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[Congressional Record Volume 141, Number 76 (Tuesday, May 9, 1995)]
[Senate]
[Pages S6322-S6330]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                  UNITED STATES-JAPAN TRADE RELATIONS

  Mr. BYRD. Mr. President, I have a Senate resolution which has been 
cleared with both leaders, and they are both cosponsors. I have the 
clearance from them to take up the resolution and proceed with its 
immediate consideration. I therefore send a Senate resolution to the 
desk and I ask unanimous consent that the Senate proceed to its 
immediate consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will read the resolution by title.
  The legislative clerk read as follows:

       A resolution (S. Res. 118) concerning United States-Japan 
     Trade Relations.

  The Senate proceeded to consider the resolution.
  Mr. BYRD. Mr. President, this resolution is being jointly cosponsored 
by Senators Dole, Daschle, Baucus, Reid, Ashcroft, Warner, Levin, 
Hollings, Pressler, Dorgan, Brown, and Sarbanes.
  Mr. President, the long and difficult negotiations between the United 
States and Japan over United States access to the Japanese automotive 
market collapsed last Friday, May 5, 1995, in Whistler, Canada. Japan 
simply cannot kick the habit of a closed automotive market, that is the 
antithesis of free trade. It is not clear as to whether the Japanese 
will return to the negotiating table with a changed position, or 
whether Japan's automakers will themselves announce an agreement with 
specific measures of progress to allow American products to compete 
fairly there. Let us hope that they do break the impasse, but this 
disappointing result of strenuous, long-term efforts by the United 
States to get fair access to this lucrative market brings us to a 
watershed in our trading relations with Japan. This blow cannot help 
our overall relationship with a nation that we have worked with for 
decades to promote our mutual goals of security, stability, and peace 
in the Pacific.
  My distinguished colleague from West Virginia, Senator Rockefeller, 
stated on this floor this past Wednesday that the nature of the 
difficult problem in getting fair access to Japan's market. Japan rigs 
her market against us, despite economic pressures to be more open. 
Despite the recent increase in the value of the yen, which would make 
United States products more competitive in Japan, Japan keeps her 
market closed to cheaper imports and overprices goods offered to the 
Japanese consumer. Increased savings which should be passed on to 
Japanese consumers, resulting from the increased strength of the yen 
vis-a-vis other currencies are never passed on to the Japanese 
consumer. The increased profits which are accumulated by Japanese 
producers are used to subsidize exports, keeping prices for those same 
goods artificially low here in the United States, making Japan 
artificially 
 [[Page S6323]]  more competitive. It is a controlled pricing 
situation, not based on free market principles. The devastating result 
of these practices in the automotive industry, for both new cars and 
parts, has been an unacceptably high and persistent trade deficit with 
Japan.
  The result in 1995 was a ballooning record trade deficit with Japan 
of $66 billion, up 10 percent over 1994, of which $37 billion, or 56 
percent of the total is attributable to cars and auto parts. The 
automotive trade deficit with Japan constituted some 22 percent of our 
entire trade deficit with the world. American manufacturers cannot get 
Japanese distributors to put American cars in their showrooms. Overall, 
while Japanese automakers hold some 22.5 percent of the American 
market, the share of the Japanese market held by the Big Three United 
States automakers is less than 1 percent. As for parts, it is extremely 
difficult for United States parts, which are highly competitive from 
both a price and value standpoint, to break into the ``Karetsu'' system 
of interrelationships between Japanese car manufacturers, suppliers and 
dealers. Despite the fact that United States government studies show 
that Japanese aftermarket repair parts cost, on average, some 340 
percent higher than comparable United States parts, the Japanese 
consumer is essentially denied the ability to buy those American parts. 
The result is that Japanese vehicle manufacturers control about 80 
percent of the parts market, as compared to a wide-open American market 
in which independent replacement parts producers account for some 80 
percent of the United States market. So, our market is open, Japan's is 
closed.
  These important economic realities are well known to both governments 
and industry on both sides of the Pacific. The impact on our domestic 
auto industry is crucial. Every $1
 billion of U.S. exports means some 17,000 jobs. The health of our 
aluminum, glass, steel, rubber, electronics, and many other industries 
is tied to the auto sector. It is our largest manufacturing industry, 
with some 700,000 people employed directly by the automakers, and 
another 2.3 million employed in the parts industry supplying the 
automakers.

