IB
104TH CONGRESS
1ST SESSION
H. R. 956
[Report No. 104–64, Part 1]
To establish legal standards and procedures for product liability litigation,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 15, 1995
Mr. HYDE (for himself and Mr. HOKE) introduced the following bill; which
was referred to the Committee on the Judiciary
MARCH 2, 1995
Reported with an amendment and referred to the Committee on Commerce
for a period ending not later than March 7, 1995 for consideration of
such provisions of the bill and amendment as fall within the jurisdiction
of that committee pursuant to clause 1(e), rule X
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on February 15, 1995]
A BILL
To establish legal standards and procedures for product
liability litigation, 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 Legal
Standards Reform Act of 1995’’.
TITLE I—PRODUCT LIABILITY
REFORM
SECTION 101. SHORT TITLE.
This title may be cited as the ‘‘Common Sense Product
Liability Reform Act of 1995’’.
SEC. 102. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds that—
(1) the manufacture and distribution of goods in
interstate commerce is to a large extent a national ac-
tivity which affects national interests in a variety of
important ways;
(2) in recent years, the free flow of products in
interstate commerce has been increasingly burdened
by product liability law;
(3) as a result of this burden, consumers have
been adversely affected through the withdrawal of
products and producers from the national market,
and from excessive liability costs passed on to them
through higher prices;
(4) the rules of product liability law in recent
years have evolved rapidly and inconsistently within
and among the several States, such that the body of
product liability law prevailing in this nation today
is complex, contradictory, and uncertain;
(5) the unpredictability of product liability
awards and doctrines are inequitable to both plain-
tiffs and defendants and have added considerably to
the high cost of liability insurance, making it difficult
for producers and insurers to protect their liability
with any degree of confidence;
(6) the recent explosive growth in product liabil-
ity actions and punitive damage awards jeopardizes
the financial well-being of many industries, and is a
particular threat to the viability of the nation’s small
businesses;
(7) the extraordinary costs of the product liabil-
ity system undermine the ability of American indus-
try to compete internationally, and is costing the loss
of jobs and productive capital; and
(8) because of the national scope of the manufac-
ture and distribution of most products, it is not pos-
sible for the individual states to enact laws that fully
and effectively respond to these problems.
(b) PURPOSES.—Based upon the powers contained in
Article I, clause 3 of the United States Constitution, the
purposes of this title are to promote the free flow of goods
in interstate commerce—
(1) by establishing certain uniform legal prin-
ciples which provide a fair balance between the inter-
sponsibility for the claimant’s harm attributable to misuse
or alteration of a product by any person if the manufac-
turer or product seller establishes by a preponderance of the
evidence that such percentage of the claimant’s harm was
proximately caused by—
(1) a use or alteration of a product in violation
of, or contrary to, the manufacturer’s or product sell-
er’s express warnings or instructions if the warnings
or instructions are adequate as determined pursuant
to applicable State law, or
(2) a use or alteration of a product involving a
risk of harm which was known or should have been
known by the ordinary person who uses or consumes
the product with the knowledge common to the class
of persons who used or would be reasonably antici-
pated to use the product.
(b) STATE LAW.—Notwithstanding section 104(b) of
this Act, subsection (a) supersedes State law concerning
misuse or alteration of a product only to the extent that
State law is inconsistent.
(c) WORKPLACE INJURY.—Notwithstanding subsection
(a), the damage for which a manufacturer or product seller
is otherwise liable under State law shall not be reduced by
the percentage of responsibility for the claimant’s harm at-
tributable to misuse or alteration of the product by the
claimant’s employer or any co-employee who is immune
from suit by the claimant pursuant to the State law appli-
cable to workplace injuries.
SEC. 108. SEVERAL LIABILITY FOR NONECONOMIC LOSS.
In any product liability action, the liability of each
defendant for noneconomic loss shall be several only and
shall not be joint. Each defendant shall be liable only for
the amount of noneconomic loss attributable to such defend-
ant in direct proportion to such defendant’s proportionate
share of fault or responsibility for the claimant’s harm, as
determined by the trier of fact.
