S5596 CONGRESSIONAL RECORD— SENATE April 24, 1995 

Mr. BREAUX. Mr. President, I ask 

unanimous consent that the order for 

the quorum call be rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

The Senator from Louisiana is recognized. 

f 

COMMON SENSE PRODUCT LIABILITY AND LEGAL REFORM ACT 

The Senate continued with the consideration of the bill. 

Mr. BREAUX. Mr. President and my 

colleagues, here we go again, back on 

the famous product liability reform 

bill. I think one of the things that 

Members do in an effort to try to get 

legislation passed, I would say sort of 

tongue in cheek, when they are uncertain about the merits, they label it 

‘‘reform.’’ We have had the Tax Reform 

Act, we have had the Health Reform 

Act, we have had the Product Liability 

Reform Act, and no matter whether it 

is real reform or not, if you call it reform long enough and loud enough and 

enough people hear it, then a lot of 

constituents will start writing and saying, ‘‘You have to be for that reform 

act that is pending in the Senate or 

pending in the House. I am not really 

sure what it does, but if it says that it 

is reform, it must be good and you had 

better vote for it if you ever want to 

come back and get reelected or speak 

with your constituents in any kind of 

civilized fashion.’’ I say here we are 

again, because once again in this Congress, the Senate is going to be called 

upon to address what some have called 

a Product Liability Reform Act. 

I raise the question at this time as to 

why we need to be doing this because, 

in fact, I think this is something that, 

over the many decades, years and years 

of our country’s history, has been an 

area that has been reserved to the 

States in order for the various State 

legislators to look at these issues and 

make decisions based on what is appropriate and proper when it comes to 

dealing with the personal injuries of 

the people who reside in their respective States. 

Now, there are some in this Congress 

who will say no, we are going to do it 

all from Washington, and we do not 

care how long the States have done it 

or how intense they have been in their 

efforts at laying out systems that 

make sense for the people of their respective States—no, we do not care 

about that. We are going to take it all 

here, here in Washington. We are going 

to do it all from Washington because 

we know best. 

I suggest just this. People in some 

parts of our Government here in Washington, and some parties here, are saying when it comes to some subjects 

like product liability reform—again, 

the word reform is attached to everything you want to change; let us reform it—they make the point that 

States are so backwards and so inefficient and so ineffective in handling 

personal injury cases, they would say 

that we are going to bring it all to 

Washington, but that with welfare reform, the Federal Government is so ignorant and so slow and so messed up 

that when it comes to welfare reform, 

we are going to send that to the States. 

They say we are going to block grant 

all the welfare programs and rules and 

regulations on welfare and send it to 

the various States—all 50 States. Let 

each State decide what is best for the 

people of that State when it comes to 

welfare programs and how to reform it 

because the States know best and the 

Federal Government is really too slow 

and too ignorant to make the right decision. But when it comes to product liability, the States are so slow and so 

dumb and do not know what to do we 

are going to take that jurisdiction 

away from them and bring that jurisdiction to Washington because Washington will do a much better job. The 

inconsistency of those positions in my 

opinion is irreconcilable. 

I would suggest that in areas where 

the States have worked their will and 

where they have done a good job we 

should leave it alone. I would suggest 

that when it comes to product liability, the phrase ‘‘if it ain’t broke don’t 

fix it’’ applies. I would also suggest 

that those who say this is such a crisis 

of litigation that it threatens the very 

legal institutions by which we govern 

ourselves, look at the facts at what is 

happening out there. Is there an explosion of litigation? Ask anybody in this 

body who would be willing to answer 

this question of the amount of litigation that says we have to supercede 

what the States have done and bring it 

all here to Washington. 

I think the facts are clearly just the 

opposite. In all State courts in 1992, all 

tort cases or cases that people sued because of personal injury in civil courts 

amounted to just 9 percent of the total 

civil cases filed. And product liability 

suits, of which we are talking about 

today, accounted for only 4 percent of 

all the tort filings in all of the civil 

courts, in all of the State courts, in the 

Nation. That amounted to .0036 percent 

of the total civil case load of all of the 

State courts in the United States of 

America—.0036 percent. 

When we read those figures, one 

might ask the question. Why in the 

world does anybody think that there is 

a problem? Why does anybody think, if 

it is that small a number of lawsuits 

being filed that represent product liability suits, that it is such a mess 

that we would have to take it away 

from the States and we are going to do 

it in Washington, we are going to make 

it right in Washington because we in 

Washington know best what is best for 

the people of my State of Louisiana, or 

any other State in the Union, that we 

know so much more about how to solve 

this we are going to do it in Washington. People back in Louisiana say, 

‘‘Senator, are not you saying at the 

same time that we do such a lousy job 

on handling personal injury product liability legislation in my State that 

you are going to take it to Washington 

but when you talk about welfare reform, Washington does such a lousy job 

you want all the States to handle it?’’

Why is it any different? 

We are talking about laws that affect 

the health and safety and the future of 

the people of a prospective State. When 

it comes to those areas I am a strong 

States rights Senator. I believe the 

rights of the States should not be 

trampled on. The rights of the States 

to govern what happens within their 

territorial boundaries should not be superseded by the Federal Government 

without a legitimate and an overriding 

mandate as to why we should do it on 

the Federal level. 

I would suggest that when only .0036 

percent of all civil cases filed in State 

courts amount to cases filed dealing 

with product liability, that it is not a 

national problem, justifying jerking 

the rug out from under the States and 

say, no. Here in Washington we are 

going do it, and we are going to do it a 

lot better than you have been able to 

do it back home. I do not buy that. 

I will say to my colleagues in the 

Senate that my own State of Louisiana 

has addressed these problems, and they 

have handled it in the State legislative 

bodies. Interestingly enough, some people say, ‘‘Well, this is a big battle between business and plaintiffs. It is a 

big battle between the people who get 

sued and the people who do the suing. 

And there are too many people doing 

the suing. So we have to pass legislation in Washington to protect those 

who are getting sued.’’ That is not so 

where I come from because I asked the 

Congressional Research Service to 

compare the legislation that is pending 

in the Senate, and legislation passed 

the House as well with the laws that we 

already have on the books in Louisiana. Do you know what they found? 

Here is the concluding paragraph. This 

ought to knock somebody’s socks off 

who is saying we should be doing what 

some have suggested. 

