H. R. 956
One Hundred Fourth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Wednesday,
the third day of January, one thousand nine hundred and ninety-six
An Act
To establish legal standards and procedures for product liability litigation, and
for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Common
Sense Product Liability Legal Reform Act of 1996’’.
(b) TABLE OF CONTENTS.—The table of contents is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
TITLE I—PRODUCT LIABILITY REFORM
Sec. 101. Definitions.
Sec. 102. Applicability; preemption.
Sec. 103. Liability rules applicable to product sellers, renters, and lessors.
Sec. 104. Defense based on claimant’s use of intoxicating alcohol or drugs.
Sec. 105. Misuse or alteration.
Sec. 106. Uniform time limitations on liability.
Sec. 107. Alternative dispute resolution procedures.
Sec. 108. Uniform standards for award of punitive damages.
Sec. 109. Liability for certain claims relating to death.
Sec. 110. Several liability for noneconomic loss.
Sec. 111. Workers’ compensation subrogation.
TITLE II—BIOMATERIALS ACCESS ASSURANCE
Sec. 201. Short title.
Sec. 202. Findings.
Sec. 203. Definitions.
Sec. 204. General requirements; applicability; preemption.
Sec. 205. Liability of biomaterials suppliers.
Sec. 206. Procedures for dismissal of civil actions against biomaterials suppliers.
TITLE III—LIMITATIONS ON APPLICABILITY; EFFECTIVE DATE
Sec. 301. Effect of court of appeals decisions.
Sec. 302. Federal cause of action precluded.
Sec. 303. Effective date.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds that—
(1) our Nation is overly litigious, the civil justice system
is overcrowded, sluggish, and excessively costly and the costs
of lawsuits, both direct and indirect, are inflicting serious and
unnecessary injury on the national economy;
(2) excessive, unpredictable, and often arbitrary damage
awards and unfair allocations of liability have a direct and
undesirable effect on interstate commerce by increasing the
cost and decreasing the availability of goods and services;
(3) the rules of law governing product liability actions,
damage awards, and allocations of liability have evolved
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inconsistently within and among the States, resulting in a
complex, contradictory, and uncertain regime that is inequitable
to both plaintiffs and defendants and unduly burdens interstate
commerce;
(4) as a result of excessive, unpredictable, and often
arbitrary damage awards and unfair allocations of liability,
consumers have been adversely affected through the withdrawal
of products, producers, services, and service providers from
the marketplace, and from excessive liability costs passed on
to them through higher prices;
(5) excessive, unpredictable, and often arbitrary damage
awards and unfair allocations of liability jeopardize the finan-
cial well-being of many individuals as well as entire industries,
particularly the Nation’s small businesses and adversely affects
government and taxpayers;
(6) the excessive costs of the civil justice system undermine
the ability of American companies to compete internationally,
and serve to decrease the number of jobs and the amount
of productive capital in the national economy;
(7) the unpredictability of damage awards is inequitable
to both plaintiffs and defendants and has added considerably
to the high cost of liability insurance, making it difficult for
producers, consumers, volunteers, and nonprofit organizations
to protect themselves from liability with any degree of con-
fidence and at a reasonable cost;
(8) because of the national scope of the problems created
by the defects in the civil justice system, it is not possible
for the States to enact laws that fully and effectively respond
to those problems;
(9) it is the constitutional role of the national government
to remove barriers to interstate commerce and to protect due
process rights; and
(10) there is a need to restore rationality, certainty, and
fairness to the civil justice system in order to protect against
excessive, arbitrary, and uncertain damage awards and to
reduce the volume, costs, and delay of litigation.
(b) PURPOSES.—Based upon the powers contained in Article
I, Section 8, Clause 3 and the Fourteenth Amendment of the United
States Constitution, the purposes of this Act are to promote the
free flow of goods and services and to lessen burdens on interstate
commerce and to uphold constitutionally protected due process
rights by—
(1) establishing certain uniform legal principles of product
liability which provide a fair balance among the interests of
product users, manufacturers, and product sellers;
(2) placing reasonable limits on damages over and above
the actual damages suffered by a claimant;
(3) ensuring the fair allocation of liability in civil actions;
(4) reducing the unacceptable costs and delays of our civil
justice system caused by excessive litigation which harm both
plaintiffs and defendants; and
(5) establishing greater fairness, rationality, and predict-
ability in the civil justice system.
