May 5, 1995 CONGRESSIONAL RECORD — SENATE S6217

The GAO indicates that it would cost

around $20 million or less to install the

private sector technology in Medicare.

And they have clearly demonstrated

that such an investment would save

Medicare taxpayers and beneficiaries

over $3.9 billion in 5 years. So, for

every dollar we invest, taxpayers will

get a $200 return. I call that a bargain.

I want to reiterate: for every day we

fail to invest, taxpayers will lose about

$2 million. And more will be lost by individual Medicare patients, sometimes

thousands of dollars by a single individual. I call that a scandal.

The Billing Abuse Prevention Act

will do three things.

First, it will provide a definite time

when commercially available computer

systems shall be in actual use to catch

billing code abuses by all of the 32 Medicare contractors who examine Medicare billings so errors and abusive billing practices can be caught. HCFA has

been given 90 days from the date of enactment to set out the exact requirements under which the 32 Medicare

contractors shall have a computer

checking system in place. And, it requires that the contractors actually

have the system in use within 180 days

after enactment.

It is my hope and expectation that

this can be done more quickly than

that. HCFA should now begin the process to develop the criteria without

waiting for the legislation to pass.

With the full cooperation of the agency, I am hopeful that the HCFA implementing requirements could be ready

by the time the President signs the

bill. That will allow the contractors to

move more quickly as well.

Many of the 32 contractors are already using the commercially available

systems to review private insurance

claims. But, some modifications of the

systems will be needed to modify the

program to match HCFA billing practices. And, the contractors will want to

review all of the systems that are

available that meet HCFA’s criteria

and go through the appropriate procurement practices.

Second, the legislation provides that

the Secretary of Health and Human

Services may keep information about

the system confidential. If that is not

done, detailed information about the

system could be used, to some degree,

to get around the system’s safeguards.

The legislation also provides that the

proprietary information about the systems are not to be released. If it became available, the companies that

created it might lose a significant part

of their investment since other companies could acquire the technical details

of the systems. The Secretary is expected to release appropriate information about the system which is in the

public interest.

It is important to use commercially

available systems because we already

know they work and we can put them

into place relatively quickly with

minor modifications. We save time

which results in real savings and we

avoid what might be a large development cost if HCFA tried to create their

own system. Another advantage of

commercial systems is that they will

be continually improved as the private

development companies work to further improve their systems to acquire

a larger share of the private marketplace.

Third, the Secretary shall order a review of all of the existing regulations

and guidelines governing Medicare payment policies and billing code abuse to

see what modifications might be appropriate to maximize the benefits of the

computer checking systems and avoiding improper payments.

I urge that this legislation be rapidly

considered and passed.

f∑

ADDITIONAL COSPONSORS

S. 326

At the request of Mr. HATFIELD, the

name of the Senator from Vermont

[Mr. LEAHY] was added as a cosponsor

of S. 326, a bill to prohibit United

States military assistance and arms

transfers to foreign governments that

are undemocratic, do not adequately

protect human rights, are engaged in

acts of armed aggression, or are not

fully participating in the United Nations Register of Conventional Arms.

S. 440

At the request of Mr. WARNER, the

name of the Senator from Kansas [Mr.

DOLE] was added as a cosponsor of S.

440, a bill to amend title 23, United

States Code, to provide for the designation of the National Highway System,

and for other purposes.

S. 483

At the request of Mr. HATCH, the

name of the Senator from Wyoming

[Mr. SIMPSON] was added as a cosponsor

of S. 483, a bill to amend the provisions

of title 17, United States Code, with respect to the duration of copyright, and

for the other purposes.

S. 607

At the request of Mr. WARNER, the

name of the Senator from Virginia [Mr.

ROBB] was added as a cosponsor of S.

607, a bill to amend the Comprehensive

Environmental Response, Compensation, and Liability Act of 1980 to clarify the liability of certain recycling

transactions, and for other purposes.

S. 692

At the request of Mr. GREGG, the

name of the Senator from Vermont

[Mr. LEAHY] was added as a cosponsor

of S. 692, a bill to amend the Internal

Revenue Code of 1986 to preserve family-held forest lands, and for other purposes.

AMENDMENTS SUBMITTED

COMMONSENSE PRODUCT

LIABILITY REFORM ACT

COVERDELL (AND DOLE)

AMENDMENT NO. 690

Mr. COVERDELL (for himself and

Mr. DOLE) proposed an amendment to

the amendment No. 596, proposed by

Mr. GORTON, to the bill (H.R. 956) to establish legal standards and procedures

for product liability litigation, and for

other purposes; as follows:

In lieu of the matter proposed to be inserted, insert the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Product Liability Fairness Act of 1995’’.

TITLE I—PRODUCT LIABILITY

SEC. 101. DEFINITIONS.

For purposes of this Act, the following

definitions shall apply:

(1) CLAIMANT.—The term ‘‘claimant’’

means any person who bring a product liability action and any person on whose behalf

such an action is brought. If an action is

brought through or on behalf of—

(A) an estate, the term includes the decedent; or

(B) a minor or incompetent, the term includes the legal guardian of the minor or incompetent.

(2) CLAIMANT’S BENEFITS.—The term

‘‘claimant’s benefits’’ means the amount

paid to an employee as workers’ compensation benefits.

(3) CLEAR AND CONVINCING EVIDENCE.—

(A) IN GENERAL.—Subject to subparagraph

(A), the term ‘‘clear and convincing evidence’’ is that measure of degree of proof

that will produce in the mind of the trier of

fact a firm belief or conviction as to the

truth of the allegations sought to be established.

(B) DEGREE OF PROOF.—The degree of proof

required to satisfy the standard of clear and

convincing evidence shall be—

(i) greater than the degree of proof required to meet the standard of preponderance of the evidence; and

(ii) less than the degree of proof required

to meet the standard of proof beyond a reasonable doubt.

(4) COMMERCIAL LOSS.—The term ‘‘commercial loss’’ means any loss or damage to a

product itself, loss relating to a dispute over

its value or consequential economic loss the

recovery of which is governed by the Uniform Commercial Code or analogous State

commercial law, not including harm.

(5) DURABLE GOOD.—The term ‘‘durable

good’’ means any product, or any component

of any such product, which has a normal life

expectancy of 3 or more years or is of a character subject to allowance for depreciation

under the Internal Revenue Code of 1986, and

which is—

(A) used in a trade or business;

(B) held for the production of income; or

(C) sold or donated to a governmental or

private entity for the production of goods,

training, demonstration, or any other similar purpose.

