T. Gorton

Mr. GORTON

Mr. GORTON. Let me try one other approach to this subject because it applies equally to the two subsections of this section. The whole concept of many of these damages, especially punitive damages, is a concept that is based on a company doing something wrong--in our case, and from some of the definitions, egregiously wrong. It is based on negligence or gross negligence. When a State or a given organization is subject to a standard of strict liability, it is liable for all of the damages that it causes to an individual--in this case, using whatever it is that the company produces, regardless of whether it is negligent or not. It may have engaged in the highest standard of safety available for such an organization. Yet, a legislature or a Congress has determined that, for some reason or another, the whole cost, all of the damages created by that organization, ought to be imposed on the organization, without regard to its having done anything wrong. That is what strict liability means. You do not have to prove negligence or that there was anything wrong at all with what the particular organization did. You are still going to hold it liable. Well, that is the reason for the first subsection. Under those circumstances, it seems quite logical that you are not going to be required to pay for more than the damages that were actually created.

Mr. GORTON. Mr. President, I yield 2 minutes to the Senator from West Virginia.

Mr. GORTON. Mr. President, this debate can come down to an example involving one individual, a young girl, and one company. The young girl is Tara Ransom, whose story is told in today's Wall Street Journal, and who with her parents has come to my office. Tara is one of 50,000 hydrocephalics in the United States with a condition that previously could not be treated at all and was a literal terror to its victims and to their parents. She has, nonetheless, led a normal life, almost a normal life, due to a series of silicon shunts which have to be replaced every year or so due to her growth rate. It is now becoming next to impossible for Tara to get such a silicon shunt because the one company, Dow-Corning, that is willing to manufacture it, is in bankruptcy largely due to product liability litigation and is threatened with class actions. Dow-Corning simply manufactures the silicone. In one of these shunts its net return is $1 or $2. As the Presiding Officer as a physician knows, not every medical device works perfectly at all times and under all circumstances. I think it is almost inevitable that among those 50,000 hydrocephalics, or the numbers of thousands who use these shunts at some point or another, one of them is going to die, and there will be a threat of a lawsuit against every one who had anything to do with the shunt. The manufacturer of the material itself would be brought right into that lawsuit. Its liability, even if it wins, the cost of its attorney's fees will be far more than the gross sales price of all of the silicone it sold. So it will not sell the material. We now in some parts of the world have a black market in these shunts for exactly this reason. So to save the trial lawyers, to deal with all of the abstractions we heard from here today, Tara Ransom and others like her may soon not be able to get the very devices that have allowed them to lead reasonably normal lives. If this bill passes--and I refer you to the statement of Senator McCain--that will no longer be the case. It is one of the harms, one of the outrages, in our present legal system which will be controlled by this bill. Mr. President, the Cessna airplane company--in the late 1970's general aircraft in the United States was being manufactured and shipped at the rate of more than 17,000 a year. By 1982, it was down to almost just more than half of that. By 1986, claims hit $210 million a year. By 1991, Piper went into bankruptcy. By 1993, 100,000 jobs had been lost in general aviation largely due to our present product liability system. By that time, fewer than 1,000 planes per year were being manufactured in the United States as against 17,000. In August 1994, this Congress passed the General Aviation Revitalization Act. All it consisted of was a statute of repose at 18 years for aircraft. That is all that was in that reform. Already there has been a rebound. The very next year more aircraft were manufactured than were manufactured before, and this year Cessna is building a $40 million plant to hire 2,000 people to get back into this business. That, Mr. President, is what this debate is all about--whether or not young people and older people will be able to get medical devices that they need without the manufacturers being frightened out of the business by liability costs, and whether or not industries in the United States will be able to operate successfully to hire people to produce goods that people would like to buy. We have a legal system now which has hurt our competitiveness, has driven up prices, has reduced the choices that the American people have, all to oblige a handful of trial lawyers. This bill is a modest beginning to create a redress in that balance and to restore the economy of the United States and to provide better products for more people at a lower cost more of the time. It is just as simple as that, Mr. President. Mr. President, how much time remains?

Mr. GORTON. I yield the remainder of my time. Have the yeas and nays been ordered?

