II
June 23 (legislative day, June 19), 1995
Ordered to be printed as passed
In the Senate of the United States,
May 10 (legislative day, May 1), 1995.
Resolved, That the bill from the House of Representa-
tives (H.R. 956) entitled ‘‘An Act to establish legal standards
and procedures for product liability litigation, and for other
purposes’’, do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Product Liability Fair-
ness Act of 1995’’.
TITLE I—PRODUCT LIABILITY
SEC. 101. DEFINITIONS.
For purposes of this Act, the following definitions shall
apply:
(1) ACTUAL MALICE.—The term ‘‘actual malice’’
means specific intent to cause serious physical injury,
illness, disease, or damage to property, or death.
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(2) CLAIMANT.—The term ‘‘claimant’’ means
any person who brings a product liability action and
any person on whose behalf such an action is brought.
If an action is brought through or on behalf of—
(A) an estate, the term includes the dece-
dent; or
(B) a minor or incompetent, the term in-
cludes the legal guardian of the minor or incom-
petent.
(3) CLAIMANT’S BENEFITS.—The term ‘‘claim-
ant’s benefits’’ means the amount paid to an em-
ployee as workers’ compensation benefits.
(4) CLEAR AND CONVINCING EVIDENCE.—
(A) IN GENERAL.—Subject to subparagraph
(A), the term ‘‘clear and convincing evidence’’ is
that measure of 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.
(B) DEGREE
OF
PROOF.—The degree of
proof required to satisfy the standard of clear
and convincing evidence shall be—
(i) greater than the degree of proof re-
quired to meet the standard of preponder-
ance of the evidence; and
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(ii) less than the degree of proof re-
quired to meet the standard of proof beyond
a reasonable doubt.
(5) COMMERCIAL LOSS.—The term ‘‘commercial
loss’’ means any loss or damage to a product itself,
loss relating to a dispute over its value, or consequen-
tial economic loss the recovery of which is governed by
the Uniform Commercial Code or analogous State
commercial law, not including harm.
(6) DURABLE GOOD.—The term ‘‘durable good’’
means any product, or any component of any such
product, which has a normal life expectancy of 3 or
more years or is of a character subject to allowance
for depreciation under the Internal Revenue Code of
1986, and which is—
(A) used in a trade or business;
(B) held for the production of income; or
(C) sold or donated to a governmental or
private entity for the production of goods, train-
ing, demonstration, or any other similar pur-
pose.
(7) ECONOMIC LOSS.—The term ‘‘economic loss’’
means any pecuniary loss resulting from harm (in-
cluding any medical expense loss, work loss, replace-
ment services loss, loss due to death, burial costs, and
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merce, the product seller produces, creates,
makes, constructs, designs, or formulates, or has
engaged another person to design or formulate,
an aspect of a product (or component part of a
product) made by another person; or
(C) any product seller that is not described
in subparagraph (B) that holds itself out as a
manufacturer to the user of the product.
(11) NONECONOMIC
LOSS.—The term ‘‘non-
economic loss’’—
(A) means subjective, nonmonetary loss re-
sulting from harm, including pain, suffering, in-
convenience, mental suffering, emotional distress,
loss of society and companionship, loss of consor-
tium, injury to reputation, and humiliation;
and
(B) does not include economic loss.
(12) PERSON.—The term ‘‘person’’ means any
individual, corporation, company, association, firm,
partnership, society, joint stock company, or any
other entity (including any governmental entity).
(13) PRODUCT.—
(A) IN
GENERAL.—The term ‘‘product’’
means any object, substance, mixture, or raw
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material in a gaseous, liquid, or solid state
that—
(i) is capable of delivery itself or as an
assembled whole, in a mixed or combined
state, or as a component part or ingredient;
(ii) is produced for introduction into
trade or commerce;
(iii) has intrinsic economic value; and
(iv) is intended for sale or lease to per-
sons for commercial or personal use.
(B) EXCLUSION.—The term ‘‘product’’ does
not include—
(i) tissue, organs, blood, and blood
products used for therapeutic or medical
purposes, except to the extent that such tis-
sue, organs, blood, and blood products (or
the provision thereof) are subject, under ap-
plicable State law, to a standard of liability
other than negligence; and
(ii) electricity, water delivered by a
utility, natural gas, or steam.
(14) PRODUCT
LIABILITY
ACTION.—The term
‘‘product liability action’’ means a civil action
brought on any theory for harm caused by a product.