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

loss’’ means any pecuniary loss resulting

from harm (including any medical expense

loss, work loss, replacement services loss,

loss due to death, burial costs, and loss of

business or employment opportunities), to

the extent that recovery for the loss is permitted under applicable State law.
S6218 CONGRESSIONAL RECORD — SENATE May 5, 1995

(7) HARM.—The term ‘‘harm’’ means any

physical injury, illness, disease, or death, or

damage to property, caused by a product.

The term does not include commercial loss

or loss or damage to a product itself.

(8) INSURER.—The term ‘‘insurer’’ means

the employer of a claimant, if the employer

is self-insured, or the workers’ compensation

insurer of an employer.

(9) MANUFACTURER.—The term ‘‘manufacturer’’ means—

(A) any person who is engaged in a business to produce, create, make, or construct

any product (or component part of a product), and who designs or formulates the product (or component part of the product), or

has engaged another person to design or formulate the product (or component part of

the product);

(B) a product seller, but only with respect

to those aspects of a product (or component

part of a product) which are created or affected when, before placing the product in

the stream of commerce, the product seller

produces, creates, makes, constructs, designs, or formulates, or has engaged another

person to design or formulate, an aspect of a

product (or component part of a product)

made by another person; or

(C) any product seller that is not described

in subparagraph (B) that holds itself out as a

manufacturer to the user of the product.

(10) NONECONOMIC LOSS.—The term ‘‘noneconomic loss’’—

(A) means subjective, nonmonetary loss resulting from harm, including pain, suffering,

inconvenience, mental suffering, emotional

distress, loss of society and companionship,

loss of consortium, injury to reputation, and

humiliation; and

(B) does not include economic loss.

(11) PERSON.—The term ‘‘person’’ means

any individual, corporation, company, association, firm, partnership, society, joint

stock company, or any other entity (including any governmental entity).

(12) PRODUCT.—

(A) IN GENERAL.—The term ‘‘product’’

means any object, substance, mixture, or

raw material in a gaseous, liquid, or solid

state that—

(i) is capable of delivery itself or as an assembled whole, in a mixed or combined

state, or as a component part or ingredient;

(ii) is produced for introduction into trade

or commerce;

(iii) has intrinsic economic value; and

(iv) is intended for sale or lease to persons

for commercial or personal use.

(B) EXCLUSION.—The term ‘‘product’’ does

not include—

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

used for therapeutic or medical purposes, except to the extent that such tissue, organs,

blood, and blood products (or the provision

thereof) are subject, under applicable State

law, to a standard of liability other than

negligence; and

(ii) electricity, water delivered by a utility, natural gas, or steam.

(13) PRODUCT LIABILITY ACTION.—The term

‘‘product liability action’’ means a civil action brought on any theory for harm caused

by a product.

(14) PRODUCT SELLER.—

(A) IN GENERAL.—The term ‘‘product seller’’ means a person who—

(i) in the course of a business conducted for

that purpose, sells, distributes, rents, leases,

prepares, blends, packages, labels, or otherwise is involved in placing a product in the

stream of commerce; or

(ii) installs, repairs, refurbishes, reconditions, or maintains the harm-causing aspect

of the product.

(B) EXCLUSION.—The term ‘‘product seller’’

does not include—

(i) a seller or lessor of real property;

(ii) a provider of professional services in

any case in which the sale or use of a product is incidental to the transaction and the

essence of the transaction is the furnishing

of judgment, skill, or services; or

(iii) any person who—

(I) acts in only a financial capacity with

respect to the sale of product; or

(II) leases a product under a lease arrangement in which the lessor does not initially

select the leased product and does not during

the lease term ordinarily control the daily

operations and maintenance of the product.

(15) STATE.—The term ‘‘State’’ means each

of the several States of the United States,

the District of Columbia, the Commonwealth

of Puerto Rico, the Virgin Islands, Guam,

American Samoa, and the Commonwealth of

the Northern Mariana Islands, and any other

territory or possession of the United States,

or any political subdivision thereof.

(16) TIME OF DELIVERY.—The term ‘‘time of

delivery’’ means the time when a product is

delivered to the first purchaser or lessee of

the product that was not involved in manufacturing or selling the product, or using the

product as a component part of another

product to be sold.

SEC. 102. APPLICABILITY; PREEMPTION.

(a) APPLICABILITY.—

(1) ACTIONS COVERED.—Subject to paragraph (2), this title applies to any product liability action commenced on or after the

date of enactment of this Act, without regard to whether the harm that is the subject

of the action or the conduct that caused the

harm occurred before such date of enactment.

(2) ACTIONS EXCLUDED.—

(A) ACTIONS FOR DAMAGE TO PRODUCT OR

COMMERCIAL LOSS.—A civil action brought for

loss or damage to a product itself or for commercial loss, shall not be subject to the provisions of this title governing product liability actions, but shall be subject to any applicable commercial or contract law.

(B) ACTIONS FOR NEGLIGENT ENTRUSTMENT.—A civil action for negligent entrustment shall not be subject to the provisions of

this title governing product liability actions,

but shall be subject to any applicable State

law.

(b) SCOPE OF PREEMPTION.—

(1) IN GENERAL.—This Act supersedes a

State law only to the extent that State law

applies to an issue covered under this title.

(2) ISSUES NOT COVERED UNDER THIS ACT.—

Any issue that is not covered under this

title, including any standard of liability applicable to a manufacturer, shall not be subject to this title, but shall be subject to applicable Federal or State law.

(c) STATUTORY CONSTRUCTION.—Nothing in

this title may be construed to—

(1) waive or affect any defense of sovereign

immunity asserted by any State under any

law;

(2) supersede or alter any Federal law;

(3) waive or affect any defense of sovereign

immunity asserted by the United States;

(4) affect the applicability of any provision

of chapter 97 of title 28, United States Code;

(5) preempt State choice-of-law rules with

respect to claims brought by a foreign nation

or a citizen of a foreign nation;

(6) affect the right of any court to transfer

venue or to apply the law of a foreign nation

or to dismiss a claim of a foreign nation or

of a citizen of a foreign nation on the ground

of inconvenient forum; or

(7) supersede or modify any statutory or

common law, including any law providing for

an action to abate a nuisance, that authorizes a person to institute an action for civil

damages or civil penalties, cleanup costs, injunctions, restitution, cost recovery, punitive damages, or any other form of relief for

remediation of the environment (as defined

in section 101(8) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. 9601(8)) or the

threat of such remediation.