Mr. GORTON. Mr. President, a document being circulated by the Association of Trial Lawyers of America [ATLA] and their allied professional interest groups makes the accusation that the conference report on H.R. 956, the Commonsense Product Liability and Legal Reform Act of 1996, is radically different than the bill passed by the Senate. The contingency-fee lawyers' argument about commonsense product liability reform is unfounded. Anyone who reads the conference report and compares it to the Senate bill can see for themselves that, except for change in the time period, not the narrow scope, of the statute of repose and two slight modifications to the additional amount provision, the conference report is virtually identical to the Senate bill. All familiar with the history of this bill also know House Members delayed going to conference, and then agreeing on a conference report, for almost a year until it became apparent that Senate allies of the trial bar would not support legal fairness legislation going beyond the Senate bill. Facts are a stubborn thing for these lawyers, because as hard as they try to avoid them or argue around them or simply ignore them, as is often the case, the facts never change. And, the fact is that the product liability conference report is a narrow and limited proposal that almost mirrors the Senate's version of H.R. 956. Statute of Repose H.R. 956, contains a narrow statute of repose, which places an outer time limit on stale litigation involving a limited category of products, workplace durable goods, that is, machine tools used in the workplace, that are over 15-years old. If the defendant made an express warranty in writing as to the safety of the specified product involved, and the warranty was longer than the period of repose--15 years--then the statute of repose does not apply until that warranty period is complete. The provision does not apply in any case involving a toxic harm, or in any case involving motor vehicles, vessels, aircraft, or trains used primarily to transport passengers for hire. The only difference between the conference report and the Senate bill is the conference report's 15-year period; the Senate bill contained a 20-year limitation. Otherwise, the provision, including the limited category of products covered, is unchanged. Approximately one-third of the States have enacted statute of repose legislation; no State provides a more liberal time period or is more favorable to potential plaintiffs in terms of its scope that the narrow provision in H.R. 956. Support is also found by comparing the proposed 15-year period to the laws of industrial nations which directly compete with the U.S. to provide jobs. The EC Product Liability Directive, implemented by 13 European nations and Australia, and Japan's new product liability law, which became effective July 1, 1995, each adopt a 10-year statute of repose which applies to all products. H.R. 956 will help level the playing field against foreign competitors abroad which put American jobs at risk. The contingency-fee lawyers argue that the conference report extends the statute of repose to virtually all goods. This statement is wrong. Section 101(7) of the conference report narrowly defines the term Durable good as follows: Durable Good.--The term ``durable good'' means any product, or any component part of any such product, which has a normal life expectancy of 3 or more years, or is of a character subject to allowance for depreciation under the Internal Revenue Code of 1986 and which is-- (A) used in a trade or business; (B) held for the production of income; (C) sold or donated to a governmental or private entity for the production of goods, training, demonstration, or any other similar purpose. (Emphasis added). Both the conference report and the Senate bill only apply to goods which have either a normal life expectancy of 3 or more years or are of a character subject to allowance for depreciation under the Internal Revenue Code of 1986 and are used in a trade or business, held for the production of income, or sold or donated to a governmental or private entity for the production of goods, training, demonstration, or any other similar purpose. A machine tool is an example of product with a long life expectancy, subject to depreciation, which is used in trade or business. The contingency-fee lawyers are misleading the public to believe that the workplace use limitation has disappeared from the conference report. It has not. the additional amount or additur provision Recognizing that a flexible approach to punitive damages is likely to deliver strong bipartisan support for legal reform, opponents have challenged the constitutionality and content of the provision in H.R. 956 which permits a judge a safety valve to go beyond the proportionate limits set for punitive damages against larger businesses and award additional punitive damages (up to the amount of the jury verdict) in cases of egregious conduct in a desperate effort to shake support. The provision is constitutional and represents good public policy. The conference report additional amount provision, as mentioned, contains two slight modifications to the Senate bill. First, a controversial provision in the Senate bill that would have allowed the defendant the right to a new trial if the court used award an additional amount of punitive damages has been removed from the legislation and does not appear in the conference report. This change was made in response to requests from the administration and several Senators just before the final Senate vote. The absence of the new trial language does not affect the constitutionality of the provision. Research by the U.S. Department of Justice indicates that the safety valve provision in H.R. 956 is constitutional. Second, the Senate bill language was modified in the conference report to clarify that the additional amount which can be awarded may not exceed the jury's initial award of punitive damages. The jury is not informed of the statutory limit. This language strengthens the constitutional foundation of the provision. Opponents' seventh amendment right to jury trial arguments are without merit. product liability does not extend to negligent entrustment Once again opponents are trying to mislead and confuse product liability actions, which are covered by the conference report, with negligent entrustment cases, which are not covered by the legislation. As in the past, they use attention-getting, but irrelevant examples, such as drunk driving cases and gun violence. The trial lawyers' hollow argument is based on the applicability section of the conference report, which says that the act applies to any product liability action brought in any State or Federal court on any theory for harm caused by a product. The reason for this broad definition is to assure that the bill covers all theories of product liability, that is, negligence, implied warranty, and strict liability. The argument then looks to the section dealing with product sellers, which imposes liability when a product seller fails to exercise reasonable care with respect to a product. The argument continues that a product seller's failure to exercise reasonable care in selling a gun to a minor, convicted felon, or mentally unstable individual would not be actionable, because the product seller was negligent with respect to the purchaser and not the product. This argument reflects an obvious misconstruction of the bill. To make this clear, one only need look to the acts covered by product sellers in the conference report. This appears in the definition of product seller. The bill says that it is applicable to product sellers, but only with respect to those aspects of a product, or component part of a product, which are created or affected when before placing the product in the stream of commerce. The definition then addresses those things where the product seller produces, creates, makes, constructs, designs, or formulates * * * an aspect of the product * * * made by another. See Sec. 101(14)(B). This is classic product liability. To make the point crystal clear, 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 section but shall be subject to any applicable State law. For these reasons, the bill would not cover the situation described by the trial lawyers. It also 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. 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. trial lawyers' other arguments are similarly without any merit The trial lawyers' desperate attempt to portray the conference report as to the right of the Senate bill includes a couple of other minor points which are so hollow and petty that they deserve only brief attention. First, the notion that the conference report expands the product seller section beyond the Senate bill, changes burden of proof rules for persons who irresponsibly misuse or alter products or seek punitive damages is completely meritless. The falsity of these arguments is apparent from the language of the conference report and the Statement of Managers. Second, the argument that the findings in the legislation are not supported is foolish. The subject of Federal product liability reform has been reviewed by Congress for 15 years and been the subject of hundreds of hours of hearings and floor debate.

