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105th Congress Rept. 105-549
HOUSE OF REPRESENTATIVES
2d Session Part 1
_______________________________________________________________________
BIOMATERIALS ACCESS ASSURANCE ACT OF 1998
_______________________________________________________________________
May 22, 1998.--Ordered to be printed
_______
Mr. Gekas, from the Committee on the Judiciary, submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 872]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 872) to establish rules governing product liability
actions against raw materials and bulk component suppliers to
medical device manufacturers, and for other purposes, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
TABLE OF CONTENTS
Page
The Amendment.............................................. 2
Purpose and Summary........................................ 9
Background and Need for the Legislation.................... 9
Hearings................................................... 12
Committee Consideration.................................... 13
Committee Oversight Findings............................... 13
Committee on Government Reform and Oversight Findings...... 13
New Budget Authority and Tax Expenditures.................. 13
Congressional Budget Office Cost Estimate.................. 13
Constitutional Authority Statement......................... 15
Section-by-Section Analysis and Discussion................. 15
Dissenting Views........................................... 21
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE
This Act may be cited as the ``Biomaterials Access Assurance Act of
1998''.
SEC. 2. FINDINGS.
The Congress finds that--
(1) each year millions of citizens of the United States
depend on the availability of lifesaving or life-enhancing
medical devices, many of which are permanently implantable
within the human body;
(2) a continued supply of raw materials and component parts
is necessary for the invention, development, improvement, and
maintenance of the supply of the devices;
(3) most of the medical devices are made with raw materials
and component parts that--
(A) move in interstate commerce;
(B) are not designed or manufactured specifically for
use in medical devices; and
(C) come in contact with internal human tissue;
(4) the raw materials and component parts also are used in a
variety of nonmedical products;
(5) because small quantities of the raw materials and
component parts are used for medical devices, sales of raw
materials and component parts for medical devices constitute an
extremely small portion of the overall market for the raw
materials and component parts;
(6) under the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
301 et seq.) manufacturers of medical devices are required to
demonstrate that the medical devices are safe and effective,
including demonstrating that the products are properly designed
and have adequate warnings or instructions;
(7) notwithstanding the fact that raw materials and component
parts suppliers do not design, produce, or test a final medical
device, the suppliers have been the subject of actions alleging
inadequate--
(A) design and testing of medical devices
manufactured with materials or parts supplied by the
suppliers; or
(B) warnings related to the use of such medical
devices;
(8) even though suppliers of raw materials and component
parts have very rarely been held liable in such actions, such
suppliers have ceased supplying certain raw materials and
component parts for use in medical devices for a number of
reasons, including concerns about the costs of such litigation;
(9) unless alternate sources of supply can be found, the
unavailability of raw materials and component parts for medical
devices will lead to unavailability of lifesaving and life-
enhancing medical devices;
(10) because other suppliers of the raw materials and
component parts in foreign nations are refusing to sell raw
materials or component parts for use in manufacturing certain
medical devices in the United States, the prospects for
development of new sources of supply for the full range of
threatened raw materials and component parts for medical
devices are remote;
(11) it is unlikely that the small market for such raw
materials and component parts in the United States could
support the large investment needed to develop new suppliers of
such raw materials and component parts;
(12) attempts to develop such new suppliers would raise the
cost of medical devices;
(13) courts that have considered the duties of the suppliers
of the raw materials and component parts have generally found
that the suppliers do not have a duty--
(A) to evaluate the safety and efficacy of the use of
a raw material or component part in a medical device;
and
(B) to warn consumers concerning the safety and
effectiveness of a medical device;
(14) because medical devices and the raw materials and
component parts used in their manufacture move in interstate
commerce, a shortage of such raw materials and component parts
affects interstate commerce;
(15) in order to safeguard the availability of a wide variety
of lifesaving and life-enhancing medical devices, immediate
action is needed--
(A) to clarify the permissible bases of liability for
suppliers of raw materials and component parts for
medical devices; and
(B) to provide expeditious procedures to dispose of
unwarranted suits against the suppliers in such manner
as to minimize litigation costs;
(16) the several States and their courts are the primary
architects and regulators of our tort system; Congress,
however, must, in certain circumstances involving the national
interest, address tort issues, and a threatened shortage of raw
materials and component parts for life-saving medical devices
is one such circumstance; and
(17) the protections set forth in this Act are needed to
assure the continued supply of materials for life-saving
medical devices; however, negligent suppliers should not be
protected.
SEC. 3. DEFINITIONS.
As used in this Act:
(1) Biomaterials supplier.--
(A) In general.--The term ``biomaterials supplier''
means an entity that directly or indirectly supplies a
component part or raw material for use in the
manufacture of an implant.
(B) Persons included.--Such term includes any person
who--
(i) has submitted master files to the
Secretary for purposes of premarket approval of
a medical device; or
(ii) licenses a biomaterials supplier to
produce component parts or raw materials.
(2) Claimant.--
(A) In general.--The term ``claimant'' means any
person who brings a civil action, or on whose behalf a
civil action is brought, arising from harm allegedly
caused directly or indirectly by an implant, including
a person other than the individual into whose body, or
in contact with whose blood or tissue, the implant is
placed, who claims to have suffered harm as a result of
the implant.
(B) Action brought on behalf of an estate.--With
respect to an action brought on behalf of or through
the estate of an individual into whose body, or in
contact with whose blood or tissue the implant is
placed, such term includes the decedent that is the
subject of the action.
(C) Action brought on behalf of a minor or
incompetent.--With respect to an action brought on
behalf of or through a minor or incompetent, such term
includes the parent or guardian of the minor or
incompetent.
(D) Exclusions.--Such term does not include--
(i) a provider of professional health care
services, in any case in which--
(I) the sale or use of an implant is
incidental to the transaction; and
(II) the essence of the transaction
is the furnishing of judgment, skill,
or services;
(ii) a person acting in the capacity of a
manufacturer, seller, or biomaterials supplier;
or
(iii) a person alleging harm caused by either
the silicone gel or the silicone envelope
utilized in a breast implant containing
silicone gel, except that--
(I) neither the exclusion provided by
this clause nor any other provision of
this Act may be construed as a finding
that silicone gel (or any other form of
silicone) may or may not cause harm;
and
(II) the existence of the exclusion
under this clause may not--
(aa) be disclosed to a jury
in any civil action or other
proceeding, and
(bb) except as necessary to
establish the applicability of
this Act, otherwise be
presented in any civil action
or other proceeding.
(3) Component part.--
(A) In general.--The term ``component part'' means a
manufactured piece of an implant.
(B) Certain components.--Such term includes a
manufactured piece of an implant that--
(i) has significant non-implant applications;
and
(ii) alone, has no implant value or purpose,
but when combined with other component parts
and materials, constitutes an implant.
(4) Harm.--
(A) In general.--The term ``harm'' means--
(i) any injury to or damage suffered by an
individual;
(ii) any illness, disease, or death of that
individual resulting from that injury or
damage; and
(iii) any loss to that individual or any
other individual resulting from that injury or
damage.
(B) Exclusion.--The term does not include any
commercial loss or loss of or damage to an implant.
(5) Implant.--The term ``implant'' means--
(A) a medical device that is intended by the
manufacturer of the device--
(i) to be placed into a surgically or
naturally formed or existing cavity of the body
for a period of at least 30 days; or
(ii) to remain in contact with bodily fluids
or internal human tissue through a surgically
produced opening for a period of less than 30
days; and
(B) suture materials used in implant procedures.
(6) Manufacturer.--The term ``manufacturer'' means any person
who, with respect to an implant--
(A) is engaged in the manufacture, preparation,
propagation, compounding, or processing (as defined in
section 510(a)(1) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360(a)(1)) of the implant; and
(B) is required--
(i) to register with the Secretary pursuant
to section 510 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360) and the
regulations issued under such section; and
(ii) to include the implant on a list of
devices filed with the Secretary pursuant to
section 510(j) of such Act (21 U.S.C. 360(j))
and the regulations issued under such section.
(7) Medical device.--The term ``medical device'' means a
device, as defined in section 201(h) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 321(h)), and includes any device
component of any combination product as that term is used in
section 503(g) of such Act (21 U.S.C. 353(g)).
(8) Raw material.--The term ``raw material'' means a
substance or product that--
(A) has a generic use; and
(B) may be used in an application other than an
implant.
(9) Secretary.--The term ``Secretary'' means the Secretary of
Health and Human Services.
(10) Seller.--
(A) In general.--The term ``seller'' means a person
who, in the course of a business conducted for that
purpose, sells, distributes, leases, packages, labels,
or otherwise places an implant in the stream of
commerce.
