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[Congressional Record Volume 141, Number 73 (Thursday, May 4, 1995)]
[Senate]
[Pages S6189-S6191]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                         PRODUCT LIABILITY BILL

  Mr. SPECTER. Mr. President, I have sought recognition to make a few 
comments on the pending product liability bill and the cloture votes 
which were taken today; that is, the vote to close off debate so that 
there could be a vote on the bill ultimately on final passage, with the 
rules of our body having unlimited debate and the rules of our Senate 
requiring there be 60 Senators join on what is called cloture to close 
off debate, and we had two such votes today. One was 46 in favor, 53 
against. The second was 47 in favor and 52 against. So it is obvious on 
the current State of the record, the Senate is long away from having 60 
votes to close off debate and move to a final decision on product 
liability.
  I think that when there are significant, really major, really 
fundamental changes to a system as profoundly important as the legal 
system in the United States, that it is a matter that requires very, 
very careful deliberation, and it is appropriate for the cloture route 
to be followed and for 60 votes to be required to pass legislation of 
this importance, of this far-reaching nature.
  Mr. President, I have stated on the floor of the Senate on a number 
of occasions that I believe that reforms are warranted on product 
liability, but I think they have to be very, very carefully crafted. I 
believe that after experience representing both plaintiffs and 
defendants in litigation and having had substantial experience in 
products liability litigation.
  The matter came up in the last Congress, and I voted for cloture at 
that time in the hopes that we could get a carefully crafted bill. I 
think that it is appropriate to have a bill which would provide for 
alternative dispute resolution, as is provided in the current 
legislation, to adopt the collateral source rule which is contested. 
But it provides that if an individual has bought insurance and has 
collected on his or her own insurance policy, then that individual 
cannot collect again in a lawsuit. The plaintiffs and the individuals 
and the consumers objected to collateral source rule on the ground that 
the individual has paid for it so that whatever benefit is received 
from the insurance policy ought not to be discounted for the defendant. 
But I think that on balance, given all the factors, that it is 
appropriate to limit that aspect of a plaintiff's recovery.
  I believe that it is worthwhile to have a tightening of the rules on 
frivolous lawsuits, and perhaps the frivolous lawsuit is really at the 
core of the litigation problem in America today, lawsuits which are 
brought without any real merit or without any real foundation.
  I think that if we could set the rules to discourage, to eliminate 
frivolous lawsuits, we would have really solved most of the problem 
that is present in the litigation system today, to stop lawsuits which 
are being brought where they do not have a real basis in fact and in 
law, where they are brought really to coerce settlements but not 
because the plaintiff has a real case.
  The distinguished Senator from Colorado, Senator Brown, offered an 
amendment to tighten up the rules on 
[[Page S6190]] frivolous lawsuits, and I supported that amendment.
  I think that there are things that can be done within the course of 
the pending legislation which would strengthen the hand of the 
defendants, such as the amendment offered by the distinguished Senator 
from Arizona, Senator Kyl, who wanted to have the same limitations on 
defendants as on plaintiffs on the alternative dispute resolution 
issue. He wanted to leave it up to the States, many of which have 
provisions on alternative dispute resolution--that is a fancy name for 
arbitration--where if a plaintiff failed to be reasonable, there could 
be sanctions on the plaintiff just as under the pending legislation. If 
the defendant is not reasonable, there can be sanctions on the 
defendant.
  I think that the distinguished Senator from Tennessee, Senator 
Thompson, offered a very important amendment to limit product liability 
to Federal cases. That is in accordance with the principle that we 
ought to allow States to make determinations and to have government 
closest to the people, a matter related to an issue which has been 
handled by, promoted by the distinguished Senator from Idaho, who now 
presides in the chair, Senator Kempthorne. He has been here only 2 
years and 4 months, if my mathematics are correct, and championed 
legislation to eliminate Federal mandates, having been the mayor of 
Boise, ID, and having seen the imposition of mandates coming from the 
Federal Government--may the Record show the distinguished Presiding 
Officer is nodding in the affirmative--really wanting to have 
government closest to the people, letting the mayors and State 
governments decide these issues so that when Senator Thompson offered 
the amendment, that it really ought to be a matter of federalism, and 
that is something which is very heavily emphasized in the Contract With 
America. I think that made good sense.
  When it comes to a few of the fundamental issues, Mr. President, I 
have grave reluctance to make very fundamental changes in the present 
system. One of those areas is on the matter of punitive damages. I do 
not think that we have really come to grips with the question of 
punitive damages in our debate.