SEC. 109. STATUTE OF REPOSE.
A product liability action shall be barred unless the
complaint is served and filed within 15 years after the time
of delivery of the product. For the purposes of this section,
the term ‘‘time of delivery’’ means the time when a product
is delivered to its first purchaser or lessee who was not in-
volved in the business of manufacturing or selling such
product or using it as a component part of another product
to be sold. This section applies only if the harm caused by
a product did not include chronic illness. This section does
not affect the limitations period established by the General
Aviation Revitalization Act of 1994. This section does not
bar a product liability action involving a manufacturer or
product seller who made an express warranty in writing
as to the safety of the specific product involved which was
longer than 15 years.
SEC. 110. FOREIGN-MADE PRODUCTS.
This title shall not apply to a product liability action
involving a product or component part of a product, manu-
factured outside the United States, unless the manufacturer
of such product or component part has appointed an agent
in the United States for service of process from anywhere
in the United States.
SEC. 111. DEFINITIONS.
As used in this title:
(1) The term ‘‘claimant’’ means any person who
brings a product liability action and any person on
whose behalf such an action is brought. If such an ac-
tion is brought through or on behalf of an estate, the
term includes the claimant’s decedent. If such action
is brought through or on behalf of a minor or incom-
petent, the term includes the claimant’s legal guard-
ian.
(2) The term ‘‘commercial loss’’ means any loss
of or damage to a product itself incurred in the course
of the ongoing business enterprise consisting of pro-
viding goods or services for compensation.
(3) The term ‘‘economic loss’’ means any pecu-
niary loss resulting from harm (including the loss of
earnings, medical expense loss, replacement services
loss, loss due to death, burial costs, and loss of busi-
ness or employment opportunities) to the extent recov-
ery for such loss is allowed under applicable State
law.
(4) The term ‘‘harm’’ means any physical in-
jury, illness, disease, or death or damage to property
caused by a product. The term does not include com-
mercial loss, or loss or damage to a product itself.
(5) The term ‘‘manufacturer’’ means—
(A) any person who is engaged in a busi-
ness to produce, create, make, or construct any
product (or component part of a product) and
who (i) designs or formulates the product (or
component part of the product), (ii) has engaged
another person to design or formulate the prod-
uct (or component part of the product), or (iii)
uses the design or formulation of the product de-
veloped by another person;
(B) a product seller, but only with respect
to those aspects of a product (or component part
of a product) which are created or affected when,
before placing the product in the stream of com-
merce, the product seller produces, creates,
makes, or constructs and designs or formulates,
or has engaged another person to design or for-
mulate, an aspect of a product (or component
part of a product) made by another; or
(C) any product seller not described in sub-
paragraph (B) which holds itself out as a manu-
facturer to the user of the product.
(6) The term ‘‘noneconomic loss’’ means subjec-
tive, nonmonetary loss resulting from harm, including
pain, suffering, inconvenience, mental suffering, emo-
tional distress, loss of society and companionship, loss
of consortium, injury to reputation, and humiliation.
(7) The term ‘‘person’’ means any individual,
corporation, company, association, firm, partnership,
society, joint stock company, or any other entity (in-
cluding any governmental entity).
(8)(A) The term ‘‘product’’ means any object,
substance, mixture, or raw material in a gaseous, liq-
uid, or solid state—
(i) which is capable of delivery itself or as
an assembled whole, in a mixed or combined
state, or as a component part or ingredient;
(ii) which is produced for introduction into
trade or commerce;
(iii) which has intrinsic economic value;
and
(iv) which is intended for sale or lease to
persons for commercial or personal use.
(B) The term does not include—
(i) human tissue, human organs, human
blood, and human blood products; or
(ii) electricity, water delivered by a utility,
natural gas, or steam.
(9) The term ‘‘product liability action’’ means a
civil action brought on any theory for harm caused
by a product or product use.
