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[Congressional Record Volume 141, Number 68 (Wednesday, April 26, 1995)]
[Senate]
[Pages S5734-S5736]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                     PRODUCT LIABILITY FAIRNESS ACT

  Ms. MOSELEY-BRAUN. Mr. President, I would like to speak for a few 
moments about product liability reform. The bill the Senate is now 
considering, the Product Liability Fairness Act of 1995, would 
establish national standard to be applied by State and Federal courts 
in product liability lawsuits. Let me say at the outset that I do 
believe some national product liability standards are needed, for 
reasons I will outline below.
  This consept--the concept of Federal product liability standards--is 
not entirely new to Congress; one version or another of the legislation 
has been pending before this body for the past 15 years. In past years 
the majority of the product liability debate has focused on whether the 
Federal Government should get involved in this area, rather than on 
what the Federal standards should be. This focus has, in my opinion, 
been unfortunate.
  I believe the Senate must begin to focus on the issue of what 
standards should apply to product liability cases. Indeed, I stood on 
the Senate floor after the product liability bill failed last year, 
stating my intention not to filibuster this bill again, and stating my 
desire to debate what alterations the Federal Government should make in 
the area of product liability law.
  That is not to imply that determining Federal product liability 
standards will be easy. It is often said when considering difficult 
legislation that ``The devil is in the details.'' This is one vote 
where the details really do matter. Any bill passed by the Senate must 
be fair not only to the manufacturers who place products on the market; 
it must also be fair to the workers who help build those products, and 
to the consumers who purchase them.
  The nature of the American marketplace has changed; commerce is no 
longer local, but is national and international in scope. American 
manufacturers ship their goods throughout the 50 States and beyond; 
this is true not only of our biggest companies, like Motorola, but of 
small businesses like Rockwell Graphic Systems in Westmont, IL, or Oxy 
Dry Corp. in Itasca, IL.
  Given the increasingly global nature of the marketplace, I believe it 
makes sense to have some basic, national 
[[Page S5735]] product liability standards that apply across the board. 
In the absence of uniform standards, companies find themselves being 
sued in one State for conduct that would not be actionable in another. 
In States without a statute of repose, for example, companies are 
forced to defend lawsuits for products that are 50 or 60 years old, 
while other States limit the right to sue on those products after 15 or 
20 years. In States with vicarious liability statutes, companies that 
rent or lease products may find themselves sued for actions over which 
they had no control--while in States without vicarious liability, such 
suits cannot go forward.
  Holding manufacturers accountable to 50 different standards in 50 
different States may have been justified when products were shipped 
down the street to be sold in the corner grocery store; it does not 
make
 sense when products are shipped for sale throughout the 50 States. The 
Constitution of the United States, in article 1, section 8, grants 
Congress the power to regulate interstate commerce. Enactment of 
product liability legislation is nothing more than a valid and 
necessary exercise of this constitutional power.

  Nor does establishing different standards in different States benefit 
consumers. There is no reason why a consmer in Massachusetts or Arizona 
should have greater or lesser rights than a consumer in Illinois. All 
consumers should have the same ability to access the courts. The bill 
introduced by Senators Rockefeller and Gorton is not perfect in this 
regard, as I will discuss. But it is a good beginning, and it does, at 
long last, allow the U.S. Senate to address the product liability 
issue. I would like at this time to congratulate Senator Rockefeller, 
who recognized years ago that product liability was an issue the U.S. 
Senate had to address. He has worked tirelessly to craft legislation 
that strikes an appropriate balance between preserving access to the 
courts on the one hand, and providing a measure of certainty and 
predictability to manufacturers on the other. We owe him a debt of 
gratitude.