(d) CONSTRUCTION.—To promote uniformity

of law in the various jurisdictions, this title

shall be construed and applied after consideration of its legislative history.

(e) EFFECT OF COURT OF APPEALS DECISIONS.—Notwithstanding any other provision

of law, any decision of a circuit court of appeals interpreting a provision of this title

(except to the extent that the decision is

overruled or otherwise modified by the Supreme Court) shall be considered a controlling precedent with respect to any subsequent decision made concerning the interpretation of such provision by any Federal or

State court within the geographical boundaries of the area under the jurisdiction of the

circuit court of appeals.

SEC. 103. LIABILITY RULES APPLICABLE TO

PRODUCT SELLERS.

(a) GENERAL RULE.—

(1) IN GENERAL.—In any product liability

action that is subject to this title filed by a

claimant for harm caused by a product, a

product seller other than a manufacturer

shall be liable to a claimant, only if the

claimant establishes—

(A) that—

(i) the product that allegedly caused the

harm that is the subject of the complaint

was sold, rented, or leased by the product

seller;

(ii) the product seller failed to exercise

reasonable care with respect to the product;

and

(iii) the failure to exercise reasonable care

was a proximate cause of harm to the claimant; or

(B) that—

(i) the product seller made an express warranty applicable to the product that allegedly caused the harm that is the subject of

the complaint, independent of any express

warranty made by a manufacturer as to the

same product;

(ii) the product failed to conform to the

warranty; and

(iii) the failure of the product to conform

to the warranty caused harm to the claimant; or

(C) that—

(i) the product seller engaged in intentional wrongdoing, as determined under applicable State law; and

(ii) such intentional wrongdoing was a

proximate cause of the harm that is the subject of the complaint.

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

product seller shall not be considered to have

failed to exercise reasonable care with respect to a product based upon an alleged failure to inspect a product if the product seller

had no reasonable opportunity to inspect the

product that allegedly caused harm to the

claimant.

(b) SPECIAL RULE.—A product seller shall

be deemed to be liable as a manufacturer of

a product for harm caused by the product

if—

(1) the manufacturer is not subject to service of process under the laws of any State in

which the action may be brought; or

(2) the court determines that the claimant

would be unable to enforce a judgment

against the manufacturer.

For purposes of this subsection only, the

statute of limitations applicable to claims

asserting liability of a product seller as a

manufacturer shall be tolled from the date of

the filing of a complaint against the manufacturer to the date that judgment is entered

against the manufacturer.
May 5, 1995 CONGRESSIONAL RECORD — SENATE S6219

(c) RENTED OR LEASED PRODUCTS.—

(1) Notwithstanding any other provision of

law, any person engaged in the business of

renting or leasing a product (other than a

person excluded from the definition of product seller under section 101 (14)(B)) shall be

subject to liability in a product liability action under subsection (a), but any person engaged in the business of renting or leasing a

product shall not be liable to a claimant for

the tortious act of another solely by reason

of ownership of such product.

(2) For purposes of paragraph (1), and for

determining the applicability of this title to

any person subject to paragraph (1), the term

‘‘product liability action’’ means a civil action brought on any theory for harm caused

by a product or product use.

SEC. 104. DEFENSES INVOLVING INTOXICATING

ALCOHOL OR DRUGS.

(a) GENERAL RULE.—Notwithstanding any

other provision of law, a defendant in a product liability action that is subject to this

title shall have a complete defense in the action if the defendant proves that—

(1) the claimant was under the influence of

intoxicating alcohol or any drug that may

not lawfully be sold over-the-counter without a prescription, and was not prescribed by

a physician for use by the claimant; and

(2) the claimant, as a result of the influence of the alcohol or drug, was more than 50

percent responsible for the accident or event

which resulted in the harm to the claimant.

(b) CONSTRUCTION.—For purposes of this

section, the determination of whether a person was intoxicated or was under the influence of intoxicating alcohol or any drug

shall be made pursuant to applicable State

law.

SEC. 105. REDUCTION FOR MISUSE OR ALTERATION OF PRODUCT.

(a) GENERAL RULE.—

(1) IN GENERAL.—Except as provided in subsection (c), in a product liability action that

is subject to this title, the damages for

which a defendant is otherwise liable under

applicable State law shall be reduced by the

percentage of responsibility for the harm to

the claimant attributable to misuse or alteration of a product by any person if the defendant establishes that such percentage of

the harm was proximately caused by a use or

alteration of a product—

(A) in violation of, or contrary to, the express warnings or instructions of the defendant if the warnings or instructions are determined to be adequate pursuant to applicable

State law; or

(B) involving a risk of harm which was

known or should have been known by the ordinary person who uses or consumes the

product with the knowledge common to the

class of persons who used or would be reasonably anticipated to use the product.

(2) USE INTENDED BY A MANUFACTURER IS

NOT MISUSE OR ALTERATION.—For the purposes of this title, a use of a product that is

intended by the manufacturer of the product

does not constitute a misuse or alteration of

the product.

(b) STATE LAW.—Notwithstanding section

3(b), subsection (a) of this section shall supersede State law concerning misuse or alteration of a product only to the extent that

State law is inconsistent with such subsection.

(c) WORKPLACE INJURY.—Notwithstanding

subsection (a), the amount of damages for

which a defendant is otherwise liable under

State law shall not be reduced by the application of this section with respect to the

conduct of any employer or coemployee of

the plaintiff who is, under applicable State

law concerning workplace injuries, immune

from being subject to an action by the claimant.

SEC. 106. UNIFORM STANDARDS FOR AWARD OF

PUNITIIVE DAMAGES.

(a) GENERAL RULE.—Punitive damages

may, to the extent permitted by applicable

State law, be awarded against a defendant in

a product liability action that is subject to

this title if the claimant establishes by clear

and convincing evidence that the harm that

is the subject of the action was the result of

conduct that was carried out by the defendant with a conscious, flagrant indifference to

the safety of others.

