S5798 CONGRESSIONAL RECORD — SENATE April 27, 1995

be denied access to care. We need a realistic,

rational health care system that will prevent

financially self interested groups from continuing to prey on unsuspecting medical consumers. We need a health care system that

allows choice, provides accountability and

incorporates a serious medical malpractice

prevention program. As a victim of malpractice, I implore you . . . please do not let

this administration strip away the rights of

victims like me. Please let my HMO experience be your guide . . . Understand that

managed care is part of our health care problem . . . It is not the solution.

[From the Milwaukee Journal, Sept. 15, 1993]

TORT REFORM ISN’T SOLUTION TO EASING

HEALTH CARE WOES

(By Karin Smith)

The President’s health care proposal is

going to be released within the next few

weeks. It is well known that tort reform will

be included in his package. There is speculation that the proposed plan will limit painand-suffering awards for medical malpractice

victims to $250,000. This would not only be

unconstitutional, but grossly unfair.

Let me explain.

Five years ago, I was a healthy, 22-year-old

woman. Today, I am a victim of both cervical cancer and medical mismanagement. In

1988, I belonged to Family Health Plan

(FHP), a Milwaukee-based health maintenance organization. When I began to experience vaginal bleeding, I sought care from

FHP.

Between June of 1988 and May of 1991, my

symptoms gradually progressed from minor

bleeding to profuse bleeding, to fatigue and

passing out. During this time, I made nearly

20 calls to doctors within my HMO to complain of the problems. Also during this time,

three Pap smears and three biopsies were

performed.

Unfortunately, my cries for help were not

heard, and all of my laboratory tests, with

the exception of one Pap smear, were misread. When I left FHP in May of 1991 and

sought the opinion of a gynecologist outside

of that plan, my diagnosis was made within

two weeks.

Since my diagnosis two years ago, I have

undergone five surgeries, three separate twomonth courses of radiation and six months of

chemotherapy. I was recently informed that

unless I have radical surgery this fall to remove a part of my spine and replace it with

a piece of my rib, I will probably be paralyzed by spring.

Because of the three-year delay in diagnosis, my chance for cure has dropped from

95% to around 10%. Even if I am fortunate

enough to survive this tragedy, I will be

plagued with chronic health problems and a

lifetime of uncertainty.

Few would disagree that this is an egregious case that has led to needless emotional

and physical pain. Certain legislators and

health care specialists believe that my noneconomic damages should be limited to

$250,000. The state Senate has passed a bill to

that effect.

According to the Health Care Financing

Administration, national health care expenditures total $675 billion. The American

Medical Association says doctors pay $5.6

billion in medical insurance premiums. As

an accountant, I can easily calculate the

cost of malpractice premiums to be less than

1% of all health care expenditures. Even the

Congressional Budget Office has said that

changing the medical liability system will

have little effect on total health spending.

Furthermore, several states have already

placed caps on pain-and-suffering awards.

History has shown this has not reduced malpractice premium expenses. The reality is

that very few plaintiffs are awarded high

amounts. In Wisconsin, almost 70% of claimants have received no payment at all, and

only 85 claims have ever exceeded $200,000.

It is important to mention that our country could save an enormous amount of

health care dollars by adopting a strict national policy for disciplining doctors.

In Wisconsin, between 1976 and 1988, the

top 10 physician defendants accounted for

2.4% of the 2,904 claims filed and 23% of the

total payments made. During this time, four

physicians were involved in more than one

claim over $400,000. The four physicians accounted for 17.8% of all losses paid in that

year. Clearly, a small percentage of doctors

is responsible for a large portion of claim

dollars.

It is common perception that tort reform

is strictly a battle between doctors and attorneys. What is painfully ignored is that

victims are in the middle of this war. This is

ironic, because these are the very people

whom the tort system was designed to protect.

The issue of capping pain-and-suffering

awards comes down to one question: Do we

allow all citizens the right to a jury trial at

which their peers decide a fair level of compensation for pain and suffering, based on

the extent of the individual’s damages and

the facts?

If the answer is no, we are violating the

constitutional rights of the most seriously

injured victims, while protecting the careers

of the most grossly negligent doctors.