(B) Exclusions.--The term does not include--
(i) a seller or lessor of real property;
(ii) a provider of professional services, in
any case in which the sale or use of an implant
is incidental to the transaction and the
essence of the transaction is the furnishing of
judgment, skill, or services; or
(iii) any person who acts in only a financial
capacity with respect to the sale of an
implant.
SEC. 4. GENERAL REQUIREMENTS; APPLICABILITY; PREEMPTION.
(a) General Requirements.--
(1) In general.--In any civil action covered by this Act, a
biomaterials supplier may raise any defense set forth in
section 5.
(2) Procedures.--Notwithstanding any other provision of law,
the Federal or State court in which a civil action covered by
this Act is pending shall, in connection with a motion for
dismissal or judgment based on a defense described in paragraph
(1), use the procedures set forth in section 6.
(b) Applicability.--
(1) In general.--Except as provided in paragraph (2),
notwithstanding any other provision of law, this Act applies to
any civil action brought by a claimant, whether in a Federal or
State court, against a manufacturer, seller, or biomaterials
supplier, on the basis of any legal theory, for harm allegedly
caused by an implant.
(2) Exclusion.--A civil action brought by a purchaser of a
medical device for use in providing professional services
against a manufacturer, seller, or biomaterials supplier for
loss or damage to an implant or for commercial loss to the
purchaser--
(A) shall not be considered an action that is subject
to this Act; and
(B) shall be governed by applicable commercial or
contract law.
(c) Scope of Preemption.--
(1) In general.--This Act supersedes any State law regarding
recovery for harm caused by an implant and any rule of
procedure applicable to a civil action to recover damages for
such harm only to the extent that this Act establishes a rule
of law applicable to the recovery of such damages.
(2) Applicability of other laws.--Any issue that arises under
this Act and that is not governed by a rule of law applicable
to the recovery of damages described in paragraph (1) shall be
governed by applicable Federal or State law.
(d) Statutory Construction.--Nothing in this Act may be construed--
(1) to affect any defense available to a defendant under any
other provisions of Federal or State law in an action alleging
harm caused by an implant; or
(2) to create a cause of action or Federal court jurisdiction
pursuant to section 1331 or 1337 of title 28, United States
Code, that otherwise would not exist under applicable Federal
or State law.
SEC. 5. LIABILITY OF BIOMATERIALS SUPPLIERS.
(a) In General.--
(1) Exclusion from liability.--Except as provided in
paragraph (2) or section 7, a biomaterials supplier shall not
be liable for harm to a claimant caused by an implant.
(2) Liability.--A biomaterials supplier that--
(A) is a manufacturer may be liable for harm to a
claimant described in subsection (b);
(B) is a seller may be liable for harm to a claimant
described in subsection (c); and
(C) furnishes raw materials or component parts that
fail to meet applicable contractual requirements or
specifications may be liable for harm to a claimant
described in subsection (d).
(b) Liability as Manufacturer.--
(1) In general.--A biomaterials supplier may, to the extent
required and permitted by any other applicable law, be liable
for harm to a claimant caused by an implant if the biomaterials
supplier is the manufacturer of the implant.
(2) Grounds for liability.--The biomaterials supplier may be
considered the manufacturer of the implant that allegedly
caused harm to a claimant only if the biomaterials supplier--
(A)(i) has or should have registered with the
Secretary pursuant to section 510 of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 360) and the
regulations issued under such section; and
(ii) included or should have included the implant on
a list of devices filed with the Secretary pursuant to
section 510(j) of such Act (21 U.S.C. 360(j)) and the
regulations issued under such section;
(B) is the subject of a declaration issued by the
Secretary pursuant to paragraph (3) that states that
the supplier, with respect to the implant that
allegedly caused harm to the claimant, was required
to--
(i) register with the Secretary under section
510 of such Act (21 U.S.C. 360), and the
regulations issued under such section, but
failed to do so; or
(ii) include the implant on a list of devices
filed with the Secretary pursuant to section
510(j) of such Act (21 U.S.C. 360(j)) and the
regulations issued under such section, but
failed to do so; or
(C) is related by common ownership or control to a
person meeting all the requirements described in
subparagraph (A) or (B), if the court deciding a motion
to dismiss in accordance with section 6(c)(3)(B)(i)
finds, on the basis of affidavits submitted in
accordance with section 6, that it is necessary to
impose liability on the biomaterials supplier as a
manufacturer because the related manufacturer meeting
the requirements of subparagraph (A) or (B) lacks
sufficient financial resources to satisfy any judgment
that the court feels it is likely to enter should the
claimant prevail.
(3) Administrative procedures.--
(A) In general.--The Secretary may issue a
declaration described in paragraph (2)(B) on the motion
of the Secretary or on petition by any person, after
providing--
(i) notice to the affected persons; and
(ii) an opportunity for an informal hearing.
(B) Docketing and final decision.--Immediately upon
receipt of a petition filed pursuant to this paragraph,
the Secretary shall docket the petition. Not later than
180 days after the petition is filed, the Secretary
shall issue a final decision on the petition.
(C) Applicability of statute of limitations.--Any
applicable statute of limitations shall toll during the
period during which a claimant has filed a petition
with the Secretary under this paragraph.
(c) Liability as Seller.--A biomaterials supplier may, to the extent
required and permitted by any other applicable law, be liable as a
seller for harm to a claimant caused by an implant only if--
(1) the biomaterials supplier--
(A) held title to the implant that allegedly caused
harm to the claimant as a result of purchasing the
implant after--
(i) the manufacture of the implant; and
(ii) the entrance of the implant in the
stream of commerce; and
(B) subsequently resold the implant; or
(2) the biomaterials supplier is related by common ownership
or control to a person meeting all the requirements described
in paragraph (1), if a court deciding a motion to dismiss in
accordance with section 6(c)(3)(B)(ii) finds, on the basis of
affidavits submitted in accordance with section 6, that it is
necessary to impose liability on the biomaterials supplier as a
seller because the related seller meeting the requirements of
paragraph (1) lacks sufficient financial resources to satisfy
any judgment that the court feels it is likely to enter should
the claimant prevail.
(d) Liability for Violating Contractual Requirements or
Specifications.--A biomaterials supplier may, to the extent required
and permitted by any other applicable law, be liable for harm to a
claimant caused by an implant if the claimant in an action shows, by a
preponderance of the evidence, that--
(1) the raw materials or component parts delivered by the
biomaterials supplier either--
(A) did not constitute the product described in the
contract between the biomaterials supplier and the
person who contracted for delivery of the product; or
(B) failed to meet any specifications that were--
(i) accepted, pursuant to applicable law, by
the biomaterials supplier;
(ii)(I) published by the biomaterials
supplier;
(II) provided to the manufacturer by the
biomaterials supplier; or
(III) contained in a master file that was
submitted by the biomaterials supplier to the
Secretary and that is currently maintained by
the biomaterials supplier for purposes of
premarket approval of medical devices; or
(iii) included in the submissions for
purposes of premarket approval or review by the
Secretary under section 510, 513, 515, or 520
of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 360, 360c, 360e, or 360j), and received
clearance from the Secretary if such
specifications were accepted, pursuant to
applicable law, by the biomaterials supplier;
and
(2) such conduct was an actual and proximate cause of the
harm to the claimant.
SEC. 6. PROCEDURES FOR DISMISSAL OF CIVIL ACTIONS AGAINST BIOMATERIALS
SUPPLIERS.
(a) Motion to Dismiss.--In any action that is subject to this Act, a
biomaterials supplier who is a defendant in such action may, at any
time during which a motion to dismiss may be filed under an applicable
law, move to dismiss the action against it on the grounds that--
(1) the defendant is a biomaterials supplier; and
(2)(A) the defendant should not, for the purposes of--
(i) section 5(b), be considered to be a manufacturer
of the implant that is subject to such section; or
(ii) section 5(c), be considered to be a seller of
the implant that allegedly caused harm to the claimant;
or
(B)(i) the claimant has failed to establish, pursuant to
section 5(d), that the supplier furnished raw materials or
component parts in violation of contractual requirements or
specifications; or
(ii) the claimant has failed to comply with the procedural
requirements of subsection (b).
(b) Manufacturer of Implant Shall be Named a Party.--The claimant
shall be required to name the manufacturer of the implant as a party to
the action, unless--
(1) the manufacturer is subject to service of process solely
in a jurisdiction in which the biomaterials supplier is not
domiciled or subject to a service of process; or
(2) a claim against the manufacturer is barred by applicable
law or rule of practice.