(b) LIMITATION ON AMOUNT.—

(1) IN GENERAL.—The amount of punitive

damages that may be awarded to a claimant

in a product 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) SPECIAL RULE.—

(A) The amount of punitive damages that

may be awarded in any civil action against

an individual whose net worth does not exceed $500,000 or against an owner of an unincorporated business, or any partnership, corporation, association, unit of local government, or organization which has fewer than

25 full-time employees, shall not exceed:

(1) Two times the sum of—

(a) the amount awarded to the claimant for

economic loss; and

(b) the amount awarded to the claimant for

non-economic loss; or

(2) $250,000,

whichever amount is lesser.

(B) Punitive damages may, to the extent

permitted by applicable State law, be awarded against a defendant in any civil action

whose net worth does not exceed $500,000 or

against an owner of an unincorporated business, or any partnership corporation, association, unit of local government, or organization which has fewer than 25 full-time employees, if the claimant establishes by clear

and convincing evidence that the harm that

is the subject of the action was the result of

conduct that was carried out by the defendant with a conscious, flagrant indifference to

the safety of others.

(3) APPLICATION BY COURT.—This subsection

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

to the jury.

(c) BIFURCATION AT REQUEST OF EITHER

PARTY.—

(1) IN GENERAL.—At the request of any

party, the trier of fact in a product liability

action that is subject to this title shall consider in a separate proceeding whether punitive damages are to be awarded for the harm

that is the subject of the action and the

amount of the award.

(2) INADMISSIBILITY OF EVIDENCE RELATIVE

ONLY TO A CLAIM OF PUNITIVE DAMAGES IN A

PROCEEDING CONCERNING COMPENSATORY DAMAGES.—If any party requests a separate proceeding under paragraph (1), in any proceeding to determine whether the claimant may

be awarded compensatory damages, any evidence that is relevant only to the claim of

punitive damages, as determined by applicable State law, shall be inadmissible.

SEC. 107. UNIFORM THE LIMITATIONS ON LIABILITY.

(a) STATUTE OF LIMITATIONS.—

(1) IN GENERAL.—Except as provided in

paragraph (2) and subsection (b), a product

liability action that is subject to this title

may be filed not later than 2 years after the

date on which the claimant discovered or, in

the exercise of reasonable care, should have

discovered, the harm that is the subject of

the action and the cause of the harm.

(2) EXCEPTIONS.—

(A) PERSON WITH A LEGAL DISABILITY.—A

person with a legal disability (as determined

under applicable law) may file a product liability action that is subject to this title not

later than 2 years after the date on which

the person ceases to have the legal disability.

(B) EFFECT OF STAY OR INJUNCTION.—If the

commencement of a civil action that is subject to this title is stayed or enjoined, the

running of the statute of limitations under

this section shall be suspended until the end

of the period that the stay or injunction is in

effect.

(b) STATUTE OF REPOSE.—

(1) IN GENERAL.—Subject to paragraphs (2)

and (3), no product liability action that is

subject to this title concerning a product

that is a durable good alleged to have caused

harm (other than toxic harm) may be filed

after the 20-year period beginning at the

time of delivery of the product.

(2) STATE LAW.—Notwithstanding paragraph (1), if pursuant to an applicable State

law, an action described in such paragraph is

required to be filed during a period that is

shorter than the 20-year period specified in

such paragraph, the State law shall apply

with respect to such period.

(3) EXCEPTIONS.—

(A) A motor vehicle, vessel, aircraft, or

train that is used primarily to transport passengers for hire shall not be subject to this

subsection.

(B) Paragraph (1) does not bar a product liability action against a defendant who made

an express warranty in writing as to the

safety of the specific product involved which

was longer than 20 years, but it will apply at

the expiration of that warranty.

(C) Paragraph (1) does not affect the limitations period established by the General

Aviation Revitalization Act of 1994 (49 U.S.C.

40101 note).

(c) TRANSITIONAL PROVISION RELATING TO

EXTENSION OF PERIOD FOR BRINGING CERTAIN

ACTIONS.—If any provision of subsection (a)

or (b) shortens the period during which a

product liability action that could be otherwise brought pursuant to another provision

of law, the claimant may, notwithstanding

subsections (a) and (b), bring the product liability action pursuant to this title not later

than 1 year after the date of enactment of

this Act.

SEC. 108. SEVERAL LIABILITY FOR NONECONOMIC LOSS.

(a) GENERAL RULE.—In a product liability

action that is subject to this title, the liability of each defendant for noneconomic loss

shall be several only and shall not be joint.

(b) AMOUNT OF LIABILITY.—

(1) IN GENERAL.—Each defendant shall be

liable only for the amount of noneconomic

loss allocated to the defendant in direct proportion to the percentage of responsibility of

the defendant (determined in accordance

with paragraph (2)) for the harm to the

claimant with respect to which the defendant is liable. The court shall render a separate judgment against each defendant in an

amount determined pursuant to the preceding sentence.

(2) PERCENTAGE OF RESPONSIBILITY.—For

purposes of determining the amount of noneconomic loss allocated to a defendant under

this section, the trier of fact shall determine

the percentage of responsibility of each person responsible for the claimant’s harm,

whether or not such person is a party to the

action.

SEC. 109. WORKERS’ COMPENSATION SUBROGATION STANDARDS.

(a) GENERAL RULE.—

(1) RIGHT OF SUBROGATION.—

(A) IN GENERAL.—An insurer shall have a

right of subrogation against a manufacturer
S6220 CONGRESSIONAL RECORD — SENATE May 5, 1995

or product seller to recover any claimant’s

benefits relating to harm that is the subject

of a product liability action that is subject

to this title.

(B) WRITTEN NOTIFICATION.—To assert a

right of subrogation under subparagraph (A),

the insurer shall provide written notice to

the court in which the product liability action is brought.

(C) INSURER NOT REQUIRED TO BE A PARTY.—

An insurer shall not be required to be a necessary and proper party in a product liability

action covered under subparagraph (A).

(2) SETTLEMENTS AND OTHER LEGAL PROCEEDINGS.—

(A) IN GENERAL.—In any proceeding relating to harm or settlement with the manufacturer or product seller by a claimant who

files a product liability action that is subject

to this title, an insurer may participate to

assert a right of subrogation for claimant’s

benefits with respect to any payment made

by the manufacturer or product seller by

reason of such harm, without regard to

whether the payment is made—

(i) as part of a settlement;

(ii) in satisfaction of judgment;

(iii) as consideration for a covenant not to

sue; or

(iv) in another manner.

(B) WRITTEN NOTIFICATION.—Except as provided in subparagraph (C), an employee shall

not make any settlement with or accept any

payment from the manufacturer or product

seller without written notification to the

employer.

