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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 565 Reported in Senate (RS)]

                                                        Calendar No. 91

104th CONGRESS

  1st Session

                                 S. 565

                          [Report No. 104-69]

_______________________________________________________________________

                                 A BILL

  To regulate interstate commerce by providing for a uniform product 
                 liability law, and for other purposes.

_______________________________________________________________________

                             April 18, 1995

        Reported with an amendment in the nature of a substitute
                                                        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.

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

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Product Liability Fairness 
Act of 1995''.</DELETED>

<DELETED>SEC. 2. DEFINITIONS.</DELETED>

<DELETED>    For purposes of this Act, the following definitions shall 
apply:</DELETED>
        <DELETED>    (1) Claimant.--The term ``claimant'' means any 
        person who brings a product liability action and any person on 
        whose behalf such an action is brought. If an action is brought 
        through or on behalf of--</DELETED>
                <DELETED>    (A) an estate, the term includes the 
                decedent; or</DELETED>
                <DELETED>    (B) a minor or incompetent, the term 
                includes the legal guardian of the minor or 
                incompetent.</DELETED>
        <DELETED>    (2) Claimant's benefits.--The term ``claimant's 
        benefits'' means an amount equal to the sum of--</DELETED>
                <DELETED>    (A) the amount paid to an employee as 
                workers' compensation benefits; and</DELETED>
                <DELETED>    (B) the present value of all workers' 
                compensation benefits to which the employee is or would 
                be entitled at the time of the determination of the 
                claimant's benefits, as determined by the appropriate 
                workers' compensation authority for harm caused to an 
                employee by a product.</DELETED>
        <DELETED>    (3) Clear and convincing evidence.--</DELETED>
                <DELETED>    (A) In general.--Subject to subparagraph 
                (A), the term ``clear and convincing evidence'' is that 
                measure of degree of proof that will produce in the 
                mind of the trier of fact a firm belief or conviction 
                as to the truth of the allegations sought to be 
                established.</DELETED>
                <DELETED>    (B) Degree of proof.--The degree of proof 
                required to satisfy the standard of clear and 
                convincing evidence shall be--</DELETED>
                        <DELETED>    (i) greater than the degree of 
                        proof required to meet the standard of 
                        preponderance of the evidence; and</DELETED>
                        <DELETED>    (ii) less than the degree of proof 
                        required to meet the standard of proof beyond a 
                        reasonable doubt.</DELETED>
        <DELETED>    (4) Commercial loss.--The term ``commercial loss'' 
        means any loss incurred in the course of an ongoing business 
        enterprise consisting of providing goods or services for 
        compensation.</DELETED>
        <DELETED>    (5) Durable good.--The term ``durable good'' means 
        any product, or any component of any such product, which has a 
        normal life expectancy of 3 or more years or is of a character 
        subject to allowance for depreciation under the Internal 
        Revenue Code of 1986, and which is--</DELETED>
                <DELETED>    (A) used in a trade or business;</DELETED>
                <DELETED>    (B) held for the production of income; 
                or</DELETED>
                <DELETED>    (C) sold or donated to a governmental or 
                private entity for the production of goods, training, 
                demonstration, or any other similar purpose.</DELETED>
        <DELETED>    (6) Economic loss.--The term ``economic loss'' 
        means any pecuniary loss resulting from harm (including any 
        medical expense loss, work loss, replacement services loss, 
        loss due to death, burial costs, and loss of business or 
        employment opportunities), to the extent that recovery for the 
        loss is permitted under applicable State law.</DELETED>
        <DELETED>    (7) Harm.--The term ``harm'' means any physical 
        injury, illness, disease, or death caused by a product. The 
        term does not include commercial loss or loss or damage to a 
        product itself.</DELETED>
        <DELETED>    (8) Insurer.--The term ``insurer'' means the 
        employer of a claimant, if the employer is self-insured, or the 
        workers' compensation insurer of an employer.</DELETED>
        <DELETED>    (9) Manufacturer.--The term ``manufacturer'' 
        means--</DELETED>
                <DELETED>    (A) any person who is engaged in a 
                business to produce, create, make, or construct any 
                product (or component part of a product), and who 
                designs or formulates the product (or component part of 
                the product), or has engaged another person to design 
                or formulate the product (or component part of the 
                product);</DELETED>
                <DELETED>    (B) a product seller, but only with 
                respect to those aspects of a product (or component 
                part of a product) which are created or affected when, 
                before placing the product in the stream of commerce, 
                the product seller produces, creates, makes, 
                constructs, designs, or formulates, or has engaged 
                another person to design or formulate, an aspect of a 
                product (or component part of a product) made by 
                another person; or</DELETED>
                <DELETED>    (C) any product seller that is not 
                described in subparagraph (B) that holds itself out as 
                a manufacturer to the user of the product.</DELETED>
        <DELETED>    (10) Noneconomic loss.--The term ``noneconomic 
        loss''--</DELETED>
                <DELETED>    (A) means subjective, nonmonetary loss 
                resulting from harm, including pain, suffering, 
                inconvenience, mental suffering, emotional distress, 
                loss of society and companionship, loss of consortium, 
                injury to reputation, and humiliation; and</DELETED>
                <DELETED>    (B) does not include economic 
        loss.</DELETED>
        <DELETED>    (11) Person.--The term ``person'' means any 
        individual, corporation, company, association, firm, 
        partnership, society, joint stock company, or any other entity 
        (including any governmental entity).</DELETED>
        <DELETED>    (12) Product.--</DELETED>
                <DELETED>    (A) In general.--The term ``product'' 
                means any object, substance, mixture, or raw material 
                in a gaseous, liquid, or solid state that--</DELETED>
                        <DELETED>    (i) is capable of delivery itself 
                        or as an assembled whole, in a mixed or 
                        combined state, or as a component part or 
                        ingredient;</DELETED>
                        <DELETED>    (ii) is produced for introduction 
                        into trade or commerce;</DELETED>
                        <DELETED>    (iii) has intrinsic economic 
                        value; and</DELETED>
                        <DELETED>    (iv) is intended for sale or lease 
                        to persons for commercial or personal 
                use.</DELETED>
                <DELETED>    (B) Exclusion.--The term ``product'' does 
                not include--</DELETED>
                        <DELETED>    (i) tissue, organs, blood, and 
                        blood products used for therapeutic or medical 
                        purposes, except to the extent that such 
                        tissue, organs, blood, and blood products (or 
                        the provision thereof) are subject, under 
                        applicable State law, to a standard of 
                        liability other than negligence; and</DELETED>
                        <DELETED>    (ii) electricity, water delivered 
                        by a utility, natural gas, or steam.</DELETED>
        <DELETED>    (13) Product liability action.--The term ``product 
        liability action'' means a civil action brought on any theory 
        for harm caused by a product.</DELETED>
        <DELETED>    (14) Product seller.--</DELETED>
                <DELETED>    (A) In general.--The term ``product 
                seller'' means a person who--</DELETED>
                        <DELETED>    (i) in the course of a business 
                        conducted for that purpose, sells, distributes, 
                        leases, prepares, blends, packages, labels, or 
                        otherwise is involved in placing a product in 
                        the stream of commerce; or</DELETED>
                        <DELETED>    (ii) installs, repairs, or 
                        maintains the harm-causing aspect of the 
                        product.</DELETED>
                <DELETED>    (B) Exclusion.--The term ``product 
                seller'' does not include--</DELETED>
                        <DELETED>    (i) a seller or lessor of real 
                        property;</DELETED>
                        <DELETED>    (ii) a provider of professional 
                        services in any case in which the sale or use 
                        of a product is incidental to the transaction 
                        and the essence of the transaction is the 
                        furnishing of judgment, skill, or services; 
                        or</DELETED>
                        <DELETED>    (iii) any person who--</DELETED>
                                <DELETED>    (I) acts in only a 
                                financial capacity with respect to the 
                                sale of a product; and</DELETED>
                                <DELETED>    (II) leases a product 
                                under a lease arrangement in which the 
                                selection, possession, maintenance, and 
                                operation of the product are controlled 
                                by a person other than the 
        lessor.</DELETED>
        <DELETED>    (15) State.--The term ``State'' means each of the 
        several States of the United States, the District of Columbia, 
        the Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
        American Samoa, and the Commonwealth of the Northern Mariana 
        Islands, and any other territory or possession of the United 
        States, or any political subdivision thereof.</DELETED>
        <DELETED>    (16) Time of delivery.--The term ``time of 
        delivery'' means the time when a product is delivered to the 
        first purchaser or lessee of the product that was not involved 
        in manufacturing or selling the product, or using the product 
        as a component part of another product to be sold.</DELETED>

