S6242 CONGRESSIONAL RECORD — SENATE May 8, 1995

But we could not have won on the

European front without a victory on

the home front. Our American forces in

Europe were the best trained, best fed,

and best supplied liberating force ever

constructed on the planet. They were

the best ever abroad because we were

the best ever at home.

Let there be no mistake. The twisted

power and oppression of Nazi terror,

hatred, and Holocaust were no match

for the collective powers of freedom, of

democracy, of individual initiative—

the very essence of America. Today, we

honor the 50th anniversary of that victory. We honor that victory every day

so long as we continue to stand for

these values at home and abroad.

Mr. REID addressed the Chair.

The PRESIDING OFFICER (Mr.

GRAMS). The Senator from Nevada.

Mr. REID. Mr. President, what is the

issue now before the body?

CONCLUSION OF MORNING

fBUSINESS

The PRESIDING OFFICER. Morning

business is now closed.

COMMONSENSE PRODUCT LIABILITY AND LEGAL REFORM ACT

fThe PRESIDING OFFICER. Under

the previous order, the Senate will now

resume consideration of H.R. 956, which

the clerk will report.

The bill clerk read as follows:

A bill (H.R. 956) to establish legal standards and procedures for product liability litigation, and for other purposes.

The Senate resumed consideration of

the bill.

Pending:

Gorton Amendment No. 596, in the nature

of a substitute.

Coverdell/Dole amendment No. 690 (to

Amendment No. 596), in the nature of a substitute.

Mr. REID. Mr. President, in the

State of Nevada, and particularly in

Las Vegas, we have some great illusionists. The most famous are two men

by the name of Siegfried and Roy.

Every night, twice a night, they are

sold out. Presently, they are at the Mirage Hotel and have been there for the

last 4 or 5 years.

These illusionists, as great as they

are, should be taking lessons from

what is going on in the Congress today

and during the past several weeks. We

are talking about things that are really illusionary. For example, there has

been a hue and cry that everything

should be turned back to the States,

that the States should make the decisions on their own destiny. All we hear

is that we should leave them alone and

let the States decide what is best for

them.

In the so-called Contract With America, that is what they talk about—returning as much back to the States as

they could. But here we are, Mr. President, now talking about tort reform

and standing that issue on its head. Instead of returning everything back to

the States, we are saying in this area

that we do not want the States to prevail, we want to have a national standard, which is really unusual to me to

find out how people could reason that

way.

For example, Mr. President, the

State of Washington does not allow punitive damages. I think the State of

Washington is wrong. But that is a decision they made with their State legislature and the Governor.

Would it not be wrong, Mr. President,

if all States had to follow the same law

as it relates to innkeepers, that we

have in the State of Nevada. In the

State of Nevada we have over—in Las

Vegas alone—over 100,000 rooms, more

rooms in Las Vegas than any other city

in the world.

The State of Nevada basically is a resort State. Would it not be wrong for

the laws of the State of Alabama as it

relates to innkeepers to be the same as

the State of Nevada? Of course, it

would. We have special problems with

tort law as it relates to innkeepers.

Therefore, the State of Nevada should

be left alone. We should be able to decide on our own what the law, as it relates to innkeepers, should be for the

residents of the State of Nevada.

The legislation that is before this

body is a bill that usurps and destabilizes well-established State law and

principles as it relates to seller liability.

The legislature of the State of Nevada is meeting as we speak. They are

talking about tort reform in Nevada as

this debate is taking place.

I would much rather rely on what the

State legislature does regarding tort

reform for Nevada than what we decide

back here should be the standard in Nevada.

The State of Nevada has carefully established rules as it relates to product

liability. We have a strict liability

standard for most products that are

sold defectively. We are not unusual in

that regard. There are 45 other States

that have, through their courts or legislatures, adopted some form of strict

liability as it relates to products.

Only a handful of States have chosen

to remove product liability from this

general rule. Should not that handful

of States be left alone?

This bill would undo the law in at

least two-thirds of the States. Contrary to nearly 200 years of State tort

law, this bill would virtually immunize

people who sold defective products.

Another troubling matter, Mr. President, is that this bill overreaches in its

efforts to protect small businesses by

placing a restrictive cap on punitive

damages, or any ‘‘entity or organization with fewer than 25 full-time employees.’’ This overlybroad language

extends the protections of this bill well

beyond the so-called small businesses.

This cap, for example, would completely take away the right that we

have in most States to allow punitive

damages against drunk drivers, against

child molesters, perpetrators of hate

crimes, and even by those who sell

drugs to children.

I have, for more than a week, listened to this debate. Prior to coming

here, I was a trial lawyer. I have tried

scores of cases before juries—almost

100 jury trials. I believe that the jury

system, Mr. President, is one of the

things that we should be very proud of

as a country.

We ought to reflect on the value of

the Magna Carta. It was signed in a

meadow of England, in a place called

Runnymede. King John could not write

his name. He had to put a mark for his

name. The Magna Carta was the beginning of the English common law that

we adopted when we became a country.

One of the things that we brought over

the water and now have and have had

for over 200 years is a jury system,

where wrongs that are perpetrated can

be brought before a group of people and

they can adjudge the wrong, if in fact,

there were any.

My experience in the jury system,

Mr. President, is that most of the time

the juries arrive at the right decision.

I would say that about 90 percent of the

time, they arrive at the right decision.

Not always for the right reason, but

the right decision. I think it is something that other countries have looked

on with awe and respect—our jury system.

Again, this bill would take away and

undermine the jury system and places

arbitrary caps on damages. The substitute arbitrarily caps punitive damages at two times other damages for all

punitive damages cases. In order to

have any deterrent impact, punitive

damages should be based on conduct

that is willful and wanton.

We have heard so much about the

McDonald’s case. But what was the

McDonald’s case? Let me explain, Mr.

President, what the McDonald’s case

was. A grandmother took her grandchild to baseball practice. She wanted

a cup of coffee. She drove to McDonald’s. She got a cup of coffee. She put

the cup of coffee between her legs, and

as she removed the lid from the cup of

coffee, it spilled. She had third-degree

burns over her body. Her genitals were

burned. She had to undergo numerous

painful skin grafts.

A person might say, why should she

be awarded for putting a cup of coffee

between her legs? The fact of the matter is the reason the jury reacted in the

way they did in this case is the fact

that McDonald’s had had 700 other burn

cases where people had been burned

with coffee. They had been warned and

warned and warned that they served

their coffee too hot —190 degrees is the

temperature they served their coffee.

Mr. President, if a person buys a

coffeemaker and plugs it in at home,

and makes his or her own coffee, it

comes out at about 135 degrees—something like that. McDonald’s served

their coffee at 180 to 190 degrees that if

accidentally spilled could result in

third-degree burns in a matter of 2 or 3

seconds.
May 8, 1995 CONGRESSIONAL RECORD — SENATE S6243

The jury felt that McDonald’s had

been warned enough that they should

not serve their coffee as hot as they

did. Why did they serve it so hot?

There were a lot of reasons, perhaps,

but one reason they served coffee so

hot is McDonald’s felt they got more

product by serving their coffee hot.

That is, they got more juice of the

beans, so to speak.

The jury award, the punitive damages award in this case, Mr. President,

was the amount of coffee sold by

McDonald’s for two days. That is why

they came up with the $2.3 million verdict. The jury felt that McDonald’s

should get the message that 700 burnings or warnings were enough.

The fact of the matter is that the

court reduced this amount to $480,000

and the parties reached an out-of-court

settlement for probably even less.

She had skin grafts, and as I indicated, the jury came to realize this was

not an isolated incident. This was a

wrong that had to be corrected, a willful wrong in the mind of the jury.

If a State, however, feels the McDonald’s case sets such a bad precedent

that they do not want to allow punitive

damages, States have that right today.

The State of Nevada, the State of Minnesota, the State of Mississippi, the

State of Arizona—they can eliminate

punitive damages if they want. But

why should it not be done by the

States? Why do we have to go and set

a standard nationwide for how they

handle their punitive damages?

The substitute amendment does not

allow punitive damages, even if a defendant’s conduct was reckless or wanton. Punitive damages can be assessed

only if an injured citizen can prove the

super-heightened standard of, ‘‘conscious, flagrant indifference to safety,’’

a standard I never came across in all

the time I practiced law. I never heard

of that. That is a new standard. It is

one that is set up to eliminate punitive

damages. Even though punitive damages is the amount that could be

awarded, even if you could prove conscious, flagrant indifference to safety,

it is cut down significantly; almost

eliminated. This would take any

thought about having punitive damages completely out of the law. Nationally, there would be no punitive damages.

Take companies like McDonald’s or

General Motors, and let us say we have

a $250,000 punitive damage limit. Does

that bother General Motors? Of course

it does not.

What about the Exxon Valdez oil

spill? Keep in mind the facts of that

case. A man who had previously been

told not to drink on the job is drunk,

controlling the ship and causes all this

damage to the environment. Should

Exxon Valdez not be required to respond

in punitive damages? I think it should.

Over the past few years we have seen

an unfortunate entrance into the market of too many dangerous products

that are marketed toward women: The

Dalkon shield, the Copper-7 IUD, DES,

silicon breast implants, are just a few

of the alarming examples of dangerous

products placed into the market that

affect women. Why should there be

some arbitrary standard now established that affects those cases? There

should not be. It is wrong. To come up

with a standard called ‘‘conscious, flagrant indifference to safety’’ is almost

unconscionable. So a vote for the substitute is to vote to eliminate the existing legal incentives for companies to

produce the safest possible products.

The substitute eliminates joint and

several liability for the people who

truly rely on noneconomic damages the

most: women, children and the elderly.

These victims will now be required to

bear the risk caused by potentially

bankrupt defendants. The joint and

several liability standard came about

as a result of there being a number of

defendants, some of whom who could

not respond. I ask the question rhetorically, is it fair to limit companies’ liability to the most vulnerable when

only joint and several liability will ensure full compensation?

This legislation creates a huge exemption for big business. The substitute excludes commercial loss from

its scope. Is that not interesting? One

of the reasons the products liability

legislation was defeated last year is because it directed its attention to individuals suing each other, it directed its

attention to the individual suing a

company, but it did not focus on companies suing each other, and that is

where most of the litigation takes

place in products liability litigation.

Again, this year the same problem exists because this provision, the commercial loss exclusion, essentially exempts big businesses from the restrictions in the bill that those same businesses seek to impose on consumers

and workers injured by the products.

Take an example. If a product used

on the factory floor blows up because

of a defect, the injured worker’s right

to seek compensation from the thirdparty manufacturer of the product is

limited. But the owner of the factory

can sue to his heart’s content, for as

much lost profits as he deems appropriate; or if he had some property that

was damaged there as a result of the

explosion he can sue all he wants. So as

a result of an injury to a human being,

no recovery; but injury to property,

you can sue just as you always did. So

big business is protected.

There is a lack of uniformity. Proponents of this measure claim it will

establish uniformity in product liability law. In reality, it creates

prodefendant disuniformity. It is a oneway preemption at its worst. The

amendment only preempts those State

laws which favor consumers. How? It

imposes an arbitrary cap on punitive

damages in those States which allow it

but it does not create punitive damages

in those States which do not allow it.