(C) EXEMPTION.—Subparagraph (B) shall

not apply in any case in which the insurer

has been compensated for the full amount of

the claimant’s benefits.

(3) HARM RESULTING FROM ACTION OF EMPLOYER OR COEMPLOYEE.—

(A) IN GENERAL.—If, with respect to a product liability action that is subject to this

title, the manufacturer or product seller attempts to persuade the trier of fact that the

harm to the claimant was caused by the

fault of the employer of the claimant or any

coemployee of the claimant, the issue of that

fault shall be submitted to the trier of fact,

but only after the manufacturer or product

seller has provided timely written notice to

the employer.

(b) RIGHTS OF EMPLOYER.—

(i) IN GENERAL.—Notwithstanding any

other provision of law, with respect to an

issue of fault submitted to a trier of fact pursuant to subparagraph (A), an employer

shall, in the same manner as any party in

the action (even if the employer is not a

named party in the action), have the right

to—

(I) appear;

(II) be represented;

(III) introduce evidence;

(IV) cross-examine adverse witnesses; and

(V) present arguments to the trier of fact.

(ii) LAST ISSUE.—The issue of harm resulting from an action of an employer or

coemployee shall be the last issue that is

presented to the trier of fact.

(C) REDUCTION OF DAMAGES.—If the trier of

fact finds by clear and convincing evidence

that the harm to the claimant that is the

subject of the product liability action was

caused by the fault of the employer or a

coemployee of the claimant—

(i) the court shall reduce by the amount of

the claimant’s benefits—

(I) the damages awarded against the manufacturer or product seller; and

(II) any corresponding insurer’s subrogation lien; and

(ii) the manufacturer or product seller

shall have no further right by way of contribution or otherwise against the employer.

(D) CERTAIN RIGHTS OF SUBROGATION NOT

AFFECTED.—Notwithstanding a finding by the

trier of fact described in subparagraph (C),

the insurer shall not lose any right of subrogation related to any—

(i) intentional tort committed against the

claimant by a coemployee; or

(ii) act committed by a coemployee outside

the scope of normal work practices.

(b) ATTORNEY’S FEES.—If, in a product liability action that is subject to this section,

the court finds that harm to a claimant was

not caused by the fault of the employer or a

coemployee of the claimant, the manufacturer or product seller shall reimburse the

insurer for reasonable attorney’s fees and

court costs incurred by the insurer in the action, as determined by the court.

SEC. 110. FEDERAL CAUSE OF ACTION PRECLUDED.

The district courts of the United States

shall not have jurisdiction under section 1331

or 1337 of title 28, United States Code, over

any product liability action covered under

this title.

TITLE II—BIOMATERIALS ACCESS

ASSURANCE

SEC. 201. SHORT TITLE.

This title may be cited as the

‘‘Biomaterials Access Assurance Act of

1995’’.

SEC. 202. FINDINGS.

Congress finds that—

(1) each year millions of citizens of the

United States depend on the availability of

lifesaving or life enhancing medical devices,

many of which are permanently implantable

within the human body;

(2) a continued supply of raw materials and

component parts is necessary for the invention, development, improvement, and maintenance of the supply of the devices;

(3) most of the medical devices are made

with raw materials and component parts

that—

(A) are not designed or manufactured specifically for use in medical devices; and

(B) come in contact with internal human

tissue;

(4) the raw materials and component parts

also are used in a variety of nonmedical

products;

(5) because small quantities of the raw materials and component parts are used for

medical devices, sales of raw materials and

component parts for medical devices constitute an extremely small portion of the

overall market for the raw materials and

medical devices;

(6) under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), manufacturers of medical devices are required to demonstrate that the medical devices are safe

and effective, including demonstrating that

the products are properly designed and have

adequate warnings or instructions;

(7) notwithstanding the fact that raw materials and component parts suppliers do not

design, produce, or test a final medical device, the suppliers have been the subject of

actions alleging inadequate—

(A) design and testing of medical devices

manufactured with materials or parts supplied by the suppliers; or

(B) warnings related to the use of such

medical devices;

(8) even though suppliers of raw materials

and component parts have very rarely been

held liable in such actions, such suppliers

have ceased supplying certain raw materials

and component parts for use in medical devices because the costs associated with litigation in order to ensure a favorable judgment for the suppliers far exceeds the total

potential sales revenues from sales by such

suppliers to the medical device industry;

(9) unless alternate sources of supply can

be found, the unavailability of raw materials

and component parts for medical devices will

lead to unavailability of lifesaving and lifeenhancing medical devices;

(10) because other suppliers of the raw materials and component parts in foreign nations are refusing to sell raw materials or

component parts for use in manufacturing

certain medical devices in the United States,

the prospects for development of new sources

of supply for the full range of threatened raw

materials and component parts for medical

devices are remote;

(11) it is unlikely that the small market

for such raw materials and component parts

in the United States could support the large

investment needed to develop new suppliers

of such raw materials and component parts;

(12) attempts to develop such new suppliers

would raise the cost of medical devices;

(13) courts that have considered the duties

of the suppliers of the raw materials and

component parts have generally found that

the suppliers do not have a duty—

(A) to evaluate the safety and efficacy of

the use of a raw material or component part

in a medical device; and

(B) to warn consumers concerning the safety and effectiveness of a medical device;

(14) attempts to impose the duties referred

to in subparagraphs (A) and (B) of paragraph

(13) on suppliers of the raw materials and

component parts would cause more harm

than good by driving the suppliers to cease

supplying manufacturers of medical devices;

and

(15) in order to safeguard the availability

of a wide variety of lifesaving and life-enhancing medical devices, immediate action

is needed—

(A) to clarify the permissible bases of liability for suppliers of raw materials and

component parts for medical devices; and

(B) to provide expeditious procedures to

dispose of unwarranted suits against the suppliers in such manner as to minimize litigation costs.

SEC. 203. DEFINITIONS.

As used in this title:

(1) BIOMATERIALS SUPPLIER.—

(A) IN GENERAL.—The term ‘‘biomaterials

supplier’’ means an entity that directly or

indirectly supplies a component part or raw

material for use in the manufacture of an

implant.

(B) PERSONS INCLUDED.—Such term includes any person who—

(i) has submitted master files to the Secretary for purposes of premarket approval of

a medical device; or

(ii) licenses a biomaterials supplier to

produce component parts or raw materials.

