II

103D CONGRESS

2D SESSION S. 2537

To regulate interstate commerce by providing uniform principles to address

the multiple imposition of punitive damages, and for other purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 7 (legislative day, SEPTEMBER 12), 1994

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

referred to the Committee on the Judiciary

A BILL

To regulate interstate commerce by providing uniform principles to address the 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’’.

6 SEC. 2. TABLE OF CONTENTS.

7 The table of contents of this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. Findings.

Sec. 4. Purpose.

Sec. 5. Definitions.
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Sec. 6. General rule.

Sec. 7. Applicability; preemption; jurisdiction of Federal courts.

Sec. 8. Effective date.

1 SEC. 3. FINDINGS.

2 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 of

6 the assets or insurance coverage of the defendant,

7 and may endanger the ability of claimants to receive

8 compensation for basic out-of-pocket expenses and

9 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 settlement that provides

14 for a higher award amount than would ordinarily be

15 obtained. To the extent that this premium exceeds

16 what would otherwise be a fair and reasonable set17 tlement for compensatory damages, assets that could

18 be available for satisfaction of future compensatory

19 claims are dissipated.

20 (3) Fundamental unfairness results when any21 one is punished repeatedly for what is essentially the

22 same conduct.

23 (4) Federal and State appellate and trial

24 judges, and well-respected commentators, have ex-
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1 pressed concern that multiple imposition of punitive

2 damages may violate constitutionally protected

3 rights.

4 (5) Multiple imposition of punitive damages

5 may be a significant obstacle to global settlement ne6 gotiations in repetitive litigation.

7 (6) Limiting the imposition of multiple punitive

8 damages awards would facilitate the resolution of

9 mass tort claims involving thousands of injured

10 claimants.

11 (7) Federal and State trial courts cannot pro12 vide solutions to problems caused by the multiple

13 imposition of punitive damages because they lack the

14 power or authority to prohibit subsequent awards in

15 other courts.

16 (8) Individual State legislatures can create only

17 a partial remedy to address problems caused by the

18 multiple imposition of punitive damages, because

19 each State lacks the power to control the imposition

20 of punitive damages in other States.

21 SEC. 4. PURPOSE.

22 The purpose of this Act is to provide a fair and bal23 anced resolution to the problem of multiple imposition of

24 punitive damages in interstate commerce.
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1 SEC. 5. DEFINITIONS.

2 As used in this Act—

3 (1) the term ‘‘punitive damages’’ means dam4 ages awarded against any person or entity to punish

5 or deter such person or entity, or others, from en6 gaging in similar behavior in the future;

7 (2) the term ‘‘specific findings of fact’’ are find8 ings in written form focusing on specific behavior of

9 a defendant that demonstrates a conscious, flagrant,

10 indifference to the safety or welfare of the claimant;

11 and

12 (3) the term ‘‘claimant’’ means—

13 (A) any person who brings a civil action

14 and any person on behalf of whom such action

15 is brought;

16 (B) if such action is brought through or on

17 behalf of an estate, the term includes the claim18 ant’s decedent; and

19 (C) if such action is brought through or on

20 behalf of a minor or incompetent, the term in21 cludes the claimant’s parent or guardian.

22 SEC. 6. GENERAL RULE.

23 (a) GENERAL RULE.—Except as provided in sub24 section (b), punitive damages shall be prohibited in any

25 civil action in Federal or State court in which such dam26 ages are sought against a defendant based on the same
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1 act or course of conduct for which punitive damages have

2 already been awarded against such defendant.

3 (b) CIRCUMSTANCES FOR AWARD.—

4 (1) SUBSTANTIAL NEW EVIDENCE.—If the

5 court determines in a pre-trial hearing that the

6 claimant will offer new and substantial evidence of

7 previously undiscovered, additional wrongful behav8 ior on the part of the defendant, other than the in9 jury to the claimant, the court may award punitive

10 damages in accordance with subsection (c).

11 (2) INSUFFICIENT AWARD.—If the court deter12 mines in a pre-trial hearing that the amount of pu13 nitive damages previously imposed were insufficient

14 to either punish the defendant’s wrongful conduct or

15 to deter the defendant and others from similar be16 havior in the future, the court may award punitive

17 damages in accordance with subsection (c).

18 (c) LIMITATIONS ON AWARD.—A court awarding pu19 nitive damages pursuant to subsection (b) shall—

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

21 to support the award;

22 (2) reduce the amount of the punitive portion

23 of the damage award by the sum of the amounts of

24 punitive damages previously paid by the defendant
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1 in prior actions based on the same act or course of

2 conduct; and

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

4 determination and action under this subsection.

5 SEC. 7. APPLICABILITY; PREEMPTION; JURISDICTION OF

6 FEDERAL COURTS.

7 (a) APPLICABILITY TO PUNITIVE DAMAGES AC8 TIONS.—

9 (1) IN GENERAL.—Except as provided in para10 graph (2), this Act shall apply to any civil action

11 brought on any theory where punitive damages are

12 sought based on the same act or course of conduct

13 for which punitive damages have already been

14 awarded against the defendant.

15 (2) STATUTORY EXCEPTION.—This Act shall

16 not apply to any civil action involving damages

17 awarded under any Federal or State statute that

18 prescribes the amount of punitive damages to be

19 awarded.

20 (b) PREEMPTION.—Except as provided in subsection

21 (a)(2), this Act shall supersede any Federal or State law

22 regarding recovery for punitive damages.

23 (c) JURISDICTION OF FEDERAL COURTS.—The dis24 trict courts of the United States shall not have jurisdiction
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1 over any civil action pursuant to this Act based on sections

2 1331 or 1337 of title 28, United States Code.

3 SEC. 8. EFFECTIVE DATE.

4 (a) IN GENERAL.—This Act shall take effect on the

5 date of its enactment.

6 (b) PENDING ACTIONS.—This Act shall apply to—

7 (1) any civil action pending on the date of en8 actment of this Act; and

9 (2) any civil action commenced on or after such

10 date, including any action in which the harm or the

11 conduct which caused the harm occurred prior to

12 such date.

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