House OKs Limits in Product Liability Suits

Concluding a Republican drive to enact high-priority legislation before beginning a two-week recess, the House on Friday approved and sent to the White House a bill limiting damage awards in product liability cases.

But the GOP sense of accomplishment was dampened by the recognition that the product liability measure is unlikely to become law and by the inability of congressional negotiators to complete work on this year’s federal budget.

President Clinton already has threatened to veto the liability bill, one of the legislative proposals contained in the Republicans’ “contract with America,” and neither the House nor the Senate passed the measure by wide enough margins to overturn a veto.

While Republican leaders managed to secure final approval of several priority measures by week’s end, their claim to legislative productivity was undercut by the failure to reach a budget agreement with the White House to fund much of the government for the rest of the current fiscal year.

In the absence of such an agreement, Congress approved another stopgap measure, providing funding until April 24 for the nine Cabinet departments and other federal agencies that have not received their regular appropriations for 1996. Clinton signed the measure Friday evening.

House approval of the product liability bill, by a vote of 259 to 158, wrapped up a week that saw congressional action on a major farm policy bill, the line-item veto, an increase in the federal debt limit, health care reform and new abortion restrictions.

Many of those measures, such as the farm bill, the line-item veto and the debt-limit increase, are supported by Clinton. Indeed, the president signed the debt-limit measure into law Friday. Others, such as the abortion and the product liability bills, are destined for vetoes.

The product liability measure--a compromise worked out by a Senate-House committee--would cap punitive damages in most liability cases at $250,000 or twice the compensatory damages, whichever is larger. Businesses with fewer than 25 employees would be awarded only the smaller of $250,000 or an amount that is double the compensatory damages.

Proponents of the bill argued that it would protect businesses and insurance companies--and by extension the consumers they serve and the staff they employ--by making it much harder for juries to award excessive punitive damages.

“The reforms are essential to long-term competitiveness of our economy,” said Rep. Thomas J. Bliley Jr. (R-Va.). “This is a pro-jobs, pro-competitiveness bill.”

But opponents contended that American companies are more disciplined and cautious because of the threat that producing or selling faulty or dangerous products can result in liability suits that can bankrupt a business.

By limiting punitive damage awards, the measure “eliminates the deterrent effect” that keeps businesses responsible, said Rep. Robert C. Scott (D-Va.).

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“It helps corporate wrongdoers at the expense of innocent victims,” Scott added.

Clinton has said he would veto the measure in its current form but would sign it with modifications. Its sponsors have said the changes the White House wants would amount to major surgery and are unacceptable.

The president’s opposition reflects, in part, pressure from trial lawyers, who are among his biggest contributors, and fears that he could lose votes in November to third-party candidate Ralph Nader--who has fought the bill--if he signs it.

The stopgap appropriations bill, approved by voice vote in the House and by a 64-24 margin in the Senate, was needed because Congress and the White House have not yet reached agreement on funding for dozens of federal agencies for the current fiscal year, which is already half over. Short-term funding of those agencies was due to expire at midnight Friday.

The new stopgap bill includes $198 million sought by the Clinton administration to help rebuild war-torn Bosnia. It also includes funding for the District of Columbia, whose budget had been stalled in disputes over a House GOP proposal to provide vouchers for District of Columbia children to use for private-school tuition. House Republicans this week dropped that proposal in the face of opposition from Democrats as well as Senate Republicans.

Despite Clinton’s signing of the measure, his spokesman criticized the Republicans for failing to come to agreement on a longer-term spending plan. “Congress can’t seem to complete work on full appropriation measures for the balance of this fiscal year,” said Press Secretary Mike McCurry.

The House and Senate have passed different versions of a broader, $160-billion appropriations bill to fund the government for the rest of the fiscal year, which ends Sept. 30. Clinton has complained that both measures short-change education, the environment and other priorities of his administration. House-Senate negotiations to resolve differences among Republicans and between Congress and the White House failed to reach an agreement Friday.

Negotiators did manage to hammer out a compromise over management of the East Mojave National Preserve. House negotiators agreed to let the National Park Service manage day-to-day operations of the 1.4-million-acre site.

But the compromise requires the Park Service to run the preserve as a multiple-use park, as did the Bureau of Land Management, the federal agency that administered the area before it was declared a park by the California Desert Protection Act.

Rep. Jerry Lewis (R-Redlands), who has fought implementation of the law in the East Mojave, was unhappy with the bargain.

“I don’t view this as a victory because I really wanted to have direct control by BLM,” he said. “I’m not satisfied with the management style of the Park Service.”

Sen. Dianne Feinstein (D-Calif.), the chief sponsor of the desert measure, also expressed dismay.

“This is unacceptable. It does not allow the Park Service to manage the lands as a preserve as it was designated under the Desert Protection Act.”

Spokesmen for the Park Service and Interior Department also said that the terms were unacceptable.

Times staff writers Edwin Chen and James Bornemeier contributed to this story.