T. Gorton

Mr. GORTON

Mr. GORTON. In fact, in order to address these very concerns you have thoughtfully raised, Senator, the product seller section specifically provides that the conference report does not cover negligent entrustment or negligence in selling, leasing or renting to an inappropriate party. Section 103(d) expressly states: ``A civil action for negligent entrustment shall not be subject to the provisions of this Act, but shall be subject to any applicable State law.'' Frankly, I believe this provision is superfluous, and for this reason, it does not matter if, or where the provision appears in the conference report. In sum, the product liability bill covers product liability, not negligent entrustment or failure to exercise reasonable care with regard to whom products are sold, rented or leased. H.R. 956 clearly would not cover ``a seller of liquor in a bar who sold to a person who was intoxicated or a car rental agency that rents a car to a person who is obviously unfit to drive or a gun dealer that sells a firearm to a `straw man' fronting for children or felons.''

Mr. GORTON. Mr. President, I would like to clarify an issue I discussed in a lengthy, and frankly, rather confusing colloquy with my colleague from North Dakota, Mr. Dorgan. Mr. Dorgan sought clarification of a provision on the Product Liability Conference Report dealing with the way in which this legislation will apply to utilities. Although I had characterized a change made in conference as technical, he asserted that the change was substantive. The intent of the bill is to cover all products. This intent is expressed in the comprehensive definition of a product found in section 101(14) of the conference report, which defines products to include ``any object, substance, mixture, or raw material in a gaseous, liquid, or solid state * * *'' This definition clearly encompasses electricity, water delivered by a utility, natural gas, and steam. To simplify this discussion I will refer only to electricity. Another goal of the legislation, however, is to leave in place state determinations of when electricity is a product. Most States treat the transmission of electricity as a service. For this reason, the Senate bill excluded electricity from the definition of product. This exclusion, however, overlooked the fact that once electricity has passed through a customer's meter, many States consider it to be a product, and subject it to a strict liability standard. Because of this oversight, the Senate provision created an unintended conflict between the two goals of this bill: First to cover all products, and second, to leave undisturbed the state determination of whether or not electricity is a product. The desire to meet both these goals is reflected on page 24, footnote 86, of the Committee on Commerce, Science, and Transportation Report on the Senate bill. But to repeat, the language of the Senate did not do what it needed; it exempted electricity, whether or not it was treated as a product by state law and whether or not it was subject to a rule of strict liability. In conference, the statutory language was made explicitly consistent with those dual intentions. That is to say, the bill should respect state choice as to whether or not a utility is a product, but the bill should apply evenly to all products. Consequently, language was added to the conference report saying that electricity was excluded from the definition of product, unless it was subject under State law to strict liability, that is to say, is treated as a product. Senator Dorgan is correct that the conference report does change the substance of this provision. I think it does so wisely and in order to make the legislation clearly express our intent.

Mr. GORTON. Mr. President, I yield 5 minutes to the Senator from Nebraska.

Mr. GORTON. Mr. President, I yield 5 minutes to the Senator from West Virginia.

Mr. GORTON. Mr. President, I yield 3 minutes to the Senator from Missouri.

Mr. GORTON. I yield 30 seconds to the Senator from Virginia.

Mr. GORTON. Mr. President, article 1, section 8 of the Constitution of the United States reads in part as follows: ``The Congress shall have power to regulate commerce among the several States.'' The purposes of this bill, as outlined in this bill, read as follows: Based upon the powers contained in Article 1, Section 8, Clause 3 of the 14th amendment of the United States Constitution, the purposes of this act are to promote the free flow of goods and services, to lessen burdens on interstate commerce, and to uphold the constitutionally protected due process by, (1), establishing certain uniform legal principles of product liability which provide a fair balance among the interests of product users, manufacturers and product sellers; (2), placing reasonable limits on damages over and above the actual damages suffered by a claimant; (3), ensuring the fair allocation of liability in civil actions; (4), reducing the unacceptable cost and delays of our civil justice system caused by excessive litigation which harm both plaintiffs and defendants; (5), establishing greater fairness, rationality, and predictability, in the civil justice system. That is precisely what this bill is designed to do, Mr. President. That is precisely what this bill does. I yield the remaining 2 minutes to the distinguished chairman of the Commerce Committee.