(2) CLAIMANT.—

(A) IN GENERAL.—The term ‘‘claimant’’

means any person who brings a civil action,or on whose behalf a civil action is

brought, arising from harm allegedly caused

directly or indirectly by an implant, including a person other than the individual into

whose body, or in contact with whose blood

or tissue, the implant is placed, who claims

to have suffered hard as a result of the implant.

(B) ACTION BROUGHT ON BEHALF OF AN ESTATE.—With respect to an action brought on

behalf or through the estate of an individual

into whose body, or in contact with whose

blood or tissue the implant is placed, such

term includes the decedent that is the subject of the action.

(C) ACTION BROUGHT ON BEHALF OF A

MINOR.—With respect to an action brought

on behalf or through a minor, such term includes the parent or guardian of the minor.

(D) EXCLUSIONS.—Such term does not include—

(i) a provider of professional services, in

any case in which—

(I) the sale or use of an implant is incidental to the transaction; and
May 5, 1995 CONGRESSIONAL RECORD — SENATE S6221

(II) the essence of the transaction is the

furnishing of judgment, skill, or services; or

(ii) a manufacturer, seller, or biomaterials

supplier.

(3) COMPONENT PART.—

(A) IN GENERAL.—The term ‘‘component

part’’ means a manufactured piece of an implant.

(B) CERTAIN COMPONENTS.—Such term includes a manufactured piece of an implant

that—

(i) has significant nonimplant applications;

and

(ii) alone, has no implant value or purpose,

but when combined with other component

parts and materials, constitutes an implant.

(4) HARM.—

(A) IN GENERAL.—The term ‘‘harm’’

means—

(i) any injury to or damage suffered by an

individual;

(ii) any illness, disease, or death of that individual resulting from that injury or damage; and

(iii) any loss to that individual or any

other individual resulting from that injury

or damage.

(B) EXCLUSION.—The term does not include

any commercial loss or loss of or damage to

an implant.

(5) IMPLANT.—The term ‘‘implant’’ means—

(A) a medical device that is intended by

the manufacturer of the device—

(i) to be placed into a surgically or naturally formed or existing cavity of the body

for a period of at least 30 days; or

(ii) to remain in contact with bodily fluids

or internal human tissue through a surgically produced opening for a period of less

than 30 days; and

(B) suture materials used in implant procedures.

(6) MANUFACTURER.—The term ‘‘manufacturer’’ means any person who, with respect

to an implant—

(A) is engaged in the manufacture, preparation, propagation, compounding, or processing (as defined in section 510(a)(1) of the

Federal Food, Drug, and Cosmetic Act (21

U.S.C. 360(a)(1)) of the implant; and

(B) is required—

(i) to register with the Secretary pursuant

to section 510 of the Federal Food, Drug, and

Cosmetic Act (21 U.S.C. 360) and the regulations issued under such section; and

(ii) to include the implant on a list of devices filed with the Secretary pursuant to

section 510(j) of such Act (21 U.S.C. 360(j))

and the regulations issued under such section.

(7) MEDICAL DEVICE.—The term ‘‘medical

device’’ means a device, as defined in section

201(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(h)).

(8) RAW MATERIAL.—The term ‘‘raw material’’ means a substance or product that—

(A) has a generic use; and

(B) may be used in an application other

than an implant.

(9) SECRETARY.—The term ‘‘Secretary’’

means the Secretary of Health and Human

Services.

(10) SELLER.—

(A) IN GENERAL.—The term ‘‘seller’’ means

a person who, in the course of a business conducted for that purpose, sells, distributes,

leases, packages, labels, or otherwise places

an implant in the stream of commerce.

(B) EXCLUSIONS.—The term does not include—

(i) a seller or lessor of real property;

(ii) a provider of professional services, in

any case in which the sale or use of an implant is incidental to the transaction and the

essence of the transaction is the furnishing

of judgment, skill, or services; or

(iii) any person who acts in only a financial capacity with respect to the sale of an

implant.

SEC. 204. GENERAL REQUIREMENTS; APPLICABILITY; PREEMPTION.

(a) GENERAL REQUIREMENTS.—

(1) IN GENERAL.—In any civil action covered by this title, a biomaterials supplier

may raise any defense set forth in section

205.

(2) PROCEDURES.—Notwithstanding any

other provision of law the Federal or State

court in which a civil action covered by this

title is pending shall, in connection with a

motion for dismissal or judgment based on a

defense described in paragraph (1), use the

procedures set forth in section 206.

(b) APPLICABILITY.—

(1) IN GENERAL.—Except as provided in

paragraph (2), notwithstanding any other

provision of law, this title applies to any

civil action brought by a claimant, whether

in a Federal or State court, against a manufacturer, seller, or biomaterials supplier, on

the basis of any legal theory, for ham allegedly caused by an implant.

(2) EXCLUSION.—A civil action brought by a

purchaser of a medical device for use in providing professional services against a manufacturer, seller or biomaterials supplier for

loss or damage to an implant or for commercial loss to the purchaser—

(A) shall not be considered an action that

is subject to this title; and

(B) shall be governed by applicable commercial or contract law.

(c) SCOPE OF PREEMPTION.—

(1) IN GENERAL.—This title supersedes any

State law regarding recovery for harm

caused by an implant and any rule of procedure applicable to a civil action to recover

damages for such harm only to the extent

that this title establishes a rule of law applicable to the recovery of such damages.

(2) APPLICABILITY OF OTHER LAWS.—Any

issue that arises under this title and that is

not governed by a rule of law applicable to

the recovery of damages described in paragraph (1) shall be governed by applicable

Federal or State law.

(d) STATUTORY CONSTRUCTION.—Nothing in

this title may be construed—

(1) to affect any defense available to a defendant under any other provisions of Federal or State law in an action alleging harm

caused by an implant; or

(2) to create a cause of action or Federal

court jurisdiction pursuant to section 1331 or

1337 of title 28, United States Code, that otherwise would not exist under applicable Federal or State law.

SEC. 205. LIABILITY OF BIOMATERIALS SUPPLIERS.

(a) IN GENERAL.—

(1) EXCLUSION FROM LIABILITY.—Except as

provided in paragraph (2), a biomaterials

supplier shall not be liable for harm to a

claimant cause by an implant.

