Summary: H.R.2700 — 101st Congress (1989-1990)All Information (Except Text)

There is one summary for H.R.2700. Bill summaries are authored by CRS.

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Introduced in House (06/21/1989)

Product Liability Reform Act of 1989 - Declares that this Act governs any product liability action brought in any State or Federal court against a manufacturer or product seller, on any theory, for harm. States that a civil action brought against a manufacturer or product seller for commercial loss shall be governed by applicable commercial or contract law.

Supersedes any inconsistent State law regarding recovery in such actions.

Lists specific laws not superseded, including: (1) defense of sovereign immunity asserted by any State or by the United States; (2) any Federal law (except the Federal Employees Compensation Act and the Longshore and Harbor Workers' Compensation Act); (3) the Foreign Sovereign Immunities Act of 1976; (4) State choice-of-law rules; (5) the right of any court to transfer venue or to apply the law of a foreign nation or to dismiss a claim of a foreign nation or citizen on the ground of inconvenient forum; and (6) any statutory or common law cause of action which is not an action for harm caused by a product or an action to abate a nuisance and which is for civil damages or civil penalties, clean up costs, injunctions, restitution, cost recovery, punitive damages, or any other form of relief from contamination or pollution of the environment or the threat of it.

Makes this Act (except provisions relating to workers' compensation offset) inapplicable to any product liability action brought in State or Federal court, on any theory, for harm caused by asbestos or asbestos products.

Provides that, with respect to civil actions brought for vaccine-related injury or death, if specified provisions of the Public Health Service Act (PHSA) take effect and establish a Federal rule of law or defense applicable to such actions, then this Act does not affect the application of such rule of law or defense and any conflicting rule or defense prescribed by this Act shall not apply to such an action. Provides that if there is an aspect of such an action for which a PHSA rule or defense does not apply, then this Act or otherwise applicable law will apply to such aspect.

Establishes a standard of manufacturer liability in product liability actions for proximate causes of harm, established by a preponderance of the evidence, which fall under the categories of: (1) negligence; (2) strict product liability; or (3) intentional wrongdoing. Provides that negligence shall be in terms of a manufacturer's failure to act as a reasonably prudent person would with respect to product design, construction, warnings, or instructions. Provides that strict liability shall be with respect to a product's being in an unreasonably dangerous defective condition in: (1) deviation from standards; (2) nonconformance with an express warranty; (3) failure to contain adequate warnings or instructions; or (4) design (in which case State law governs with respect to establishment of a prima facie case). Provides that a manufacturer's intentional wrongdoing shall be determined under applicable State law.

Sets forth a defense to manufacturer liability based on a product's inherent characteristics. Provides that a product shall not be considered to be in an unreasonably dangerous defective condition if the product aspect which allegedly caused the harm cannot be made safe and is not dangerous to an extent beyond that which would be contemplated by the ordinary person who uses or consumes the product with the knowledge common to the community as to its characteristics. Provides that such defense does not limit a manufacturer's liability solely because the risk of harm is patent, open, or obvious.

Provides that a manufacturer shall not be relieved of liability on the grounds that the product that allegedly caused the harm was unavoidably unsafe, unless the product is a drug or medical device. Provides that in product liability actions involving an improperly designed and unavoidably unsafe drug or medical device, the manufacturer's liability shall be determined under State law (and the state-of-the-art defense under this Act shall not apply).

Sets forth a state-of-the-art defense. Provides that the manufacturer shall not be liable for the design of the product if the manufacturer establishes by a preponderance of the evidence that at the time the product left its control: (1) the manufacturer did not and could not know that the product was in an unreasonably dangerous defective condition because of its design in light of knowledge reasonably available to experts; or (2) there was not a feasible alternative design that would have prevented the harm without substantially impairing the reasonably anticipated or intended function of the product (considering specified factors).

Makes the state-of-the-art defense inapplicable if the court finds, on its own or on a party's motion, that a claimant has established by a preponderance of the evidence that the product is so unsafe compared to its usefulness that it should not have been marketed.

Sets forth standards for product warnings and instructions. Provides that a product is in an unreasonably dangerous defective condition because it failed to contain adequate warnings and instructions if reasonably prudent, adequate warnings or instructions, in the light of knowledge reasonably available to experts, on the aspect (including a design aspect) which caused the harm: (1) did not accompany the product at the time it left the manufacturer's control; or (2) were not given on a timely basis by the manufacturer before the harm. Requires that specified factors be considered.