(15) PRODUCT SELLER.—
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(A) IN GENERAL.—The term ‘‘product sell-
er’’ means a person who—
(i) in the course of a business con-
ducted for that purpose, sells, distributes,
rents, leases, prepares, blends, packages, la-
bels, or otherwise is involved in placing a
product in the stream of commerce; or
(ii) installs, repairs, refurbishes, recon-
ditions, or maintains the harm-causing as-
pect of the product.
(B) EXCLUSION.—The term ‘‘product seller’’
does not include—
(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 furnish-
ing 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 lessor does
not initially select the leased product
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and does not during the lease term or-
dinarily control the daily operations
and maintenance of the product.
(16) STATE.—The term ‘‘State’’ means each of
the several States of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, the Vir-
gin Islands, Guam, American Samoa, and the Com-
monwealth of the Northern Mariana Islands, and any
other territory or possession of the United States, or
any political subdivision thereof.
(17) TIME OF DELIVERY.—The term ‘‘time of de-
livery’’ means the time when a product is delivered
to the first purchaser or lessee of the product that was
not involved in manufacturing or selling the product,
or using the product as a component part of another
product to be sold.
SEC. 102. APPLICABILITY; PREEMPTION.
(a) APPLICABILITY.—
(1) ACTIONS
COVERED.—Subject to paragraph
(2), this title applies to any product liability action
commenced on or after the date of enactment of this
Act, without regard to whether the harm that is the
subject of the action or the conduct that caused the
harm occurred before such date of enactment.
(2) ACTIONS EXCLUDED.—
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(A) ACTIONS FOR DAMAGE TO PRODUCT OR
COMMERCIAL LOSS.—A civil action brought for
loss or damage to a product itself or for commer-
cial loss, shall not be subject to the provisions of
this title governing product liability actions, but
shall be subject to any applicable commercial or
contract law.
(B) ACTIONS
FOR
NEGLIGENT
ENTRUST-
MENT.—A civil action for negligent entrustment
shall not be subject to the provisions of this title
governing product liability actions, but shall be
subject to any applicable State law.
(b) SCOPE OF PREEMPTION.—
(1) IN GENERAL.—This Act supersedes a State
law only to the extent that State law applies to an
issue covered under this title.
(2) ISSUES NOT COVERED UNDER THIS ACT.—
Any issue that is not covered under this title, includ-
ing any standard of liability applicable to a manu-
facturer, shall not be subject to this title, but shall be
subject to applicable Federal or State law.
(c) STATUTORY CONSTRUCTION.—Nothing in this title
may be construed to—
(1) waive or affect any defense of sovereign im-
munity asserted by any State under any law;
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(2) supersede or alter any Federal law;
(3) waive or affect any defense of sovereign im-
munity asserted by the United States;
(4) affect the applicability of any provision of
chapter 97 of title 28, United States Code;
(5) preempt State choice-of-law rules with re-
spect to claims brought by a foreign nation or a citi-
zen of a foreign nation;
(6) affect the right of any court to transfer venue
or to apply the law of a foreign nation or to dismiss
a claim of a foreign nation or of a citizen of a foreign
nation on the ground of inconvenient forum; or
(7) supersede or modify any statutory or com-
mon law, including any law providing for an action
to abate a nuisance, that authorizes a person to insti-
tute an action for civil damages or civil penalties,
cleanup costs, injunctions, restitution, cost recovery,
punitive damages, or any other form of relief for re-
mediation of the environment (as defined in section
101(8) of the Comprehensive Environmental Re-
sponse, Compensation, and Liability Act of 1980, 42
U.S.C. 9601(8)) or the threat of such remediation.
(d) CONSTRUCTION.—To promote uniformity of law in
the various jurisdictions, this title shall be construed and
applied after consideration of its legislative history.
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(e) EFFECT OF COURT OF APPEALS DECISIONS.—Not-
withstanding any other provision of law, any decision of
a circuit court of appeals interpreting a provision of this
title (except to the extent that the decision is overruled or
otherwise modified by the Supreme Court) shall be consid-
ered a controlling precedent with respect to any subsequent
decision made concerning the interpretation of such provi-
sion by any Federal or State court within the geographical
boundaries of the area under the jurisdiction of the circuit
court of appeals.
SEC. 103. ALTERNATIVE DISPUTE RESOLUTION PROCE-
DURES.