  There is extensive support across the board from industry and labor 
organizations for the current negotiations. They have been grinding on 
for some 18 months before the stinging Japanese rebuff on Friday in 
Canada. Last October 1994, our Trade Representative opened an 
investigation under section 301 of the Trade Act of 1974 of the unfair 
practices in the aftermarket parts market, which constitutes about a 
third of the automotive deficit with Japan. The unwillingness of Japan 
to address this unfair automotive trade balance demands a strong 
administration response and equally strong supportive actions by this 
body and American industry, both business and labor. President Clinton 
and our Trade Representative, Ambassador Kantor, have made it clear 
that the end of long, long American tolerance and give has now been 
reached on this issue. On Friday, Ambassador Kantor indicated that the 
``government of Japan has refused to address our most fundamental 
concerns in all areas'' of automotive trade, and that ``discrimination 
against foreign manufacturers of auto and auto parts continues.'' The 
President indicated on the same day that the United States is 
``committed to taking strong action'' regarding Japanese imports into 
the United States in the absence of an agreement.
  Pursuant to the 301 case, trade sanctions, meaning tariff retaliation 
against a variety of Japanese goods imported into the United States, 
are now in order. Such retaliation has been openly discussed regarding 
these negotiations for months, and so the Japanese are saying, either 
``we do not believe you will do it,'' or ``we do not care,'' or, 
lately, that ``you cannot impose sanctions under the 301 law 
bilaterally on Japan because it is illegal under the newly created 
World Trade Organization rules.''
  Mr. President, the stakes of these automotive negotiations and U.S. 
actions under 301 are very high. The auto trade is very lucrative, and 
thus there is a major financial stake. But there is more at stake than 
money here. At issue is whether nontariff barriers, discriminatory 
treatment by foreign economic interests, aided by a maze of regulatory, 
bureaucratic obstacles to open trade, will dominate large sectors of 
international trade. As opposed to an open United States market, our 
major Asian trading partners practice wide discriminatory treatment 
against our goods. China and Korea appear to be taking a cue from 
Japanese behavior and the apparent success of these unfair practices. 
Other sectors will continue to follow suit, such as the highly 
explosive and rich trade in telecommunications, where we are 
experiencing similar problems.
  The inability of our two nations to resolve our differences on trade 
in a way which demonstrates a real commitment to fairness by Japan will 
inevitably corrode our overall relationship. It is unrealistic to 
expect to insulate the costly effects to the U.S. economy, to jobs, and 
the health of so many of our important industries from the total 
relationship. Our economic health is critical to our national security 
and to our staying power as the key deployed military power in the 
Pacific. It all hangs together. The fabric of our economic health and 
Japan's national security is a seamless web, and a strong United States 
auto industry is an important strand in that web. I hope the Japanese 
will come to understand that this is all interrelated.
  The Japanese have threatened to bring a case against United States 
imposition of sanctions under section 301 before the World Trade 
Organization, in the hope the WTO would rule against the United States 
and declare the imposition of sanctions a violation of WTO rules. I am 
gratified that Ambassador Kantor has said he would welcome such a 
challenge, because, according to his comments in the New York Times of 
May 7, 1995, ``it would give us an opportunity to make clear to the 
world the full range of Japan's discriminatory practices'' in the 
automotive market. I hope Japan does bring the case to the WTO. I am 
fully confident that our Trade Representative would conduct a vigorous 
defense of United States actions, and turn the tables against the 
Japanese, whose trade sanctuary regime is anathema to the goal of an 
open world trading system. We should insist on a complete review of 
Japan's practices. Either we are heading toward a more open world 
system or we are not. This would be a litmus test of the actions and 
posture of the WTO. It would be a key test of the future of the WTO. I 
cannot conceive of continued U.S. commitment to an organization that 
would reward blatant discrimination and the perpetuation of sanctuary 
behavior. Thus, the case would be a welcome, early test of what kind of 
world organization we have created.
  Mr. President, I am offering this resolution as a sense-of-the-Senate 
resolution that puts the Senate on record as supporting the President's 
actions. First, it expresses the Senate's regret that negotiations 
between the United States and Japan for sharp reductions in the trade 
imbalances in automotive sales and parts, through elimination of 
restrictive Japanese market-closing practices and regulations have 
collapsed. Second, it states, if negotiations under section 301 of the 
Trade Act of 1974 fail to open the Japanese auto parts market, the 
United States Senate strongly supports the decision by the President to 
impose sanctions on Japanese products in accordance with section 301.
  There is still opportunity for Japan to return to the negotiating 
table and satisfy the legitimate case of the United States that 
immediate action to open Japan's market is urgently needed. I hope the 
Japanese see the light before it is too late. There are press reports 
that the Japanese think we may shrink from the imposition of sanctions. 
I hope that we here in the Senate will send a strong message of support 
for the President on this matter, and help disabuse the Japanese of 
that view.
  Mr. President, I yield the floor.
  (Ms. SNOWE assumed the chair.)
  Mr. DOLE addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the majority leader.
  Mr. DOLE. Madam President, I am a cosponsor of the resolution. I 
thank my distinguished colleague from West Virginia for adding me as a 
cosponsor of the resolution. I think it is very timely 
 [[Page S6324]]  and very important. I hope my colleagues will strongly 
support the efforts of Senator Byrd in this area.
  This resolution is not an example of Japan-bashing. The United States 
has now negotiated in good faith for 2 years in this administration. 
Previous administrations tried to pry open the Japanese auto market 
through serious negotiation. The results have been disappointing, at 
best.
  Congress has passed market-opening trade laws because U.S. 
negotiators have needed effective tools. They are there to be used, if 
negotiations fail. They are not empty threats.
  Section 301 is not a threat, it is an effective tool. I happen to 
believe Ambassador Kantor has wielded this tool responsibly.
  That is why, if a negotiated solution cannot be found, I support the 
use of section 301 to impose appropriate sanctions.
  Madam President, this would be strong medicine. Some people might not 
like it. Some people might think it disruptive.
  But there has always been bipartisan agreement that the United States 
must pursue more open markets. We have always provided leadership on 
this issue, and we will continue to do so.
  There comes a time in every trade negotiation, when all other means 
have been exhausted, to take strong, decisive action. That time may 
have come, Madam President, if a last minute solution cannot be found. 
I urge my colleagues to support this sense-of-the-Senate and stand up 
for American commercial interests abroad.
  In my view, if nothing else, a strong vote on this resolution will 
send an urgent message to the negotiators, more particularly the 
Japanese negotiators, that we are serious, we mean business, we stand 
behind the administration and their efforts to break the logjam.
  So I encourage my colleagues on both sides of the aisle to support 
the sense-of-the-Senate resolution.
  I ask unanimous consent that Senator Specter be added as a cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BYRD. Madam President, I thank the distinguished majority leader 
for his cosponsorship and for his fine statement. I believe we would 
like to have the yeas and nays.
  Mr. DOLE. Madam President, I ask for the yeas and nays on the 
resolution.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. BRADLEY. Madam President, I rise to explain my opposition to this 
resolution. Although this resolution calls attention to a serious 
problem, the persistence of Japanese trade barriers, it does not 
identify a workable solution.
  Japanese trade barriers need to come down. They need to come down 
because they contribute to America's bilateral trade deficit with 
Japan. Studies cited by the administration have found that removing 
every single Japanese barrier would reduce the bilateral merchandise 
trade deficit by around 20 percent.
  Note, however, that Japanese trade barriers do not themselves account 
for America's global trade deficit, only its composition. As the 
administration itself admits in the President's 1994 annual report on 
the Trade Agreements Program:

       The United States still suffers from relatively low savings 
     at a time when domestic investment is growing rapidly. The 
     shortfall between domestic saving and investment was larger 
     in 1994 and was filled by a net increase in foreign capital 
     inflows. The United States thus had a large surplus on its 
     international capital account and a large offsetting deficit 
     on its trade or current account.

  In plain English, our domestic budget deficit crowds out savings and 
requires us to import capital. This leads to our global trade deficit.
  Japanese trade barriers also need to come down because they reduce 
the Japanese people's quality of life and impede the process of 
democratization in Japan. Japan's democratization is also in our 
interest; it is the only way we will have a stable, democratic, 
prosperous Japanese partner in our efforts to secure a stable 
international environment.
  So, on this point, we agree, Japan's trade barriers must come down.
  However, the administration's strategy, which this resolution 
supports, is the wrong way to do this. Declaring unilateral trade war 
on Japan--and, make no mistake, that is what we are talking about--
would once again leave the United States isolated in the world. 
Europeans, Latin Americans, and Asians, fearing similar treatment from 
us in the future, would line up with Japan.
  Currency markets will react badly. If you think a rate of 80 yen to 
the dollar is disadvantageous to this country, as I do, imagine a rate 
of 75 or even 70. I am not alarmist when I say that this could threaten 
the position of the dollar as the international reserve currency. 
Indeed, Japan is already talking of switching its reserves out of 
dollars and into deutschmarks.
  This dispute is likely to end in the fledgling World Trade 
Organization. No matter what happened there, support would be weakened. 
Either the United States would lose, causing a tidal wave of calls to 
leave the World Trade Organization, or Japan would lose, leading to 
reduced Japanese support for the international trading system. Either 
way, we all lose.
  Finally, by strengthening the power of the bureaucrats, who are 
standing up to the Americans, a trade war would cut across the forces 
of transparency, democratization, and accountable electoral politics 
which are the ultimate answer to our trade imbalance.
  I have spoken many times of a better way to reduce Japan's trade 
barriers, one that works with the forces shaping Japan, does not cut 
across our interests in the new World Trade Organization, and 
depoliticizes the trade relationship. To repeat, I believe we can best 
address Japan's trade barriers by establishing a dispute resolution 
mechanism, similar to the ones in the United States-Japan and United 
States-Canada free trade agreements, to impartially adjudicate United 
States-Japan trade disputes.
  Madam President, it is ironic that we are voting on this resolution. 
In many ways, it is like judo. What appears strength is actually 
revealed as weakness.
  I, for one, believe in strength. This is why I believe we must take a 
strategic, long-term approach to the United States-Japan trade 
relationship. A strong America will negotiate and adjudicate, as I have 
described. A weak America will only, impotently, bash.
  The PRESIDING OFFICER. Is there further debate on the resolution? If 
not, the question is on agreeing to the resolution. The clerk will call 
the roll.
  The bill clerk called the roll.
  Mr. LOTT. I announce that the Senator from Minnesota [Mr. Grams], the 
Senator from Pennsylvania [Mr. Specter], and the Senator from Virginia 
[Mr. Warner] are necessarily absent.
  Mr. FORD. I announce that the Senator from New York [Mr. Moynihan] is 
necessarily absent.
  The PRESIDING OFFICER (Mr. Coats). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 88, nays 8, as follows:

