I

107TH CONGRESS

1ST SESSION H. R. 2103

To establish limits on medical malpractice claims, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 7, 2001

Mr. GREENWOOD (for himself, Mr. THOMAS, Mrs. JOHNSON of Connecticut,

Mr. SHAYS, Mr. NEY, and Mr. TOOMEY) introduced the following bill;

which was referred to the Committee on the Judiciary, and in addition

to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such

provisions as fall within the jurisdiction of the committee concerned

A BILL

To establish limits on medical malpractice claims, 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 ‘‘Medical Malpractice

5 Rx Act’’.

6 SEC. 2. FEDERAL REFORM OF HEALTH CARE LIABILITY AC7 TIONS.

8 (a) APPLICABILITY.—This Act shall apply with re9 spect to any health care liability action brought in any
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1 State or Federal court and to any health care liability

2 claim subject to an ADR, except that this Act shall not

3 apply to—

4 (1) an action for damages arising from a vac5 cine-related injury or death to the extent that title

6 XXI of the Public Health Service Act applies to the

7 action, or

8 (2) an action under the Employee Retirement

9 Income Security Act of 1974 (29 U.S.C. 1001 et

10 seq.).

11 (b) PREEMPTION.—This Act shall not preempt any

12 State law that—

13 (1) provides for defenses or places limitations

14 on a person’s liability in addition to those contained

15 in this Act or otherwise imposes greater restrictions

16 than those provided in this Act; or

17 (2) imposes greater restrictions on liability or

18 damages than those provided in this Act.

19 No provision of this Act shall be construed to preempt or

20 displace the implementation of any State sponsored or pri21 vate ADR system.

22 (c) LIMITATIONS.—This Act supersedes chapter 171

23 of title 28, United States Code, (relating to tort claims

24 procedure) and preempts State law with respect to both

25 procedural and substantive matters only to the extent that
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1 such chapter or State law differs from any provision of

2 this Act or provision established under this Act. Section

3 5 shall supersede or preempt any provision of such chapter

4 or State law which prohibits the introduction of evidence

5 regarding collateral source benefits or mandates or per6 mits subrogation or a lien on the plaintiff’s award for the

7 cost of providing collateral source benefits. Any issue that

8 is not governed by any provision of this Act shall be gov9 erned by otherwise applicable Federal or State law.

10 (d) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE

11 OF LAW OR VENUE.—Nothing in subsection (c) shall be

12 construed to—

13 (1) waive or affect any defense of sovereign im14 munity asserted by any State under any provision of

15 law;

16 (2) waive or affect any defense of sovereign im17 munity asserted by the United States;

18 (3) affect the applicability of any provision of

19 the Foreign Sovereign Immunities Act of 1976;

20 (4) preempt State choice-of-law rules with re21 spect to claims brought by a foreign nation or a cit22 izen of a foreign nation; or

23 (5) affect the right of any court to transfer

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

25 dismiss a claim of a foreign nation or of a citizen
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1 of a foreign nation on the ground of inconvenient

2 forum.

3 (e) AMOUNT IN CONTROVERSY.—In an action to

4 which this Act applies and which is brought under section

5 1332 of title 28, United States Code, the amount of non6 economic damages or punitive damages, and attorneys’

7 fees or costs, shall not be included in determining whether

8 the matter in controversy exceeds the sum or value of

9 $75,000.

10 (f) FEDERAL COURT JURISDICTION NOT ESTAB11 LISHED ON FEDERAL QUESTION GROUNDS.—Nothing in

12 this Act shall be construed to establish any jurisdiction

13 in the district courts of the United States over health care

14 liability actions on the basis of section 1331 or 1337 of

15 title 28, United States Code.

16 SEC. 3. STATUTE OF LIMITATIONS.

17 A health care liability action may not be brought

18 after the expiration of the 2-year period that begins on

19 the date on which the alleged injury that is the subject

20 of the action was discovered or should reasonably have

21 been discovered, but in no case after the expiration of the

22 5-year period that begins on the date the alleged injury

23 occurred.
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1 SEC. 4. CALCULATION AND PAYMENT OF DAMAGES.