<DELETED>SEC. 3. APPLICABILITY; PREEMPTION.</DELETED>

<DELETED>    (a) Applicability.--</DELETED>
        <DELETED>    (1) Actions covered.--Subject to paragraph (2), 
        this Act applies to any product liability action commenced on 
        or after the date of enactment of this Act, without regard to 
        whether the harm that is the subject of the action or the 
        conduct that caused the harm occurred before such date of 
        enactment.</DELETED>
        <DELETED>    (2) Actions excluded.--</DELETED>
                <DELETED>    (A) Actions for damage to product or 
                commercial loss.--A civil action brought for loss or 
                damage to a product itself or for commercial loss, 
                shall not be subject to the provisions of this Act 
                governing product liability actions, but shall be 
                subject to any applicable commercial or contract 
                law.</DELETED>
                <DELETED>    (B) Actions for negligent entrustment.--A 
                civil action for negligent entrustment shall not be 
                subject to the provisions of this Act governing product 
                liability actions, but shall be subject to any 
                applicable State law.</DELETED>
<DELETED>    (b) Scope of Preemption.--</DELETED>
        <DELETED>    (1) In general.--This Act supersedes a State law 
        only to the extent that State law applies to an issue covered 
        under this Act.</DELETED>
        <DELETED>    (2) Issues not covered under this act.--Any issue 
        that is not covered under this Act, including any standard of 
        liability applicable to a manufacturer, shall not be subject to 
        this Act, but shall be subject to applicable Federal or State 
        law.</DELETED>
<DELETED>    (c) Statutory Construction.--Nothing in this Act may be 
construed to--</DELETED>
        <DELETED>    (1) waive or affect any defense of sovereign 
        immunity asserted by any State under any law;</DELETED>
        <DELETED>    (2) supersede any Federal law, except the Act of 
        April 22, 1908 (35 Stat. 65 et seq., chapter 149; 45 U.S.C. 51 
        et seq.) (commonly known as the ``Federal Employers' Liability 
        Act'') and the Longshore and Harbor Workers' Compensation Act 
        (33 U.S.C. 901 et seq.);</DELETED>
        <DELETED>    (3) waive or affect any defense of sovereign 
        immunity asserted by the United States;</DELETED>
        <DELETED>    (4) affect the applicability of any provision of 
        chapter 97 of title 28, United States Code;</DELETED>
        <DELETED>    (5) preempt State choice-of-law rules with respect 
        to claims brought by a foreign nation or a citizen of a foreign 
        nation;</DELETED>
        <DELETED>    (6) affect the right of any court to transfer 
        venue or to apply the law of a foreign nation or to dismiss a 
        claim of a foreign nation or of a citizen of a foreign nation 
        on the ground of inconvenient forum; or</DELETED>
        <DELETED>    (7) supersede any statutory or common law, 
        including any law providing for an action to abate a nuisance, 
        that authorizes a State or person to institute an action for 
        civil damages or civil penalties, cleanup costs, injunctions, 
        restitution, cost recovery, punitive damages, or any other form 
        of relief relating to contamination or pollution of the 
        environment (as defined in section 101(8) of the Comprehensive 
        Environmental Response, Compensation, and Liability Act of 
        1980, 42 U.S.C. 9601(8)) or the threat of such contamination or 
        pollution.</DELETED>
<DELETED>    (d) Construction.--To promote uniformity of law in the 
various jurisdictions, this Act shall be construed and applied after 
consideration of its legislative history.</DELETED>
<DELETED>    (e) Effect of Court of Appeals Decisions.--Notwithstanding 
any other provision of law, any decision of a circuit court of appeals 
interpreting a provision of this Act (except to the extent that the 
decision is overruled or otherwise modified by the Supreme Court) shall 
be considered a controlling precedent with respect to any subsequent 
decision made concerning the interpretation of such provision by any 
Federal or State court within the geographical boundaries of the area 
under the jurisdiction of the circuit court of appeals.</DELETED>

<DELETED>SEC. 4. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES.</DELETED>

<DELETED>    (a) In General.--</DELETED>
        <DELETED>    (1) Service of offer.--A claimant or a defendant 
        in a product liability action that is subject to this Act may, 
        not later than 60 days after the service of the initial 
        complaint of the claimant or the applicable deadline for a 
        responsive pleading (whichever is later), serve upon an adverse 
        party an offer to proceed pursuant to any voluntary, nonbinding 
        alternative dispute resolution procedure established or 
        recognized under the law of the State in which the product 
        liability action is brought or under the rules of the court in 
        which such action is maintained.</DELETED>
        <DELETED>    (2) Written notice of acceptance or rejection.--
        Except as provided in paragraph (3), not later than 10 days 
        after the service of an offer to proceed under paragraph (1), 
        an offeree shall file a written notice of acceptance or 
        rejection of the offer.</DELETED>
        <DELETED>    (3) Extension.--The court may, upon motion by an 
        offeree made prior to the expiration of the 10-day period 
        specified in paragraph (2), extend the period for filing a 
        written notice under such paragraph for a period of not more 
        than 60 days after the date of expiration of the period 
        specified in paragraph (2). Discovery may be permitted during 
        such period.</DELETED>
<DELETED>    (b) Defendant's Penalty for Unreasonable Refusal.--
        </DELETED>
        <DELETED>    (1) In general.--The court shall assess reasonable 
        attorney's fees (calculated in accordance with paragraph (2)) 
        and costs against the offeree, if--</DELETED>
                <DELETED>    (A) a defendant as an offeree refuses to 
                proceed pursuant to the alternative dispute resolution 
                procedure referred to subsection (a)(1);</DELETED>
                <DELETED>    (B) final judgment is entered against the 
                defendant for harm caused by the product that is the 
                subject of the action; and</DELETED>
                <DELETED>    (C) the refusal by the defendant to 
                proceed pursuant to such alternative dispute resolution 
                was unreasonable or not made in good faith.</DELETED>
        <DELETED>    (2) Reasonable attorney's fees.--For purposes of 
        this subsection, a reasonable attorney's fee shall be 
        calculated on the basis of an hourly rate, which shall not 
        exceed the hourly rate that is considered acceptable in the 
        community in which the attorney practices law, taking into 
        consideration the qualifications and experience of the attorney 
        and the complexity of the case.</DELETED>
<DELETED>    (c) Good Faith Refusal.--In determining whether the 
refusal of an offeree to proceed pursuant to the alternative dispute 
procedure referred to in subsection (a)(1) was unreasonable or not made 
in good faith, the court shall consider such factors as the court 
considers appropriate.</DELETED>

<DELETED>SEC. 5. LIABILITY RULES APPLICABLE TO PRODUCT 
SELLERS.</DELETED>

<DELETED>    (a) General Rule.--</DELETED>
        <DELETED>    (1) In general.--In any product liability action 
        that is subject to this Act filed by a claimant for harm caused 
        by a product, a product seller other than a manufacturer shall 
        be liable to a claimant, only if the claimant establishes--
                </DELETED>
                <DELETED>    (A) that--</DELETED>
                        <DELETED>    (i) the product that allegedly 
                        caused the harm that is the subject of the 
                        complaint was sold by the product 
                        seller;</DELETED>
                        <DELETED>    (ii) the product seller failed to 
                        exercise reasonable care with respect to the 
                        product; and</DELETED>
                        <DELETED>    (iii) the failure to exercise 
                        reasonable care was a proximate cause of harm 
                        to the claimant;</DELETED>
                <DELETED>    (B) that--</DELETED>
                        <DELETED>    (i) the product seller made an 
                        express warranty applicable to the product that 
                        allegedly caused the harm that is the subject 
                        of the complaint, independent of any express 
                        warranty made by a manufacturer as to the same 
                        product;</DELETED>
                        <DELETED>    (ii) the product failed to conform 
                        to the warranty; and</DELETED>
                        <DELETED>    (iii) the failure of the product 
                        to conform to the warranty caused harm to the 
                        claimant; or</DELETED>
                <DELETED>    (C) that--</DELETED>
                        <DELETED>    (i) the product seller engaged in 
                        intentional wrongdoing, as determined under 
                        applicable State law; and</DELETED>
                        <DELETED>    (ii) such intentional wrongdoing 
                        was a proximate cause of the harm that is the 
                        subject of the complaint.</DELETED>
        <DELETED>    (2) Reasonable opportunity for inspection.--For 
        purposes of paragraph (1)(A)(ii), a product seller shall not be 
        considered to have failed to exercise reasonable care with 
        respect to a product based upon an alleged failure to inspect a 
        product if the product seller had no reasonable opportunity to 
        inspect the product that allegedly caused harm to the 
claimant.</DELETED>
<DELETED>    (b) Special Rule.--A product seller shall be deemed to be 
liable as a manufacturer of a product for harm caused by the product 
if--</DELETED>
        <DELETED>    (1) the manufacturer is not subject to service of 
        process under the laws of any State in which the action may be 
        brought; or</DELETED>
        <DELETED>    (2) the court determines that the claimant would 
        be unable to enforce a judgment against the 
              manufacturer.</DELETED>

<DELETED>SEC. 6. DEFENSES INVOLVING INTOXICATING ALCOHOL OR 
DRUGS.</DELETED>

<DELETED>    (a) General Rule.--Notwithstanding any other provision of 
law, a defendant in a product liability action that is subject to this 
Act shall have a complete defense in the action if the defendant proves 
that--</DELETED>
        <DELETED>    (1) the claimant was under the influence of 
        intoxicating alcohol or any drug that may not lawfully be sold 
        over-the-counter without a prescription, and was not prescribed 
        by a physician for use by the claimant; and</DELETED>
        <DELETED>    (2) the claimant, as a result of the influence of 
        the alcohol or drug, was more than 50 percent responsible for 
        the accident or event which resulted in the harm to the 
        claimant.</DELETED>
<DELETED>    (b) Construction.--For purposes of this section, the 
determination of whether a person was intoxicated or was under the 
influence of intoxicating alcohol or any drug shall be made pursuant to 
applicable State law.</DELETED>

<DELETED>SEC. 7. REDUCTION FOR MISUSE OR ALTERATION OF 
PRODUCT.</DELETED>

<DELETED>    (a) General Rule.--</DELETED>
        <DELETED>    (1) In general.--Except as provided in subsection 
        (c), in a product liability action that is subject to this Act, 
        the damages for which a defendant is otherwise liable under 
        applicable State law shall be reduced by the percentage of 
        responsibility for the harm to the claimant attributable to 
        misuse or alteration of a product by any person if the 
        defendant establishes that such percentage of the harm was 
        proximately caused by a use or alteration of a product--
                </DELETED>
                <DELETED>    (A) in violation of, or contrary to, the 
                express warnings or instructions of the defendant if 
                the warnings or instructions are determined to be 
                adequate pursuant to applicable State law; or</DELETED>
                <DELETED>    (B) involving a risk of harm which was 
                known or should have been known by the ordinary person 
                who uses or consumes the product with the knowledge 
                common to the class of persons who used or would be 
                reasonably anticipated to use the product.</DELETED>
        <DELETED>    (2) Use intended by a manufacturer is not misuse 
        or alteration.--For the purposes of this Act, a use of a 
        product that is intended by the manufacturer of the product 
        does not constitute a misuse or alteration of the 
product.</DELETED>
<DELETED>    (b) State Law.--Notwithstanding section 3(b), subsection 
(a) of this section shall supersede State law concerning misuse or 
alteration of a product only to the extent that State law is 
inconsistent with such subsection.</DELETED>
<DELETED>    (c) Workplace Injury.--Notwithstanding subsection (a), the 
amount of damages for which a defendant is otherwise liable under State 
law shall not be reduced by the application of this section with 
respect to the conduct of any employer or coemployee of the plaintiff 
who is, under applicable State law concerning workplace injuries, 
immune from being subject to an action by the claimant.</DELETED>