Establishes, in addition to the general standard of manufacturer's liability, a presumption of liability applicable to manufacturers of fire fighting equipment or protective clothing for harm suffered by any fire fighter performing interior structural firefighting if: (1) the harm was the result of the use of such equipment or clothing which left the manufacturer's control after the enactment of this Act; and (2) the equipment or clothing did not comply with the OSHA (Occupational Safety and Health Act) fire brigade occupational safety and health standards or a more stringent State standard.

Establishes a standard of product seller liability in product liability actions for proximate causes of harm, established by a preponderance of the evidence, which fall under the categories of: (1) negligence; (2) express warranty; or (3) intentional wrongdoing. Provides that such negligence shall be in terms of a product seller's failure to exercise reasonable care with respect to the product. Provides that it shall not be such a failure based on an alleged failure to inspect a product where there was no reasonable opportunity to inspect it in a manner which would or should, in the exercise of reasonable care, have revealed the aspect which allegedly caused the harm. Provides that such product seller's express warranty must be independent of any express warranty of the manufacturer. Provides that a product seller's intentional wrongdoing shall be determined under applicable State law.

Establishes an additional product seller liability as a manufacturer. Makes the product seller liable as if it were the manufacturer if: (1) the manufacturer is not subject to service of process under the laws of the State in which the claimant brings the action; or (2) the court determines that the claimant would be unable to enforce a judgment against the manufacturer.

Sets forth a defense based on a claimant's being, as a result of the influence of intoxicating alcohol or any non-over-the-counter drug which has not been prescribed for the claimant by a physician, more than 50 percent at fault for the harm.

Reduces the manufacturer's or product seller's liability for damages by the percentage of responsibility for the harm attributable to misuse or alteration of a product.

Allows punitive damages to be awarded, to the extent provided by applicable State law, if the claimant establishes by clear and convincing evidence that the manufacturer or product seller engaged in conduct giving rise to punitive damages under applicable State law, with the following exception. Provides that a failure to exercise reasonable care in selecting among alternative product designs, formulations, instructions, or warnings shall not, by itself, constitute conduct that may give rise to punitive damages. Requires separate proceedings for punitive damages if such separate proceedings are requested by the defendant. Makes evidence in such separate proceedings which is relevant only to the claim of punitive damages inadmissible in any proceeding for compensatory damages.

Directs the trier of fact, in determining the amount of punitive damages, to consider all relevant evidence, including specified factors.

Prohibits punitive damages against a manufacturer of a drug or medical device unless the claimant establishes by clear and convincing evidence that the manufacturer or product seller engaged in conduct giving rise to punitive damages under applicable State law and unless the manufacturer engaged in: (1) intentional and wrongful withholding or misrepresentation of information, material and relevant to the harm, which either was required to be submitted before the approval of the drug or device or was related to the safety and efficacy of the drug or device after its approval, under the Federal Food, Drug, and Cosmetic Act (FFDCA) or the Public Health Service Act; or (2) a violation of the FFDCA which was material and relevant to the harm and was committed with the intent to defraud or mislead, as determined by the court and proven by clear and convincing evidence.

Prohibits punitive damages against a drug manufacturer where the harm is alleged to relate to the adequacy of the packaging or labeling of a drug required to have tamper-resistant packaging (and related labeling), unless the drug is found by clear and convincing evidence to be substantially out of compliance with Federal regulations.

Makes findings with respect to punitive damages relating to drugs and medical devices inadmissible in any criminal proceeding.

Requires that civil actions subject to this Act be brought within two years from the time the individual discovered or should have discovered the harm and its cause, with the following exception. Bars actions for harm caused by a product which is a capital good unless the complaint is served and filed within 25 years of the date of delivery of the product to its first purchaser or lessee who was not engaged in the business of selling or leasing it or using it as a component in the manufacture of another product. Applies this capital goods rule only if: (1) the court determines that the claimant has received or would be eligible to receive State or Federal workers' compensation for the harm; and (2) the harm did not include chronic illness.