Mr. GORTON. Mr. President, I simply would like to say after this extended debate, not only over the period of the last 2 days but over the period of the last year, and for that matter several Congresses, that it is wonderful to have at least this phase of it completed. This very important element in the reform of our country's legal system would not have been completed with this degree of success without the help of both many Members and a significant number of staff. When one names names, one runs the risk of leaving out many people who deserve credit, but particular credit from my perspective belongs to Lance Bultena of the Commerce Committee staff, and my own Jeanne Bumpus and Trent Erickson. Together they have put in so many hours on this subject that it cannot possibly be measured, and have done a wonderful job in educating and advising me. For Senator Rockefeller, Jim Gottlieb, a magnificent and skilled attorney, and Ellen Doneski have provided similar services. All of my cosponsors I wish to thank. All those who voted with me, I wish to thank. Most particularly, however, is the Senator from West Virginia [Mr. Rockefeller]. We have come to be close personal friends during the course of the many years that we have worked together on this subject. He is a wonderful, thoughtful, and hard-working individual. In this connection, he is a courageous individual with the willingness to take on a majority of his own party and his own President. His devotion to the public interest is not exceeded by any Member of this body. The ability to become such a close personal friend has been an important ancillary privilege of leading the debate on product liability. With that, Mr. President, I am sure it is time to move on. Mr. President, I yield the remainder of our time.

Mr. GORTON

Mr. GORTON. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Thursday, March 21, 1996, at 2 p.m. to hold a closed briefing for members on intelligence matters.

Mr. GORTON. Mr. President, I ask unanimous consent that the Committee on Small Business be authorized to meet during the session of the Senate for a hearing on Thursday, March 21, 1996, at 10:30 a.m., in room 428A of the Russell Senate Office Building, to conduct a hearing focusing on ``S. 1574, the HUBZones Act of 1996--Revitalizing Inner Cities and Rural America.''

Mr. GORTON. Mr. President, I ask unanimous consent that the Committee on Labor and Human Resources be authorized to hold a meeting during the session of the Senate on Thursday, March 21, 1996. The committee will be in executive session at 9:00 a.m. on S. 1578, The Individuals With Disabilities in Education Act [IDEA].

Mr. GORTON. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet at 10 a.m. on Thursday, March 21, 1996, in open session, to receive testimony from the unified commanders on their military strategies, operational requirements, and the defense authorization request for fiscal year 1997 and the future years defense programs.

Mr. GORTON. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet at 2 p.m. on Thursday, March 21, 1996 to receive testimony on Department of the Navy shipbuilding programs in review of the defense authorization request for fiscal year 1997 and the future years defense program.

Mr. GORTON. Mr. President, I ask unanimous consent on behalf of the Governmental Affairs Committee to meet on Thursday, March 21, at 9:00 a.m. for a hearing on the Tenth Amendment Enforcement Act of 1996.

Mr. GORTON

Mr. GORTON. Under the same circumstances that it would provide it for any other similarly situated organization, providing product liability provides it for any manufacturer, or for that matter, distributor, no matter how large or how small. The direction of the bill, the direction of a product liability bill is to provide a degree of predictability and a protection of the consumer interest for the producers of goods--not services in this case--goods. If this is the description that a State uses for its utilities, yes, the committee did intend to provide exactly that protection, and that is exactly what the committee report says.

Mr. GORTON. I think that is the case not only with electricity but with respect to tissue, organs, and blood.

Mr. GORTON. The intent of the conference committee drafters was to see to it that subsection (i) and subsection (ii) read the same way, because we had already described them as having the same meaning in the original Senate bill. There was an inconsistency. There they were described in the Senate bill, conference report, as having exactly the same meaning. So there is a change only to the extent that something was already gone with respect to tissue, organs, and blood.

Mr. GORTON. Well, first I need to say that no outside group came and asked whatsoever.

Mr. GORTON. I am sorry. Repeat it again.

Mr. GORTON. I would say the second is correct, with the exception if a State wants to define it as a product and bring it under this bill, they can.