  Punitive damages are set up as a form of punishment as the word 
``punitive'' says, when there is some egregious, willful, wanton 
misconduct on the part of the defendant which really has to be 
controlled in a civil contest. And a number of the cases that I brought 
to the floor to illustrate what this really means, where you have a 
matter like the notorious Pinto case, where the gas tank was in the 
rear of the car and exploded. As I recollect the figures, it would cost 
$11 apiece to modify that dangerous gas tank. Ford Motor Co. made a 
calculated decision, figuring out how many personal injury cases there 
would be, how many death cases and injury cases there would be, where 
the motorists and the passengers would burn up, and figured it out that 
it made dollars and cents, economic value to them, to pay the cost of 
litigation as opposed to correcting the car.
  On the Cutter blood case where it was shown that the defendant had 
knowledge that blood was being transmitted which contained AIDS, they 
made a calculation as to what it would cost to cure it and decided not 
to issue the warning and to have the blood circulated. That came to 
light, as in the Pinto case, by going into the records of the defendant 
and finding that out. Or the IUD case, where women were subjected to 
the IUD which caused infections, sterilization, and tremendous damages, 
although well known to the defendant company that that was a problem. 
Or the flammable pajama case. Because there had not been any standard 
set by the Federal Government, the manufacturer put out pajamas that 
they knew would become flammable, that is burn up, with very little 
provocation. Some of the cases put into the Record--one specifically 
that I recollect involved a case where the conduct of the defendant 
corporation was so aggravated that criminal charges were brought--
really, where you have a willful and malicious disregard for human life 
that constitutes malice and is sufficient to have a criminal 
prosecution for murder in the second degree.
  Some of the cases by big corporations, by big companies, on the cost 
benefit analysis as to what it would cost to leave the damaged product 
go on, those are present in many cases. They have been put into the 
Record. That is why it seems to me, Mr. President, that we really ought 
not to be making fundamental changes which would give a green light and 
a license to disregard the interests of the consumer. What we are 
really talking about is the interest of the consumer here, the interest 
of the general public in trying to weigh what is fair in terms of 
handling the issues of defendant companies.
  I am very concerned about American productivity and especially about 
the ability of small business to function. I am concerned about some 
who say, well, the claim is so large and the damages are so enormous, 
potentially, even though there is no merit, that we would be betting 
the business if we went to trial and therefore really intimidated and 
intimidated into a settlement.
  I filed an amendment which would limit recovery on punitive damages 
to 10 percent of the value of the company. I filed that amendment and I 
offered that as an alternative possibility, with some trepidation, 
frankly, because of a concern I have that if you limit punitive 
damages, it may be an incentive for somebody to be wantonly 
disregarding of the safety of others. It may be that the punitive 
damage issue could be further contained by analogy to the libel cases 
where, after a libel verdict is entered under a very tough standard of 
malice--New York Times versus Sullivan, Supreme Court of the United 
States. On appellate review, there is a de novo review, the Latin word 
which means a full review. It is not a matter limited to a decision on 
whether there is sufficient evidence to support the verdict of the 
jury.
  Customarily, in litigation, when the jury enters a verdict and there 
is an appeal taken, the appellate court, the reviewing court, will look 
to see if there is sufficient evidence to support the verdict of the 
jury. But in libel cases because of the interest in freedom of speech 
and the interest of limiting the liability of the media--newspapers, 
radio, television--there is a different standard. The standard is 
applied that the reviewing court will look at it fresh to decide if 
there is sufficient evidence so that we will have a check on the jury 
system if they are capricious or arbitrary or really out of line.
  Mr. President, I have expressed the same concern on changing the law 
on joint liability. And bear in mind that as the cases are built up on 
punitive damages or joint liability, they are built up by courts which 
have a very deliberate process, much more thoughtful process than the 
legislative process. When we have hearings, it is well known, 
frequently only one or two Senators are present. When we mark up the 
bill--that is, write it up--it is not really the essence of 
understanding of all of the provisions. On the issue of punitive 
damages, there are learned opinions by Justice Scalia, a known 
conservative writing on punitive damages, from the constitutional 
perspective, saying there is a constitutional basis for punitive 
damages and rejecting the claim that punitive damages ought to be 
overturned. That is in the context of whether there is a constitutional 
basis for it as opposed to a public policy determination, which would 
be up to the Congress.