(10) The term ‘‘product seller’’ means a person
who, in the course of a business conducted for that
purpose, sells, distributes, rents, leases, prepares,
blends, packages, labels a product or is otherwise in-
volved in placing a product in the stream of com-
merce, or who installs, repairs, or maintains the
harm-causing aspect of a product. The term does not
include—
(A) a seller or lessor of real property;
(B) 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 furnishing of judgment,
skill, or services; or
(C) any person who—
(i) acts in only a financial capacity
with respect to the sale of a product; or
(ii) leases a product under a lease ar-
rangement in which the selection, posses-
sion, maintenance, and operation of the
product are controlled by a person other
than the lessor.
(11) The term ‘‘State’’ means any State of the
United States, the District of Columbia, Puerto Rico,
the Northern Mariana Islands, the Virgin Islands,
Guam, American Samoa, and any other territory or
possession of the United States, or any political sub-
division of any of the foregoing.
TITLE II—PUNITIVE DAMAGES
REFORM
SEC. 201. PUNITIVE DAMAGES.
(a) GENERAL RULE.—Punitive damages may, to the
extent permitted by applicable State law, be awarded in
any civil action for harm in any Federal or State court
against a defendant if the claimant establishes by clear and
convincing evidence that the harm suffered was result of
conduct—
(1) specifically intended to cause harm, or
(2) conduct manifesting a conscious, flagrant in-
difference to the rights of others.
(b) PROPORTIONAL AWARDS.—The amount of punitive
damages that may be awarded to a claimant in any civil
action subject to this title shall not exceed 3 times the
amount of damages awarded to the claimant for the eco-
nomic loss on which the claimant’s action is based, or
$250,000, whichever is greater. The requirements of this
subsection shall be applied by the court and shall not be
disclosed to the jury.
(c) APPLICABILITY AND PREEMPTION.—Except as pro-
vided in section 301, this title shall apply to any civil ac-
tion brought in any Federal or State court on any theory
where punitive damages are sought. This title does not cre-
ate a cause of action for punitive damages in any jurisdic-
tion that does not authorize such actions.
(d) BIFURCATION AT EITHER PARTY’S REQUEST.—At
the request of either 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 separate
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 wheth-
er compensatory damages are to be awarded.
SEC. 202. DEFINITIONS.
As used in this title:
(1) The term ‘‘claimant’’ means any person who
brings a civil action and any person on whose behalf
such an action is brought; if such action is brought
through or on behalf of an estate, the term includes
the claimant’s decedent and if such action is brought
through or on behalf of a minor or incompetent, the
term includes the claimant’s legal guardian.
(2) The term ‘‘clear and convincing evidence’’ is
that measure 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 estab-
lished. The level of proof required to satisfy such
standard is more than that required under preponder-
ance of the evidence, but less than that required for
proof beyond a reasonable doubt.
(3) The term ‘‘economic loss’’ means any pecu-
niary loss resulting from harm (including the loss of
earnings, medical expense loss, replacement services
loss, loss due to death, burial costs, and loss of busi-
ness or employment opportunities), to the extent re-
covery for such loss is allowed under applicable State
law.
(4) The term ‘‘harm’’ means any legally cog-
nizable wrong or injury for which punitive damages
may be imposed.
(5) The term ‘‘punitive damages’’ means dam-
ages awarded against any person or entity to punish
or deter such person or entity, or others, from engag-
ing in similar behavior in the future.
(6) The term ‘‘State’’ means any State of the
United States, the District of Columbia, Puerto Rico,
the Northern Mariana Islands, the Virgin Islands,
Guam, American Samoa, and any other territory or
possession of the United States, or any political sub-
division of any of the foregoing.
TITLE III—EFFECT ON OTHER
LAW; EFFECTIVE DATE
SEC. 301. EFFECT ON OTHER LAW.
Nothing in title I or II shall be construed to—
(1) waive or affect any defense of sovereign im-
munity asserted by any State under any law;
(2) supersede 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 any Federal law that prescribes a
specific regimen for punitive damages.
SEC. 302. EFFECTIVE DATE.
Titles I and II shall apply with respect to actions
which are commenced after the date of the enactment of this
Act.
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