I
106TH CONGRESS
2D SESSION
H. R. 5344
To establish limits on medical malpractice claims, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 28, 2000
Mr. TOOMEY
(for himself, Mr. GREENWOOD, Mr. SCHAFFER, Mr.
HOSTETTLER, and Mr. SOUDER) introduced the following bill; which was
referred to the Committee on the Judiciary, and in addition to the Com-
mittee on Commerce, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall within
the jurisdiction 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 2000’’.
SEC. 2. FEDERAL REFORM OF HEALTH CARE LIABILITY AC-
TIONS.
(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
this Act or provision established under this Act. Section
5 shall supersede or preempt any provision of such chapter
or State law which prohibits the introduction of evidence
regarding collateral source benefits or mandates or per-
mits subrogation or a lien on the plaintiff’s award for the
cost of providing collateral source benefits. Any issue that
is not governed by any provision of this Act shall be gov-
erned by otherwise applicable Federal or State law.
(d) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE
OF LAW OR VENUE.—Nothing in subsection (c) shall be
construed to—
(1) waive or affect any defense of sovereign im-
munity asserted by any State under any provision of
law;
(2) waive or affect any defense of sovereign im-
munity asserted by the United States;
(3) affect the applicability of any provision of
the Foreign Sovereign Immunities Act of 1976;
(4) preempt State choice-of-law rules with re-
spect to claims brought by a foreign nation or a cit-
izen of a foreign nation; or
(5) 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.
(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
conduct—
(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-
ant to secure the right to such collateral source pay-
ments.
(2) NO SUBROGATION.—No provider of collat-
eral source payments shall recover any amount
against the claimant or receive any lien or credit
against the claimant’s recovery or be equitably or le-
gally subrogated the right of the claimant in a
health care liability action.
(3) APPLICATION TO SETTLEMENTS.—This sub-
section shall apply to an action that is settled as well
as an action that is resolved by a fact finder.
SEC. 5. LIMITATIONS ON CONTINGENT FEES.
(a) IN GENERAL.—The total of all contingent fees
for representing all claimants in a health care liability
claim or action shall not exceed the following limits:
(1) 40 percent of the first $50,000 recovered by
the claimant.
(2) 331⁄3 percent of the next $50,000 recovered
by the claimant.
(3) 25 percent of the next $50,000 recovered by
the claimant.
(4) 15 percent of any amount by which the re-
covery by the claimant exceeds $600,000.
(b) APPLICABILITY.—The limitations shall apply
whether the recovery is by judgment, settlement, medi-
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
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 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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