2 (a) JOINT AND SEVERAL LIABILITY.—In any health

3 care liability action, a defendant shall be liable only for

4 the amount of noneconomic damages attributable to such

5 defendant in direct proportion to such defendant’s share

6 of fault or responsibility for the claimant’s actual dam7 ages, as determined by the trier of fact. In all such cases,

8 the liability of a defendant for noneconomic damages shall

9 be several and not joint.

10 (b) LIMITATION ON NONECONOMIC DAMAGES.—The

11 total amount of noneconomic damages that may be award12 ed to a claimant for losses resulting from the injury which

13 is the subject of a health care liability action may not ex14 ceed $500,000, regardless of the number of parties against

15 whom the action is brought or the number of actions

16 brought with respect to the injury. The limitation under

17 this paragraph shall not apply to an action for damages

18 based solely on intentional denial of medical treatment

19 necessary to preserve a patient’s life that the patient is

20 otherwise qualified to receive, against the wishes of a pa21 tient, or if the patient is incompetent, against the wishes

22 of the patient’s guardian, on the basis of the patient’s

23 present or predicated age, disability, degree of medical de24 pendency, or quality of life.

25 (c) TREATMENT OF PUNITIVE DAMAGES.—
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1 (1) GENERAL RULE.—Punitive damages may,

2 to the extent permitted by applicable State law, be

3 awarded in any health care liability action for harm

4 in any Federal or State court against a defendant if

5 the claimant establishes by clear and convincing evi6 dence that the harm suffered was the result of

7 conduct—

8 (A) specifically intended to cause harm, or

9 (B) conduct manifesting a conscious, fla10 grant indifference to the rights or safety of oth11 ers.

12 (2) APPLICABILITY.—This subsection shall

13 apply to any health care liability action brought in

14 any Federal or State court on any theory where pu15 nitive damages are sought. This subsection does not

16 create a cause of action for punitive damages. This

17 subsection does not preempt or supersede any State

18 or Federal law to the extent that such law would

19 further limit the award of punitive damages.

20 (3) BIFURCATION.—At the request of any

21 party, the trier of fact shall consider in a separate

22 proceeding whether punitive damages are to be

23 awarded and the amount of such award. If a sepa24 rate proceeding is requested, evidence relevant only

25 to the claim of punitive damages, as determined by
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1 applicable State law, shall be inadmissible in any

2 proceeding to determine whether actual damages are

3 to be awarded.

4 (4) DRUGS AND DEVICES.—

5 (A) IN GENERAL.—(i) Punitive damages

6 shall not be awarded against a manufacturer or

7 product seller of a drug or medical device which

8 caused the claimant’s harm where—

9 (I) such drug or device was subject to

10 premarket approval by the Food and Drug

11 Administration with respect to the safety

12 of the formulation or performance of the

13 aspect of such drug or device which caused

14 the claimant’s harm, or the adequacy of

15 the packaging or labeling of such drug or

16 device which caused the harm, and such

17 drug, device, packaging, or labeling was

18 approved by the Food and Drug Adminis19 tration; or

20 (II) the drug is generally recognized

21 as safe and effective pursuant to conditions

22 established by the Food and Drug Admin23 istration and applicable regulations, includ24 ing packaging and labeling regulations.
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1 (ii) Clause (i) shall not apply in any case

2 in which the defendant, before or after pre3 market approval of a drug or device—

4 (I) intentionally and wrongfully with5 held from or misrepresented to the Food

6 and Drug Administration information con7 cerning such drug or device required to be

8 submitted under the Federal Food, Drug,

9 and Cosmetic Act (21 U.S.C. 301 et seq.)

10 or section 351 of the Public Health Service

11 Act (42 U.S.C. 262) that is material and

12 relevant to the harm suffered by the claim13 ant, or

14 (II) made an illegal payment to an of15 ficial or employee of the Food and Drug

16 Administration for the purpose of securing

17 or maintaining approval of such drug or

18 device.

