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[Congressional Record Volume 141, Number 76 (Tuesday, May 9, 1995)]
[Senate]
[Pages S6297-S6299]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                   THE PRODUCT LIABILITY FAIRNESS ACT

  Mr. LEVIN. Madam President, the bill that we will be voting on later 
this morning is called the Product Liability Fairness Act of 1995. One 
of the arguments for it is that we need uniformity in a tort system. As 
a matter of fact, Madam President, the bill is carefully structured to 
authorize States to diverge from these standards in order to provide 
more favorable treatment to defendants than the bill provides, but the 
bill prohibits States from providing more favorable treatment to 
plaintiffs.
  In other words, this bill does not provide us with uniformity. When 
we look down the provisions in the bill, we will see in a moment that 
the bill does not assure that there will be a uniform application of 
these provisions to all plaintiffs and all defendants. The bill 
prohibits a State law attempting to provide more favorable treatment to 
those who have been injured, but it allows State laws that are more 
favorable to those who allegedly cause the injury.
  Now there is a reasonable argument for uniformity in product 
liability law, since many products are sold across State lines. But, 
this bill does not provide that uniformity. States can be more 
restrictive than the so-called national standards in the bill. A 
patchwork of State laws is still permitted, provided that the 
divergences are in the direction of greater restriction on the injured 
party.
  For instance, the bill contains a so-called statute of repose barring 
any product liability action against a manufacturer of a product that 
is more than 20 years old. This provision prohibits States from 
providing a longer period for those who are injured. But the bill 
expressly authorizes States to adopt a shorter and more restrictive 
period in order to benefit defendants.
  Similarly, the bill contains standards for the imposition of punitive 
damages, but the provision by its own terms only applies to the extent 
that punitive damages are permitted by State law. The committee report 
states that:

       It is not the committee's intention that this act preempt 
     State legislation or any other rule of State law that 
     provides for defenses or places limitations on the amount of 
     damages that may be recovered.

  In other words, if a State has more lenient standards for the award 
of punitive damages, the bill overrides those 
 [[Page S6298]]  standards--States cannot do that--but if a State has 
more restrictive standards, lower caps, additional limitations, or even 
bars punitive damages altogether, that is allowed by this bill.
  While I am on the topic of punitive damages, I would like to point 
out that the so-called fix adopted by the Gorton-Rockefeller substitute 
is, in fact, no fix at all. Punitive damages would be capped under the 
substitute as they are capped by the underlying bill. The substitute 
limits the punitive damages that maybe awarded by a jury at two times 
compensatory damages, or $250,000, whichever is greater. The substitute 
then purports to authorize judges to increase punitive damages in cases 
where a jury award is ``insufficient to punish the egregious conduct of 
the defendant.''
  But, Madam President, the authority under this substitute we will be 
voting on, which is given to the judge, is an illusion. Because if the 
defendant objects to the increased damages, he or she is entitled to a 
new trial on the subject of punitive damages. Judgment is not entered 
on liability or damages until the completion of the new trial. So the 
plaintiff cannot get a dime until after the new trial is completed.
  Nothing in the substitute indicates that the judge's decision to 
increase the punitive damages award may be considered at this new 
trial. Nothing in the substitute indicates that the caps on punitive 
damages would be waived at the new trial. So it even appears that the 
same old caps may apply.
  Under these circumstances, what defendant would not insist on a new 
trial on punitive damages? And what plaintiff would be willing to 
forego all compensatory damages while awaiting a new trial on the 
subject of punitive damages?
  Those of my colleagues who favor punitive damage caps should feel 
very comfortable indeed voting for cloture on this substitute. But 
those who oppose caps should be forewarned. The caps in this substitute 
are every bit as real as the caps in the underlying bill.
  Back to the uniformity issue. These are one-way limits.
  This chart shows which State laws would be prohibited and which would 
be allowed. Categories of State laws that would be prohibited are shown 
in red. Categories of State laws that would be allowed are shown in 
green. In the left-hand column, we see that every single type of State 
law that would be more favorable to the injured party is prohibited. 
Every State law that would vary from the so-called standard in order to 
benefit a plaintiff in any of the areas covered by this bill is 
prohibited by the bill; it is preempted. But in the right-hand column, 
we see that, with one exception, State law provisions that are more 
favorable to defendants are allowed.
  We have heard a lot of talk about the need for national standards for 
product liability. But what this chart shows is that where the bill 
provides true national standards, it is only where plaintiffs are 
prohibited from gaining the benefit of any State law that varies from 
the so-called standard. But with one exception, State laws are allowed 
to vary from the so-called standard and to have more restrictive rules 
that benefit the defendant.
  These are not national standards. These are one-way rules that limit 
only plaintiffs, and if defendants are able to get more restrictive 
laws passed by the States, they will not restrict defendants.
  Let us look at one example of how this one-way preemption provision 
would work. The bill would override State laws that provide joint and 
several liability for noneconomic damages. Joint and several liability 
is the doctrine under which any one defendant may be held responsible 
for 100 percent of the damages in a case, even if other wrongdoers also 
contributed to the injury.
  The sponsors of this bill, and this amendment, have pointed out that 
there are problems with joint and several liability. In some cases, a 
defendant who has only a marginal role in causing the damage ends up 
holding the bag for all of the damages. That does not seem fair.
  On the other hand, there are good reasons for the doctrine of joint 
and several liability. Cause and effect often cannot be assigned on a 
percentage basis with accuracy. There may be many causes of an event, 
the absence of any one of which would have prevented the event from 
occurring. Because the injury would not have occurred without each of 
these so-called but-for causes, each is, in a very real sense, 100 
percent responsible for the resulting injury.
  This bill, however, does not recognize that in the real world, 
multiple wrongdoers may each be a cause of the same injury. It insists 
that responsibility be portioned out, with damages divided up into 
pieces, and the liability of each defendant limited to a single piece. 
Under this approach, the more causes the event can be attributed to, 
the less each defendant will have to pay.
  Unless the person who has been injured can successfully sue all 
parties who contributed to the injury, he or she will not be 
compensated for his entire loss. The real world result is that
 most plaintiffs will not be made whole, even if they manage to 
overcome the burdens of our legal system and prevail in court. Would it 
not be more fair to say that the wrongdoers, each of whom caused the 
injury, should bear the risk that one or more of them might not be able 
to pay its share than it is for the injured party to be only partially 
compensated for his or her loss?

