I

107TH CONGRESS

1ST SESSION H. R. 1805

To provide small businesses certain protections from litigation excesses and

to limit the product liability of nonmanufacturer product sellers.

IN THE HOUSE OF REPRESENTATIVES

MAY 10, 2001

Mr. HUTCHINSON (for himself, Mr. HOLDEN, Mr. BURR of North Carolina,

Mr. MORAN of Virginia, Mr. CHABOT, and Mr. DOOLEY of California) 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 provide small businesses certain protections from litigation excesses and to limit the product liability of nonmanufacturer product sellers.

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Small Business Liability Reform Act of 2001’’.

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this Act is as follows:
2

•HR 1805 IH

Sec. 1. Short title; table of contents.

TITLE I—SMALL BUSINESS LAWSUIT ABUSE PROTECTION

Sec. 101. Findings.

Sec. 102. Definitions.

Sec. 103. Limitation on punitive damages for small businesses.

Sec. 104. Limitation on joint and several liability for noneconomic loss for

small businesses.

Sec. 105. Exceptions to limitations on liability.

Sec. 106. Preemption and election of State nonapplicability.

TITLE II—PRODUCT SELLER FAIR TREATMENT

Sec. 201. Findings; purposes.

Sec. 202. Definitions.

Sec. 203. Applicability; preemption.

Sec. 204. Liability rules applicable to product sellers, renters, and lessors.

Sec. 205. Federal cause of action precluded.

TITLE III—EFFECTIVE DATE

Sec. 301. Effective date.

1 TITLE I—SMALL BUSINESS

2 LAWSUIT ABUSE PROTECTION

3 SEC. 101. FINDINGS.

4 Congress finds that—

5 (1) the United States civil justice system is in6 efficient, unpredictable, unfair, costly, and impedes

7 competitiveness in the marketplace for goods, serv8 ices, business, and employees;

9 (2) the defects in the United States civil justice

10 system have a direct and undesirable effect on inter11 state commerce by decreasing the availability of

12 goods and services in commerce;

13 (3) there is a need to restore rationality, cer14 tainty, and fairness to the legal system;
3

•HR 1805 IH

1 (4) the spiralling costs of litigation and the

2 magnitude and unpredictability of punitive damage

3 awards and noneconomic damage awards have con4 tinued unabated for at least the past 30 years;

5 (5) the Supreme Court of the United States has

6 recognized that a punitive damage award can be un7 constitutional if the award is grossly excessive in re8 lation to the legitimate interest of the government in

9 the punishment and deterrence of unlawful conduct;

10 (6) just as punitive damage awards can be

11 grossly excessive, so can it be grossly excessive in

12 some circumstances for a party to be held respon13 sible under the doctrine of joint and several liability

14 for damages that party did not cause;

15 (7) as a result of joint and several liability, en16 tities including small businesses are often brought

17 into litigation despite the fact that their conduct

18 may have little or nothing to do with the accident

19 or transaction giving rise to the lawsuit, and may

20 therefore face increased and unjust costs due to the

21 possibility or result of unfair and disproportionate

22 damage awards;

23 (8) the costs imposed by the civil justice system

24 on small businesses are particularly acute, since
4

•HR 1805 IH

1 small businesses often lack the resources to bear

2 those costs and to challenge unwarranted lawsuits;

3 (9) due to high liability costs and unwarranted

4 litigation costs, small businesses face higher costs in

5 purchasing insurance through interstate insurance

6 markets to cover their activities;

7 (10) liability reform for small businesses will

8 promote the free flow of goods and services, lessen

9 burdens on interstate commerce, and decrease liti10 giousness; and

11 (11) legislation to address these concerns is an

12 appropriate exercise of the powers of Congress under

13 clauses 3, 9, and 18 of section 8 of article I of the

14 Constitution of the United States, and the 14th

15 amendment to the Constitution of the United States.

16 SEC. 102. DEFINITIONS.

17 In this title:

18 (1) CRIME OF VIOLENCE.—The term ‘‘crime of

19 violence’’ has the same meaning as in section 16 of

20 title 18, United States Code.

21 (2) DRUG.—The term ‘‘drug’’ means any con22 trolled substance (as defined in section 102 of the

23 Controlled Substances Act (21 U.S.C. 802)) that

24 was not legally prescribed for use by the defendant

25 or that was taken by the defendant other than in
5

•HR 1805 IH

1 accordance with the terms of a lawfully issued pre2 scription.

