T. Gorton

Mr. GORTON

Mr. GORTON. Yes. The Friar case involved a forklift and the Colson case involved the use of a lawnmower. In to warn where the dangers are of common knowledge.

Mr. GORTON. Indeed. Under the ``common knowledge'' doctrine the defendant is not held responsible for injuries to the plaintiff caused by the plaintiff's misuse of a product that is commonly known and recognized to be dangerous by ordinary users.

Mr. GORTON. That is correct.

Mr. GORTON. Yes, I would be glad to do so.

Mr. GORTON. Mr. President, very briefly on the subject. No, I say, Mr. President, nothing in this law limits the State of Alabama from providing unlimited compensatory damages in the case of wrongful death. It is Alabama that has said that it will not grant compensatory damages in the case of wrongful death, and Alabama this bill puts any limit on compensatory damages awarded by courts in the State of Alabama for wrongful death; absolutely nothing. What this bill does do is to take a modest step toward bringing under a certain degree of control punitive damages with rules for small business, rules for larger organizations and an exception when a judge wishes to go above any of the latter limitation. That is all. This amendment seeks for a single State to be totally exempt from that rule, therefore, in the view of this Senator is wrong. Mr. President, I am going to suggest the absence of a quorum because it is my hope that we are about to reach a unanimous consent agreement on all of the rest of the amendments that are to be offered and perhaps a chance to vote on them all and on final passage of this bill the same time tomorrow and serve the convenience of our colleagues. And so I will do that in just a moment, though I do not want to limit anyone else having a right to say something. I do need to say two other things. First, with respect to this constant new trials for large punitive damage awards, the Senator from West Virginia considered that last night, worked with his friends and supporters on his side of the aisle on that subject last night and worked with staff on this side. We agreed to take that section or subsection out of the bill. Because of cloture rules, we can only do that by unanimous consent. Opponents of the bill--Senator Hollings-- have refused that unanimous consent. I am here publicly to assure all Members that it will not appear in any bill coming out of conference, because Senator Rockefeller and I have made that commitment. We will not bring back a conference report with that proposal in it. We wish that we could have the courtesy of such unanimous-consent agreement. But we cannot, and they are certainly operating under the rules. But it is not going to appear in any final bill. We can assure them of that. With that, Mr. President, hoping that we will soon be able to reach a unanimous-consent agreement about votes, I will suggest--I withhold that. Mr. ROCKEFELLER addressed the Chair.

Mr. GORTON. There were no DeWine amendments and there were no Snowe amendments in previous bills. Second, this is, Mr. President, to be candid, a very peculiar rule in the State of Alabama where negligence is accounted to be the subject of punitive damages. It is not the rule in any other State in the Union. Nothing in this bill, without this amendment, prevents Alabama from providing any kind of damages for wrongful death that it wishes to, either through its legislature or through its court interpretations. So Alabama is not going to be penalized any more than any other State by this bill unless Alabama wants to be, and willfully refuses to conform its laws to those of other States. But, more significant than that, Mr. President, are two other features about this amendment. The first, one of the most carefully worked out elements in this entire bill, the most carefully worked out element in this bill, is the triple set of requirements we have with respect to punitive damages, one of which, in the ultimate analysis, allows judges to impose unlimited punitive damages when they find the conduct of the defendant to have been sufficiently egregious. The second is the Snowe amendment which, in most cases, will limit punitive damages to twice the total amount of all compensatory damages. And the third, Mr. President, is the fact that this body, I think, with a wide majority, determined that we were not going to allow punitive damages in a single case simply to destroy small businesses or individuals of relatively modest assets, with total assets of less than $500,000. Now, if this amendment passes, that will be the rule in 49 States--in 49 States, Mr. President. It will not be the rule in Alabama. In Alabama, there will not be any Snowe limitation in general cases, and there will not be any protection for small businesses or for individuals with net assets of less than half a million dollars. Mr. President, this is only 1 State out of 50, but Alabama is the single most notorious State in the United States of America related to its size for punitive damage awards. It is a cottage industry in that State to award very, very large, huge punitive damages awards against, generally speaking but not necessarily limited to, out-of-State corporations. So what we are saying is that the set of rules that we have adopted, in most of these cases by very large majorities in this body, will apply in every State except the State that comes first in the alphabet, Alabama, and none of the Because it has a peculiar law which can be changed by one word by its State legislature or, for that matter, by its supreme court. And we are going to do this, for all practical purposes, permanently. Finally, Mr. President, a profound change has taken place in this body since the time this amendment was first proposed in this debate. When it was first proposed in this debate, the absolute maximum for punitive damages was the Snowe amendment--twice compensatory damages-- which, as the two Senators from Alabama pointed out, under this peculiar Alabama law, would be zero. And, of course, twice zero is zero. So that is no longer the case. So the bill, the way it exists now, the way it has been amended now, allows the judge in any case on certain findings to impose punitive damages in unlimited amounts. That, in the bill as it exists now, without this amendment, of course, applies in Alabama, and will allow those Alabama judges to impose whatever they wish, if they meet the standards for punitive damages, themselves. So at that level, at least, this proposal is entirely unnecessary in a way that was not the case or not the argument just a few days ago in this bill. So even if Alabama is perverse enough to keep its law in its present peculiar fashion, this will not mean that there cannot not be any recovery in wrongful death cases. But if it is passed, we set one rule for Alabama in which everything is the sky is the limit in a State where the sky is higher already than it is in any other State in the Nation, and a quite different rule for 49 other States. Mr. President, that is absolutely unfair; that is profoundly unfair that this State, because of one peculiar rule, should be exempted from all of the rules which the great majority of Members here have said are appropriately applied to all of the States. Mr. SHELBY addressed the Chair.

