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The 'slimy' side of FQPA (sidebar)

Senate takes risks on product liability bill

Like the swallows returning to Capistrano product liability legislation is roosting again in Congress. The Senate Commerce Science and Transportation Committee passed a bill (S. 648) in May that is almost identical to the one Congress passed and President Clinton vetoed in 1996. The Committee approved the bill along a party-line vote of 11-9. But even though Democrats opposed the bill there is evidence that the White House will be striking a deal with Sen. Slade Gorton (R-WA) the bill's sponsor. Evidence of an imminent Democrat/GOP deal was the May 21 letter from Commerce Secretary William Daley to Richard Lesher president of the U.S. Chamber of Commerce. Daley said that S. 648 could be made acceptable to the Clinton administration with "relatively modest changes." President Clinton has set up an administration task force to detail what those changes should be. It is being headed by Bruce Lindsey the deputy White House counsel. The Small Business Assn. Commerce and Justice Departments will have seats on the task force. Pat Rowland executive director of the Product Liability Coordinating Committee the business alliance pushing for the bill says his group supports changes to S. 648 "provided they are reasonable." On one important issue this year's bill is even better for product packagers than in 1996. That is because of a change to the provision on a statute of repose. The 1996 bill included a 15-year statute but limited its applicability only to durable goods manufacturers. However there was no time limit for consumer products. Those could be filed anytime. This year's bill extends the statute to 18 years and includes consumer products under the umbrella. Moreover it preempts state laws. There are 19 states with statutes of repose and none of them are longer than 12 years. So the 18-year standard would be viewed as a pro-consumer provision in those states one likely to help attract Democratic support to the bill. Because of that the Clinton administration is not expected to make the addition of consumer products a main sticking point. The Democrats are more likely to push for changes in S. 648's provisions on "joint and several" liability and punitive damages. Joint and several is where a company is one of a number of companies in a product manufacturing and distribution chain. For example a company may be responsible for packaging a product that has been supplied to them. At some point after the product is purchased it misfires in some way injuring a consumer. The consumer sues. All the companies in the original supply chain have gone out of business except the packager whose contribution had only constituted 10% of the finished product. But because of "joint and several" that packager has to pay 100% of the damages. The Senate bill maintains joint and several for economic damages to an individual. Those would be items such as medical expenses and loss of wages. But the packager in the above example would only pay its "fair share" of non-economic damages for example the individual's pain and suffering. President Clinton in his 1996 veto message cited that section as a problem arguing it would hurt children the elderly and women who perhaps would have a hard time substantiating their non-economic damages. S-648 stays with the 1996 bill's version on punitive damages money awarded to a successful plaintiff who argues a company was reckless or negligent in producing a product. There would be a cap on punitive damages of the greater of $250 or two times the total of economic and non-economic damages. Clinton also had problems with that.

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