19 (B) PACKAGING.—In a health care liability

20 action for harm which is alleged to relate to the

21 adequacy of the packaging or labeling of a drug

22 which is required to have tamper-resistant

23 packaging under regulations of the Secretary of

24 Health and Human Services (including labeling

25 regulations related to such packaging), the
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1 manufacturer or product seller of the drug shall

2 not be held liable for punitive damages unless

3 such packaging or labeling is found by the court

4 by clear and convincing evidence to be substan5 tially out of compliance with such regulations.

6 (d) PERIODIC PAYMENTS FOR FUTURE LOSSES.—

7 (1) GENERAL RULE.—In any health care liabil8 ity action in which the damages awarded for future

9 economic and noneconomic loss exceeds $50,000, a

10 person shall not be required to pay such damages in

11 a single, lump-sum payment, but shall be permitted

12 to make such payments periodically based on when

13 the damages are found likely to occur, as such pay14 ments are determined by the court.

15 (2) FINALITY OF JUDGMENT.—The judgment

16 of the court awarding periodic payments under this

17 subsection may not, in the absence of fraud, be re18 opened at any time to contest, amend, or modify the

19 schedule or amount of the payments.

20 (3) LUMP-SUM SETTLEMENTS.—This sub21 section shall not be construed to preclude a settle22 ment providing for a single, lump-sum payment.

23 (e) TREATMENT OF COLLATERAL SOURCE PAY24 MENTS.—
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1 (1) INTRODUCTION INTO EVIDENCE.—In any

2 health care liability action, any defendant may intro3 duce evidence of collateral source payments. If any

4 defendant elects to introduce such evidence, the

5 claimant may introduce evidence of any amount paid

6 or contributed or reasonably likely to be paid or con7 tributed in the future by or on behalf of the claim8 ant to secure the right to such collateral source pay9 ments.

10 (2) NO SUBROGATION.—No provider of collat11 eral source payments shall recover any amount

12 against the claimant or receive any lien or credit

13 against the claimant’s recovery or be equitably or le14 gally subrogated the right of the claimant in a

15 health care liability action.

16 (3) APPLICATION TO SETTLEMENTS.—This sub17 section shall apply to an action that is settled as well

18 as an action that is resolved by a fact finder.

19 SEC. 5. AWARD OF ATTORNEY’S FEES.

20 (a) LIMITATIONS ON CONTINGENT FEES.—

21 (1) IN GENERAL.—The total of all contingent

22 fees for representing all claimants in a health care

23 liability claim or action shall not exceed the following

24 limits:
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1 (A) 40 percent of the first $50,000 recov2 ered by the claimant.

(B) 331 3 ⁄3 percent of the next $50,000 re4 covered by the claimant.

5 (C) 25 percent of the next $500,000 recov6 ered by the claimant.

7 (D) 15 percent of any amount by which

8 the recovery by the claimant exceeds $600,000.

9 (2) APPLICABILITY.—The limitations prescribed

10 by paragraph (1) shall apply whether the recovery is

11 by judgment, settlement, mediation, arbitration, or

12 any other form of ADR. A court acting in a health

13 care liability claim or action involving a minor or in14 competent person retains the authority to authorize

15 or approve a fee that is less than the maximum per16 mitted under paragraph (1).

17 (3) DEFINITIONS.—For purposes of this sub18 section:

19 (A) CONTINGENT FEE.—The term ‘‘contin20 gent fee’’ includes all compensation to any per21 son which is payable only if a recovery is ef22 fected on behalf of one or more claimants.

23 (B) RECOVERY.—The term ‘‘recovery’’

24 means the net sum recovered after deducting

25 any disbursements or costs incurred in connec-
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1 tion with prosecution or settlement of the claim,

2 including all costs paid or advanced by any per3 son. Costs of health care incurred by the plain4 tiff and the attorney’s office overhead costs or

5 charges for legal services are not deductible dis6 bursements of costs for such purpose.

7 (b) HOURS WORKED.—Counsel of record in a health

8 care liability action shall maintain accurate and up-to-date

9 records of hours worked for such action regardless of the

10 fee arrangement with the attorney’s client.

11 (c) COSTS.—Nothing in this section shall affect the

12 right of a party to be awarded costs under applicable law.

