H. R. 956—9
section (a) or (b) shortens the period during which a product liability
action could be otherwise brought pursuant to another provision
of law, the claimant may, notwithstanding subsections (a) and (b),
bring the product liability action not later than 1 year after the
date of enactment of this Act.
SEC. 107. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES.
(a) SERVICE OF OFFER.—A claimant or a defendant in a product
liability action may, not later than 60 days after the service of—
(1) the initial complaint; or
(2) the applicable deadline for a responsive pleading;
whichever is later, serve upon an adverse party an offer to proceed
pursuant to any voluntary, nonbinding alternative dispute resolu-
tion procedure established or recognized under the law of the State
in which the product liability action is brought or under the rules
of the court in which such action is maintained.
(b) WRITTEN NOTICE OF ACCEPTANCE OR REJECTION.—Except
as provided in subsection (c), not later than 10 days after the
service of an offer to proceed under subsection (a), an offeree shall
file a written notice of acceptance or rejection of the offer.
(c) EXTENSION.—The court may, upon motion by an offeree
made prior to the expiration of the 10-day period specified in
subsection (b), extend the period for filling a written notice under
such subsection for a period of not more than 60 days after the
date of expiration of the period specified in subsection (b). Discovery
may be permitted during such period.
SEC. 108. UNIFORM STANDARDS FOR AWARD OF PUNITIVE DAMAGES.
(a) GENERAL RULE.—Punitive damages may, to the extent per-
mitted by applicable State law, be awarded against a defendant
if the claimant establishes by clear and convincing evidence that
conduct carried out by the defendant with a conscious, flagrant
indifference to the rights or safety of others was the proximate
cause of the harm that is the subject of the action in any product
liability action.
(b) LIMITATION ON AMOUNT.—
(1) IN GENERAL.—The amount of punitive damages that
may be awarded in an action described in subsection (a) may
not exceed the greater of—
(A) 2 times the sum of the amount awarded to the
claimant for economic loss and noneconomic loss; or
(B) $250,000.
(2) SPECIAL RULE.—Notwithstanding paragraph (1), in any
action described in subsection (a) against an individual whose
net worth does not exceed $500,000 or against an owner of
an unincorporated business, or any partnership, corporation,
association, unit of local government, or organization which
has fewer that 25 full-time employees, the punitive damages
shall not exceed the lesser of—
(A) 2 times the sum of the amount awarded to the
claimant for economic loss and noneconomic loss; or
(B) $250,000.
For the purpose of determining the applicability of this para-
graph to a corporation, the number of employees of a subsidiary
or wholly-owned corporation shall include all employees of a
parent or sister corporation.
H. R. 956—10
(3) EXCEPTION FOR INSUFFICIENT AWARD IN CASES OF EGRE-
GIOUS CONDUCT.—
(A) DETERMINATION
BY
COURT.—If the court makes
a determination, after considering each of the factors in
subparagraph (B), that the application of paragraph (1)
would result in an award of punitive damages that is
insufficient to punish the egregious conduct of the defend-
ant against whom the punitive damages are to be awarded
or to deter such conduct in the future, the court shall
determine the additional amount of punitive damages
(referred to in this paragraph as the ‘‘additional amount’’)
in excess of the amount determined in accordance with
paragraph (1) to be awarded against the defendant in a
separate proceeding in accordance with this paragraph.
(B) FACTORS FOR CONSIDERATION.—In any proceeding
under paragraph (A), the court shall consider—
(i) the extent to which the defendant acted with
actual malice;
(ii) the likelihood that serious harm would arise
from the conduct of the defendant;
(iii) the degree of the awareness of the defendant
of that likelihood;
(iv) the profitability of the misconduct to the
defendant;
(v) the duration of the misconduct and any concur-
rent or subsequent concealment of the conduct by the
defendant;
(vi) the attitude and conduct of the defendant upon
the discovery of the misconduct and whether the mis-
conduct has terminated;
(vii) the financial condition of the defendant; and
(viii) the cumulative deterrent effect of other
losses, damages, and punishment suffered by the
defendant as a result of the misconduct, reducing the
amount of punitive damages on the basis of the eco-
nomic impact and severity of all measures to which
the defendant has been or may be subjected, includ-
ing—
(I) compensatory and punitive damage awards
to similarly situated claimants;
(II) the adverse economic effect of stigma or
loss of reputation;
(III) civil fines and criminal and administra-
tive penalties; and
(IV) stop sale, cease and desist, and other
remedial or enforcement orders.
(C) 
REQUIREMENTS
FOR
AWARDING
ADDITIONAL
AMOUNT.—If the court awards an additional amount pursu-
ant to this subsection, the court shall state its reasons
for setting the amount of the additional amount in findings
of fact and conclusions of law.
(D) PREEMPTION.—This section does not create a cause
of action for punitive damages and does not preempt or
supersede any State or Federal law to the extent that
such law would further limit the award of punitive dam-
ages. Nothing in this subsection shall modify or reduce
the ability of courts to order remittiturs.