<DELETED>SEC. 8. UNIFORM STANDARDS FOR AWARD OF PUNITIVE 
DAMAGES.</DELETED>

<DELETED>    (a) General Rule.--Punitive damages may, to the extent 
permitted by applicable State law, be awarded against a defendant in a 
product liability action that is subject to this Act if the claimant 
establishes by clear and convincing evidence that the harm that is the 
subject of the action was the result of conduct that was carried out by 
the defendant with a conscious, flagrant indifference to the safety of 
others.</DELETED>
<DELETED>    (b) Limitation on Amount.--The amount of punitive damages 
that may be awarded for a claim in any product liability action that is 
subject to this Act shall not exceed 3 times the amount awarded to the 
claimant for the economic injury on which the claim is based, or 
$250,000, whichever is greater. This subsection shall be applied by the 
court and the application of this subsection shall not be disclosed to 
the jury.</DELETED>
<DELETED>    (c) Bifurcation at Request of Either Party.--</DELETED>
        <DELETED>    (1) In general.--At the request of either party, 
        the trier of fact in a product liability action that is subject 
        to this Act shall consider in a separate proceeding whether 
        punitive damages are to be awarded for the harm that is the 
        subject of the action and the amount of the award. </DELETED>
        <DELETED>    (2) Admissible evidence.--</DELETED>
                <DELETED>    (A) Inadmissibility of evidence relative 
                only to a claim of punitive damages in a proceeding 
                concerning compensatory damages.--If either party 
                requests a separate proceeding under paragraph (1), in 
                any proceeding to determine whether the claimant may be 
                awarded compensatory damages, any evidence that is 
                relevant only to the claim of punitive damages, as 
                determined by applicable State law, shall be 
                inadmissible.</DELETED>
                <DELETED>    (B) Proceeding with respect to punitive 
                damages.--Evidence that is admissible in the separate 
                proceeding under paragraph (1)--</DELETED>
                        <DELETED>    (i) may include evidence of the 
                        profits of the defendant, if any, from the 
                        alleged wrongdoing; and</DELETED>
                        <DELETED>    (ii) shall not include evidence of 
                        the overall assets of the defendant.</DELETED>

<DELETED> SEC. 9. UNIFORM TIME LIMITATIONS ON LIABILITY.</DELETED>

<DELETED>    (a) Statute of Limitations.--</DELETED>
        <DELETED>    (1) In general.--Except as provided in paragraph 
        (2) and subsection (b), a product liability action that is 
        subject to this Act may be filed not later than 2 years after 
        the date on which the claimant discovered or, in the exercise 
        of reasonable care, should have discovered, the harm that is 
        the subject of the action and the cause of the harm.</DELETED>
        <DELETED>    (2) Exceptions.--</DELETED>
                <DELETED>    (A) Person with a legal disability.--A 
                person with a legal disability (as determined under 
                applicable law) may file a product liability action 
                that is subject to this Act not later than 2 years 
                after the date on which the person ceases to have the 
                legal disability.</DELETED>
                <DELETED>    (B) Effect of stay or injunction.--If the 
                commencement of a civil action that is subject to this 
                Act is stayed or enjoined, the running of the statute 
                of limitations under this section shall be suspended 
                until the end of the period that the stay or injunction 
                is in effect.</DELETED>
<DELETED>    (b) Statute of Repose.--</DELETED>
        <DELETED>    (1) In general.--Subject to paragraphs (2) and 
        (3), no product liability action that is subject to this Act 
        concerning a product that is a durable good alleged to have 
        caused harm (other than toxic harm) may be filed after the 20-
        year period beginning at the time of delivery of the 
        product.</DELETED>
        <DELETED>    (2) State law.--Notwithstanding paragraph (1), if 
        pursuant to an applicable State law, an action described in 
        such paragraph is required to be filed during a period that is 
        shorter than the 20-year period specified in such paragraph, 
        the State law shall apply with respect to such 
        period.</DELETED>
        <DELETED>    (3) Exception.--A motor vehicle, vessel, aircraft, 
        or train that is used primarily to transport passengers for 
        hire shall not be subject to this subsection.</DELETED>
<DELETED>    (c) Transitional Provision Relating to Extension of Period 
for Bringing Certain Actions.--If any provision of subsection (a) or 
(b) shortens the period during which a product liability action that 
could be otherwise brought pursuant to another provision of law, the 
claimant may, notwithstanding subsections (a) and (b), bring the 
product liability action pursuant to this Act not later than 1 year 
after the date of enactment of this Act.</DELETED>

<DELETED>SEC. 10. SEVERAL LIABILITY FOR NONECONOMIC LOSS.</DELETED>

<DELETED>    (a) General Rule.--In a product liability action that is 
subject to this Act, the liability of each defendant for noneconomic 
loss shall be several only and shall not be joint.</DELETED>
<DELETED>    (b) Amount of Liability.--</DELETED>
        <DELETED>    (1) In general.--Each defendant shall be liable 
        only for the amount of noneconomic loss allocated to the 
        defendant in direct proportion to the percentage of 
        responsibility of the defendant (determined in accordance with 
        paragraph (2)) for the harm to the claimant with respect to 
        which the defendant is liable. The court shall render a 
        separate judgment against each defendant in an amount 
        determined pursuant to the preceding sentence.</DELETED>
        <DELETED>    (2) Percentage of responsibility.--For purposes of 
        determining the amount of noneconomic loss allocated to a 
        defendant under this section, the trier of fact shall determine 
        the percentage of responsibility of each person responsible for 
        the amount of noneconomic loss caused to the claimant, whether 
        or not such person is a party to the action.</DELETED>

<DELETED> SEC. 11. WORKERS' COMPENSATION SUBROGATION 
STANDARDS.</DELETED>

<DELETED>    (a) General Rule.--</DELETED>
        <DELETED>    (1) Right of subrogation.--</DELETED>
                <DELETED>    (A) In general.--An insurer shall have a 
                right of subrogation against a manufacturer or product 
                seller to recover any claimant's benefits relating to 
                harm that is the subject of a product liability action 
                that is subject to this Act.</DELETED>
                <DELETED>    (B) Written notification.--To assert a 
                right of subrogation under subparagraph (A), the 
                insurer shall provide written notice to the court in 
                which the product liability action is 
                brought.</DELETED>
                <DELETED>    (C) Insurer not required to be a party.--
                An insurer shall not be required to be a necessary and 
                proper party in a product liability action covered 
                under subparagraph (A).</DELETED>
        <DELETED>    (2) Settlements and other legal proceedings.--
                </DELETED>
                <DELETED>    (A) In general.--In any proceeding 
                relating to harm or settlement with the manufacturer or 
                product seller by a claimant who files a product 
                liability action that is subject to this Act, an 
                insurer may participate to assert a right of 
                subrogation for claimant's benefits with respect to any 
                payment made by the manufacturer or product seller by 
                reason of such harm, without regard to whether the 
                payment is made--</DELETED>
                        <DELETED>    (i) as part of a 
                        settlement;</DELETED>
                        <DELETED>    (ii) in satisfaction of 
                        judgment;</DELETED>
                        <DELETED>    (iii) as consideration for a 
                        covenant not to sue; or</DELETED>
                        <DELETED>    (iv) in another manner.</DELETED>
                <DELETED>    (B) Written consent.--Except as provided 
                in subparagraph (C)--</DELETED>
                        <DELETED>    (i) an employee shall not make any 
                        settlement with or accept any payment from the 
                        manufacturer or product seller without the 
                        written consent of the insurer; and</DELETED>
                        <DELETED>    (ii) no release to or agreement 
                        with the manufacturer or product seller 
                        described in clauses (i) through (iv) of 
                        subparagraph (A) shall be valid or enforceable 
                        for any purpose without the consent of the 
                        insurer.</DELETED>
                <DELETED>    (C) Exemption.--Subparagraph (B) shall not 
                apply in any case in which the insurer has been 
                compensated for the full amount of the claimant's 
                benefits.</DELETED>
        <DELETED>    (3) Harm resulting from action of employer or 
        coemployee.--</DELETED>
                <DELETED>    (A) In general.--If, with respect to a 
                product liability action that is subject to this Act, 
                the manufacturer or product seller attempts to persuade 
                the trier of fact that the harm to the claimant was 
                caused by the fault of the employer of the claimant or 
                any coemployee of the claimant, the issue of that fault 
                shall be submitted to the trier of fact, but only after 
                the manufacturer or product seller has provided timely 
                written notice to the employer.</DELETED>
                <DELETED>    (B) Rights of employer.--</DELETED>
                        <DELETED>    (i) In general.--Notwithstanding 
                        any other provision of law, with respect to an 
                        issue of fault submitted to a trier of fact 
                        pursuant to subparagraph (A), an employer 
                        shall, in the same manner as any party in the 
                        action (even if the employer is not a named 
                        party in the action), have the right to--
                                </DELETED>
                                <DELETED>    (I) appear;</DELETED>
                                <DELETED>    (II) be 
                                represented;</DELETED>
                                <DELETED>    (III) introduce 
                                evidence;</DELETED>
                                <DELETED>    (IV) cross-examine adverse 
                                witnesses; and</DELETED>
                                <DELETED>    (V) present arguments to 
                                the trier of fact.</DELETED>
                        <DELETED>    (ii) Last issue.--The issue of 
                        harm resulting from an action of an employer or 
                        coemployee shall be the last issue that is 
                        presented to the trier of fact.</DELETED>
                <DELETED>    (C) Reduction of damages.--If the trier of 
                fact finds by clear and convincing evidence that the 
                harm to the claimant that is the subject of the product 
                liability action was caused by the fault of the 
                employer or a coemployee of the claimant--</DELETED>
                        <DELETED>    (i) the court shall reduce by the 
                        amount of the claimant's benefits--</DELETED>
                                <DELETED>    (I) the damages awarded 
                                against the manufacturer or product 
                                seller; and</DELETED>
                                <DELETED>    (II) any corresponding 
                                insurer's subrogation lien; 
                        and</DELETED>
                        <DELETED>    (ii) the manufacturer or product 
                        seller shall have no further right by way of 
                        contribution or otherwise against the 
                employer.</DELETED>
                <DELETED>    (D) Certain rights of subrogation not 
                affected.--Notwithstanding a finding by the trier of 
                fact described in subparagraph (C), the insurer shall 
                not lose any right of subrogation related to any--
                        </DELETED>
                        <DELETED>    (i) intentional tort committed 
                        against the claimant by a coemployee; 
                        or</DELETED>
                        <DELETED>    (ii) act committed by a coemployee 
                        outside the scope of normal work 
practices.</DELETED>
<DELETED>    (b) Attorney's Fees.--If, in a product liability action 
that is subject to this section, the court finds that harm to a 
claimant was not caused by the fault of the employer or a coemployee of 
the claimant, the manufacturer or product seller shall reimburse the 
insurer for reasonable attorney's fees and court costs incurred by the 
insurer in the action, as determined by the court.</DELETED>

<DELETED>SEC. 12. FEDERAL CAUSE OF ACTION PRECLUDED.</DELETED>

<DELETED>    The district courts of the United States shall not have 
jurisdiction under section 1331 or 1337 of title 28, United States 
Code, over any product liability action covered under this 
              Act.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Product Liability Fairness Act of 
1995''.

