I 
108TH CONGRESS 
1ST SESSION 
H. R. 321
To establish limits on medical malpractice claims, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 8, 2003
Mr. TOOMEY introduced the following bill; which was referred to the Com-
mittee on the Judiciary, and in addition to the Committee on Energy and 
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 
A BILL 
To establish limits on medical malpractice claims, and for 
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Common Sense Med-
ical Malpractice Reform Act of 2003’’. 
SEC. 2. FEDERAL REFORM OF HEALTH CARE LIABILITY
ACTIONS. 
(a) APPLICABILITY.—This Act shall apply with re-
spect to any health care liability action brought in any
State or Federal court and to any health care liability 
claim subject to an ADR, except that this Act shall not 
apply to an action for damages arising from a vaccine-
related injury or death to the extent that title XXI of the 
Public Health Service Act applies to the action. 
(b) PREEMPTION.—
(1) IN GENERAL.—This Act shall amend chap-
ter 171 of title 28, United States Code, (relating to 
tort claims procedure) and preempt any State law to 
the extent that such State law is inconsistent with 
the limitations in this Act. 
(2) STRONGER STATE LAWS.—This Act shall 
not preempt any State law that provides for defenses 
or places limitations on a person’s liability in addi-
tion to those contained in this Act or otherwise im-
poses greater restrictions on liability or damages 
than those provided in this Act. 
No provision of this Act shall be construed to preempt or 
displace the implementation of any State sponsored or pri-
vate ADR system. 
(c) LIMITATIONS.—This Act supersedes chapter 171 
of title 28, United States Code (relating to tort claims pro-
cedure) and preempts State law with respect to both pro-
cedural and substantive matters only to the extent that 
such chapter or State law differs from any provision of
of a foreign nation on the ground of inconvenient 
forum. 
(e) AMOUNT
IN CONTROVERSY.—In an action to 
which this Act applies and which is brought under section 
1332 of title 28, United States Code, the amount of non-
economic damages or punitive damages, and attorneys’ 
fees or costs, shall not be included in determining whether 
the matter in controversy exceeds the sum or value of 
$75,000. 
(f) FEDERAL COURT JURISDICTION NOT ESTAB-
LISHED ON FEDERAL QUESTION GROUNDS.—Nothing in 
this Act shall be construed to establish any jurisdiction 
in the district courts of the United States over health care 
liability actions on the basis of section 1331 or 1337 of 
title 28, United States Code. 
SEC. 3. STATUTE OF LIMITATIONS. 
A health care liability action may not be brought 
after the expiration of the 1-year period that begins on 
the date on which the alleged injury that is the subject 
of the action was discovered or should reasonably have 
been discovered, but in no case after the expiration of the 
3-year period that begins on the date the alleged injury 
occurred.
SEC. 4. CALCULATION AND PAYMENT OF DAMAGES. 
(a) TREATMENT OF NONECONOMIC DAMAGES.—In 
any health care liability claim or action, the amount of 
noneconomic damages shall not exceed $250,000, regard-
less of the number of parties against whom the action is 
brought or the number of claims or actions brought with 
respect to the injury. 
(b) JOINT AND SEVERAL LIABILITY.—In any health 
care liability action, a defendant shall be liable only for 
the amount of noneconomic damages attributable to such 
defendant in direct proportion to such defendant’s share 
of fault or responsibility for the claimant’s actual dam-
ages, as determined by the trier of fact. In all such cases, 
the liability of a defendant for noneconomic damages shall 
be several and not joint. 
(c) TREATMENT OF PUNITIVE DAMAGES.—
(1) GENERAL RULE.—Punitive damages may, 
to the extent permitted by applicable State law, be 
awarded in any health care liability action for harm 
in any Federal or State court against a defendant if 
the claimant establishes by clear and convincing evi-
dence that the harm suffered was the result of con-
duct—
(A) specifically intended to cause harm, or 
(B) manifesting a conscious, flagrant indif-
ference to the rights or safety of others.
(2) AMOUNT.—In no event shall the amount of 
punitive damages awarded exceed two times the 
amount of compensatory damages awarded or 
$250,000, whichever is greater. The jury shall not 
be informed of this limitation. 