Conclusion: H.R. 956, which I understand is the pending bill, the House 

passed product liability bill. H.R. 956 

would be more favorable to the plaintiffs than is Louisiana law with respect 

to product seller liability. 

I repeat that again. The bill before 

the Senate would be more favorable to 

plaintiffs than is Louisiana law with 

respect to product seller liability. This 

is from the Congressional Research 

Service dated March 17, 1995. Therefore, 

if businesses say we get sued too much, 

we know we need changes in the law 

and we want more protection, my goodness. The bill that we have pending before us today on the Federal level is 

more favorable to the plaintiffs than 

what Louisiana has already done to 

limit product liability suits and to 

make it more difficult to prove damages and to recover. Louisiana has already drafted legislation. It is on the 

books. It is the law of the land in my 

State. 

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April 24, 1995 CONGRESSIONAL RECORD— SENATE S5597 

Therefore, I argue not whether we 

should be benefiting plaintiffs or 

whether we should be benefiting those 

who make defective products. My argument is that we should not be taking 

this jurisdiction away from the States 

who have had to address these issues, 

for countless numbers of years. The 

States know the needs of people and 

they know the needs of the companies 

that produce products that operate in 

their respective States. The question 

is; and I will ask it until someone can 

give me a good answer. Why is it necessary to usurp the jurisdiction of the 

States and make the argument that 

some things the Federal Government 

knows best and we are going to handle 

it here in Washington? 

When I was in law school they used 

to call it forum shopping. They used to 

say you pick the district where you 

want to file the suit depending on the 

type of judge you have, and you file it 

where you have the best judge for your 

particular cause. If you are a defendant 

or a plaintiff, you forum shop. I would 

suggest that the companies that are 

concerned about defective products 

that they may have produced, say in 

some States we get a good deal but I 

bet we can get a better deal if we bring 

it to Washington. So let us forum shop. 

Let us see if the U.S. Congress can take 

away all the jurisdiction from the 

States and bring it all to Washington 

because big brother in Washington 

knows better than the people of our respective States. 

I just cannot get passed the point argued by some people. On welfare reform, the Federal Government is so 

dumb we are going to give it all to the 

States. But on product liability the 

States are so dumb we will give it to 

the Federal Government. That is forum 

shopping. Pick the issue and find where 

you are going to handle it, pick the 

best forum, the best results on a particular issue. 

The point I am trying to make here 

today is the States have in fact addressed product liability. For my 

State, as the CRS has concluded, the 

Federal bill is better for plaintiffs than 

our State law. But I side with the 

States. I side with my legislatures who 

have looked over Louisiana and said 

this is what the people of my State 

want. This is what is best for our 

State. They passed it by majority vote. 

The laws have been signed into law by 

the Governor of our State, and it is the 

law of the land. For the life of me I 

cannot decide why that should be 

changed and have everything sent to 

Washington for a change. 

In addition to that, I am concerned 

about the fairness of this legislation. I 

do think it is one-sided. I do think on 

the Federal bill we do not treat people 

who are injured with the same rights 

and the same standards as we do the 

people who have made defective products. That is not fair. If there is anything we ought to be following as our 

guideline on legislation that affects 

human health and safety, it is fairness. 

It is how people are treated, both who 

make the products that are defective 

and that cause injuries and how we 

treat people who are injured by those 

defective products. Nobody should have 

an advantage. We should speak of fairness. We should speak of a level playing field. Everybody should be treated 

equally. 

But I will assure you that my reading 

of the legislation S. 565 does not provide any basic system of standard of 

fairness. Let me give you an example. 

The bill S. 565 provides a series of hurdles and limitations on the ability of 

people who are injured, that they have 

to cross over in order to be able to recover from manufacturers who make 

defective products. But it expressly exempts business from many of the same 

requirements that we put on individuals who are injured, many of them 

quite seriously by defective products. 

The standards, in other words, for the 

people who are injured and what they 

have to show and what they have to 

prove in order to get recovery from 

their bodily injury is different from the 

standards that this bill places on business, when they have injuries that are 

economic injuries caused by the same 

defective products. 

I would suggest that is wrong; that is 

not fair; that is not balanced; that is 

not a level playing field. Let me give 

you an example. If company A, for instance, purchased a piece of equipment 

from company B, and that piece of 

equipment was defective and one day 

explodes, company A that bought it 

could sue company B that manufactured for the economic injury they suffered. They could sue for the loss of 

profits they would have made if that 

piece of equipment had not broken or 

exploded. They could sue the company 

that sold them that product for all of 

their lost profits caused by the disruption of that accident. 

On the other hand, let us take the 

family of the poor worker who was operating that machinery which exploded 

in the same factory. When he or she 

brings their case to the courts of the 

land under this legislation, they must 

face limitations and hurdles in order 

for them to recover. 

To make matters even worse, under 

the Senate Commerce Committee’s 

version of the bill, if that machinery, 

for instance, had been in place for 20 

years or more, the injured person in 

the family could not even bring litigation to recover any of their losses for 

their injuries while the business would 

not be restricted in any way. 

Why is it all right for the business to 

be able to sue for lost economic profits 

because of a piece of defective equipment but the individual who may be injured physically by this same piece of 

defective equipment is somehow prohibited from bringing a case against 

the company merely because it had 

been in place for maybe 20 years? 

What is fair about that? Why should 

they not both be prohibited from bringing the case or both allowed to bring a 

cause of action for defective equipment? How can you say this is fair? 

I talked a little bit about punitive 

damages. It is really interesting; remember when I talked about Louisiana, that we have already addressed 

this? In Louisiana, there are no punitive damages, period—none—for product liability. You cannot get punitive 

damages for a product liability case in 

Louisiana. That is what the legislature 

said. That is the law of our land. This 

bill allows it. This bill says we can 

have punitive damages limited to 

$250,000 or three times economic losses 

of the person who is injured. 

Now, I do not know why there is a 

huge rush to do this in the first place. 

My State has done it. I wish they had 

not done it. I disagree with it. But this 

bill says punitive damages—which are 

intended to say to a manufacturer, you 

have done wrong; do not do it again; 

you will be penalized—will be limited 

to $250,000 or three times the economic 

damages. That sounds like an awful lot 

if it is a mom and pop product manufacturer, but if it is an international 

business? Does it mean a lot to them, 

when they may make more than that 

in profits in an hour? Is it really a deterrent to say you are only going to be 

able to have punitive damages of 

$250,000 or three times economic losses? 