Mr. GORTON. But it seems to me, I say to the Senator from North Dakota, there is a relationship between the standard and what kind of damages ought to be allowed over and above the actual losses suffered by the victim.

Mr. GORTON. Do I have a specific understanding of that or can I name the States? I would have to answer the question ``no.'' The committee report, which I believe to be accurate, says that most of the courts in most States treat these matters as matters that are subject to a negligent standard, not to a strict liability standard. Certainly there are some States treating them as strict liability.

Mr. GORTON. My understanding was that it was the meaning as is stated in the conference committee report of the original bill that they were excluded unless the State had defined them as a product and had subjected them to strict liability. That was the meaning of the original bill and the meaning of this bill.

Mr. GORTON. Let me finish. I think it is exactly the same exclusion for both unless a State legislature has determined that they ought to be considered products. That is a privilege that the State legislature has now and retains under this bill.

Mr. GORTON. I am sorry.

Mr. GORTON. I yield such time that the Senator from North Dakota may desire.

Mr. GORTON. I yield such time as the Senator from Connecticut desires.

Mr. GORTON. Mr. President, I yield to the Senator from West Virginia such time as he may desire.

Mr. GORTON. Mr. President, I ask unanimous consent that Craig Williams, a fellow on the staff of Senator McCain, be granted the privilege of the floor during the Senate session today.