(a) SERVICE OF OFFER.—A claimant or a defendant
in a product liability action that is subject to this title may,
not later than 60 days after the service of the initial com-
plaint of the claimant or the applicable deadline for a re-
sponsive pleading (whichever is later), serve upon an ad-
verse party an offer to proceed pursuant to any voluntary,
nonbinding alternative dispute resolution procedure estab-
lished 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 REJEC-
TION.—Except as provided in subsection (c), not later than
10 days after the service of an offer to proceed under sub-
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section (a), an offeree shall file a written notice of accept-
ance 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 filing 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 dur-
ing such period.
SEC. 104. LIABILITY RULES APPLICABLE TO PRODUCT SELL-
ERS.
(a) GENERAL RULE.—
(1) IN GENERAL.—In any product liability ac-
tion that is subject to this title filed by a claimant
for harm caused by a product, a product seller other
than a manufacturer shall be liable to a claimant,
only if the claimant establishes—
(A) that—
(i) the product that allegedly caused
the harm that is the subject of the complaint
was sold, rented, or leased by the product
seller;
(ii) the product seller failed to exercise
reasonable care with respect to the product;
and
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(iii) the failure to exercise reasonable
care was a proximate cause of harm to the
claimant; or
(B) that—
(i) the product seller made an express
warranty applicable to the product that al-
legedly caused the harm that is the subject
of the complaint, independent of any ex-
press warranty made by a manufacturer as
to the same product;
(ii) the product failed to conform to the
warranty; and
(iii) the failure of the product to con-
form to the warranty caused harm to the
claimant; or
(C) that—
(i) the product seller engaged in inten-
tional wrongdoing, as determined under ap-
plicable State law; and
(ii) such intentional wrongdoing was a
proximate cause of the harm that is the sub-
ject of the complaint.
(2) REASONABLE
OPPORTUNITY
FOR
INSPEC-
TION.—For purposes of paragraph (1)(A)(ii), a prod-
uct seller shall not be considered to have failed to ex-
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ercise reasonable care with respect to a product based
upon an alleged failure to inspect a product if the
product seller had no reasonable opportunity to in-
spect the product that allegedly caused harm to the
claimant.
(b) SPECIAL RULE.—
(1) IN
GENERAL.—A product seller shall be
deemed to be liable as a manufacturer of a product
for harm caused by the product if—
(A) the manufacturer is not subject to serv-
ice of process under the laws of any State in
which the action may be brought; or
(B) the court determines that the claimant
would be unable to enforce a judgment against
the manufacturer.
(2) STATUTE OF LIMITATIONS.—For purposes of
this subsection only, the statute of limitations appli-
cable to claims asserting liability of a product seller
as a manufacturer shall be tolled from the date of the
filing of a complaint against the manufacturer to the
date that judgment is entered against the manufac-
turer.
(c) RENTED OR LEASED PRODUCTS.—
(1) Notwithstanding any other provision of law,
any person engaged in the business of renting or leas-
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ing a product (other than a person excluded from the
definition of product seller under section 101 (14)(B))
shall be subject to liability in a product liability ac-
tion under subsection (a), but any person engaged in
the business of renting or leasing a product shall not
be liable to a claimant for the tortious act of another
solely by reason of ownership of such product.
(2) For purposes of paragraph (1), and for deter-
mining the applicability of this title to any person
subject to paragraph (1), the term ‘‘product liability
action’’ means a civil action brought on any theory
for harm caused by a product or product use.
SEC. 105. DEFENSES INVOLVING INTOXICATING ALCOHOL
OR DRUGS.
(a) GENERAL RULE.—Notwithstanding any other pro-
vision of law, a defendant in a product liability action that
is subject to this title shall have a complete defense in the
action if the defendant proves that—
(1) the claimant was under the influence of in-
toxicating alcohol or any drug that may not lawfully
be sold over-the-counter without a prescription, and
was not prescribed by a physician for use by the
claimant; and
(2) the claimant, as a result of the influence of
the alcohol or drug, was more than 50 percent respon-
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sible for the accident or event which resulted in the
harm to the claimant.
(b) CONSTRUCTION.—For purposes of this section, the
determination of whether a person was intoxicated or was
under the influence of intoxicating alcohol or any drug shall
be made pursuant to applicable State law.
SEC. 106. REDUCTION FOR MISUSE OR ALTERATION OF
PRODUCT.