If I was a big international manufacturer and I saw that my punitive damages were going to be limited, why 

worry about it. That is just the cost of 

doing business. I am going to make the 

product, sell a lot of it and if somebody 

litigates this and takes 4 or 5 years to 

finally get a judgment against me, I 

will just pay the judgment and if the 

punitive damage is so low, why worry 

about it? 

This is the point I wish to make here. 

I do not know why people think there 

is such a rush of litigation that provides for punitive damages that we 

need to change the law. The statistics 

I have show only 355 punitive damage 

awards in product suits occurred from 

1965 to 1990. That is in the Nation. Only 

355 cases between the years 1965 and 

1990 ever awarded punitive damages, 

and half of these awards were reduced 

or overturned on appeal. And in three 

fourths of these cases the defendants 

took steps to improve the safety of 

their product. Of course, that is the 

point of having punitive damages. They 

say to a manufacturer of a product 

that they knew was defective or likely 

to be, we want you to make some 

changes; we want you to do things differently. The threat, even a small 

threat of punitive damages for detective products makes a great deal of 

sense and should not be changed. 

This portion of the bill, quite frankly, discriminates against low and middle income people. I think it discriminates against women, infants and children by limiting the damages to three 

times the economic injury or $250,000. 

I give you an example. The same type 

of lawsuit for a defective product 

against company A. The product causes 

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S5598 CONGRESSIONAL RECORD— SENATE April 24, 1995 

injury to an insurance executive or a 

businessman who is making $1 million 

a year and doing very well in society. 

Now, compare that with the same injury from the same product to perhaps 

an ordinary housewife who is not employed except within the home, is not 

employed as a salaried person. If the 

injury causes the executive to miss 1 

year of work and causes the housewife 

to miss 1 year of work, the executive 

would be able to receive $3 million in 

punitive damages—three times his economic loss. And, for the same conduct, 

the housewife would only receive a 

very small amount, $250,000, for the 

same type of injury, in the same case, 

with the same defective product. I do 

not think that is fair. 

So I will conclude. We will have a lot 

of time to debate this over the period 

of time that is allotted for us to consider this legislation. But the two 

points I have tried to make today are 

quite simple. No. 1, the States are already doing this. And to all Members of 

Congress who have stood in the Chambers of the House and Senate over the 

years and said I am for States rights, 

the Federal Government should not 

interfere where it is not necessary, the 

Federal Government does not always 

know best—the people of the States 

know what is best as communicated 

through their State legislatures—I say 

that we should not be yanking the rug 

out from under the States. We should 

not be usurping the power of the States 

to handle personal injury legislation 

affecting the people of that State concerning products that injure them. 

Point No. 2 I think is equally simple 

and not difficult to understand. The 

legislation that is before the Senate at 

this time is simply not fair. It is simply a piece of legislation that discriminates against those who have and those 

who do not have. The goal of this legislation should not be for us to try to 

make it better for one category of 

Americans over another category of 

Americans; that the goal should be to 

create a system of balance, a level 

playing field, and a system of fairness 

for all of our citizens, whether they be 

businesses that make products or people who use those products. It should 

not be a guiding light for us to say we 

are going to do everything we can to 

help those who make the products but 

discriminate against those who use the 

products. 

I think in the couple of cases that I 

have tried to cite this bill does not provide the fairness that we as Members of 

this body should be striving to accomplish through this legislation. 

Mr. President, I will have more to 

say on this legislation as the debate 

continues but at this point I yield the 

floor. 

Mr. SPECTER addressed the Chair. 

The PRESIDING OFFICER. The Senator from Pennsylvania. 

Mr. SPECTER. I thank the Chair. 

Mr. President, I have sought recognition to comment preliminarily on the 

pending legislation, and it is my view 

that some reform would be useful—illustratively, the alternative dispute 

resolution or perhaps the collateral 

source rule which would limit a recovery where the plaintiff has already 

been compensated by insurance proceeds. 

It is true, as to the collateral source 

rule, that the plaintiffs contend they 

should not be foreclosed because they 

have paid for the insurance, but there 

are valid considerations I think in such 

a situation where having been compensated there should not be a double 

recovery. 

In looking at this legislation, it is 

my view that we must exercise care in 

what we do here and that we must proceed with a scalpel and not a meat ax, 

and that, as the Founding Fathers declared it, the Senate should function as 

the saucer to cool the tea which has 

come from the House of Representatives. 

As a practicing lawyer, I represented 

both plaintiffs and defendants in personal injury cases, represented both 

sides in security act cases. In my early 

days in the practice of the law with the 

Philadelphia firm Barnes, Dechert, 

Crassmeier and Rhoads, which later became Dechert, Price and Rhoads, I represented the Pennsylvania Railroad in 

the defense of personal injury cases. I 

represented a plaintiff in a widely 

noted product liability case. 

In the course of that activity in the 

practice of law and having been on the 

Judiciary Committee for the past 14 

years-plus, it is my view that the Congress should proceed with caution in 

altering the decisions of the courts 

which have been built up over many 

years, many decades, really many centuries. 

As was pointed out in the treatise on 

the American Law of Torts by Stewart 

M. Speiser, Charles F. Krause, and Alfred W. Gans, tort law has been used to 

control behavior for over 2,000 years. 

As Prosser and Keeton on the law of 

torts point out, the tort rules, including product liability, are evolutionary 

accretions, and the decisions on which 

they are based have been handed down 

by the courts in a very methodical way 

with extraordinary analysis over long 

periods of time. 

The seminal case was the decision in 

England in Winterbottom versus 

Wright, where the broad language of 

Lord Amiger laid down the first rule 

that the original seller of goods was 

not liable for damages caused by their 

defects to anyone except his immediate 

buyer or one in privity with him. That 

rule stood for a very long period of 

time until the celebrated case of 

MCPherson versus Buick Motor Co., 

where Judge Cardozo of the New York 

Court of Appeals, the highest appellate 

court in New York, later Justice 

Cardozo, ruled that a manufacturer 

was liable for negligence to the buyer 

of an automobile, a rule that now 

seems strange that it had to be a 

change in the law to say that the manufacturer would be liable to the person 

who ultimately bought the automobile 

as opposed to limiting the claim of the 

buyer of the automobile to a company 

which sold him the car and then leaving it up to that company to go back to 

the manufacturer. 