3 (3) ECONOMIC LOSS.—The term ‘‘economic

4 loss’’ means any pecuniary loss resulting from harm

5 (including the loss of earnings or other benefits re6 lated to employment, medical expense loss, replace7 ment services loss, loss due to death, burial costs,

8 and loss of business or employment opportunities) to

9 the extent recovery for such loss is allowed under ap10 plicable State law.

11 (4) HARM.—The term ‘‘harm’’ means any phys12 ical injury, illness, disease, or death or damage to

13 property.

14 (5) INTERNATIONAL TERRORISM.—The term

15 ‘‘international terrorism’’ has the same meaning as

16 in section 2331 of title 18, United States Code.

17 (6) NONECONOMIC LOSS.—The term ‘‘non18 economic loss’’ means loss for physical or emotional

19 pain, suffering, inconvenience, physical impairment,

20 mental anguish, disfigurement, loss of enjoyment of

21 life, loss of society and companionship, loss of con22 sortium (other than loss of domestic service), injury

23 to reputation, or any other nonpecuniary loss of any

24 kind or nature.
6

•HR 1805 IH

1 (7) PERSON.—The term ‘‘person’’ means any

2 individual, corporation, company, association, firm,

3 partnership, society, joint stock company, or any

4 other entity (including any governmental entity).

5 (8) PUNITIVE DAMAGES.—The term ‘‘punitive

6 damages’’ means damages awarded against any per7 son or entity to punish or deter such person, entity,

8 or others from engaging in similar behavior in the

9 future. Such term does not include any civil pen10 alties, fines, or treble damages that are assessed or

11 enforced by an agency of State or Federal govern12 ment pursuant to a State or Federal statute.

13 (9) SMALL BUSINESS.—

14 (A) IN GENERAL.—The term ‘‘small busi15 ness’’ means any unincorporated business, or

16 any partnership, corporation, association, unit

17 of local government, or organization that has

18 fewer than 25 full-time employees as deter19 mined on the date the civil action involving the

20 small business is filed.

21 (B) CALCULATION OF NUMBER OF EM22 PLOYEES.—For purposes of subparagraph (A),

23 the number of employees of a subsidiary of a

24 wholly owned corporation includes the employ25 ees of—
7

•HR 1805 IH

1 (i) a parent corporation; and

2 (ii) any other subsidiary corporation

3 of that parent corporation.

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

5 the several States, the District of Columbia, the

6 Commonwealth of Puerto Rico, the Virgin Islands,

7 Guam, American Samoa, the Northern Mariana Is8 lands, any other territory or possession of the

9 United States, or any political subdivision of any

10 such State, commonwealth, territory, or possession.

11 SEC. 103. LIMITATION ON PUNITIVE DAMAGES FOR SMALL

12 BUSINESSES.

13 (a) GENERAL RULE.—Except as provided in section

14 105, in any civil action against a small business, punitive

15 damages may, to the extent permitted by applicable Fed16 eral or State law, be awarded against the small business

17 only if the claimant establishes by clear and convincing

18 evidence that conduct carried out by that defendant with

19 a conscious, flagrant indifference to the rights or safety

20 of others was the proximate cause of the harm that is the

21 subject of the action.

22 (b) LIMITATION ON AMOUNT.—In any civil action

23 against a small business, punitive damages awarded

24 against a small business shall not exceed the lesser of—
8

•HR 1805 IH

1 (1) three times the total amount awarded to the

2 claimant for economic and noneconomic losses; or

3 (2) $250,000,

4 except that the court may make this subsection inappli5 cable if the court finds that the plaintiff established by

6 clear and convincing evidence that the defendant acted

7 with specific intent to cause the type of harm for which

8 the action was brought.

9 (c) APPLICATION BY THE COURT.—The limitation

10 prescribed by this section shall be applied by the court

11 and shall not be disclosed to the jury.

12 SEC. 104. LIMITATION ON JOINT AND SEVERAL LIABILITY

13 FOR NONECONOMIC LOSS FOR SMALL BUSI14 NESSES.

15 (a) GENERAL RULE.—Except as provided in section

16 105, in any civil action against a small business, the liabil17 ity of each defendant that is a small business, or the agent

18 of a small business, for noneconomic loss shall be deter19 mined in accordance with subsection (b).