(c) Proceeding on Motion to Dismiss.--The following rules shall apply
to any proceeding on a motion to dismiss filed under this section:
(1) Affidavits relating to listing and declarations.--
(A) In general.--The defendant in the action may
submit an affidavit demonstrating that defendant has
not included the implant on a list, if any, filed with
Secretary pursuant to section 510(j) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 360(j)).
(B) Response to motion to dismiss.--In response to
the motion to dismiss, the claimant may submit an
affidavit demonstrating that--
(i) the Secretary has, with respect to the
defendant and the implant that allegedly caused
harm to the claimant, issued a declaration
pursuant to section 5(b)(2)(B); or
(ii) the defendant who filed the motion to
dismiss is a seller of the implant who is
liable under section 5(c).
(2) Effect of motion to dismiss on discovery.--
(A) In general.--If a defendant files a motion to
dismiss under paragraph (1) or (2) of subsection (a),
no discovery shall be permitted in connection to the
action that is the subject of the motion, other than
discovery necessary to determine a motion to dismiss
for lack of jurisdiction, until such time as the court
rules on the motion to dismiss in accordance with the
affidavits submitted by the parties in accordance with
this section.
(B) Discovery.--If a defendant files a motion to
dismiss under subsection (a)(2)(B)(i) on the grounds
that the biomaterials supplier did not furnish raw
materials or component parts in violation of
contractual requirements or specifications, the court
may permit discovery, as ordered by the court. The
discovery conducted pursuant to this subparagraph shall
be limited to issues that are directly relevant to--
(i) the pending motion to dismiss; or
(ii) the jurisdiction of the court.
(3) Affidavits relating to status of defendant.--
(A) In general.--Except as provided in clauses (i)
and (ii) of subparagraph (B), the court shall consider
a defendant to be a biomaterials supplier who is not
subject to an action for harm to a claimant caused by
an implant, other than an action relating to liability
for a violation of contractual requirements or
specifications described in section 5(d).
(B) Responses to motion to dismiss.--The court shall
grant a motion to dismiss any action that asserts
liability of the defendant under subsection (b) or (c)
of section 5 on the grounds that the defendant is not a
manufacturer subject to such section 5(b) or seller
subject to section 5(c), unless the claimant submits a
valid affidavit that demonstrates that--
(i) with respect to a motion to dismiss
contending the defendant is not a manufacturer,
the defendant meets the applicable requirements
for liability as a manufacturer under section
5(b); or
(ii) with respect to a motion to dismiss
contending that the defendant is not a seller,
the defendant meets the applicable requirements
for liability as a seller under section 5(c).
(4) Basis of ruling on motion to dismiss.--
(A) In general.--The court shall rule on a motion to
dismiss filed under subsection (a) solely on the basis
of the pleadings of the parties made pursuant to this
section and any affidavits submitted by the parties
pursuant to this section.
(B) Motion for summary judgment.--Notwithstanding any
other provision of law, if the court determines that
the pleadings and affidavits made by parties pursuant
to this section raise genuine issues as concerning
material facts with respect to a motion concerning
contractual requirements and specifications, the court
may deem the motion to dismiss to be a motion for
summary judgment made pursuant to subsection (d).
(d) Summary Judgment.--
(1) In general.--
(A) Basis for entry of judgment.--A biomaterials
supplier shall be entitled to entry of judgment without
trial if the court finds there is no genuine issue as
concerning any material fact for each applicable
element set forth in paragraphs (1) and (2) of section
5(d).
(B) Issues of material fact.--With respect to a
finding made under subparagraph (A), the court shall
consider a genuine issue of material fact to exist only
if the evidence submitted by claimant would be
sufficient to allow a reasonable jury to reach a
verdict for the claimant if the jury found the evidence
to be credible.
(2) Discovery made prior to a ruling on a motion for summary
judgment.--If, under applicable rules, the court permits
discovery prior to a ruling on a motion for summary judgment
made pursuant to this subsection, such discovery shall be
limited solely to establishing whether a genuine issue of
material fact exists as to the applicable elements set forth in
paragraphs (1) and (2) of section 5(d).
(3) Discovery with respect to a biomaterials supplier.--A
biomaterials supplier shall be subject to discovery in
connection with a motion seeking dismissal or summary judgment
on the basis of the inapplicability of section 5(d) or the
failure to establish the applicable elements of section 5(d)
solely to the extent permitted by the applicable Federal or
State rules for discovery against nonparties.
(e) Stay Pending Petition for Declaration.--If a claimant has filed a
petition for a declaration pursuant to section 5(b)(3)(A) with respect
to a defendant, and the Secretary has not issued a final decision on
the petition, the court shall stay all proceedings with respect to that
defendant until such time as the Secretary has issued a final decision
on the petition. The Secretary shall complete review of any such
petition within 6 weeks of receipt of the petition.
(f) Dismissal With Prejudice.--An order granting a motion to dismiss
or for summary judgment pursuant to this section shall be entered with
prejudice, except insofar as the moving defendant may be rejoined to
the action as provided in section 7.
(g) Manufacturer Conduct of Litigation.--The manufacturer of an
implant that is the subject of an action covered under this Act shall
be permitted to conduct litigation on any motion for summary judgment
or dismissal filed by a biomaterials supplier who is a defendant under
this section on behalf of such supplier if the manufacturer and any
other defendant in such action enter into a valid and applicable
contractual agreement under which the manufacturer agrees to bear the
cost of such litigation or to conduct such litigation.
SEC. 7. SUBSEQUENT IMPLEADER OF DISMISSED DEFENDANT.
(a) Impleading of Dismissed Defendant.--A court, upon motion by a
manufacturer or a claimant within 90 days after entry of a final
judgment in an action by the claimant against a manufacturer, and
notwithstanding any otherwise applicable statute of limitations, may
implead a biomaterials supplier who has been dismissed from the action
pursuant to this Act if--
(1) the manufacturer has made an assertion, either in a
motion or other pleading filed with the court or in an opening
or closing statement at trial, or as part of a claim for
contribution or indemnification, and the court makes a finding
based on the court's independent review of the evidence
contained in the record of the action, that under applicable
law--
(A) the negligence or intentionally tortious conduct
of the dismissed supplier was an actual and proximate
cause of the harm to the claimant; and
(B) the manufacturer's liability for damages should
be reduced in whole or in part because of such
negligence or intentionally tortious conduct; or
(2) the claimant has moved to implead the supplier and the
court makes a finding based on the court's independent review
of the evidence contained in the record of the action, that
under applicable law--
(A) the negligence or intentionally tortious conduct
of the dismissed supplier was an actual and proximate
cause of the harm to the claimant; and
(B) the claimant is unlikely to be able to recover
the full amount of its damages from the remaining
defendants.
(b) Standard of Liability.--Notwithstanding any preliminary finding
under subsection (a), a biomaterials supplier who has been impleaded
into an action subject to this Act, as provided for in this section--
(1) may, prior to entry of judgment on the claim against it,
supplement the record of the proceeding that was developed
prior to the grant of the motion for impleader under subsection
(a), and
(2) may be found liable to a manufacturer or a claimant only
to the extent required and permitted by any applicable State or
Federal law other than this Act in an action alleging harm
caused by an implant.
(c) Discovery.--Nothing in this section shall give a claimant or any
other party the right to obtain discovery from a biomaterials supplier
defendant at any time prior to grant of a motion for impleader beyond
that allowed under section 6.
SEC. 8. APPLICABILITY.
This Act shall apply to all civil actions covered under this Act that
are commenced on or after the date of enactment of this Act, including
any such action with respect to which the harm asserted in the action
or the conduct that caused the harm occurred before the date of
enactment of this Act.
Purpose and Summary
H.R. 872, the ``Biomaterials Access Assurance Act of 1998''
is designed to ensure American patients' access to medical
implants and devices. To foster medical device access, the bill
would protect the suppliers of raw materials and component
parts for such devices from much of the costs of discovery and
defense in lawsuits where those suppliers would not be held
liable. Litigation costs currently drive biomaterials suppliers
away from the medical market, with potentially disastrous
effects for ill and injured Americans.
H.R. 872 would essentially codify for biomaterials
suppliers the ``bulk supplier'' and ``learned intermediary''
doctrines from the common law of torts. These doctrines
generally provide that manufacturers--not suppliers of raw
materials and component parts--are responsible for ensuring
that products are safe.
The bill would also establish expedited procedures for
dismissal of actions from which biomaterials suppliers are
protected. A biomaterials supplier could be re-joined to a suit
from which it was dismissed if evidence admitted in a trial
between a claimant and an implant manufacturer showed that the
biomaterials supplier may be liable.