Early in my own legal career, I had 

an occasion to litigate in some depth a 

product liability case captioned 

Thompson versus Reidman and General 

Motors. That case achieved some note, 

having been reviewed in law review articles because it established a new rule 

which enabled a passenger in an automobile to sue the seller of the automobile, Reidman Chevrolet Co., and 

also the manufacturer, General Motors. 

It seems that such a decision back in 

1961, when it was cited as one of the 

important cases in the law of the development of product liability in the law 

of torts by Prosser and Keeton that by 

the hindsight of the intervening years 

seems strange that there would be any 

question about the standing of a passenger in an automobile to sue the seller of the automobile, Reidman Motor 

Co., and the manufacturer. But it was. 

And it is an indication of the kind of 

accretion, or what I call encrustation, 

of the common law that I studied in 

great depth in the course of bringing 

that litigation as a plaintiff’s lawyer. 

When I represented the passenger, a 

man named Pete J. Thompson, against 

the driver of the automobile, William 

Gray, who was a sergeant in the military, and did not learn until some 2 

years and 9 months after the incident 

that the cause was a stuck accelerator 

pedal and then found that the statute 

of limitations, 2 years in the State of 

Pennsylvania, had expired. Then I took 

a look at the Uniform Commercial 

Code, which had a 4-year statute of 

limitations, and sought to sue on behalf of the passenger against Reidman, 

which sold the car, and General Motors, the manufacturer. I faced a motion to dismiss. And the prevailing law 

at that time was that a passenger 

could not collect because the passenger 

was not in privity. And that is the 

legal term where the individual did not 

have a contract with the seller of the 

automobile, Reidman Motor Co., as did 

the buyer, William Gray. And there 

was no privity that the passenger had 

with General Motors. 

I argued that the court ought to create an exception to the privity rule because it was an analogy to the guest in 

a household. The Uniform Commercial 

Code had established a standing of a 

guest in a household to sue the seller of 

a product, like a toaster or an oven, or 

the manufacture of the product. The 

U.S. District Court for the Eastern District of Pennsylvania decided in my 

favor. 

As I say, the case was noted in some 

of the law reviews. And then, a plaintiff in Allegheny County noted it and 

filed a lawsuit out of privity and the 

case went to the State supreme court 

which decided that privity was necessary as a matter of Pennsylvania 

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April 24, 1995 CONGRESSIONAL RECORD— SENATE S5599 

law. The rule is that on substantive decisions, under Erie versus Tompkins, it 

is the State law which governs. Then 

General Motors and Reidman Chevrolet 

Motor Co. came back to the eastern 

district court and moved to dismiss 

and the judge reversed himself and my 

case was thrown out of court, as the expression goes. 

In the course of that litigation, it 

was quite an extensive research job 

that I undertook to give me some substantial appreciation of how we come 

to these rules of law. 

While not directly relevant from the 

point of view of product liability, I 

then found an exception to the statute 

of limitations under the Soldiers and 

Sailors Civil Relief Act of 1940, even 

though this was many years later, and 

was able to press the claim in tort and 

ultimately took the case to trial and 

after several days of trial received a 

settlement in the case. 

But I refer to the decision at some 

length because of the insights which I 

gained from that decision. And as I sit 

through the markups in the various 

committees—and the markup, for those 

who may be listening on C–SPAN and 

are not familiar with precisely what we 

do, is where we take a bill in a committee and decide how we ought to 

change the law or what law we ought 

to make as a matter of public policy. 

These markups, where we write the 

legislation which later comes to the 

floor, follow hearings where very frequently, although there are maybe 18 

members of the committee, as, for example, on the Judiciary Committee, 

there are only one or two present. It 

has been my observation that our 

markups do not necessarily reflect the 

epitome of reason and experience as we 

do the best we can. 

So that, by contrast, to the way the 

encrustations occurred in the judicial 

decisions since 1842, when these issues 

were considered, through the 1916 case 

in Buick versus MCPherson and the 

1961 decision that I personally participated in in Thompson versus Reidman 

and General Motors, I approach the 

field of legislative changes in tort liability with some substantial concern. 

The issues which we are considering 

were considered, to a substantial extent, in a law review article which I 

think is worthy of some reference by 

Prof. Gary T. Schwartz from the UCLA 

law school, as published in the Georgia 

Law Review in the spring of 1992. And 

the point that Professor Schwartz 

makes, which I think is worth noting 

here, is the way that the courts have 

responded in a rational, case-by-case, 

stare decisis way to important public 

policy considerations. 

Professor Schwartz points out at 

page 697 of the Georgia Law Review, 

volume 26, as follows: 

Consider the New Jersey Supreme Court 

which had voted unanimously in favor of 

hindsight liability in failure to warn cases in 

Chadha and then voted again unanimously 

against hindsight liability in Feldman 2 

years later. In explaining the turnabout in 

Feldman, the court acknowledged the heavy 

criticism that the Chadha case had provoked 

in the law reviews. 

Then Professor Schwartz goes on to 

point to other changes when he notes 

the evolution of the views of the distinguished supreme court justice of California’s highest court, Justice Stanley 

Mosk. He says: 

As a member of the California court in the 

1960’s and 1970’s, Justice Mosk was deeply involved in the fashioning of the strict products liability doctrine. In 1978, the court majority, in a somewhat conservative vein, 

ruled the principles of comparative negligence can reduce the plaintiff’s recovery in 

a strict products liability action. Justice 

Mosk’s dissenting opinion began with the 

complaint that ‘‘this will be remembered as 

a dark day when this court, which heroically 

took the lead in originating the doctrine of 

products liability, beat a hasty retreat almost to square one. The pure concept of 

products liability so pridefully fashioned and 

nurtured by this court is reduced to a shambles. 