(3) 
APPLICABILITY.—This 
subsection 
shall 
apply to any health care liability action brought in 
any Federal or State court on any theory where pu-
nitive damages are sought. This subsection does not 
create a cause of action for punitive damages. This 
subsection does not preempt or supersede any State 
or Federal law to the extent that such law would 
further limit the award of punitive damages. 
(4) BIFURCATION.—At the request of any 
party, the trier of fact shall consider in a separate 
proceeding whether punitive damages are to be 
awarded and the amount of such award. If a sepa-
rate proceeding is requested, evidence relevant only 
to the claim of punitive damages, as determined by 
applicable State law, shall be inadmissible in any 
proceeding to determine whether actual damages are 
to be awarded. 
(5) DRUGS AND DEVICES—
(A) IN
GENERAL.—(i) Punitive damages 
shall not be awarded against a manufacturer or
product seller of a drug or medical device which 
caused the claimant’s harm where—
(I) such drug or device was subject to 
premarket approval by the Food and Drug 
Administration with respect to the safety 
of the formulation or performance of the 
aspect of such drug or device which caused 
the claimant’s harm, or the adequacy of 
the packaging or labeling of such drug or 
device which caused the harm, and such 
drug, device, packaging, or labeling was 
approved by the Food and Drug Adminis-
tration; or 
(II) the drug is generally recognized 
as safe and effective pursuant to conditions 
established by the Food and Drug Admin-
istration and applicable regulations, includ-
ing packaging and labeling regulations. 
(ii) Clause (i) shall not apply in any case 
in which the defendant, before or after pre-
market approval of a drug or device—
(I) intentionally and wrongfully with-
held from or misrepresented to the Food 
and Drug Administration information con-
cerning such drug or device required to be
submitted under the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 301 et seq.) 
or section 351 of the Public Health Service 
Act (42 U.S.C. 262) that is material and 
relevant to the harm suffered by the claim-
ant, or 
(II) made an illegal payment to an of-
ficial or employee of the Food and Drug 
Administration for the purpose of securing 
or maintaining approval of such drug or 
device. 
(B) PACKAGING.—In a health care liability 
action for harm which is alleged to relate to the 
adequacy of the packaging or labeling of a drug 
which is required to have tamper-resistant 
packaging under regulations of the Secretary of 
Health and Human Services (including labeling 
regulations related to such packaging), the 
manufacturer or product seller of the drug shall 
not be held liable for punitive damages unless 
such packaging or labeling is found by the court 
by clear and convincing evidence to be substan-
tially out of compliance with such regulations. 
(d) PERIODIC PAYMENTS FOR FUTURE LOSSES.—
(1) GENERAL RULE.—In any health care liabil-
ity action in which the damages awarded for future 
economic and noneconomic loss exceeds $50,000, a 
person shall not be required to pay such damages in 
a single, lump-sum payment, but shall be permitted 
to make such payments periodically based on when 
the damages are found likely to occur, as such pay-
ments are determined by the court. 
(2) FINALITY OF JUDGMENT.—The judgment 
of the court awarding periodic payments under this 
subsection may not, in the absence of fraud, be re-
opened at any time to contest, amend, or modify the 
schedule or amount of the payments. 
(3) 
LUMP-SUM
SETTLEMENTS.—This 
sub-
section shall not be construed to preclude a settle-
ment providing for a single, lump-sum payment. 
(e) TREATMENT
OF COLLATERAL SOURCE PAY-
MENTS.—
(1) INTRODUCTION
INTO
EVIDENCE.—In any 
health care liability action, any defendant may intro-
duce evidence of collateral source payments. If any 
defendant elects to introduce such evidence, the 
claimant may introduce evidence of any amount paid 
or contributed or reasonably likely to be paid or con-
tributed in the future by or on behalf of the claim-
ation, arbitration, or any other form of ADR. A court act-
ing in a health care liability claim or action involving a 
minor or incompetent person retains the authority to au-
thorize or approve a fee that is less than the maximum 
permitted under this section. 