                      [Rollcall Vote No. 158 Leg.]

                                YEAS--88

     Abraham
     Akaka
     Ashcroft
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brown
     Bryan
     Bumpers
     Burns
     Byrd
     Campbell
     Chafee
     Coats
     Cochran
     Cohen
     Conrad
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Exon
     Faircloth
     Feingold
     Feinstein
     Ford
     Frist
     Glenn
     Gorton
     Graham
     Gramm
     Grassley
     Gregg
     Harkin
     Hatch
     Heflin
     Helms
     Hollings
     Hutchison
     Inhofe
     Jeffords
     Kempthorne
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     Mack
     McConnell
     Mikulski
     Moseley-Braun
     Murkowski
     Murray
     Nickles
     Nunn
     Pell
     Pressler
     Pryor
     Reid
     Robb
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Shelby
     Simon
     Simpson
     Smith
     Snowe
     Stevens
     Thomas
     Thompson
     Thurmond
     Wellstone

                                NAYS--8

     Bradley
     Hatfield
     Inouye
     Johnston
     Kassebaum
     Kyl
     McCain
     Packwood

                             NOT VOTING--4

     Grams
     Moynihan
     Specter
     Warner
  So the resolution (S. Res. 118) was agreed to.
  The preamble was agreed to
.
[[Page S6325]]

  The resolution, with its preamble, is as follows:

                              S. Res. 118

       Whereas, the United States and Japan have a long and 
     important relationship which serves as an anchor of peace and 
     stability in the Pacific region;
       Whereas, tension exists in an otherwise normal and friendly 
     relationship between the United States and Japan because of 
     persistent and large trade deficits which are the result of 
     practices and regulations which have substantially blocked 
     legitimate access of American automotive products to the 
     Japanese market;
       Whereas, the current account trade deficit with Japan in 
     1994 reached an historic high level of $66 billion, of which 
     $37 billion, or 56 percent, is attributed to imbalances in 
     the automotive sector, and of which $12.8 billion is 
     attributable to auto parts flows:
       Whereas, in July, 1993, the Administration reached a broad 
     accord with the Government of Japan, which established 
     automotive trade as one of 5 priority areas for negotiations, 
     to seek market-opening arrangements based on objective 
     criteria and which would result in objective progress;
       Whereas, a healthy American automobile industry is of 
     central importance to the American economy, and to the 
     capability of the United States to fulfill its commitments to 
     remain as an engaged, deployed, Pacific power;
       Whereas, after 18 months of negotiations with the Japanese, 
     beginning in September 1993, the U.S. Trade Representative 
     concluded that no progress had been achieved, leaving the 
     auto parts market in Japan ``virtually closed'';
       Whereas, in October, 1994, the United States initiated an 
     investigation under Section 301 of the Trade Act of 1974 into 
     the Japanese auto parts market, which could result in the 
     imposition of trade sanctions on a variety of Japanese 
     imports into the United States unless measurable progress is 
     made in penetrating the Japanese auto parts market;
       Whereas, the latest round of U.S.-Japan negotiations on 
     automotive trade, in Whistler, Canada, collapsed in failure 
     on May 5, 1995, and the U.S. Trade Representative, Ambassador 
     Kantor, stated the ``government of Japan has refused to 
     address our most fundamental concerns in all areas'' of 
     automotive trade, and that ``discrimination against foreign 
     manufacturers of autos and auto parts continues.''
       Whereas, President Clinton stated, on May 5, 1995, that the 
     U.S. is ``committed to taking strong action'' regarding 
     Japanese imports into the U.S. if no agreement is reached. 
     Now, therefore, be it
       Resolved, That it is the Sense of the Senate that--
       (1) The Senate regrets that negotiations between the United 
     States and Japan for sharp reductions in the trade imbalances 
     in automotive sales and parts, through elimination of 
     restrictive Japanese market-closing practices and 
     regulations, have collapsed;
       (2) If negotiations under Section 301 of the Trade Act of 
     1974 fail to open the Japanese auto parts market, the United 
     States Senate strongly supports the decision by the President 
     to impose sanctions on Japanese products in accordance with 
     Section 301.

  Mr. BYRD. Mr. President, I move to reconsider the vote by which the 
resolution was agreed to, and I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. BYRD. 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. SHELBY. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                 Amendment No. 693 to Amendment No. 690

(Purpose: To provide that a defendant may be liable for certain damages 
  if the alleged harm to a claimant is death and certain damages are 
         provided for under State law, and for other purposes)

  Mr. SHELBY. Madam President, I have an amendment at the desk--No. 
693, I believe it is.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows.

       The Senator from Alabama [Mr. Shelby], for himself and Mr. 
     Heflin, proposes an amendment numbered 693 to amendment No. 
     690.

  Mr. SHELBY. Madam President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place insert the following:

     SEC.   . LIABILITY FOR CERTAIN CLAIMS RELATING TO DEATH.

       In any civil action in which the alleged harm to the 
     claimant is death and, as of the effective date of this Act, 
     the applicable State law provides, or has been construed to 
     provide, for damages only punitive in nature, a defendant may 
     be liable for any such damages without regard to this 
     section, but only during such time as the State law so 
     provides.