  The bill before us completely ignores the complexity of this issue 
with its one-way approach to Federal preemption. States which are more 
favorable to defendants are allowed to retain their laws. But State 
laws that try to reach a balanced approach between plaintiffs and 
defendants would be preempted.
  Roughly half the States choose to protect the injured party through 
the doctrine of joint and several liability. Another half dozen States 
have adopted creative approaches to joint and several liability, 
seeking to balance the rights of plaintiffs and defendants.
  Let me give you a few examples.
  Louisiana law provides joint and several liability only to the extent 
necessary for the plaintiff to recover 50 percent of damages; there is 
no joint and several liability at all in cases where the plaintiff's 
contributory fault was greater than the defendant's fault.
  Mississippi law provides joint and several liability only to the 
extent necessary for the plaintiff to recover 50 percent of damages, 
and for any defendant who actively took part in the wrongdoing.
  New Jersey law provides joint and several liability in the case of 
defendants who are 60 percent or more responsible for the harm; joint 
and several liability for economic loss only in the case of defendants 
who are 20 to 60 percent responsible; and no joint and several 
liability at all for defendants who are less than 20 percent 
responsible.
  New York law provides joint and several liability for defendants who 
are more than 50 percent responsible for the harm; joint and several 
liability is limited to economic loss in the case of defendants who are 
less than 50 percent responsible.
  South Dakota law provides that a defendant that is less than 50 
percent responsible for the harm caused to the claimant may not be 
liable for more than twice the percentage of fault assigned to it.
  Texas law provides joint and several liability only for defendants 
who are more than 20 percent responsible for the harm caused to the 
claimant.
  All of these State laws are efforts to address a complex problem in a 
balanced manner, with full recognition of factors unique to the State. 
Because they are all more favorable to the injured party than the 
approach adopted in this bill, however, they would all be prohibited.
  Perhaps this is one reason why the National Conference of State 
Legislatures opposes this bill. As the NCSL explains:

       Tort law traditionally has been a state responsibility, and 
     the imposition of federal products standards into the complex 
     context of state tort law would create confusion in state 
     courts. Without imposing one-size-fits-all federal standards, 
     states may act on their own initiative to reform product 
     liability law in ways that are tailored to meet their 
     particular needs and that fit into the context of existing 
     state law.
       The proponents of S. 565 want Washington to dictate the 
     legal standards and evidentiary rules that fifty state court 
     systems use to adjudicate injury disputes involving
      allegedly defective products. There is no precedent for such 
     congressional imposition of federal rules by which state 
     courts will be forced to decide civil disputes.
        [[Page S6299]] For NCSL, the question is not which tort 
     reforms are appropriate, but who makes that decision. The 
     issue is who has responsibility for state civil justice. This 
     is a federalism issue of major consequence. It should not be 
     ignored.