So in my earlier statement when I

talked about the State of Washington

having to now have an award given for

punitive damages, some of those who

are looking at this legislation say,

‘‘That is absolutely wrong. In fact, if

your standards are less than what is in

the bill you can keep those.’’ How unfair. It also establishes an arbitrary

statute of repose for 20 years but allows States to impose shorter limitations if they so desire.

So we are rushing hastily to pass a

piece of legislation that dramatically

favors big business. It dramatically

will change centuries of State-developed law. It is ironic that those who

argue most vigorously for a stronger

10th amendment are the proponents of

this amendment. This is the Siegfried

and Roy illusion I talked about in the

beginning of my statement. The State

of Nevada knows best as to how their

litigation should be handled. Unfortunately, the proponents of this legislation think they know what is best for

Nevada.

We are saying to the American people that we no longer trust the judgments of State legislatures. We are

saying we no longer trust people sitting as juries. And as I said earlier, the

American system of justice and the

jury system—while there are some decisions that I disagree with and we can

all point to some of the criminal verdicts that have come about—the jury

system is a uniquely American concept

with its roots in the Magna Carta,

grounded in democracy, and rooted in

the ideal that ordinary Americans applying their inherent common sense

can often best fashion a judgment or a

decision that results in justice to the

injured party.

Who knows the number of lives saved

and the catastrophes prevented because

of our laws relating to punitive damages? In the area of products liability,

I pause to think what would happen if

manufacturers, especially big business,

did not have to worry about their products being safe.

So, let us not throw this standard out

of the window and invite corporate

wrongdoers to engage in a cost-benefit

analysis of whether it makes sense to

place defective products into the market. I think we would not be well

served by adopting this legislation.

The PRESIDING OFFICER. The Senator from Mississippi.

Mr. LOTT. Mr. President, let me first

inquire if we are in a period of general

debate on the product liability legislation?

The PRESIDING OFFICER. The Senator is correct.

Mr. LOTT. Mr. President, I would

like to extend my congratulations to

the distinguished Senator from Washington, Senator GORTON, for his outstanding leadership both in the Commerce, Science, and Transportation

Committee and here on the floor, in an

effort to get a very responsible piece of

legislation through, the Product Liability Fairness Act. He has worked

very closely with the Senator from

West Virginia, Senator ROCKEFELLER,
S6244 CONGRESSIONAL RECORD — SENATE May 8, 1995

and they really have done yeomen’s

work in producing this legislation.

The bill that was reported from the

Commerce, Science, and Transportation Committee has been expanded.

A number of amendments have been

adopted. And in my opinion, all of

those amendments are improving

amendments. We are talking about

legal reform, not just product liability

reform.

Having said that, it is obvious from

votes late last week we are not going

to be able to get through the broader

bill, as much as I would like for that to

happen. So there will be votes shortly,

either later on this afternoon or, I assume, tomorrow morning—maybe this

afternoon and tomorrow morning—on

exactly what will be the final bill. I

presume we will have a narrower bill

than now exists before the Senate, one

that is directed primarily at product liability but with some additional provisions, but not many, that have been approved overwhelmingly by the Senate.

I urge my colleagues in the Senate to

vote to invoke cloture to stop the filibuster and allow the Senate to vote on

this very, very important issue. It has

been suggested that this would be a

rush to judgment. Rush to judgment?

We have been debating this issue—

product liability—for 10 years in the

Senate. This will be the third time we

have voted to try to end the filibuster

so we can even get to a vote since I

have been in the Senate. This is my

seventh year. We know the issue. We

know the details. This is not a rush to

judgment.

Plus, let it be noted once again that

the Senate talks and the Senate stalls.

The Senate is now in its third week on

product liability and the effort to try

to broaden it to have genuine legal reform. There have been legitimate negotiations going on led by Senator GORTON and Senator ROCKEFELLER to bring

this to a conclusion. We should be

ready to do that. The leaders have listened to the Senate. We have looked at

the amendments and how close they

were. What can we do to get an end to

the filibuster so we can get to a vote?

This legislation will be narrow. It

will be targeted primarily at product

liability. It will not include medical

malpractice reform even though we

clearly need that and the Senate voted

for it. But, if it is included, we probably cannot get the 60 votes that are

necessary, once again, to end the filibuster.

This bill does not include criminal

matters. The President suggested that

it does. I have heard suggestions here

on the floor of the Senate that it does.

It does not apply to criminal matters

like hate crimes. It is just not applicable here. That is a scare tactic.

Let me clarify this joint and several

issues. It is amazing how things can be

turned around in the debate here in the

Senate. Joint and several—what does

that mean? That means when you file a

lawsuit, you file a lawsuit against everybody remotely connected or even in

the area when you are wanting to sue

and recover damages. But even though

you were only remotely involved, like

say maybe 5 or 10 percent of the damages attributable to you, if the other

defendants are broke, you can be forced

to pay the entire judgment. It is called

deep pockets. If you happen to be in

the area and you happen to be a successful company or an individual, you

are the one who will get hit even

though you were just involved to a

very small degree. We are saying there

ought to be some sensible limit there.

You ought to pay for the damage you

caused but not pay for everybody. It

makes such good common sense.

Let me remind my colleagues here

today that the American people overwhelmingly support the idea of legal

reform—overwhelmingly. We have a

few interest groups that do not want

that to happen. But the people understand who pays. I mean it is easy to

stand here on the floor of the Senate

and say let us make you, EXXON, pay.

Let us make General Motors pay. You

know who pays? The consumer pays. It

does not just come out of the sky.

Somebody pays the bill.

When you have frivolous lawsuits

against people acting in good faith,

when you have doctors, ob-gyn’s that

are afraid to stay in their profession

because they are liable to be sued paying thousands upon thousands of dollars for medical malpractice insurance,

who loses? The patients lose. They pay

more. Or you have doctors getting out

of the business because they cannot afford to stay in it anymore.

However, we will have to reserve

most of this legal reform for another

day. Here we are only talking about

product liability. We are trying to get

some uniformity in an area that clearly involves interstate commerce. We

are trying to get some commonsense

answer in this area to stop forum shopping where a small company in my

State that produces heavy equipment

can be sued in all kinds of forums all

over the country, and you shop around

until you find the best forum. Then

you sue them there. Some uniformity

is all we are seeking here.

When scholars write the legislative

history of Congress in the last quarter

of the century, I think they will be

puzzled by the debate the Senate has

been engaged in now for 2 whole weeks

and entering the third week. They will

wonder why so much time, so much

passion, so much pressure was expended on a bill that should have

brought us together in unanimous

agreement. It passed overwhelmingly

out of the Commerce Committee. Yet

when it gets to the floor the talk begins.

The scholars will note that the substance of this legislation enjoyed overwhelming approval of the public, that

it was a moderate proposal with bipartisan sponsorship, and that a much

more expansive measure had already

passed the House of Representatives by

a whopping margin of 265 to 161.

Why could the House get such a

broad bill providing for legal reform

passed by an overwhelming margin but

the Senate cannot do it? Answer: Because it takes 60 votes to stop the debate in the Senate. Just keep talking,

keep talking, keep talking and never

take action. This time we should take

action. I believe we will.

People will wonder in the future

what could have been so controversial

about the provisions in this bill. National uniformity in product liability

law and putting American manufacturers on equal footing with foreign competitors should not be controversial.

Encouraging alternative dispute resolution in place of lengthy and expensive court proceedings should not be

controversial. That just simply says

use a process to try to resolve a dispute

instead of going through lengthy trials.

It makes good common sense to me.

It should not be controversial to require that the person who creates harm

must take responsibility for it. If

someone who is drunk or under the influence of illegal drugs is more than 50

percent responsible for his own injury,

he should not be able to extort money

from others by blaming them for what

happened. People who rent or lease

cars and equipment should not be legally liable for the acts of those who

rent those items from them. If you rent

a car and go out and get drunk, cause

an accident, injure people, why should

the rental company be responsible for

your misconduct?

It should not be controversial to stop

the practice of holding defendants

jointly liable for noneconomic damages

usually referred to as ‘‘pain and suffering.’’ That has become a way for plaintiffs to get into the deep pockets of one

defendant that I talked about earlier,

even though some other defendant,

with less resources, was at fault.

Jury awards of punitive damages in

the millions of dollars have become

commonplace. One example just cited

was the McDonald’s case. That is just

one example. I would recommend to

people that when they buy a hot cup of

coffee, they not set it between their

legs and try to drive an automobile. It

seems to me that is contributory negligence.

It certainly should not be controversial to set a 20-year limit—a statute of

repose—for a manufacturer’s liability

for a product used in the workplace. If

a product is more than two decades old

it should not be subject to a product liability suit unless it came with the

written safety warranty longer than 20

years.

None of these provisions should be

terribly divisive. Indeed to most of us

here, as to most of the public, they are

just common sense. I have referred to

that several times. We are trying to

curb excesses in the civil—civil—justice system, not the criminal justice

system, although clearly after watching television the last few weeks we

have a little work we need to do in the

criminal justice area, too.
May 8, 1995 CONGRESSIONAL RECORD — SENATE S6245

Yet somehow, H.R. 956, the vehicle

for product liability reform, has become a battleground. We have allowed

ourselves to get into heated debate. I

have been guilty of that. I have said

some things about the Trial Lawyers

Association, the plaintiffs bar, that I

should not have. I have had things attributed to me that I do not recall saying. It has been quoted that I said

‘‘they cheat people all over America.’’

That would be inappropriate. I reject

that kind of language. Even having it

attributed to me, I apologize for that.

We do not need that kind of rhetoric. I

should not contribute to it. None of us

should contribute to it. What we

should do instead is reason together.

That is what is happening now. We are

trying to find a solution so we can stop

the debate, pass the legislation, get

into conference with the House of Representatives, and do what is the right

thing.

In some measures, you understand,

with the intensity of the debate, that

ideologically divisive—left, right—divisions come into play. If something is

good in the South but not good in

North, we get pretty hot about it because you are talking about our constituency and our regions of the country. But that is not what is happening

here. This is something that involves

economic interests of all the people. It

involves trying to get some legitimate

litigation reform. I think we will be

able to do that today.

But what we have now has eroded—

the public’s respect for, and confidence

in, the administration of civil justice.

The worst of it—and the most important reason why this bill be so needed—

is that litigation involving product liability is harming consumers, taxpayers, businesses, and investors. It

limits job creation, stifles creativity,

thwarts medical and scientific advances, and lessens our country’s international competitiveness.

And it benefits almost no one. Certainly not the hapless defendants, who

often spend enormous amounts of

money either defending themselves

against frivolous lawsuits or settling

out of court just to cut their losses.

Nor does it help the plaintiffs all that

much when a large share of their court

winnings goes for attorney’s fees, payments for expert witnesses, and court

costs. One recent settlement against

the Nation’s major airlines gave consumers coupons for future flights,

which they could redeem only a few

dollars at a time. But the plaintiff’s

lawyers walked off with $16,012,500 in

cold cash.