Mr. GORTON. Mr. President, I am pleased, after a lapse of almost 1 year, to present to the Senate and to support the conference report on H.R. 956, the Common Sense Product Liability Legal Reform Act of 1996. This is a bipartisan proposal reflecting, essentially, the decisions made here in the U.S. Senate last year, without the broader additions that were passed by the House of Representatives. Mr. President, during the course of this 5 hours today, there will be many statements--passionately held--about what the future holds with respect to both our legal system and our economic system, and whether this bill should pass. As a consequence, Mr. President, I want to start my remarks with a statement about what has already happened as a result of a very modest product liability reform that was passed by the Congress of the United States, and signed by the President, just 2 or 3 years ago. I am going to do that because that action speaks louder than any words we can say about the desirability of this broader legislation. On August 17, 1994, President Clinton signed the General Aviation Revitalization Act of 1994. That act created an 18-year statute of repose on general aviation, piston-driven aircraft. That single provision, in less than 2 years, has already had a magnificently positive impact on the general aviation industry. Since the enactment of the bill, the general aviation industry has recorded its best year in more than a decade. In 1986, as a result largely of product liability litigation, Cessna, a famous name in aviation, stopped producing piston-driven aircraft. It has now reentered that field. In July, Cessna will open a new $40 million facility in Kansas and, once again, will begin to produce piston-driven aircraft. The facility will employ about 2,000 people. Cessna is not alone in this connection, Mr. President. Piper Aircraft, just 2 years ago, was having an extremely difficult time getting out of a bankruptcy proceeding to which it had been subjected. No investor wanted to come to the rescue of that famous American company because it would have to assume its liability risks. Since the enactment of that simple piece of legislation, however, investors have come forward. The Piper Aircraft Co. has come out of bankruptcy, and its employment has increased by 30 percent. More generally, employment is up at every general aviation manufacturing facility in the United States by 15 percent. We went to the Internet last week to find the kind of job openings that have resulted from this resurgence in general aviation activity. Here is a brief list of some of the jobs we found: Avionics technician, Cessna; computer control technician, Cessna; systems designer, Cessna; weights engineer, Cessna; senior cost accountant, Raytheon; senior engineer, software systems certification, Raytheon. Exactly the kind of high-skill, high-wage jobs that the United States needs in order to continue its leadership in world technology, and in order to provide jobs for coming generations. Mr. President, that bill less than 2 years ago was criticized as restricting the rights of plaintiffs. Yet, Mr. President, I am confident when I say that there is not a single Member of this body-- or, for that matter, of the House of Representatives--who ever, in the course of a political campaign or to meet an obligation, turned down a ride in a Cessna aircraft on the grounds that those aircraft were negligently manufactured. Those who most eloquently defend the present legal system--a system which for all practical purposes bankrupted Cessna and Piper by reason of lawsuits claiming negligent manufacture-- never once acted on that and said, ``Oh, no, I cannot get on the plane; it was negligently manufactured.'' Mr. President, I cannot imagine that there is a Member of this body, or of the House of Representatives, who ever said, ``I won't allow my child to get a whooping cough vaccination because the materials in that vaccination were negligently manufactured.'' And yet they will stand up here today and say, ``We cannot change the law. We cannot protect those manufacturers against lawsuits like that because it would be unwise to do so.'' The present system has driven every such manufacturer--except one-- out of the business, and has caused the cost of that vaccine to be multiplied by 400 percent. It is less available and more expensive because of the insistence that we continue to allow absurd lawsuits to be brought against those manufacturers. The people of the United States deserve, we all agree, a system that is fair and efficient, yields reasonably predictable results, holds parties responsible in accordance with their fault, and perhaps most importantly reduces the wasteful transaction costs associated with all kinds of litigation, but in this case product liability litigation. Estimates of total tort costs of litigation and associated activities range from some $80 to $117 billion a year. Every dollar of these costs is forced back on consumers through higher prices on products used every day, and not at all, incidentally, limits the choice of those products as well. Listen to just a few facts about today's product liability system in America. The current system accounts for about 20 percent of the cost of a ladder. It accounts for 50 percent of the cost of a football helmet. Injured parties, on the other hand, receive less than half of the money spent on product liability actions, with the other half going to lawyers and their associated expenses. Nearly 90 percent of all of the companies in the United States can expect to become a defendant in a product liability case at least once--90 percent of all of the companies in the United States. Are 90 percent of them negligent manufacturers or product sellers? No. Many win these lawsuits, but they have to pay their attorney fees and they have to pay their insurance costs, in any event. Product liability insurance costs 15 times as much in the United States as it does in Japan and 20 times more than it does in Europe. Are their manufacturers, as a result, automatically negligent and indifferent to their consumers? Under the present laws in most of the States of the United States, manufacturers can be sued for products manufactured in the 1800's--manufactured a century ago. The present system costs too much. In a book published 5 years ago by the Brookings Institution the following note appears: Regardless of the trends in tort verdicts, most studies in this area have concluded that, after adjusting for inflation and population, liability costs have risen dramatically