(c) DEFINITIONS.—For purposes of this subsection: 
(1) CONTINGENT FEE.—The term ‘‘contingent 
fee’’ includes all compensation to any person which 
is payable only if a recovery is effected on behalf of 
one or more claimants. 
(2) RECOVERY.—The term ‘‘recovery’’ means 
the net sum recovered after deducting any disburse-
ments or costs incurred in connection with prosecu-
tion or settlement of the claim, including all costs 
paid or advanced by any person. Costs of health care 
incurred by the plaintiff and the attorney’s office 
overhead costs or charges for legal services are not 
deductible disbursements of costs for such purpose. 
SEC. 6. ALTERNATIVE DISPUTE RESOLUTION. 
Any ADR used to resolve a health care liability action 
or claim shall contain provisions relating to statute of limi-
tations, noneconomic damages, joint and several liability, 
punitive damages, collateral source rule, periodic pay-
ments, and limitations on contingent fees which are iden-
tical to the provisions relating to such matters in this Act.
SEC. 7. DEFINITIONS. 
As used in this Act: 
(1) ACTUAL DAMAGES.—The term ‘‘actual dam-
ages’’ means damages awarded to pay for economic 
loss. 
(2) ADR.—The term ‘‘ADR’’ means an alter-
native dispute resolution system established under 
Federal or State law that provides for the resolution 
of health care liability claims in a manner other than 
through health care liability actions. 
(3) CLAIMANT.—The term ‘‘claimant’’ means 
any person who brings a health care liability action 
and any person on whose behalf such an action is 
brought. If such action is brought through or on be-
half of an estate, the term includes the claimant’s 
decedent. If such action is brought through or on be-
half of a minor or incompetent, the term includes 
the claimant’s legal guardian.
(4) CLEAR AND CONVINCING EVIDENCE.—The 
term ‘‘clear and convincing evidence’’ is that meas-
ure or degree of proof that will produce in the mind 
of the trier of fact a firm belief or conviction as to 
the truth of the allegations sought to be established. 
Such measure or degree of proof is more than that 
required under preponderance of the evidence but
less than that required for proof beyond a reason-
able doubt. 
(5) COLLATERAL
SOURCE
PAYMENTS.—The 
term ‘‘collateral source payments’’ means any 
amount paid or reasonably likely to be paid in the 
future to or on behalf of a claimant, or any service, 
product, or other benefit provided or reasonably like-
ly to be provided in the future to or on behalf of a 
claimant, as a result of an injury or wrongful death, 
pursuant to—
(A) any State or Federal health, sickness, 
income-disability, accident or workers’ com-
pensation Act; 
(B) any health, sickness, income-disability, 
or accident insurance that provides health bene-
fits or income-disability coverage; 
(C) any contract or agreement of any 
group, organization, partnership, or corporation 
to provide, pay for, or reimburse the cost of 
medical, hospital, dental, or income disability 
benefits; and 
(D) any other publicly or privately funded 
program. 
(6) DRUG.—The term ‘‘drug’’ has the meaning 
given such term in section 201(g)(1) of the Federal
Food, 
Drug, 
and 
Cosmetic 
Act 
(21 
U.S.C. 
321(g)(1)). 
(7) ECONOMIC DAMAGES.—The term ‘‘economic 
damages’’ means ojectively verifiable monetary losses 
incurred as a result of the provision of, use of, or 
payment for (or failure to provide, use, or pay for) 
health care services or medical products such as past 
and future medical expenses, loss of past and future 
earnings, cost of obtaining domestic services, loss of 
employment, loss due to death, burial costs, and loss 
of business or employment opportunities. 
(8) HARM.—The term ‘‘harm’’ means any le-
gally cognizable wrong or injury for which punitive 
damages may be imposed. 
(9) 
HEALTH
BENEFIT
PLAN.—The 
term 
‘‘health benefit plan’’ means—
(A) a hospital or medical expense incurred 
policy or certificate, 
(B) a hospital or medical service plan con-
tract, 
(C) a health maintenance subscriber con-
tract, or 
(D) a MedicarePlus product (offered under 
part C of title XVIII of the Social Security
Act), that provides benefits with respect to 
health care services. 