Background and Need For the Legislation
Biomaterials are the raw materials and component parts that
go into medical implants and devices, which save and enhance
the lives of millions of Americans. Under the bill's
definition, biomaterials have generic or non-implant uses, and
they are used in a variety of nonmedical products.
The common law of torts generally gives an injured person a
cause of action against manufacturers and sellers of products
that cause injuries. This is based on the principle that such
parties owe consumers a duty to make sure that their products
are safe. The Federal Food, Drug, and Cosmetic Act (21 U.S.C.
Sec. 301 et seq.) requires manufacturers of medical devices to
ensure and demonstrate that their products are safe and
effective, are properly designed, and have adequate warnings or
instructions.
Suppliers of biomaterials do not design, test, or produce
medical devices so they are not responsible, at common law or
by statute, for ensuring the safety of medical devices.
Nonetheless, when a medical device is alleged to have caused
harm, biomaterials suppliers are often named along with
manufacturers as defendants in lawsuits alleging inadequate
design and testing or inadequate warning related to use of the
device.
Biomaterials suppliers are almost never held liable because
of two common law doctrines, the ``bulk supplier'' and
``learned intermediary'' doctrines. They hold, in general, that
the manufacturer of a component (in this context, a
biomaterials supplier) is not liable for injuries caused by the
component when it is incorporated into a finished product by a
third party (in this case, an implant manufacturer) where the
component in and of itself was not unreasonably dangerous at
the time it left the component manufacturer's control.\1\ In
the same circumstances, a component manufacturer is generally
not liable for failure to warn potential consumers of known or
suspected finished product dangers.\2\
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\1\ See Restatement (Third) of Torts: Products Liability Sec. 5,
cmt. a (1997) (``However expressed, these formulations recognize that
component sellers who do not participate in the integration of the
component into the design of the product should not be liable merely
because the integration of the component causes the product to become
dangerously defective.''); 1 Am. Law Prod. Liab. 3d (LCP BW) Sec. 8:8
(May, 1996); In re TMJ Implants Prods. Liab. Litig., 872 F. Supp. 1019,
1025-28 (D. Minn. 1995) (discussing raw material supplier and bulk
supplier/learned intermediary rules).
\2\ See 1 Am. Law Prod. Liab. 3d (LCP BW) Sec. 8:14 (May, 1996).
Many courts have noted the inadvisability of extending the duty to
warn, and thus liability, to component manufacturers. See, e.g.,
Apperson v. E.I. Du Pont de Nemours, 41 F.3d 1103 (7th Cir. 1994)
(``[I]mposing such a duty forces the supplier to retain an expert in
every finished product manufacturer's line of business.'').
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Because relatively small quantities and numbers of
biomaterials are used for medical devices, sales of raw
materials and component parts for medical devices often
constitute an extremely small portion of the overall market for
such products. For example, the quantity of polyester (PET)
yarn consumed for permanent implants is about 0.002% of that
consumed by other markets, the quantity of PTFE fiber consumed
by the implant market is 0.3% of other markets, and the
quantity of polyacetal resin consumed by the implant market is
0.00025% of other markets.\3\
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\3\ Aronoff Associates, Market Study: Biomaterials Supply for
Permanent Medical Implants 2 (March 1994).
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Many biomaterials suppliers have ceased supplying raw
materials and component parts for use in medical devices and
implants because the costs associated with litigation far
exceed the benefits of sales to the medical market. For
example, based on sales of less than $100 dollars-worth of
Teflon, DuPont has been sued 651 times in 41 States over ten
years, spending several million dollars successfully defending
product liability suits related to another company's use of
Teflon in jaw implants.\4\ In a recent study of biomaterials
suppliers, all of them considered the risk of legal liability
as a prominent factor in their decision whether or not to
supply the medical market.\5\ Biomaterials that have been
withdrawn or threatened with withdrawal from the market include
fluorinated carbon, surgical stainless steel, fluorpolymers,
resins and film products, silicone and silicone adhesives,
polyethylene, nickel and titanium memory metals, and many
others.
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\4\ Letter from Ross F. Schmucki, Senior Counsel, Du Pont, to
Senator Joseph I. Lieberman (July 25, 1997).
\5\ Aronoff Associates, Biomaterials Availability: A Vital Health
Care Industry Hangs in the Balance 10 (April 1997).
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Continued abandonment of the medical market by biomaterials
suppliers would have several probable effects. Some life-
enhancing and life-saving devices could disappear from the
market altogether. Other devices could disappear from the
market while implant manufacturers redesign, retest, and
recertify them with the Food and Drug Administration using
alternative biomaterials. Whether or not any device comes off
the market, the prices of medical devices for patients would
rise as manufacturers pass on added costs. Already, uncertain
availability of biomaterials impedes the design, testing, and
marketing of new life-enhancing and life-saving implants and
devices.\6\ The medical device and implant industry could
decline relative to countries where biomaterials continue to be
available. American jobs in that now-vibrant industry could
level off or decline. Most importantly, patients needing life-
saving and life-enhancing medical implants and devices could be
forced to go without and, as a result, could needlessly suffer
or die.
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\6\ See Biomaterials Access Assurance Act: Hearing on H.R. 872
Before the Subcomm. on Commercial and Administrative Law of the House
Comm. on the Judiciary, 105th Cong. 122 (1997) (testimony of Dr. James
E. Brown).
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Article I, section 8 of the Constitution gives Congress the
power ``To regulate Commerce with foreign Nations and among the
several States.'' \7\ Modern consumers are less-and-less likely
to reside in the State--or even the country--where products
they purchase, and the components of those products, are
manufactured. Biomaterials and the medical implants and devices
made from them are a good example. They are bought, sold, and
transported for purchase and sale throughout the United States
and the world. Many medical devices and implants, moreover, go
on to be transported among the States and throughout the world
in the bodies of individuals whom they have restored to health
and vitality.
---------------------------------------------------------------------------
\7\ U.S. Const. art. I, Sec. 8, Cl. 3.
---------------------------------------------------------------------------
Though the States and their courts are the primary
architects and regulators of the tort system, biomaterials
suppliers can not be protected, and their participation in the
medical market fostered, by reform in any one State or group of
States. The susceptibility of biomaterials suppliers to
extensive litigation and discovery in any State could drive
them from the medical market entirely, frustrating the purposes
of the bill. The Committee has heard testimony empirically
illustrating the incapacity of State tort law reform to
effectively apply to products that move in interstate commerce
because they are bought, sold, and used in numerous
jurisdictions.\8\ Leaving biomaterials suppliers susceptible to
high litigation costs in any State would harm all of the United
States and their citizens because medical devices and implants
would be more scarce and expensive, and because the now-
thriving biotechnology industry would be hobbled in its
competition with firms in countries where biomaterials are more
freely available.
---------------------------------------------------------------------------
\8\ Hearing on Product Liability Reform Before the House Comm. on
the Judiciary, 105th Cong. 93 (1997) (statement of Representative Tom
Campbell).
---------------------------------------------------------------------------
Congress can address civil liability issues when they
directly and substantially affect commerce among the States and
with foreign nations. A threatened or actual shortage of raw
materials and component parts for life-saving and life-
enhancing medical devices, and a threatened or actual shortage
of such devices, is a circumstance where the Constitution's
Commerce Clause empowers Congress to act.
The Biomaterials Access Assurance Act would generally
codify for biomaterials suppliers the protections from
liability found in the common law of torts. A limited
protection from liability, coupled with three exceptions, cause
the bill's protections to follow the contours of the common law
in most States. A biomaterials supplier would not be protected
by the bill if (a) it is the manufacturer of a medical device,
(b) it is the seller of a medical device, or (c) it failed to
meet contractual and other specifications.
In addition, the bill would create expedited procedures for
determining whether a biomaterials supplier defendant is
protected by the bill. A defendant asserting such protection
would file a motion to dismiss alleging that it is a
biomaterials supplier not subject to any exception. The motion
to dismiss in most cases would be decided on affidavits, and
discovery would be limited during pendency of the motion.
The bill contains a post-trial procedure designed to retain
the protections of the bill while providing for the
extraordinary situation in which a dismissed biomaterials
supplier should be liable. Within 90 days of entry of final
judgment in the action by the claimant against the implant
manufacturer, a claimant could move to implead a dismissed
biomaterials supplier. A court would be authorized to grant
such a motion under limited circumstances. The rulings on these
motions would be preliminary because, once brought back into
the proceeding, a biomaterials supplier would be entitled to
supplement the record with evidence relevant to the court's
ultimate finding of liability.