                       TITLE I--PRODUCT LIABILITY

SEC. 101. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Claimant.--The term ``claimant'' means any person who 
        brings a product liability action and any person on whose 
        behalf such an action is brought. If an action is brought 
        through or on behalf of--
                    (A) an estate, the term includes the decedent; or
                    (B) a minor or incompetent, the term includes the 
                legal guardian of the minor or incompetent.
            (2) Claimant's benefits.--The term ``claimant's benefits'' 
        means an amount equal to the sum of--
                    (A) the amount paid to an employee as workers' 
                compensation benefits; and
                    (B) the present value of all workers' compensation 
                benefits to which the employee is or would be entitled 
                at the time of the determination of the claimant's 
                benefits, as determined by the appropriate workers' 
                compensation authority for harm caused to an employee 
                by a product.
            (3) Clear and convincing evidence.--
                    (A) In general.--Subject to subparagraph (A), the 
                term ``clear and convincing evidence'' is that measure 
                of degree of proof that will produce in the mind of the 
                trier of fact a firm belief or conviction as to the 
                truth of the allegations sought to be established.
                    (B) Degree of proof.--The degree of proof required 
                to satisfy the standard of clear and convincing 
                evidence shall be--
                            (i) greater than the degree of proof 
                        required to meet the standard of preponderance 
                        of the evidence; and
                            (ii) less than the degree of proof required 
                        to meet the standard of proof beyond a 
                        reasonable doubt.
            (4) Commercial loss.--The term ``commercial loss'' means 
        any loss or damage to a product itself, loss relating to a 
        dispute over its value, or consequential economic loss the 
        recovery of which is governed by the Uniform Commercial Code or 
        analogous State commercial law, not including harm.
            (5) Durable good.--The term ``durable good'' means any 
        product, or any component of any such product, which has a 
        normal life expectancy of 3 or more years or is of a character 
        subject to allowance for depreciation under the Internal 
        Revenue Code of 1986, and which is--
                    (A) used in a trade or business;
                    (B) held for the production of income; or
                    (C) sold or donated to a governmental or private 
                entity for the production of goods, training, 
                demonstration, or any other similar purpose.
            (6) Economic loss.--The term ``economic loss'' means any 
        pecuniary loss resulting from harm (including any medical 
        expense loss, work loss, replacement services loss, loss due to 
        death, burial costs, and loss of business or employment 
        opportunities), to the extent that recovery for the loss is 
        permitted under applicable State law.
            (7) Harm.--The term ``harm'' means any physical injury, 
        illness, disease, or death, or damage to property, caused by a 
        product. The term does not include commercial loss or loss or 
        damage to a product itself.
            (8) Insurer.--The term ``insurer'' means the employer of a 
        claimant, if the employer is self-insured, or the workers' 
        compensation insurer of an employer.
            (9) Manufacturer.--The term ``manufacturer'' means--
                    (A) any person who is engaged in a business to 
                produce, create, make, or construct any product (or 
                component part of a product), and who designs or 
                formulates the product (or component part of the 
                product), or has engaged another person to design or 
                formulate the product (or component part of the 
                product);
                    (B) a product seller, but only with respect to 
                those aspects of a product (or component part of a 
                product) which are created or affected when, before 
placing the product in the stream of commerce, the product seller 
produces, creates, makes, constructs, designs, or formulates, or has 
engaged another person to design or formulate, an aspect of a product 
(or component part of a product) made by another person; or
                    (C) any product seller that is not described in 
                subparagraph (B) that holds itself out as a 
                manufacturer to the user of the product.
            (10) Noneconomic loss.--The term ``noneconomic loss''--
                    (A) means subjective, nonmonetary loss resulting 
                from harm, including pain, suffering, inconvenience, 
                mental suffering, emotional distress, loss of society 
                and companionship, loss of consortium, injury to 
                reputation, and humiliation; and
                    (B) does not include economic loss.
            (11) Person.--The term ``person'' means any individual, 
        corporation, company, association, firm, partnership, society, 
        joint stock company, or any other entity (including any 
        governmental entity).
            (12) Product.--
                    (A) In general.--The term ``product'' means any 
                object, substance, mixture, or raw material in a 
                gaseous, liquid, or solid state that--
                            (i) is capable of delivery itself or as an 
                        assembled whole, in a mixed or combined state, 
                        or as a component part or ingredient;
                            (ii) is produced for introduction into 
                        trade or commerce;
                            (iii) has intrinsic economic value; and
                            (iv) is intended for sale or lease to 
                        persons for commercial or personal use.
                    (B) Exclusion.--The term ``product'' does not 
                include--
                            (i) tissue, organs, blood, and blood 
                        products used for therapeutic or medical 
                        purposes, except to the extent that such 
                        tissue, organs, blood, and blood products (or 
                        the provision thereof) are subject, under 
                        applicable State law, to a standard of 
                        liability other than negligence; and
                            (ii) electricity, water delivered by a 
                        utility, natural gas, or steam.
            (13) Product liability action.--The term ``product 
        liability action'' means a civil action brought on any theory 
        for harm caused by a product.
            (14) Product seller.--
                    (A) In general.--The term ``product seller'' means 
                a person who--
                            (i) in the course of a business conducted 
                        for that purpose, sells, distributes, rents, 
                        leases, prepares, blends, packages, labels, or 
                        otherwise is involved in placing a product in 
                        the stream of commerce; or
                            (ii) installs, repairs, refurbishes, 
                        reconditions, or maintains the harm-causing 
                        aspect of the product.
                    (B) Exclusion.--The term ``product seller'' does 
                not include--
                            (i) a seller or lessor of real property;
                            (ii) a provider of professional services in 
                        any case in which the sale or use of a product 
                        is incidental to the transaction and the 
                        essence of the transaction is the furnishing of 
                        judgment, skill, or services; or
                            (iii) any person who--
                                    (I) acts in only a financial 
                                capacity with respect to the sale of a 
                                product; or
                                    (II) leases a product under a lease 
                                arrangement in which the lessor does 
                                not initially select the leased product 
                                and does not during the lease term 
                                ordinarily control the daily operations 
                                and maintenance of the product.
            (15) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Virgin Islands, Guam, American 
        Samoa, and the Commonwealth of the Northern Mariana Islands, 
        and any other territory or possession of the United States, or 
        any political subdivision thereof.
            (16) Time of delivery.--The term ``time of delivery'' means 
        the time when a product is delivered to the first purchaser or 
        lessee of the product that was not involved in manufacturing or 
        selling the product, or using the product as a component part 
        of another product to be sold.

SEC. 102. APPLICABILITY; PREEMPTION.

    (a) Applicability.--
            (1) Actions covered.--Subject to paragraph (2), this title 
        applies to any product liability action commenced on or after 
        the date of enactment of this Act, without regard to whether 
        the harm that is the subject of the action or the conduct that 
        caused the harm occurred before such date of enactment.
            (2) Actions excluded.--
                    (A) Actions for damage to product or commercial 
                loss.--A civil action brought for loss or damage to a 
                product itself or for commercial loss, shall not be 
                subject to the provisions of this title governing 
                product liability actions, but shall be subject to any 
                applicable commercial or contract law.
                    (B) Actions for negligent entrustment.--A civil 
                action for negligent entrustment shall not be subject 
                to the provisions of this title governing product 
                liability actions, but shall be subject to any 
                applicable State law.
    (b) Scope of Preemption.--
            (1) In general.--This Act supersedes a State law only to 
        the extent that State law applies to an issue covered under 
        this title.
            (2) Issues not covered under this act.--Any issue that is 
        not covered under this title, including any standard of 
        liability applicable to a manufacturer, shall not be subject to 
        this title, but shall be subject to applicable Federal or State 
        law.
    (c) Statutory Construction.--Nothing in this title may be construed 
to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any law;
            (2) supersede any Federal law;
            (3) waive or affect any defense of sovereign immunity 
        asserted by the United States;
            (4) affect the applicability of any provision of chapter 97 
        of title 28, United States Code;
            (5) preempt State choice-of-law rules with respect to 
        claims brought by a foreign nation or a citizen of a foreign 
        nation;
            (6) affect the right of any court to transfer venue or to 
        apply the law of a foreign nation or to dismiss a claim of a 
        foreign nation or of a citizen of a foreign nation on the 
        ground of inconvenient forum; or
            (7) supersede or modify any statutory or common law, 
        including any law providing for an action to abate a nuisance, 
        that authorizes a person to institute an action for civil 
        damages or civil penalties, cleanup costs, injunctions, 
        restitution, cost recovery, punitive damages, or any other form 
        of relief for remediation of the environment (as defined in 
        section 101(8) of the Comprehensive Environmental Response, 
        Compensation, and Liability Act of 1980, 42 U.S.C. 9601(8)) or 
        the threat of such remediation.
    (d) Construction.--To promote uniformity of law in the various 
jurisdictions, this title shall be construed and applied after 
consideration of its legislative history.
    (e) Effect of Court of Appeals Decisions.--Notwithstanding any 
other provision of law, any decision of a circuit court of appeals 
interpreting a provision of this title (except to the extent that the 
decision is overruled or otherwise modified by the Supreme Court) shall 
be considered a controlling precedent with respect to any subsequent 
decision made concerning the interpretation of such provision by any 
Federal or State court within the geographical boundaries of the area 
under the jurisdiction of the circuit court of appeals.