in the last 30 years, and most especially in the last decade. I have already spoken to the proposition that more of the money in the system goes to the lawyers and to their associates than goes to victims. Liability insurance costs affect every manufacturer in the United States. One example from my own State is a water ski manufacturer, Connelly Water Skis of Lynnwood, WA, pays an annual premium every year of $345,000 for product liability insurance even though it has never lost a case. It has never lost a case--but still has to pay that huge premium. The present system takes forever--years--to settle cases. Compensation, ironically, is unfair. The smaller the amount of damages, the larger the percentage of recovery. The larger the actual damages, the actual losses to an individual, the lower the percentage of actual recovery. Unpredictability. Last year in a hearing before the Commerce Committee a Virginia law professor, Jeffrey O'Connell, explained: If you are badly injured in our society by a product and you go to a highly skilled lawyer . . . in all honesty the lawyer cannot tell you what you will be paid, when you will be paid, or, indeed, if you will be paid. What is the effect of a broken down system on people in the United States today? First, it is increased costs. I have already referred to the fact that one manufacturer of vaccines has raised its price 400 percent, from $2.80 to $11.40, solely to recover the cost of increased lawsuits, and that in 1984 two of the three companies manufacturing the DPT vaccine decided to stop production because it just simply was not worth it, by reason of the cost of the product liability. Later in that year, the Centers for Disease Control recommended that doctors stop vaccinating children over the age of 1 in order to conserve limited supplies of that vaccine. Second, it is very clear that the fear of product liability litigation hinders the development of new products in the United States, and the marketing of those products once they are developed. In an American Medical Association report entitled ``The Impact of Product Liability on the Development of New Medical Technologies,'' they wrote: Innovative new products are not being developed, or are being withheld from the market because of liability concerns, or the inability to obtain adequate insurance. Certain older technologies have been removed from the market not because of sound scientific evidence indicating lack of safety or efficacy but because product liability suits have exposes manufacturers to unacceptable financial risk. Rawlings Sporting Goods, one of the leading manufacturers of competitive football equipment for more than 80 years, announced in 1988 that it would no longer manufacture, distribute, or sell football helmets. Two manufacturers in the United States out of 20 that were in this business in 1975 remain in that business today. A recent article in Science magazine reported that a careful examination of the current state of research to develop an AIDS vaccine ``shows liability concerns have had negative effects.'' It points out that Genentech halted its AIDS vaccine research after the California legislature failed to enact State tort reform. Only after a favorable ruling did they renew or resume that research. On that same topic, consider a recent comment by Dr. Jonas Salk, the inventor of the polio vaccine. I quote Dr. Salk: If I develop an AIDS vaccine, I do not believe a U.S. manufacturer will market it because of the current punitive damage system. Not only does the current system hurt medical innovation, it also inhibits small companies from producing everyday goods. For example, again in my own State, Washington Auto Carriage in Spokane distributes various kinds of truck equipment throughout the United States. Here is what its owner, Cliff King, says, and I quote him. We have been forced out of selling some kinds of truck equipment because of the exorbitant insurance premiums required to be in the market. As a result, this type of equipment tends to be distributed only by a very few large distributors around the country who can afford to spread the costs over a very large base of sales. Ultimately there is much less competition in these markets. Many arguments are made against this proposal on the basis of federalism. The United States is a single market, however, a single market now with 51 different product liability regimes. As a result, one of the associations that is most interested in a devolution of power to the States, the National Governors' Association, recognizes that the current patchwork of U.S. product liability law is too costly, time consuming, unpredictable and counterproductive, resulting in severely adverse effects on the American consumer, workers' competitiveness, innovation and competence. Mr. President, we will have a considerable period of time today during which to debate details of this legislation, but I wish to return just for a moment to the point with which I began this explanation of the bill. First, the Members of the Senate, even those who argue most passionately and eloquently to retain the present broken down system, do they act in their own lives as if these manufacturers were engaged in nefarious activities indifferent to the safety of their consumers? Did they, during all of the years in which Cessna and Piper were being driven out of business by the system they defended, refuse to fly on their airplanes? No. Do they tell their families or do they themselves refuse the latest medical devices, the latest serums, the costs of which have been driven sky high by product liability litigation? No, they do not. They use them. They use them for their children. Do we have an example of what even modest reform in this field means to the American economy? Yes, we do, in the general aviation industry. And so I am convinced that we can and should pass this modest product liability reform, and we can expect an immodest and positive result: more competition, better goods and services, lower prices, fewer lawsuits, and a higher degree of justice for the American people as a whole. This issue has been debated in this body for more than a decade at this point. It is time to bring that debate to a close, to pass this legislation, and to see the relief that the American consumer, the American manufacturer, and American competitiveness needs to be successful in the world of the 21st century. As a consequence, I urgently ask my fellow Senators promptly to pass this bill and send it to the House and then to the President of the United States.