Some of the more prominent objections to the bill have
decried cases where implant manufacturer defendants have sought
bankruptcy protection, potentially denying recovery to
deserving plaintiffs.\9\ Bankruptcy of an implant manufacturer
creates no duty on the part of biomaterials suppliers to
protect the users of implant manufacturers' products, and it
does not extend liability on the part of biomaterials
suppliers.\10\ The Biomaterials Access Assurance Act leaves in
place the outcomes in cases where there is a bankrupt implant
manufacturer. The bill would, however, allow actions against
biomaterials suppliers related by common ownership and control
to manufacturers or sellers found to lack sufficient resources
to pay a likely judgment.
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\9\ Federal bankruptcy law generally protects debtors from
proceedings and judgments against them. See 11 U.S.C. Sec. 362.
\10\ See, e.g., In re TMJ Implants Prods. Liab. Litig., 872 F.
Supp. 1019 (D. Minn. 1995).
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Hearings
In the 105th Congress, the Committee's Subcommittee on
Commercial and Administrative Law held a hearing dealing with
H.R. 872 on June 12, 1997. Testimony was received from eleven
witnesses, representing themselves and five organizations, with
additional material submitted by two organizations. The
witnesses were Neil Kahanovitz, M.D., Founder, Center for
Patient Advocacy; Rita Bergmann of Clarksburg, Maryland; Randy
Markey of Newton, Massachusetts; Stephen D. Kaiser of
Baltimore, Maryland; Donald P. Doty of Minnetonka, Minnesota;
Kenneth M. Kent, M.D., Director, Washington Cardiology Center;
Ronald J. Greene, Esq., Wilmer, Cutler & Pickering,
representing the Health Industry Manufacturers Association; Dr.
James E. Brown, Vice President for Biopharmaceutical and
Implant R&D;, Alza Corporation; Dane A. Miller, Ph.D., President
and CEO, BioMet, Inc.; Jorge Ramirez, Ph.D., Sales and
Marketing Manager, Hostalen GUR Americas, Hoechst Corporation;
and Professor Mark McLaughlin Hager, Washington College of the
Law, American University. The House Commerce Committee's
Subcommittee on Telecommunications, Trade, and Consumer
Protection also held a hearing on the subject of biomaterials
access on April 8, 1997. A version of the bill has been
reported by the Senate Committee on Commerce, Science, and
Transportation as a title of S. 648. Several versions of
biomaterials access legislation were introduced in the 104th
Congress, including H.R. 753, introduced by Mr. Gekas, S. 303,
and S. 565, the latter of which was reported by the Senate
Committee on Commerce, Science, and Transportation. H.R. 753
was the basis of the biomaterials access title in H.R. 956, the
Common Sense Legal Standards Reform Act, which passed both the
House and Senate. Mr. Gekas re-introduced biomaterials access
legislation as H.R. 3468 after President Clinton vetoed H.R.
956.
Committee Consideration
On September 11, 1997, the Subcommittee on Commercial and
Administrative Law met in open session and ordered reported the
bill H.R. 872, as amended, by voice vote, a quorum being
present. On April 1, 1998, the Committee met in open session
and ordered reported favorably the bill H.R. 872 as amended by
voice vote, a quorum being present.
Committee Oversight Findings
In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
Committee on Government Reform and Oversight Findings
No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the Rules of the House of
Representatives.
New Budget Authority and Tax Expenditures
Clause 2(l)(3)(B) of House Rule XI is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 2(l)(3)(C) of rule XI of the
Rules of the House of Representatives, the Committee sets
forth, with respect to the bill, H.R. 872, the following
estimate and comparison prepared by the Director of the
Congressional Budget Office under section 403 of the
Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 13 1998.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 872, the
Biomaterials Access Assurance Act of 1998.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Susanne S.
Mehlman (for federal costs), who can be reached at 226-2860,
and Pepper Santalucia (for the state and local impact), who can
be reached at 225-3220.
Sincerely,
June E. O'Neill, Director.
Enclosure.
cc: Hon. John Conyers, Jr.,
Ranking Minority Member.
H.R. 872--Biomaterials Access Assurance Act of 1998
CBO estimates that enacting this bill would have no
significant impact on the federal budget. Because the bill
would not affect direct spending or receipts, pay-as-you-go
procedures would not apply.
Under H.R. 872, suppliers of biomaterials (raw materials
used to make medical implants and devices) would not be liable
in federal or state courts for harm to a claimant caused by a
medical implant or device unless the generic raw material used
in the medical implant or device violated contract
specifications or the biomaterials supplier could be classified
as either a manufacturer or seller of the medical implant or
device. In addition, implementing H.R. 872 would create
expedited court procedures for determining whether a supplier
of biomaterials is protected from liability.
While some product liability cases are tried in federal
court, the majority of such cases are handled in state courts.
Based on information from the Administrative Office of the
United States Courts, CBO estimates that enacting this bill
would have no significant impact on the number of cases that
would be referred to federal courts. Thus, we estimate that
enacting H.R. 872 would have no significant impact on the
federal budget.
The bill contains intergovernmental mandates as defined in
the Unfunded Mandates Reform Act of 1995 (UMRA) because it
would preempt state tort laws and would establish new court
procedures for determining whether a supplier of biomaterials
is protected from liability. States could initially incur some
costs in adjusting to the new procedures. Based on information
from the National Center for State Courts about the number of
product liability cases heard in state courts, CBO estimates
that those costs would be well below the threshold established
in the law ($50 million in 1996, adjusted annually for
inflation). In the longer run, states could realize net savings
if this bill were to discourage potential plaintiffs from
filing suits against suppliers of biomaterials. This bill would
impose no new private-sector mandates as defined in UMRA.
The CBO staff contacts for this estimate are Susanne S.
Mehlman (for federal costs), who can be reached at 226-2860,
and Pepper Santalucia (for the state and local impact), who can
be reached at 225-3220. This estimate was approved by Robert A.
Sunshine, Deputy Assistant Director for Budget Analysis.
Constitutional Authority Statement
Pursuant to Rule XI, clause 2(l)(4) of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article I, section 8 of the Constitution.
Section-By-Section Analysis
Sec. 1. Short Title.
Section 1 entitles the Act the ``Biomaterials Access
Assurance Act.''
Sec. 2. Findings.
Section 2 contains findings upon which the Act is based.
Sec. 3. Definitions.
Section 3 defines key terms used in the Act.
A ``biomaterials supplier'' is a supplier of a component
part or raw material used in the manufacture of an implant.
This includes any person who has submitted master files \11\ to
the Secretary of Health and Human Services for purposes of pre-
market approval of a medical device or who licenses a
biomaterials supplier to produce component parts or raw
materials.
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\11\ A ``master file'' is a reference source submitted to the Food
and Drug Administration, which may contain detailed information on a
specific manufacturing facility, process, methodology, or component
used in the manufacture, processing, or packaging of a medical device.
See 21 C.F.R. Sec. 814.3.
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A ``claimant'' is a person bringing a civil action,
claiming to have suffered harm from an implant. The definition
includes a decedent on whose behalf the estate brings an action
and the parent or guardian bringing an action on behalf of a
minor or incompetent. The definition excludes providers of
professional health care services, persons acting in the
capacity of a manufacturer, seller, or biomaterials supplier,
and persons bringing such actions alleging harm caused by a
silicone breast implant.
The latter exclusion was not based on a determination that
silicone gel or any other form of silicone causes or may cause
adverse health effects. Because of the controversy surrounding
the use of silicone breast implants, in 1992 the FDA placed
certain restrictions on their use pending further study. Since
the imposition of these restrictions, Congress has taken
testimony which reveals results of several major studies that
have found no significant connection between silicone gel
breast implants and connective tissue disease. The FDA has
acknowledged the value of these studies in congressional
hearings, but the FDA's interpretation of the scientific
evidence is not yet fully settled. Congress continues to
encourage the FDA to pursue a sound scientific conclusion.
The Act specifically prohibits the silicone-gel breast
implant exclusion from being used to imply that Congress has
made a finding regarding the health effects of silicone or
silicone implants. Even the existence of this exclusion shall
not be disclosed to a jury in a civil action or other
proceeding. It shall not be presented in any type of proceeding
except as necessary, if necessary, to establish the
applicability of the Act. This would only happen in the
unlikely event that a defendant in a breast implant case were
to assert one of the defenses the Act provides.
A ``component part'' is a manufactured piece of an implant.
By definition, a component part has significant non-implant
applications and has no implant value on its own.