SEC. 103. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES.

    (a) In General.--
            (1) Service of offer.--A claimant or a defendant in a 
        product liability action that is subject to this title may, not 
        later than 60 days after the service of the initial complaint 
        of the claimant or the applicable deadline for a responsive 
        pleading (whichever is later), serve upon an adverse party an 
        offer to proceed pursuant to any voluntary, nonbinding 
        alternative dispute resolution procedure established or 
        recognized under the law of the State in which the product 
        liability action is brought or under the rules of the court in 
        which such action is maintained.
            (2) Written notice of acceptance or rejection.--Except as 
        provided in paragraph (3), not later than 10 days after the 
        service of an offer to proceed under paragraph (1), an offeree 
        shall file a written notice of acceptance or rejection of the 
        offer.
            (3) Extension.--The court may, upon motion by an offeree 
        made prior to the expiration of the 10-day period specified in 
        paragraph (2), extend the period for filing a written notice 
        under such paragraph for a period of not more than 60 days 
        after the date of expiration of the period specified in 
        paragraph (2). Discovery may be permitted during such period.
    (b) Defendant's Penalty for Unreasonable Refusal.--
            (1) In general.--The court shall assess reasonable 
        attorney's fees (calculated in accordance with paragraph (2)) 
        and costs against the offeree, incurred by the offeror during 
        trial if--
                    (A) a defendant as an offeree refuses to proceed 
                pursuant to the alternative dispute resolution 
                procedure referred to subsection (a)(1);
                    (B) final judgment is entered against the defendant 
                for harm caused by the product that is the subject of 
                the action; and
                    (C) the refusal by the defendant to proceed 
                pursuant to such alternative dispute resolution was 
                unreasonable or not made in good faith.
            (2) Reasonable attorney's fees.--For purposes of this 
        subsection, a reasonable attorney's fee shall be calculated on 
        the basis of an hourly rate, which shall not exceed the hourly 
        rate that is considered acceptable in the community in which 
        the attorney practices law, taking into consideration the 
        qualifications and experience of the attorney and the 
        complexity of the case.
    (c) Good Faith Refusal.--In determining whether the refusal of an 
offeree to proceed pursuant to the alternative dispute procedure 
referred to in subsection (a)(1) was unreasonable or not made in good 
faith, the court shall consider--
            (1) whether the case involves potentially complicated 
        questions of fact;
            (2) whether the case involves potentially dispositive 
        issues of law;
            (3) the potential expense faced by the offeree in retaining 
        counsel for both the alternative dispute resolution procedure 
        and to litigate the matter for trial;
            (4) the professional capacity of available mediators within 
        the applicable geographic area; and
            (5) such other factors as the court considers appropriate.

SEC. 104. LIABILITY RULES APPLICABLE TO PRODUCT SELLERS.

    (a) General Rule.--
            (1) In general.--In any product liability action that is 
        subject to this title filed by a claimant for harm caused by a 
        product, a product seller other than a manufacturer shall be 
        liable to a claimant, only if the claimant establishes--
                    (A) that--
                            (i) the product that allegedly caused the 
                        harm that is the subject of the complaint was 
                        sold, rented, or leased by the product seller;
                            (ii) the product seller failed to exercise 
                        reasonable care with respect to the product; 
                        and
                            (iii) the failure to exercise reasonable 
                        care was a proximate cause of harm to the 
                        claimant; or
                    (B) that--
                            (i) the product seller made an express 
                        warranty applicable to the product that 
                        allegedly caused the harm that is the subject 
                        of the complaint, independent of any express 
                        warranty made by a manufacturer as to the same 
                        product;
                            (ii) the product failed to conform to the 
                        warranty; and
                            (iii) the failure of the product to conform 
                        to the warranty caused harm to the claimant; or
                    (C) that--
                            (i) the product seller engaged in 
                        intentional wrongdoing, as determined under 
                        applicable State law; and
                            (ii) such intentional wrongdoing was a 
                        proximate cause of the harm that is the subject 
                        of the complaint.
            (2) Reasonable opportunity for inspection.--For purposes of 
        paragraph (1)(A)(ii), a product seller shall not be considered 
        to have failed to exercise reasonable care with respect to a 
        product based upon an alleged failure to inspect a product if 
        the product seller had no reasonable opportunity to inspect the 
        product that allegedly caused harm to the claimant.
    (b) Special Rule.--A product seller shall be deemed to be liable as 
a manufacturer of a product for harm caused by the product if--
            (1) the manufacturer is not subject to service of process 
        under the laws of any State in which the action may be brought; 
        or
            (2) the court determines that the claimant would be unable 
        to enforce a judgment against the manufacturer.
    (c) Rented or Leased Products.--
            (1) Notwithstanding any other provision of law, any person 
        engaged in the business of renting or leasing a product (other 
        than a person excluded from the definition of product seller 
        under section 101(14)(B)) shall be subject to liability in a 
        product liability action under subsection (a), but shall not be 
        liable to a claimant for the tortious act of another solely by 
        reason of ownership of such product.
            (2) For purposes of paragraph (1), and for determining the 
        applicability of this title to any person subject to paragraph 
        (1), the term ``product liability action'' means a civil action 
brought on any theory for harm caused by a product or product use.

SEC. 105. DEFENSES INVOLVING INTOXICATING ALCOHOL OR DRUGS.

    (a) General Rule.--Notwithstanding any other provision of law, a 
defendant in a product liability action that is subject to this title 
shall have a complete defense in the action if the defendant proves 
that--
            (1) the claimant was under the influence of intoxicating 
        alcohol or any drug that may not lawfully be sold over-the-
        counter without a prescription, and was not prescribed by a 
        physician for use by the claimant; and
            (2) the claimant, as a result of the influence of the 
        alcohol or drug, was more than 50 percent responsible for the 
        accident or event which resulted in the harm to the claimant.
    (b) Construction.--For purposes of this section, the determination 
of whether a person was intoxicated or was under the influence of 
intoxicating alcohol or any drug shall be made pursuant to applicable 
State law.

SEC. 106. REDUCTION FOR MISUSE OR ALTERATION OF PRODUCT.

    (a) General Rule.--
            (1) In general.--Except as provided in subsection (c), in a 
        product liability action that is subject to this title, the 
        damages for which a defendant is otherwise liable under 
        applicable State law shall be reduced by the percentage of 
        responsibility for the harm to the claimant attributable to 
        misuse or alteration of a product by any person if the 
        defendant establishes that such percentage of the harm was 
        proximately caused by a use or alteration of a product--
                    (A) in violation of, or contrary to, the express 
                warnings or instructions of the defendant if the 
                warnings or instructions are determined to be adequate 
                pursuant to applicable State law; or
                    (B) involving a risk of harm which was known or 
                should have been known by the ordinary person who uses 
                or consumes the product with the knowledge common to 
                the class of persons who used or would be reasonably 
                anticipated to use the product.
            (2) Use intended by a manufacturer is not misuse or 
        alteration.--For the purposes of this title, a use of a product 
        that is intended by the manufacturer of the product does not 
        constitute a misuse or alteration of the product.
    (b) State Law.--Notwithstanding section 3(b), subsection (a) of 
this section shall supersede State law concerning misuse or alteration 
of a product only to the extent that State law is inconsistent with 
such subsection.
    (c) Workplace Injury.--Notwithstanding subsection (a), the amount 
of damages for which a defendant is otherwise liable under State law 
shall not be reduced by the application of this section with respect to 
the conduct of any employer or coemployee of the plaintiff who is, 
under applicable State law concerning workplace injuries, immune from 
being subject to an action by the claimant.

SEC. 107. UNIFORM STANDARDS FOR AWARD OF PUNITIVE DAMAGES.

    (a) General Rule.--Punitive damages may, to the extent permitted by 
applicable State law, be awarded against a defendant in a product 
liability action that is subject to this title if the claimant 
establishes by clear and convincing evidence that the harm that is the 
subject of the action was the result of conduct that was carried out by 
the defendant with a conscious, flagrant indifference to the safety of 
others.
    (b) Limitation on Amount.--The amount of punitive damages that may 
be awarded to a claimant in any product liability action that is 
subject to this title shall not exceed 3 times the amount awarded to 
the claimant for the economic loss on which the claim is based, or 
$250,000, whichever is greater. This subsection shall be applied by the 
court and the application of this subsection shall not be disclosed to 
the jury.
    (c) Bifurcation at Request of Either Party.--
            (1) In general.--At the request of either party, the trier 
        of fact in a product liability action that is subject to this 
        title shall consider in a separate proceeding whether punitive 
        damages are to be awarded for the harm that is the subject of 
        the action and the amount of the award. 
            (2) Admissible evidence.--
                    (A) Inadmissibility of evidence relative only to a 
                claim of punitive damages in a proceeding concerning 
                compensatory damages.--If either party requests a 
                separate proceeding under paragraph (1), in any 
                proceeding to determine whether the claimant may be 
                awarded compensatory damages, any evidence that is 
                relevant only to the claim of punitive damages, as 
                determined by applicable State law, shall be 
                inadmissible.
                    (B) Proceeding with respect to punitive damages.--
                Evidence that is admissible in the separate proceeding 
                under paragraph (1)--
                            (i) may include evidence of the profits of 
                        the defendant, if any, from the alleged 
                        wrongdoing; and
                            (ii) shall not include evidence of the 
                        overall assets of the defendant.

 SEC. 108. UNIFORM TIME LIMITATIONS ON LIABILITY.