(a) GENERAL RULE.—
(1) IN GENERAL.—Except as provided in sub-
section (c), in a product liability action that is sub-
ject to this title, the damages for which a defendant
is otherwise liable under applicable State law shall be
reduced by the percentage of responsibility for the
harm to the claimant attributable to misuse or alter-
ation of a product by any person if the defendant es-
tablishes that such percentage of the harm was proxi-
mately caused by a use or alteration of a product—
(A) in violation of, or contrary to, the ex-
press warnings or instructions of the defendant
if the warnings or instructions are determined to
be adequate pursuant to applicable State law; or
(B) involving a risk of harm which was
known or should have been known by the ordi-
nary person who uses or consumes the product
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with the knowledge common to the class of per-
sons who used or would be reasonably antici-
pated to use the product.
(2) USE INTENDED BY A MANUFACTURER IS NOT
MISUSE OR ALTERATION.—For the purposes of this
title, a use of a product that is intended by the manu-
facturer of the product does not constitute a misuse
or alteration of the product.
(b) STATE LAW.—Notwithstanding section 3(b), sub-
section (a) of this section shall supersede State law concern-
ing misuse or alteration of a product only to the extent that
State law is inconsistent with such subsection.
(c) WORKPLACE INJURY.—Notwithstanding subsection
(a), the amount of damages for which a defendant is other-
wise liable under State law shall not be reduced by the ap-
plication of this section with respect to the conduct of any
employer or coemployee of the plaintiff who is, under appli-
cable State law concerning workplace injuries, immune
from being subject to an action by the claimant.
SEC. 107. UNIFORM STANDARDS FOR AWARD OF PUNITIVE
DAMAGES.
(a) GENERAL RULE.—Punitive damages may, to the
extent permitted by applicable State law, be awarded
against a defendant in a product liability action that is
subject to this title if the claimant establishes by clear and
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convincing evidence that the harm that is the subject of the
action was the result of conduct that was carried out by
the defendant with a conscious, flagrant indifference to the
safety of others.
(b) LIMITATION ON AMOUNT.—
(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), the amount of punitive damages
that may be awarded to a claimant in a product li-
ability action that is subject to this title shall not ex-
ceed the greater of—
(A) 2 times the sum of—
(i) the amount awarded to the claim-
ant for economic loss; and
(ii) the amount awarded to the claim-
ant for noneconomic loss; or
(B) $250,000.
(2) SPECIAL
RULE.—The amount of punitive
damages that may be awarded in a product liability
action that is subject to this title against an individ-
ual 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
than 25 full-time employees, shall not exceed the lesser
of—
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(A) 2 times the sum of—
(i) the amount awarded to the claim-
ant for economic loss; and
(ii) the amount awarded to the claim-
ant for noneconomic loss; or
(B) $250,000.
(3) EXCEPTION.—
(A) DETERMINATION BY COURT.—Notwith-
standing subparagraph (C), in a product liabil-
ity action that is subject to this title, if the court
makes a determination, after considering each of
the factors in subparagraph (B), that the appli-
cation of paragraph (1) would result in an
award of punitive damages that is insufficient to
punish the egregious conduct of the defendant
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 in excess of the amount de-
termined in accordance with paragraph (1) to be
awarded to the claimant (referred to in this
paragraph as the ‘‘additur’’) in a separate pro-
ceeding in accordance with this paragraph.
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(B) FACTORS
FOR
CONSIDERATION.—In
any proceeding under subparagraph (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 misconduct of the de-
fendant;
(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 concurrent or subsequent concealment
of the conduct by the defendant;
(vi) the attitude and conduct of the de-
fendant upon the discovery of the mis-
conduct and whether the misconduct has
terminated;
(vii) the financial condition of the de-
fendant; and
(viii) the cumulative deterrent effect of
other losses, damages, and punishment suf-
fered by the defendant as a result of the
misconduct, reducing the amount of puni-
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tive damages on the basis of the economic
impact and severity of all measures to
which the defendant has been or may be
subjected, including—
(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
administrative penalties; and
(IV) stop sale, cease and desist,
and other remedial or enforcement or-
ders.
(C) 
REQUIREMENTS
FOR
AWARDING
ADDITURS.—If the court awards an additur
under this paragraph, the court shall state its
reasons for setting the amount of the additur in
findings of fact and conclusions of law. If the
additur is—
(i) accepted by the defendant, it shall
be entered by the court as a final judgment;
(ii) accepted by the defendant under
protest, the order may be reviewed on ap-
peal; or
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(iii) not accepted by the defense, the
court shall set aside the punitive damages
award and order a new trial on the issue
of punitive damages only, and judgment
shall enter upon the verdict of liability and
damages after the issue of punitive damages
is decided.
(4) APPLICATION
BY
COURT.—This subsection
shall be applied by the court and the application of
this subsection shall not be disclosed to the jury.