``Harm'' is injury to or damage suffered by an individual;
any illness, disease, or death of that individual resulting
from that injury or damage; and any loss to that individual or
any other individual resulting from that injury or damage. It
is not commercial loss or damage to an implant.
An ``implant'' is a medical device intended by its
manufacturer to be placed into a surgically or naturally formed
or existing cavity of the body for at least thirty days; or to
remain in contact with bodily fluids or internal human tissue
through a surgically produced opening for a period of less than
thirty days; and suture materials used in implant procedures.
A ``manufacturer'' is a person (a) engaged in manufacture,
preparation, propagation, compounding, or processing, as
defined in Sec. 510(a)(1) of the Federal Food, Drug, and
Cosmetic Act, of an implant and (b) required to register with
the Secretary pursuant to Sec. 510 of that Act and include the
implant on a list of devices filed with the Secretary pursuant
to Sec. 510(j) of that Act.
A ``medical device'' is a device, as defined in Sec. 201 of
the Federal Food, Drug, and Cosmetic Act, and includes any
device component of any combination product as that term is
used in Sec. 503(g) of that Act.
A ``raw material'' is a substance or product that has
generic and non-implant uses. While ``raw material'' and
``component part'' are defined separately in this section of
the Act, they are treated identically, just as they are at
common law.\12\ When either a raw material or a component part
is incorporated into a final product, the producer of that
final product generally owes the product's users a duty of
care. The supplier of the raw material or component part does
not. Furthermore, there is no sound distinction between raw
materials and component parts. For example, a substance that is
highly manufactured to achieve specific molecular or chemical
properties, though not formed into the shape it would take in a
medical implant or device, straddles the divide between raw
material and component part. Whether and when it moves from raw
material to component part could fall at nearly any point in
the manufacturing process. Advances in biotechnology may take
advantage of both the chemical and mechanical properties of
substances. A distinction between raw materials and component
parts would confuse and confound the application of this Act to
such innovations. As long as commerce follows the current model
of purchase and sale among identifiable parties, however,
suppliers of raw materials and component parts will be
distinguishable from manufacturers and sellers of medical
implants and devices.
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\12\ The Restatement treats raw materials as a subset of component
parts. See Restatement (Third) of Torts: Products Liability Sec. 5,
cmt. c (``Product components include raw materials.'').
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The ``Secretary'' is the Secretary of Health and Human
Services.
A ``seller'' is a person who sells, distributes, leases,
packages, labels, or places an implant in the stream of
commerce, but is not a seller of real property, a provider of
professional services, or a person acting in a financial
capacity with respect to the sale of an implant.
Sec. 4. General Requirements; Applicability; Preemption.
This section makes the scope of the Act explicit. The Act
provides a narrow, statutory defense to liability for
biomaterials suppliers in actions brought by claimants alleging
harm from a medical device or implant, and the means for
asserting that defense. The Act applies to all civil actions in
State or Federal court, brought against a manufacturer, seller,
or biomaterials supplier for harm allegedly caused by an
implant, as each of those terms are defined in the Act. It does
not apply to loss of, or damage to, an implant, or to
commercial loss to the purchaser. Nor is it intended to
restrict any rights other persons may have to sue biomaterials
suppliers under a variety of State law theories. The Act does
not affect the scope of a biomaterials supplier's liability to
such persons under existing State common law doctrines. As a
result, an implant manufacturer may sue a supplier for breach
of warranty or contract violations, if such claims exist under
State law, without regard to the provisions of this Act.
While the protections of the Act are intended to follow the
contours of the common law in most states, they may not in
every case, and the Act preempts State law to the extent it
establishes a rule of law applicable to the recovery of
damages. The Act does not affect any defense available under
other provisions of law to a defendant in an action where harm
caused by an implant is alleged. Other law, including, but not
limited to, jurisdiction, rules of evidence, and jury trial
rights, is unaffected by the Act.
Note also that, following a successful impleader under
section 7 of the Act, any preemption of the rule of law
applicable to the recovery of damages would be nullified. If a
party is re-joined to a case under section 7, other applicable
law is fully reinstated as to that party.
Sec. 5. Liability of Biomaterials Suppliers.
This section supplies the standard of liability for
biomaterials suppliers, other than those re-joined to a case
under section 7, and makes three exceptions that take a party
otherwise fitting the definition of a biomaterials supplier out
from under the protections of the Act.
A biomaterials supplier is not liable for harm to a
claimant caused by an implant unless it is (a) a manufacturer,
(b) a seller, or (c) a furnisher of raw materials that fails to
meet contractual requirements or specifications, as discussed
below.
A biomaterials supplier may be liable as a manufacturer if
it registered, or if it should have registered, as such with
the Secretary under the Federal Food, Drug and Cosmetic Act. It
also may be liable if it listed, or if it should have listed,
the implant with the Secretary pursuant to that Act. It may be
liable if the Secretary declares that it was required either to
register or to list the implant under federal law, but failed
to do so. A biomaterials supplier may also be liable if it is
related by common ownership or control to a person, meeting
either requirement above, that is found by a court to lack
sufficient resources to pay a likely judgment.
A biomaterials supplier may be liable as a seller if it
held title to the implant after the implant's manufacture and
entry into the stream of commerce and if it subsequently resold
the implant. It may also be liable if it is related by common
ownership or control to a person meeting the above requirement
if that person is found by a court to lack sufficient resources
to pay a likely judgment.
A biomaterials supplier may be liable, having violated
contractual requirements or specifications, if that violation
was an actual and proximate cause of harm. A violation of
contractual requirements or specifications occurs if the raw
material or component parts did not constitute the product
described in the contract, or if the biomaterials supplier
failed to meet specifications that were (a) accepted by it
under applicable law, (b) published by the biomaterials
supplier, (c) provided to the manufacturer by the supplier, or
(d) submitted by the supplier to the Secretary pursuant to the
pre-market approval process. While making clear that a
biomaterials supplier may be liable if it failed to meet the
terms of a contract or certain administrative filings, these
provisions do not place any requirement on a biomaterials
supplier to ensure that its products meet the specialized
requirements of medical applications; this must be done by
implant manufacturers and sellers.
The Act allows claimants to petition the Secretary and, if
warranted, receive a declaration that a biomaterials supplier
should have registered with the Secretary or listed an implant
under the Federal Food, Drug and Cosmetic Act. The Act sets
forth the procedures the Secretary must follow in deciding
whether to issue a declaration. In light of the Secretary's
expertise and in the interest of consistent interpretations of
law and regulation, the Committee encourages courts to defer to
a declaration issued by the Secretary regarding registration or
listing requirements. In passing these provisions, the
Committee contemplated currently issued registration and
listing requirements. Changes to the registration and listing
requirements after the Act is passed should not make otherwise
bona fide biomaterials suppliers susceptible to suit as
manufacturers.
The Act allows 180 days for the Secretary to decide on the
petition. So that claims can be promptly adjudicated, this time
is shortened elsewhere in the Act if an action is stayed due to
pendency of a petition. Any statute of limitations is tolled
while the Secretary considers whether to issue a declaration.
This is intended to eliminate the incentive to file suit
against a biomaterials supplier while a petition is pending.
The Committee encourages potential claimants to refrain from
filing an action against a biomaterials supplier on the theory
that the supplier may be liable as a manufacturer until a
declaration that the biomaterials supplier should have
registered has been issued by the Secretary.
Sec. 6. Procedures for Dismissal of Civil Actions Against Biomaterials
Suppliers.
This section lays out the procedure to be used for ruling
on a motion to dismiss under the Act. It narrowly circumscribes
discovery during pendency of such a motion so that a
presumptively protected biomaterials supplier is subject to
discovery only on issues salient to the motion until the court
rules.
A supplier may file a motion to dismiss on the grounds that
it is a biomaterials supplier and that it is not considered to
be a manufacturer; that it is not a seller; and that it has not
failed to meet specifications. The claimant must name the
manufacturer of the implant as a party unless jurisdiction over
the manufacturer is not available or the claimant can not
proceed against the manufacturer because of applicable law or
rules of practice. A biomaterials supplier may file a motion to
dismiss on the ground that the claimant has failed to name the
manufacturer of the implant as a party.
The defendant and claimant may file affidavits regarding
certain issues in the dismissal motion. If the court permits
discovery while the motion to dismiss is pending, it is limited
to the issues salient to the motion, and to jurisdiction of the
court.
In an action other than one based on failure to meet
specifications, the court shall grant the motion to dismiss
unless the claimant demonstrates by affidavit that the supplier
is a manufacturer or seller. The court shall make its
determination based solely on the pleadings and affidavits, and
may treat the motion as a motion for summary judgment.