Mr. FEINGOLD. I thank the Chair

and I yield the floor.

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

quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOLE. Mr. President, I advise

my colleagues that it is our hope to

have an agreement here in the next few

minutes. And if the agreement is

reached, then there will be no more

votes this evening and no votes on

Monday. There will be a number of

votes starting at 11 o’clock on Tuesday

morning, maybe as many as four or

five.

So I indicate to my colleagues that I

do not believe there will be any more

votes this evening. We will know for

certain in matter of minutes.

Mr. President, I suggest the absence

of a quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The bill clerk proceeded to call the

roll.

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

quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

UNANIMOUS-CONSENT AGREEMENT

Mr. DOLE. Mr. President, we have

freached an agreement on the medical

malpractice amendments. It has been

cleared by the Democratic leader, Senator DASCHLE. I will now read the consent.

I ask unanimous consent that all

amendments regarding medical malpractice only be in order for the duration of Thursday’s session of the Senate and Monday’s session of the Senate, except for one amendment each,

which may be offered by the majority

and minority leaders, or their designees.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOLE. Mr. President, I further

ask that any votes ordered on or in relation to the pending Thomas amendment, or on or in relation to the

Wellstone amendment, and any other

second-degree amendments that may

be offered to the McConnell amendment occur in sequence at 11 a.m. on

Tuesday, May 2, and that the final vote

in sequence be on or in relation to the

McConnell amendment No. 603, as

amended, if amended.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOLE. For the information of all

Senators, this agreement means that

any Senator who wishes to offer an

amendment regarding medical malpractice must offer and debate that

amendment today and/or Monday, and

those votes will occur beginning at 11

a.m. on Tuesday, and thereafter medical malpractice amendments would no

longer be in order to the bill except for

an amendment that may be offered by

each leader or their designee. I assume

that would be the managers of the bill.

So having reached that agreement, I

can announce there will be no more

votes this evening. The Senate will not

be in session tomorrow because both

the Republicans and the Democrats

have conferences tomorrow.

The Senate will come in at noon on

Monday, be back on the bill on Monday. We may come in at 11 a.m. for

morning business. There will be no

votes on Monday, but we expect a lot of

debate on Monday. And then rollcall

votes will start at 11 a.m. on Tuesday.

Mr. GORTON. Mr. President, will the

majority leader yield?

Will the Senate come in on Tuesday

and have any time before 11 o’clock on

Tuesday in which Members can speak

to their amendments?

Mr. DOLE. I would be happy to make

that arrangement. In other words,

come in at 10:30 and speak for 5 minutes on amendments which we have already discussed. They can offer amendments on Monday.

Mr. GORTON. They can offer amendments on Monday. But I suggest to the

leader that there be at least an hour

before 11 o’clock for Members to summarize their amendments.

Mr. DOLE. We set aside the hour between 10 and 11 to discuss any of the

amendments. We try to divide it up so

everybody is treated fairly. We may

come in at 9:30 for a half hour of morning business.
April 27, 1995 CONGRESSIONAL RECORD — SENATE S5799

So there will be no more votes tonight. There will be no votes tomorrow, and no votes on Monday, except I

assume there will be considerable debate on Monday. And then, as suggested by the Senator from Washington, Senator GORTON, there will be an

hour set aside before the votes start for

discussion of any of the amendments

that may be offered.

Mr. President, I suggest the absence

of a quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The bill clerk proceeded to call the

roll.

Mr. SIMPSON. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. SIMPSON. Mr. President, I want

to speak briefly in opposition to the

pending product liability reform legislation. I have not been vigorous in the

debate to this point because there has

been so much vigor expressed that I

thought I would simply wait for a

calmer moment.

Let me assure all that it gives me no

pleasure at all to be in the position of

opposition to many of my good Republican colleagues on this issue. But I

have a number of concerns about this

legislation—always have had about

this type of legislation—which I will

just review briefly which compel me to

oppose this measure.

Mr. President, like many of my colleagues, I was a lawyer by trade—as

was my father, as was my grandfather,

his father before him, and my two sons

now; 100 years of Simpsons practicing

law in the State of Wyoming and, in

fact, practicing law in the same community in the State of Wyoming, Park

County and Cody, WY. And so I take

great pride in my profession. When I

graduated from the University of Wyoming law school, I believed that the

profession was very reputable, indeed

honorable, and that it meant something, something ennobling, to be a

lawyer.

