Senate to Enter Fray on Product Liability Issue : Bush campaign: Attack on trial lawyers will get test in debate on bill to preempt state laws. Drugs, medical devices are involved.

The Bush-Quayle campaign’s attack on trial lawyers and their “crazy lawsuits” will get a major test when the U.S. Senate votes this week for the first time on whether to put federal restrictions on state product liability laws.

At the Republican Convention, both President Bush and Vice President Dan Quayle won applause by sniping at “sharp lawyers” and their “tassled loafers.” But until now, the legislative battle that pits plaintiffs’ lawyers and consumer groups against corporate lawyers and insurance companies has been fought mostly in state capitals, not Washington.

On Tuesday, however, the Senate is scheduled to begin debate on a bill that would preempt state laws involving defective products, which would make it harder for injured plaintiffs to win money for “pain and suffering” and easier for manufacturers to block “punitive damage” verdicts.

Under the proposed legislation, manufacturers of drugs, medical devices and aircraft would be protected from punitive damage verdicts if their products had been approved by the Food and Drug Administration or the Federal Aviation Administration. Its advocates say that this measure would encourage companies to produce new products, such as a proposed vaccine for AIDS, without fear of liability suits.

In general, California law currently allows more generous damage verdicts than would be permitted under the proposed federal law.

Corporate lawyers describe the bill before the Senate as a “moderate” measure that is fair to both consumers and manufacturers. It would bar punitive damage verdicts against product makers unless they are found guilty of “conscious, flagrant indifference” to public safety, and it would exempt sellers of products from liability of any sort unless they were negligent in handling the product. Sellers now routinely are included in such suits.

But consumer advocates and plaintiffs’ lawyers have denounced the bill, saying that it would give unjustified protection to the makers of dangerous products. “This is a soft-on-crime approach . . . to protect corporate wrongdoers,” consumer advocate Ralph Nader charged last week.

He accused Republican administrations of first weakening the federal regulatory agencies, such as the FDA and the Consumer Product Safety Commission, and then packing the federal courts with conservative, business-oriented judges.

“Now they want to take away the last remaining chance for an injured person to get justice,” by imposing new limits on state courts and juries, Nader said.

Sponsors of the proposed bill point out that it would not take away an injured person’s right to sue nor would it put a dollar cap on how much money could be won in court.

“Right now, the trial lawyers are the ones who really profit from the system,” said Phyllis Eisen, an official of the National Assn. of Manufacturers.

The NAM has been working for 12 years to get a product liability measure onto the Senate floor. Advocates of the bill said they are concerned that the Administration’s vocal support could drive away key Democrats and defeat the bill.

“I’m uneasy about it,” Victor Schwartz, counsel for the pro-business Product Liability Coordinating Council, said of the Administration’s recent attacks on trial lawyers. “We want to keep this a bipartisan effort.”

Nine Senate Democrats, led by Sen. John D. (Jay) Rockefeller IV of West Virginia, have said that they will vote for the bill. Their votes are likely to be needed Thursday to break an expected filibuster led by Sen. Ernest F. Hollings (D-S.C.), a former trial lawyer and fierce opponent of the legislation. Both sides are predicting a close vote.

While the Clinton-Gore campaign has not taken an official position on the bill, Sen. Al Gore (D-Tenn.) opposed the product liability measure at the committee level. The Democratic vice-presidential candidate “sees it as an anti-consumer bill,” said Gregory Simon, a Senate aide to Gore.

Quayle, a non-practicing lawyer, has made “civil justice reform” a top concern in the Bush Administration. Last year the President’s Council on Competitiveness, which the vice president heads, proposed a 50-point agenda for limiting lawsuits.

Many of the proposals were modest and technical. For example, one would encourage parties to a lawsuit to forgo a full-blown trial and settle their dispute before an arbitrator. The council also recommended that the losers in a lawsuit pay the attorney’s fees for the winning side to discourage new suits. Another proposal would limit “discovery” motions that precede trials to save time and money.

The vice president’s proposals gained national attention in August, 1991, when he went before the convention of the American Bar Assn. and lambasted lawyers for a “litigation explosion” that is costing jobs and hurting American competitiveness.

“Let’s ask ourselves: does America really need 70% of the world’s lawyers?” Quayle said.

His speech drew favorable notice--except, of course, from lawyers and the ABA. Since then, Quayle repeatedly has cited the same staggering figures: that 70% of the world’s lawyers live in the United States and file nearly 18 million lawsuits each year, costing the nation an estimated $300 billion a year.

But, since Quayle made his proposal, scholars who study the court system have called into question those numbers.

For example, the 18 million civil suits are made up mostly of mundane matters such as divorces, wills and small claims. Deborah R. Hensler of the Institute for Civil Justice at the nonprofit Rand Corp. in Santa Monica said that about 2.5 million tort claims are filed each year involving injuries or contracts, claims that can result in costly trials and large damage verdicts.

But, she noted, only about one in 10 injured persons seeks compensation from someone else.

Moreover, contract claims--usually one business suing another business--have been outpacing personal injury claims.

Marc Galanter, a University of Wisconsin law professor, noted that the number of product liability claims has been declining steadily since 1985.

In the last year, new claims filed in the federal courts have indeed risen--but only because of the U.S. government itself. Lawyers working for the Bush Administration have gone to court seeking reimbursement from government contractors or to collect money owed by students or veterans. The number of federal contract claims doubled from 10,754 to 20,856 in the last year, while the suits seeking repayment of student loans went up by 370%.

And how many of the world’s lawyers are Americans? That depends on who is counted as a lawyer. The vice president’s U.S. tally included people with law degrees who are not practicing. And the count did not include persons in other nations with roles ranging from judge to tax law adviser who are considered lawyers here. Galanter, the Wisconsin professor, estimates that, including these people, the United States has 25% to 35% of the world’s lawyers.

Another count puts the percentage at an even lower rate. Ray August, a Washington State University law professor, was provoked by Quayle’s speech to do a nation-by-nation analysis of the legal system. His conclusion is published in this month’s ABA Journal: the United States ranks 35th in the per capita number of lawyers, and has 9.4% of all lawyers.