If the claimant has petitioned the Secretary for a
declaration, and if the Secretary's decision on the petition
has not been issued, the court shall stay proceedings for which
the declaration is needed until the Secretary has issued a
final decision on the petition. When a proceeding is stayed,
the Secretary must issue a decision on the petition within six
weeks of the date the petition was received.
A dismissal under the Act shall be entered with prejudice,
except insofar as a biomaterials supplier may be re-joined to
the action under section 7.
The Act permits a manufacturer to file and conduct any
proceeding on behalf of a supplier if both parties have entered
into a binding indemnification agreement allowing the
manufacturer to do so.
Sec. 7 Subsequent Impleader of Dismissed Defendant.
Section 7 provides for the extraordinary situation where
evidence admitted at the trial between the claimant and the
implant manufacturer clearly shows that the dismissed
biomaterials supplier may be liable under other law. The
purpose of this section is to leave open the possibility of
litigation against a biomaterials supplier in an extreme case
so egregious as to overcome the common law limitations on
supplier liability. The Committee has not found a single case
that has gone to final judgment where a biomaterials supplier
has been held liable. While this procedure may identify such a
case, if one ever arises, courts should police its use to
ensure that it does not become a routine post-trial motion. It
is for extreme, unusual cases.
Upon motion, made within ninety days after entry of a final
judgment in an action by the claimant against a manufacturer, a
court may implead a biomaterials supplier who was dismissed
pursuant to the Act. The court may do so if the manufacturer
asserts in motions or arguments at trial, and the court finds
preliminarily, based on its independent review of the evidence
contained in the record of the action, that, under applicable
law, the biomaterials supplier's negligence or intentional
tortious conduct caused the claimant's injury. Additional or
novel theories of liability should not form the basis for
granting the motion.
The court's review should be independent and substantive. A
court should grant the impleader motion only if it finds by a
preponderance of the evidence that a biomaterials supplier may
be liable--not if it finds, for example, that a ``reasonable
jury'' might view the evidence that is part of the record as
sufficient to support liability. Because the biomaterials
supplier will not have been represented in the trial, no
finding by a jury, by general or special verdict, can dispose
of any issue for purposes of the court's review.
If a court grants the motion, its finding that a
biomaterials supplier may be liable is preliminary. Because it
is based on evidence adduced at a trial where the biomaterials
supplier will not have been represented, the court's
preliminary finding may not become the law of the case, or a
basis for issue preclusion or collateral estoppel. The Act
gives a re-joined biomaterials supplier an opportunity to fully
supplement the record. This is intended to ensure that the
claimant and the biomaterials supplier reach equipoise in terms
of evidence admitted, opportunity to have facts found, and
arguments and motions made. A court must make every effort to
see that they do.
If the court allows impleader of the biomaterials supplier,
the standard of liability and legal rule determining all issues
are provided by other applicable law.
Sec. 8. Applicability.
The Act does not apply to actions commenced before the date
of enactment of the Act.
DISSENTING VIEWS ON H.R. 872
H.R. 872 ``Biomaterials Access Assurance Act of 1998''
introduction
We oppose the Biomaterials Access Assurance Act of 1998.
While we recognize that H.R. 872 represents an improvement over
predecessor versions of the legislation, we believe the
legislation represents yet another misguided effort to
federalize state tort law at the expense of victims.
H.R. 872 would shield the liability of biomaterials
suppliers under state law to those who fail to meet contractual
and other specifications where such failure is an actual and
proximate cause of the harm to the claimant. The immunity is so
broad that even a supplier that knew or should have known that
its product would cause injury or death would be immune from
suit if it can meet the foregoing requirement. The legislation
also prescribes very detailed procedural mandates on state
courts for the dismissal of actions against biomaterials
suppliers, at the beginning stage of a suit. It provides for
post-trial procedures permitting a dismissed supplier to be
brought back into the action only if it can be shown that its
negligence was an actual and proximate cause of harm to the
claimant.
We oppose H.R. 872 because in our view there is no evidence
of a shortage of life-saving medical devices, and there is no
compelling reason to abrogate traditional respect for state
tort law in this area. For these and the other reasons set
forth herein, we dissent from H.R. 872.
1. There is no evidence of a shortage of medical devices and current
law provides appropriate safeguards for the dismissal of
frivolous litigation.
Although the purported justification to H.R. 872 is that
there is an imminent shortage of life-saving medical devices
and that manufacturers will soon run out of their raw materials
stock piles, a comprehensive review of the 1997 Medical Device
Register (published by Medical Economics) which lists every
medical device registered with the FDA, indicates to the
contrary. Among other things, the most recent Register reports
that there continue to be several, and often numerous,
manufacturers of almost every permanent implant that are
alleged to be in short supply.\1\
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\1\ U.S. Public Interest Research Group, The ``Biomaterials
Shortage'' Where's the Evidence at 1.
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Notwithstanding proponents' arguments that costly lawsuits
and the fear of litigation remove incentives for suppliers to
make their life-saving compounds available to implant
manufacturers, the record indicates that biomaterials suppliers
have been sued infrequently, and when they are, blameless
suppliers are routinely found not liable for injuries and
illnesses caused by defective medical implants.\2\
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\2\ For example, while complaints frequently cite that children
suffering from hydrocephalus (water on the brain) will be unable to
obtain life-saving silastic shunts because of costly litigation, a
review of case filings reveals only two lawsuits involving defective
shunts. Both cases were brought against physicians whose failure to
diagnose shunt malfunction resulted in serious mental incapacity for
the patients. See U.S. Public Interest Research Group, The
``Biomaterials Shortage'' Where's the Evidence? at 2.
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Professor Mark Hager has also observed that a number of
legal doctrines have evolved which provide protection to
biomaterials suppliers from supposedly frivolous lawsuits:
A fabric of common law doctrines has effectively
protected upstream suppliers from such suits. These
doctrines--the bulk supplier doctrine, the
sophisticated user doctrine, the component parts
doctrine, and others--have been constructed by courts
to protect upstream suppliers in the medical device
industry and elsewhere from liability. Courts have
determined that upstream liability could saddle
suppliers with burdensome duties to monitor the safety
of parts and materials they sell in a thousand and one
different applications.\3\
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\3\ H.R. 872, The Biomaterials Access Assurance Act of 1997:
Hearing before the House Judiciary Sub-Committee on Administrative and
Commercial Law, 105th Cong., 1st Sess. (June 12, 1997) (Statement of
Mark Hager at 1-2).
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The bulk supplier/sophisticated user doctrine, for example,
provides a supplier with immunity if the supplier sold bulk
quantities of an inherently nondefective raw material to a
manufacturer, who combined the material with other ingredients
to produce a defective implant, and the supplier did not know
that the raw material would be put to a dangerous use.\4\
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\4\ The rationale supporting this doctrine is that downstream
producers (finished product manufacturers) are in a better position
than upstream suppliers (raw materials and component parts
manufacturers) to convey product warnings to consumers. This is
especially true when the raw materials suppliers supply in ``bulk'' to
a host of manufacturers or where product manufacturers are so
``sophisticated,'' such as medical device manufacturers, that they can
assess the dangers of the product and properly advise the public.
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The fact that the few possible negligent manufacturers are
subject to potential liability through the tort system helps
ensure the safety of biomaterials supplies. As Professor Andrew
Popper testified at the House Commerce Subcommittee on
Telecommunications, Trade and Consumer Protections Hearing on
access to biomaterials:
Suppliers currently have an incentive to develop
means to inspect and test products or create such
opportunities in part because they are subject to
liability in tort . . . Their exposure compels a
critical level of caution regarding their products, a
pressure that would be lost were they to be granted
immunity from liability.\5\
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\5\ Product Liability and Consumer Access to Biomaterial Products:
Hearing before the House Commerce Sub-Committee on Telecommunications,
Trade, and Consumer Protection, 105th Cong., 1st Sess. (April 8, 1997)
(Statement of Professor Andrew F. Popper at 17).
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While the FDA regulates the design of medical devices, it only
regulates the raw materials and component parts on rare
occasions. It is therefore important that safety standards be
imposed by the suppliers on themselves and by the manufacturers
on the suppliers. The current state tort system fills these
regulatory gaps.