  Mr. SHELBY. Madam President, I offer today on behalf of myself and 
the senior Senator from Alabama [Mr. Heflin] an amendment to ensure 
that individuals guilty of wrongful deaths are not provided unfair and 
unwarranted protection by the product liability reform legislation we 
are considering today.
  This amendment we are offering was accepted last week by both sides 
but was excluded from the Gorton-Rockefeller-Dole amendment today. I 
believe that all of my colleagues will support this measure once they 
take time to examine its merits. It is unique to the State of Alabama. 
My State of Alabama has a wrongful death statute, the damages of which 
are construed as only punitive in nature--not compensatory but only 
punitive in nature. Under the product liability bill that we are 
considering today, along with some of the proposed amendments to this 
bill, people who have committed or are guilty of a wrongful death in my 
State of Alabama, the damages available will be severely limited. While 
the bill here allows for additur, the additur procedures in this 
legislation are cumbersome at best and possibly unworkable.
  Madam President, in 1852, I believe it was, the Alabama Legislature 
passed what is known as the Alabama Homicide Act. This act permits a 
personal representative to recover damages for a death caused by a 
wrongful act, omission, or negligence. For the past 140 years, the 
Alabama Supreme Court has interpreted this statute as imposing punitive 
damages for any conduct which causes death.
  Alabama believes that all people have equal worth in our society so 
the financial position of a person is not used as a measure of damages 
in wrongful death cases in Alabama as it possibly is in other States. 
The entire focus of Alabama's wrongful death civil action is on the 
cause of death.
  The amendment I am offering today on behalf of myself and Senator 
Heflin will provide that in a civil action where the alleged harm to 
the claimant is death and the applicable State law only allows for 
punitive damages, the punitive damages provision of this bill will not 
apply. In other words, this amendment will only apply to my State of 
Alabama.
  Madam President, I believe there are legitimate reasons to exclude 
from the coverage of this bill actions such as those brought under 
Alabama's wrongful death statute. Cases of wrongful death are often 
some of the most legitimate instances where punitive damages should be 
awarded.
  Everyone in this body knows that I have great reservation about this 
legislation now before us. However, I do believe the addition of this 
amendment will help ensure that this bill will not unduly, not unduly, 
Madam President, penalize the citizens of my State.
  I urge my colleagues to support this important amendment.
  Mr. HEFLIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. HEFLIN. I join with the distinguished Senator from Alabama [Mr. 
Shelby] in his amendment.
  Of all of the 50 States, Alabama has a different method pertaining to 
the recovery of damages when a death occurs as a result of culpable 
action, regardless of whether it be simple negligence, gross 
negligence, willful conduct, intentional conduct, wanton conduct, any 
type of conduct that allows for the recovery. It allows under the 
interpretation given for this statute that punitive damages only can be 
recovered. It is different from other States where most of the other 
States allow a plaintiff, the executor or the administrator or the 
parent of the child, if deceased, to be able to introduce, for example, 
hospital bills.
  A person may have died after 6 months in a hospital, and under 
hospital bills of today they can accumulate to over $150,000. Burial 
expenses in most States can be introduced into evidence and can be an 
element of compensatory damages. Loss of earning capacity, noneconomic 
damages, pain and suffering in some instances in some States can be 
introduced as an element 
 [[Page S6326]]  of damages, and so on down the list of all of the 
types of damages.
  But in Alabama you are not allowed to introduce any of that. You 
attempt to introduce a hospital bill, and a doctor's bill, and whether 
they were $150,000 or whether, on the other hand, they amounted to $500 
or $25, you cannot introduce that in evidence as an element of damages 
under the Alabama wrongful death statute as has been interpreted, and 
the charge to the jury is that it is a matter of punishment for the 
wrongdoer, and therefore it is limited to that.
  Over the years, the companies, corporate America, in Alabama, 
insurance companies, defense counsel who represent them, have fought to 
maintain this, and over the years the plaintiffs' lawyers have come to 
live with it, and therefore it is accepted as being the measure of 
damages.
  However, under the provisions that we have here under this bill in 
product liability cases the provisions pertaining to this would apply. 
And under the DeWine amendment, you would be limited in a situation 
with regard to that to almost zero, where there would be nothing that 
could be recovered, and it would limit it, restrict it substantially.
  So I support the Shelby amendment in this regard. This is a situation 
that applies only to Alabama. The language of this bill is basically 
the same language that was considered in the 101st Congress and in the 
102d Congress. They came out of the Commerce Committee. We had pointed 
this defect out, and the drafters of the bill, including people who had 
been working on product liability, put a provision in those bills that 
would allow for the Alabama law to prevail. We offered it as an 
amendment in regard to the Gorton and Rockefeller underlying 
substitute, and it was accepted after they made some changes in the 
language. Senator Shelby and I are agreeable to any changes in the 
language of the Shelby amendment that they might want to propose 
provided it allows for recovery--it is limited strictly to the wrongful 
death cases, and therefore we are amenable to any change that they 
might make as long as it does not abolish, or greatly minimize the 
recovery under the Alabama statute.
  So we feel that this is something which should be adopted. Otherwise, 
it is singling out Alabama, and Alabama has a very unique, they argue, 
uniformity, and the preemption matters ought to be uniform among all of 
the 50 States. But what it means is that in the preemption which does 
bring about some uniformity as it would apply to the preempted 
sections, that it will not apply to Alabama. And it is a very 
discriminatory act in regard to Alabama. I would think that it has, 
from a Federal constitutional basis, some imperfections in regard to 
it.
  I urge my colleagues in the Senate to support the Shelby-Heflin 
amendment.

                     Amendment No. 693, as Modified

  Mr. SHELBY addressed the Chair.
  The PRESIDING OFFICER (Mr. Grams). The Senator from Alabama.
  Mr. SHELBY. Mr. President, I ask unanimous consent to amend the 
amendment that I have filed that is the subject of debate.
  I send the modification to the desk.
  The PRESIDING OFFICER. Is there objection to the modification?
  Mr. HOLLINGS. Reserving the right to object. That is a modification 
to the Senator's amendment?
  Mr. SHELBY. The Senator is correct. It just clarifies this amendment. 
I mention in the amendment section 107. That is all it does.
  Mr. HOLLINGS. The distinguished Senator from Washington and I had a 
discussion about another amendment. I am sitting around making sure 
that unanimous consent is not given for that amendment.
  Mr. GORTON. This is not that amendment.
  Mr. HOLLINGS. I thank the Senator. I have no objection.
  The PRESIDING OFFICER. Without objection, the amendment is so 
modified.
  The amendment (No. 693), as modified, is as follows:

       At the appropriate place insert the following:

     SEC.   . LIABILITY FOR CERTAIN CLAIMS RELATING TO DEATH.

       In any civil action in which the alleged harm to the 
     claimant is death and, as of the effective date of this Act, 
     the applicable State law provides, or has been construed to 
     provide, for damages only punitive in nature, a defendant may 
     be liable for any such damages without regard to section 107, 
     but only during such time as the State law so provides.