(2) LIABILITY.—A biomaterials supplier

that—

(A) is a manufacturer may be liable for

harm to a claimant described in subsection

(b);

(B) is a seller may be liable for harm to a

claimant described in subsection (c); and

(C) furnishes raw materials or component

parts that fail to meet applicable contractual requirements or specifications may be

liable for a harm to a claimant described in

subsection (d).

(b) LIABILITY AS MANUFACTURER.—

(1) IN GENERAL.—A biomaterials supplier

may, to the extent required and permitted

by any other applicable law, be liable for

harm to a claimant caused by an implant if

the biomaterials supplier is the manufacturer of the implant.

(2) GROUNDS FOR LIABILITY.—The

biomaterials supplier may be considered the

manufacturer of the implant that allegedly

caused harm to a claimant only if the

biomaterial supplier—

(A)(i) has registered with the Secretary

pursuant to section 510 of the Federal Food,

Drug, and Cosmetic Act (21 U.S.C. 360) and

the regulations issued under such section;

and

(ii) included the implant on a list of devices filed with the Secretary pursuant to

section 510(j) of such Act (21 U.S.C. 360(j))

and the regulations issued under such section;

(B) is the subject of a declaration issued by

the Secretary pursuant to paragraph (3) that

states that the supplier, with respect to the

implant that allegedly caused harm to the

claimant, was required to—

(i) register with the Secretary under section 510 of such Act (21 U.S.C. 360), and the

regulations issued under such section, but

failed to do so; or

(ii) include the implant on a list of devices

filed with the Secretary pursuant to section

510(j) of such Act (21 U.S.C. 360(j)) and the

regulations issued under such section, but

failed to do so; or

(C) is related by common ownership or control to a person meeting all the requirements

described in subparagraph (A) or (B), if the

court deciding a motion to dismiss in accordance with section 206(c)(3)(B)(i) finds, on the

basis of affidavits submitted in accordance

with section 206, that it is necessary to impose liability on the biomaterial supplier as

a manufacturer because the related manufacturer meeting the requirements of subparagraph (A) or (B) lacks sufficient financial resources to satisfy any judgment that

the court feels it is likely to enter should the

claimant prevail.

(3) ADMINISTRATIVE PROCEDURES.—

(A) IN GENERAL.—The Secretary may issue

a declaration described in paragraph (2)(B)

on the motion of the Secretary or on petition by any person, after providing—

(i) notice to the affected persons; and

(ii) an opportunity for an informal hearing.

(B) DOCKETING AND FINAL DECISION.—Immediately upon receipt of a petition filed pursuant to this paragraph, the Secretary shall

docket the petition. Not later than 180 days

after the petition is filed, the Secretary shall

issue a final decision on the petition.

(C) APPLICABILITY OF STATUTE OF LIMITATIONS.—Any applicable statute of limitations

shall toll during the period during which a

claimant has filed a petition with the Secretary under this paragraph.

(c) LIABILITY AS SELLER.—A biomaterials

supplier may, to the extent required and permitted by any other applicable law, be liable

as a seller for harm to a claimant caused by

an implant if—

(1) the biomaterials supplier—

(A) held title to the implant that allegedly

caused harm to the claimant as a result of

purchasing the implant after—

(i) the manufacture of the implant; and

(ii) the entrance of the implant in the

stream of commerce; and

(B) subsequently resold the implant; or

(2) the biomaterials supplier is related by

common ownership or control to a person

meeting all the requirements described in

paragraph (1), if a court deciding a motion to

dismiss in accordance with section

206(c)(3)(B)(i) finds, on the basis of affidavits

submitted in accordance with section 206,

that it is necessary to impose liability on

the biomaterials supplier as a seller because

the related manufacturer meeting the requirements of paragraph (1) lacks sufficient

financial resources to satisfy any judgment

that the court feels it is likely to enter

should the claimant prevail.
S6222 CONGRESSIONAL RECORD — SENATE May 5, 1995

(d) LIABILITY FOR VIOLATING CONTRACTUAL

REQUIREMENTS OR SPECIFICATIONS.—A

biomaterials supplier may, to the extent required and permitted by any other applicable

law, be liable for harm to a claimant caused

by an implant, if the claimant in an action

shows, by a preponderance of the evidence,

that—

(1) the raw materials or component parts

delivered by the biomaterials supplier either—

(A) did not constitute the product described in the contract between the

biomaterials supplier and the person who

contracted for delivery of the product; or

(B) failed to meet any specifications that

were—

(i) provided to the biomaterials supplier

and not expressly repudiated by the

biomaterials supplier prior to acceptance of

delivery of the raw materials or component

parts;

(ii)(I) published by the biomaterials supplier;

(II) provided to the manufacturer by the

biomaterials supplier; or

(III) contained in a master file that was

submitted by the biomaterials supplier to

the Secretary and that is currently maintained by the biomaterials supplier for purposes of premarket approval of medical devices; or

(iii)(I) included in the submissions for purposes of premarket approval or review by the

Secretary under section 510, 513, 515, or 520 of

the Federal Food, Drug, and Cosmetic Act

(21 U.S.C. 360, 360c, 360e, or 360j); and

(II) have received clearance from the Secretary,

if such specifications were provided by the

manufacturer to the biomaterials supplier

and were not expressly repudiated by the

biomaterials supplier prior to the acceptance

by the manufacturer of delivery of the raw

materials or component parts; and

(2) such conduct was an actual and proximate cause of the harm to the claimant.

SEC. 206. PROCEDURES FOR DISMISSAL OF CIVIL

ACTIONS AGAINST BIOMATERIALS

SUPPLIERS.

(a) MOTION TO DISMISS.—In any action that

is subject to this title, a biomaterials supplier who is a defendant in such action may,

at any time during which a motion to dismiss may be filed under an applicable law,

move to dismiss the action on the grounds

that—

(1) the defendant is a biomaterials supplier; and

(2)(A) the defendant should not, for the

purposes of—

(i) section 205(b), be considered to be a

manufacturer of the implant that is subject

to such section; or

(ii) section 205(c), be considered to be a

seller of the implant that allegedly caused

harm to the claimant; or

(B)(i) the claimant has failed to establish,

pursuant to section 205(d), that the supplier

furnished raw materials or component parts

in violation of contractual requirements or

specifications; or

(ii) the claimant has failed to comply with

the procedural requirements of subsection

(b).