Professor Schwartz continues: 

Ten years later, however, Justice Mosk authored the California court’s opinion in 

Brown versus Superior Court ruling that 

negligence principles, rather than hindsight 

strict liability, apply in a prescription drug 

case. Three years after Brown, however, Justice Mosk concurred in the court’s ruling in 

Anderson versus Owens-Corning Fiberglas 

Corp. that a hindsight analysis should be rejected in all cases involving a failure to warn 

even when the product is asbestos. Indeed, 

Justice Mosk’s concurring opinion suggests 

that the entire doctrine of failure to warn in 

products liability should probably be reclassified under the heading of negligence. In 

this concurrence, Justice Mosk quotes his 

own pure concept of products liability words 

from the Daily and then goes on, in essence, 

to eat his words. 

I do not expect the casual listener to 

be able to follow the details of this 

kind of commentary on this very complex, opaque, and difficult-to-understand products liability matter. But for 

those who are conversant in the field, 

it shows the evolution of a very learned 

and very thoughtful supreme court justice as he works through the rules. 

I would suggest that when the Congress of the United States seeks to 

make changes on this very carefully 

calibrated law, which is a matter of accretion, as Professors Prosser and 

Keeton articulated, or incrustation, as 

others have, that there ought to be 

very great care exercised by the Congress in the procedures we undertake. 

Especially in the context where we are 

functioning now in response to a mandate from last November, that we 

ought to in this body exercise the Senate’s traditional prerogative of the saucer which cools the tea which comes 

from the House of Representatives. 

Without going on at much greater 

length than what Professor Schwartz 

had to say, I will quote his comments 

at page 702 of the Georgia Law Review 

to this effect, citing how there are 

modifications in the judicial decisions: 

The last decade has witnessed a number of 

judicial rulings. Thus, New Jersey has reversed itself on manufacturer’s liability on 

unknowable hazards, Illinois has engaged in 

an interesting effort to abrogate the traditional tort of attorneys’ malpractice, the 

fifth circuit has essentially overruled its presumption of causation for inherent riskwarning cases, Tennessee has eliminated 

joint and several liability, and Maryland has 

overturned precedents in reducing the availability of punitive damages. Still, for the 

most part in recent years, we have seen the 

marking by courts’ unwillingness to extend 

precedent and by their resolution of open 

legal questions in a liability-restraining 

way. 

When you take a look at some of the 

provisions of the current legislation 

where we exonerate the seller from responsibility but leave the purchaser to 

the manufacturer, how problemsome 

may that be in cases where the manufacturer may turn out to be insolvent. 

That determination may not be made 

until long after the statute of limitations has expired as to the seller or 

provisions under the workmen’s compensation sections where the employer 

may be entitled to greater compensation than he has actually paid out. 

It may be that useful attention may 

be directed to the question of service or 

process of foreign manufacturers who 

come to the United States to sell, but 

inordinately complex rules limit the 

ability of buyers in the United States 

to bring in those foreign sellers or 

changes in the rule where the issue 

arises as to the collection from foreign 

sellers. 

The issue of joint and several liability is a very complex one, and it may 

be that there is some intermediate 

ground which will not subject someone 

liable for a tiny fraction, a percent or 

two, which is decided for the entire 

award where all others are judgmentproof. That is something which I think 

has to be very carefully considered as 

we work through the amendments on 

the pending legislation. 

Also, the issue of damages as to what 

will occur where you have a case like 

the one involving the tragic death of 

our late colleague Senator John Heinz 

where there were tragic deaths and injury on the ground when the plane in 

which Senator Heinz was flying had a 

landing gear which apparently was not 

going down and a helicopter from Sun 

Oil came to try to help out. There was 

a collision, and the plane fell to the 

ground in a school yard in suburban 

Philadelphia—tragic deaths, tragic 

burning injuries which would not have 

been compensated as this bill would 

limit joint liability, a liability which 

has been eliminated in some States but 

something which I think we have to 

very, very carefully consider. 

There are a series of cases which 

have illustrated the very dastardly 

conduct—searching for a right word 

not to be overly condemnatory—where 

you have the Ford Pinto case where 

there would be a classic case for the 

imposition of punitive damages if ever 

one existed. 

It was brought to light in litigation 

where the defendant had the matter 

brought to light in a letter which was 

sent by Ford’s chief safety officer to 

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S5600 CONGRESSIONAL RECORD— SENATE April 24, 1995 

the National Highway Traffic Safety 

Administration. It was noted in that 

case that Ford had sought to avoid liability or responsibility to make 

changes in its fuel system which was 

located too close to the rear bumper 

and lacked critical safeguards where 

minor collisions caused the car to 

burst into flames upon impact. 

This letter, which contained a remarkable cost analysis saying that 

there ought not to be a change in the 

fuel system because the savings from 

180 burn deaths and 180 serious burn injuries and 2,100 burn vehicles would 

cost $49.5 million, evaluating the 

deaths at $200,000 per death and the injuries at $67,000 per injury, and the vehicles at $700 per vehicle, contrasted 

with the cost of what the National 

Highway Traffic Safety Administration 

wanted done to change 11 million cars 

and a million and a half light trucks at 

$11 million per car and trucks which 

would cost $137 million. 

When this effort was brought to 

light, it showed in as clear a way as 

you can conceive the necessity for a liability which would exceed the kind 

which is talked about here under punitive damages. Or if you deal with the 

Dalkon shield IUD case or the asbestos 

cases, where in the face of known damage the manufacturing was done again 

and again and again; or in the Playtex 

case of tampons causing toxic shock 

syndrome, or the flammable pajamas 

case, or the Dalkon shield. These instances have to be very carefully considered when this body is undertaking 

a review of the punitive damage issue. 

There are several relatively recent 

decisions by the Supreme Court of the 

United States in this field, including 

one captioned TXO Production Corp. 

versus Alliance Resources Corp., decided by the Supreme Court in 1993, 

and another case is captioned Pacific 

Mutual Life Insurance Co. versus 

Haislip. Both of these decisions have 

opinions written by Justice Scalia, who 

is noted for his conservatism. While 

these cases involve the constitutional 

issues regarding punitive damages, 

they have some bearing on a public policy analysis which, as we know, when 

the Supreme Court of the United 

States takes up constitutional issues, 

they very frequently move over into 

being a super legislature. Some of 

those matters, I think, are worthy of 

our analysis. 