And, indeed, I think there are few

professions outside of the law where

one has the opportunity to directly

rectify an inequity or injustice. And

this is, I feel, the motivation for many

of us who entered the profession.

I remember doing lots of pro bono

work. I remember charging 35 bucks an

hour. I remember doing these things. I

was in everything from replevining a

one-eyed mule to reorganizing railroads, as the guy said. So I took great

pride in the profession.

I believe the legislation before us addresses a concern that is very real.

There are, indeed—and sadly so—serious abuses and excesses within the

practice of law—the profession I love—

as there are in every other profession.

And one thing that has clearly worsened the public perceptions of our profession is action by a seemingly everincreasing number of greedy—and that

is the word, greedy, avaricious—attorneys who have used the profession solely for their own gain and not for the

public gain. Their sole purpose, at least

in some that I have observed, is padding their own particular bank accounts.

Time and again I hear accounts of attorneys who have charged many hundreds of dollars for preparing a simple

will when the only thing they did was

spend 5 minutes cranking the client’s

name into a computer-generated form.

And these abuses do indeed occur. And

there are the attorneys, I am sure, who

take the 3-hour lunches and play the 18

holes of golf every day and still manage to make a million bucks or more

during the course of a year.

The point I make in citing those examples is to note that one motive for

this legislation is to attack irresponsible, costly behavior by those who

practice law. But I would argue that

this legislation specifically chooses to

weed out the results of such ethical

transgressions rather than to correct

their root causes in the irresponsible

practice of law. It is for lawyers to

clean up their own act and to weed

from their profession those who soil it

and belittle it.

Assuredly, irresponsibility may lie

behind some of the large awards that

are given out in product liability suits.

But it does not necessarily follow that

the solution is to limit punitive damages so as to affect even those which

may be properly arrived at and properly computed.

Particular concerns I have about

such an approach include the preemption of State tort law and excluding

joint and several liability. The latter

measure could conceivably eliminate

the only recourse of many citizens

against substantial harm to their

health, at no real cost to the unscrupulous in the legal profession.

I believe one of the better results of

the November 1994 elections has been

to arrest the concentration of power in

Washington, and to begin a correction

of transferring some of it back to the

beleaguered States and localities. And

we have done some of that already.

Partly for this reason, I oppose any

federalizing of the major areas of tort

law. This certainly would expand the

scope of Federal Government activity

by assuming 10th amendment powers

that have been properly under the jurisdiction of the individual States for

more than 200 years.

We must remember that federalization of tort law would, in my mind, severely limit the local citizenry’s ability to influence tort law at the local or

State legislative level. Greater proximity to the individual citizen would

allow us to make certain that the laws

adopted are those which best serve the

local community’s best interest.

Federalization also sends the message that we in Congress do not trust

the average citizen sitting on a jury to

render a fair and equitable award. I can

assure you I certainly do not agree

with every award about which I have

read and studied. But I just do not believe that the solution lies in taking

that power away from the citizenry

and in having the Federal Government

fix the boundaries.

I also believe that a statutory limitation on punitive damages will remove a

very key motivating factor that now

forces companies to design the safest

products possible. I in no way imply

that American companies as a rule

seek to design unsafe products. That

would be absurd. But I do believe it

would be very poor policy to fix and to

limit the cost of such irresponsibility

right up front in a way that could

maybe be planned around.

And by that I mean by limiting punitive damages and setting a figure

could—could—result in company officials developing liability scenarios of

what they expect to lose from such

suits and to ring it up on the scorecard.

A hypothetical, unscrupulous company

could calculate: ‘‘Well, if we make

modification A here in the product, we

project only 500 people a year will be

injured, or some killed. That would

still result in a 20 percent yearly profit

margin, even after paying the maximum punitive damages for every one of

these injuries or lost lives.’’

Now, is that a pipe dream? I do not

know. Possibly so. I do not know. But

it is unseemly to me to facilitate the

attachment of dollar values potentially

to the cost of human lives.

