II

104TH CONGRESS

1ST SESSION S. 671

To provide a fair and balanced resolution to the problem of multiple

imposition of punitive damages, and for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 4 (legislative day, MARCH 27), 1995

Mr. HATCH introduced the following bill; which was read twice and referred

to the Committee on the Judiciary

A BILL

To provide a fair and balanced resolution to the problem

of multiple imposition of punitive damages, and for other

purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Multiple Punitive

5 Damages Fairness Act of 1995’’.

6 SEC. 2. DEFINITIONS.

7 For purposes of this Act, the term—

8 (1) ‘‘claimant’’ means any person who brings a

9 civil action and any person on whose behalf such an

10 action is brought; if such an action is brought
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1 through or on behalf of an estate, the term includes

2 the claimant’s decedent; if such action is brought

3 through or on behalf of a minor or incompetent, the

4 term includes the claimant’s legal guardian;

5 (2) ‘‘harm’’ means any legally cognizable wrong

6 or injury for which punitive damages may be im7 posed;

8 (3) ‘‘defendant’’ means any individual, corpora9 tion, company, association, firm, partnership, soci10 ety, joint stock company, or any other entity (includ11 ing any governmental entity);

12 (4) ‘‘punitive damages’’ means damages award13 ed against any person or entity to punish or deter

14 such person or entity, or others, from engaging in

15 similar behavior in the future;

16 (5) ‘‘specific findings of fact’’ means findings in

17 written form focusing on specific behavior of a de18 fendant; and

19 (6) ‘‘State’’ means any State of the United

20 States, the District of Columbia, Puerto Rico, the

21 Northern Mariana Islands, the Virgin Islands,

22 Guam, American Samoa, and any other territory or

23 possession of the United States, or any political sub24 division thereof.
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1 SEC. 3. MULTIPLE PUNITIVE DAMAGES FAIRNESS.

2 (a) FINDINGS.—The Congress finds the following:

3 (1) Multiple or repetitive imposition of punitive

4 damages for harms arising out of a single act or

5 course of conduct may deprive a defendant of all the

6 assets or insurance coverage of the defendant, and

7 may endanger the ability of future claimants to re8 ceive compensation for basic out-of-pocket expenses

9 and damages for pain and suffering.

10 (2) The detrimental impact of multiple punitive

11 damages exists even in cases that are settled, rather

12 than tried, because the threat of punitive damages

13 being awarded results in a higher settlement than

14 would ordinarily be obtained. To the extent this pre15 mium exceeds what would otherwise be a fair and

16 reasonable settlement for compensatory damages, as17 sets that could be available for satisfaction of future

18 compensatory claims are dissipated.

19 (3) Fundamental unfairness results when any20 one is punished repeatedly for what is essentially the

21 same conduct.

22 (4) Federal and State appellate and trial

23 judges, and well-respected commentators, have ex24 pressed concern that multiple imposition of punitive

25 damages may violate constitutionally protected due

26 process rights.
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1 (5) Multiple imposition of punitive damages

2 may be a significant obstacle to comprehensive set3 tlement negotiations in repetitive litigation.

4 (6) Limiting the imposition of multiple punitive

5 damages awards would facilitate resolution of mass

6 tort claims involving thousands of injured claimants.

7 (7) Federal and State trial courts have not pro8 vided adequate solutions to problems caused by the

9 multiple imposition of punitive damages because of

10 a concern that such courts lack the power or author11 ity to prohibit subsequent awards in other courts.

12 (8) Individual State legislatures can create only

13 a partial remedy to address problems caused by the

14 multiple imposition of punitive damages, because

15 each State lacks the power to control the imposition

16 of punitive damages in other States.

17 (b) GENERAL RULE.—Except as provided in sub18 section (c), punitive damages shall be prohibited in any

19 civil action in any State or Federal court in which such

20 damages are sought against a defendant based on the

21 same act or course of conduct for which punitive damages

22 have already been sought or awarded against such defend23 ant.

24 (c) CIRCUMSTANCES FOR AWARD.—If the court de25 termines in a pretrial hearing that the claimant will offer
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1 new and substantial evidence of previously undiscovered,

2 additional wrongful behavior on the part of the defendant,

3 other than the injury to the claimant, the court may award

4 punitive damages in accordance with subsection (d).

5 (d) LIMITATIONS ON AWARD.—A court awarding pu6 nitive damages pursuant to subsection (c) shall—

7 (1) make specific findings of fact on the record

8 to support the award;

9 (2) reduce the amount of the punitive portion

10 of the damage award by the sum of the amounts of

11 punitive damages previously paid by the defendant

12 in prior actions based on the same act or course of

13 conduct; and

14 (3) prohibit disclosure to the jury of the court’s

15 determination and action under this subsection.

16 (e) APPLICABILITY AND PREEMPTION.—(1) Except

17 as provided in paragraph (3), this section shall apply to—

18 (A) any civil action brought on any theory

19 where punitive damages are sought based on the

20 same act or course of conduct for which punitive

21 damages have already been sought or awarded

22 against the defendant; and

23 (B) all civil actions in which the trial has not

24 commenced before the effective date of this Act.
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1 (2) Except as provided in paragraph (3), this section

2 shall apply to all civil actions in which the trial has not

3 commenced before the effective date of this Act.

4 (3) This section shall not apply to any civil action

5 involving damages awarded under any Federal or State

6 statute that prescribes the precise amount of punitive

7 damages to be awarded.

8 (4) This section shall not preempt or supersede any

9 existing Federal or State law limiting or otherwise re10 stricting the recovery for punitive damages to the extent

11 that such law is inconsistent with the provisions of this

12 section.

13 SEC. 4. EFFECT ON OTHER LAW.

14 Nothing in this Act shall be construed to—

15 (1) waive or affect any defense of sovereign im16 munity asserted by any State under any law;

17 (2) supersede any Federal law;

18 (3) waive or affect any defense of sovereign im19 munity asserted by the United States;

20 (4) affect the applicability of any provision of

21 chapter 97 of title 28, United States Code;

22 (5) preempt State choice-of-law rules with re23 spect to claims brought by a foreign nation or a citi24 zen of a foreign nation;
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1 (6) affect the right of any court to transfer

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

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

4 of a foreign nation on the ground of inconvenient

5 forum; or

6 (7) create a cause of action for punitive dam7 ages.

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