Mr. GORTON. Mr. President, I regret that I have to oppose the amendment sponsored by the two Senators from Alabama. In some respects, I am sorry that I have to do so, but I believe that I have good and sufficient reasons for doing so. First, the senior Senator from Alabama said that this was included in previous product liability bills, which is certainly true. But those previous product liability bills did not have rules like this relating to punitive damages.

Mr. GORTON. It is. I simply pointed out to the distinguished junior Senator from Alabama that the way the amendment was set up it did not have any reference to any section, but it was about punitive damages. His correction is to see to it that it applies to the punitive damages section. But that is the section that has all the punitive damages in it.

Mr. GORTON. It does. That is in section 107, as well.

Mr. GORTON. It is.

Mr. GORTON. This is not that amendment.

Mr. GORTON

Mr. GORTON. Mr. President, I suggest the absence of a quorum.

Mr. GORTON. Mr. President, I ask unanimous consent that it be in order for me to offer the amendment I have in my hand which the Democrats have also seen and it be in order notwithstanding the provisions of rule XXII. This is the so-called additur fix amendment requested by the White House.

Mr. GORTON. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GORTON. Mr. President, I move to reconsider the vote by which the amendment was agreed to.

Mr. GORTON. Mr. President, by consent of all parties, I ask for action on the Gorton-Rockefeller-Dole amendment. Vote on Amendment No. 709, As Modified

Mr. GORTON. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GORTON. It will be.

Mr. GORTON. Mr. President, I do believe there is one other clarification that needs to be made. The questions that have been propounded by the Senator from Alaska refer to S. 565. Technically speaking, S. 565 is not before us. We are dealing with a House bill and a Senate amendment which incorporated all of the provisions of S. 565 in it. And so the questions and answers are applicable equally to that amendment as they would be if the identical S. 565 were before the Senate.

Mr. GORTON. I appreciate the Senator's request for absolute clarity. Further reference to the example of the ruptured oil tank may best illustrate the answer to your question. Suppose the oil tank ruptures as a result of a manufacturing defect. It leaks oil, causing damage to the environment and the neighboring private property, as well as damage to the tank owner and the tank. The statutory construction of the environmental exemption is clear. This bill will not alter any law under which any injured party could recover for damage to the environment. To the extent that the owner or manufacturer of the tank is liable for civil damages or civil penalties, cleanup costs, restitution, cost recovery, punitive damages or any other form of relief ordered to restore, correct, or compensate for damage to the environment, the rules in this bill would not apply. The bill would apply to an action by the private property owner to recover under State law for damage to that property based on the failure of the tank or on the basis that the oil, which is also a product, caused the harm. Similarly, under section 102(c)(7) this bill would not apply to third party actions related to environmental damages. For example, the tank owner could implead or cross-claim against the manufacturer of the tank for damages awarded against the tank owner for remediation of the environment under any theory, including product liability. S. 565 would not apply as a limitation on the causes of action or remedies available to the tank owner in an action against the manufacturer, but only to the extent that the tank owner is seeking to recover against the manufacturer for damages awarded against the tank owner for remediation of the environment. Applicable Federal or State law, other than this bill, would continue to govern the action with respect to environmental damage. However, this bill would apply with respect to any action under a product liability theory by the tank owner against the manufacturer for harm, as defined by this bill, caused by the product. In the case of a tank owner which has been held liable under a strict liability regime such as that found in section 1002 of the Oil Pollution Act of 1990, any damages assessed against the tank owner, including damages for injury to real or personal property caused by the product, should be considered economic damages to the tank owner for purposes of this bill, and an action to recover those economic damages from the manufacturer under a product liability theory would be without limitation under this bill.

