IB
106TH CONGRESS
2D SESSION
H. R. 2366
[Report No. 106–494, Part I]
To provide small businesses certain protections from litigation excesses and
to limit the product liability of nonmanufacturer product sellers.
IN THE HOUSE OF REPRESENTATIVES
JUNE 25, 1999
Mr. ROGAN (for himself, Mr. HOLDEN, Mr. BURR of North Carolina, and Mr.
MORAN of Virginia) introduced the following bill; which was referred to
the Committee on the Judiciary, and in addition to the Committee on
Commerce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned
FEBRUARY 7, 2000
Additional sponsors: Mr. NUSSLE, Mr. BAKER, Mr. CUNNINGHAM, Mr.
DEMINT, Mr. LEWIS of California, Mr. WELDON of Florida, Mr. RYUN
of Kansas, Mr. PITTS, Mr. TALENT, Mr. HILL of Montana, Ms. PRYCE
of Ohio, Mr. HOBSON, Mr. GOODE, Mr. MCCOLLUM, Mr. CANNON, Mr.
CONDIT, Mr. VITTER, Mr. SMITH of Texas, Mr. COMBEST, Mrs.
NORTHUP, Mr. WATKINS, Mr. STUMP, Mr. DAVIS of Virginia, and Mr.
WHITFIELD
FEBRUARY 7, 2000
Reported from the Committee on the Judiciary with an amendment and
ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
FEBRUARY 7, 2000
Referral to the Committee on Commerce extended for a period ending not
later than February 14, 2000
HR 2366 RH
[For text of introduced bill, see copy of bill as introduced on June 25, 1999]
A BILL
To provide small businesses certain protections from litiga-
tion excesses and to limit the product liability of non-
manufacturer product sellers.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Small Business Liability Reform Act of 2000’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—SMALL BUSINESS LAWSUIT ABUSE PROTECTION
Sec. 101. Findings.
Sec. 102. Definitions.
Sec. 103. Limitation on punitive damages for small businesses.
Sec. 104. Limitation on joint and several liability for noneconomic loss for small
businesses.
Sec. 105. Exceptions to limitations on liability.
Sec. 106. Preemption and election of State nonapplicability.
TITLE II—PRODUCT SELLER FAIR TREATMENT
Sec. 201. Findings; purposes.
Sec. 202. Definitions.
Sec. 203. Applicability; preemption.
Sec. 204. Liability rules applicable to product sellers, renters, and lessors.
Sec. 205. Federal cause of action precluded.
TITLE III—EFFECTIVE DATE
Sec. 301. Effective date.
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TITLE I—SMALL BUSINESS
LAWSUIT ABUSE PROTECTION
SEC. 101. FINDINGS.
Congress finds that—
(1) the defects in the United States civil justice
system have a direct and undesirable effect on inter-
state commerce by decreasing the availability of goods
and services in commerce;
(2) there is a need to restore rationality, cer-
tainty, and fairness to the legal system;
(3) the spiralling costs of litigation and the mag-
nitude and unpredictability of punitive damage
awards and noneconomic damage awards have con-
tinued unabated for at least the past 30 years;
(4) the Supreme Court of the United States has
recognized that a punitive damage award can be un-
constitutional if the award is grossly excessive in re-
lation to the legitimate interest of the government in
the punishment and deterrence of unlawful conduct;
(5) just as punitive damage awards can be gross-
ly excessive, so can it be grossly excessive in some cir-
cumstances for a party to be held responsible under
the doctrine of joint and several liability for damages
that party did not cause;
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(6) as a result of joint and several liability, enti-
ties including small businesses are often brought into
litigation despite the fact that their conduct may have
little or nothing to do with the accident or trans-
action giving rise to the lawsuit, and may therefore
face increased and unjust costs due to the possibility
or result of unfair and disproportionate damage
awards;
(7) the costs imposed by the civil justice system
on small businesses are particularly acute, since small
businesses often lack the resources to bear those costs
and to challenge unwarranted lawsuits;
(8) due to high liability costs and unwarranted
litigation costs, small businesses face higher costs in
purchasing insurance through interstate insurance
markets to cover their activities;
(9) liability reform for small businesses will pro-
mote the free flow of goods and services, lessen burdens
on interstate commerce, and decrease litigiousness;
and
(10) legislation to address these concerns is an
appropriate exercise of the powers of Congress under
clauses 3, 9, and 18 of section 8 of article I of the
Constitution of the United States, and the 14th
amendment to the Constitution of the United States.