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PRODUCT LIABILITY LEGISLATION PROMOTED AS BOOSTER TO ECONOMY

This article was originally published in The Tan Sheet

Executive Summary

PRODUCT LIABILITY LEGISLATION PROMOTED AS BOOSTER TO ECONOMY by its five Senate sponsors who introduced the legislation March 31. The bipartisan measure was jointly introduced by principal author Sen. Jay Rockefeller (D-W. Va.) and four cosponsors: Christopher Dodd (D-Conn.), Joseph Lieberman (D-Conn.), Slade Gorton (R-Wash.) and John Danforth (R-Mo.). Rockefeller claimed that the bill will "break the gridlock in our civil courts" and "bring new efficiencies to our economy." Lieberman asserted that the bill is "pro-business and pro-consumer at the same time." Gorton maintained that product liability reform will both improve U.S. companies' international competitiveness and encourage development of products that previously were not developed due to liability concerns. Like past versions of product liability reform legislation, this year's bill includes a government standards defense that exempts products subject to FDA review, including monographed OTCs, from liability for punitive damages, as long as their marketers have not withheld or misrepresented material information about the products. One difference between the current bill and S 640, which was authored by Sen. Bob Kasten in the 102nd Congress, is that claimants no longer would be penalized for refusing to participate in an alternative dispute resolution in a case subsequently lost. On the other hand, defendant companies under the current bill must pay reasonable legal fees and costs for the claimant if they refuse to pursue expedited settlement and subsequently lose. Rockefeller explained that after one of last year's votes on S 640, "a number" of Democratic senators expressed concern about the provision penalizing injured parties who lose their cases. The new bill "entirely satisfies that particular sentiment," he said. Danforth and Rockefeller added that S 640 for "about 45 minutes" had a super majority of 60 votes required to pass the bill and end debate, but the bill failed after a few senators changed their votes. They feel the changed provision could give the new bill the boost needed for Senate endorsement. Information about the legislation has been presented to the White House, Rockefeller said. Although President Clinton has not given any commitment to support the legislation, Rockefeller said the President in the past has given indications that he might endorse such a bill. As Governor of Arkansas, Clinton "twice . . . voted with other governors to establish uniform, national, federal product liability laws," the West Virginia Democrat said. In addition, the President in February told business leaders "that he recognizes that there has to be some kind of change in the tort system, [although] he didn't specify" what changes he thought were necessary. Furthermore, Clinton "has talked from time to time about the alternative dispute resolution system, which is a state system, after all," Rockefeller said. "But having said that, there is no commitment from the White House at all."
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