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SENATE PRODUCT LIABILITY BILL WOULD HAVE SUPPORT OF CONSUMER FEDERATION

Executive Summary

SENATE PRODUCT LIABILITY BILL WOULD HAVE SUPPORT OF CONSUMER FEDERATION of America if "three or four" additional changes are made to the legislation, CFA Legislative Director Gene Kimmelman declared at an April 5 hearing before the Senate Commerce/Consumer Subcommittee. Responding to a comment by the bill's principal sponsor that S 1400 is a moderate and reasonable measure, Kimmelman testified: "I agree with what Sen. Kasten [R-Wis.] said about the changes in his bill. There have been a number of changes made" from the last bill referred to the full Senate by the Commerce Committee. "We think that probably three or four more and we're there," he said. "We're not nearly so far apart as we used to be." One of the additional changes CFA advocates is deletion of the provision for a defense against punitive damages for firms whose products are approved or rated generally recognized as safe and effective by FDA. The group also opposes the bill's provision to amend the doctrine of joint and several liability. The Wisconsin Republican commented that the modifications made to his legislation since the 99th Congress have "boxed in" consumer groups, who he suggested must eventually relent in their opposition to the bill. "Increasingly, we are going to have consumers recognize that we don't want to have impediments" to marketing quality products, Kasten said. At some point "the consumer organizations are no longer going to be able to front for the trial lawyers; they're going to have to be off on their own," he declared. At some point "we've got to separate that link, just as we have separated the lawyers [the American Bar Association now supports modified reform legislation] from the [American] Trial Lawyers" Association, which continues to oppose the legislation in any form. "More and more, you're getting boxed in," he said. Many changes have been made with the approval of consumer advocates, the senator pointed out. For example, he noted, "all limits on damages have now been removed, an expedited claims system has been added...compliance with [industry or government] standards [as a defense against] compensatory damages has been removed...rules that would reduce a worker's right to recover based on employer fault have been deleted, rules eliminating collateral estoppel have been removed, the requirement that plaintiffs prove negligence (a major demand of the manufacturers) was deleted," and a joint and several liability provision has been modified and now reflects legislation recently enacted in California. Kimmelman suggested that reform legislation is not needed to enhance international competitiveness of U.S. industry. If product liability laws have forced manufacturing industries overseas, as many proponents of the bill claim, most products would be launched overseas before they are introduced here, the CFA lobbyist argued. However, he maintained that the Roussel-Uclaf oral abortifacient, RU-486, is the only example of a such a product. CFA has looked for instances of "products that are marketed somewhere else before they are marketed here" and "only found one ...and that's a special contraceptive in France," Kimmelman said. CFA "can't seem to find others." Instead, "what we have been seeing is more foreign manufacturers coming in and hiring American workers and manufacturing here under our liability rules," he said. * Commerce Department Secretary Robert Mosbacher testified that product liability concerns caused Genentech to cancel research into an AIDS vaccine. "The potential liability for that product was so great that [Genentech] abandoned their" research program, Mosbacher said. "That is, in my view, a tragedy for this country." Genentech testified two years ago before the California legislature in support of a state bill to provide product liability protection for AIDS vaccine developers. The firm said the risk of product liability exposure was among the concerns that caused Genentech to drop its AIDS vaccine research project. Kasten remarked that when Merrell Dow withdrew the anti-emetic Bendectin from the market, it had annual "sales of $20 mil." but "legal and insurance costs of $18 mil." He added that the decision to withdraw Bendectin was made "despite the petition of 12,000 doctors, who said this product should remain on the market because they need it." Sen. Rockefeller (D-W.Va.), a cosponsor of the legislation, cited a 1990 Commerce Department "Industrial Outlook" survey of U.S. industry, which found that the current product liability system competitively disadvantages "all" industries that rely on biotechnology. Affected products, he continued, include "pharmaceuticals, vaccines, medical devices, chemicals [and] pesticides."
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