  Mr. HEFLIN. I assume section 107, I ask Senator Gorton, is the 
section dealing with punitive damages.
  Mr. GORTON. It is.
  Mr. HEFLIN. So it is limited to that. But does that include the 
DeWine amendment and language in regard to small business, and the 
individual relative to the $500,000?
  Mr. GORTON. It does. That is in section 107, as well.
  Mr. HEFLIN. That is all included in section 107, all punitive 
damages?
  Mr. GORTON. It is.
  I simply pointed out to the distinguished junior Senator from Alabama 
that the way the amendment was set up it did not have any reference to 
any section, but it was about punitive damages. His correction is to 
see to it that it applies to the punitive damages section. But that is 
the section that has all the punitive damages in it.
  Mr. HEFLIN. I thank the Senator.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Mr. President, I regret that I have to oppose the 
amendment sponsored by the two Senators from Alabama. In some respects, 
I am sorry that I have to do so, but I believe that I have good and 
sufficient reasons for doing so.
  First, the senior Senator from Alabama said that this was included in 
previous product liability bills, which is certainly true. But those 
previous product liability bills did not have rules like this relating 
to punitive damages.
  Mr. HEFLIN. Did not have what? I did not understand the Senator.
  Mr. GORTON. There were no DeWine amendments and there were no Snowe 
amendments in previous bills.
  Second, this is, Mr. President, to be candid, a very peculiar rule in 
the State of Alabama where negligence is accounted to be the subject of 
punitive damages. It is not the rule in any other State in the Union.
  Nothing in this bill, without this amendment, prevents Alabama from 
providing any kind of damages for wrongful death that it wishes to, 
either through its legislature or through its court interpretations. So 
Alabama is not going to be penalized any more than any other State by 
this bill unless Alabama wants to be, and willfully refuses to conform 
its laws to those of other States.
  But, more significant than that, Mr. President, are two other 
features about this amendment. The first, one of the most carefully 
worked out elements in this entire bill, the most carefully worked out 
element in this bill, is the triple set of requirements we have with 
respect to punitive damages, one of which, in the ultimate analysis, 
allows judges to impose unlimited punitive damages when they find the 
conduct of the defendant to have been sufficiently egregious. The 
second is the Snowe amendment which, in most cases, will limit punitive 
damages to twice the total amount of all compensatory damages. And the 
third, Mr. President, is the fact that this body, I think, with a wide 
majority, determined that we were not going to allow punitive damages 
in a single case simply to destroy small businesses or individuals of 
relatively modest assets, with total assets of less than $500,000.
  Now, if this amendment passes, that will be the rule in 49 States--in 
49 States, Mr. President. It will not be the rule in Alabama. In 
Alabama, there will not be any Snowe limitation in general cases, and 
there will not be any protection for small businesses or for 
individuals with net assets of less than half a million dollars.
  Mr. President, this is only 1 State out of 50, but Alabama is the 
single most notorious State in the United States of America related to 
its size for punitive damage awards. It is a cottage industry in that 
State to award very, very large, huge punitive damages awards against, 
generally speaking but not necessarily limited to, out-of-State 
corporations.
  So what we are saying is that the set of rules that we have adopted, 
in most of these cases by very large majorities in this body, will 
apply in every State except the State that comes first in the alphabet, 
Alabama, and none of the 
 [[Page S6327]]  limitations will apply in the State of Alabama. Why? 
Because it has a peculiar law which can be changed by one word by its 
State legislature or, for that matter, by its supreme court. And we are 
going to do this, for all practical purposes, permanently.
  Finally, Mr. President, a profound change has taken place in this 
body since the time this amendment was first proposed in this debate. 
When it was first proposed in this debate, the absolute maximum for 
punitive damages was the Snowe amendment--twice compensatory damages--
which, as the two Senators from Alabama pointed out, under this 
peculiar Alabama law, would be zero. And, of course, twice zero is 
zero. So that is no longer the case.
  So the bill, the way it exists now, the way it has been amended now, 
allows the judge in any case on certain findings to impose punitive 
damages in unlimited amounts. That, in the bill as it exists now, 
without this amendment, of course, applies in Alabama, and will allow 
those Alabama judges to impose whatever they wish, if they meet the 
standards for punitive damages, themselves. So at that level, at least, 
this proposal is entirely unnecessary in a way that was not the case or 
not the argument just a few days ago in this bill.
  So even if Alabama is perverse enough to keep its law in its present 
peculiar fashion, this will not mean that there cannot not be any 
recovery in wrongful death cases. But if it is passed, we set one rule 
for Alabama in which everything is the sky is the limit in a State 
where the sky is higher already than it is in any other State in the 
Nation, and a quite different rule for 49 other States.
  Mr. President, that is absolutely unfair; that is profoundly unfair 
that this State, because of one peculiar rule, should be exempted from 
all of the rules which the great majority of Members here have said are 
appropriately applied to all of the States.
  Mr. SHELBY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SHELBY. Mr. President, I will be brief.
  I would just like to say again, I believe it was in 1852, the Alabama 
Supreme Court decreed that there would be, in a wrongful death action, 
punitive damages only, and that has worked in my State since 1852. That 
is one reason I oppose all of this legislation.
  Every State has different problems. Alabama, my State, is unique as 
far as measuring the wrongful death damages. They do it by punitive 
damages. It is not anything new. It goes back way over 100 years. But 
it has worked. It has worked for my State. This would only deal in 
wrongful death cases, nothing else. All we are asking the Senate to do 
is to preserve what we have and what we have had for over 100 years.
  Mr. HEFLIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. HEFLIN. Mr. President, I am rather surprised to hear my good 
friend from Washington, who has long been an advocate of federalism, 
come forward with language from the screaming Federal Eagle over States 
saying: ``Alabama, you change your law or else you don't get even 
peanuts.''
  In other words, this is federalism in reverse, the big Federal 
Government that we have heard so much about telling the Alabama 
Legislature and the Alabama courts, ``You change your law.'' Now you 
have preemption that takes place. This is a mandate as to whether a 
claimant is going to recover or not.
  I am rather surprised that we would hear that language coming from 
such a strong supporter of the concept of federalism. If the Federal 
Government is going to tell a State you do this or not, we usually give 
them a carrot or some type of incentive. But my colleague's position 
is, to me, an example of brute force--``you change your law or you're 
not going to be able to protect your people.''
  Then we have the additur provision pertaining to the judge. Clearly, 
that is unconstitutional. The Supreme Court of the United States, in 
the case of Dimick versus Schiedt, has already ruled on that issue. In 
practice what will occur is where an additur is made by the judge but 
the defendant does not want to accept the new amount, the defendant or 
defendants will request a new trial. However, that is what appeals are 
for--new trials.
  So, automatically a defendant will ask for a new trial if he does not 
like what the judge added to the judgment. If the judge, therefore, 
feels that the punitive damage award was inadequate, because the 
defendant's conduct was extremely egregious and the plaintiff's 
injuries were great, the judge could award additional punitive damages.
  In the normal course of events, when the judge adds that to the 
damage award, a defendant takes an appeal to reverse it where he could 
get a new trial. But, the punitive damages provisions of this bill give 
defendants the automatic opportunity to request a new trial.
  Well, what defendant is going to not take advantage of it? Every 
defendant is going to say, ``Give me a new trial. I can keep my money, 
draw interest on my money in the meantime, and delay a new trial for 2 
years.'' Therefore, if the overall award was $300,000, and if the judge 
added to it above the $250,000 cap that is in this bill, the defendant 
takes its $300,000 and draws interest or makes investments with it.
  Defendants are going to follow that course of action with the idea 
also that they have to go back to a new trial which means that every 
issue will have to be litigated all over again. There is not much to 
lose in following this course of action. So automatically you are going 
to find that every defendant is going to demand a new trial. What 
happens? A defendant knows he is not going to get any more than what 
was originally put in the judgment, the amount he put there. Then it 
comes back to the judge again and the judge says, ``Well, I believe 
that that conduct was so egregious and find this is a terrible case and 
that the defendant ought to be punished, and therefore, I will again 
make an additur.''
  What does the defendant say? ``Well, I have under this bill 
automatically a right to a new trial, and I demand a new trial.'' So 
the defendant delays it 2 more years, draws his interest, and makes his 
investments in the meantime.
  Then he goes back and retries it and gets the same judgment. Then the 
defendant says, ``All right, I'm going to take advantage of my 
opportunity for a new trial'' and receives a new trial. So the case is 
tried a third time and, finally, the plaintiff says, ``It doesn't make 
any difference what the judge adds, there is no way in the world that I 
can collect it, and I just have to give in, there is nothing I can 
do.'' The judge and the jury felt that defendant's conduct was 
egregious and met the extremely high standards of this bill. However 
there is no way under this language that a defendant can ever recover 
because instead of having the normal event of trying to reverse a case 
on appeal and have a new trial, the defendant just has an automatic 
right to a new trial on punitive damages.''
   When you think about it, the situation is just plain ridiculous. I 
think Alabama's legislature and its courts have the clear right to 
determine that its wrongful death statute is to be punitive in nature 
only, recognizing the sacredness and value of human life. The concept 
of federalism that every State has its right to choose its laws ought 
to respect that right of my state. But here we have the American 
Federal Government imposing, and intruding, and saying: ``All right, 
you can't recover for the death of an Alabamian or the death of a 
Washingtonian if you are traveling in Alabama or any other individual 
that might be there.''
  What we are asking is, let us allow federalism to prevail, and if the 
State of Alabama wants to, it can continue to recognize the validity of 
its wrongful death statute which is designed to protect its citizens by 
making it of a punitive nature only.
  I yield the floor.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Mr. President, very briefly on the subject. No, I say, 
Mr. President, nothing in this law limits the State of Alabama from 
providing unlimited compensatory damages in the case of wrongful death. 
It is Alabama that has said that it will not grant compensatory damages 
in the case of wrongful death, and Alabama 
 [[Page S6328]]  can change that at any time that it wants. Nothing in 
this bill puts any limit on compensatory damages awarded by courts in 
the State of Alabama for wrongful death; absolutely nothing.
  What this bill does do is to take a modest step toward bringing under 
a certain degree of control punitive damages with rules for small 
business, rules for larger organizations and an exception when a judge 
wishes to go above any of the latter limitation. That is all. This 
amendment seeks for a single State to be totally exempt from that rule, 
therefore, in the view of this Senator is wrong.
  Mr. President, I am going to suggest the absence of a quorum because 
it is my hope that we are about to reach a unanimous consent agreement 
on all of the rest of the amendments that are to be offered and perhaps 
a chance to vote on them all and on final passage of this bill the same 
time tomorrow and serve the convenience of our colleagues.
 And so I will do that in just a moment, though I do not want to limit 
anyone else having a right to say something.