I do not mean to suggest that anyone

who finds fault with some provision of

H.R. 956 does so from an unworthy motive. Reform of product liability laws is

a complicated matter, and there are legitimate questions as to how far one or

another reform should be taken. I will

candidly admit that this bill does not

go as far as I would like it to. But I understand that some of its supporters do

not wish to broaden its provisions. Despite our disagreement in that regard,

we agree on the need for reform and are

forthrightly working together toward

common ground.

I am disappointed, however, that

more Members of the Senate have not

endorsed at least the principle of product liability reform, even if they might

disagree with some provisions of H.R.

956. I wish they were trying to modify

the bill to meet their objections, much

as I might oppose their modifications,

rather than trying to kill it. As it is,

they have allowed themselves to become champions of the status quo, and

that, I submit, is not an enviable position in the eyes of the American people.

And that is why the Senate has been

spending all this time on what should

have been a rather brief and unifying

exercise in legal reform. It is why we

still have the threat of filibuster hanging over our heads. It is why we spent

so many hours over the last 2 weeks on

amendments—one that was later tabled

by a vote of 94 to 3.

We have dealt with several critical

amendments, which have been accepted. One dealing with punitive damage

awards against small businesses and

charitable and volunteer organizations,

many of which are being crippled by a

justified fear of liability suits. Another

would limit the use of joint and severable damage awards. A third will offer

badly needed reforms in medical malpractice law. But what we have before

us is a good start. It will bring about

significant improvements in the way

our courts operate, in the way our

economy operates. It will make our

civil justice system fairer, less costly,

and more efficient. So I urge my colleagues here this afternoon to vote cloture. We still have some more amendments that can be offered. We could

still discuss the final result. But it is

time we vote and get this legislation

moving forward.

Mr. President, I yield the floor at

this time and, observing no other Senator who wishes to speak, I suggest the

absence of a quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. HEFLIN. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER (Mr.

SANTORUM). Without objection, it is so

ordered.

Mr. HEFLIN. Mr. President, a substitute has been offered and I want to

go into some of the aspects of the substitute, and I will later.

First, I think I stated in the beginning of the debate that I considered

this to be an extremely unfair bill.

While it was titled the ‘‘Product Liability Fairness’’ bill, there were numerous provisions that were one-sided

and which attempted to take away

rather basic rights of a claimant in a

lawsuit, and I thought it was extremely unfair. Also this bill was unfair because of the fact that it exempted all commercial loss and made commercial loss come under the category

of commercial or contract law, primarily the Uniform Commercial Code.

Commercial loss is a business loss,

not a personal injury loss. Some of the

most egregious punitive damage suits—

practically all of the large ones—have

been against business. Penzoil versus

Texaco, $11 billion, is the one that

stands out primarily in the minds of

most people. But commercial loss

would be in most all instances restricted to corporate America suing

corporate America.

Manufacturers do not want to come

under the provisions of this bill because they do not want to be put under

the same laws as the people who receive personal injuries.

For example, under the statute of

limitations on implied warranties in

contract law, it is substantially longer.

My State of Alabama has a contract

statute of limitations of 6 years. Under

the Uniform Commercial Code, under

warranties, it is 4 years. Yet, under

this bill, it would come to apply to personal injury which is 2 years.

There are several types of implied

warranties under the Uniform Commercial Code. For example, there is an implied warranty that the product is suited for the purpose for which it is sold.

However, under this bill implied warranties are not recognized.

Therefore, if a person remains silent,

there is no implied warranty. The rules

with respect to implied warranties

have been developed over the years and

have been recognized as being an essential element in sales that a product

ought to be fit for the purposes for

which it is sold.

There are other aspects of this that

have emerged relating to its unfair provisions, and I will touch on some of

these provisions at this time.

First, I want to address my remarks

initially to the Snowe amendment. The

Snowe amendment has been touted as

eliminating the unfairness of the original cap on punitive damages in this

product liability case. Under the original bill, it was set at being three times

the economic loss, or $250,000.

There were those that said that noneconomic loss, such as scarring or disfigurement, the infertility or loss of

childbearing ability of a woman, or

other noneconomic factors such as loss

of consortium, was discriminatory because of the fact that they would be

limited to $250,000, whereas a person’s

economic loss could be up into the millions.

In a speech I made last week, I cited

a 55-year-old CEO of a corporation who

is making $5 million annually who has

an anticipated work expectancy of 10

years. We would have a situation where

his loss of earnings, his economic loss,

would be $5 million a year times 10

years, or $50 million, and then multiply

it by three. He would have a cap of $150

million, as opposed to the housewife
S6246 CONGRESSIONAL RECORD — SENATE May 8, 1995

who has no economic loss, or the elderly who have no economic loss. Their

cap would be $250,000—$150 million versus $250,000. That is quite a disparity in

regard to caps, and I believe my point

caused some Senators to reflect on the

unfairness of the original punitive

damage provision in the Gorton-Rockefeller substitute.

As a result, there have been some

changes made. The Snowe amendment

now has a formula with regard to punitive damages which provides for twice

the amount of total economic loss and

the noneconomic loss—or twice times

compensatory damages.

Yet, there are still examples in which

this would cause an even worse situation. In the case where death occurs instantaneously, there is no noneconomic—that is ‘‘pain and suffering’’—loss under the laws of most

States. We would have a situation defined as meaning noneconomic loss

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—

all of this is in the definition of noneconomic loss that is in the substitute

that we have now before the Senate.

Now, on that scenario where a person

died as a result of injury, what would

be the situation? That same 55-year-old

CEO who was making $5 million a year,

his economic loss would be $50 million

on a work expectancy of 10 years times

two under the Snowe amendment—or

$100 million.

Well, that is less of a cap than the

$150 million we have. But what do we

have on the housewife? She also dies

immediately. She did not suffer any

pain and suffering, emotional distress,

loss of society and companionship, and

so forth, so she would really be in a situation where her noneconomic loss

would be zero.

Then we revert back to what the situation was under the original bill. She

had no economic loss because she did

not work outside the home, and therefore her total economic loss and her

total noneconomic loss would be zero.

We double zero, and we still have zero.

Now, some might say, well, she would

at least have an economic loss in funeral expenses. Well, there are some

States—and I do not know whether this

is the majority or not—that say that

death is inevitable, like taxes. Therefore, we have a situation in which we

are going to have to be buried, and that

cannot be counted as an economic loss.

Let’s say, for purposes of discussion

and debate, that all of the States were

to allow it. Instead of the death case

with the elderly or the housewife, it

would be an economic loss of maybe

$5,000 for funeral expenses, and we double that under the Snowe amendment

and we have $10,000.

So we still have the difference between the 55-year-old CEO who is

killed, at $100 million; and we have, for

the elderly or the housewife, maybe

zero, and maybe $10,000 for funeral expenses.

That shows, to me, the disparity of

the Snowe amendment, and a situation

in which it would not operate fairly. At

least, under the original bill, we would

have had a cap of $250,000. Now the cap,

under the death case that I recited,

would either be zero for the elderly and

zero for the housewife, or perhaps

maybe $10,000, or possibly $15,000, at

the most, in regard to burial expenses.

So this Snowe fix supposedly did

come up under a situation in which

death occurs, and as a result, if there

were personal injuries, the personal injuries would have a different cap. But,

therefore, it would be for the benefit of

the wrongdoer who is going to be sued.

A tortfeasor would much rather see the

person dead than that he would be

alive and incurring some pain and suffering and giving the jury some leeway

in the determination of noneconomic

loss, particularly if it is a person like a

housewife, and elderly person, or a

child or student, who has yet to begin

making a living for herself.

Under the Snowe amendment, a highincome victim will continue to be able

to receive a high punitive award,

whereas a homemaker, retiree, low-income victim will be limited to a very

low punitive damage award in regards

to these instances. Punitive damages

are designed to punish and deter egregious conduct. They are not necessarily designed to have caps. You

have to deal with it on an individual

basis.

As to the McDonald’s hot coffee case,

the situation was that the jury determined that punitive damages were in

order to send a message to McDonald’s,

after 700 instances of burn cases. The

jury in that situation decided on a punitive damage award of 2 days of the

gross sales of coffee by the McDonald’s

Corp. which amounted to approximately $2.5 million, and then the judge

reduced that down to $460,000. Later it

was settled for an undisclosed sum that

was protected by a secrecy order. There

were third-degree burns in this case

and McDonald’s had repeated warnings

that its coffee was being served way

too hot. This bill takes away from the

ability of juries to determine just what

type of egregious conduct warrants an

appropriate amount of punishment as

to damages.

Other language that appears in the

Dole-Coverdell substitute has been

changed. There was put into the substitute an amendment by Senator

DEWINE which appeared as a special

rule. It says,

The amount of punitive damages that may

be awarded in any products liability action

against an individual whose net worth does

not exceed $500,000 or against an owner of an

incorporated business or any partnership,

corporation, association, unit of local government or organization that has fewer than

25 employees, shall not exceed $250,000.

Now it appears in the substitute that

the Dewine exemption applies in all

civil cases—not just product liability

cases—against an individual whose net

worth does not exceed $500,000 or a

partnership, corporation, so on—but it

has as its cap, two times the sum of the

economic damages and the noneconomic damages—still Snowe—or

$250,000, but then it has the language

which says, ‘‘which amount is lesser.’’

So a suit against a small corporation,

partnership or an individual where the

net worth does not exceed $500,000—and

of course a small business has fewer

than 25 employees—that has as its caps

Snowe, which is double the compensatory damages or $250,000, but which

amount is lesser.

This exemption applies to all civil

cases. I believe the President called a

similar provision the drunk drivers’

protection act.

It is still a drunk drivers’ protection

act against a limited number of people.

It just says that if you are drinking

while driving you better not be worth

more than $500,000 or you must not be

an owner of an unincorporated business

or be involved in a partnership or corporation. But it still is a drunk drivers’

protection act, as it would apply to the

limits that are placed in the bill, because it applies to any civil action, not

just product liability.

But let us also look at these caps and

see how they apply. That 55-year-old

CEO who is, we will say, killed, he has

a situation in which he had a work expectancy of 10 years; with a $5 million

annual salary he would have had a $50

million loss as his economic loss; multiply that times two and that would be

$100 million. But under this, he would

be limited to $250,000. Because that is

the lesser of his $250,000 or two times

his compensatory damages. So if he

gets killed by a drunk driver, then the

drunk driver is limited under the now

substituted proposal to $250,000.

Let us take the housewife, the elderly person, or the child in some instances. You would think they would

still be under the $250,000, but that

amount is greater. It is not lesser. And

the language here says ‘‘is the lesser.’’

So the housewife who has no economic

loss, and no noneconomic loss, it is

still zero. For the elderly person who

has no economic loss, the cap is zero

because it is the lesser. Because the

compensatory damages that they

would suffer, in a death case, would be

less than the $250,000, therefore the

lesser amount, zero, would apply.

This amendment also, as it is written

now affects automobile accidents almost every type of conceivable accident, not just products liability incidents. It fails to take into account how

much insurance an individual carries

on his automobile or how much liability insurance he carries in his business.