As a general principle, I believe it is

clear that more often than not prescribing local actions at the Federal

level does not work—that ‘‘one size fits

all’’ is not a practical approach.

Let us not, therefore, repeat the mistakes of other recent Congresses, and

instead leave alone an area which is

traditionally under the purview of the

States.

So let us address the real root of the

problem that is found in the legal profession itself—and there are plenty of

them, and, I must say, they are grievous in many cases. But it is not in the

legal system’s infrastructure. It is in

the legal profession itself. And the

legal profession evolved as a means of

protection for our citizens from its beginning.

I hear often the quote from Shakespeare, ‘‘Kill all the lawyers.’’ Well,

there was a reason for that request and

that admonition. And that was if they

got the lawyers out of the way, they

could get on with their nefarious conduct. You want to reread that one.

And that is an interesting part of

that remarkable phrase in Shakespeare: Kill all the lawyers; because

they could not get done what they intended to do if the lawyers had been

there to protect.

So I just wanted to share those

things. I am well aware of what is

going to happen to lawyers in this session of the Legislature. I wish there

were always the most pristine reasons

for that, but one of the most vivid ones

in a political body will be simply the

fact that the trial lawyers of America
S5800 CONGRESSIONAL RECORD — SENATE April 27, 1995

and affiliates gave $1,626,000 to those of

the other faith in the 1994 election and

only $101,000 to those of our faith, and

they are looking for them, hunting

them down.

So we have to be a little careful in

that atmosphere, I would suggest. Not

only did they bet on the wrong horse,

they bet everything they had on all of

the horses, and they all went backward

down the track. That is a part of this

that we want to keep in mind, that in

the spirit of punishing the trial lawyers who showered forth their worldly

goods upon those of the other faith,

that we do not react in a way which is

injurious to a profession that has protected us all. We all hate lawyers, except we love the one that represents us.

Just like politicians, they have a lot of

disgust for us, except for those who

represent them.

So I want to share those views and

indicate my opposition to the measure,

which has been consistent throughout

my time here. I thank the Chair.

Ms. SNOWE addressed the Chair.

The PRESIDING OFFICER. The Senator from Maine.

Ms. SNOWE. Mr. President, I ask

unanimous consent to set aside the

pending Wellstone amendment.

The PRESIDING OFFICER. Without

objection, it is so ordered.

AMENDMENT NO. 608 TO AMENDMENT NO. 603

(Purpose: To limit the amount of punitive

damages that may be awarded in a health

care liability action)

Ms. SNOWE. Mr. President, I send an

amendment to the desk.

The PRESIDING OFFICER. The

clerk will report.

The legislative clerk read as follows:

The Senator from Maine [Ms. SNOWE] proposes an amendment numbered 608.

Ms. SNOWE. Mr. President, I ask

unanimous consent that the reading of

the amendment be dispensed with.

The PRESIDING OFFICER. Without

objection, it is so ordered.

The amendment is as follows:

On page 14, line 22, insert:

In section 15 of the amendment, strike

subsection (e) and insert the following new

subsection:

(e) LIMITATION ON AMOUNT.—

(1) IN GENERAL.—The amount of punitive

damages that may be awarded to a claimant

in a health care liability action that is subject to this title shall not exceed 2 times the

sum of—

(A) the amount awarded to the claimant

for economic loss; and

(B) the amount awarded to the claimant

for noneconomic loss.

(2) APPLICATION BY COURT.—This subsection

shall be applied by the court and the application of this subsection shall not be disclosed

to the jury.

Ms. SNOWE. Thank you, Mr. President. This legislation, unlike any other

we have debated this year, touches

each and every one of our daily lives. It

touches our society as few bills do. In

our homes. In our schoolrooms, In our

work rooms. And in our hospital

rooms.

There is a compelling case for product liability reform in this country,

and this bill provides for a positive

foundation on which we can build in

the future. It may not be the end-all to

the liability reform debate. And it is

not a panacea to the legal labyrinth

that millions of Americans have found

themselves caught in at some time in

their lives.

But it is a critical and long overdue

first step in the process.

Mr. President, many Americans may

ask a very simple question as we begin

this debate, and that is this: In this

time of downsizing Government and devolving power back to the States, why

do we need Federal legislation on product liability?

