S6322 CONGRESSIONAL RECORD — SENATE May 9, 1995

The motion to lay on the table was

agreed to.

Mr. DOLE addressed the Chair.

The PRESIDING OFFICER. The Senator from Kansas.

Mr. DOLE. Mr. President, I ask unanimous consent to proceed as in morning business for the next 15 minutes.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOLE. I thank the Chair.

(The remarks of Mr. DOLE pertaining

to the introduction of S. 770 are located

in today’s RECORD under ‘‘Statements

on Introduced Bills and Joint Resolutions.’’)

Mr. DOLE. 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. GORTON. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. GORTON. Mr. President, I ask

unanimous consent that it be in order

for me to offer the amendment I have

in my hand which the Democrats have

also seen and it be in order notwithstanding the provisions of rule XXII.

This is the so-called additur fix amendment requested by the White House.

The PRESIDING OFFICER. Is there

objection?

Mr. HARKIN. Mr. President, on behalf of Senator HOLLINGS, I object.

The PRESIDING OFFICER. Objection is heard.

Mr. GORTON. Mr. President, I suggest the absence of a quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. HEFLIN. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. HEFLIN. Mr. President, during

the course of debate in discussing the

breadth of the products liability bill, I

mentioned that a nuclear power plant

or a component part thereof could be

included within the purview of the

products liability bill. I also stated

that maybe the bill might not cover a

nuclear power plant or a component

part thereof.

I, in effect, raise two issues: One

being the issue of pain and suffering,

and the other being the statute of

repose. In regard to these issues, I mention the Chernobyl melt-down.

Since that time, my office has been

contacted by reliable and informed individuals who feel that I misspoke on

this issue.

First, they say the difference between design and operation of the United States and Soviet plants make a

Chernobyl-style accident virtually impossible.

Second, they state that the bill

would not in any way prohibit compensation for injured parties in the

event of a nuclear accident regardless

of the time of the manufacture of the

plant or components. They particularly

point out that Congress has provided a

sure and certain recovery system for

any member of the public injured as a

result of a nuclear power plant accident—the Price-Anderson Act—and,

further, that Congress in 1988 increased

the amount of funds available for

claims to more than $6.8 billion and

pledged to review the situation in the

case of an accident where more funds

were needed to compensate the injured.

The nuclear power industry, I am told,

has willingly agreed to be assessed up

to $63 million against each licensed reactor in order to pay damage claims.

The nuclear power industry has met

this obligation to provide a clear and

reliable source of liability compensation when it is justified.

While I have not researched this

issue completely, I do find that following the case of Klick v. Metropolitan

Edison Co. (1986, CA3 Pa) 784 F2d 490,

which limited certain damages to an

‘‘extraordinary nuclear occurrence,’’

Congress did amend the Price-Anderson

Act to include a ‘‘nuclear incident.’’

In the exclusion clause of the products liability bill there is a statement

to the effect that the bill does not supersede any Federal law.

I have great confidence in the knowledge and reliability of the individuals

who have brought this to my attention,

and I would like to put the record

straight. I will continue to research

this matter; and if there is anything

different from what I have been told, I

will make it known to the Senate.

I yield the floor and suggest the absence of a quorum.

The PRESIDING OFFICER (Mr.

DEWINE). The clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. BURNS. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. BURNS. Mr. President, I ask

unanimous consent that I may be allowed to proceed as in morning business for the next 10 minutes.

The PRESIDING OFFICER. Without

objection, it is so ordered.

(The remarks of Mr. BURNS pertaining to the introduction of S. 768 are

printed in today’s RECORD under

‘‘Statements on Introduced Bills and

Joint Resolutions.’’)

Mr. BURNS. Mr. President, I suggest

the absence of a quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The legislative clerk proceeded to

call the roll.

Mr. BYRD. Mr. President, I ask unanimous consent that the order for the

quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

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
May 9, 1995 CONGRESSIONAL RECORD — SENATE 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
S6324 CONGRESSIONAL RECORD — SENATE May 9, 1995

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-theSenate 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 senseof-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 StatesCanada free trade agreements, to impartially adjudicate United StatesJapan 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
May 9, 1995 CONGRESSIONAL RECORD — SENATE 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
S6326 CONGRESSIONAL RECORD — SENATE May 9, 1995

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
May 9, 1995 CONGRESSIONAL RECORD — SENATE 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
S6328 CONGRESSIONAL RECORD — SENATE May 9, 1995

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
May 9, 1995 CONGRESSIONAL RECORD — SENATE S6329

Stat. § 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. § 2805(d)(2);

Fair Credit Reporting Act, 15 U.S.C.

§ 1681n(2); Patent Act, 35 U.S.C. § 284; Equal

Credit Opportunity Act, 15 U.S.C. § 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
S6330 CONGRESSIONAL RECORD — SENATE May 9, 1995

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.