So, Mr. President, I make these preliminary observations as we move to 

open debate on this product liability 

legislation, saying as I did at the outset that some reform would be appropriate, but urging my colleagues to 

subject this legislation to very, very 

careful analysis, because we are looking at tort law developed over some 

2,000 years to influence human conduct 

and a stream of product liability cases 

originating in Great Britain in 1842, 

subject to very, very intensive litigation in the United States; product liability, which is not made by the plaintiff’s bar or the defense bar but made 

by the courts of the United States, and 

issues on punitive damages which have 

reached the Supreme Court of the 

United States, which have been upheld 

in the constitutional context by justices like Justice Scalia. 

I think the debate will prove useful. 

There are many issues to be considered. And as has been said earlier, I 

look forward to the debate and to an 

opportunity to participate extensively 

as we move through consideration of 

this important legislation. 

Mr. President, I thank the Chair and 

yield the floor. 

Mr. KYL addressed the Chair. 

The PRESIDING OFFICER (Mr. 

FRIST). The Senator from Arizona is 

recognized. 

Mr. KYL. Mr. President, I, too, wish 

to address Senate bill 565, the GortonRockefeller Product Liability Fairness 

Act of 1995. As the Senator from Pennsylvania has just mentioned, today 

marks the beginning of a historic debate in the Senate on the need for civil 

justice reform, because more than ever 

in recent years there appears to be an 

opportunity for us to make some real 

changes in law. For the first time in 

more than two decades, the House of 

Representatives has debated and passed 

comprehensive legal reform legislation, 

including product liability reform, as 

part of its Contract With America. 

According to a Luntz Research Co. 

survey, ‘‘83 percent of Americans continue to believe that our liability lawsuit system has major problems and 

needs serious improvements.’’

Now the Senate, I suggest, must do 

its part to make meaningful legal reform a reality to respond to this concern on the part of the American people. 

I want to begin by commending my 

colleagues from Washington and West 

Virginia for their 15-year effort to 

bring needed reform to the Nation’s 

product liability laws. 

I also agreed with the comments of 

the Senator from Pennsylvania who 

noted that it is important for us to be 

careful in the process of changing this 

law, because our States have different 

versions of product liability laws and 

because the law has built up expectations over the years. I also note, however, that the roughly 2,000-year development of this law, as the Senator 

from Pennsylvania mentioned, has 

changed rather dramatically just in 

the time since I attended law school, 

and that was not that long ago, Mr. 

President. In fact, the law was quite 

stable until about that time. 

So I think that because of the 

changes in the law and the dramatic 

impact that those changes have had on 

our economy and on our society, it is 

time to reexamine what might be done 

and that it is important for the Congress to enact reasonable reforms to 

protect our Nation’s manufacturing 

base from unreasonable litigation. 

Historically, of course, America’s 

strength has been in manufacturing, 

where much of the wealth of our Nation has been created. Although product liability law is but a small area of 

tort law generally, it is also a critical 

area in which America is losing its 

competitive edge. I noted, Mr. President, that this law has changed dramatically since I was in law school. 

The year was 1964 when I began law 

school. Some important decisions came 

down, starting with decisions from the 

State of California, which created a 

new concept called ‘‘liability without 

fault.’’ It is a concept that some Americans might have difficulty in understanding. I myself still have difficulty 

understanding why someone who is not 

at fault can be held liable for literally 

millions of dollars in damages. That is 

what the doctrine is called, liability 

without fault. 

Why is the doctrine called liability 

without fault? Because a plaintiff who 

is injured has the right now to bring an 

action against a manufacturer for a defective product, even though it is impossible to prove that there was any 

negligence in the creation of that defect. In other words, Mr. President, a 

manufacturer cannot have exerted 

every bit of care possible, has been as 

careful as one could be in developing 

the plans and hiring the people to 

produce the product, and they could 

have been as careful as possible; yet, 

notwithstanding all of the care exercised in the creation of the product, as 

happens, we all know it is part of life, 

a mistake is made, a defect is created 

and someone is injured as a result. Because of that injury, and only because 

there was an injury, in this one limited 

area of our law the manufacturer can 

be held liable for an unlimited amount 

of dollar damage because of the defect, 

even though there was no negligence. 

Mr. President, I said Americans 

might find this difficult to understand 

because of the historic notion in our 

tort law that you can recover against 

someone who is negligent, who was not 

careful, as a result of which you were 

injured and sustained damage. That 

has been the law for 2,000 years, until 

20 years ago, or 25 years ago, when the 

notion began to be accepted that the 

status of the victim was the most important thing and that it did not really 

matter what the consequences were to 

the manufacture of a product or to our 

society as a result of holding manufacturers of products to this standard of 

liability without fault. 

In other words, it did not matter 

with respect to the financial status of 

a business; it did not matter whether 

or not it puts the United States at a 

great competitive disadvantage; it does 

not matter that all due care was exercised. The only thing that mattered 

was that someone who was hurt had to 

be able to recover against someone. 

It is so bad, Mr. President, that persons do not even have to recover just 

against the manufacturer of the product. It is enough to find someone in the 

case persons can sue and recover from. 

So we identify the manufacturer of 

the product, we identify the wholesaler 

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April 24, 1995 CONGRESSIONAL RECORD— SENATE S5601 

and we identify the retailer, just to 

make it a simple case, although there 

are more complex cases. And we then 

find that the manufacturer has gone 

out of business or does not have enough 

insurance to cover the loss. The wholesaler, too, has gone out of business or 

does not have adequate insurance. 

So despite the fact that the seller 

had nothing to do with this except that 

he unwrapped the box, put it on the 

shelf, and sold it to the consumer, who 

was then injured because of the defect, 

despite that fact, the seller can also be 

held responsible. 

In a case where we get a judgment 

against all three—the manufacturer, 

the wholesaler, and the retailer—there 

is what is called joint and several liability. They are each liable for all of 

the dollar damage, irrespective of the 

relative degree of their involvement. 

None of them, remember, were negligent, but one of them produced a 

product which turned out to have a defect in it that caused the damage. All 

of them can be held liable. The notion 

has been accepted that all of them can 

be liable for the entire amount, so that 

the retailer in this case, if that is the 

one that has the deepest pockets, as 

they say, the one that can afford to 

pay, ends up paying the bill. 

A lot of folks think that is wrong. I 

agree. That is why we have joint and 

several liability reform. But it does not 

go nearly far enough in this bill, as I 

will get to in a moment. 