Mr. GORTON. The exclusion in section 102(c)(7) would apply to all causes of action and remedies for damage to the environment. As the Senator from Alaska has correctly noted, the bill would apply to actions under State law for injury to persons or property that are caused by a product. As mentioned earlier, this bill would not apply to any Federal statutory or common law cause of action. To expand on the Senator's question, in the case of an oilspill caused by the failure of a storage tank in which the plaintiffs seek to recover for both damage to the environment and loss of property, the rules in the bill would establish the standard of proof and the limit of punitive damages with respect to recovery on the basis of damage to property under any applicable State law. The bill would not apply to any aspect of the recovery for environmental damages, including any recovery for cleanup costs, remedial measures, damages or penalties for loss of wildlife, or punitive damages that are assessed for damage to the environment, whether under State or Federal law and even if the cause of action is based on a product liability theory. As is noted on page 22 of the committee report in the discussion of the definition of ``harm'' ``it is the nature of the loss that triggers the application of the act'' with respect to State law, not the cause of action used.

Mr. GORTON. I would be happy to elaborate on this section for the Senator from Alaska. Section 102(c)(7) reads: * * (7) supersede or modify any statutory or common law, including any law providing for an action to abate a nuisance, that authorizes a state or person to institute an action for civil damages or civil penalties, cleanup costs, injunctions, restitution, cost recovery, punitive damages, or any other form of relief for remediation of the environment * * * or the threat of such remediation. As the Senator notes, the committee report explains that the exception for environmental cases is intended to exclude from S. 565 all causes of action and remedies that are available under Federal or State statutory or common law for damage to the environment. Therefore, this act would not place a cap on any punitive damage award or other remedy under any cause of action related to damage to the environment, including an action under a product liability theory.

Mr GORTON

Mr GORTON. The assumption of the Senator from Alaska is correct. Section 102(c)(2) provides that S. 565 does not supersede ``any Federal law,'' and that includes both Federal statutory law and Federal common law. The act, therefore, would not affect any causes of action or any remedies, including punitive damages, determined under Federal statutory or common law, including admiralty law.

Mr. GORTON

Mr. GORTON. I think the Senator from Alabama is correct about the parliamentary situation. Certainly, given Senator Hollings' views on the subject, I want his full knowledge and participation before we go ahead. My announcement was just in hopes that we can get interested people here to make those decisions. Awaiting our ability to do so, I suggest the absence of a quorum.

Mr. GORTON. Mr. President, since we are now under cloture and without the presence of my colleague, Senator Rockefeller, I should like, very tentatively, to announce what I hope the course of action will be this afternoon. I will, unless there is objection, within a reasonable period of time, ask unanimous consent for a minor but significant amendment to the Gorton-Rockefeller-Dole amendment, a proposition that does require unanimous consent to keep the undertaking that Senator Rockefeller made with respect to the right of a new trial after a judge imposed additur. After that, I would propose that we go forward by adopting the Gorton-Dole-Rockefeller amendment and the underlying amendment and then having a debate on any further amendments to the bill, some of which will require unanimous consent in order to bring them up, as I understand from the Parliamentarian, because of the position in which we find ourselves. Senator Rockefeller and I have agreed that amendments from the other side, during the pendency of cloture, that Members opposed to this bill want to bring up ought to be allowed to be brought up, and certainly we will grant unanimous consent for that taking place. Each of these will require cooperation and essentially unanimous consent. Senator Rockefeller is not back yet. One of the opponents to the bill is here. I am going to suggest the absence of a quorum so that Members can digest this request, so that the leaders can get together if they wish, and so we can proceed for the rest of the day. I hope that we will end up being able to finish the entire bill and having our final vote on final passage before the day is out, as the leader would like to go on to other bills.