    (a) Statute of Limitations.--
            (1) In general.--Except as provided in paragraph (2) and 
        subsection (b), a product liability action that is subject to 
        this title may be filed not later than 2 years after the date 
        on which the claimant discovered or, in the exercise of 
        reasonable care, should have discovered, the harm that is the 
        subject of the action and the cause of the harm.
            (2) Exceptions.--
                    (A) Person with a legal disability.--A person with 
                a legal disability (as determined under applicable law) 
                may file a product liability action that is subject to 
                this title not later than 2 years after the date on 
                which the person ceases to have the legal disability.
                    (B) Effect of stay or injunction.--If the 
                commencement of a civil action that is subject to this 
                title is stayed or enjoined, the running of the statute 
                of limitations under this section shall be suspended 
                until the end of the period that the stay or injunction 
                is in effect.
    (b) Statute of Repose.--
            (1) In general.--Subject to paragraphs (2) and (3), no 
        product liability action that is subject to this title 
        concerning a product that is a durable good alleged to have 
        caused harm (other than toxic harm) may be filed after the 20-
        year period beginning at the time of delivery of the product.
            (2) State law.--Notwithstanding paragraph (1), if pursuant 
        to an applicable State law, an action described in such 
        paragraph is required to be filed during a period that is 
        shorter than the 20-year period specified in such paragraph, 
        the State law shall apply with respect to such period.
            (3) Exceptions.--
                    (A) A motor vehicle, vessel, aircraft, or train 
                that is used primarily to transport passengers for hire 
                shall not be subject to this subsection.
                    (B) Paragraph (1) does not bar a product liability 
                action against a defendant who made an express warranty 
                in writing as to the safety of the specific product 
                involved which was longer than 20 years, but it will 
                apply at the expiration of that warranty.
    (c) Transitional Provision Relating to Extension of Period for 
Bringing Certain Actions.--If any provision of subsection (a) or (b) 
shortens the period during which a product liability action that could 
be otherwise brought pursuant to another provision of law, the claimant 
may, notwithstanding subsections (a) and (b), bring the product 
liability action pursuant to this title not later than 1 year after the 
date of enactment of this Act.

SEC. 109. SEVERAL LIABILITY FOR NONECONOMIC LOSS.

    (a) General Rule.--In a product liability action that is subject to 
this title, the liability of each defendant for noneconomic loss shall 
be several only and shall not be joint.
    (b) Amount of Liability.--
            (1) In general.--Each defendant shall be liable only for 
        the amount of noneconomic loss allocated to the defendant in 
        direct proportion to the percentage of responsibility of the 
        defendant (determined in accordance with paragraph (2)) for the 
        harm to the claimant with respect to which the defendant is 
        liable. The court shall render a separate judgment against each 
        defendant in an amount determined pursuant to the preceding 
        sentence.
            (2) Percentage of responsibility.--For purposes of 
        determining the amount of noneconomic loss allocated to a 
        defendant under this section, the trier of fact shall determine 
        the percentage of responsibility of each person responsible for 
        the claimant's harm, whether or not such person is a party to 
        the action.

 SEC. 110. WORKERS' COMPENSATION SUBROGATION STANDARDS.

    (a) General Rule.--
            (1) Right of subrogation.--
                    (A) In general.--An insurer shall have a right of 
                subrogation against a manufacturer or product seller to 
                recover any claimant's benefits relating to harm that 
                is the subject of a product liability action that is 
                subject to this title.
                    (B) Written notification.--To assert a right of 
                subrogation under subparagraph (A), the insurer shall 
                provide written notice to the court in which the 
                product liability action is brought.
                    (C) Insurer not required to be a party.--An insurer 
                shall not be required to be a necessary and proper 
                party in a product liability action covered under 
                subparagraph (A).
            (2) Settlements and other legal proceedings.--
                    (A) In general.--In any proceeding relating to harm 
                or settlement with the manufacturer or product seller 
                by a claimant who files a product liability action that 
                is subject to this title, an insurer may participate to 
                assert a right of subrogation for claimant's benefits 
                with respect to any payment made by the manufacturer or 
                product seller by reason of such harm, without regard 
                to whether the payment is made--
                            (i) as part of a settlement;
                            (ii) in satisfaction of judgment;
                            (iii) as consideration for a covenant not 
                        to sue; or
                            (iv) in another manner.
                    (B) Written consent.--Except as provided in 
                subparagraph (C)--
                            (i) an employee shall not make any 
                        settlement with or accept any payment from the 
                        manufacturer or product seller without the 
                        written consent of the insurer; and
                            (ii) no release to or agreement with the 
                        manufacturer or product seller described in 
                        clauses (i) through (iv) of subparagraph (A) 
                        shall be valid or enforceable for any purpose 
                        without the consent of the insurer.
                    (C) Exemption.--Subparagraph (B) shall not apply in 
                any case in which the insurer has been compensated for 
                the full amount of the claimant's benefits.
            (3) Harm resulting from action of employer or coemployee.--
                    (A) In general.--If, with respect to a product 
                liability action that is subject to this title, the 
                manufacturer or product seller attempts to persuade the 
                trier of fact that the harm to the claimant was caused 
                by the fault of the employer of the claimant or any 
                coemployee of the claimant, the issue of that fault 
                shall be submitted to the trier of fact, but only after 
                the manufacturer or product seller has provided timely 
                written notice to the employer.
                    (B) Rights of employer.--
                            (i) In general.--Notwithstanding any other 
                        provision of law, with respect to an issue of 
                        fault submitted to a trier of fact pursuant to 
                        subparagraph (A), an employer shall, in the 
                        same manner as any party in the action (even if 
                        the employer is not a named party in the 
                        action), have the right to--
                                    (I) appear;
                                    (II) be represented;
                                    (III) introduce evidence;
                                    (IV) cross-examine adverse 
                                witnesses; and
                                    (V) present arguments to the trier 
                                of fact.
                            (ii) Last issue.--The issue of harm 
                        resulting from an action of an employer or 
                        coemployee shall be the last issue that is 
                        presented to the trier of fact.
                    (C) Reduction of damages.--If the trier of fact 
                finds by clear and convincing evidence that the harm to 
                the claimant that is the subject of the product 
                liability action was caused by the fault of the 
                employer or a coemployee of the claimant--
                            (i) the court shall reduce by the amount of 
                        the claimant's benefits--
                                    (I) the damages awarded against the 
                                manufacturer or product seller; and
                                    (II) any corresponding insurer's 
                                subrogation lien; and
                            (ii) the manufacturer or product seller 
                        shall have no further right by way of 
                        contribution or otherwise against the employer.
                    (D) Certain rights of subrogation not affected.--
                Notwithstanding a finding by the trier of fact 
                described in subparagraph (C), the insurer shall not 
                lose any right of subrogation related to any--
                            (i) intentional tort committed against the 
                        claimant by a coemployee; or
                            (ii) act committed by a coemployee outside 
                        the scope of normal work practices.
    (b) Attorney's Fees.--If, in a product liability action that is 
subject to this section, the court finds that harm to a claimant was 
not caused by the fault of the employer or a coemployee of the 
claimant, the manufacturer or product seller shall reimburse the 
insurer for reasonable attorney's fees and court costs incurred by the 
insurer in the action, as determined by the court.

SEC. 111. FEDERAL CAUSE OF ACTION PRECLUDED.

    The district courts of the United States shall not have 
jurisdiction under section 1331 or 1337 of title 28, United States 
Code, over any product liability action covered under this title.

                TITLE II--BIOMATERIALS ACCESS ASSURANCE

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Biomaterials Access Assurance Act 
of 1995''.

SEC. 202. FINDINGS.

    Congress finds that--
            (1) each year millions of citizens of the United States 
        depend on the availability of lifesaving or life-enhancing 
        medical devices, many of which are permanently implantable 
        within the human body;
            (2) a continued supply of raw materials and component parts 
        is necessary for the invention, development, improvement, and 
        maintenance of the supply of the devices;
            (3) most of the medical devices are made with raw materials 
        and component parts that--
                    (A) are not designed or manufactured specifically 
                for use in medical devices; and
                    (B) come in contact with internal human tissue;
            (4) the raw materials and component parts also are used in 
        a variety of nonmedical products;
            (5) because small quantities of the raw materials and 
        component parts are used for medical devices, sales of raw 
        materials and component parts for medical devices constitute an 
        extremely small portion of the overall market for the raw 
        materials and medical devices;
            (6) under the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 301 et seq.), manufacturers of medical devices are 
        required to demonstrate that the medical devices are safe and 
        effective, including demonstrating that the products are 
        properly designed and have adequate warnings or instructions;
            (7) notwithstanding the fact that raw materials and 
        component parts suppliers do not design, produce, or test a 
        final medical device, the suppliers have been the subject of 
        actions alleging inadequate--
                    (A) design and testing of medical devices 
                manufactured with materials or parts supplied by the 
                suppliers; or
                    (B) warnings related to the use of such medical 
                devices;
            (8) even though suppliers of raw materials and component 
        parts have very rarely been held liable in such actions, such 
        suppliers have ceased supplying certain raw materials and 
        component parts for use in medical devices because the costs 
        associated with litigation in order to ensure a favorable 
        judgment for the suppliers far exceeds the total potential 
        sales revenues from sales by such suppliers to the medical 
        device industry;
            (9) unless alternate sources of supply can be found, the 
        unavailability of raw materials and component parts for medical 
        devices will lead to unavailability of lifesaving and life-
        enhancing medical devices;
            (10) because other suppliers of the raw materials and 
        component parts in foreign nations are refusing to sell raw 
        materials or component parts for use in manufacturing certain 
        medical devices in the United States, the prospects for 
        development of new sources of supply for the full range of 
        threatened raw materials and component parts for medical 
        devices are remote;
            (11) it is unlikely that the small market for such raw 
        materials and component parts in the United States could 
        support the large investment needed to develop new suppliers of 
        such raw materials and component parts;
            (12) attempts to develop such new suppliers would raise the 
        cost of medical devices;
            (13) courts that have considered the duties of the 
        suppliers of the raw materials and component parts have 
        generally found that the suppliers do not have a duty--
                    (A) to evaluate the safety and efficacy of the use 
                of a raw material or component part in a medical 
                device; and
                    (B) to warn consumers concerning the safety and 
                effectiveness of a medical device;
            (14) attempts to impose the duties referred to in 
        subparagraphs (A) and (B) of paragraph (13) on suppliers of the 
        raw materials and component parts would cause more harm than 
        good by driving the suppliers to cease supplying manufacturers 
        of medical devices; and
            (15) in order to safeguard the availability of a wide 
        variety of lifesaving and life-enhancing medical devices, 
        immediate action is needed--
                    (A) to clarify the permissible bases of liability 
                for suppliers of raw materials and component parts for 
                medical devices; and
                    (B) to provide expeditious procedures to dispose of 
                unwarranted suits against the suppliers in such manner 
                as to minimize litigation costs.