20 (b) AMOUNT OF LIABILITY.—

21 (1) IN GENERAL.—In any civil action described

22 in subsection (a)—

23 (A) each defendant described in that sub24 section shall be liable only for the amount of

25 noneconomic loss allocated to that defendant in
9

•HR 1805 IH

1 direct proportion to the percentage of responsi2 bility of that defendant (determined in accord3 ance with paragraph (2)) for the harm to the

4 claimant with respect to which that defendant

5 is liable; and

6 (B) the court shall render a separate judg7 ment against each defendant described in that

8 subsection in an amount determined under sub9 paragraph (A).

10 (2) PERCENTAGE OF RESPONSIBILITY.—For

11 purposes of determining the amount of noneconomic

12 loss allocated to a defendant under this section, the

13 trier of fact shall determine the percentage of re14 sponsibility of each person responsible for the harm

15 to the claimant, regardless of whether or not the

16 person is a party to the action.

17 SEC. 105. EXCEPTIONS TO LIMITATIONS ON LIABILITY.

18 The limitations on liability under sections 103 and

19 104 do not apply—

20 (1) to any defendant whose misconduct—

21 (A) constitutes—

22 (i) a crime of violence; or

23 (ii) an act of international terrorism;
10

•HR 1805 IH

1 (B) results in liability for damages relating

2 to the injury to, destruction of, loss of, or loss

3 of use of, natural resources described in—

4 (i) section 1002(b)(2)(A) of the Oil

5 Pollution Act of 1990 (33 U.S.C.

6 2702(b)(2)(A)); or

7 (ii) section 107(a)(4)(C) of the Com8 prehensive Environmental Response, Com9 pensation, and Liability Act of 1980 (42

10 U.S.C. 9607(a)(4)(C));

11 (C) involves—

12 (i) a sexual offense, as defined by ap13 plicable State law; or

14 (ii) a violation of a Federal or State

15 civil rights law;

16 (D) occurred at the time the defendant

17 was under the influence (as determined under

18 applicable State law) of intoxicating alcohol or

19 a drug, and the fact that the defendant was

20 under the influence was the cause of any harm

21 alleged by the plaintiff in the subject action; or

22 (2) to any cause of action which is brought

23 under the provisions of title 31, United States Code,

24 relating to false claims (31 U.S.C. 3729–3733) or to
11

•HR 1805 IH

1 any other cause of action brought by the United

2 States relating to fraud or false statements.

3 SEC. 106. PREEMPTION AND ELECTION OF STATE NON4 APPLICABILITY.

5 (a) PREEMPTION.—Subject to subsection (b), this

6 title preempts the laws of any State to the extent that

7 State laws are inconsistent with this title.

8 (b) ELECTION OF STATE REGARDING NONAPPLICA9 BILITY.—This title does not apply to any action in a State

10 court against a small business in which all parties are citi11 zens of the State, if the State enacts a statute—

12 (1) citing the authority of this subsection;

13 (2) declaring the election of such State that this

14 title does not apply as of a date certain to such ac15 tions in the State; and

16 (3) containing no other provision.

17 TITLE II—PRODUCT SELLER

18 FAIR TREATMENT

19 SEC. 201. FINDINGS; PURPOSES.

20 (a) FINDINGS.—Congress finds that—

21 (1) although damage awards in product liability

22 actions may encourage the production of safer prod23 ucts, they may also have a direct effect on interstate

24 commerce and consumers of the United States by in-
12

•HR 1805 IH

1 creasing the cost of, and decreasing the availability

2 of, products;

3 (2) some of the rules of law governing product

4 liability actions are inconsistent within and among

5 the States, resulting in differences in State laws that

6 may be inequitable with respect to plaintiffs and de7 fendants and may impose burdens on interstate com8 merce;

9 (3) product liability awards may jeopardize the

10 financial well-being of individuals and industries,

11 particularly the small businesses of the United

12 States;

13 (4) because the product liability laws of a State

14 may have adverse effects on consumers and busi15 nesses in many other States, it is appropriate for the

16 Federal Government to enact national, uniform

17 product liability laws that preempt State laws; and

18 (5) under clause 3 of section 8 of article I of

19 the United States Constitution, it is the constitu20 tional role of the Federal Government to remove

21 barriers to interstate commerce.