An individual may have $1 million or $5

million in liability insurance. But he

still could have a net worth of less

than $500,000. So he is protected under

this special rule. He is protected by

this small business exemption and the

individual net worth figure, and his insurance goes home free. Certainly, if he
May 8, 1995 CONGRESSIONAL RECORD — SENATE S6247

had $1 million worth of insurance, as a

lot of people carry on their various

businesses or automobiles—many individuals carry umbrella policies to try

to protect them against that sort of

thing—then that cap applies to him.

But as to the housewife, the cap is zero

or to the elderly the cap is zero.

So I just point these out to show how

these caps would apply and what inequities would come about and would

occur. These also would apply to any

civil action. I wonder in regard to the

Oklahoma City explosion if there were

attempts to bring suits against those

that are eventually determined to be

responsible for that bombing.

So I just want to point out that there

are many problems with the way this

amendment is written. Certainly, if

somebody carries insurance, the

amount of the insurance ought to be

counted in calculating whether or not

a cap goes into effect. The idea is to

protect the small business or the individual not worth more than $500,000. He

might have a total net worth of $50,000

or $100,000 or $150,000 and carry $100,000

worth of insurance or carry $1 million

worth of insurance. But these do not

take into account his insurance that he

carries on his car in the way it is written.

I mentioned one time in a previous

speech about the situation of the

homeowner policy. Homeowner policies

have for years and years now carried

comprehensive liability coverage. Comprehensive liability coverage is very

comprehensive, and basically it is written in a manner in which it has to exclude those things that are not covered. But practically all homeowners

carry some type of comprehensive liability insurance. Again, that insurance does not come into effect as the

way this substitute—the change of the

language—took place from the DeWine

amendment. To me, that is another example of how this is being written for

the advantage of insurance companies.

Therefore, I think that ought to be

given very careful consideration.

There are numerous aspects of this

bill that are unfair as they apply to

real life situations. I think it is very

unfair to local government. There are

some units of local government that

are included under the DeWine amendment, if they have fewer than 25 fulltime employees. But the way the bill is

written, a claimant is defined to include a governmental entity. This affects most local governments, anywhere from a city that has about 25

employees. They usually define that as

a city of anywhere from 10,000 and up

with various types of departments:

street department, fire department, police department and so on. I do not

know the exact number. But it includes

in the claimant.

So, therefore, a city or county, State

government or Federal Government

which has a claim arising out of this,

or property damage, may have some

claim in regard to subrogation rights

under certain circumstances and would

also include the Federal Government.

Therefore, they come within the purview of this relative to all of the provisions that are in this substitute, including the misuse and alteration of a

product by any person, not the claimant himself. He might not have anything to do with it. But they are entitled to a reduction in regard to the percentage of fault in regard to misuse or

alteration.

With regard to the statute of repose,

many, many products are bought by

these governmental entities. Then the

bill, or substitute, includes the Federal

Government, the Army, the services.

Most of our armed services utilize, helicopter, trucks, automobiles, Jeeps,

and other vehicles all of which are

built for the test of time. Many of

them today are far in excess in age of

over 20 years. For example, many of

the types of helicopters that were used

in the Vietnam war are still in use

today. But the statute of repose in effect applies to them.

The purpose of this bill is obviously

to save money for business, corporate

America, and insurance companies. In

this instance, who are they going to

save money from in regard to their defective product—governmental entities?

There are provisions relating to several liability which concern me. You do

not even have to be a party. You can

prove it against a nondefendant in a

suit. You prove several liability on

that, and that includes coemployees,

which in most States you cannot sue

the employer. It has a provision that, if

there is any fault to be allocated

against the coemployee and the employer, then that is the last item that

you are to bring up in the priority of

how you present your case before a

jury.

There are many other aspects of this

that continue to be of concern, and I

may mention some of these later as I

go along. But there are numerous provisions in this bill that are written in

such a manner which are directed toward taking away rights of the injured

party and benefiting the wrongdoer.

The provision that says you cannot

introduce gross negligence or any punitive damage elements in your main

trial relative to compensation if you

have demanded punitive damages and

there is a call for a bifurcated or separated trial is further evidence of the

bill’s basic unfairness. To me that is a

real serious situation. A claimant, for

example, could not show if a person

was guilty of drunkenness. That would

be a punitive damage element, and you

could not show that in the trial in

chief.

Mr. President, for the time being, I

am going to yield the floor.

I suggest the absence of a quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The legislative clerk proceeded to

call the roll.

Mr. GORTON. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

AMENDMENT NO. 709 TO AMENDMENT NO. 690

(Purpose: To provide for a uniform product

liability law and to provide assurance of

access to certain biomaterials)

Mr. GORTON. Mr. President, on my

behalf and on behalf of the Senator

from West Virginia [Mr. ROCKEFELLER],

I have just filed with the clerk a second-degree amendment, and I ask that

that second-degree amendment be reported.

The PRESIDING OFFICER. The

clerk will report.

The legislative clerk read as follows:

The Senator from Washington [Mr. GORTON], for himself and Mr. ROCKEFELLER, proposes an amendment numbered 709.

Mr. GORTON. Mr. President, I ask

unanimous consent that reading of the

amendment be dispensed with.

The PRESIDING OFFICER. Without

objection, it is so ordered.

(The text of the amendment is printed in today’s RECORD under ‘‘Amendments Submitted.’’)

Mr. GORTON. Mr. President, I address these remarks to the President,

and through him to my distinguished

colleague from Alabama, who is opposed to this bill, and I hope to all Senators or to their staffs, because I hope

and trust that this will be the final

amendment with which we will deal on

this bill, as we are to vote cloture on

the Coverdell substitute at 4 o’clock.

But as the proponents of product liability hope that Coverdell will be amended as per this proposal by Senator

ROCKEFELLER and myself, I believe I

should outline the key changes between the Coverdell proposal of last

Friday and this one, because either before or after cloture it will be this

amendment which becomes the final

product liability vehicle for the Senate

to vote on.

We can discuss a bit later all of the

details of the proposal. But as the Senate will remember, last week what had

started out to be a product liability

bill was very considerably expanded,

first by an amendment by Senator

ABRAHAM from Michigan on relationships between lawyers and clients with

respect to their fees and, second, by a

proposal with respect to civil procedure

11 on frivolous lawsuits.

But more significantly, there was

added an entirely new set of provisions

on medical malpractice—a new medical

malpractice code—to override, in many

respects, the codes of the States. And,

secondly, a broadening amendment by

the majority leader, Senator DOLE,

which extended the punitive damage

rules contained in the product liability

bill at that point to all civil litigation;

and, of course, some change in the

rules relating to punitive damages by

the adoption of the Snowe amendment

which limited punitive damages in

product liability cases and then, by extension of the Dole amendment, to all
S6248 CONGRESSIONAL RECORD — SENATE May 8, 1995

cases to an amount not to exceed twice

the total of both noneconomic and economic damages.

When on two occasions last Thursday

cloture was rejected on that broadened

legal reform proposal, Senator

COVERDELL, with the help of the majority leader, Senator DOLE, put the

Coverdell substitute on the desk on

Friday and filed a cloture motion on it.

It returned the bill pretty much to the

status of a product liability bill, with

one exception that I will speak to in a

moment. It restored for all practical

purposes the original Rockefeller-Gorton bill with the Snowe and DeWine

changes to punitive damages.

The Snowe amendment, as I have already said, said that punitive damages

would be limited to an amount twice

the amount of the total of all compensatory damages, economic, and noneconomic. The DeWine amendment

limited the amount of punitive damages to $250,000 in the case of small

businesses, those with fewer than 25

employees, and individual defendants

of modest means with a net worth of

less than $500,000.

There was no Abraham amendment

in the Coverdell substitute. There was

no change in rule 11 in the Coverdell

substitute. There were also no alternative dispute resolution provisions at

all, as they had been stricken before

the cloture vote by a Kyl amendment.

However, the Coverdell substitute did

extend the punitive damage rules related to small businesses only—that is to

say, the DeWine amendment limiting

punitive damages against small businesses or modest individuals to

$250,000—to all litigation. It retained

that part of the original Dole amendment.

After extensive negotiations Friday

and over the weekend with my partner

in this, Senator ROCKEFELLER, and his

negotiations with as many as 15 members of the Democratic Party who want

some product liability reform but who

have been, to a greater or lesser extent,

opposed to any theoretical limitations

on the potential for punitive damages,

we have arrived at this RockefellerGorton second-degree amendment.

How does this change the Coverdell

proposal? Mr. President, it changes it

in about four ways.

First, we do return to a set of alternative dispute reasons or sections in

the bill, but they are not the alternative dispute resolution provisions

that were stricken by the Kyl amendment.

Senator KYL opposed those for two

reasons: First, because they overrode

the alternative dispute rules of the various States; and, second, because they

provided sanctions against defendants

but no comparable sanctions against

plaintiffs when the proposed ADR solution was more favorable to the winning

party.

The new Rockefeller-Gorton proposal

on alternative dispute resolutions simply set up a set of rules under which

States will conduct their own alternative dispute resolution proceedings.

We do not override State rules on ADR,

alternative dispute resolutions, except

with respect to the time with which

they must be commenced. So the only

places in which these rules would be

more or less mandatory are in that

tiny handful of States that have no

ADR provisions whatsoever.

The second and most important

change in this bill relates to the formula for the maximum level of punitive damages.

The long and short of it is, Mr. President, that there is no longer any theoretical maximum limit on punitive

damages, which I think will secure the

support of many Senators of both parties who have wanted some kind of reform in the product liability field but

have not wanted even the limitations

that were contained in the Snowe

amendment. So let me describe what

they are now.

In cases that go before juries, the

Snowe amendment will continue to be

the case with the modifications proposed by Senator DEWINE; that is to

say, the jury will have an upward limit

in its award of punitive damages of

twice the total of both economic and

noneconomic damages.

Economic damages, Mr. President,

are those for lost wages, for medical

expenses and the like, the full out of

pocket losses of the claimant. Noneconomic damages are those for pain

and suffering which, almost by definition, are more subjective in nature.

You will total up the sum of noneconomic and economic damages and

punitive damages can be awarded or, of

course, not awarded, but cannot be

awarded by the jury in an amount

greater than twice the total of those

economic and noneconomic damages,

except that if that total is less than

$250,000, the jury can award up to

$250,000. So the maximum jury award

will be $250,000 or twice the total of all

compensatory damages, whichever is

higher.

The big change, Mr. President, however, is the fact that the judge in the

case may add to that award of punitive

damages if the judge feels that it is inadequate because of the egregious nature of the tort which led to the punitive damages in the first place. The

judge may add to that number and may

do so in an unlimited fashion, there is

no cap in this Rockefeller-Gorton

amendment, except that if a judge does

do so—in other words, what we consider a requirement by the seventh

amendment—the defendant would have

the right to a new trial to go back and

start all over again.

There is one other major difference

and that other major difference is a

criticism which the Senator from Alabama made just a few moments ago

against the Coverdell amendment; that

is, there is no attempt in this bill to

extend these punitive damage rules or

limitations to cases other than product

liability. In other words, that portion

of the Dole amendment of last week

which was left in the Coverdell substitute is now gone. This bill now applies to punitive damage cases only, as

it did when it was reported by the Commerce Committee.