The point of this little discourse in 

law is simply to note the fact that 

some things have happened to our law 

over the years that have, in my view, 

not been based on common sense, not 

been based upon sound principles of 

law, but rather have been based upon 

the overriding notion that no matter 

what, someone who is hurt must recover. Even if he cannot find anybody 

that did anything wrong, and even if 

the party you recover against did not 

do anything wrong, if persons can find 

somebody that has deep enough pockets and they have something to do with 

the incident, then nail them. 

That has resulted in a lot of people in 

our country deciding not to get into 

certain forms of business. Last year, 

fortunately, the Congress amended the 

law very slightly with respect to the 

manufacturer of airplanes because nobody was building airplanes in this 

country anymore. I am talking not 

about the big commercial jets, but the 

planes that a person would fly on the 

weekend, for example, or a small plane 

for business purposes. 

Companies have stopped making 

things and people have stopped selling 

things because of this potential liability. That is why it is important to reform the law of product liability and 

why this legislation is so important. 

I suggest, Mr. President, that we 

must ultimately go beyond product liability to comprehensively reform the 

entire civil justice system, and that 

this bill will be one of the ways in 

which we can do that. 

In effect, we must repeal the regressive tort tax, as someone called it, that 

depletes our economy, raises prices, destroys jobs, stifles innovation, and reduces exports, making America less 

competitive in the world. This tort tax 

creates a capricious legal lottery that 

stimulates the filing of lawsuits. 

One result, a very important result, 

is that it causes doctors to add billions 

to our national medical care costs each 

year because they must practice defensive medicine. They must order unnecessary tests or perform unnecessary 

procedures simply to cover the possibility that someone could claim that 

that last procedure or test was necessary to prevent some kind of harm to 

a patient; in other words, to do defensive medicine rather than the medicine 

that makes the most sense. 

In Arizona, my own State, Mr. President, medical malpractice premiums 

have increased by nearly 200 percent 

just in the last 14 years. That is obviously reflective of the cost of the medical care which we provide. It is one of 

the areas that requires specific attention as we reform health care in this 

country today. 

Attorney’s fees and transaction costs 

are increasingly a large part of litigation expenses; in fact, approaching 50 

percent. I think people would be interested to note, those who argue that we 

would be denying victims the right to 

recover, that, in fact, half of the money 

collected or nearly half of it goes to 

the lawyers—not to the victims. 

The U.S. Department of Commerce 

has estimated that only 40 cents of 

each dollar expended in product liability suits ultimately reaches the victims. A Rand Corp. study showed that 

50 cents of each liability dollar does 

not go to victims but to attorney’s fees 

and other transaction costs. 

Toward the goal of national legal reform, S. 565 represents a small but critical first step. This bill and the House 

bill, H.R. 956, contain many similar 

provisions. 

They are, very quickly, a product 

seller provision that extends coverage 

of the bill to rented and leased products as well; a drug and alcohol defense 

provision does not go far enough; a provision creating incentive for biomaterial suppliers to make available raw 

material for use in medical implant devices sponsored by my colleague from 

Arizona, JOHN MCCAIN, and a very important provision; and finally, a provision reducing judgment amounts where 

a product has been misused or altered. 

Beyond the provisions, the House bill 

is significantly broader in scope, and I 

support most of its additional provisions. It is my understanding this body 

will consider more comprehensive legal 

reform legislation later this year: Senator HATCH’s Civil Justice Reform Act 

of 1995, and Senator MCCONNELL’s Lawsuit Reform Act of 1995, and I will support those efforts. 

I will plan to offer and support 

amendments to S. 565 that would 

broaden the legislative scope of this 

bill, more consistent with the House 

product. For example, I support expanding the scope of Senate bill 565, 

punitive damage reform provisions of 

three times a claimant’s economic loss 

or $250,000, whichever is greater, now 

applicable only to product liability actions, to all civil actions. 

It is important in the medical malpractice arena, in particular, where we 

very seldom have a product that has 

created a problem, to limit the liability of the physician or hospital or 

other health care provider in order to 

contain the cost of health care. 

Second, I would support expanding 

the scope of S. 565, joint and several liability reform with respect to noneconomic damages for product liability 

actions to all civil actions, which I 

spoke to a moment ago. I will be offering an amendment to that effect. 

Third, expanding Senate bill 565’s 

$250,000 limitation on noneconomic 

damages in product liability actions to 

medical malpractice actions, as well. 

I will also support the amendment of 

my colleague from Michigan regarding 

attorney disclosure requirements 

which would require that attorneys appearing in Federal court fully disclose 

at the time of retention all of the clients options, including a clear statement of the terms of compensation, 

and to provide an itemized accounting 

at the termination of representation. 

I will be introducing an amendment 

that would preclude punitive damages 

from being awarded if the health care 

producer of a medical device or drug 

successfully completes the FDA approval process, unless there is a situation of fraud involved. I also believe 

that there may be three other amendments necessary to this bill in order to 

preclude it from, I would say, Mr. 

President, having fatal flaws. 

There is one provision which relates 

to alternative dispute resolution where 

the parties seek to resolve their dispute outside of the tort lawsuit, and 

try to shorten the time and reduce the 

expenses. There is a penalty involved 

for the defendant in one of those situations. I believe that those provisions 

should be fair, equal to both the plaintiffs and the defendant, and that if 

there is any penalty attached for not 

agreeing to participate in an alternative dispute resolution mechanism, 

that that penalty should be provided 

both equally to the plaintiffs and the 

defendant, rather than only being a 

penalty for defendants. 

Second, there is a good provision 

that says, where a plaintiff has been 

impaired by drug or alcohol use and is 

therefore more than 50 percent culpable or responsible—in some States it 

is called contributory negligence, 

where plaintiff himself or herself is at 

least half responsible for the injuries—

there could not be recovery. It seems 

to me that the principle is sound but 

the limitation is too restrictive. 

Whether it is because of drug or alcohol use or because of lack of care or 

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S5602 CONGRESSIONAL RECORD— SENATE April 24, 1995 

concern or negligence, if plaintiff is 50 

percent responsible then either there 

should be comparative negligence or 

contributory negligence should preclude a recovery. It should not just be 

limited in that one situation. In fact, I 

can think of far more egregious actions 

on the part of the plaintiff than simply 

being drunk or under the influence of 

alcohol. 