It is a good question that merits a

good answer.

The problem involves a vast patchwork of product liability laws in 50

States and the District of Columbia

that send confusing and often conflicting signals to those who make, sell, or

use products in the United States.

Moreover, it is the uncertainty of this

product liability system that creates

unnecessary legal costs, impedes interstate commerce, and stifles innovation.

And it unnecessarily places consumers—those we are trying to protect—at

risk.

Despite recent product liability reforms in various States around the

country, there is still an overriding

and strong need for a protective, uniform, and all-encompassing Federal

product liability law.

The problem with State product liability legislation—apart from the simple fact that different States have different rules—is that State legislation

cannot capture or control the product

liability problem outside its own borders.

Every suit filed and every judgment

rendered has a potential impact on

every other consumer in America by

leading to possible changes in the product itself, increasing the item’s price,

and potentially affecting the price and

availability of a wide range of other

products. In extreme cases, manufacturers may even cease production of

some products.

Even States in which product liability lawsuits are infrequent and judgments have been deemed appropriate

are not immune from the impact of disparate State laws. I am proud to say

that in my home State of Maine, it has

been said that our jury verdicts have

been reasonable and our judges fair.

But the effect of the judgment in one

State is shouldered by the consumers

of that product in every other State.

Therefore, the State of Maine residents

pay a premium on every product they

buy that has come in from outside the

State of Maine—and on every product

they buy from a local company that

also distributes outside our State’s

borders.

The simple fact is that the residents

of Maine are impacted by the product

liability laws of every other State. And

just as States cannot single-handedly

address the problems caused by our spiraling national debt, they cannot address the national product liability

problem. I have come to the conclusion

that a Federal product liability law is

the only mechanism to assure that a

fair and uniform law will apply evenly

throughout the United States.

I also recognize the role that uniformity plays in protecting the common good in certain circumstances.

Civil rights laws and many environmental laws reflect the understanding

that serving the common good may be

best accomplished by maintaining

similar standards across State borders.

Not every issue affecting both States

warrants a Federal standard, but some

issues are pervasive enough—significant enough—that we cannot help but

recognize the need for some level of

agreement.

Mr. President, as a member of the

Commerce Committee, I certainly have

stressed the need for balance in this

legislation and I offer my own personal

check-list of the issues this legislation

must address so that it is fair and equitable.

First, we must allow safe consumer

products to be developed to meet

consumer needs, and ensure that consumers can seek reasonable compensation when injuries and damages occur.

Second, the law must dissuade consumers from filing lawsuits frivolously,

without discouraging Americans with

substantive complaints from filing

their own suit.

Third, a uniform law must encourage

companies to police the safety of their

own products, both by offering incentives for excellence in safety and

strong punishment when product safety is breached.

Lastly, and perhaps most importantly, one of our fundamental goals

must be to ensure this legislation protects the interests of the average

American consumer who makes hefty

use of products, but knows little of

their innate safety or risk—much less

their rights under the law.

Although I believe the call for product liability reform is justified, I certainly understand the concerns of

those who testified before the committee regarding the potential discriminatory impact of this bill—particularly

the dual standards created within the

cap on punitive damages.

To understand the issue of a punitive

damage cap, I think it is valuable to

remember what punitive damages are—

and are not. Punitive damages are punishment that serve an invaluable role

in deterring quasi-criminal behavior by

businesses. They have nothing to do

with providing compensation to a person who has been harmed and are not

intended in any way to make the plaintiff whole.

That purpose is served by compensatory damages, which provide recovery for both economic damages—which

include lost wages and medical expenses—and noneconomic damages,

which include pain and suffering and

other losses.
April 27, 1995 CONGRESSIONAL RECORD — SENATE S5801

However, I also understand the concerns of those who would contain runaway juries by capping punitive damages. One of the overriding problems in

our current system is the absence of

any consistent, meaningful standards

for determining whether punitive damages should be awarded and—if so—in

what amounts.

The absence of consistent standards

not only leads to widely disparate and

runaway punitive awards, but it also

affects the settlement process. Individuals and companies that are used often

face a catch-22: pay high legal fees to

fight a case through trial, verdict, and

appeal—or simply settle out of court

for any amount less than these anticipated legal fees.