  I do need to say two other things. First, with respect to this 
constant new trials for large punitive damage awards, the Senator from 
West Virginia considered that last night, worked with his friends and 
supporters on his side of the aisle on that subject last night and 
worked with staff on this side. We agreed to take that section or 
subsection out of the bill. Because of cloture rules, we can only do 
that by unanimous consent. Opponents of the bill--Senator Hollings--
have refused that unanimous consent.
  I am here publicly to assure all Members that it will not appear in 
any bill coming out of conference, because Senator Rockefeller and I 
have made that commitment. We will not bring back a conference report 
with that proposal in it. We wish that we could have the courtesy of 
such unanimous-consent agreement. But we cannot, and they are certainly 
operating under the rules. But it is not going to appear in any final 
bill. We can assure them of that.
  With that, Mr. President, hoping that we will soon be able to reach a 
unanimous-consent agreement about votes, I will suggest--I withhold 
that.
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. Mr. President, my distinguished colleague from 
Washington just made a very, very important point, one which he and I 
have already made in public at a press conference which we held several 
hours ago, and that is that we are, in spite of the fact that the 
Senator from South Carolina, my esteemed, cherished ranking member of 
the Commerce Committee--who is a very good friend and has been, and his 
wife and my wife for a long, long time--does not wish to give consent 
for us to be able to do this--I think with the idea being that if he 
does not give consent, then the chances that this bill would be less 
attractive to the White House would increase.
  Senator Gorton and I are trying to make this more attractive to the 
Members of the Senate, Members of the House, and the White House. But I 
have also taken the same blood oath that the Senator from Washington 
has, and that is that we are so committed in terms of the additur 
amendment that we will not come back from conference without its being 
in the proper condition, and that, in fact, if it does not come back 
from conference in the proper condition, as we said at our press 
conference, we will vote against a motion for cloture.
  I do not know how it is possible for any two floor managers to put 
anything in stronger terms, or to say anything with greater faith and, 
therefore, it grieves me very much that we will not be granted 
unanimous consent to do that here when we are being so direct and 
honest and forthright with our colleagues.
  There were just timing problems in terms of submitting this, or else 
the amendment would have been filed and could have been brought up as a 
matter of the order. Nevertheless, that was not done. The Senator from 
South Carolina does have the power to grant us unanimous consent, but 
he chooses not to do so.
  Mr. President, I also want to simply indulge my colleagues in a 
couple of thoughts, to make some comments on the discussion here about 
the section in the compromise now pending. We are there. It deals with 
punitive damages. No. 1, the whole section is the result of many, many 
months of negotiation and discussion on, in fact, how a product 
liability reform bill might best deal with the costs and the problems 
and the erratic nature which we all recognize is at play--punitive 
damages.
  I have tried to represent the Clinton administration's discomfort--
expressed discomfort--with the idea of imposing a flat cap on punitive 
awards, while accommodating the strong desires of Senators on both 
sides of the aisle to include some reform in this bill, to pursue the 
idea that the punishment impleaded in punitive damages should have some 
sense of connection, in fact, to the crime.
  I also have to say that in my own personal experience, I do not like 
to vote for caps. I am on the Finance Committee, and when medical 
malpractice was before us last year and there was a vote on a cap on 
noneconomic damages, I voted against it. I do not like caps. It has 
been my own personal purpose in which I have negotiated in good faith 
with Members of my own party and the other party to find a way to make 
sure that the cap would be uncapped. I think we have done that. The 
Senator from South Carolina knows that. And I say this with respect 
because he is within his rights and he is a very skilled legislator and 
a very good friend. I repeat that. He understands that we are, in fact, 
trying to improve the bill in a way which would appeal to virtually all 
Members on my side of the aisle, including, in fact, in truth, I 
believe the Senator from South Carolina himself, because it would be a 
better amendment with the judge additur provision refined and nobody 
could dispute that.
  It would be better than simply two times compensatory damages with an 
alternate ceiling of $250,000 because one can construe that--although 
one can never guess what noneconomic damages will be--one can construe 
that, in theory, to be a cap. So I have been trying my best in 
negotiating with both sides to try and get that out and have succeeded. 
I have some sense of accomplishment in that, which is now being put 
aside by the Senator from South Carolina.
  Mr. President, I also want to make a correction for the record 
regarding the discussions of the constitutionality of the judge additur 
provision in the Gorton-Rockefeller amendment.
  The judge additur provision in section 107 (b) of our amendment, as 
it exists now, creates a right to a new trial for defendants if they do 
not accept the additional punitive awards set by the judge. This 
provision was inserted to address a perceived constitutionality concern 
with the judge additur provision--perceived. Senator Gorton and I are 
now in agreement that this right to a new trial provision is in fact 
unnecessary to meet any constitutionality test.
  The Associate Attorney General, in several conversations with my 
staff, has asserted that he believes the judge additur provision in 
Senator Gorton's and my amendment is constitutional on its own--free 
standing--without the provision creating a right to a new trial for the 
defendant should the defendant object to an award which results from 
the judge additur provision.
  Indeed, the Department of Justice prepared a list of precedents and 
authorities for judicial determinations of the amount of punitive 
damages which I ask unanimous consent to have printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Authorities Which Support the Constitutionality of Requiring Judges To 
                Determine the Amount of Punitive Damages
                           some of the cases