(10) HEALTH
CARE
LIABILITY
ACTION.—The 
term ‘‘health care liability action’’ means a civil ac-
tion brought in a State or Federal court or pursuant 
to alternative dispute resolution against a health 
care provider, an entity which is obligated to provide 
or pay for health benefits under any health benefit 
plan (including any person or entity acting under a 
contract or arrangement to provide or administer 
any health benefit), or the manufacturer, distributor, 
supplier, marketer, promoter, or seller of a medical 
product, in which the claimant alleges a claim (in-
cluding third party claims, cross claims, counter 
claims, or distribution claims) based upon the provi-
sion of (or the failure to provide or pay for) health 
care services or the use of a medical product, re-
gardless of the theory of liability on which the claim 
is based or the number of plaintiffs, defendants, or 
causes of action.
(11) HEALTH
CARE
LIABILITY
CLAIM.—The 
term ‘‘health care liability claim’’ means a claim in 
which the claimant alleges that injury was caused by 
the provision of (or the failure to provide) health 
care services or medical products.
(12) HEALTH
CARE
PROVIDER.—The term 
‘‘health care provider’’ means any person that is en-
gaged in the delivery of health care services in a 
State and that is required by the laws or regulations 
of the State to be licensed or certified by the State 
to engage in the delivery of such services in the 
State. 
(13) 
HEALTH
CARE
SERVICE.—The 
term 
‘‘health care service’’ means any service for which 
payment may be made under a health benefit plan 
including services related to the delivery or adminis-
tration of such service. 
(14) MEDICAL PRODUCT.—The term ‘‘medical 
product’’ means a drug (as defined in section 
201(g)(1)) of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 321(g)(1)) or a medical device (as 
defined in section 201(h)) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 321(h)), includ-
ing any component or raw material used in a drug 
or device but excluding health care services. 
(15) 
NONECONOMIC
DAMAGES.—The 
term 
‘‘noneconomic damages’’ means damages paid to an 
individual for pain and suffering, inconvenience, 
emotional distress, mental anguish, loss of consor-
tium, injury to reputation, humiliation, and other 
nonpecuniary losses. 
(16) PERSON.—The term ‘‘person’’ means any 
individual, corporation, company, association, firm, 
partnership, society, joint stock company, or any 
other entity, including any governmental entity. 
(17) PRODUCT SELLER.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), the term ‘‘product seller’’ means a 
person who, in the course of a business con-
ducted for that purpose—
(i) sells, distributes, rents, leases, pre-
pares, blends, packages, labels, or is other-
wise involved in placing, a product in the 
stream of commerce, or 
(ii) installs, repairs, or maintains the 
harm-causing aspect of a product. 
(B) EXCLUSION.—Such term does not in-
clude—
(i) a seller or lessor of real property; 
(ii) a provider of professional services 
in any case in which the sale or use of a 
product is incidental to the transaction and 
the essence of the transaction is the fur-
nishing of judgment, skill, or services; or
(iii) any person who—
(I) acts in only a financial capac-
ity with respect to the sale of a prod-
uct; or 
(II) leases a product under a 
lease arrangement in which the selec-
tion, possession, maintenance, and op-
eration of the product are controlled 
by a person other than the lessor. 
(18) PUNITIVE DAMAGES.—The term ‘‘punitive 
damages’’ means damages awarded against any per-
son not to compensate for actual injury suffered, but 
to punish or deter such person or others from en-
gaging in similar behavior in the future. 
(19) STATE.—The term ‘‘State’’ means each of 
the several States, the District of Columbia, Puerto 
Rico, the Virgin Islands, Guam, American Samoa, 
the Northern Mariana Islands, and any other terri-
tory or possession of the United States. 
SEC. 8. EFFECTIVE DATE. 
This Act will apply to any health care liability action 
brought in a Federal or State court and to any health 
care liability claim subject to an ADR system, that is initi-
ated on or after the date of enactment of this Act, except 
that any health care liability claim or action arising from
an injury occurring prior to the date of enactment of this 
Act shall be governed by the applicable statute of limita-
tions provisions in effect at the time the injury occurred.
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