22 (b) PURPOSES.—The purposes of this title, based on

23 the powers of the United States under clause 3 of section

24 8 of article I of the United States Constitution, are to
13

•HR 1805 IH

1 promote the free flow of goods and services and lessen the

2 burdens on interstate commerce, by—

3 (1) establishing certain uniform legal principles

4 of product liability that provide a fair balance among

5 the interests of all parties in the chain of production,

6 distribution, and use of products; and

7 (2) reducing the unacceptable costs and delays

8 in product liability actions caused by excessive litiga9 tion that harms both plaintiffs and defendants.

10 SEC. 202. DEFINITIONS.

11 In this title:

12 (1) ALCOHOL PRODUCT.—The term ‘‘alcohol

13 product’’ includes any product that contains not less

than 1 14 ⁄2 of 1 percent of alcohol by volume and is in15 tended for human consumption.

16 (2) CLAIMANT.—The term ‘‘claimant’’ means

17 any person who brings an action covered by this title

18 and any person on whose behalf such an action is

19 brought. If such an action is brought through or on

20 behalf of an estate, the term includes the claimant’s

21 decedent. If such an action is brought through or on

22 behalf of a minor or incompetent, the term includes

23 the claimant’s legal guardian.

24 (3) COMMERCIAL LOSS.—The term ‘‘commercial

25 loss’’ means—
14

•HR 1805 IH

1 (A) any loss or damage solely to a product

2 itself;

3 (B) loss relating to a dispute over the

4 value of a product; or

5 (C) consequential economic loss, the recov6 ery of which is governed by applicable State

7 commercial or contract laws that are similar to

8 the Uniform Commercial Code.

9 (4) COMPENSATORY DAMAGES.—The term

10 ‘‘compensatory damages’’ means damages awarded

11 for economic and noneconomic losses.

12 (5) DRAM-SHOP.—The term ‘‘dram-shop’’

13 means a drinking establishment where alcoholic bev14 erages are sold to be consumed on the premises.

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

16 loss’’ means any pecuniary loss resulting from harm

17 (including the loss of earnings or other benefits re18 lated to employment, medical expense loss, replace19 ment services loss, loss due to death, burial costs,

20 and loss of business or employment opportunities)

21 to the extent recovery for that loss is allowed under

22 applicable State law.

23 (7) HARM.—The term ‘‘harm’’ means any phys24 ical injury, illness, disease, or death or damage to
15

•HR 1805 IH

1 property caused by a product. The term does not in2 clude commercial loss.

3 (8) MANUFACTURER.—The term ‘‘manufac4 turer’’ means—

5 (A) any person who—

6 (i) is engaged in a business to

7 produce, create, make, or construct any

8 product (or component part of a product);

9 and

10 (ii)(I) designs or formulates the prod11 uct (or component part of the product); or

12 (II) has engaged another person to

13 design or formulate the product (or compo14 nent part of the product);

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

16 to those aspects of a product (or component

17 part of a product) that are created or affected

18 when, before placing the product in the stream

19 of commerce, the product seller—

20 (i) produces, creates, makes, con21 structs and designs, or formulates an as22 pect of the product (or component part of

23 the product) made by another person; or

24 (ii) has engaged another person to de25 sign or formulate an aspect of the product
16

•HR 1805 IH

1 (or component part of the product) made

2 by another person; or

3 (C) any product seller not described in

4 subparagraph (B) that holds itself out as a

5 manufacturer to the user of the product.

6 (9) NONECONOMIC LOSS.—The term ‘‘non7 economic loss’’ means loss for physical or emotional

8 pain, suffering, inconvenience, physical impairment,

9 mental anguish, disfigurement, loss of enjoyment of

10 life, loss of society and companionship, loss of con11 sortium (other than loss of domestic service), injury

12 to reputation, or any other nonpecuniary loss of any

13 kind or nature.

14 (10) PERSON.—The term ‘‘person’’ means any

15 individual, corporation, company, association, firm,

16 partnership, society, joint stock company, or any

17 other entity (including any governmental entity).

