House Panel Backs Limits on Personal-Injury Suits
Led by an aggressive Republican majority, the House Judiciary Committee voted Thursday to recommend the first-ever national restrictions on personal-injury lawsuits.
The panel moved to limit the size of punitive-damage awards, to shield makers of products that are more than 15 years old, to exempt retailers and distributors from most product-liability suits and to block intoxicated people from suing product manufacturers for injuries.
In hopes of deterring lawsuits, the committee also voted to force some losing plaintiffs to pay the legal costs of those they sue.
Before becoming law, however, the bill must pass what are expected to be stiff tests on the House floor, in the Senate and at the White House.
The legislation is part of the Republican “contract with America” but goes much further than previously advertised.
Before this week, the bill’s sponsors planned to limit large punitive verdicts against manufacturers in product-liability cases. However, the version approved Thursday applies “to any civil action brought in any federal or state court on any theory where punitive damages are sought.”
“It covers punitive damages across the board. That’s the most important change,” said Richard K. Willard, a Washington attorney who headed the Justice Department’s civil division during the Ronald Reagan Administration.
In most damage suits, injured or wronged people seek money to compensate them for medical bills, lost work or “pain and suffering.”
In recent years, however, lawyers have pressed jurors to tack on an extra amount to punish a convicted wrongdoer. While such verdicts are rare, they can result in huge awards.
In August, for example, a jury in New Mexico handed down a $2.7-million punitive verdict against the McDonald’s restaurant chain because an elderly woman suffered burns when she spilled hot coffee on herself.
Trial lawyers and consumer advocates say punitive verdicts deter corporate misbehavior, force big firms to pay attention to the welfare of ordinary people and make safer products. Business lawyers say such awards are often exorbitant and act to dissuade companies from marketing new products.
The bill, scheduled to go the House floor March 6, would limit punitive awards to three times the victim’s “economic loss,” or $250,000, whichever is greater.
Republicans--who normally tout the need to return power to the states--said this week that the federal government must impose new rules for lawsuits that have always been governed by state law.
Judiciary Committee Chairman Henry J. Hyde (R-Ill.) noted that 70% of goods made in one state are sold in another. Similarly, services such as insurance, banking or airlines operate nationwide.
“So, the fundamental interstate character of this area of law would seem to justify a uniform, national solution,” Hyde said.
Democrats, who usually support the use of federal power, insisted just as fervently that the states know best when it comes to liability law. Rep. John Conyers Jr. (D-Mich.) said the bill “represents a wish list of changes requested by corporate defendants” and a “giant step backwards for the cause of equal justice in our nation.”
The legislation still faces three hurdles. House Speaker Newt Gingrich (R-Ga.) predicted that it will face a “real brawl” on the House floor. The more cautious Senate may block some of the more sweeping changes. And of course, President Clinton could veto the bill.
Among the legislation’s key provisions:
* A person who injures himself while under “the influence of intoxicating alcohol or any drug” cannot sue a product manufacturer to pay for his injuries.
* A “product seller” cannot be sued by the victim of a defective product unless he “failed to exercise reasonable care” in selling it. Only the manufacturer is liable. Typically, product-liability suits name everyone in the chain of commerce, from manufacturer to wholesaler and retailer.
* Product makers can be sued only “within 15 years after the time of delivery of the product.” Companies often complain that they are sued over defects in their cars, boats, lawn mowers or other products after the goods have outlived their normal lives.
* Injured people who refuse a settlement offer and insist on going to trial will be forced to pay the legal costs of the defendants if they lose. This is a version of the so-called “loser pays” rule that is standard in Britain.
* When several people or companies are found liable, each of them must pay only their share of “non-economic” damages.