Third, there is a provision that I 

spoke to earlier that says that, in a 

product liability case, the seller should 

not have to pay for the manufacturer’s 

liability. It seems to me that should 

apply in any kind of situation. In no 

case should the seller be required to 

pay for the manufacturer’s liability 

simply because you cannot find the 

manufacturer or the manufacturer does 

not have insurance to pay. If the seller 

was not responsible in any way, then 

the seller should not have to pay the 

damages. 

As I said, notwithstanding these 

areas in which I believe S. 565 could be 

broadened, I think it is important we 

not allow the perfect to be the enemy 

of the good, and therefore we should 

support whatever reforms we can accomplish. In the last 5 years cloture 

motions have effectively barred votes 

on the merits of bills similar to this 

that were supported by a majority of 

the Senate. We should not allow this to 

happen again. 

So I would like to close by addressing 

one of the most frequently cited and 

most unpersuasive arguments employed by the opponents of the national legal reform, only one, but I 

think it is important to establish this 

right up front because it has the superficial sense of States rights about it 

and suggests that those of us who support this legislation do not trust the 

States. 

As someone who is a very strong 

States’ rights supporter, who is very 

interested in allowing local decisionmaking, I want to make very clear our 

basis for supporting this legislation. 

This legislation would not prohibit a 

State from enacting more restrictive 

provisions so we are not saying the 

Federal Government should take over 

this area of law to the exclusion of the 

States at all. We are simply establishing a standard. If the States wish 

to be more restrictive they are entitled 

to do so. 

It is not appropriate to argue it 

would be an unconstitutional preemption of State authority if we were to 

act in this fashion. The commerce 

clause clearly grants the United States 

the authority to act. No individual 

State can solve the problems created 

by abusive litigation of the kind we 

have been discussing here and that is 

particularly true with product liability 

where a product may be manufactured 

in one State, sold in another State, and 

cause injury in a third State. In fact, 

Government figures establish that on 

average over 70 percent of the goods 

manufactured in one State are shipped 

out of State for sale and use. So it is 

clear that a national solution is required and justified by the fundamental interstate character of produce 

commerce. 

The threat of disproportionate unpredictable punitive damages awards exerts an impact far beyond the borders 

of individual States, and this threat influences investment strategies, it 

dampens job creation and prevents new 

products from reaching the marketplace. In an increasingly integrated national and international economy, the 

confusing inconsistent patchwork of 

State liability awards has created a 

major obstacle to America’s economic 

strength. And I think this is precisely 

the kind of problem the Framers gave 

Congress the power to address through 

the commerce clause of the U.S. Constitution. The Framers clearly realized 

the National Government needed the 

power to prevent the chaos that would 

result if every State could regulate 

interstate commerce. That is one of 

the reasons, as a matter of fact, that 

the Articles of Confederation were required to be amended. 

Opponents of legal reform profess 

concern about the preemption of State 

law and interference with States 

rights, but I note that many of these 

same interests are enthusiastic supporters of intrusive Federal regulations 

imposed on the States by OSHA, by the 

FDA, by the EPA, and other Federal 

regulators. In truth, States rights is 

not what is being defended here but 

rather the status quo or else. 

Why is the multimillion-dollar litigation industry the only segment of the 

economy that opponents of legal reform believe is beyond the reach of 

Federal law? Legal reform will not 

cause the creation of a single new Federal program or the expenditure of a 

single new appropriation. Legal reform 

will not impose new taxes or new regulations on our citizens. Legal reform 

will simply create clear, consistent 

legal standards covering civil actions 

brought in State and Federal court. It 

will enhance the essential principle of 

due process and, as the U.S. Supreme 

Court has said, due process, criminal 

and civil, is fundamental to our concept of ordered liberty. 

So, Mr. President, I hope we keep 

these thoughts in mind as we debate 

this important, and as I said at the beginning, historic legislation, and that 

in the end we will have found the wisdom and courage to make these reforms so we can pass them on to the 

President for his signature and begin 

the process of restoring more sensibility, more common sense, more fairness into the U.S. tort system. 

I yield the floor, Mr. President. 

Mr. President, 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. KYL. Mr. President, I ask unanimous consent that the order for the 

quorum call be rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

MORNING BUSINESS 

Mr. KYL. Mr. President, I have several announcements and requests for 

unanimous consent. I would note all of 

these have been cleared with the minority and therefore I wish to make 

them at this time. 

First, Mr. President, I ask unanimous consent that there now be a period for the transaction of routine 

morning business with Senators permitted to speak for up to 10 minutes 

each. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

MESSAGE FROM THE HOUSE RECEIVED DURING THE ADJOURNMENT 

Under the authority of the order of 

January 4, 1995, the Secretary of the 

Senate on April 7, 1995, during the adjournment of the Senate received a 

message from the House of Representatives announcing that the Speaker has 

signed the following enrolled bills: 

H.R. 889. An act making emergency supplemental appropriations and rescissions to preserve and enhance the military readiness of 

the Department of Defense for the fiscal year 

ending September 30, 1995, and for other purposes; 

S. 178. An act to provide for the safety of 

journeymen boxers, and for other purposes; 

and 

S. 244. An act to further the goals of the 

Paperwork Reduction Act to have Federal 

agencies become more responsible and publicly accountable for reducing the burden of 

Federal paperwork on the public, and for 

other purposes. 

The enrolled bills were signed on 

April 7, 1995 by the President pro tempore (Mr. THURMOND). 

Under the authority of the order of 

January 4, 1995, the Secretary of the 

Senate on April 12, 1995, during the adjournment of the Senate received a 

message from the House of Representatives announcing that the Speaker has 

signed the following enrolled bill: 

H.R. 1345. An act to eliminate budget deficits and management inefficiencies in the 

government of the District of Columbia 

through the establishment of the District of 

Columbia Financial Responsibility and Management Assistance Authority, and for other 

purposes. 

The enrolled bills were signed on 

April 12, 1995 by the President pro tempore (Mr. THURMOND

f 

). 

MESSAGES FROM THE PRESIDENT 

Messages from the President of the 

United States were communicated to 

the Senate by Mr. Thomas, one of his 

secretaries. 

f 

EXECUTIVE MESSAGES REFERRED 

As in executive session the Presiding 

Officer laid before the Senate messages 

from the President of the United 

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