SEC. 203. DEFINITIONS.

    As used in this title:
            (1) Biomaterials supplier.--
                    (A) In general.--The term ``biomaterials supplier'' 
                means an entity that directly or indirectly supplies a 
                component part or raw material for use in the 
                manufacture of an implant.
                    (B) Persons included.--Such term includes any 
                person who--
                            (i) has submitted master files to the 
                        Secretary for purposes of premarket approval of 
                        a medical device; or
                            (ii) licenses a biomaterials supplier to 
                        produce component parts or raw materials.
            (2) Claimant.--
                    (A) In general.--The term ``claimant'' means any 
                person who brings a civil action, or on whose behalf a 
                civil action is brought, arising from harm allegedly 
                caused directly or indirectly by an implant, including 
                a person other than the individual into whose body, or 
                in contact with whose blood or tissue, the implant is 
                placed, who claims to have suffered harm as a result of 
                the implant.
                    (B) Action brought on behalf of an estate.--With 
                respect to an action brought on behalf or through the 
                estate of an individual into whose body, or in contact 
                with whose blood or tissue the implant is placed, such 
                term includes the decedent that is the subject of the 
                action.
                    (C) Action brought on behalf of a minor.--With 
                respect to an action brought on behalf or through a 
                minor, such term includes the parent or guardian of the 
                minor.
                    (D) Exclusions.--Such term does not include--
                            (i) a provider of professional services, in 
                        any case in which--
                                    (I) the sale or use of an implant 
                                is incidental to the transaction; and
                                    (II) the essence of the transaction 
                                is the furnishing of judgment, skill, 
                                or services; or
                            (ii) a manufacturer, seller, or 
                        biomaterials supplier.
            (3) Component part.--
                    (A) In general.--The term ``component part'' means 
                a manufactured piece of an implant.
                    (B) Certain components.--Such term includes a 
                manufactured piece of an implant that--
                            (i) has significant nonimplant 
                        applications; and
                            (ii) alone, has no implant value or 
                        purpose, but when combined with other component 
                        parts and materials, constitutes an implant.
            (4) Harm.--
                    (A) In general.--The term ``harm'' means--
                            (i) any injury to or damage suffered by an 
                        individual;
                            (ii) any illness, disease, or death of that 
                        individual resulting from that injury or 
                        damage; and
                            (iii) any loss to that individual or any 
                        other individual resulting from that injury or 
                        damage.
                    (B) Exclusion.--The term does not include any 
                commercial loss or loss of or damage to an implant.
            (5) Implant.--The term ``implant'' means--
                    (A) a medical device that is intended by the 
                manufacturer of the device--
                            (i) to be placed into a surgically or 
                        naturally formed or existing cavity of the body 
                        for a period of at least 30 days; or
                            (ii) to remain in contact with bodily 
                        fluids or internal human tissue through a 
                        surgically produced opening for a period of 
                        less than 30 days; and
                    (B) suture materials used in implant procedures.
            (6) Manufacturer.--The term ``manufacturer'' means any 
        person who, with respect to an implant--
                    (A) is engaged in the manufacture, preparation, 
                propagation, compounding, or processing (as defined in 
                section 510(a)(1) of the Federal Food, Drug, and 
                Cosmetic Act (21 U.S.C. 360(a)(1)) of the implant; and
                    (B) is required--
                            (i) to register with the Secretary pursuant 
                        to section 510 of the Federal Food, Drug, and 
                        Cosmetic Act (21 U.S.C. 360) and the 
                        regulations issued under such section; and
                            (ii) to include the implant on a list of 
                        devices filed with the Secretary pursuant to 
                        section 510(j) of such Act (21 U.S.C. 360(j)) 
                        and the regulations issued under such section.
            (7) Medical device.--The term ``medical device'' means a 
        device, as defined in section 201(h) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 321(h)).
            (8) Qualified specialist.--With respect to an action, the 
        term ``qualified specialist'' means a person who is qualified 
        by knowledge, skill, experience, training, or education in the 
        specialty area that is the subject of the action.
            (9) Raw material.--The term ``raw material'' means a 
        substance or product that--
                    (A) has a generic use; and
                    (B) may be used in an application other than an 
                implant.
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (11) Seller.--
                    (A) In general.--The term ``seller'' means a person 
                who, in the course of a business conducted for that 
                purpose, sells, distributes, leases, packages, labels, 
                or otherwise places an implant in the stream of 
                commerce.
                    (B) Exclusions.--The term does not include--
                            (i) a seller or lessor of real property;
                            (ii) a provider of professional services, 
                        in any case in which the sale or use of an 
                        implant is incidental to the transaction and 
                        the essence of the transaction is the 
                        furnishing of judgment, skill, or services; or
                            (iii) any person who acts in only a 
                        financial capacity with respect to the sale of 
                        an implant.

SEC. 204. GENERAL REQUIREMENTS; APPLICABILITY; PREEMPTION.

    (a) General Requirements.--
            (1) In general.--In any civil action covered by this title, 
        a biomaterials supplier may raise any defense set forth in 
        section 205.
            (2) Procedures.--Notwithstanding any other provision of 
        law, the Federal or State court in which a civil action covered 
        by this title is pending shall, in connection with a motion for 
        dismissal or judgment based on a defense described in paragraph 
        (1), use the procedures set forth in section 206.
    (b) Applicability.--
            (1) In general.--Except as provided in paragraph (2), 
        notwithstanding any other provision of law, this title applies 
        to any civil action brought by a claimant, whether in a Federal 
        or State court, against a manufacturer, seller, or biomaterials 
        supplier, on the basis of any legal theory, for harm allegedly 
        caused by an implant.
            (2) Exclusion.--A civil action brought by a purchaser of a 
        medical device for use in providing professional services 
        against a manufacturer, seller, or biomaterials supplier for 
        loss or damage to an implant or for commercial loss to the 
        purchaser--
                    (A) shall not be considered an action that is 
                subject to this title; and
                    (B) shall be governed by applicable commercial or 
                contract law.
    (c) Scope of Preemption.--
            (1) In general.--This Act supersedes any State law 
        regarding recovery for harm caused by an implant and any rule 
        of procedure applicable to a civil action to recover damages 
        for such harm only to the extent that this title establishes a 
        rule of law applicable to the recovery of such damages.
            (2) Applicability of other laws.--Any issue that arises 
        under this title and that is not governed by a rule of law 
        applicable to the recovery of damages described in paragraph 
        (1) shall be governed by applicable Federal or State law.
    (d) Statutory Construction.--Nothing in this title may be 
construed--
            (1) to affect any defense available to a defendant under 
        any other provisions of Federal or State law in an action 
        alleging harm caused by an implant; or
            (2) to create a cause of action or Federal court 
        jurisdiction pursuant to section 1331 or 1337 of title 28, 
        United States Code, that otherwise would not exist under 
        applicable Federal or State law.

SEC. 205. LIABILITY OF BIOMATERIALS SUPPLIERS.

    (a) In General.--
            (1) Exclusion from liability.--Except as provided in 
        paragraph (2), a biomaterials supplier shall not be liable for 
        harm to a claimant caused by an implant.
            (2) Liability.--A biomaterials supplier that--
                    (A) is a manufacturer may be liable for harm to a 
                claimant described in subsection (b);
                    (B) is a seller may be liable for harm to a 
                claimant described in subsection (c); and
                    (C) furnishes raw materials or component parts that 
                fail to meet applicable contractual requirements or 
                specifications may be liable for a harm to a claimant 
                described in subsection (d).
    (b) Liability as Manufacturer.--
            (1) In general.--A biomaterials supplier may, to the extent 
        required and permitted by any other applicable law, be liable 
        for harm to a claimant caused by an implant if the biomaterials 
        supplier is the manufacturer of the implant.
            (2) Grounds for liability.--The biomaterials supplier may 
        be considered the manufacturer of the implant that allegedly 
        caused harm to a claimant only if the biomaterials supplier--
                    (A)(i) has registered with the Secretary pursuant 
                to section 510 of the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 360) and the regulations issued under 
                such section; and
                    (ii) included the implant on a list of devices 
                filed with the Secretary pursuant to section 510(j) of 
                such Act (21 U.S.C. 360(j)) and the regulations issued 
                under such section; or
                    (B) is the subject of a declaration issued by the 
                Secretary pursuant to paragraph (3) that states that 
                the supplier, with respect to the implant that 
                allegedly caused harm to the claimant, was required 
                to--
                            (i) register with the Secretary under 
                        section 510 of such Act (21 U.S.C. 360), and 
the regulations issued under such section, but failed to do so; or
                            (ii) include the implant on a list of 
                        devices filed with the Secretary pursuant to 
                        section 510(j) of such Act (21 U.S.C. 360(j)) 
                        and the regulations issued under such section, 
                        but failed to do so.
            (3) Administrative procedures.--
                    (A) In general.--The Secretary may issue a 
                declaration described in paragraph (2)(B) on the motion 
                of the Secretary or on petition by any person, after 
                providing--
                            (i) notice to the affected persons; and
                            (ii) an opportunity for an informal 
                        hearing.
                    (B) Docketing and final decision.--Immediately upon 
                receipt of a petition filed pursuant to this paragraph, 
                the Secretary shall docket the petition. Not later than 
                180 days after the petition is filed, the Secretary 
                shall issue a final decision on the petition.
                    (C) Applicability of statute of limitations.--Any 
                applicable statute of limitations shall toll during the 
                period during which a claimant has filed a petition 
                with the Secretary under this paragraph.
    (c) Liability as Seller.--A biomaterials supplier may, to the 
extent required and permitted by any other applicable law, be liable as 
a seller for harm to a claimant caused by an implant if the 
biomaterials supplier--
            (1) held title to the implant that allegedly caused harm to 
        the claimant as a result of purchasing the implant after--
                    (A) the manufacture of the implant; and
                    (B) the entrance of the implant in the stream of 
                commerce; and
            (2) subsequently resold the implant.
    (d) Liability for Violating Contractual Requirements or 
Specifications.--A biomaterials supplier may, to the extent required 
and permitted by any other applicable law, be liable for harm to a 
claimant caused by an implant, if the claimant in an action shows, by a 
preponderance of the evidence, that--
            (1) the raw materials or component parts delivered by the 
        biomaterials supplier either--
                    (A) did not constitute the product described in the 
                contract between the biomaterials supplier and the 
                person who contracted for delivery of the product; or
                    (B) failed to meet any specifications that were--
                            (i) provided to the biomaterials supplier 
                        and not expressly repudiated by the 
                        biomaterials supplier prior to acceptance of 
                        delivery of the raw materials or component 
                        parts;
                            (ii)(I) published by the biomaterials 
                        supplier;
                            (II) provided to the manufacturer by the 
                        biomaterials supplier; or
                            (III) contained in a master file that was 
                        submitted by the biomaterials supplier to the 
                        Secretary and that is currently maintained by 
                        the biomaterials supplier for purposes of 
                        premarket approval of medical devices; or
                            (iii)(I) included in the submissions for 
                        purposes of premarket approval or review by the 
                        Secretary under section 510, 513, 515, or 520 
                        of the Federal Food, Drug, and Cosmetic Act (21 
                        U.S.C. 360, 360c, 360e, or 360j); and
                            (II) have received clearance from the 
                        Secretary,
                if such specifications were provided by the 
                manufacturer to the biomaterials supplier and were not 
                expressly repudiated by the biomaterials supplier prior 
                to the acceptance by the manufacturer of delivery of 
                the raw materials or component parts; and
            (2) such conduct was an actual and proximate cause of the 
        harm to the claimant.