18 (11) PRODUCT.—

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

20 means any object, substance, mixture, or raw

21 material in a gaseous, liquid, or solid state

22 that—

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

24 assembled whole, in a mixed or combined
17

•HR 1805 IH

1 state, or as a component part or ingre2 dient;

3 (ii) is produced for introduction into

4 trade or commerce;

5 (iii) has intrinsic economic value; and

6 (iv) is intended for sale or lease to

7 persons for commercial or personal use.

8 (B) EXCLUSION.—The term ‘‘product’’

9 does not include—

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

11 products used for therapeutic or medical

12 purposes, except to the extent that such

13 tissue, organs, blood, and blood products

14 (or the provision thereof) are subject,

15 under applicable State law, to a standard

16 of liability other than negligence; or

17 (ii) electricity, water delivered by a

18 utility, natural gas, or steam.

19 (12) PRODUCT LIABILITY ACTION.—

20 (A) GENERAL RULE.—Except as provided

21 in subparagraph (B), the term ‘‘product liabil22 ity action’’ means a civil action brought on any

23 theory for a claim for any physical injury, ill24 ness, disease, death, or damage to property that

25 is caused by a product.
18

•HR 1805 IH

1 (B) The following claims are not included

2 in the term ‘‘product liability action’’:

3 (i) NEGLIGENT ENTRUSTMENT.—A

4 claim for negligent entrustment.

5 (ii) NEGLIGENCE PER SE.—A claim

6 brought under a theory of negligence per

7 se.

8 (iii) DRAM-SHOP.—A claim brought

9 under a theory of dram-shop or third-party

10 liability arising out of the sale or providing

11 of an alcoholic product to an intoxicated

12 person or minor.

13 (13) PRODUCT SELLER.—

14 (A) IN GENERAL.—The term ‘‘product sell15 er’’ means a person who in the course of a busi16 ness conducted for that purpose—

17 (i) sells, distributes, rents, leases, pre18 pares, blends, packages, labels, or other19 wise is involved in placing a product in the

20 stream of commerce; or

21 (ii) installs, repairs, refurbishes, re22 conditions, or maintains the harm-causing

23 aspect of the product.

24 (B) EXCLUSION.—The term ‘‘product sell25 er’’ does not include—
19

•HR 1805 IH

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

2 (ii) a provider of professional services

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

4 product is incidental to the transaction and

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

7 (iii) any person who—

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

11 (II) leases a product under a

12 lease arrangement in which the lessor

13 does not initially select the leased

14 product and does not during the lease

15 term ordinarily control the daily oper16 ations and maintenance of the prod17 uct.

18 (14) STATE.—The term ‘‘State’’ means each of

19 the several States, the District of Columbia, the

20 Commonwealth of Puerto Rico, the Virgin Islands,

21 Guam, American Samoa, the Northern Mariana Is22 lands, any other territory or possession of the

23 United States, or any political subdivision of any

24 such State, commonwealth, territory, or possession.
20

•HR 1805 IH

1 SEC. 203. APPLICABILITY; PREEMPTION.

2 (a) APPLICABILITY.—

3 (1) IN GENERAL.—Except as provided in para4 graph (2), this title governs any product liability ac5 tion brought in any Federal or State court.

6 (2) ACTIONS FOR COMMERCIAL LOSS.—A civil

7 action brought for commercial loss shall be governed

8 only by applicable State commercial or contract laws

9 that are similar to the Uniform Commercial Code.

10 (b) RELATIONSHIP TO STATE LAW.—This title su11 persedes a State law only to the extent that the State law

12 applies to an issue covered by this title. Any issue that

13 is not governed by this title, including any standard of

14 liability applicable to a manufacturer, shall be governed

15 by any applicable Federal or State law.

16 (c) EFFECT ON OTHER LAW.—Nothing in this title

17 shall be construed to—

18 (1) waive or affect any defense of sovereign im19 munity asserted by any State under any State law;

20 (2) supersede or alter any Federal law;

21 (3) waive or affect any defense of sovereign im22 munity asserted by the United States;

23 (4) affect the applicability of any provision of

24 chapter 97 of title 28, United States Code;
21

•HR 1805 IH

1 (5) preempt State choice-of-law rules with re2 spect to claims brought by a foreign nation or a cit3 izen of a foreign nation;

4 (6) affect the right of any court to transfer

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

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

7 of a foreign nation on the ground of inconvenient

8 forum; or

9 (7) supersede or modify any statutory or com10 mon law, including any law providing for an action