H. R. 956—11
(4) APPLICATION
BY
COURT.—This subsection shall be
applied by the court and application of this subsection shall
not be disclosed to the jury. Nothing in this subsection shall
authorize the court to enter an award of punitive damages
in excess of the jury’s initial award of punitive damages.
(c) BIFURCATION AT REQUEST OF ANY PARTY.—
(1) IN GENERAL.—At the request of any party the trier
of fact in any action that is subject to this section shall consider
in a separate proceeding, held subsequent to the determination
of the amount of compensatory damages, whether punitive dam-
ages are to be awarded for the harm that is the subject of
the action and the amount of the award.
(2) INADMISSIBILITY OF EVIDENCE RELATIVE ONLY TO A CLAIM
OF PUNITIVE DAMAGES IN A PROCEEDING CONCERNING COMPEN-
SATORY DAMAGES.—If any party requests a separate proceeding
under paragraph (1), in a proceeding to determine whether
the claimant may be awarded compensatory damages, any evi-
dence, argument, or contention that is relevant only to the
claim of punitive damages, as determined by applicable State
law, shall be inadmissible.
SEC. 109. 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 108, but only during such time
as the State law so provides. This section shall cease to be effective
September 1, 1996.
SEC. 110. SEVERAL LIABILITY FOR NONECONOMIC LOSS.
(a) GENERAL RULE.—In a product liability action, the liability
of each defendant for noneconomic loss shall be several only and
shall not be joint.
(b) AMOUNT OF LIABILITY.—
(1) IN GENERAL.—Each defendant shall be liable only for
the amount of noneconomic loss allocated to the defendant
in direct proportion to the percentage of responsibility of the
defendant (determined in accordance with paragraph (2)) for
the harm to the claimant with respect to which the defendant
is liable. The court shall render a separate judgment against
each defendant in an amount determined pursuant to the
preceding sentence.
(2) PERCENTAGE OF RESPONSIBILITY.—For purposes of deter-
mining the amount of noneconomic loss allocated to a defendant
under this section, the trier of fact shall determine the percent-
age of responsibility of each person responsible for the claim-
ant’s harm, whether or not such person is a party to the
action.
SEC. 111. WORKERS’ COMPENSATION SUBROGATION.
(a) GENERAL RULE.—
(1) RIGHT OF SUBROGATION.—
(A) IN
GENERAL.—An insurer shall have a right of
subrogation against a manufacturer or product seller to
recover any claimant’s benefits relating to harm that is
the subject of a product liability action that is subject
to this Act.
H. R. 956—12
(B) WRITTEN NOTIFICATION.—To assert a right of sub-
rogation under subparagraph (A), the insurer shall provide
written notice to the court in which the product liability
action is brought.
(C) INSURER NOT REQUIRED TO BE A PARTY.—An insurer
shall not be required to be a necessary and proper party
in a product liability action covered under subparagraph
(A).
(2) SETTLEMENTS AND OTHER LEGAL PROCEEDINGS.—
(A) IN GENERAL.—In any proceeding relating to harm
or settlement with the manufacturer or product seller by
a claimant who files a product liability action that is subject
to this Act, an insurer may participate to assert a right
of subrogation for claimant’s benefits with respect to any
payment made by the manufacturer or product seller by
reason of such harm, without regard to whether the pay-
ment is made—
(i) as part of a settlement;
(ii) in satisfaction of judgment;
(iii) as consideration for a covenant not to sue;
or
(iv) in another manner.
(B) WRITTEN
NOTIFICATION.—Except as provided in
subparagraph (C), an employee shall not make any settle-
ment with or accept any payment from the manufacturer
or product seller without written notification to the insurer.
(C) EXEMPTION.—Subparagraph (B) shall not apply in
any case in which the insurer has been compensated for
the full amount of the claimant’s benefits.
(3) HARM
RESULTING
FROM
ACTION
OF
EMPLOYER
OR
COEMPLOYEE.—
(A) IN GENERAL.—If, with respect to a product liability
action that is subject to this Act, the manufacturer or
product seller attempts to persuade the trier of fact that
the harm to the claimant was caused by the fault of the
employer of the claimant or any coemployee of the claimant,
the issue of that fault shall be submitted to the trier
of fact, but only after the manufacturer or product seller
has provided timely written notice to the insurer.
(B) RIGHTS OF INSURER.—
(i) IN GENERAL.—Notwithstanding any other provi-
sion of law, with respect to an issue of fault submitted
to a trier of fact pursuant to subparagraph (A), an
insurer shall, in the same manner as any party in
the action (even if the insurer is not a named party
in the action), have the right to—
(I) appear;
(II) be represented;
(III) introduce evidence;
(IV) cross-examine adverse witnesses; and
(V) present arguments to the trier of fact.
(ii) LAST ISSUE.—The issue of harm resulting from
an action of an employer or coemployee shall be the
last issue that is submitted to the trier of fact.
(C) REDUCTION OF DAMAGES.—If the trier of fact finds
by clear and convincing evidence that the harm to the
claimant that is the subject of the product liability action