  But those kinds of issues are considered and considered very 
carefully by the courts. I think, fairly stated, having been a party to 
the judicial process and legislative process, I say unequivocally the 
analysis given in the court is much more intricate and more thorough 
than we are able to do in the legislative process. But there are points 
where we ought to legislate. When the issue of joint liability comes 
up, I have been reluctant to disturb that.
  One of the cases which comes to my mind is the case involving the 
fatality of our distinguished and learned colleague, the late John 
Heinz, who was killed in April 1991 in a plane crash when he was riding 
in a charter plane and there was a noted problem with the landing gear, 
and they went by the airport and came away, and a helicopter owned by 
the Sun Oil Co. came by trying to observe, and there was a crash. The 
planes fell into a crowded school yard in suburban Philadelphia. There 
[[Page S6191]] were terrible injuries. If we had made changes in joint 
liability in that case, the children, some of whom were killed, and 
some of whom were badly burned, would not be able to recover fully.
  So when you have a case where there is joint liability and the issue 
is raised, why should a party who is only 50 percent liable pay the 
whole thing when the other party is insolvent, or under the current law 
has the full responsibility? The law has been established in that 
effect because joint liability is composed when there is substantial 
negligent conduct by the party which causes the injuries. If you have 
to balance the injustice of having one party only partially liable pay 
the full damages, where others are insolvent, it turns on who is going 
to bear the loss, the injured plaintiff, who is not at fault, as the 
children were not at fault in the air collision which took the life of 
Senator Heinz and others on the ground, and very serious burn injuries.
  I filed an amendment at the desk which would seek to limit, to an 
extent, joint liability. You hear about the cases where somebody is 
liable only for 1 or 2 percent and the parties liable for 98 or 99 
percent are insolvent and the party who is only peripherally involved 
has to pay the full verdict. It seems to me that perhaps something in 
the nature of 15 percent might be an appropriate cutoff. That joint 
liability would not attach if somebody were not liable beyond the 
extent of 15 percent.
  Mr. President, I offer these observations about ways that product 
liability could be crafted so that we could get legislation out of the 
Senate,
 where we might have a different standard on punitive damages to 
accommodate different review by the appellate courts to eliminate the 
really outlandish, runaway, or arbitrary jury verdicts, or limit it to 
the percentage of the net worth of the company--10 percent as I have 
suggested--so that a company, especially a small company, is not, in 
effect, intimidated or blackmailed into a settlement, because they 
cannot get the whole company. Or ways where we might have a limitation 
on joint liability.

  Mr. President, I have been in Congress, the Senate, since the 97th 
Congress, when we reported out a product liability bill from the 
Commerce Committee, Senator Kasten. It was a long time before the bill 
came to the floor after that.
  Last year, as I say, I voted for cloture, thinking we might get a 
bill. I believe that we could get a bill which would take significant 
steps, most emphatically, on the issues of frivolous lawsuits. So that 
in opposing cloture--on a vote, we have only 46 Senators who voted for 
cloture, 53 against; on the second vote, 47 voted for cloture as 
against 52 against, a long way from the 60 votes.
  I make these comments because I think that when we deal with the 
judicial system, it is not the plaintiff's trial bar which establishes 
these rules. These rules were established by the courts of the United 
States. As I say, I have been on both sides of the fence representing 
plaintiffs and defendants in personal injury cases.
  I think where we have so many, many cases of outlandish conduct where 
big companies put products on the market on a calculation that they 
would rather pay for the deaths and the damages than to make the 
correction, if we take punitive damages away, it is not a wise thing 
for the Congress to do.
  I do not think many of our colleagues understand that. After I talked 
about some of the cases, talked about the blood case with AIDS virus in 
it, being circulated by one of the big companies, and one of my 
colleagues said, ``That is awful,'' and I made the comment about it. 
They had not heard. I do not think they really have reached all of our 
Members.
  Usually, there is not more than one Senator present or two, one 
presiding, but the rule of this body is that these speeches are made 
and these presentations are made with not more than two or three or 
four Senators on the floor. Some are listening in their offices, but 
relatively few.
  These are matters, I think, which yet have to be considered. It is my 
hope that we can craft legislation which will be curative on some of 
the issues, especially that of frivolous lawsuits, which I think is at 
the core of the problem in our courts today. I thank the Chair for 
staying late. I yield the floor.

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