The profound difference between the

form in which it finds itself here and

the way in which it was reported from

the Commerce Committee with debate

beginning 2 weeks ago today, if my

memory serves me correctly, the profound difference is in respect to punitive damages. You will remember that

the original bill from the Commerce

Committee had a cap of $250,000 or

three times economic damages only,

whichever was higher. The Snowe

amendment effectively lifted that cap,

to a certain degree. This removes the

cap entirely, but only when a judge determines that that limitation would be

unreasonable and finds the actions of

the defendant sufficiently egregious to

warrant it.

Excuse me, there is one other matter,

the DeWine amendment, which does set

a separate rule for small business defendants and for individual defendants

whose assets do not exceed half a million dollars, designed to see a single

case does not bankrupt.

So, Mr. President, I recognize that

this is, oh, if not a complicated set of

changes, still a complicated bill because the Senator from West Virginia

and this Senator have collaborated on

drafting this amendment because it reflects, I believe—and he can speak to it

himself when he gets to the floor—because it reflects the views of the more

than a dozen additional members of the

Democratic Party who have been working with Senator ROCKEFELLER, and because it represents the considered

views of the majority leader at this

point. I hope that we will be permitted

to adopt this second-degree amendment before 4 o’clock, so that it is absolutely clear exactly what the cloture

vote is on.

I can say, Mr. President, that if that

does not happen, if we have not adopted the second-degree amendment by 4

o’clock, I can assure Members that this

amendment will be adopted postcloture

before we reach a vote on final passage

on the bill. I speak in this case for myself, for Senator ROCKEFELLER and for

the majority leader; in other words, I

believe that among us, we can guarantee enough votes so that Members can

be assured that what they are bringing

to a close is a debate on this modified

proposal, a proposal which does not

have the caps on punitive damages

which caused, I think, the great bulk of

the debate on this issue during the

course of the last 2 weeks.

I can say rather bluntly, Mr. President, that I do not regard this as a totally satisfactory response. I believe

that the desire for predictability and

for economic progress and opportunity

in this country calls for limitations on

punitive damages which this proposal

lacks.
May 8, 1995 CONGRESSIONAL RECORD — SENATE S6249

So I have given up ideas which I

think are quite important in connection with this aspect of legal reform,

but I have done so for the greater good

for accomplishing something, for doing

something to bring a greater degree of

balance and fairness into this whole

field than exists at the present time.

I expect during the course of the next

hour that my friend, the Senator from

West Virginia, will be here. I believe

that the majority leader will ratify

what I have said. I see the Senator

from Alabama on his feet, and I will let

him either speak to it——

Mr. HEFLIN. I just wanted to ask if

the Senator will yield and respond to a

couple questions.

Mr. GORTON. I will be delighted to

do so.

Mr. HEFLIN. Let me ask the Senator

this. Is the Shelby amendment included?

Mr. GORTON. The single printed

copy of the amendment that I had was

submitted to the desk about 15 minutes

ago, and it is in the process of being

copied. I hope within the next 5 minutes we will have copies for every

Member.

Mr. HEFLIN. To answer my question,

is the Shelby amendment included or

not?

Mr. GORTON. The Shelby amendment is not included in it, I say to the

Senator from Alabama. On consideration and on speaking to a wide number of other Members, we believe that

the peculiar rules in Alabama with respect to wrongful death decisions, that

we were going to do one of two things:

Either create a hole in this bill big

enough to drive a truck through or, alternatively, encourage the Alabama

Legislature to change its law to conform with those of other States.

Mr. HEFLIN. Let me ask the Senator

this. In regard to the DeWine amendment, is it still the lesser of $250,000 or

two times compensatory plus

noncompensatory? Is it still the lesser?

Mr. GORTON. No, it is the greater of.

Mr. HEFLIN. What I have written

out to me is the lesser of it. This was

handed out as some sort of brief statement.

Mr. GORTON. That is a very good

question, I say to the Senator from

Alabama. It is my intention to have it

the greater. I know this says the lesser.

I will check and see and we will change

it.

Mr. HEFLIN. I think the distinguished Senator from Washington

wishes to speak. I yield the floor.

Mrs. MURRAY addressed the Chair.

The PRESIDING OFFICER (Mr.

KYL). The Senator from Washington.

Mr. GORTON. Excuse me, Mr. President, the Senator from Washington has

the floor.

Mr. President, can I have the attention of the Senator from Alabama?

Mr. HEFLIN. Yes.

Mr. GORTON. I need to say to the

Senator from Alabama, I believe I

misspoke myself because there are two

separate uses of the $250,000 figure.

Mrs. BOXER. Parliamentary inquiry.

What is the status of the floor debate

at this time?

The PRESIDING OFFICER. The senior Senator from Washington has the

floor. The Gorton substitute, amendment No. 709, a second-degree amendment is the pending business. He yielded the floor to the Senator from Alabama for a question and he is responding to that.

Mr. GORTON. There are two separate

uses of the figure $250,000 in this Gorton-Rockefeller second-degree amendment. The first is that in most cases,

in normal cases, the $250,000—rather

the Snowe amendment says that the

maximum punitive damage award is

twice the total of economic and noneconomic damages. This adds to that,

or $250,000, whichever is greater.

Let us say in a case the total economic and noneconomic damages were

$15,000. Twice that is $30,000. Under this

amendment, nonetheless, the jury

could award $250,000 as being greater

than $30,000.

In the case of the small business,

however, the business with fewer than

25 employees or the individual defendant with less than $500,000 in assets,

$250,000 or twice economic and noneconomic damages, whichever is the

lesser is the ceiling.

Mrs. MURRAY addressed the Chair.

The PRESIDING OFFICER. The Senator from Washington

Mr. GORTON. I yield the floor.

Mrs. MURRAY. Mr. President, I rise

today in opposition to S. 565. The bill

before the Senate claims to promote

fairness, but I believe it is actually far

from fair to consumers in my home

State of Washington and throughout

this Nation.

I will leave it to the lawyers here to

discuss the legal intricacies of the bill.

However, I want to raise some very serious, commonsense problems I have

with this legislation.

First, I am deeply concerned about

the bill’s potential to disproportionately harm women.

I am amazed that the bill before us

treats a corporate executive’s loss of

salary as more important and deserving of compensation than the loss of

such priceless assets as the ability to

bear children, the senses of sight and

touch, the love of a parent or husband,

and the ability to move freely—

unhindered by disability, disfigurement, or lifelong pain.

Certainly, this body must believe

that raising a family, and having children should not be seen as unimportant

in our legal system.

S. 565 would eliminate joint and several liability for noneconomic losses.

And, by making noneconomic damages

more difficult to recover, it would impair a woman’s ability to recover her

full damage award.

It is unfair to require only the victims of noneconomic losses—such as a

woman who has lost the ability to bear

children, or a child disabled in his

youth—to bear the burden of pulling

all the defendants who caused them

harm into court.

Joint and several liability allows injured victims to receive full compensation, and leaves it to the guilty defendants to divide the damages appropriately among themselves. It seems to

me much fairer to place this burden

with the guilty parties, than with

those who are injured.

The singling out of noneconomic

losses for adverse treatment will prevent women from being fully and fairly

compensated. This is especially objectionable because women have been the

victims of many of our Nation’s most

severe drug and medical device disasters—DES, Dalkon shield and Copper-7

IUD’s, and silicon breast implants are

just three examples.

I have met with many women from

my home State of Washington whose

lives have been devastated by these

products. Their stories are tragic.

Their lives have been changed dramatically. They deserve a system of laws

that treats them fairly.

Mr. President, mandating a nationwide cap on punitive damages also

seems ill-conceived in light of the number of dangerous products that have

been marketed primarily to women in

this country.

S. 565 establishes a cap on punitive

damages of three times a person’s economic injury or $250,000, whichever is

greater.

We should not forget in our rush to

make changes in this Congress that the

purpose of punitive damages is to deter

bad behavior by making it impossible

to calculate the risk of engaging in

such behavior. Under S. 565’s cap, I

fear wrongdoers will find it more cost

effective to continue marketing their

dangerous products rather than removing them from the marketplace.

Even Senator SNOWE’s amendment to

change the cap on punitive damages to

two times compensatory damages does

not remedy the unfairness of this cap.

Although, Senator SNOWE’s amendment

includes noneconomic damages within

the formula for punitive damages, it

does not acknowledge the important

role of punitive damages in deterring

and punishing outrageous misconduct.

Last year, Senator KOHL introduced

an amendment to the product liability

bill that, unfortunately, was not adopted. He sought to incorporate more fairness in this legislation by restricting

the ability of Federal courts to sanction secrecy in cases affecting public

health and safety. I was proud to join

him as a cosponsor of his antisecrecy

amendment last year, and look forward

to joining him again when he raises the

issue in this Congress.

The settlement of the Stern case in

1985 by Dow Corning is a great example

of why such a change is necessary. As

a result of a secret settlement agreement, Dow Corning was able to hide its

decade-old knowledge of the serious

health problems its silicon breast implants could cause for 6 additional

years.
S6250 CONGRESSIONAL RECORD — SENATE May 8, 1995

The damaging information did not

become public until the FDA launched

a breast cancer implant investigation

in 1992. In the meantime, nearly 10,000

women received breast implants every

month, and countless women were

harmed.

Mr. President, this bill would not

only disproportionately harm women,

it would also deprive injured consumers in my home State of Washington of

rights they currently have.

This is significant because Washington has one of the most conservative

tort law schemes in the Nation. This

bill would reduce the statute of limitations in my home State of Washington

from 3 years to 2 years. Injured consumers would have less time in which

to file lawsuits when they are harmed

by dangerous products. The bill also

would reduce the number of situations

in which product sellers can be held

liable in Washington State. And the

bill would abolish joint and several liability for noneconomic damages currently available in Washington when

the injured person has not contributed

to her injury.

As the Seattle Times editorialized

just last week:

Recent polls show that the great majority

of Americans oppose restricting the right of

individuals to hold manufacturers and medical workers accountable for their injurious

act.

The National Conference of State Legislatures opposes having Congress federalize an

area of law that has been the exclusive domain of state lawmakers for 200 years. And

state judges are coming out against federal

statutes that would tamper with century-old

jurisprudence developed in state courts.

The rush to impose federal rules on tort

claims runs counter to the Republican philosophy of giving more power to the states.

Surely, this is one area where state judges

and legislators are better suited to determine what’s needed in their communities.

The Washington Legislature, for example,

passed a comprehensive tort-reform law in

1986. Many other states have done so in the

past decade, Yet, voters in some places, such

as Arizona and Michigan, have turned down

tort reform initiatives. Why should Congress

now force those voters to live with legal

changes they rejected at the polls. * * *

I ask unanimous consent to have the

editorial printed in the RECORD.

There being no objection, the material was ordered to be printed in the

RECORD, as follows:

[From the Seattle Times, Apr. 30, 1995]

FEDERAL TORT REFORM USURPS STATES

RIGHTS

The only parties pushing for tort reform

seems to be big businesses, doctors intent on

curbing medical malpractice lawsuits, and

lawmakers who receive financial contributions from those lobbies.