  Mr. President, I know that Senators on both sides of this issue point 
to numerous studies which purport to prove their support or opposition 
to this legislation. Supporters of the bill cite studies which conclude 
that product liability reform will spur job creation. Opponents of the 
bill, conversely, cite studies which conclude that product liability 
reform will have no effect on job creation. Supporters of the bill cite 
studies to show that product liability reform will result in lower 
prices to consumers, while opponents cite studies that show the bill 
will have no effect on consumer prices. I have considered all these 
studies, and I do not believe that the benefits of product liability 
reform can be proven with studies or statistics.
  That is not to say, however, that this bill will not make a 
difference. Based on countless conversations members of my staff and I 
have had with Illinois manufacturers, with Illinois small business men 
and women, and with major Illinois corporations, I am convinced that 
the bill being debated by the Senate will help give employers a level 
of certainty, a level of predictability, and will create jobs. As one 
example, consider the statute of repose. I have talked to manufacturers 
who have been sued in the 1980's for products their company 
manufactured in the 1920's. The fact that a manufacturer can be sued in 
1995 for a piece of machinery that was manufactured 50, 75, even 100 
years ago, creates a substantial disincentive for manufacturers to 
create quality products that will stand the test of time. If American 
manufacturers do not create quality products, American workers don't 
work. The U.S. Senate should not be perpetuating a system that acts as 
a disincentive to the manufacturing of quality products; the statue of 
repose in S. 565 will help ensure that we do not.
  In addition, I think it is important to keep in mind that no 
individual has just one
 role in this debate, Consumers are not just consumers, they are also 
workers whose ability to find a job may hinge on how many products are 
manufactured in this country. They are also small business men and 
women, whose ability to keep their firms afloat and meet their payroll 
may hinge on the amount of money they have to spend on product 
liability insurance. They are retirees, whose pensions are dependent on 
the solvency of their former employers.

  That being said, it is also true that establishing Federal standards 
for tort liability represents a fundamental change in the structure of 
the product liability system, one that Congress must consider very 
carefully. I am pleased that our focus today is not limited to whether 
the Federal Government should be involved in product liability reform; 
instead, we are finally addressing what standards are necessary and 
appropriate to apply in product liability actions. Those standards 
must, however, be evaluated carefully. The Federal Government must 
strike an appropriate balance between the right of consumers to access 
the courts for legitimate lawsuits, and the need for employers and 
manufacturers to have some predictability about the standards by which 
their products will be judged. The Federal Government must strike a 
balance that prevents manufacturers from placing dangerous products on 
the market, but that also encourages manufacturers to develop new 
products that could save lives. This is not an all-or-nothing debate. 
We can craft a bill that is fair to everyone.
  Mr. President, much of the debate that has swirled around S. 565 has 
focused on provisions that are not included in the Senate bill, but 
were instead passed by the House of Representatives. As you know, the 
House recently passed a series of bills designed to reform the civil 
justice system. A number of Senators have taken to the floor to 
criticize provisions in the House legislation that are grossly unfair 
to consumers, and would limit the right of ordinary Americans to access 
the courts. I too would like to address those provisions at this time, 
in the hopes that the U.S. Senate will reject them; if it does not, I 
will be forced to vote against a product liability bill that I want to 
support.
  First and foremost, I cannot support legislation that imposes any 
form of a loser pays, or English rule system in the U.S. courts. I 
firmly believe that loser pays provisions run counter to the most 
fundamental notion of American jurisprudence, namely, that our courts 
serve all our citizens, not merely the rich and powerful. Loser pays 
provisions seriously undermine our efforts to open the courts to all 
Americans, regardless of income level. Instead, loser pays guarantees a 
system of justice where the most important factor is wealth. I cannot 
think of anything more un-American than charging an entry fee at the 
courthouse door. For that is what loser pays provisions do--if they are 
enacted, access to the courts will be determined not by who is right 
and who is wrong, but will be determined by how much an individual 
makes. Americans can and should be proud of the fact that, under the 
American legal system, all individuals have access to
 the courts. In America, the poorest worker who has been wronged by the 
richest corporation can go to court, can prove the corporation was 
wrong, and can get justice. But if the English rule is adopted, that 
situation will change. Even those individuals with meritorious claims 
cannot afford the risk of paying not only their own legal fees, but 
those of the defendant as well. As a result, only those with enough 
financial security to risk paying for their own legal fees and those of 
the defendant--a very small segment of the population indeed--would 
have the ``luxury'' of pursuing their claim in court.