       Tull versus United States, 481 U.S. 412 (1987), held it did 
     not violate the Seventh Amendment to have a judge determine 
     the amount of a civil penalty under the Clean Water Act. The 
     Supreme Court indicated that ``[n]othing in the Amendment's 
     language suggests that the right to jury trial extends to the 
     remedy phase of a civil trial.'' 481 U.S. 426 n.9. It also 
     reasoned that ``highly discretionary calculations that take 
     into account multiple factors are necessary in order to set 
     civil penalties * * * These are the kind of calculations 
     traditionally performed by judges.'' 481 U.S. at 427.
       Smith versus Printup, 866 P.2d 985 (Kan. 1993), upheld the 
     constitutionality of Kansas 
      [[Page S6329]]  Stat. Sec. 60-3701, which requires courts to 
     determine the amount of punitive damages. The Kansas Supreme 
     Court reasoned: ``Because a plaintiff does not have a right 
     to punitive damages, the legislature could, without 
     infringing upon a plaintiff's basic constitutional rights, 
     abolish punitive damages. If the legislature may abolish 
     punitive damages, then it also may, without impinging upon 
     the right to trial by jury, accomplish anything short of 
     that, such as requiring the court to determine the amount of 
     punitive damages * * *''
       Federal statutes. Various existing federal statutes require 
     judicial assessment of punitive damages. See Petroleum 
     Marketing Practices Act (PMPA), 15 U.S.C. Sec. 2805(d)(2); 
     Fair Credit Reporting Act, 15 U.S.C. Sec. 1681n(2); Patent 
     Act, 35 U.S.C. Sec. 284; Equal Credit Opportunity Act, 15 
     U.S.C. Sec. 1691e(b). None of these statutes has ever been 
     held unconstitutional See Swofford versus B & W, Inc., 336 
     F.2d 406 (5th Cir. 1964) (holding that plaintiffs in patent 
     action were not entitled to jury trial on issues of exemplary 
     damages).
       Courts have also upheld judicial determination of punitive 
     damages in a variety of other contexts. See, e.g., Tingely 
     Systems, Inc versus Norse Systems. Inc., 49 F.3d 93 (2d Cir. 
     1995) (holding that remittitur of jury verict was not 
     reversible error because judge was entiteld to determine 
     punitive damages under the Connecticut Unfair Trade Practices 
     Act).

                        SOME OF THE COMMENTATORS

       Dean Dorsey D. Ellis, Jr., Punitive Damages, Due Process, 
     and the Jury, 40 Ala. L. Rev. 975, 1005 (1989). (``Under a 
     traditional legal analysis, punitive damages are more 
     analogous to fines than to damages. The determination of the 
     appropriate amount of a fine is traditionally treated as a 
     question of law, hence an issue for the judge, and not a 
     question of fact for the jury. By analogy, the judge, not the 
     jury, should decide the amount of a punitive damage award * * 
     *'')
       Victor E. Schwartz & Mark A. Behrens, The American Law 
     Institute's Reports' Study on Enterprise Responsibility for 
     Personal Injury: A Timely Call for Punitive Damages Reform, 
     30 San Diego L. Rev. 263 (1993) (``Some critics have 
     challenged judicial assessment of punitive damages as a 
     violation of a defendant's right to jury trial under the 
     Seventh Amendment * * * This criticism is unlikely to hold up 
     if asserted in court. In the past, defendants in criminal 
     cases have challenged judges' activity in sentencing as a 
     violation of their Sixth Amendment right to a jury trial. The 
     Supreme Court, however, has held that no violation exists 
     because sentencing is not a determination of guilt or 
     innocence.* * *[A] criminal defendant's Sixth Amendment right 
     to trial by jury is given a broader scope than a civil 
     defendant or plaintiff's rights under the Seventh Amendment. 
     Thus, we believe that [judicial determination] is 
     constitutional under the Seventh Amendment.'')
       Robert W. Pritchard, The Due Process Implications of Ohio's 
     Punitive Damages Law A Change Must Be Made, 19 U. Dayton L. 
     Rev. 1207 (1994). (``Because assessing the amount of civil 
     penalties is not a fundamental element of the right to trial 
     by jury and because judges are better able to perform the 
     highly discretionary calculations of punitive damage 
     assessments, the statutory mandate of judicial assessment of 
     punitive damages awards is constitutional.''
       Colleen P. Murphy, Integrating the Constitutional Authority 
     of Civil and Criminal Juries, 61 Geo. Wash. L. Rev. 723 
     (1993). (``The Constitution should not be deemed to guarantee 
     jury calculation of punitive damages, just as it does not 
     guarantee jury participation in either civil penalty 
     assessment or in certain aspects of sentencing. Federal 
     courts therefore will not violate the Seventh Amendment if 
     they enforce legislation that * * * authorizes judges to 
     calculate awards.'')
       Jonathan Kagan, Toward a Uniform Application of Punishment: 
     Using the Federal Sentencing Guidelines as a Model for 
     Punitive Damage Reform, 40 U.C.L.A. 753, 767-68 (1993). 
     (``While it seems clear that there is a right for juries to 
     determine if plaintiffs have met their evidentiary burdens, 
     it seems clear whether this right extends to the calculation 
     of damages. The Supreme Court resolved this issue in Tull. It 
     held that the defendant was entitled to a jury trial on the 
     issue of liability, but not on the issue of civil damages.'')
       Stanley L. Amberg, Equivalent and Claim Construction: 
     Critical Issues En Banc in the Federal Circuit, P.L. Inst. 
     (1994) (``Consistent with the right under the Seventh 
     Amendment to have a jury determine entitlement to punitive 
     damages, * * * Congress may authorize judges to assess the 
     amount of punitive damages or civil penalties.'')