  Madam President, what kind of national standard is it that prohibits 
State laws only when they are more favorable to plaintiffs than Federal 
law and not when they vary from Federal law to favor defendants? What 
kind of fairness bill is it that contains such a blatant double 
standard?
  Madam President, the bill before us is called the Product Liability 
Fairness Act of 1995. If you read the title, it sounds pretty good. Who 
could be against bringing greater fairness to our product liability 
system, or to our legal system in general?
  There is a list of problems in our legal system that we could all go 
through. Going to court takes too much time and it costs too much 
money. There are many stories of plaintiffs winning what seem like 
absurdly high verdicts or, on the other hand, being denied a day in 
court by defendants with deep pockets who engage in such hard-ball 
tactics as investigations into the private lives of plaintiffs, 
grueling depositions, unreasonable requests for medical and 
psychological histories of plaintiffs, and multiple motions to dismiss.
  As Senator Gorton, one of the lead authors of the bill before us, 
explained at the outset of this debate:

       [T]he victims of this system are very often the claimants, 
     the plaintiffs themselves, who suffer by the actual 
     negligence of a product manufacturer, and frequently are 
     unable to afford to undertake the high cost of legal fees 
     over an extended period of time. Frequently, they are forced 
     into settlements that are inadequate because they lack 
     resources to pay for their immediate needs, their medical and 
     rehabilitation expenses, their actual out-of-pocket costs.
        In 1989, a General Accounting Office study found that on 
     average, cases take 2\1/2\ to 3 years to be resolved, and 
     even longer when there is an appeal. One case studied by the 
     GAO took 9\1/2\ years to move through our court system. In 
     one of many hearings held on this issue over the years, 
     University of Virginia law professor Jeffrey O'Connell 
     explained, and I quote him: ``If you are badly injured in our 
     society by a product and you go to the highly skilled lawyer, 
     in all honesty the lawyer cannot tell you what you will be 
     paid, when you will be paid or, indeed, if you will be 
     paid.''

  Senator Gorton concluded his thought as follows:

       Uncertainty in the present system is a reason for change. 
     Plaintiffs, those injured by faulty products, need quicker, 
     more certain recovery--recovery that fully compensates them 
     for their genuine losses. Defendants, those who produced the 
     products, need greater certainty as to the scope of their 
     liability.

  I agree with Senator Gorton that there is unfairness in our current 
legal system. There is unfairness to defendants in some cases, and 
there is unfairness to plaintiffs. However, this bill does not address 
the problems faced by plaintiffs at all. There is virtually nothing in 
this bill to assist those who have been hurt by defective products and 
face the difficult burdens of trying to recover damages through our 
legal system.
  For instance, this bill does nothing to address the hardball 
litigation tactics used by some defendants in product liability cases, 
such as excessive investigations, depositions, and motions practice 
that often mars such litigation. It does nothing to help bring to 
public light documents revealing defendants' knowledge of product 
defects, or to shorten the time required to litigate these cases and 
obtain relief.
  Instead this bill would limit the money that can be recovered by 
plaintiffs who manage to navigate the hazards of our legal system and 
provide in court that they were hurt by defective products. The bill 
contains any number of provisions addressing compensation to plaintiffs 
which is too high, but not a single provision addressing the cases in 
which, as the sponsors themselves acknowledge, compensation is too low.
  This bill is not balanced, it is not uniform, and I cannot support 
it.
  Madam President, if I have any additional time remaining, I will be 
happy to yield to the Senator from Alabama.
  Mr. HEFLIN. Madam President, I only want to speak briefly right now 
relative to this matter. I think the Senator from Michigan has covered 
the issue on additur very adequately.
  In the case of Dimick versus Schiedt, a 1935 Supreme Court case, the 
High Court ruled that the district court lacked the power to deny a 
plaintiff a new trial, sought on the ground that the jury award of 
damages was too low, when the trial court judge proposed to increase 
the damages and the defendant had consented in order to avoid a new 
trial. The Supreme Court held that the power to increase a damage 
award, known as an additur, was a violation of the right of trial by 
jury. According to the Court, the amount of damages must be determined 
by juries, not judges, in the Federal court, subject to the right of 
courts to set aside jury awards that are clearly excessive. Some State 
courts have held that additur violates their State's constitution as 
well.
  That is the major point that I want to make on this issue. Senator 
Levin mentioned this matter pertaining to the lack of uniformity.
  I want to also point out that all State courts under the bill and the 
substitute--any of the substitutes--are to accept as binding precedents 
in the construing act, the decision of a Federal court of appeals 
covering this mandate.
  This mandate, in my judgment, is clearly unconstitutional and 
contrary to article III of section 1 of the Constitution, which 
provides that the judicial power of the United States shall be vested 
in one Supreme Court, which has always been construed to mean that 
State courts must follow the decisions of the Supreme Court and not the 
lower Federal courts.
  With the addition of the punitive damage additur provision in the 
substitute, there is an expansion by Congress of an extraordinary 
nature to encroach on the power of the State courts. Rules concerning 
the use of additur and remittitur have always been left to the State 
courts, as have also every other State rule of civil procedure.
  I just wanted to mention that. I think there are others who are 
desiring to speak. I yield the floor at this time.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Pennsylvania is recognized to speak up to 10 minutes.
  Mr. GLENN. Parliamentary inquiry. Is there a 5-minute limit on 
speeches this morning?
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Pennsylvania has been allocated 10 minutes to speak, after which there 
is a 10:30 a.m. vote.
  Mr. GLENN. I thank the Chair.
  Mr. SANTORUM. Madam President, I yield 5 minutes of my time to the 
Senator from Oklahoma.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.

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