Recent polls show that the great majority

of Americans oppose restricting the right of

individuals to hold manufacturers and medical workers accountable for their injurious

acts.

The National Conference of State Legislatures oppose having Congress federalize an

area of law that has been the exclusive domain of state lawmakers for 200 years. And

state judges are coming out against federal

statutes that would tamper with century-old

jurisprudence developed in state courts.

The rush to impose federal rules on tort

claims runs counter to the Republican philosophy of giving more power to the states.

Surely, this is one area where state judges

and legislators are better suited to determine what’s needed in their communities.

The Washington Legislature, for example,

passed a comprehensive tort-reform law in

1986. Many other states have done so in the

past decade. Yet, voters in some places, such

as Arizona and Michigan, have turned down

tort reform initiatives. Why should Congress

now force those voters to live with legal

changes they rejected at the polls?

The Senate product-liability bill, sponsored by Sen. Slade Gorton, though more

limited than the House legislation, is still an

unnecessary federal intrusion into state law.

The Senate bill does not include the

House’s onerous ‘‘loser pays’’ rule that would

prevent individuals and small businesses

from filing legitimate lawsuits for fear of

having to pay legal fees for the opposing

side. But like the House bill, it would cap punitive damages in dangerous-product cases

to $250,000 or three times the economic loss,

whichever is greater.

The change might make sense if it created

a uniform rule across all 50 states. But it

won’t. Washington law does not allow punitive damage awards at all, so the proposed

federal standard won’t apply here.

Other provisions of the Senate bill, however, will affect Washington residents. One

provision would make it harder for people injured by defective products to collect for

‘‘pain and suffering.’’ The bill places limits

on lawsuits by individuals, yet places no

such limits on businesses.

Tort reform will not unclog the court systems. Though businesses routinely complain

about the litigation explosion, tort claims

account for only 9 percent of all civil suits,

and product-liability cases make up only 4

percent of tort claims. The real problem is

with companies suing each other—a phenomenon completely unaddressed by the proposed legislation.

But this isn’t about clearing up court

dockets or improving the way judges and juries handle tort claims. It is about reducing

the financial exposure of manufacturers even

when there are serious proven injuries. If

states believe protection is needed for businesses, they are free to enact tort reform

without congressional interference.

Mrs. MURRAY. Mr. President, I have

serious concerns about S. 565 and cannot support passage of this legislation.

I urge my colleagues to think long and

hard about consumer health and safety, their individual State’s autonomy

in determining its own tort laws, as

well as the potential impact of this bill

on women.

I believe this bill tilts the scales of

justice far too dramatically in favor of

corporate profits. It is our job to do all

we can to assure the families we represent that the products they use are

safe, and that they will have recourse

if they are harmed.

Mr. President, this bill hurts the little guy. Is it not time we all stepped

back, and remembered the adage—

there but for the grace of God go I.

Mrs. BOXER addressed the Chair.

The PRESIDING OFFICER. The Senator from California [Mrs. BOXER] is

recognized.

Mrs. BOXER. Mr. President, I want

to associate myself with my colleague

from Washington, Senator MURRAY, because I think that she, as she usually

does, puts her finger on real people.

Who are the real people that are

going to be impacted by this change in

this law that is before us? I hope that

we do not vote for cloture. The bill

that would be before us, if cloture is

voted, is a bill that I think is very,

very harmful to the American people.

It is bad for consumers; it is bad for a

system that has produced the safest

products in the world.

With all our problems, we still have

the safest products because we have a

legal system out there that acts as a

deterrent to those sitting around in the

boardrooms deciding if they can write

off a certain number of injuries and

still make a profit.

I said the last time I debated this

that this so-called reform is not so

much about what will go on in the

courtroom as what goes on in the

boardroom, because it is in the boardroom—and we see it through discovery

in other products cases—where the dollars and cents take hold. We have

heard about automobile manufacturers

who knowingly did not spend enough

time on safety and said, ‘‘we can afford

to have so many explosions and we will

still make money.’’ We want to make

sure that that kind of callous attitude

does not increase in America today. We

want the safest products.

My friend from Washington, Senator

MURRAY—I have to be clear because we

have the two Senators from Washington on different sides of this—was very

clear on who could be hurt from this

so-called reform. Again, I want to

make the point here that it is the Republican Congress that keeps on saying, ‘‘We want the people of the States

to handle everything. They are better

at it.’’ Yet, when it comes to product

liability, for whatever reason, they

want big brother and big sister and the

U.S. Senate to dictate to every judge

and jury in this country as to what

damages ought to be. I find it almost

amusing, if it were not such a serious

matter.

When it is convenient, you are for

the local people, and when it is not, do

not let philosophy get in the way. I

think Senator THOMPSON from Tennessee made that point very clearly, as

a Republican Senator who does not like

this bill, asking if this goes against the

grain of what he said Republicans are

trying to do. I applaud him for that directness.

Now, we know that there are going to

be some changes to the bill as it is before us in order to get enough votes to

move forward. I was very pleased to see

that not even a majority of this Senate

would stand up for that Dole amendment which would put a punitive damages cap on all civil cases. It was so

far-reaching and so hurtful that Senator DOLE could not even get 50, 51

votes. I think he got 47. That is very

far from shutting off debate.

I have to say that I believe the substitute bill will have some terrible consequences. Yes, it stripped out the
May 8, 1995 CONGRESSIONAL RECORD — SENATE S6251

other areas of law, and they are just

sticking to products.

I think there will be three consequences. By the way, I am not suggesting that the people who support

this bill want these consequences. But

I believe these are the consequences of

the bill.

First, it will make our products less

safe—less safe—for consumers.

Second, the formula for punitive

damages is blatantly unfair. It favors

the wealthiest. Let me repeat that: The

formula for punitive damages is blatantly unfair and favors the wealthy. I

will show a particular case where we

have a wealthy corporate executive

suffer the same injury from the same

product as a homemaker and wait until

we see the difference in the award that

they get. It will make your hair stand

on end, it is so unfair.

Third, there is another issue that has

not yet been raised that deals with the

biomaterials section, which I believe

will unduly restrict liability for suppliers of component parts. In other words,

if a person gets hurt by a product that

has a number of parts, what this would

do is put some of the manufacturers of

those parts off limits. They would have

no liability. It sets up a real problem,

which I will go into.

Moving to consumer safety, one

study done on tort law and its effect on

improved safety, reported that the

State system of product liability saves

lives. The study estimates that 6,000 to

7,000 accidental deaths are prevented

and as many as 3 million fewer injuries

occur every year because of State product liability laws. We are talking here

about changing laws that studies have

shown saves lives.

Why do we want to do that? Some

6,000 to 7,000 deaths are prevented

every year. Three million fewer injuries. Why do we want to change a system that helps this country? I do not

believe the proponents of this legislation want to see more deaths and injuries, but I believe that is an unintended

consequence of this bill. The best products in the world, and we are messing

with it over here, and I think it is

wrong.

Now, I want to talk about fairness.

The Dole bill, as it is before the Senate, and I know that Senator GORTON

plans to amend it so I will address

both, would do the following, and I will

prove it by giving a case and walking

through a case.

There is a CEO who earns $400,000 a

year. His auto engine explodes and he

is unable to work for a year. Then,

there is a 45-year-old female homemaker. She earns no wages. Same

thing happens to her. Her auto engine

explodes and she is unable to work for

a year. The automaker is found 100 percent liable by the jury.

For the CEO, the jury awards economic damages of $425,000—the $400,000

he makes plus $25,000 in medical bills;

pain and suffering damages of $25,000;

he gets a compensatory damage award

of $450,000. When we add that in with

the punitive damages, which is two

times compensatory damages, he gets

$1.35 million.

Identical injury, different results.

Now we will look at the homemaker, 45

years old—same age as the CEO. She

earns no wages. Her auto engine explodes and she cannot work for a year.

She is not working anyway. She has no

wages. The automaker is found 100 percent liable. She gets economic damages

of $25,000. She has no lost wages. She

has $25,000 in medical bills, pain and

suffering of $25,000. Her total compensatory damage award is $50,000.

Here is what happens to her: She gets

compensatory damages of $50,000; punitive damages of $100,000, for a total

award of $150,000. Same injury, different result.

This is the bill that is before the Senate. Senator GORTON wants to make it

better. I am glad he does. He is putting

back the $250,000, so she could get

$250,000 in punitive damages if his

amendment holds.

Now, giving them the benefit of the

doubt, that they change it to $250,000,

it is $1.35 million versus $300,000—same

injury, different result. This is what we

are voting on.

I hate to say it, but it hurts women

the most. Women still earn only 71

cents for every $1 earned by a man.

And women and minorities make up

only 5 percent of top management jobs.

The consequences of that disparity

here will play out.

Who will get hurt? Middle-income

people, women, the elderly, children.

Who gets the highest award? A highpaid executive. Oh good. Just what we

needed. Robin Hood in reverse. A court

system that pays this man $1.35 million

and pays this woman $300,000 or

$150,000, depending on what we wind up

with.

I have to say that anyone who votes

for this is voting for something that is

blatantly unfair, blatantly unfair. We

in the almighty Senate are putting our

imprimatur on this kind of a plan.

Not this Senator. I hope we have

enough Senators who stand up and be

counted for the little guy, as my colleague Senator MURRAY says, the little

guy, the little gal. They do not have

pinstripe suiters around here. They do

not get on the plane and come and

knock on our door. But the big guys

can. And that is what this bill is for.

Unfair, blatantly unfair.

The bottom line is that juries, who

see these cases firsthand, can make

these decisions. That is the bottom

line.

Now, I want to talk about medical

devices. This is something that hits

home again to a large number, particularly of women, although I might say

men who have pacemakers or other

kinds of devices implanted should be

very concerned about the biomaterials

section in this bill. Senator HEFLIN and

I have discussed this, and we both

agree that this title of the bill has not

gotten enough attention.

As biomaterial suppliers, component

parts manufacturers would be shielded

from liability under this bill.

I am concerned that these provisions

go too far. We know about silicone gel

implants. Would the people who make

that silicone be immunized under the

bill? Will they be protected from lawsuits?

We know Dow Chemical set up a corporation just to make breast implants,

and they called it Dow Corning. They

tried to protect Dow Chemical from liability that way even though Dow

Chemical made the chlorinated organic

compounds, the solvents and the catalyst that went into these implants.

The product of silicone breast implants, we know, is the subject of ongoing litigation, but will this title in the

bill that is still in the bill mean that

Dow Chemical could be dismissed from

the case? What would we be telling the

women, infants, and children whose

lives have been devastated by these

leaking silicone implants? What would

we be telling them now that they are

finally ending their battle with the

chemical giants? Are they going to be

told, ‘‘Sorry, Congress just gave extraordinary protection to Dow, and you

are left with no way to be made

whole?’’ I hope we will not vote cloture

on this bill.

We are not sure if Dow would be

shielded, but it is clear that manufacturers will try for this absolute defense.