  Mr. ROCKEFELLER. This list sets the precedents and authorities 
supporting the constitutionality of requiring judges to determine the 
amount of punitive damages. And is therefore valuable information to be 
considered in this debate.
  I rely on the word and the integrity of the Associate Attorney 
General and his staff at the President's Justice Department. They 
believe, as I have indicated, that a freestanding judge additur 
provision as it is written in the Gorton-Rockefeller amendment, and we 
would like to modify it by striking section 107(b)(3)(C), passes 
constitutional muster. I have said that several times purposely.
  In my view, as an author of this legislation, that is sufficient 
authority to say that a severability amendment regarding additur is 
superfluous.
  To reiterate, relying on the Justice Department's determination that 
a judge additur provision is constitutional, I do not believe it is 
necessary to further amend this provision to sever the judge additur 
requirements of this bill in an effort to guard against a circumstance 
where this provision would be deemed unconstitutional. It will not be 
deemed unconstitutional for the reasons I have articulated.
  Mr. President, I just want to take this opportunity to make my 
colleagues aware that we have, in fact, addressed the concerns raised 
about constitutionality.
  The judge additur provision, coupled with the modification that 
strikes the defendant's right to a new trial, is a constitutional 
provision. Again, some of my colleagues on the other side of the aisle 
would like to add additional language which makes this particular 
provision severable, to make absolutely certain that the 
constitutionality of this bill will not be tested as a result of this 
provision.
  I have assured them, based upon my conversations with the Department 
of Justice and others, that their extra cautious approach is not 
required.
  In concluding, I cannot remember in the 10 years that I have been in 
the Senate where the two managers of different political persuasions 
have publicly said that they are so committed to rectifying something 
which is of concern to the Senator from South Carolina, to some of my 
colleagues, and to the White House; that the Senator from Washington 
has said, ``We will not come back from the conference with these 
provisions;'' and where the Senator from Washington this morning at a 
public press conference said that he would vote against the motion to 
invoke cloture, assuming that the conference report was filibustered. I 
share exactly that same view.
  I think that is pretty strong and dealing in good faith. We would 
like to hope that we can be dealt with in good faith also.
  Mr. President, I thank the presiding officer. I yield the floor.
  Mr. McCONNELL. Will the manager of the bill, Senator Gorton, yield 
for a question about a particular section of the bill?
  Mr. GORTON. Yes, I would be glad to do so.
  Mr. McCONNELL. I thank the Senator. The bill, at section 106, sets 
out a provision to hold individuals who misuse or alter a product 
accountable for any injury resulting from the misuse or alteration. 
This provision would allow for the reduction of damages based on such 
misuse or alteration.
  This section, at 106(b), also provides that this provision only 
supersedes State laws that do not already impose such apportioning of 
damages among responsible parties, including the injured party found to 
have misused or altered the product, is that not correct?
  Mr. GORTON. That is correct.
  Mr. McCONNELL. But, this apportioning of damages would only occur if 
the court has found the defendant liable for at least some portion of 
the plaintiff's injuries. In other words, if, under State law, the 
defendant has no liability, for example under the ``common knowledge'' 
doctrine, then this provision would not change that result. Am I 
reading this section correctly?
  Mr. GORTON. Indeed. Under the ``common knowledge'' doctrine the 
defendant is not held responsible for injuries to the plaintiff caused 
by the plaintiff's misuse of a product that is commonly known and 
recognized to be dangerous by ordinary users.
  Mr. McCONNELL. So, the Senator shares my understanding that this bill 
would not overturn the result in, for example, Friar v. Caterpillar, 
Inc., (539 So. 2d 509, La. App. 5th Cir., 1988) or Colson v. Allied 
Products Corp. (640 F.2d 5, 1981)? Those both involved situations in 
which the plaintiffs were injured using products that the courts found 
presented a danger of which plaintiffs were aware.
  Mr. GORTON. Yes. The Friar case involved a forklift and the Colson 
case involved the use of a lawnmower. In 
 [[Page S6330]]  both of those cases the courts held there was no duty 
to warn where the dangers are of common knowledge.
  Mr. McCONNELL. This basic principle is part of case law and it is 
also set forth in the Restatement of Torts, at section 402A, which I 
would like to include in the Record. The relevant part provides that 
defendants

       Are not required to warn with respect to products, or 
     ingredients in them, which are only dangerous, or potentially 
     so, when consumed in excessive quantity, or over a long 
     period of time, when the danger, or potentiality of danger, 
     is generally known and recognized. Again the dangers of 
     alcoholic beverages, are an example, as are also those foods 
     containing such substances as saturated fats, which may over 
     a period of time have a deleterious effect upon the human 
     heart.

  I thank my colleague for responding to my inquiries.
  Mr. GORTON. I am glad we clarified the meaning of section 106.
  Mr. HOLLINGS. Mr. President, I have been at the Budget Committee all 
afternoon, and so I have not been able to monitor all the nuances, but 
we are now hearing that reasoned objections need not be given to this 
provision because the distinguished Senators say that they are going to 
take care of this issue in conference.
  That could be. I have served on many a conference committee and I 
have learned that you are never able really to control it. Each Senator 
is given a vote, along with the House Members.
  Be that as it may, I will not give the reasons why I am concerned 
about this provision at this particular time, other than to say that I 
am also honestly objecting. I am courteously objecting. I do not know 
how to say it any better than that.
  When the proponents make a request, a unanimous-consent request, and 
assume that theirs is the only honest request, courteous request, and 
sincere request, and how they can be more honest, then that constrains 
me to stand and say that I am just as courteously objecting and 
honestly objecting as I know how to object. And I object.
  Mr. DOLE addressed the Chair.
  The PRESIDING OFFICER. The majority leader is recognized.

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