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[Congressional Record Volume 141, Number 75 (Monday, May 8, 1995)]
[Senate]
[Pages S6231-S6232]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                           PRODUCT LIABILITY

  Mr. GRAMS. Mr. President, for the last 2 weeks we have had a serious 
debate over our Nation's broken liability system.
  We have heard stores from supporters of the plaintiff's bar who claim 
that manufacturers are putting products on the market with little 
regard for consumer safety.
  And we have also heard from supporters of manufacturers who have 
anecdotes of honest individuals who were sued for multimillion-dollar 
awards and settled out of court to avoid more costly legal fees, even 
when they were innocent.
  Later today or tomorrow, there will be an effort by supporters of 
product liability reform to end debate, but before we do that, I wanted 
to make sure this body heard comments from a few of my constituents
  An all-too-familiar story from America's small businesses is 
exemplified in a letter from Trade Mart Furniture's Jerry Johnson, a 
constituent from Rochester, MN.
  Jerry writes:

       I've experienced firsthand the effects of a frivolous 
     lawsuit. After two years of court appearances, legal fees and 
     countless hours, I won. It cost almost $10,000 to defend 
     myself. I thought the legal system was created to protect the 
     citizen, not the profiteer.

  Ann Hartman of Hartman Tree Farms in Victoria, MN, states, ``I am 
tired of seeing lawyers make so much money off the tragedies of 
others.''
  And a couple from Menahga, MN, who own Burkel Turkey Farms writes:

       The system now is a free-for-all for the money-hungry and 
     the lawyers. There are far too many people out there that 
     feel the system owes them something.
       We are at the mercy of dishonest people who are only out 
     for a buck. It's different if a person has a legitimate 
     claim, but something must be done to maintain a fair legal 
     system for the honest people of this world.

  Mr. President, these are just a few of the comments I have received 
throughout my tenure as a representative from Minnesota, and as a small 
businessman myself, I understand the effects of the threat of a 
potential lawsuit.
  The fact is that almost 90 percent of all U.S. companies can expect 
to be named in a product liability lawsuit. The present liability 
system costs Americans $300 billion a year and like most Americans, my 
Minnesota constituents are concerned about the devastating effects the 
liability system has on them.
  Recent polls continue to show strong support for liability reform: 83 
percent believe the present liability system has problems and should be 
improved, while 89 percent believe that ``too many lawsuits are being 
filed in America today.''
  Our current system benefits the lawyers and the dishonest. It treats 
both plaintiffs and defendants unfairly. Inconsistent laws force both 
sides to sacrifice time and money on unpredictable 
[[Page S6232]] litigation. Both consumers and manufacturers end up 
losers. Consumers lose because they receive inadequate compensation. 
Some estimates have shown that our tort system consumes 57 cents of 
every $1 awarded in lawsuits.
  In addition, consumers wait unreasonable amounts of time before they 
receive compensation, and often pay outrageous fees to their attorneys.
  Manufacturers lose because liability concerns stifle research and 
development.
  A recent survey showed that because of fear of litigation, 47 percent 
of companies had withdrawn products from the market; 25 percent had 
discontinued some kind of research; and 8 percent actually had laid off 
workers.
  In fact in 1 year alone, Texas lost 79,000 jobs due to the cost of 
the liability system.
  Each year there are more than 70,000 product liability lawsuits filed 
in the United States--yet Great Britain only has an average of 200.
  Now, this is only one of the reasons liability insurance costs are 20 
times higher in the United States than in Europe.
  As a result of this well-known liability gold-rush, the United States 
as a nation loses as well.
  According to the Product Liability Coordinating Committee, the cost 
of product liability ranges from $80 to $120 billion per year.
  These costs are passed directly on to you and me as consumers. 
Appropriately, this is known as the tort tax.
  For example, manufacturers of football helmets add $100 to the cost 
of a $200 helmet. Auto manufacturers add $500 to the price of a new 
car, and the markers of a $100 stepladder will add another $20 to its 
cost, just to cover potential liability.
  I know many of my colleagues have mentioned this, but I want to 
reiterate the fact that right here in Washington, DC, the Girl Scout 
Council must sell 87,000 boxes of Girl Scout cookies each year just to 
cover the cost of their liability insurance.
  In my own State of Minnesota, Attorney General Hubert Humphrey III, 
the son of Minnesota's great U.S. Senator, recently testified before 
the State legislature that his office spent $340,000 in 1994 defending 
Minnesota against frivolous lawsuits. Attorney General Humphrey offered 
a top-10 list of lawsuits from Minnesota inmates. These are just a few 
of the ridiculous claims that prisoners have filed:
  One prisoner claimed he had a constitutional right to a computer in 
his jail cell. One claimed that the President gave him a fungus.
  Another prisoner claimed underwear was not provided, and when it was 
provided, it was so tight that it constituted cruel and unusual 
punishment.
  If you think these lawsuits are laughable, try Mr. Humphrey's No. 1 
frivolous lawsuit: One prisoner claimed that his primary reason for 
filing a lawsuit was ``pure delight in spending taxpayers' money.'' I 
understand that suits like these may be rare. However, they typify the 
problems with our current system.
  The Gorton-Rockefeller Product Liability Fairness Act will address 
many of the problems faced by well-intentioned, honest manufacturers.
  This legislation will establish alternative dispute resolution, 
extend protection to product sellers, provide an absolute defense for 
injuries received when the plaintiff was under the influence of drugs 
or alcohol, and prevent automobile rental companies from being held 
liable for damages caused by the renters of its cars when the company 
is not at fault.
  In addition, the Gorton-Rockefeller bill will provide much-needed 
relief to suppliers of biomaterials.
 Currently, raw material suppliers who have no direct role in the raw 
material's ultimate use as a biomaterial share extraordinary and 
irrational liability risk with device manufacturers.

  Companies such as DuPont, Dow Chemical, and Dow Corning have decided 
to stop supplying manufacturers of medical devices with raw materials 
for fear of lawsuits. This legislation is progress, and is the first 
step in the right direction.
  While I am encouraged by the hard work of the Senators from 
Washington State and West Virginia, I am concerned that we may be 
opening up a new can of worms, when this legislation is signed into 
law.
  While it will offer protection for product manufacturers, my fear is 
that it will leave the service industry as the only remaining deep 
pocket.
  I believe the Senate should continue moving forward to reform our 
liability system, making sure that individuals who deserve compensation 
are made whole and that individuals who are not at fault are not held 
liable for someone else's actions.
  Mr. President, we should take this historic opportunity today to 
approve the Product Liability Fairness Act, and in doing so ensure that 
our liability system is fair to all parties involved, not just those 
who are looking for their golden nugget in the liability gold-rush.

                          ____________________
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