UNANIMOUS CONSENT

AGREEMENTS

fMr. DOLE. Mr. President, I ask unanimous consent that notwithstanding

rule XXII, that the following amendments be the only remaining amendments in order to H.R. 956, and not be

in order after the hour of 11 o’clock

a.m. on Wednesday: Harkin, punitive

damages; Boxer, harm to women; Dorgan, punitive cap; Heflin-Shelby, Alabama wrongful death cases; Heflin, punitive damage insurance.

I ask unanimous consent that the

vote occur in relation to the ShelbyHeflin amendment number 693 at 9:45

a.m. on Wednesday, to be followed by a

vote on or in relation to the Harkin

amendment.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOLE. I further ask that following the disposition of the above listed

votes, if no other Senator on the list is

seeking recognition to offer their

amendment, the Senate proceed to the

adoption of the Coverdell-Dole substitute, as amended, the Gorton substitute, and the bill be advanced to

third reading without any intervening

action or debate.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOLE. I further ask that following third reading, the following Members be recognized for the following allotted times, to be followed immediately by a vote on H.R. 956, as amended:

Senator HEFLIN, followed by Senator

ROCKEFELLER, 15 minutes each; followed by Senator GORTON, 15 minutes;

followed by Senator HOLLINGS, 15 minutes; and followed by Senator LEVIN, 10

minutes.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOLE. Mr. President, I ask unanORDER TO PROCEED TO S. 534

fimous consent, and this has been

cleared by the Democratic leader, at 12

noon on Wednesday, May 10, the Senate

proceed to calendar 74, S. 534, the Solid

Waste Disposal Act.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. DOLE. Mr. President, I think

Senator HARKIN plans to offer his

amendment in about 20 minutes, at 7

o’clock. I am not certain whether the

amendments by Senator BOXER or DORGAN will be offered.

We have the agreement, in any event.

I want to thank my colleagues on both

sides of the aisle. This means no more

votes tonight. We can alert our colleagues but there will be debate on the

Harkin amendment, and I assume other

amendments if they want to be called

up. I thank the Chair.

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. ABRAHAM. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

Mr. ABRAHAM. I thank the Chair.

Mr. President, I rise this evening in

support of the product liability reform

bill now under consideration, and I

would like to just preface my remarks

by offering my compliments to the

bill’s managers for their tenacity in

sticking with this process as we have

moved through all the various perspectives to find a point of common agreement between 60 Members of the Senate. I think both Senator ROCKEFELLER

and Senator GORTON worked very effectively on this product liability reform

effort.

I believe the bill represents an excellent start at reforming our civil justice

system, a system that eats up over $300

billion a year in legal and court costs,

awards, and litigants’ lost time, not to

mention the loss to consumers and the

economy from higher prices for products, innovations and improvements

not on the market, and unnecessarily

high insurance costs.

By placing reasonable limitations on

punitive damages in product liability

suits, this legislation will begin the

process of reforming our litigation lottery without harming anyone’s right to

recover for damages suffered.

I am especially pleased that the bill

now includes a special provision limiting punitive damages for individuals

with assets of less than $500,000 and for

small businesses with fewer than 25

employees. This provision is modeled

on a proposal that Senator DEWINE and

I cosponsored and provides that the

maximum award against such individuals or entities is the lesser of $250,000

or twice compensatory damages.

Mr. President, no one benefits when

businesses go bankrupt because of arbitrary punitive damage awards. Small

businesses are particularly susceptible

to such problems as are the millions of

Americans employed by them.

The bill will also eliminate joint liability for noneconomic damages in

product liability cases. Thus the bill

would end the costly and unjust practice of making a company pay for all

damages when it is only responsible

for, say, 20 percent just because the

other defendants are somehow judgment proof.

The bill would replace the outmoded

joint liability doctrine with proportionate fault in which each defendant

would have to pay only the amount

necessary to cover the damage for

which he or she was responsible.

The bill also creates some important

limitations on the liability of sellers of

products generally as well as on the liability of suppliers of raw materials

critical to the production of lifesaving

medical devices.

These provisions go a good way toward restoring individual responsibility as the cornerstone of tort law. They

also recognize an important fact about

our legal system. Ultimately, in its

current form, it is profoundly

anticonsumer. By raising the prices of

many important goods, our legal system makes them unavailable to poor

individuals who cannot afford them

when an exorbitant tort tax has been

added. And in extreme cases our legal

system can literally lead to death or

misery by driving off the market drugs

that, if properly used, can cure terrible

but rare diseases or medical devices for

which raw materials are unavailable on

account of liability risks.

These are important reforms, Mr.

President; reforms that will increase

product availability, decrease prices

and save jobs.