(5) REMITTITURS.—Nothing in this subsection
shall modify or reduce the ability of courts to order
remittiturs.
(c) BIFURCATION AT REQUEST OF ANY PARTY.—
(1) IN GENERAL.—At the request of any party,
the trier of fact in a product liability action that is
subject to this title shall consider in a separate pro-
ceeding whether punitive damages 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 PRO-
CEEDING CONCERNING COMPENSATORY DAMAGES.—If
any party requests a separate proceeding under para-
graph (1), in any proceeding to determine whether the
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claimant may be awarded compensatory damages,
any evidence that is relevant only to the claim of pu-
nitive damages, as determined by applicable State
law, shall be inadmissible.
SEC. 108. 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 sec-
tion 107, but only during such time as the State law so
provides. This section shall cease to be effective September
1, 1996.
SEC. 109. UNIFORM TIME LIMITATIONS ON LIABILITY.
(a) STATUTE OF LIMITATIONS.—
(1) IN GENERAL.—Except as provided in para-
graph (2) and subsection (b), a product liability ac-
tion that is subject to this title may be filed not later
than 2 years after the date on which the claimant dis-
covered or, in the exercise of reasonable care, should
have discovered, the harm that is the subject of the ac-
tion and the cause of the harm.
(2) EXCEPTIONS.—
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(A) PERSON WITH A LEGAL DISABILITY.—A
person with a legal disability (as determined
under applicable law) may file a product liabil-
ity action that is subject to this title not later
than 2 years after the date on which the person
ceases to have the legal disability.
(B) EFFECT OF STAY OR INJUNCTION.—If
the commencement of a civil action that is sub-
ject to this title is stayed or enjoined, the run-
ning of the statute of limitations under this sec-
tion shall be suspended until the end of the pe-
riod that the stay or injunction is in effect.
(b) STATUTE OF REPOSE.—
(1) IN GENERAL.—Subject to paragraphs (2) and
(3), no product liability action that is subject to this
title concerning a product that is a durable good al-
leged to have caused harm (other than toxic harm)
may be filed after the 20-year period beginning at the
time of delivery of the product.
(2) STATE
LAW.—Notwithstanding paragraph
(1), if pursuant to an applicable State law, an action
described in such paragraph is required to be filed
during a period that is shorter than the 20-year pe-
riod specified in such paragraph, the State law shall
apply with respect to such period.
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(3) EXCEPTIONS.—
(A) A motor vehicle, vessel, aircraft, or
train that is used primarily to transport pas-
sengers for hire shall not be subject to this sub-
section.
(B) Paragraph (1) does not bar a product
liability action against a defendant who made
an express warranty in writing as to the safety
of the specific product involved which was longer
than 20 years, but it will apply at the expira-
tion of that warranty.
(C) Paragraph (1) does not affect the limi-
tations period established by the General Avia-
tion Revitalization Act of 1994 (49 U.S.C. 40101
note).
(c) TRANSITIONAL PROVISION RELATING TO EXTEN-
SION OF PERIOD FOR BRINGING CERTAIN ACTIONS.—If any
provision of subsection (a) or (b) shortens the period during
which a product liability action that could be otherwise
brought pursuant to another provision of law, the claimant
may, notwithstanding subsections (a) and (b), bring the
product liability action pursuant to this title not later than
1 year after the date of enactment of this Act.
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SEC. 110. SEVERAL LIABILITY FOR NONECONOMIC LOSS.
(a) GENERAL RULE.—In a product liability action
that is subject to this title, 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 ac-
cordance 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 pur-
poses of determining the amount of noneconomic loss
allocated to a defendant under this section, the trier
of fact shall determine the percentage of responsibility
of each person responsible for the claimant’s harm,
whether or not such person is a party to the action.
SEC. 111. WORKERS’ COMPENSATION SUBROGATION STAND-
ARDS.
(a) GENERAL RULE.—
(1) RIGHT OF SUBROGATION.—
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(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 title.
(B) WRITTEN NOTIFICATION.—To assert a
right of subrogation 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 li-
ability action covered under subparagraph (A).
(2) SETTLEMENTS AND OTHER LEGAL PROCEED-
INGS.—
(A) IN GENERAL.—In any proceeding relat-
ing to harm or settlement with the manufacturer
or product seller by a claimant who files a prod-
uct liability action that is subject to this title, an
insurer may participate to assert a right of sub-
rogation 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 payment is made—
(i) as part of a settlement;
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(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 settlement with or accept any pay-
ment from the manufacturer or product seller
without written notification to the employer.
