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Senate's Product Liability Deal Has Strong Prospects For Avoiding Clinton Veto

By Juliana Gruenwald, CQ Staff Writer

After years of battling trial lawyers and consumer groups, supporters of overhauling the nation's laws governing faulty products say they have crafted a deal that may become law.

Sens. Slade Gorton, R-Wash., and John D. Rockefeller IV, D-W.Va., said June 9 they hammered out a compromise bill President Clinton will sign.

The bill is "an incremental step toward reforming the current judicial lottery system, where runaway awards inflate the price of goods, stifle innovation . . . and hurt America's ability to compete," Gorton said.

White House spokesman Barry Toiv said the president will sign the legislation if it is passed in its current form.

"It's not an issue that's been a high priority for us," Toiv said. But the president "wanted to make sure it's sensible, and there were appropriate strong protections for consumers."

The legislation includes a cap on punitive damages for small businesses. Supporters say multimillion-dollar judgments and frivolous claims are driving up product costs and inhibiting innovation.

Opponents argue that limiting awards in such cases will damage protections for consumers who are harmed by products of negligent manufacturers.

Product liability legislation has been a GOP priority for years. Senate Majority Leader Trent Lott, R-Miss., said in May that he wanted to move a bill before the July Fourth congressional recess.

Gorton has apparently gotten assurances from Lott that he will bring the bill to the floor but no firm commitment on a date, according to Gorton's spokeswoman Cynthia Bergman.

Long-Running Battle

Rockefeller is among a small group of Democrats who have joined Republicans in backing an overhaul of the nation's product liability laws. He has been working with the White House and Gorton to craft legislation that the president will sign and business will support.

Congress cleared a product liability bill in 1996, but Clinton vetoed it, saying it did not adequately protect consumers.

However, Clinton said he would support a "common sense" product liability bill. Clinton signed a bill in 1994 setting limits on civil lawsuits against aircraft manufacturers.

The Senate Commerce, Science and Transportation Committee approved a product liability bill (S648) in May 1997, similar to the legislation vetoed by Clinton in 1996. But Gorton, sponsor of that bill, said the bill was a starting point for further discussions with the White House.

Gorton and Rockefeller's draft legislation is much narrower than the bill Clinton vetoed.

For example, the latest measure includes a $250,000 cap on punitive damages against small businesses. The 1996 bill included a punitive damages cap for both big and small businesses.

It would establish a national standard for awarding punitive damages that is more strict than many existing state laws. Plaintiffs could only receive punitive damages when they show "clear and convincing evidence" that a defendant acted with a "conscious, flagrant indifference to the rights or safety of others."

The measure also would place an 18-year limit on the filing of lawsuits relating to harm caused by goods used in the workplace.

James A. Anderson Jr., vice president of government relations for the National Association for Wholesaler-Distributors, said the legislation "is not the be-all and end-all for civil justice or even product liability reform but it is a measure that will do a lot of good for a lot of people."

The House has yet to take up a broad product liability bill. The House Judiciary Committee, however, approved legislation (HR872) that would make it more difficult to sue suppliers of raw materials used to make medical devices. A similar provision is included in Gorton and Rockefeller's measure.

© 1998 Congressional Quarterly Inc. All Rights Reserved.
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June 16, 1998

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Senate's Product Liability Deal Has Strong Prospects For Avoiding Clinton Veto

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