H. R. 956—3
TITLE I—PRODUCT LIABILITY REFORM
SEC. 101. DEFINITIONS.
For purposes of this title—
(1) ACTUAL MALICE.—The term ‘‘actual malice’’ means spe-
cific intent to cause serious physical injury, illness, disease,
death, or damage to property.
(2) CLAIMANT.—The term ‘‘claimant’’ means any person
who brings an action covered by this title and any person
on whose behalf such an action is brought. If such an action
is brought through or on behalf of an estate, the term includes
the claimant’s decedent. If such an action is brought through
or on behalf of a minor or incompetent, the term includes
the claimant’s legal guardian.
(3) CLAIMANT’S BENEFITS.—The term ‘‘claimant’s benefits’’
means the amount paid to an employee as workers’ compensa-
tion benefits.
(4) CLEAR AND CONVINCING EVIDENCE.—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
established. The level of proof required to satisfy such standard
is more than that required under preponderance of the evidence,
but less than that required for proof beyond a reasonable doubt.
(5) COMMERCIAL LOSS.—The term ‘‘commercial loss’’ means
any loss or damage solely to a product itself, loss relating
to a dispute over its value, or consequential economic loss,
the recovery of which is governed by the Uniform Commercial
Code or analogous State commercial or contract law.
(6) COMPENSATORY
DAMAGES.—The term ‘‘compensatory
damages’’ means damages awarded for economic and non-eco-
nomic loss.
(7) 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 Reve-
nue 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, training, demonstration, or
any other similar purpose.
(8) ECONOMIC LOSS.—The term ‘‘economic loss’’ means any
pecuniary loss resulting from harm (including the loss of earn-
ings or other benefits related to employment, medical expense
loss, replacement 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 applicable State law.
(9) HARM.—The term ‘‘harm’’ means any physical injury,
illness, disease, or death or damage to property caused by
a product. The term does not include commercial loss.
(10) INSURER.—The term ‘‘insurer’’ means the employer
of a claimant if the employer is self-insured or if the employer
is not self-insured, the workers’ compensation insurer of the
employer.
(11) MANUFACTURER.—The term ‘‘manufacturer’’ means—
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(A) any person who is engaged in a business 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), or (ii) has engaged
another person to design or formulate the product (or
component part of the product);
(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 commerce, the product seller produces,
creates, makes or constructs and designs, or formulates,
or has engaged another person to design or formulate,
an aspect of the product (or component part of the product)
made by another person; or
(C) any product seller not described in subparagraph
(B) which holds itself out as a manufacturer to the user
of the product.
(12) NONECONOMIC
LOSS.—The term ‘‘noneconomic loss’’
means subjective, nonmonetary loss resulting from harm,
including pain, suffering, inconvenience, mental suffering, emo-
tional distress, loss of society and companionship, loss of consor-
tium, injury to reputation, and humiliation.
(13) PERSON.—The term ‘‘person’’ means any individual,
corporation, company, association, firm, partnership, society,
joint stock company, or any other entity (including any govern-
mental entity).
(14) PRODUCT.—
(A) IN GENERAL.—The term ‘‘product’’ means any object,
substance, mixture, or raw material in a gaseous, liquid,
or solid state which—
(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 com-
merce;
(iii) has intrinsic economic value; and
(iv) is intended for sale or lease to persons for
commercial or personal use.
(B) EXCLUSION.—The term does not include—
(i) tissue, organs, blood, and blood products used
for therapeutic or medical purposes, except to the
extent that such tissue, organs, blood, and blood prod-
ucts (or the provision thereof) are subject, under
applicable State law, to a standard of liability other
than negligence; or
(ii) electricity, water delivered by a utility, natural
gas, or steam except to the extent that electricity,
water delivered by a utility, natural gas, or steam,
is subject, under applicable State law, to a standard
of liability other than negligence.
(15) PRODUCT LIABILITY ACTION.—The term ‘‘product liabil-
ity action’’ means a civil action brought on any theory for
harm caused by a product.
(16) PRODUCT SELLER.—
(A) IN GENERAL.—The term ‘‘product seller’’ means a
person who in the course of a business conducted for that
purpose—