(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
EM-
PLOYER OR COEMPLOYEE.—
(A) IN
GENERAL.—If, with respect to a
product liability action that is subject to this
title, 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 claim-
ant, 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 no-
tice to the employer.
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(B) RIGHTS OF EMPLOYER.—
(i) 
IN
GENERAL.—Notwithstanding
any other provision of law, with respect to
an issue of fault submitted to a trier of fact
pursuant to subparagraph (A), an employer
shall, in the same manner as any party in
the action (even if the employer is not a
named party in the action), have the right
to—
(I) appear;
(II) be represented;
(III) introduce evidence;
(IV) cross-examine adverse wit-
nesses; 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
presented 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 was caused by the
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fault of the employer or a coemployee of the
claimant—
(i) the court shall reduce by the
amount of the claimant’s benefits—
(I) the damages awarded against
the manufacturer or product seller; and
(II) any corresponding insurer’s
subrogation lien; and
(ii) the manufacturer or product seller
shall have no further right by way of con-
tribution or otherwise against the employer.
(D) CERTAIN RIGHTS OF SUBROGATION NOT
AFFECTED.—Notwithstanding a finding by the
trier of fact described in subparagraph (C), the
insurer shall not lose any right of subrogation
related to any—
(i) intentional tort committed against
the claimant by a coemployee; or
(ii) act committed by a coemployee
outside the scope of normal work practices.
(b) ATTORNEY’S FEES.—If, in a product liability ac-
tion that is subject to this section, the court finds that harm
to a claimant was not caused by the fault of the employer
or a coemployee of the claimant, the manufacturer or prod-
uct seller shall reimburse the insurer for reasonable attor-
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ney’s fees and court costs incurred by the insurer in the
action, as determined by the court.
SEC. 112. FEDERAL CAUSE OF ACTION PRECLUDED.
The district courts of the United States shall not have
jurisdiction under section 1331 or 1337 of title 28, United
States Code, over any product liability action covered under
this title.
TITLE II—BIOMATERIALS
ACCESS ASSURANCE
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘Biomaterials Access As-
surance Act of 1995’’.
SEC. 202. FINDINGS.
Congress finds that—
(1) each year millions of citizens of the United
States depend on the availability of lifesaving or life-
enhancing medical devices, many of which are perma-
nently implantable within the human body;
(2) a continued supply of raw materials and
component parts is necessary for the invention, devel-
opment, improvement, and maintenance of the supply
of the devices;
(3) most of the medical devices are made with
raw materials and component parts that—
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(A) are not designed or manufactured spe-
cifically for use in medical devices; and
(B) come in contact with internal human
tissue;
(4) the raw materials and component parts also
are used in a variety of nonmedical products;
(5) because small quantities of the raw materials
and component parts are used for medical devices,
sales of raw materials and component parts for medi-
cal devices constitute an extremely small portion of
the overall market for the raw materials and medical
devices;
(6) under the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 301 et seq.), manufacturers of medical
devices are required to demonstrate that the medical
devices are safe and effective, including demonstrating
that the products are properly designed and have ade-
quate warnings or instructions;
(7) notwithstanding the fact that raw materials
and component parts suppliers do not design,
produce, or test a final medical device, the suppliers
have been the subject of actions alleging inadequate—
(A) design and testing of medical devices
manufactured with materials or parts supplied
by the suppliers; or
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(B) warnings related to the use of such med-
ical devices;
(8) even though suppliers of raw materials and
component parts have very rarely been held liable in
such actions, such suppliers have ceased supplying
certain raw materials and component parts for use in
medical devices because the costs associated with liti-
gation in order to ensure a favorable judgment for the
suppliers far exceeds the total potential sales revenues
from sales by such suppliers to the medical device in-
dustry;
(9) unless alternate sources of supply can be
found, the unavailability of raw materials and com-
ponent parts for medical devices will lead to unavail-
ability of lifesaving and life-enhancing medical de-
vices;
(10) because other suppliers of the raw materials
and component parts in foreign nations are refusing
to sell raw materials or component parts for use in
manufacturing certain medical devices in the United
States, the prospects for development of new sources of
supply for the full range of threatened raw materials
and component parts for medical devices are remote;
(11) it is unlikely that the small market for such
raw materials and component parts in the United
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ment of this Act, including any such action with respect
to which the harm asserted in the action or the conduct
that caused the harm occurred before the date of enactment
of this Act.
Attest:
Secretary.