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104th Congress, 2d Session - - - - - - - - - -  House Document 104-207


 
                           VETO OF H.R. 956

                               __________

                                MESSAGE

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

     HIS VETO OF H.R. 956, A BILL TO ESTABLISH LEGAL STANDARDS AND 
  PROCEDURES FOR PRODUCT LIABILITY LITIGATION, AND FOR OTHER PURPOSES

 <GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>


   May 6, 1996.--Message and accompanying bill ordered to be printed
To The House of Representatives:
    I am returning herewith without my approval H.R. 956, the 
``Common Sense Product Liability Legal Reform Act of 1996.''
    I support real commonsense product liability reform. To 
deserve that label, however, legislation must adequately 
protect the interests of consumers, in addition to the 
interests of manufacturers and sellers. Further, the 
legislation must respect the important role of the States in 
our Federal system. The Congress could have passed such 
legislation, appropriately limited in scope and balanced in 
application, meeting these tests. Had the Congress done so, I 
would have signed the bill gladly. The Congress, however, chose 
not to do so, deciding instead to retain provisions in the bill 
that I made clear I could not accept.
    This bill inappropriately intrudes on State authority, and 
does so in a way that tilts the legal playing field against 
consumers. While some Federal action in this area is proper 
because no one State can alleviate nationwide problems in the 
tort system, the States should have, as they always have had, 
primary responsibility for tort law. The States traditionally 
have handled this job well, serving as laboratories for new 
ideas and making needed reforms. This bill unduly interferes 
with that process in products cases; moreover, it does so in a 
way that peculiarly disadvantages consumers. As a rule, this 
bill displaces State law only when that law is more favorable 
to consumers; it defers to State law when that law is more 
helpful to manufacturers and sellers. I cannot accept, absent 
compelling reasons, such a one-way street of federalism.
    Apart from this general problem of displacing State 
authority in an unbalanced manner, specific provisions of H.R. 
956 unfairly disadvantage consumers and their families. 
Consumers should be able to count on the safety of the products 
they purchase. And if these products are defective and cause 
harm, consumers should be able to get adequate compensation for 
their losses. Certain provisions in this bill work against 
these goals, preventing some injured persons from recovering 
the full measure of their damages and increasing the 
possibility that defective goods will come onto the market as a 
result of intentional misconduct.
    In particular, I object to the following provisions of the 
bill, which subject consumers to too great a risk of harm.
    First, as I previously have stated, I oppose wholly 
eliminating joint liability for noneconomic damages such as 
pain and suffering because such a change would prevent many 
persons from receiving full compensation for injury. When one 
wrongdoer cannot pay its portion of the judgment, the other 
wrongdoers, and not the innocent victim, should have to 
shoulder that part of the award. Traditional law accomplishes 
this result. In contrast, this bill would leave the victim to 
bear these damages on his or her own. Given how often companies 
that manufacture defective products go bankrupt, this provision 
has potentially large consequences.
    This provision is all the more troubling because it 
unfairly discriminates against the most vulnerable members of 
our society--the elderly, the poor, children, and nonworking 
women--whose injuries often involve mostly noneconomic losses. 
There is no reason for this kind of discrimination. Noneconomic 
damages are as real and as important to victims as economic 
damages. We should not create a tort system in which people 
with the greatest need of protection stand the least chance of 
receiving it.
    Second, as I also have stated, I oppose arbitrary ceilings 
on punitive damages, because they endanger the safety of the 
public. Capping punitive damages undermines their very purpose, 
which is to punish and thereby deter egregious misconduct. The 
provision of the bill allowing judges to exceed the cap if 
certain factors are present helps to mitigate, but does not 
cure this problem, given the clear intent of the Congress, as 
expressed in the Statement of Managers, that judges should use 
this authority only in the most unusual cases.
    In addition, I am concerned that the Conference Report 
fails to fix an oversight in title II of the bill, which limits 
actions against suppliers of materials used in devices 
implanted in the body. In general, title II is a laudable 
attempt to ensure the supply of materials needed to make life-
saving medical devices, such as artificial heart valves. But as 
I believe even many supporters of the bill agree, a supplier of 
materials who knew or should have known that the materials, as 
implanted, would cause injury should not receive any protection 
from suit. Title II's protections must be clearly limited to 
nonnegligent suppliers.
    My opposition to these Senate-passed provisions were known 
prior to the Conference on the bill. But instead of addressing 
these issues, the Conference Committee took several steps 
backward in the direction of the bill approved by the House.
    First, the Conference Report seems to expand the scope of 
the bill, inappropriately applying the limits on punitive and 
noneconomic damages to lawsuits, where, for example, a gun 
dealer has knowingly sold a gun to a convicted felon or a bar 
owner has knowingly served a drink to an obviously inebriated 
customer. I believe that such suits should go forward 
unhindered. Some in the Congress have argued that the change 
made in Conference is technical in nature, so that the bill 
still exempts these actions. But I do not read the change in 
this way--and in any event, I do not believe that a victim of a 
drunk driver should have to argue in court about this matter. 
The Congress should not have made this last-minute change, 
creating this unfortunate ambiguity, in the scope of the bill.
    In addition, the Conference Report makes certain changes 
that, though sounding technical, may cut off a victim's ability 
to sue a negligent manufacturer. The Report deletes a provision 
that would have stopped the statute of limitations from running 
when a bankruptcy court issues the automatic stay that prevents 
suits from being filed during bankruptcy proceedings. The 
effect of this seemingly legalistic change will be that some 
persons harmed by companies that have entered bankruptcy 
proceedings (as makers of defective products often do) will 
lose any meaningful opportunity to bring valid claims.
    Similarly, the Conference Report reduces the statute of 
repose to 15 years (and less if States so provide) and applies 
the statute to a wider range of goods, including handguns. This 
change, which bars a suit against a maker of an older product 
even if that product has just caused injury, also will preclude 
some valid suits.
    In recent weeks, I have heard from many victims of 
defective products whose efforts to recover compensation would 
have been frustrated by this bill. I have heard from a woman 
who would not have received full compensatory damages under 
this bill for the death of a child because one wrongdoer could 
not pay his portion of the judgment. I have heard from women 
whose suits against makers of defective contraceptive devices--
and the punitive damages awarded in those suits--forced the 
products off the market, in a way that this bill's cap on 
punitives would make much harder. I have heard from persons 
injured by products more than 15 years old, who under this bill 
could not bring suit at all.
    Injured people cannot be left to suffer in this fashion; 
furthermore, the few companies that cause these injuries cannot 
be left, through lack of a deterrent, to engage in misconduct. 
I therefore must return the bill that has been presented to me. 
This bill would undermine the ability of courts to provide 
relief to victims of harmful products and thereby endanger the 
health and safety of the entire American public. There is 
nothing common sense about such reforms to product liability 
law.

                                                William J. Clinton.
    The White House, May 2, 1996.
         H.R. 956                                              

  One Hundred Fourth Congress of the United States of America, at the 
 First 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 
    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 financial 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 confidence 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 
    predictability in the civil justice system.

                   TITLE I--PRODUCT LIABILITY REFORM

SEC. 101. DEFINITIONS.

    For purposes of this title--
        (1) Actual malice.--The term ``actual malice'' means specific 
    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 

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