Mr. GORTON

Mr. GORTON. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to hold a business meeting during the session of the Senate on Wednesday, March 20, 1996, at 2 p.m. in SH- 216.

Mr. GORTON. Mr. President, I ask unanimous consent that the Committee on Rules and Administration be authorized to meet during the session of the Senate on Wednesday, March 20, 1996, at 9:30 a.m., to hold an oversight hearing on the Congressional Research Service.

Mr. GORTON. The Committee on Veterans' Affairs would like to request unanimous consent to hold a hearing on veterans' health care eligibility priorities. The hearing will be held on March 20, 1996, at 10 a.m., in room 418 of the Russell Senate Office Building.

Mr. GORTON. Mr. President, I ask unanimous consent that the Subcommittee on Strategic Forces of the Committee on Armed Services be authorized to meet at 9:30 a.m. on Wednesday, March 20, 1996, in open session, to receive testimony on the Department of Defense space programs and issues 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 that the Subcommittee on Personnel of the Committee on Armed Services be authorized to meet at 10:00 a.m. on Wednesday, March 20, 1996, in open session, to receive testimony regarding the manpower, personnel, and compensation programs of the Department of Defense in review of the National Defense Authorization Request for fiscal Year 1997.

Mr. GORTON. Mr. President, I ask unanimous consent that the Subcommittee on Near Eastern and South Asian Affairs of the Committee on Foreign Relations be authorized to meet during the session of the Senate on Wednesday, March 20, 1996, at 2:00 p.m.

Mr. GORTON. Mr. President, I ask unanimous consent that the Permanent Subcommittee on Investigations of the Committee on Government Affairs, be authorized to meet during the session of the Senate on Wednesday, March 20, 1996 to hold hearings on the Global Proliferation of Weapons of Mass Destruction, Part II.

Mr. GORTON. Mr. President, I ask unanimous consent that the Subcommittee on International Economic Policy, Export and Trade Promotion of the Committee on Foreign Relations be authorized to meet during the session of the Senate on Wednesday, March 20, 1996, at 10:00 a.m.

Mr. GORTON. Mr. President, I ask unanimous consent that the Subcommittee on Energy Research and Development of the Committee on Energy and Natural Resources be granted permission to meet during the session of the Senate on Wednesday, March 20, 1996 for purposes of conducting a subcommittee hearing which is scheduled to begin at 2:00 p.m. the purpose of this oversight hearing is to receive testimony on S. 1077, a bill to authorize research, development, and demonstration of hydrogen as an energy carrier and for other purposes, S. 1153, a bill to authorize research, development, and demonstration of hydrogen as an energy carrier, and a demonstration-commercialization project which produces hydrogen as an energy source produced from solid and complex waste for onsite use in fuel cells, and for other purposes, and H.R. 655, a bill to authorize the hydrogen research, development, and demonstration programs of the Department of Energy, and for other purposes.