  I know some have claimed that the loser pays system passed by the 
House of Representatives is actually very moderate. Under the House-
passed bill, plaintiffs in Federal court who reject a settlement offer, 
and then receive a lower award at trial, would be required to bear the 
opposing sides legal fees from the time of the settlement offer. 
Supporters of this provision--what they refer to as a ``modified'' 
English rule--maintain such fee shifting is necessary to deter 
frivolous lawsuits. In reality, such an amendment would have a much 
more detrimental effect. The amendment would also deter meritorious 
lawsuits by requiring a party prevailing on the merits to pay the 
losing side's attorney fees. Think about that for a minute. Under the 
bill passed by the House, a party who wins in court, who proves that 
the defendant 
[[Page S5736]] manufactured a dangerous product, engaged in employment 
discrimination, or was guilty of medical malpractice, could still be 
forced to pay the other side's legal fees. I believe it is bad public 
policy to allow wrongdoers to escape paying their own legal bills when 
they are proved on the merits in a court of law to be at fault.
  I do not disagree that Congress should encourage parties to settle 
their claims. Certainly all Americans, including victims of unsafe 
products or medical malpractice, prefer a quick and certain resolution 
of their claims. That is why plaintiffs will, in all likelihood, accept 
settlements offers if they are just and reasonable. There is no need to 
impose draconian measures that greatly infringe on the ability of all 
individuals to access the courts. I cannot think of anything in the 
history of American jurisprudence that would support the enactment of 
such a provision, and I urge my colleagues in the Senate to reject this 
approach.
  Nor do I support efforts to place arbitrary caps on noneconomic 
damages. The fact that noneconomic damages are difficult to precisely 
value does not mean that the losses in those areas are not real. 
Noneconomic damages compensate individuals for the things that they 
value most, the ability to have children, the ability to have your 
spouse or child alive to share in your life, the ability to look in the 
mirror without seeing a permanently disfigured face. If a company acts 
in a manner that robs people of these precious gifts, we should ensure 
that the injured party can recover fully for their loss through the 
jury system. We should not limit the ability to recover with an 
arbitrary cap.
  In addition, I will oppose attempts to broaden this bill beyond the 
area of product liability. I know that a number of Senators have 
broader ``civil justice reform'' amendments, that would extend the 
provisions of this bill to every civil litigation claim filed in State 
court, or medical malpractice amendments. As I mentioned above, my 
support for product liability reform is based both on the 
constitutional power given Congress to regulate interstate commerce, 
and the need that has been demonstrated--after many years of study--for 
a uniform approach in the product liability area. The debate on civil 
justice reform and medical malpractice should be left for another day.
  This is particularly true considering the wide-ranging implications 
that a number of proposed amendments would have on the enforcement of 
our Nation's civil rights and antidiscrimination laws. Enacting the 
broader ``civil justice reform'' bills that have been proposed could 
cause title VII of the Civil Rights Act of 1964, the Americans with 
Disabilities Act, or the reconstruction-era civil rights legislation to 
become ``toothless tigers.'' We must not stand by and let Congress 
repeal our Nation's civil rights protections under the guise of civil 
justice reform.
  Finally, I would like to express my continued opposition to the FDA 
excuse, a provision that Senator Dorgan and I worked to remove last 
year. I am pleased that Senator Rockefeller and Gorton did not include 
the FDA excuse in this year's bill.
  Mr. President, as I stated at the outset, I do not oppose some 
product liability reform at the Federal level. Indeed, I am pleased to 
see Congress debating the
 standards that should apply in the product liability area, and I hope 
to work with Senators Rockefeller and Gorton to craft moderate, 
bipartisan legislation. I believe the Product Liability Fairness Act 
that was reported out of the Commerce Committee strikes a reasonable 
balance between the need to preserve access to the courts, and the need 
to curb frivolous lawsuits.

