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WASHINGTON-Product liability reform proponents are waiting to see how Republicans recast a White House-backed product liability reform proposal before deciding whether to embrace it.
In fact, no major business group has endorsed the proposal, which became public earlier this month (BI, Oct. 13). The initial response of reform advocates was lukewarm at best.
The nation's largest organization of plaintiffs attorneys, meanwhile, has reiterated its opposition to the proposal, which was worked out after months of negotiations between the White House and Sen. John D. Rockefeller IV, D-W.Va., the most vocal Democratic product reform advocate and chief architect of several earlier bills.
Both houses of Congress approved product liability reform legislation last year, but President Clinton vetoed the measure, and backers lacked the votes necessary to override the veto (BI, May 6, 1996). When he vetoed the bill, the president expressed his willingness to sign "reasonable" product liability reform legislation.
But the "reasonable" proposal that arose from the White House negotiations fell short of what many reform proponents sought.
For example, the measure would limit punitive damages in product liability cases only in those awards made against very small businesses, those with 25 or fewer employees and annual revenues below $5 million. The proposal would limit punitive damages in such cases to the greater of $250,000 or twice compensatory damages. The bill vetoed last year would have applied that same punitive damages formula to all product liability awards.
The new proposal also says nothing about limiting the joint and several liability of multiple parties for non-economic damages in product liability cases. Last year's bill would have made defendants responsible only for paying their portion of non-economic damages under most circumstances.
The measure also would set an 18-year statute of repose on workplace durable goods provided that injured workers were covered by workers compensation; limit the liability of sellers of products subject to product liability suits; and provide some protection for manufacturers of products deliberately misused or used by people under the influence of alcohol or drugs.
The proposal is now being examined by Senate Republican leaders, notably Sen. Slade Gorton, R-Wash.
Pat Rowland, executive director of the Arlington, Va.-based Product Liability Coordinating Committee, said Sen. Gorton could respond with a proposal of his own as early as this week.
"We're really waiting for the Gorton redraft. I understand they hope to have it done when both senators return," said Mr. Rowland.
The PLCC's members read like a "Who's Who" of trade associations promoting product liability reform. They include the National Assn. of Manufacturers, the National Federation of Independent Business and the U.S. Chamber of Commerce. None has independently endorsed the proposal.
The Risk & Insurance Management Society Inc., which is not a member of the PLCC, also is reserving judgment on the reform proposal until it can be studied more, said Paul Brown, director of government affairs for the New York-based organization.
Mr. Rowland made clear that PLCC wants the measure to go further.
"We still would like to see a multiple punitive damage proposal-to limit punitive damages for the same cause-and to have the statute of repose cover all products," he said.
Mr. Rowland added that even proponents inclined to support the White House-backed measure would wait to do so until they saw final legislative language.
"There could be time bombs" buried in the wording, he said.
Nonetheless, Mr. Rowland said he remains "optimistic something can be done in this Congress," though not necessarily this year.
But if business groups think that the proposal does not go far enough, the Assn. of Trial Lawyers in America believes that even the compromise draft goes too far in tilting the playing field in favor of business.
"The latest proposal by Sen. Rockefeller to shield corporations from liability for producing dangerous products that injure and kill consumers is just another chapter in the same old story," said Richard D. Hailey, president of the ATLA in Washington.
"The American people believe in personal and corporate responsibility. This proposal-like its predecessors of the past 20 years, written and paid for by tobacco, insurance and manufacturing giants-would allow corporations, at the expense of consumers, to evade responsibility for their wrongdoing," said Mr. Hailey, who is a partner in the Indianapolis law firm Hailey & Ramey.
"The bill arbitrarily limits punitive damages, undermining their purpose-to punish and deter egregious misconduct. It violates states rights and throws out state laws more favorable to injured consumers, while retaining laws more favorable to manufacturers. And it grants immunity from liability to manufacturers of many products more than 18 years old-like elevators and farm equipment-no matter how dangerous or how long they were intended to last," he said.
"This proposal limits the legal rights of injured consumers, but not those of businesses that suffer economic losses-even as a result of the same incident. This is the same old story-unfair to consumers and far too generous to corporations," he said.