SEC. 206. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS AGAINST 
              BIOMATERIALS SUPPLIERS.

    (a) Motion To Dismiss.--In any action that is subject to this 
title, a biomaterials supplier who is a defendant in such action may, 
at any time during which a motion to dismiss may be filed under an 
applicable law, move to dismiss the action on the grounds that--
            (1) the defendant is a biomaterials supplier; and
            (2)(A) the defendant should not, for the purposes of--
                    (i) section 205(b), be considered to be a 
                manufacturer of the implant that is subject to such 
                section; or
                    (ii) section 205(c), be considered to be a seller 
                of the implant that allegedly caused harm to the 
                claimant; or
            (B)(i) the claimant has failed to establish, pursuant to 
        section 205(d), that the supplier furnished raw materials or 
        component parts in violation of contractual requirements or 
        specifications; or
            (ii) the claimant has failed to comply with the procedural 
        requirements of subsection (b).
    (b) Procedural Requirements.--
            (1) In general.--The procedural requirements described in 
        paragraphs (2) and (3) shall apply to any action by a claimant 
        against a biomaterials supplier that is subject to this title.
            (2) Manufacturer of implant shall be named a party.--The 
        claimant shall be required to name the manufacturer of the 
        implant as a party to the action, unless--
                    (A) the manufacturer is subject to service of 
                process solely in a jurisdiction in which the 
                biomaterials supplier is not domiciled or subject to a 
                service of process; or
                    (B) an action against the manufacturer is barred by 
                applicable law.
            (3) Affidavit.--At the time the claimant brings an action 
        against a biomaterials supplier the claimant shall be required 
        to submit an affidavit that--
                    (A) declares that the claimant has consulted and 
                reviewed the facts of the action with a qualified 
                specialist, whose qualifications the claimant shall 
                disclose;
                    (B) includes a written determination by a qualified 
                specialist that the raw materials or component parts 
                actually used in the manufacture of the implant of the 
                claimant were raw materials or component parts 
                described in section 205(d)(1), together with a 
                statement of the basis for such a determination;
                    (C) includes a written determination by a qualified 
                specialist that, after a review of the medical record 
                and other relevant material, the raw material or 
                component part supplied by the biomaterials supplier 
                and actually used in the manufacture of the implant was 
                a cause of the harm alleged by claimant, together with 
                a statement of the basis for the determination; and
                    (D) states that, on the basis of review and 
                consultation of the qualified specialist, the claimant 
                (or the attorney of the claimant) has concluded that 
                there is a reasonable and meritorious cause for the 
                filing of the action against the biomaterials supplier.
    (c) Proceeding on Motion To Dismiss.--The following rules shall 
apply to any proceeding on a motion to dismiss filed under this 
section:
            (1) Affidavits relating to listing and declarations.--
                    (A) In general.--The defendant in the action may 
                submit an affidavit demonstrating that defendant has 
                not included the implant on a list, if any, filed with 
                the Secretary pursuant to section 510(j) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 360(j)).
                    (B) Response to motion to dismiss.--In response to 
                the motion to dismiss, the claimant may submit an 
                affidavit demonstrating that--
                            (i) the Secretary has, with respect to the 
                        defendant and the implant that allegedly caused 
                        harm to the claimant, issued a declaration 
                        pursuant to section 205(b)(2)(B); or
                            (ii) the defendant who filed the motion to 
                        dismiss is a seller of the implant who is 
                        liable under section 205(c).
            (2) Effect of motion to dismiss on discovery.--
                    (A) In general.--If a defendant files a motion to 
                dismiss under paragraph (1) or (2) of subsection (a), 
                no discovery shall be permitted in connection to the 
                action that is the subject of the motion, other than 
                discovery necessary to determine a motion to dismiss 
                for lack of jurisdiction, until such time as the court 
                rules on the motion to dismiss in accordance with the 
                affidavits submitted by the parties in accordance with 
                this section.
                    (B) Discovery.--If a defendant files a motion to 
                dismiss under subsection (a)(2) on the grounds that the 
                biomaterials supplier did not furnish raw materials or 
                component parts in violation of contractual 
                requirements or specifications, the court may permit 
                discovery, as ordered by the court. The discovery 
                conducted pursuant to this subparagraph shall be 
                limited to issues that are directly relevant to--
                            (i) the pending motion to dismiss; or
                            (ii) the jurisdiction of the court.
            (3) Affidavits relating status of defendant.--
                    (A) In general.--Except as provided in clauses (i) 
                and (ii) of subparagraph (B), the court shall consider 
a defendant to be a biomaterials supplier who is not subject to an 
action for harm to a claimant caused by an implant, other than an 
action relating to liability for a violation of contractual 
requirements or specifications described in subsection (d).
                    (B) Responses to motion to dismiss.--The court 
                shall grant a motion to dismiss any action that asserts 
                liability of the defendant under subsection (b) or (c) 
                of section 205 on the grounds that the defendant is not 
                a manufacturer subject to such section 205(b) or seller 
                subject to section 205(c), unless the claimant submits 
                a valid affidavit that demonstrates that--
                            (i) with respect to a motion to dismiss 
                        contending the defendant is not a manufacturer, 
                        the defendant meets the applicable requirements 
                        for liability as a manufacturer under section 
                        205(b); or
                            (ii) with respect to a motion to dismiss 
                        contending that the defendant is not a seller, 
                        the defendant meets the applicable requirements 
                        for liability as a seller under section 205(c).
            (4) Basis of ruling on motion to dismiss.--
                    (A) In general.--The court shall rule on a motion 
                to dismiss filed under subsection (a) solely on the 
                basis of the pleadings of the parties made pursuant to 
                this section and any affidavits submitted by the 
                parties pursuant to this section.
                    (B) Motion for summary judgment.--Notwithstanding 
                any other provision of law, if the court determines 
                that the pleadings and affidavits made by parties 
                pursuant to this section raise genuine issues as 
                concerning material facts with respect to a motion 
                concerning contractual requirements and specifications, 
                the court may deem the motion to dismiss to be a motion 
                for summary judgment made pursuant to subsection (d).
    (d) Summary Judgment.--
            (1) In general.--
                    (A) Basis for entry of judgment.--A biomaterials 
                supplier shall be entitled to entry of judgment without 
                trial if the court finds there is no genuine issue as 
                concerning any material fact for each applicable 
                element set forth in paragraphs (1) and (2) of section 
                205(d).
                    (B) Issues of material fact.--With respect to a 
                finding made under subparagraph (A), the court shall 
                consider a genuine issue of material fact to exist only 
                if the evidence submitted by claimant would be 
                sufficient to allow a reasonable jury to reach a 
                verdict for the claimant if the jury found the evidence 
                to be credible.
            (2) Discovery made prior to a ruling on a motion for 
        summary judgment.--If, under applicable rules, the court 
        permits discovery prior to a ruling on a motion for summary 
        judgment made pursuant to this subsection, such discovery shall 
        be limited solely to establishing whether a genuine issue of 
        material fact exists.
            (3) Discovery with respect to a biomaterials supplier.--A 
        biomaterials supplier shall be subject to discovery in 
        connection with a motion seeking dismissal or summary judgment 
        on the basis of the inapplicability of section 205(d) or the 
        failure to establish the applicable elements of section 205(d) 
        solely to the extent permitted by the applicable Federal or 
        State rules for discovery against nonparties.
    (e) Stay Pending Petition for Declaration.--If a claimant has filed 
a petition for a declaration pursuant to section 205(b) with respect to 
a defendant, and the Secretary has not issued a final decision on the 
petition, the court shall stay all proceedings with respect to that 
defendant until such time as the Secretary has issued a final decision 
on the petition.
    (f) Manufacturer Conduct of Proceeding.--The manufacturer of an 
implant that is the subject of an action covered under this title shall 
be permitted to file and conduct a proceeding on any motion for summary 
judgment or dismissal filed by a biomaterials supplier who is a 
defendant under this section if the manufacturer and any other 
defendant in such action enter into a valid and applicable contractual 
agreement under which the manufacturer agrees to bear the cost of such 
proceeding or to conduct such proceeding.
    (g) Attorney Fees.--The court shall require the claimant to 
compensate the biomaterials supplier (or a manufacturer appearing in 
lieu of a supplier pursuant to subsection (f)) for attorney fees and 
costs, if--
            (1) the claimant named or joined the biomaterials supplier; 
        and
            (2) the court found the claim against the biomaterials 
        supplier to be without merit and frivolous.

SEC. 207. APPLICABILITY.

    This Act shall apply to all civil actions covered under this title 
that are commenced on or after the date of enactment of this title, 
including any such action with respect to which the harm asserted in 
the action or the conduct that caused the harm occurred before the date 
of enactment of this title.
S 565 RS----2
S 565 RS----3
S 565 RS----4
S 565 RS----5
S 565 RS----6
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