Even for the defendant who recognizes the cost of proving innocence to

be too great, or simply hopes to avoid

the lottery nature of a possible punitive award—seeking a settlement carries a hidden cost. The lack of a uniform national standard—or simply the

existence of vague State standards—

forces the defendant to include a punitive premium in their settlements,

even when the likelihood of a punitive

award is small or even nonexistent.

The high reversal rate of punitive

damage awards underscores the absence of clear and understandable

rules. Moreover, appealing the initial

award is extremely costly and unnecessarily wasteful of both private and judicial resources. Although businesses

and related entities pay the initial

price of punitive awards, the impact of

runaway awards is felt by consumers

who pay higher prices in goods and

services.

And health care is not different. Malpractice is an issue that should concern

every American because it directly impacts the amount of money they pay

for health care and their access to care.

A 1993 Lewin-VHI study estimates that

the combined cost of physician and

hospital defensive medicine to be as

high as $25 billion. And the 1994 Physician Payment Review Commission Annual Report to Congress noted a ‘‘widespread concern that the current functioning of the malpractice system may

promote the practice of defensive medicine and impeded efforts to improve

the appropriateness and cost effectiveness of care.’’

Access to quality care was an issue

that received a great deal of attention—as well it should—over the last 2

years as Congress looked at ways to reform our health care system. The cost

of malpractice has a direct impact on

access to care, especially for women. A

1990 survey found that liability concerns caused 12 percent of doctors to

give up their obstetrical practices, 24

percent to reduce their treatment of

high-risk patients, and 10 percent to reduce their number of deliveries.

Concern has been expressed this

afternoon during the debate that this

is a matter that should be left up to

the individual States. But the American taxpayers from Maine to Oregon

have a direct stake in malpractice reform because the U.S. Government—in

other words the American taxpayer—

pays 32 percent of all the health care

costs in this country. They are already

paying a heavy price for the patchwork

system of malpractice laws that currently exist and they deserve our best

effort to provide a uniform standard

that will help bring down the cost of

health care and help ensure access to

providers.

As we establish a cap, it is vital that

we ensure the measure we choose is

fair, uniform, acts as adequate punishment, and serves as an effective deterrent. I believe the amendment I have

offered accomplishes all of these objectives.

I should mention that Senator GORTON, the primary sponsor of this legislation, has indicated that he will certainly support my amendment. And I

thank the underlying sponsors, Senator MCCONNELL and Senator KASSEBAUM, for their support as well for this

amendment.

My amendment is fair because it is

blind to the socioeconomic position of

the plaintiff. The current cap contained in the McConnell amendment

would cap punitive damages at the

greater of $250,000 or three times economic damages.

Economic damages—again—are the

out-of-pocket expenses incurred by the

plaintiff, such as their lost wages and

medical expenses. Although this measure might serve as adequate punishment and act as an adequate deterrent

in many cases, it relies too greatly on

the economic position of the plaintiff

in establishing a sufficient level of

punishment.

I believe that all plaintiffs—regardless of their income—must be in a position to levy adequate punishment on

those medical providers who have performed a particularly egregious act.

We must not allow a medical provider

to suffer only a slap on the wrist because his conduct harmed an individual

of modest means.

As a very basic example, assume that

two individuals—a truck driver with an

annual income of $24,000 and one a corporate executive with an annual income of $1.2 million—suffer from similar medical malpractice injuries from

two separate defendants and are each

hospitalized for 1 month due to these

injuries. Further assume that the medical expenses for these individuals are

nearly identical at $100,000—an amount

I am sure is far too low.

Under the three times economic damages formula, the potential punitive

damage award—or punishment—that

could be levied in the suit involving

the millionaire would be up to approximately $600,000. This would be derived

by adding the individual’s lost income—$100,000—with his or her medical

expenses—$100,000—and multiplying by

three.

Conversely, the defendant in the lawsuit involving the truck driver could

only be subjected to punitive damages

of up to $306,000—or 51 percent that of

the millionaire’s defendant. This

amount is derived by trebling the sum

of the plaintiff’s lost wages—$2,000—

and medical expenses $100,000.