Mind you, in that section they will

be shielded from liability for component parts. And will these provisions

encourage device manufacturers to set

up their own separate entities to manufacture all the component parts and

supply all the raw materials? Would

these provisions protect these shell

corporations from reckless conduct or

even deliberate harm?

I know small businesses are concerned about this, if they supply a

small part. I am not talking about that

situation. I am talking about a situation that could occur in this bill with

this title where a corporation that

makes, say, the silicone breast implant, sets up another corporation at

an arm’s distance, legally, and that

second corporation supplies all of the

component parts. If the product is unsafe and the company that makes the

product goes out of business, no one

can go after the company that makes

component parts because—guess why—

they are shielded under this bill.

Let us not mess with the product liability laws in this land.

In the beginning we heard a lot of

talk: Oh, there is a crisis, so many

cases. There have been about 350 cases

in 25 years where there have been punitive damage awards. I think we have

proven that on this floor over and over

again. The leadership on this, from my

side of the aisle, has been magnificent.

Senator HOLLINGS and Senator HEFLIN

have been on their feet, hour after hour

after hour, peeling away the talk and
S6252 CONGRESSIONAL RECORD — SENATE May 8, 1995

looking at the facts of what this bill

will do.

I think the American people are

starting to get scared, because just because somebody says ‘‘legal reform’’

does not mean necessarily that is what

it is. This is not reform, this is basically the Federal Government taking

over and tying the hands of judges and

juries, tying their hands, so if someone

is disfigured or has brain damage or

cannot have a child and suffers mightily and his or her family suffers mightily, that judge and that jury cannot decide the dollar number to put on that

case.

We know there are enough checks

and balances in the system today. We

do not need to take over this area of

the law. I hope we will stand strong

today, again, against cloture. Just

keep in mind in this accident: Identical

injuries, different results—a homemaker getting a maximum of $150,000;

with the Gorton amendment getting a

maximum of $300,000; and the same

identical injury, a CEO making $400,000

comes away with $1.35 million.

To me that is a denial of equal protection under the law. But, yet, that is

the kind of law we are looking at.

Let us beat back this other attempt

at cloture. Let us protect the American

people from this bill. It is not necessary and it will be very hurtful.

I yield the floor.

The PRESIDING OFFICER. The Senator from Alabama.

Mr. HEFLIN. Mr. President, this bill

ought to be determined kill them, not

injure them. Certainly in regard to the

DeWine small business amendment,

where it is the lesser of $250,000 or two

times noneconomic and economic damages, you can have instances in death

cases where the limit would be zero because there are no economic damages

and because death occurs immediately,

without pain and suffering, or with a

minimum amount of time in which one

goes through that.

But the whole issue comes down to

the role of the Senate. To me, the role

of the Senate in regards to this is extremely important. Some of my colleagues, I am afraid, do not realize

there will be a conference and the

House of Representatives bill, which

was passed, which has a 15-year statute

of repose, which does not even have the

Snowe amendment, which I consider

not to be—an improvement—does not

have it in it. And when you go to conference what is going to happen? I do

not see the Speaker of the House of

Representatives is going to be outdone

by my good friend, Senator ROCKEFELLER. I think he will come out with

a House version of the bill.

So, regardless of what substitute to a

substitute might be offered here, if cloture were to be agreed to then what do

you do? You go to conference and what

do you come out with? You come out

with the Gingrich bill.

The role of the Senate is to be a deliberative body. We are not a body that

votes aye and nay, and the majority

rules in the event a person desires to

take advantage of the rules. You have

the cloture situation. So what is really

at stake here is an issue in regards to

the role of the Senate and the rules of

the Senate.

Do not be under any illusion to the

effect that what you might adopt as a

substitute to a substitute is going to be

the final bill that goes to the President. It goes to conference. I think we

ought to realize very clearly what the

situation will be.

There are just so many bugs in this.

One of the lawyers on Senator HOLLINGS staff mentioned to me you can

organize subsidiary corporations or

you can keep down the major corporations to fewer than 25 employees. There

are so many maneuvers and various activities that can occur relative to that,

that opens the market wide open pertaining to this.

So I have already spoken. Senator

HOLLINGS is here, and others that will

probably want to speak. I am not going

to speak long on this, but this is basically saying that life in the United

States, if a wrongdoer kills you, it is

worth no more than $250,000, particularly in the event that you fall under

the small business protection. I say

this is flawed with great unfairness

throughout. I have outlined it before.

But the main issue to be considered

in this cloture vote that is upcoming is

the role of the Senate. Do not forget

there is going to be a conference. Do

not forget who is going to control the

conference. I hope my colleagues bear

that in mind as they consider their cloture vote.

The PRESIDING OFFICER. The Senator from South Carolina.

Mr. HOLLINGS. Mr. President, the

Senator from Alabama is right on target. I remember my children years ago

used to listen to a little Saturday

morning radio show, ‘‘Big John and

Sparky,’’ and they had little squeaky

Sparky with the voice:

All the way through your life,

Make this your goal,

Keep your eye on the doughnut,

And not on the hole.

Keeping our eyes on the doughnut

and trying to avoid falling into holes

that these folks have on course, all we

need do is go to the contract, the contract and what is really intended.

The theme of the contract is that

Government is not the solution; Government is the problem. The Government is the enemy. Abolish the Department of Education; abolish the Department of Commerce; abolish the Department of Housing and Urban Development; abolish the Department of Energy; get rid of public TV; get rid of

private TV; abolish the Federal Communications Commission; abolish the

Endowment for the Arts on the one

hand, the Environmental Protection

Agency on the other hand. And then, as

concerns fundamental rights, we come

to trial by jury. This is none other

than an assault on the seventh amendment, the fundamental right given

under our Government for a jury of

your peers.

I could quote Patrick Henry, James

Madison, Thomas Jefferson. We could

go right on down the line, up to Chief

Justice Rehnquist —and we will have

time to do that—very, very interesting

observations, right up to date. But you

can see it in that contract, the English

rule.

Now, you have to watch them closely

to get the eye on the doughnut. It is

not in there—tort reform—but it is

over in H.R. 988, a separate bill. In that

separate bill, yes, they have the English rule on the one hand, and interestingly, Mr. President, they sneaked in

what the Senator from West Virginia

said. Now we do not have that in our

bill this year; that is, the settlement

process whereby if you are offered a

settlement and decline, and you get a

verdict of less than that settlement,

you have to pay the attorney’s fees on

the other side. That is the English rule

of intimidation, and they have it in

this separate bill. You can bet your

boots they will get it in the conference.

Yes, they constantly are reminding

us that we lost. You are right. Tom

Foley is not over there; NEWT GINGRICH

is over there. I have seen him whip

these young Congressmen from my own

State into line. It was said conscientiously we did not have the money for

a tax cut. We did not have it; no. They

are opposed to a tax cut because we

just did not have it. What we needed to

do was pay the bill—on and on. But we

are now in the bottom nine game. You

either come out for practice or you do

not play on the team.

Speaker GINGRICH is a hard taskmaster. You can bet your boots when

this bill or any bill gets there, it needs

little fixes at the end before cloture

votes. Essentially, they are that; just

momentary fixes to get just a title or

anything that would relate to it over

to the House side, for they know what

they can get by an overwhelming Gingrich vote over there, and bring it back

where the poor majority leader has to

mimic because he is all wound up in a

Presidential race.

I know the distinguished Senator

from Kansas does not want to do away

with punitive damages in all civil

cases. But anything you can do, I can

do better. So you do one. So I up the

ante and go to all civil cases. We will

find out who is for who, and who ought

to be the Republican nominee, and we

will just out-Republican each other.

And you have all kinds of mischief

afoot if you do not keep your eye on

the doughnut and watch it very, very

closely.

They never would apply this to the

manufacturers. I just allude here to

one case because they keep talking

about punitive damages. It is the case

of TXO Production Corp. verses Reliance Resources, decided just 2 years

ago by whom? The U.S. Supreme Court,

on punitive damages. What were the

actual damages? They were $19,000.

What were the punitive damages? They
May 8, 1995 CONGRESSIONAL RECORD — SENATE S6253

were $10 million. You get all of this anecdotal nonsense. They come out in individual injury cases like it is so outrageous, that the poor lady who was

burned with the McDonald’s coffee was

just outrageous, not this kind of percentage. They go to 1,000 percent. This

is way more than that $19,000 actual,

$10 million punitive, the most recent

case on punitive damages before the

U.S. Supreme Court in a civil action.

So there it is. They do not believe in

it because they will not apply that to

themselves. They have the unmitigated

gall to come around saying they represent the consumers, but they will not

let it apply to the manufacturers.

Come on. Come on. Do not give me that

this bill is for consumers, and the

consumer and the injured party are not

getting enough money. Do not come

with respect to the trial lawyers that

bought the crowd. Come on. Everybody

is in the contribution business. I would

like to get some more from the trial

lawyers. I would like to get more from

the chamber of commerce. You do not

think that the chamber of commerce,

the National Association of Manufacturers, the Conference Board, the Business Round Table, and the National

Federation of Independent Businesses,

yes, they have PAC’s. And they give

away more money. But you cannot find

it quoted in the newspaper.

They not only give more in contributions but they have a better currency.

They have organized PAC’s and organized focus. I see them in my elections.

They come to you, and they say, ‘‘How

about it, now? We want you to help us

on this bill.’’ I am getting the letters.

I am getting the calls now. The people

in a position of objecting to this heinous measure here, the Consumer Federation of America, the leading one,

they do not have a PAC. They do not

give you a nickel.

Do you think you get calls at election time? The NFIB and the small

business people out there are calling,

the chamber of commerce is calling,

big boys from the Business Round

Table and the National Association of

Manufacturers in my State are calling.

The Consumer Federation of America

does not have a PAC. Public Citizen

does not have a PAC. The Association

of State Legislatures does not have a

PAC. The Association of State Supreme Court Justices does not have a

PAC. The Attorneys General of the

United States does not have a PAC.

The American Bar Association does not

have a PAC. Let us clear the air here

and find out who is who, and who is

supporting who.

This insulting reference that this bill

ought to just whip right on through,

they do not believe in it themselves, or

their own manufacturers that they represent. They do not believe it by way of

contractors, because the contractors

are sending everything back to the people. This bill is to take it away, take it

away from the people; bring it to the

Washington bureaucrats on the one

hand, and take away the rights of trial

by jury on the other. You do not just

outright abolish the seventh amendment. You nibble at it. You nibble at

it. You just erode it like a rat just

gnawing at it gradually. Yes, get rid of

punitive damages. Get rid of joint and

several liability. Limit the evidence

that goes in. Get a bifurcated—a divided—proof of actual and proof of punitive. Go right on down the list. Give

them the English rule.

Well, that is not 170 years ago. I had

this quote from none other than the

British National Council for Civil Liberties, what they had to say about the

systematic erosion of the English jury

system between 1967 and 1978:

The jury system has been badly undermined in recent years. The prosecution in

criminal cases, otherwise than civil cases,

need no longer convince 12 jurors. They can

convict on the views of only 10.