(b) MANUFACTURER OF IMPLANT SHALL BE

NAMED A PARTY.—The claimant shall be required to name the manufacturer of the implant as a party to the action, unless—

(1) the manufacturer is subject to service

of process solely in a jurisdiction in which

the biomaterials supplier is not domiciled or

subject to a service of process; or

(2) an action against the manufacturer is

barred by applicable law.

(c) PROCEEDING ON MOTION TO DISMISS.—

The following rules shall apply to any proceeding on a motion to dismiss filed under

this section:

(1) AFFIDAVITS RELATING TO LISTING AND

DECLARATIONS.—

(A) IN GENERAL.—The defendant in the action may submit an affidavit demonstrating

that defendant has not included the implant

on a list, if any, filed with the Secretary pursuant to section 510(j) of the Federal Food,

Drug, and Cosmetic Act (21 U.S.C. 360(j)).

(B) RESPONSE TO MOTION TO DISMISS.—In response to the motion to dismiss, the claimant may submit an affidavit demonstrating

that—

(i) the Secretary has, with respect to the

defendant and the implant that allegedly

caused harm to the claimant, issued a declaration pursuant to section 205(b)(2)(B); or

(ii) the defendant who filed the motion to

dismiss is a seller of the implant who is liable under section 205(c).

(2) EFFECT OF MOTION TO DISMISS ON DISCOVERY.—

(A) IN GENERAL.—If a defendant files a motion to dismiss under paragraph (1) or (21) of

subsection (a), no discovery shall be permitted in connection to the action that is

the subject of the motion, other than discovery necessary to determine a motion to dismiss for lack of jurisdiction, until such time

as the court rules on the motion to dismiss

in accordance with the affidavits submitted

by the parties in accordance with this section.

(B) DISCOVERY.—If a defendant files a motion to dismiss under subsection (a)(2) on the

grounds that the biomaterials supplier did

not furnish raw materials or component

parts in violation of contractual requirements or specifications, the court may permit discovery, as ordered by the court. The

discovery conducted pursuant to this subparagraph shall be limited to issues that are

directly relevant to—

(i) the pending motion to dismiss; or

(ii) the jurisdiction of the court.

(3) AFFIDAVITS RELATING STATUS OF DEFENDANT.—

(A) IN GENERAL.—Except as provided in

clauses (i) and (ii) of subparagraph (B), the

court shall consider a defendant to be a

biomaterials supplier who is not subject to

an action for harm to a claimant caused by

an implant, other than an action relating to

liability for a violation of contractual requirements or specifications described in

subsection (d).

(B) RESPONSE TO MOTION TO DISMISS.—The

court shall grant a motion to dismiss any action that asserts liability of the defendant

under subsection (b) or (c) of section 205 on

the grounds that the defendant is not a manufacturer subject to such section 205(b) or

seller subject to section 205(c), unless the

claimant submits a valid affidavit that demonstrates that—

(i) with respect to a motion to dismiss contending the defendant is not a manufacturer,

the defendant meets the applicable requirements for liability as a manufacturer under

section 205(b); or

(ii) with respect to a motion to dismiss

contending that the defendant is not a seller,

the defendant meets the applicable requirements for liability as a seller under section

205(c).

(4) Basis of ruling on motion to dismiss.—

(A) IN GENERAL.—The court shall rule on a

motion to dismiss filed under subsection (a)

solely on the basis of the pleadings of the

parties made pursuant to this section and

any affidavits submitted by the parties pursuant to this section.

(B) MOTION FOR SUMMARY JUDGMENT.—Notwithstanding any other provision of law, if

the court determines that the pleadings and

affidavits made by parties pursuant to this

section raise genuine issues as concerning

material facts with respect to a motion concerning contractual requirements and specifications, the court may deem the motion to

dismiss to be a motion for summary judgment made pursuant to subsection (d).

(d) SUMMARY JUDGMENT.—

(1) IN GENERAL.—

(A) BASIS FOR ENTRY OF JUDGMENT.—A

biomaterials supplier shall be entitled to

entry of judgment without trial if the court

finds there is no genuine issue as concerning

any material fact for each applicable element set forth in paragraphs (1) and (2) of

section 205(d).

(B) ISSUES OF MATERIAL FACT.—With respect to a finding made under subparagraph

(A), the court shall consider a genuine issue

of material fact to exist only if the evidence

submitted by claimant would be sufficient to

allow a reasonable jury to reach a verdict for

the claimant if the jury found the evidence

to be credible.

(2) DISCOVERY MADE PRIOR TO A RULING ON A

MOTION FOR SUMMARY JUDGMENT.—If, under

applicable rules, the court permits discovery

prior to a ruling on a motion for summary

judgment made pursuant to this subsection,

such discovery shall be limited solely to establishing whether a genuine issue of material fact exists.

(3) DISCOVERY WITH RESPECT TO A

BIOMATERIALS SUPPLIER.—A biomaterials

supplier shall be subject to discovery in connection with a motion seeking dismissal or

summary judgment on the basis of the inapplicability of section 205(d) or the failure to

establish the applicable elements of section

205(d) solely to the extent permitted by the

applicable Federal or State rules for discovery against nonparties.

(e) STAY PENDING PETITION FOR DECLARATION.—If a claimant has filed a petition for a

declaration pursuant to section 205(b) with

respect to a defendant, and the Secretary has

not issued a final decision on the petition,

the court shall stay all proceedings with respect to that defendant until such time as

the Secretary has issued a final decision on

the petition.

(f) MANUFACTURER CONDUCT OF PROCEEDING.—The manufacturer of an implant that is

the subject of an action covered under this

title shall be permitted to file and conduct a

proceeding on any motion for summary judgment or dismissal filed by a biomaterials

supplier who is a defendant under this section if the manufacturer and any other defendant in such action enter into a valid and

applicable contractual agreement under

which the manufacturer agrees to bear the

cost of such proceeding or to conduct such

proceeding.

(g) ATTORNEY FEES.—The court shall require the claimant to compensate the

biomaterials supplier (or a manufacturer appearing in lieu of a supplier pursuant to subsection (f)) for attorney fees and costs, if—

(1) the claimant named or joined the

biomaterials supplier; and

(2) the court found the claim against the

biomaterials supplier to be without merit

and frivolous.

SEC. 207. APPLICABILITY.

This title shall apply to all civil actions

covered under this title that are commenced

on or after the date of enactment of this Act,

including any such action with respect to

which the harm asserted in the action or the

conduct that caused the harm occurred before the date of enactment of this Act.