  That is not to say I believe this bill is perfect. I have a number of 
concerns with the legislation as currently drafted, concerns that I 
have raised with Senator Rockefeller, and concerns that my staff has 
made clear to Senator Rockefeller and Senator Gorton's staff. In the 
first instance, I would like to see the punitive damage provisions 
altered to accord equal treatment to noneconomic damages. Under S. 565 
as currently drafted, punitive damages are limited to $250,000 or three 
times economic damages, whichever is greater. By excluding noneconomic 
damages from this calculation, the bill shortchanges the women who do 
not work outside the home, children, the elderly, and others who may 
not have large amounts of economic damages. While I support the notion 
of making punitive damages proportionate to the harm cased by the 
product--the goal that the punitive damage limitation is intended to 
accomplish--that harm should not be limited to out of pocket costs or 
lost wages. Noneconomic damages can often be difficult to calculate, 
but that does not make them any less real. As a notion of fundamental 
fairness, any congressional attempts to create a punitive damage 
standard should include both economic and noneconomic damages in its 
formula.
  Nor do I feel the bill as currently drafted strikes the proper 
balance in the area of creating ``National, uniform standards,'' it 
will not completely level the playing field in all 50 States. If 
anything, I wish the current bill went farther in pre-empting State law 
in the product liability area. National standards should be just that; 
standards that apply in all 50 States. For example, if the Federal 
Government wishes to establish a 20-year statute of repose, that should 
be the statute of repose, States should not be allowed to establish a 
lower statute that will prevent consumers from suing after only 12 or 
15 years. Again, I have raised this concern with Senator Rockefeller, 
and I will continue to raise it in the coming days.
  Yet while S. 565 is not perfect, it represents a good start. If this 
bill remains substantially the same, I intend to vote for cloture, as I 
stated very clearly on the floor of the Senate last year. It is not 
appropriate for the Senate to continue to filibuster an issue that 
clearly needs to be addressed. The current system is too slow. The 
transaction costs are too high. Given that our markets are now national 
and global in scope, Congress, which has authority over interstate 
commerce, has a responsibility to examine this problem.
  The issue of product liability reform has been before the Senate for 
well over a decade now. I believe that everyone who is interested in 
our Civil Justice System should have come to the table and worked with 
the Commerce Committee, with Senators Rockefeller and Gorton to address 
and resolve the underlying issues. If you do not feel this bill is the 
right one, submit a counterproposal. If you feel there are still 
changes that need to be made, put them forward.
  But to simply refuse to even discuss the issue is, in my opinion, 
irresponsible. It is gridlock. It is not in the best interest of 
consumers, it is not in the interests of business men and women, it is 
not in the interests of employees, and it is not in the interest of our 
country.
  I do want to caution, however, that my commitment to vote for cloture 
is limited to the bill as reported by the Senate Commerce Committee. I 
do not think that I am alone in that respect; indeed, I believe that 
the prospects of enacting a product liability bill will be vastly 
improved if the Senate rejects amendments to broaden the bill beyond 
its current scope, or to add the dangerous, anticonsumer provisions in 
the House legislation. If cloture is not able to be invoked, there will 
be many who will try to blame the democrats. In truth, however, if this 
bill does not clear the Senate, it will be because the majority on the 
other side of the aisle was more interested in making a political point 
than in making a law. It will be because they failed to keep the bill 
narrow enough and fair enough to command the supermajority necessary to 
move this bill to final passage.
  So, Mr. President, in conclusion I would just say I hope in the 
ensuing weeks we will be able to debate, and I am sure we will debate 
in detail, the particular provisions of S. 565. But at this point, 
based on the legislation before us, I am prepared to support a vote for 
cloture so we can actually get on the legislation and get beyond 
filibuster. I yield the floor.

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