Although some would argue that the

lower cap imposed in the suit involving

the truck driver may serve as sufficient punishment, I believe it is fundamentally unfair. If the language of

my amendment is adopted, the potential punitive award in the suit involving the truck driver will be far more in

line with that of the millionaire. By including noneconomic damages—which

are less tangible and include pain and

suffering and the loss of one’s eye,

hand, or other faculty—the discriminatory effect of the cap will also be removed.

Continuing with the example already

described, let us further assume that

the jury award for noneconomic damages caused by the loss of one of the

plaintiff’s eyes is $500,000 for both the

millionaire and the truck driver.

Using the two times compensatory

measure, the possible punitive award

would be $1.2 million for the millionaire and $1.004 million for the truck

driver. In this way, the possible punitive award that could be imposed is

nearly identical in both cases as the

cap for the truck driver is 84 percent

the size of the millionaire’s cap.

Although hard statistics on this issue

are difficult to find, the 1989 General

Accounting Office report on product liability found that there was a strong

correlation between the size of punitive

awards and the size of compensatory

damages. Excluding one extreme case

in which compensatory damages far exceeded punitive damages, the punitive

damages had a correlation of 0.71 with

compensatory damages—which is just

shy of a one-to-one ratio.

Although each of the five States contained in the study had varying levels

of correlation, this average demonstrates that a reasonable cap based

on compensatory damages can be drafted.

The Supreme Court has also expressed its concern with the manner in

which punitive damages have been

awarded—and lends credence to the argument in favor of a uniform cap. In

the case of Pacific Mutual Life Insurance Company versus Haslip, the Supreme Court found that a four-to-one

ratio of compensatory to punitive damages was ‘‘close to the line’’ of being

unconstitutional, and expressed a

strong concern that punitive damages

in the United States have ‘‘run wild.’’

Similar sentiments were expressed in

TXO Production Corp. versus Alliance

Resources Corp., a case involving a

commercial land dispute.

In both cases, Justices made clear

that this was an area for reasonable

and rational reform. Although no clear

standard was identified, I believe the

measure of two times compensatory

damages would be deemed appropriate

by the Supreme Court.
S5802 CONGRESSIONAL RECORD — SENATE April 27, 1995

Finally, the American College of

Trial Lawyers [ACTL]—a respected organization of experienced plaintiff and

defense attorneys—recommended a cap

based on a two times compensatory

damages in their 1989 report on punitive damages.

The ACTL report also recommended

that the two times compensatory damage cap be combined with a minimum

cap of $250,000, but I do not believe such

a measure is advisable or necessary. I

believe a single measure—such as the

measure contained in my amendment—

is the most easily understood and ensures that all relevant cases are subject to the same standard. Multiple

measures and standards imply that

there is an imbalance in the formula

being utilized.

I believe the measure of two times

compensatory damages will work for

everyone and will subject egregious offenders to strong punishment. This

standard is fair and nondiscriminatory.

It will apply to all litigants equally—

whether you are a man or woman,

wealthy or poor, a child or an adult.

Mr. President, if we have to include a

cap on punitive damages in this legislation, we must ensure it is the best

cap possible. So I ask my colleagues to

join me in support of this amendment

to the McConnell amendment today,

and during further consideration of the

underlying bill next week, because I do

intend to offer this very same amendment to the underlying legislation as

well.

I think the legislation, which is

named the Product Liability Fairness

Act, must live up to its name and

therefore I think that my amendment

will correct this discriminatory impact

of punitive damages as it is currently

drafted in this amendment as well as

the underlying bill.

I believe my amendment is the best

alternative available and I encourage

my colleagues to support it.

The PRESIDING OFFICER. The

clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. DASCHLE. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DASCHLE. Mr. President, I ask

to speak in morning business and use

part of my leader time to do so.

The PRESIDING OFFICER. The Senator has that right.

COUNTERTERRORISM INITIATIVE

Mr. DASCHLE. Mr. President, the

fday after the tragic bombing in Oklahoma City, when it became more evident that the terrorist attack was

launched by Americans, President

Clinton said he would seek prompt action on counterterrorism proposals he

had already made, and promised to develop additional tools for Federal law

enforcement to use.