They state that to come in now, to

allow a check on the jurors’ backgrounds, while the defense is not even

allowed to know his occupation, the

prosecution can secretly bet your all

for their political loyalty, yet the defense is not even allowed to ask jurors

questions in open court. The principle

of randomness has been used to cut

down defense challenges but leave prosecution challenges unlimited. A large

percentage of the criminal work has

been removed from the jury to the

magistrates court. And on the civil

side, we find that less than 2 percent of

the civil cases are tried before a jury.

I had a lawyer friend that went to the

American Bar Association seminars

and interviewed the prospective jurors

at random. He kept going through, trying to find any that would serve. He

could not find anybody in London. He

went on up to Scotland. They just did

not serve on juries. You have to be a

member of the elite. So do not come

and give me the English rule.

I know about the unstudied mind of

the ideas of the Magna Carta, King

John at Runnymede. I remember, I say

to the Senator, when we went over on

one of these tourist trips to London.

They got on the bus one afternoon and

stopped at Runnymede, and my friend

is as talkative as I am. He said, ‘‘Now,

what happened here?’’ The bus driver

called back and said, ‘‘King John, the

signing of the Magna Carta.’’ And he

said, ‘‘Well, when was that?’’ The driver shouted back, ‘‘1215.’’ He looked at

his watch. He said, ‘‘Florence, damn it,

you are 2 hours late again. We are behind time.’’

That is about how much this crowd

knows about Runnymede and the

Magna Carta. They do not know about

the English system. They do not know

it is totally eroded. The fundamental

right of trial by jury here is being assaulted.

Let us look at that so-called English

rule that they have on another bill

that they hope to put in in conference.

I will never forget one case I had before

I got elected to the Senate. In fact, it

was settled after I got out of the law

practice and in the Senate. My law

partner and I were the only two who

tried the case. There was a firm of 12

lawyers in Charleston. There was a

firm of 17 lawyers in Columbia. There

were some from New York that came

in. They had 20-some lawyers. They

had to get three tables. And just he and

I had an injured party and we were trying the case.

I think back to the fact that particular case never even received an offer of

any kind of settlement until it went

out to the jury, never a red cent of

offer. It was one of the most injurious

cases—injuries, clear-cut proof—that I

had ever been engaged in. I never could

understand why they would not make

us an offer.

But you have these insurance company lawyers who will say, ‘‘We don’t

settle cases.’’ They think that is

macho and everything else. Translated,

we factor it in the cost of litigation. So

we have no idea of settling. So what

happens? You intimidate the injured

party.

Look at a case we had last year in

the district court under Judge Ross Anderson with General Motors. General

Motors was represented by four of the

biggest law firms. They had a grand

total from those firms of 1,000 lawyers.

Present in the courtroom representing

General Motors was the former Attorney General Griffin Bell, the former

Attorney General William Barr, the

former Solicitor General, Kenneth

Starr—you can go down the list—some

of the most well known attorneys that

you will ever find. They have to be paid

$400 to $500 an hour.

You would think that the plaintiff in

that case would not bring the case

when they have General Motors and all

of those lawyers and everything else

and have to run the risk of not prevailing and getting all 12 jurors. They talk

about consumers and everything else.

They are trying inch by inch, yard by

yard to get rid of the trial by jury. It

has happened in England and they

would like to have it happen right now

in the United States of America.

That cannot be emphasized too much

as it now concerns what we have before

us because we have to look at the

doughnut and not the hole. We look at

all these little ramifications. They will

put in any and every kind of amendment that you can possibly think of

just to fix this vote or fix that vote or

change the vote we had last week,

knowing all along that they have kept

their word and the amendment is clear.

Then when they get on the other

side, they will be telling the truth

again when they say, ‘‘Well, you know,

Speaker GINGRICH took over and this is

his bill, and that is all we could get the

House Members to vote for and that is

what we got in the conference report.’’

And then you really have all of this

thing piled on you. That is why some of

us in this Chamber struggle so because

we can see exactly what is occurring.

Everything that was reprehensible in

these previous bills by the distinguished Senator from West Virginia, in
S6254 CONGRESSIONAL RECORD — SENATE May 8, 1995

the House bills, and considered in separate bills over there and everything

else of that kind, is being and is going

to be reinserted. And so when they get

to conference, just like this bill started

as a product liability measure; it soon

became a malpractice, a medical malpractice measure. And just as soon as

it became a medical malpractice measure, the next thing you look around it

was all civil cases that it would apply

to. And that is exactly how the conference would go if we did exactly as

they wish, and that is let us get this

little change here and that little

change there, and we will all be happy.

We all have been working hard. We

have been on this for several years.

And the plea is to what you committed. Laws are really passed at campaign time. Too often it is that these

eminent organizations come—the National Federation of Independent Businesses—for one thing only, your vote

on their bill. Necessarily you want

their support. In fact, they give you a

little award, a little statue, and that is

the NFIB award. And it is the treasure

board award that you get from that

small business group.

They have thousands of mailouts. I

can tell you, trial lawyers do not have

any thousands of mailouts. The others,

as well, including consumer organizations, do not mail out anything. They

just do not have any PAC’s at the supreme courts of the 50 States. The

American Bar Association, which opposes this measure, does not have any

PAC. They do not have political

mailouts. But the NFIB mails out; the

chamber of commerce has its meetings

as well as the mailouts. The National

Association of Manufacturers is strong

in my State. They come around, and

they have not only mailouts but special manufacturers come around and

meet with you and everything else of

that kind.

So if you are not studied as to the individual rights of injured parties, you

may not realize how horrendous this

legislation is, and the detrimental impact it will have on our Nation’s civil

justice system. What’s worse is that it

is based on a total distorted record.

They lament and lament about punitive damages. However, according to

the hearing record, the amount of all of

product liability punitive damage

awards in the last 30 years adds up to

only a fraction of the $3 billion Pennzoil versus Texaco verdict, or the $3

billion verdict in the Exxon Valdez

case.

Are they really concerned about consumers? Are they really concerned

about the injured parties?

Mr. President, of all civil filings,

torts represent 9 percent, and of those

tort filings only 4 percent of the 9 percent, are product liability cases—.38—

thirty-eight one-hundredths—percent.

And this thing has taken 2 weeks now.

To do what? To take it away from the

States that have had jurisdiction for

230 years, the English law and everything else of that kind, or the regular

statutes, the regular burdens of proof,

the greater weight of the preponderance of evidence, all 12 jurors have to

find it and on appeal and everything,

injured party on a contingent basis. It

has worked. The States themselves

over the past 15 years have reformed

their laws, and there is no question in

my mind that they are handling it and

handling it well. My judges tell me so,

particularly my Republican judges that

we have confirmed that I am proud of

because I voted for their confirmation.

But I wanted to make absolutely sure

that we did not have that problem. I

am assured of it. But they are trying

now to get their foot in the door, and

the ultimate goal is to restrict, if not

totally eliminate, as they have in England, trial by jury.

I yield the floor.

Mr. GORTON. Mr. President, I suggest the absence of a quorum.

The PRESIDING OFFICER (Mr.

CRAIG). The absence of a quorum has

been noted. The clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. HELMS. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

VISIT TO THE SENATE BY PRIME

MINISTER OF ISRAEL YITZHAK

fRABIN

Mr. HELMS. Mr. President, I have

the honor of presenting to the Senate—

and I shall do that in a minute—the

distinguished Prime Minister of Israel,

Mr. Rabin.

RECESS

Mr. HELMS. Mr. President, I ask

unanimous consent that the Senate

stand in recess for 5 minutes so that

Senators may greet our distinguished

guest.

There being no objection, the Senate,

at 4:02 p.m., recessed until 4:07 p.m.;

whereupon, the Senate reassembled

when called to order by the Presiding

Officer (Mr. C

fRAIG).

COMMONSENSE PRODUCT LIABILITY AND LEGAL REFORM ACT

The Senate resumed consideration of

the bill.

Mr. DOLE addressed the Chair.

The PRESIDING OFFICER. The majority leader.

ORDER FOR CLOTURE VOTE TO BEGIN AT 4:20 P.M.

Mr. DOLE. Mr. President, it is my

understanding that a couple of our colleagues, one on each side of the aisle,

may not be available until 4:15 or 4:20.

I ask unanimous consent that the cloture vote scheduled for 4 p.m. today be

postponed to occur at 4:20 p.m.

The PRESIDING OFFICER. Without

objection, it is so ordered.

UNANIMOUS-CONSENT REQUEST

Mr. DOLE. Mr. President, I would

also ask unanimous consent that the

pending Gorton substitute be modified

to reflect to ‘‘Strike all after the first

word, and insert,’’ and on page 20, line

6, strike ‘‘or (2)’’ and on line 14, strike

‘‘or (2)’’.

Mr. HOLLINGS. Mr. President, I

have discussed this with the leadership.

I would have to object.

The PRESIDING OFFICER. Objection is heard.

Mr. DOLE. Mr. President, let me indicate we were trying to clear up a procedural problem. The Senator certainly

has every right to object. It may mean

that this will be corrected tomorrow, if

cloture is not invoked today. I hope

cloture will be invoked today.

EXPRESSING THE SENSE OF THE

SENATE ON 50TH ANNIVERSARY

fOF V–E DAY

Mr. DOLE. Mr. President, today is a

very important day for a number of

people on this Senate floor. It is V–E

Day. May 8, 1945, was a very important

day. We have a V–E Day resolution

that I think deserves a rollcall. I hope

my colleagues would agree that, immediately after the cloture vote, we would

have a vote on the V–E Day resolution.

I send that resolution to the desk and

ask that it be read.

The PRESIDING OFFICER. The

clerk will report.

The legislative clerk read as follows:

A resolution (S. Res. 115) expressing the

sense of the Senate that America’s World

War II veterans and their families are deserving of this nation’s respect and appreciation on the 50th anniversary of V–E Day.

The resolution is as follows:

Whereas on May 7, 1945 in Reims, France,

the German High Command signed the document of surrender, surrendering all air, land

and sea forces unconditionally to the Allies;

Whereas President Harry S Truman proclaimed May 8, 1945 to be V–E Day:

Whereas May 8, 1995 is the 50th Anniversary of that proclamation:

Whereas, the courage and sacrifice of the

American fighting men and women who

served with distinction to save the world

from tyranny and aggression should always

be remembered; Now, therefore, be it

Resolved, That the United States Senate

joins with a grateful nation in expressing our

respect and appreciation to the men and

women who served in World War II, and their

families. Further, we remember and pay tribute to those Americans who made the ultimate sacrifice and gave their life for their

country.

The Senate proceeded to consider the

resolution.

Mr. DOLE. Mr. President, it is a very

brief resolution. I have taken the liberty of adding World War II veterans as

cosponsors. If some do not want to—I

have Senator EXON, Senator HOLLINGS,

Senator GLENN, Senator INOUYE, Senator STEVENS, Senator HELMS—I think

there are a couple of others—Senator

HEFLIN.

Mr. HOLLINGS. Senator THURMOND.

Mr. DOLE. Senator THURMOND. I will

furnish those names at the desk.

So I hope, unless there is some objection on the other side, that that vote

could follow immediately the vote on

cloture.