c) PROCEEDING ON MOTION TO DISMISS.—The fol5 lowing rules shall apply to any proceeding on a motion to

6 dismiss filed under this section:

7 (1) AFFIDAVITS RELATING TO LISTING AND DEC8 LARATIONS.—

9 (A) IN GENERAL.—The defendant in the ac10 tion may submit an affidavit demonstrating that

11 defendant has not included the implant on a list,

12 if any, filed with the Secretary pursuant to sec13 tion 510(j) of the Federal Food, Drug, and Cos14 metic Act (21 U.S.C. 360(j)).

15 (B) RESPONSE TO MOTION TO DISMISS.—In

16 response to the motion to dismiss, the claimant

17 may submit an affidavit demonstrating that—

18 (i) the Secretary has, with respect to

19 the defendant and the implant that alleg20 edly caused harm to the claimant, issued a

21 declaration pursuant to section

22 205(b)(2)(B); or

23 (ii) the defendant who filed the motion

24 to dismiss is a seller of the implant who is

25 liable under section 205(c).
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1 (2) EFFECT OF MOTION TO DISMISS ON DISCOV2 ERY.—

3 (A) IN GENERAL.—If a defendant files a

4 motion to dismiss under paragraph (1) or (2) of

5 subsection (a), no discovery shall be permitted in

6 connection to the action that is the subject of the

7 motion, other than discovery necessary to deter8 mine a motion to dismiss for lack of jurisdiction,

9 until such time as the court rules on the motion

10 to dismiss in accordance with the affidavits sub11 mitted by the parties in accordance with this

12 section.

13 (B) DISCOVERY.—If a defendant files a mo14 tion to dismiss under subsection (a)(2) on the

15 grounds that the biomaterials supplier did not

16 furnish raw materials or component parts in

17 violation of contractual requirements or speci18 fications, the court may permit discovery, as or19 dered by the court. The discovery conducted pur20 suant to this subparagraph shall be limited to is21 sues that are directly relevant to—

22 (i) the pending motion to dismiss; or

23 (ii) the jurisdiction of the court.

24 (3) AFFIDAVITS RELATING STATUS OF DEFEND25 ANT.—
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•S 565 RS

1 (A) IN GENERAL.—Except as provided in

2 clauses (i) and (ii) of subparagraph (B), the

3 court shall consider a defendant to be a

4 biomaterials supplier who is not subject to an

5 action for harm to a claimant caused by an im6 plant, other than an action relating to liability

7 for a violation of contractual requirements or

8 specifications described in subsection (d).

9 (B) RESPONSES TO MOTION TO DISMISS.—

10 The court shall grant a motion to dismiss any

11 action that asserts liability of the defendant

12 under subsection (b) or (c) of section 205 on the

13 grounds that the defendant is not a manufac14 turer subject to such section 205(b) or seller sub15 ject to section 205(c), unless the claimant sub16 mits a valid affidavit that demonstrates that—

17 (i) with respect to a motion to dismiss

18 contending the defendant is not a manufac19 turer, the defendant meets the applicable re20 quirements for liability as a manufacturer

21 under section 205(b); or

22 (ii) with respect to a motion to dismiss

23 contending that the defendant is not a sell24 er, the defendant meets the applicable re-
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•S 565 RS

1 quirements for liability as a seller under

2 section 205(c).

3 (4) BASIS OF RULING ON MOTION TO DISMISS.—

4 (A) IN GENERAL.—The court shall rule on

5 a motion to dismiss filed under subsection (a)

6 solely on the basis of the pleadings of the parties

7 made pursuant to this section and any affidavits

8 submitted by the parties pursuant to this section.

9 (B) MOTION FOR SUMMARY JUDGMENT.—

10 Notwithstanding any other provision of law, if

11 the court determines that the pleadings and affi12 davits made by parties pursuant to this section

13 raise genuine issues as concerning material facts

14 with respect to a motion concerning contractual

15 requirements and specifications, the court may

16 deem the motion to dismiss to be a motion for

17 summary judgment made pursuant to subsection

18 (d).

19 (d) SUMMARY JUDGMENT.—

20 (1) IN GENERAL.—

21 (A) BASIS FOR ENTRY OF JUDGMENT.—A

22 biomaterials supplier shall be entitled to entry of

23 judgment without trial if the court finds there is

24 no genuine issue as concerning any material fact
79

•S 565 RS

1 for each applicable element set forth in para2 graphs (1) and (2) of section 205(d).

3 (B) ISSUES OF MATERIAL FACT.—With re4 spect to a finding made under subparagraph (A),

5 the court shall consider a genuine issue of mate6 rial fact to exist only if the evidence submitted

7 by claimant would be sufficient to allow a rea8 sonable jury to reach a verdict for the claimant

9 if the jury found the evidence to be credible.

10 (2) DISCOVERY MADE PRIOR TO A RULING ON A

11 MOTION FOR SUMMARY JUDGMENT.—If, under appli12 cable rules, the court permits discovery prior to a rul13 ing on a motion for summary judgment made pursu14 ant to this subsection, such discovery shall be limited

15 solely to establishing whether a genuine issue of mate16 rial fact exists.

17 (3) DISCOVERY WITH RESPECT TO A

18 BIOMATERIALS SUPPLIER.—A biomaterials supplier

19 shall be subject to discovery in connection with a mo20 tion seeking dismissal or summary judgment on the

21 basis of the inapplicability of section 205(d) or the

22 failure to establish the applicable elements of section

23 205(d) solely to the extent permitted by the applicable

24 Federal or State rules for discovery against

25 nonparties.
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1 (e) STAY PENDING PETITION FOR DECLARATION.—If

2 a claimant has filed a petition for a declaration pursuant

3 to section 205(b) with respect to a defendant, and the Sec4 retary has not issued a final decision on the petition, the

5 court shall stay all proceedings with respect to that defend6 ant until such time as the Secretary has issued a final deci7 sion on the petition.

8 (f) MANUFACTURER CONDUCT OF PROCEEDING.—The

9 manufacturer of an implant that is the subject of an action

10 covered under this title shall be permitted to file and con11 duct a proceeding on any motion for summary judgment

12 or dismissal filed by a biomaterials supplier who is a de13 fendant under this section if the manufacturer and any

14 other defendant in such action enter into a valid and appli15 cable contractual agreement under which the manufacturer

16 agrees to bear the cost of such proceeding or to conduct such

17 proceeding.

18 (g) ATTORNEY FEES.—The court shall require the

19 claimant to compensate the biomaterials supplier (or a

20 manufacturer appearing in lieu of a supplier pursuant to

21 subsection (f)) for attorney fees and costs, if—

22 (1) the claimant named or joined the

23 biomaterials supplier; and
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1 (2) the court found the claim against the

2 biomaterials supplier to be without merit and frivo3 lous.

4 SEC. 207. APPLICABILITY.

5 This Act shall apply to all civil actions covered under

6 this title that are commenced on or after the date of enact7 ment of this title, including any such action with respect

8 to which the harm asserted in the action or the conduct

9 that caused the harm occurred before the date of enactment

10 of this title.

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