Yesterday evening, the President

hosted a meeting of the bipartisan congressional leadership to present his

proposals and ask for timely, bipartisan consideration and enactment.

The President’s proposals result from

the well-considered experience of Federal law enforcement officials. They

are designed to provide the additional

legal authority Government needs to

effectively combat terrorism, whether

domestic or foreign.

These additional authorities will give

Federal law enforcement agencies tools

to combat terrorism more effectively

without undermining or curtailing the

constitutional rights of law-abiding

American citizens.

Briefly, the proposal would extend

the authority the FBI now has in national security cases to access credit

reports and financial data for

counterterrorism investigations.

The same standards as now apply in

routine criminal cases would be used in

counterterrorism cases for the orders

that permit the FBI to use pen registers and trap-and-trace devices in investigations. These devices are not

wiretaps; they simply capture phone

numbers dialed, like a caller ID device

that many people use in their own

homes.

It would require hotel and motel operators and common carriers to provide

records to the FBI for national security cases as they now routinely do for

State and local law enforcement purposes.

It would fully fund the costs of implementing the digital telephony law,

so that the ability of law enforcement

to carry out court-authorized electronic surveillance would not be impeded by the shift to digital transmissions.

It would add 1,000 additional agents,

prosecutors, and other personnel to increase the resources devoted to

counterterrorism investigations, and

establish an interagency

counterterrorism center that would

make sure the information and expertise of all Federal law enforcement

agencies in this field are properly integrated in investigations.

It includes practical issues such as

the requirement that chemical

taggants be included in the raw materials from which explosive charges are

created. This is essential to tracing the

sources of such explosions as the one in

Oklahoma City in the future.

Additionally, the proposal would enhance the penalties for crimes related

to explosives, and directed against Federal employees. The proposal has been

released by the White House, so all my

colleagues have the opportunity to review these proposals in detail.

In addition, the President asked that

we approve the Omnibus

Counterterrorism Act of 1995, legislation which is primarily directed at foreign terrorists.

This package of proposals, along with

the existing legislation, are carefully

designed to give additional tools to law

enforcement without weakening in any

way the constitutional rights of any

American.

The President has been particularly

clear that we will fight against terrorists at home and abroad with all constitutional tools. Anything less would

give the terrorists the victory over us

that they seek: They would have destroyed the fundamental rule of law in

our country.

As Americans, we all understand that

we cannot and must not allow the cowardly attack on civilian Federal workers to incite us to such anger that we

take shortcuts with American citizens’

rights.

The President’s proposals are sound,

moderate, and effective. They reflect

the advice of practical, hands-on law

enforcement agents who have experience in this field. They deserve careful

and thorough review by the Congress,

and they deserve timely enactment.

It had been the President’s hope, and

mine as well, that on this matter,

where there is truly broad agreement

across partisan lines, the Congress

could work in a bipartisan fashion to

enact this package of security enhancements in the not too distant future.

I also hoped that we could have a bipartisan, narrowly tailored package of

proposals that could be enacted without divisive debates over controversial

issues of long standing.

I believe that the American people

expect us to put partisanship and political advantage aside and respond with

unity to the immediate and urgent

needs of Federal law enforcement agencies.

Last night, at the meeting with the

President, there was every indication

that there would be a bipartisan, focused proposal on which Congress and

the President could agree to move us

forward in the effort to combat terrorism. Each of us in attendance pledged

our support toward that end. Regrettably, today the majority leader introduced a bill that threatens to slow our

progress and mire the Senate in divisive, partisan, rhetorical debate.

Americans know that we can and undoubtedly will debate matters such as

habeus corpus reform later this year.

We have debated the issue in virtually

every Congress in the past decade. But

that debate involves persons who are

already incarcerated with no chance

for parole and who no longer pose a

threat to society.

I think this is a time when we should

instead be concentrating on measures

that will have an effect on those who

may be planning an attack, and from

whom we are not at all safe, as the

bombing in Oklahoma City so dramatically proved last week.

I sincerely hope prompt action on

these needed law enforcement tools

will not be held hostage to political

priorities. I believe Americans expect

more of us. I know the Federal workers

who lost their lives and their children

certainly deserve that and more.