13 (d) EFFECTIVE DATE.—This section shall apply with

14 respect to a health care liability action which is brought

15 after the date of the enactment of this Act for a claim

16 arising from an injury occurring after such date of enact17 ment.

18 SEC. 6. ALTERNATIVE DISPUTE RESOLUTION.

19 Any ADR used to resolve a health care liability action

20 or claim shall contain provisions relating to statute of limi21 tations, noneconomic damages, joint and several liability,

22 punitive damages, collateral source rule, periodic pay23 ments, and award of attorney’s fees which are consistent

24 with the provisions relating to such matters in this Act.
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1 SEC. 7. DEFINITIONS.

2 As used in this Act:

3 (1) ACTUAL DAMAGES.—The term ‘‘actual dam4 ages’’ means damages awarded to pay for economic

5 loss.

6 (2) ADR.—The term ‘‘ADR’’ means an alter7 native dispute resolution system established under

8 Federal or State law that provides for the resolution

9 of health care liability claims in a manner other than

10 through health care liability actions.

11 (3) CLAIMANT.—The term ‘‘claimant’’ means

12 any person who brings a health care liability action

13 and any person on whose behalf such an action is

14 brought. If such action is brought through or on be15 half of an estate, the term includes the claimant’s

16 decedent. If such action is brought through or on be17 half of a minor or incompetent, the term includes

18 the claimant’s legal guardian.

19 (4) CLEAR AND CONVINCING EVIDENCE.—The

20 term ‘‘clear and convincing evidence’’ is that meas21 ure or degree of proof that will produce in the mind

22 of the trier of fact a firm belief or conviction as to

23 the truth of the allegations sought to be established.

24 Such measure or degree of proof is more than that

25 required under preponderance of the evidence but
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1 less than that required for proof beyond a reason2 able doubt.

3 (5) COLLATERAL SOURCE PAYMENTS.—The

4 term ‘‘collateral source payments’’ means any

5 amount paid or reasonably likely to be paid in the

6 future to or on behalf of a claimant, or any service,

7 product, or other benefit provided or reasonably like8 ly to be provided in the future to or on behalf of a

9 claimant, as a result of an injury or wrongful death,

10 pursuant to—

11 (A) any State or Federal health, sickness,

12 income-disability, accident or workers’ com13 pensation Act;

14 (B) any health, sickness, income-disability,

15 or accident insurance that provides health bene16 fits or income-disability coverage;

17 (C) any contract or agreement of any

18 group, organization, partnership, or corporation

19 to provide, pay for, or reimburse the cost of

20 medical, hospital, dental, or income disability

21 benefits; and

22 (D) any other publicly or privately funded

23 program.

24 (6) DRUG.—The term ‘‘drug’’ has the meaning

25 given such term in section 201(g)(1) of the Federal
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1 Food, Drug, and Cosmetic Act (21 U.S.C.

2 321(g)(1)).

3 (7) ECONOMIC DAMAGES.—The term ‘‘economic

4 damages’’ means objectively verifiable monetary

5 losses incurred as a result of the provision of, use

6 of, or payment for (or failure to provide, use, or pay

7 for) health care services or medical products such as

8 past and future medical expenses, loss of past and

9 future earnings, cost of obtaining domestic services,

10 loss of employment, loss due to death, burial costs,

11 and loss of business or employment opportunities.

12 (8) HARM.—The term ‘‘harm’’ means any le13 gally cognizable wrong or injury for which punitive

14 damages may be imposed.

15 (9) HEALTH BENEFIT PLAN.—The term

16 ‘‘health benefit plan’’ means—

17 (A) a hospital or medical expense incurred

18 policy or certificate,

19 (B) a hospital or medical service plan con20 tract,

21 (C) a health maintenance subscriber con22 tract, or

23 (D) a Medicare+Choice product (offered

24 under part C of title XVIII of the Social Secu25 rity Act),
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1 that provides benefits with respect to health care

2 services.

