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[Congressional Record Volume 141, Number 75 (Monday, May 8, 1995)]
[Senate]
[Pages S6236-S6237]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                         PRODUCT LIABILITY BILL

  Mr. SPECTER. I thank the Chair.
  Mr. President, I have sought recognition to comment about the pending 
legislation on products liability on which there is a cloture vote 
scheduled for 4 o'clock this afternoon, that is, a vote to cut off 
debate.
  As I have expressed in the prior debate, it is my view that it would 
be appropriate to have reform on product liability, providing the 
reform is very, very carefully crafted.
  As I have noted in previous speeches, I have represented both 
plaintiffs and defendants in personal injury cases. I had one large 
product liability case, which I litigated many years ago. Actually, it 
was ultimately settled. But the issue in the case concerning privity 
and coverage for a passenger in an [[Page S6237]] automobile was widely 
noted in the law reviews. I have therefore had occasion to do very 
extensive research in the area, although that was some substantial time 
ago.
  I believe that a very key provision for limiting frivolous lawsuits 
would be to tighten up the current mechanism to give greater authority 
under rule 11 to the judges who sit on those cases to try to influence 
or discourage frivolous lawsuits.
  My reading of the substitute amendment shows that the amendment 
offered by the distinguished Senator from Colorado, Senator Brown, an 
amendment which I supported and which I think would be of substantial 
help in discouraging frivolous litigation, and therefore a provision 
which I think ought to be in the bill, has been deleted.
  With respect to the issue of punitive damages, I am very reluctant to 
see the provisions of the current bill enacted into law, because there 
are so many cases which have been disclosed in product liability 
litigation where companies, major companies, have made a calculated 
determination that it is in their financial interest not to make 
repairs or changes, because the damages awarded in litigation will be 
lesser than the costs of making the modifications.
  Perhaps the most celebrated case--but there are many others like it--
is the Pinto case, where the gas tank was left in a very dangerous 
position in the rear of the car and resulted in explosions when there 
was impact, a very common kind of accident in automobile driving, rear-
end collisions.
  As a result of product liability litigation, it was disclosed that 
there was a memorandum in the files of the defendant company, Ford 
Motor Co., actually a letter to the National Highway Transportation 
Safety Administration, in which there was a computation as to what it 
would cost to pay damages for people injured or killed as a result of 
the placement of the gas tank, as to what it would cost to make the 
repairs. The calculated decision was not to make the repairs.
  And then you have the famous cases of IUD's made by A.H. Robins, in 
which it was known for a long period of time they would cause problems 
for women, such as infections and sterilization.
  There were blood cases with AIDS being transmitted, and a failure to 
take appropriate action. And there were the flammable pajamas. There 
have been many cases, some even resulting in criminal prosecutions. I 
discussed many of these cases last week.
  So on the current state of the record, my own sense is that there 
needs to be further refinement of the provision on punitive damages.
  The revised bill does contain an amendment offered by the 
distinguished Senator from Ohio, Senator DeWine, which would limit 
punitive damages to small businesses, and small businesses are defined 
as those having fewer than 25 employees or a net worth of under 
$500,000. It may be that this provision would go far beyond product 
liability cases and would affect all ranges of tort litigation, 
including medical malpractice cases. I do not know if that is the 
intent.
  It also may be that this amendment to protect small businesses does 
not bear a sufficient nexus to interstate commerce in affecting all 
tort cases, so that we may be legislating beyond our authority, as 
interpreted by the Supreme Court of the United States recently in the 
Lopez case. I think that is another matter which requires some 
amplification.
  I do believe that there is some limitation appropriate on punitive 
damages where small businesses are involved. I have heard the complaint 
that a defendant small business is often compelled to make a settlement 
that it would not make if it was not betting the business on it. I have 
filed a proposed amendment, and will refile it so it would survive 
postcloture, if cloture is invoked, so that the amendment will be on 
record to be considered, which would limit punitive damages to 10 
percent of the net worth of a business, so that there would not be a 
problem of betting the business in litigation.
  The substitute also deletes alternative dispute resolution, which I 
regret to see, because I think that is a way of eliminating many cases 
from the litigation process, by having alternative dispute resolution, 
which is a fancy name for arbitration or mediation. That is not present 
in the current bill.
  I express again the concern about totally eliminating joint liability 
for noneconomic damages as a Federal standard, where some States have 
elected to do that as a matter of States rights and others have not. I 
note again my support for the amendment offered by the distinguished 
Senator from Tennessee, Senator Thompson, which would have limited this 
bill to litigation in Federal courts, which would have been more in 
accordance with the mood of the Congress and the country now to let the 
States decide these matters for themselves.
  On the issue of joint liability, I am very sympathetic to the claim 
that some people or some defendants are in it, people or individuals or 
companies, to a very slight extent--maybe 1 percent--and they have the 
full responsibility for the verdict. I have filed another possible 
amendment which would limit joint liability for noneconomic damages if 
the defendant was not responsible for in excess of 15 percent of the 
injury, which I think would provide a better balance there.
  Again, I will comment about the case involving the death of our late 
colleague, Senator John Heinz, where there was a collision between a 
helicopter and the plane in which Senator Heinz was a passenger. The 
planes fell into a schoolyard where there were children on the ground, 
and some were killed and some were injured. Those victims could not 
have been compensated fully if joint liability had been eliminated.
  While it is always a difficult choice as to who will bear the loss, 
and difficult for some defendants who are involved to a lesser extent 
where other defendants are insolvent, but as between injured plaintiffs 
who are not responsible at all for what has happened and those who have 
been held liable and are subject to payment for joint liability, my own 
sense is that there ought not to be the total elimination of joint 
liability for noneconomic damages, which is the thrust of the present 
legislation.
  I am hopeful, Mr. President, that we can craft legislation which will 
make an improvement in product liability litigation. But on the current 
state of the record, I think the substitute still does not address the 
real needs of consumers and does not strike an appropriate balance 
between those who are sued and those who are bringing claims.
  I thank the Chair and I yield the floor.
  

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