2. H.R. 872 prevents adequate discovery from taking place in cases
involving defective medical devices
In a misguided and unnecessary effort to protect
biomaterials suppliers from defending against most lawsuits,
H.R. 872 inappropriately dismisses biomaterials suppliers at
the outset of litigation, rather than after the discovery
period. Although the legislation nominally allows for
interpleader of negligent suppliers at the end of the case, the
proposed standards provided in H.R. 872 are extremely
burdensome. The supplier can be made a party to the action
subsequent to dismissal, but only after a final judgment has
been ordered. Thus, the case must by tried twice. Even then,
the motion to implead will only be granted if the court finds
that evidence contained in the record exists that the supplier
was the actual and proximate cause of harm. Finally, there are
many reasons why evidence may not make it into the record--for
example, the court may determine certain evidence offered by
the plaintiff in the initial trial to be irrelevant--and once a
court renders a final decision, it is generally reluctant to
reopen the case.
The net effect of these restrictive impleader rules will be
to prevent victims from obtaining information leading to the
determination of the biomaterials supplier's liability and to
prevent victims from gathering valuable information that would
strengthen the case against the device manufacturer. As a
result, plaintiffs may never learn who is responsible for their
injuries, and neither the public nor regulators may be alerted
to product dangers.
3. H.R. 872 abrogates our traditional respect for State tort law
States are fully capable of enacting product liability
reforms when they feel it necessary to balance the competing
needs of business and consumers within their borders. Indeed
over the last twenty years all states have enacted some form or
another of product liability or tort law protection to benefit
defendants.\6\
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\6\ See Henry Cohen, Fifty-State Surveys of Selected Products
Liability Issues, CRS Report for Congress (June 20, 1995).
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Unfortunately, federalizing this issue will inevitably lead
to greater confusion than certainty because the federal
standard will be applied and interpreted in many different
contexts in federal and state courts. The Conference of Chief
Justices has testified that the search for uniformity of
product liability laws (through laws such as H.R. 872) will
ultimately prove counterproductive:
It follows that Federal standards, however well
articulated, will be applied in many different contexts
and inevitably will be interpreted and implemented
differently, not only by the State courts but also by
the Federal courts . . . Moreover, State Supreme Courts
will no longer be, as they are today, the final
arbiters of their tort law . . . a legal thicket is
inevitable and the burden of untangling it, if it can
be untangled at all, will lie only with the Supreme
Court of the United States, a court which many experts
feel is not only overburdened but also incapable of
maintaining adequate uniformity in existing Federal
law.\7\
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\7\ Product Liability and Civil Justice Reform: Hearings before the
House Comm. On the Judiciary, 104th Cong., 1st Sess. (February 13,
1995) (Statement of the Conference of Chief Justices at 6-7).
We would also note that H.R. 872 sets forth elaborate rules
of civil procedure with regard to motions to dismiss,
discovery, summary judgment and impleader for the states to
follow, disregarding state rules of civil procedure.\8\ This
unprecedented intervention into state procedural rules may well
violate the Tenth Amendment under the New York v. United
States.\9\ In that 1992 case, the Supreme Court held that the
federal government cannot commandeer state regulatory processes
for federal purposes in a way that unduly burdens or takes away
political accountability. In H.R. 872 as well, we are concerned
that dictating state rules of civil procedure will unduly
burden state courts and will remove the political
accountability of the state legislatures.
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\8\ For example, in order to obtain a pre-trial dismissal, the bill
specifies that a defendant may file a motion alleging that it has met
the various legal requirements for dismissal, including the contractual
and other product specifications. While the motion is pending, H.R. 872
limits discovery and requires that State courts rule on the motion
based on the pleadings and affidavits before it. It also sets forth
rules for the issuance of summary judgments and stays. Post-trial
motions to implead are also subject to limited discovery and the bill
provides further opportunity for the supplier to supplement the record
before any trial on the merits may proceed.
\9\ 505 U.S. 144 (1992). See also Printz v. United States, 117
S.Ct. 2365 (1997) (holding unconstitutional, under the Tenth Amendment,
the requirement in the Brady Handgun Violence Protection Act that local
law enforcement officials conduct background checks on prospective gun
purchasers).
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4. There is no evidence of a competitive threat from foreign
biomaterials providers
One of the principal rationales stated for the bill is
American competitiveness--the need to ensure that we are not at
a competitive disadvantage in our biomaterials industry as
compared to other countries, as suppliers supposedly withdraw
from the medical device market.\10\ But, the medical device
industry is a thriving domestic market and as Professor Popper
has testified, ``a system that condemns defective products and
services produced in a negligent or grossly negligent manner
cannot possibly be considered destructive of our competitive
posture.'' \11\
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\10\ Sec. 2(10).
\11\ Product Liability and Consumer Access to Biomaterial Products:
Hearing before the House Commerce Sub-Committee on Telecommunications,
Trade, and Consumer Protection, 105th Cong., 1st Sess. (April 8, 1997)
(Statement of Professor Andrew F. Popper at 14).
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If increased foreign competitiveness was being sought by
the bill's proponents, they would have accepted an amendment
offered by Representative Conyers providing that the
protections under H.R. 872 do not apply to a biomaterials
supplier which is a foreign corporation unless it was located
in the United States or was headquartered in a country whose
law accords protections comparable to those that will apply in
the United States with respect to biomaterials suppliers. This
would have ensured that our own suppliers would be placed on at
least an equal footing with foreign firms. However, the
amendment was defeated by the majority.
5. Other substantive concerns
In addition to the above problems we have with the
legislation, there are a number of other substantive concerns
with H.R. 872. For example, immunity is so broadly written \12\
that it extends to biomaterials suppliers who knew or should
have known that their product would cause injury or death.
President Clinton specifically addressed this issue in his veto
statement of last Congress' products liability bill where he
stated that ``such suppliers should not receive any protection
from suit.'' \13\ Because suppliers usually know the potential
misuses of their products and are aware of the dangerous
consequences associated with improper uses, they must be relied
upon to take remedial action when appropriate.
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\12\ Sec. 5.
\13\ Message on Returning Without Approval to the House of
Representatives the Common Sense Product Liability Legal Reform Act of
1996, 32 Weekly Comp. Pres. Doc. 780 (May 2, 1996).
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H.R. 872 also improperly shields components that are
intricate products themselves. While the legislation's
proponents claim their motivation is to protect the
availability of raw materials used in medical implants, the
definition of ``biomaterials'' includes ``components'' and
thus, extends the legislation's protections to manufacturers of
component parts contained in implantable medical devices. Raw
materials and component parts are not one and the same and
should not be treated as such. No showing has been made during
the hearings of any need to immunize component parts
manufacturers.
It is also informative to note that H.R. 872 exempts breast
implant litigants from its coverage. However, the exclusion
does not take into account the thousands of medical device
patients, who may suffer from a silicone induced disease,
caused by such products as penile implants, hip or joint
implants, and jaw implants. In our view, there is simply no
policy rationale for distinguishing between these cases. While
this exclusion reflects the sponsors' awareness that
biomaterials may, in certain limited circumstances, cause
substantial physical injury, it also indicates that the
sponsors of this bill are, in essence, betting the lives and
health of future generations of Americans that the silicone gel
tragedy will never occur with some other biomaterial.
H.R. 872 also carves out a number of possible non-
individual claimants from the liability restrictions in the
bill. For example, providers of professional health care
services, manufacturers, sellers and biomaterials suppliers are
specifically excluded from the definition of ``claimant.'' \14\
H.R. 872 further provides a ``commercial loss'' exception which
allows doctors and others who use implants to provide
professional services to sue the biomaterials supplier for
commercial loss (damage to goods). Collectively, these
provisions discriminate against implant recipients, the persons
whose lives have been drastically affected \15\ by taking away
their right to sue suppliers, while retaining every other
possible corporate plaintiff's right to sue.
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\14\ Sec. (3)(2)(D)(I) and (2).
\15\ Sec. 4(B)(2).
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Finally, we would note there are possible market solutions
to the liability concerns of biomaterials suppliers that do not
require federal preemption of state liability law. For example,
medical device manufacturers could indemnify suppliers against
liability or could name suppliers as co-insureds on liability
policies that they maintain.
conclusion
While we support appropriate safeguards to protect
biomaterials suppliers from frivolous litigation, we cannot
support this legislation. State common law provides numerous
special defenses to suppliers. To the extent such defenses are
found to be in any way to be insufficient, the remedy lies with
the states, rather than with a one-size-fits-all federal fix.
H.R. 872, though improved from prior versions, continues to
include numerous flaws. These include offering immunity to
potentially negligent raw material and component parts
suppliers; restrictive discovery and interpleader rules;
burdensome procedural mandates on the states; and exclusions
for potential corporate victims which discriminate against
individual victims.
John Conyers, Jr.
Jerrold Nadler.
Robert C. Scott.
Sheila Jackson Lee.
Maxine Waters.