Mr. GORTON

Mr. GORTON. Mr. President, I ask that a copy of a letter from Elliot Laws, EPA Assistant Administrator, on the subject of the Tulalip Superfund site be printed in the Record immediately following my remarks. The letter from EPA clarifies that the Agency fully intends to comply with the report language included in the fiscal year 1996 Senate VA-HUD and independent agencies report on the Tulalip Superfund site. In addition, the letter promises to provide further information on the liability of the Tulalip Tribe for the cleanup of the Superfund site. The letter follows: U.S. Environmental Protection Agency, Washington, DC, March 19, 1996. Hon. Slade Gorton, U.S. Senate, Washington, DC. Dear Senator Gorton: Thank you for inviting us to meet with you on Monday, March 11, 1996, concerning the Tulalip Landfill Superfund Project. This is to summarize the meeting with Timothy Fields, Jr., Deputy Assistant Administrator, Office of Solid Waste and Emergency Response, and Kathryn Schmoll, Comptroller, and to reiterate the U.S. Environmental Protection Agency's (EPA) commitment to work closely with you and to carefully and thoroughly consider issues you have raised regarding this matter. The meeting focused on three key issues you raised: conducting alternative dispute resolution (ADR) with the interested parties, performing a baseline risk assessment, and incorporating the results of these activities into a new review of remedial alternatives for the site. We also discussed EPA's recent decision to issue an Interim Record of Decision (ROD) for the source areas of the site, and other issues relating to allocation of remedial costs. EPA has already taken a number of steps consistent with the goals you have laid out. For example, we have engaged the potentially responsible parties (PRPs) and others in an extensive dialogue on Tulalip. The Region extended the public comment period on the proposed remedial action plan from 30 days to 80 days, held two public meetings, reviewed and responded to voluminous comments, and thoroughly documented the remedy selection process before publishing the interim ROD. The Agency also generated an extensive record of written communications with the PRPs addressing the cleanup alternatives and the differences between the reviews which the PRPs and EPA have performed. Senior EPA Headquarters management also met with representatives of the PRPs in order to hear and respond to their concerns with the remedy selection process. Publishing the interim ROD is part of a comprehensive effort to identify and address all actual and potential risks associated with this site. It is designed to control migration of contaminants from the source areas of the site and follows the Agency's guidance of presumptive remedies for landfills. This allows for a prompt remedy selection process based on a brief site characterization and risk assessment effort. Nevertheless, the Agency is currently conducting a full baseline risk assessment to evaluate the off-source portions of the site. Thus, concurrent with this interim action to prevent further environmental degradation, EPA is evaluating the impacts of the site on the surrounding area and the risks associated with those impacts. This baseline risk assessment is scheduled for completion in the Summer of 1996. It will form the basis for the final ROD, which will address all remaining aspects of the site. EPA expects to issue this final ROD in Summer 1997, after receiving and responding to public comment on the risk evaluation. Again, the issuance of the interim ROD was in no way intended to interfere with our ability to address the interests and concerns raised by yourself and by other parties. Since, the interim remedy will address the source contamination at the Tulalip site in the most timely and cost-effective manner, EPA designed the baseline risk assessment assuming the interim action would be taken for the on-source areas while continuing investigation of off-source areas. The findings of the baseline risk assessment will be used as the basis for review of the interim ROD, to the extent practicable, and the selection of the final remedy. EPA has furthermore initiated an ADR settlement project for Tulalip. In cooperation with many of the principal respondents for the site, the Agency has employed a neutral, third-party facilitator to assist in allocating remediation costs. The PRPs are currently working to establish the criteria which the facilitator will use to assign liability for the costs of the cleanup. We understand that the facilitator will most likely consider a combination of factors in assigning liability which will probably include both tonnage (contribution) and the degree of involvement/ responsibility for the activities which led to the current site conditions. However, the exact terms of this agreement are the subject of ongoing discussions among the PRPs and their representatives. In the meeting, you asked a hypothetical question regarding the Tulalip tribe's liability for a portion of the cleanup costs. With respect to estimates of liability, EPA notes that it has published costs estimates only for de minimis settlers as part of an early settlement offer. If other PRPs have estimates of their potential liability, these may represent their own estimates, made for business and planning purposes. However, they are not EPA estimates, and we have not reviewed or concurred with the assumptions on which they may have been based. Again, these issues relating to liability for cleanup costs are to be resolved through the ADR process. We will provide a further update on this issue to you in the future. As a final note, EPA also seriously evaluated the lower- cost options which several of the PRPs have supported. These alternatives do not provide a cap for the site and would therefore not comply with the minimum applicable State landfill closure requirements. I have enclosed letters from the State of Washington and tribal representatives that present their views in support of EPA's remedy selection decisions. I believe this letter is responsve to the concerns you raised at the March 11 meeting, and I appreciate your continued interest in the Superfund program and the Tulalip Landfill Superfund cleanup. Sincerely, Elliott P. Laws, Assistant Administrator.