3 (10) HEALTH CARE LIABILITY ACTION.—The

4 term ‘‘health care liability action’’ means a civil ac5 tion brought in a State or Federal court or pursuant

6 to alternative dispute resolution against a health

7 care provider, an entity which is obligated to provide

8 or pay for health benefits under any health benefit

9 plan (including any person or entity acting under a

10 contract or arrangement to provide or administer

11 any health benefit), or the manufacturer, distributor,

12 supplier, marketer, promoter, or seller of a medical

13 product, in which the claimant alleges a claim (in14 cluding third party claims, cross claims, counter

15 claims, or contribution claims) based upon the provi16 sion of (or the failure to provide or pay for) health

17 care services or the use of a medical product, re18 gardless of the theory of liability on which the claim

19 is based or the number of plaintiffs, defendants, or

20 causes of action.

21 (11) HEALTH CARE LIABILITY CLAIM.—The

22 term ‘‘health care liability claim’’ means a claim in

23 which the claimant alleges that injury was caused by

24 the provision of (or the failure to provide) health

25 care services or medical products.
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1 (12) HEALTH CARE PROVIDER.—The term

2 ‘‘health care provider’’ means any person that is en3 gaged in the delivery of health care services in a

4 State and that is required by the laws or regulations

5 of the State to be licensed or certified by the State

6 to engage in the delivery of such services in the

7 State.

8 (13) HEALTH CARE SERVICE.—The term

9 ‘‘health care service’’ means any service for which

10 payment may be made under a health benefit plan

11 including services related to the delivery or adminis12 tration of such service.

13 (14) MEDICAL PRODUCT.—The term ‘‘medical

14 product’’ means a drug (as defined in section

15 201(g)(1)) of the Federal Food, Drug, and Cosmetic

16 Act (21 U.S.C. 321(g)(1)) or a medical device (as

17 defined in section 201(h)) of the Federal Food,

18 Drug, and Cosmetic Act (21 U.S.C. 321(h)), includ19 ing any component or raw material used in a drug

20 or device but excluding health care services.

21 (15) NONECONOMIC DAMAGES.—The term

22 ‘‘noneconomic damages’’ means damages paid to an

23 individual for pain and suffering, inconvenience,

24 emotional distress, mental anguish, loss of consor-
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1 tium, injury to reputation, humiliation, and other

2 nonpecuniary losses.

3 (16) PERSON.—The term ‘‘person’’ means any

4 individual, corporation, company, association, firm,

5 partnership, society, joint stock company, or any

6 other entity, including any governmental entity.

7 (17) PRODUCT SELLER.—

8 (A) IN GENERAL.—Subject to subpara9 graph (B), the term ‘‘product seller’’ means a

10 person who, in the course of a business con11 ducted for that purpose—

12 (i) sells, distributes, rents, leases, pre13 pares, blends, packages, labels, or is other14 wise involved in placing, a product in the

15 stream of commerce, or

16 (ii) installs, repairs, or maintains the

17 harm-causing aspect of a product.

18 (B) EXCLUSION.—Such term does not

19 include—

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

21 (ii) a provider of professional services

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

23 product is incidental to the transaction and

24 the essence of the transaction is the fur25 nishing of judgment, skill, or services; or
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1 (iii) any person who—

2 (I) acts in only a financial capac3 ity with respect to the sale of a prod4 uct; or

5 (II) leases a product under a

6 lease arrangement in which the selec7 tion, possession, maintenance, and op8 eration of the product are controlled

9 by a person other than the lessor.

10 (18) PUNITIVE DAMAGES.—The term ‘‘punitive

11 damages’’ means damages awarded against any per12 son not to compensate for actual injury suffered, but

13 to punish or deter such person or others from en14 gaging in similar behavior in the future.

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

16 the several States, the District of Columbia, Puerto

17 Rico, the Virgin Islands, Guam, American Samoa,

18 the Northern Mariana Islands, and any other terri19 tory or possession of the United States.

20 SEC. 8. EFFECTIVE DATE.

21 This Act will apply to any health care liability action

22 brought in a Federal or State court and to any health

23 care liability claim subject to an ADR system, that is initi24 ated on or after the date of enactment of this Act, except

25 that any health care liability claim or action arising from
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1 an injury occurring prior to the date of enactment of this

2 Act shall be governed by the applicable statute of limita3 tions provisions in effect at the time the injury occurred.

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