I 
110TH CONGRESS 
1ST SESSION H. R. 2995 
To provide small businesses certain protections from litigation excesses. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 11, 2007 
Mr. CHABOT (for himself, Mr. AKIN, Mr. BARTLETT of Maryland, Mr. 
BOREN, Ms. GINNY BROWN-WAITE of Florida, Mr. CONAWAY, Mr. 
FEENEY, Mr. FRANKS of Arizona, Mr. GINGREY, Mr. MILLER of Florida, 
Mrs. MUSGRAVE, Mr. PITTS, Mr. WALBERG, and Mr. WELDON of Flor-
ida) introduced the following bill; which was referred to the Committee 
on the Judiciary 
A BILL 
To provide small businesses certain protections from 
litigation excesses. 
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 ‘‘Small Business Liabil-
ity Reform Act of 2007’’. 
SEC. 2. FINDINGS. 
Congress finds that— 
(1) the defects in the United States civil justice 
system have a direct and undesirable effect on inter-
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state commerce by decreasing the availability of 
goods and services in commerce; 
(2) the spiraling costs of litigation and the 
magnitude and unpredictability of punitive damage 
awards and noneconomic damage awards have con-
tinued unabated for at least the past 30 years; 
(3) the Supreme Court of the United States has 
recognized that a punitive damage award can be un-
constitutional if the award is grossly excessive in re-
lation to the legitimate interest of the government in 
the punishment and deterrence of unlawful conduct; 
(4) just as punitive damage awards can be 
grossly excessive, so can it be grossly excessive in 
some circumstances for a party to be held respon-
sible under the doctrine of joint and several liability 
for damages that party did not cause; 
(5) as a result of joint and several liability, en-
tities including small businesses are often brought 
into litigation despite the fact that their conduct 
may have little or nothing to do with the accident 
or transaction giving rise to the lawsuit, and may 
therefore face increased and unjust costs due to the 
possibility or result of unfair and disproportionate 
damage awards; 
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(6) due to high liability costs and unwarranted 
litigation costs, small businesses face higher costs in 
purchasing insurance through interstate insurance 
markets to cover their activities; and 
(7) legislation to address these concerns is an 
appropriate exercise of the powers of Congress under 
clauses 3, 9, and 18 of section 8 of article I of the 
Constitution of the United States, and the 14th 
amendment to the Constitution of the United States. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) CRIME OF VIOLENCE.—The term ‘‘crime of 
violence’’ has the same meaning as in section 16 of 
title 18, United States Code. 
(2) DRUG.—The term ‘‘drug’’ means any con-
trolled substance (as defined in section 102 of the 
Controlled Substances Act (21 U.S.C. 802)) that 
was not legally prescribed for use by the defendant 
or that was taken by the defendant other than in ac-
cordance with the terms of a lawfully issued pre-
scription. 
(3) ECONOMIC
LOSS.—The term ‘‘economic 
loss’’ means any pecuniary loss resulting from harm 
(including the loss of earnings or other benefits re-
lated to employment, medical expense loss, replace-
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ment services loss, loss due to death, burial costs, 
and loss of business or employment opportunities) to 
the extent recovery for such loss is allowed under ap-
plicable State law. 
(4) HARM.—The term ‘‘harm’’ means any phys-
ical injury, illness, disease, or death or damage to 
property. 
(5) INTERNATIONAL
TERRORISM.—The term 
‘‘international terrorism’’ has the same meaning as 
in section 2331 of title 18, United States Code. 
(6) NONECONOMIC
LOSS.—The term ‘‘non-
economic loss’’ means loss for physical or emotional 
pain, suffering, inconvenience, physical impairment, 
mental anguish, disfigurement, loss of enjoyment of 
life, loss of society and companionship, loss of con-
sortium (other than loss of domestic service), injury 
to reputation, or any other nonpecuniary loss of any 
kind or nature. 
(7) PERSON.—The term ‘‘person’’ means any 
individual, corporation, company, association, firm, 
partnership, society, joint stock company, or any 
other entity (including any governmental entity). 
(8) PUNITIVE DAMAGES.—The term ‘‘punitive 
damages’’ means damages awarded against any per-
son or entity to punish or deter such person, entity, 
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or others from engaging in similar behavior in the 
future. Such term does not include any civil pen-
alties, fines, or treble damages that are assessed or 
enforced by an agency of State or Federal govern-
ment pursuant to a State or Federal statute. 
(9) SMALL BUSINESS.— 
(A) IN GENERAL.—The term ‘‘small busi-
ness’’ means any unincorporated business, or 
any partnership, corporation, association, unit 
of local government, or organization that has 
fewer than 50 full-time employees as deter-
mined on the date the civil action involving the 
small business is filed. 
(B) CALCULATION
OF
NUMBER
OF
EM-
PLOYEES.—For purposes of subparagraph (A), 
the number of employees of a subsidiary of a 
wholly owned corporation includes the employ-
ees of— 
(i) a parent corporation; and 
(ii) any other subsidiary corporation 
of that parent corporation. 
(10) STATE.—The term ‘‘State’’ means each of 
the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, 
Guam, American Samoa, the Northern Mariana Is-
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