11 to abate a nuisance, that authorizes a person to in12 stitute an action for civil damages or civil penalties,

13 cleanup costs, injunctions, restitution, cost recovery,

14 punitive damages, or any other form of relief, for re15 mediation of the environment (as defined in section

16 101(8) of the Comprehensive Environmental Re17 sponse, Compensation, and Liability Act of 1980 (42

18 U.S.C. 9601(8))).

19 SEC. 204. LIABILITY RULES APPLICABLE TO PRODUCT

20 SELLERS, RENTERS, AND LESSORS.

21 (a) GENERAL RULE.—

22 (1) IN GENERAL.—In any product liability ac23 tion covered under this title, a product seller other

24 than a manufacturer shall be liable to a claimant

25 only if the claimant establishes that—
22

•HR 1805 IH

1 (A)(i) the product that allegedly caused the

2 harm that is the subject of the complaint was

3 sold, rented, or leased by the product seller;

4 (ii) the product seller failed to exercise rea5 sonable care with respect to the product; and

6 (iii) the failure to exercise reasonable care

7 was a proximate cause of the harm to the

8 claimant;

9 (B)(i) the product seller made an express

10 warranty applicable to the product that alleg11 edly caused the harm that is the subject of the

12 complaint, independent of any express warranty

13 made by a manufacturer as to the same prod14 uct;

15 (ii) the product failed to conform to the

16 warranty; and

17 (iii) the failure of the product to conform

18 to the warranty caused the harm to the claim19 ant; or

20 (C)(i) the product seller engaged in inten21 tional wrongdoing, as determined under applica22 ble State law; and

23 (ii) the intentional wrongdoing caused the

24 harm that is the subject of the complaint.
23

•HR 1805 IH

1 (2) REASONABLE OPPORTUNITY FOR INSPEC2 TION.—For purposes of paragraph (1)(A)(ii), a

3 product seller shall not be considered to have failed

4 to exercise reasonable care with respect to a product

5 based upon an alleged failure to inspect the product,

6 if—

7 (A) the failure occurred because there was

8 no reasonable opportunity to inspect the prod9 uct; or

10 (B) the inspection, in the exercise of rea11 sonable care, would not have revealed the as12 pect of the product that allegedly caused the

13 claimant’s harm.

14 (b) SPECIAL RULE.—

15 (1) IN GENERAL.—A product seller shall be

16 deemed to be liable as a manufacturer of a product

17 for harm caused by the product, if—

18 (A) the manufacturer is not subject to

19 service of process under the laws of any State

20 in which the action may be brought; or

21 (B) the court determines that the claimant

22 is or would be unable to enforce a judgment

23 against the manufacturer.

24 (2) STATUTE OF LIMITATIONS.—For purposes

25 of this subsection only, the statute of limitations ap-
24

•HR 1805 IH

1 plicable to claims asserting liability of a product sell2 er as a manufacturer shall be tolled from the date

3 of the filing of a complaint against the manufacturer

4 to the date that judgment is entered against the

5 manufacturer.

6 (c) RENTED OR LEASED PRODUCTS.—

7 (1) DEFINITION.—For purposes of paragraph

8 (2), and for determining the applicability of this title

9 to any person subject to that paragraph, the term

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

11 brought on any theory for harm caused by a product

12 or product use.

13 (2) LIABILITY.—Notwithstanding any other

14 provision of law, any person engaged in the business

15 of renting or leasing a product (other than a person

16 excluded from the definition of product seller under

17 section 202(13)(B)) shall be subject to liability in a

18 product liability action under subsection (a), but any

19 person engaged in the business of renting or leasing

20 a product shall not be liable to a claimant for the

21 tortious act of another solely by reason of ownership

22 of that product.
25

•HR 1805 IH

1 SEC. 205. FEDERAL CAUSE OF ACTION PRECLUDED.

2 The district courts of the United States shall not

3 have jurisdiction under this title based on section 1331

4 or 1337 of title 28, United States Code.

5 TITLE III—EFFECTIVE DATE

6 SEC. 301. EFFECTIVE DATE.

7 This Act shall take effect with respect to any civil

8 action commenced after the date of the enactment of this

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

10 of the action occurred before such date.

Æ