Reduces any damages awarded under this Act by the amount paid in workers' compensation benefits which the claimant-employee is or would be entitled to receive. Provides for such reduction only where the employer or the employer's workers' compensation insurance carrier does not have a lien against the claimant's recovery in a product liability action against a claimant or product seller. Provides that determinations under this Act of workers' compensation benefits shall have no binding effect on, and shall not be used as evidence in, any other proceeding. Allows the claimant to stay product liability actions under this Act until the workers' compensation benefits have been determined.

Provides that the employer and its insurance carrier shall have no right of subrogation, contribution, or implied indemnity against an award made under this Act, unless the employer establishes, and the trier of fact determines, that the harm was not caused in any way by fault of the employer or a co-employee.

Prohibits any third-party tortfeasor from maintaining any action for implied indemnity or contributions against the employer, any co-employee, or the exclusive representative of the injured party. Provides that nothing in this Act shall affect any provision of State or Federal workers' compensation law which: (1) prohibits a person who is or would have been entitled to receive compensation under such law, or any derivative claim, from recovering in any other action against an employer, employer's insurer, co-employee, or exclusive representative; or (2) permits recovery based on an intentional tort by the employer or co-employee. Declares that this Act's restrictions on third-party claim tortfeasors shall not apply and applicable State law shall control if the employer or its insurer, in a product liability action subject to this Act, asserts or attempts to assert, because of provisions relating to its lack of fault under this Act, a right of subrogation, contribution, or implied indemnity against the manufacturer or product seller or a lien against the claimant's recovery from them.

Sets forth standards, procedures, and sanctions relating to frivolous pleadings under this Act.

Provides for the availability of information under this Act.

Provides that U.S. district courts shall not have jurisdiction over any civil action arising under this Act.

Requires the court in which any action is brought under this Act, upon the application of any party to the action, to refer the action to mediation, unless the court determines that the action involves novel or unsettled issues of law or is otherwise unsuitable for mediation.

Allows the court to impose fees to cover the costs of the mediation. Makes mediation statements, briefs, and summaries inadmissable in any court or any other evidentiary proceeding.

Requires the evaluation by the mediation panel to include a separate award for each claim, crossclaim, counterclaim, or third-party claim. Requires each party to file an acceptance or rejection of the panel's award, with special procedures for multiple parties.

Requires that the action proceed to trial with respect to any claim for which any party rejects the mediation award. Makes the findings, evaluations, and awards of the panel and the parties' acceptance or rejection inadmissable at trial. Requires the rejecting party to pay the opposing party's costs, upon request, unless the verdict is more favorable to the rejecting party than the mediation award.

Requires each State Attorney General and the Administrative Office of the U.S. Courts to report to the Attorney General, and the Attorney General to report to the Congress regarding implementation of the mediation provisions of this Act.

Sets forth definitions under this Act. Excludes commercial loss from the definition of harm. Defines harm as any of the following caused by a product: (1) personal physical illness, injury, or death; (2) mental anguish or emotional harm caused by or causing personal physical illness or injury; or (3) physical damage to property other than the product itself.

Directs the Secretary of Commerce (the Secretary) to report to the Congress on the effect of the implementation of this Act upon the cost and availability of product liability insurance. Sets forth requirements relating to the information on which such report is based. Requires such a report annually for ten years, after which the Secretary shall report on the costs and benefits of continuing such reports and continue them only if so requested by a majority of specified congressional committees.

Directs the Secretary to report to the Congress on what information is needed to enable the Congress to measure the effect of product liability reforms on product liability actions. Requires consultation with specified entities in making such report. Requires specified information to be included in such report. Requires the report to be submitted within 18 months after the enactment of this Act.

Directs the Secretary to report to the Congress on the effect of this Act upon product liability actions, product manufacturers, and product sellers (including small businesses), claimants, and Federal and State courts. Requires such report to assess specified factors. Requires such a report to be made biennially five times, after which the Secretary shall report on the costs and benefits of continuing such reports and continue them only if so requested by a majority of specified congressional committees.

Directs the Secretary, upon determining that sufficient data does not exist to measure the effect of product liability reform on litigation, to report on what information is needed to enable the Congress to measure the effect of product liability reforms on product liability actions. Requires consultation with specified entities in making such report. Requires specified information to be included in such report. Requires the report to be submitted within 18 months after enactment of this Act.

Declares that this Act shall not apply to any product liability cause of action arising from the use of a product before the date of enactment of this Act against a person who is a debtor in a case commenced on a specified date under bankruptcy provisions of Federal law.