Mr. GORTON. I can. I would start by referring the Senator from North Dakota back to page 6 of the original bill, the bill that passed the Commerce Committee, on which both of us serve, and passed this body, the Senate, unchanged and to look at the entire subsection (B), entitled ``Exclusion.'' The Senator from North Dakota will see in that exclusion. The term ``product'' does not include, (i) tissue, organs, blood, and blood products used for therapeutic or medical purposes, except to the extent that such tissue, organs, blood and blood products (or the provision thereof) are subject, under applicable State law, to a standard of liability other than negligence. It goes on to say, [And] (ii) electricity, water delivered by a utility, natural gas, or steam . . . The next reference that I would make to the Senator from North Dakota is in the Senate committee report on that bill. On page 24 of the Senate committee report on the bill that passed the Senate here, in subsection (ii), the explanation under the term ``product'' there is, for all practical purposes, word for word this exclusionary language, particularly the last two sentences. The term does not include tissue, organs, blood and blood products used for therapeutic or medical purposes, except to the extent that such tissue, organs, blood and blood products, or the provision thereof, are subject under applicable State law to a standard of liability other than negligence. In other words, the same word is in the statute. The term also does not include electricity, water delivered by a utility, natural gas or steam. There is a footnoted comment. And the footnote reads: Claims for harm caused by tissue, organs, blood and blood products used for therapeutic and medical purposes are, in the view of most courts, claims for negligently performed services and are not subject to strict product liability. The act, thus, respects State law by providing that in those States, the law with respect to harms caused by these substances will not be changed. In the past, however, a few States have held that claims for these substances are subject to a standard of liability other than negligence, and this act does not prevent them from doing so. Such actions would be governed by the act. Actions involving claims for harms caused by electricity, water delivered by a utility, natural gas or steam are treated in the same manner. When this went to conference--we had the better part of a year to read through every detail--the proposition, the meaning of this bill, as it passed the Senate, showed up in the proposition that this exception appeared in subsection (i) on page 6. It did not appear in subsection (ii). The same words have now been added to subsection (ii), which simply accords with the committee report interpretation of the language that we passed here in the Senate. So the fundamental answer at this point to the question that is raised by the Senator from North Dakota is that this change does not change the meaning of the act as it was set out in the committee report to the original Senate bill. State law, in other words, in each of these cases, whether it is tissue or electricity, State law will govern. If a State passes a law that says electricity is a product, yes, it would be governed. If that State consciously decides to treat electricity as a product, then it would be a product under this bill. But these strict liability States, you know, do not do that. It leaves it entirely up to North Dakota or California or to Washington or West Virginia to make that determination. If it wishes for strict liability, it can impose strict liability. If it wants to call it a product--I do not know of any that do--but if it wants to call it a product, it can bring it up to this bill. That is up to the State.

Mr. GORTON. Let me summarize a response to the general concern expressed by the Senator from North Dakota. Generally, at least in common law, the provision of electricity has been considered a service. The provision of the service is not governed by strict liability. Strict liability is a concept that applies to products. A number of States have determined that there should be a standard of strict liability applied to electricity and, for that matter, to the delivery of blood, the subjects of the first subsection of that section. If a State treats as a product the delivery of electricity, or the supply of blood, and subjects it to strict liability, it is subject to the provisions of this act. It was meant to be subject to the provisions of this act by the bill as it was reported from the Commerce Committee. It is included as a part of the Commerce Committee report. It was noticed simply by someone on the staff that, for some reason or another, subsection (2) omitted the language that was in subsection (1), and it was added during the course of the drafting of the conference committee report. That was not intended to create any difference in the way in which the bill would have been interpreted, in any event. It was intended to bring it into conformity with the committee report, and it has done so. But if the fundamental question of the Senator from North Dakota is, if a State imposes strict liability under these circumstances and treats electricity as a product, it is subject to those provisions, and I say ought to be.

Mr. GORTON. If I can say one other thing, obviously, this question did not come up during the long debate we had a year ago. If it had, to the best of my ability, I would have answered the question of the Senator the same way I am answering now. That is what was meant. Had I memorized this footnote at the time? No, I had not. I would have had to refer to it, but I would have come up with the same answer.

Mr. GORTON. Exactly the same logic that applies to the entire bill. If the utility manufactured a toaster, which is clearly a product, and gave it as a bonus to its customers, that product would be subject to this bill. The whole logic of the bill is to provide a degree of predictability to the law from State to State, which does not exist at the present time. That logic is every bit as applicable to a utility as it is to General Motors or to a small business that is engaged in retail sales.

Mr. GORTON

Mr. GORTON. Mr. President, this morning the Senate will immediately begin consideration of the conference report accompanying H.R. 956, the product liability bill. Under the consent agreement reached last night, there will be 5 hours of debate, equally divided, which will end just after 3 p.m. today. At that time, the Senate will begin a vote on invoking cloture on the conference report, to be immediately followed by a cloture vote on the motion to proceed to the Whitewater legislation. As a reminder, under a previous order, if cloture is invoked today on the product liability conference report, there will be an additional 3 hours of debate tomorrow morning at 9 a.m., with a vote on the adoption of the conference report at 12 noon on Thursday. Following the cloture votes scheduled at 3 o'clock today, the Senate will begin consideration of S. 1459, the grazing fees legislation. Additional votes are, therefore, to be expected today in regard to the grazing fees bill.