T. Gorton

Mr. GORTON

Mr. GORTON. Mr. President, nominally, at least, the issue before the Senate at the moment is the Dole amendment. The Dole amendment, which incorporates the limitations on punitive damages proposed by the Senator from Maine [Ms. Snowe], and accepted earlier here today, would extend those limitations from the product liability sections of this bill and the now medical malpractice sections of this bill to all actions. In other words, we would have one uniform standard of limitations and relatively one uniform definition of the degree of proof required for punitive damages in all States which have fewer limitations at the present time or no limitations at all. Mr. President, the majority leader has outlined some of the persuasive reasons for this extension. The primary reasons being the impact on small businesses which now live under the Damocles sword of a punitive damage judgment which can literally put them out of business and the increasing and adverse impact of punitive damage awards or potential punitive damage awards on nonprofit organizations, including charities, including, as the majority leader pointed out, the Girl Scouts, Little League, and the like. I find these reasons to be persuasive reasons. I find it easy to be persuaded because it has been my view, almost from the time that I began to practice law, that the rule with respect to punitive damages in the State I represent, the State of Washington, which prohibits punitive damages for all practical purposes in all civil litigations, to be the appropriate rule. Punitive damages are just exactly that. They are a form of punishment. In our society and American tradition, punishment by the Government or at the hands of the Government is traditionally reserved for the criminal code. The criminal code carries with it privileges against self incrimination, a requirement that the prosecution prove its case beyond a reasonable doubt and, of course, explicit statutory limitations and definitions of what punishment is appropriate in connection with a particular crime. None of these projections exist with respect to punitive damages. Juries decide them on an ad hoc basis, generally speaking, on whether or not the same conduct or product resulted in punitive damages. There is, of course, no self-incrimination. The standard of proof in many States is a preponderance of the evidence, and even in this bill it is clear and convincing evidence, which falls short of the beyond a reasonable doubt standard. And most significantly of all, there are absolutely no limitations on the amount of punitive damages, thus the degree of punishment which can be imposed on a given defendant in civil litigation. several appeals of large punitive damage judgments, appeals based on constitutional protections through the 14th amendment. The Supreme Court has never come up with a standard, with a maxim, by any means, although there have been hints that punitive damage awards that exceed four times the actual damages come close to reaching some potential constitutional limitation. So from my perspective, I believe that it is both constitutional and appropriate for the Congress to deal with these issues and for the Congress to adopt the rule of the minority of the States--my own included--that say punishment should be reserved for the criminal code and that civil litigation should make a claimant whole, a wronged claimant whole, but do no more. As a consequence, I find it easy to support the relatively mild limitations which are included in the amendment proposed by Senator Dole, the majority leader of this body. My friend from South Carolina, with whom I have engaged in debates on this subject in the Commerce Committee and here on the floor, is most eloquent on the other side of this issue. Whatever his point about a political organization which trains its candidates in rhetoric may have been, it is very clear that he does not need any lessons in how to present a case forcefully and well. He does it here on this floor in this connection and in many others. But I must admit to being puzzled by at least some elements of the point that he makes. He says that because certain foreign companies--in this case in the automobile business--are willing to locate their factories in Alabama, that must mean they love the Alabama laws with respect to product liability. Well, Mr. President, there is no connection between the two. Just because the market for manufactured products is nationwide, the location of a particular factory is absolutely irrelevant. Those automobile companies can be sued, for all practical purposes, in any State because they sell their automobiles in every State, whether it is the State in which their factory is located or some other. In fact, if there might be any possible motivation created by product liability laws, which I doubt, it would be to locate your factory in the most notorious plaintiff-minded State because at least the judgments in that State would not be against an out-of-State manufacturer but an in-State one, which might create the tiniest degree of sympathy for the manufacturer. But the location of a place at which a manufacturer operates and the product liability laws of that State simply have no relevance to one another at all. The question before this body is whether we are dealing with product liability or with medical malpractice or, for that matter, with tort litigation in general. Do we have a system at the present time that appropriately balances the interests of claimants, people who have been injured or claim injury as a result of the use of products or as a result of the quality of health care they have received, or as a result of any other kind of act; do we properly balance their rights in court with other undoubted purposes of our society? In the case of product liability, have we properly balanced it with our desire that our companies spend large amounts on research and then develop new and improved products and then market those products or market existing products--sometimes for dangerous occupations where inevitably someone using the product is going to be injured? Or do we have a system which is so unbalanced that perfectly legitimate products are taken off the market, not because they are unsafe but because they simply cannot create profits enough to run the risk of litigation, even of successful litigation. Incidentally, Mr. President, very little has been said here on the floor about the impact of unsuccessful litigation in these areas. The attorney's fees, the expert witness fees, the cost in time and effort on the part of employees is every bit as much when the claim is rejected, when there is a verdict in litigation for the defendant, as it is when the litigation lottery turns out exactly the other way. Any intelligent individual or company is going to say, ``I know I am going to get sued and even if I am successful, I am going to spend more money than I can possibly make by marketing the product or engaging in the activity.'' That individual is going to say, ``Why bother?'' Even if that individual or that company has produced something good for society or is a part of the medical profession that is frequently sued or, for that matter, is a Little League volunteer or Red Cross volunteer, that volunteer figures he or she has a good chance of being sued, and it hardly matters whether they calculate that they will lose or win the lawsuit. They are going to say, ``I do not need the aggravation.'' It seems to me that it is almost beyond arguing that we have constricted the activities, restricted the activities, of individual volunteers. We have caused physicians with many productive years left in their careers to abandon those careers and to retire when they become reasonably financially comfortable. We have caused companies to abandon promising areas of research and development. We have caused the removal from the market of significant products by the threat of litigation, by the lottery of litigation--not just litigation that is going to be lost, but litigation which, more often than not, is won. We have done this all in the name of a system which produces only a relatively moderate percentage of the dollars that go into it for claimants who actually establish their claims. A claimant who loses the case, of course, ends up with nothing. But claimants taken collectively who win these cases, at least in the fields of product liability and medical malpractice, win less than half the cost of the system. Sixty percent, roughly, of the dollars that go into the system go to the lawyers and insurance adjustors and hired expert witnesses--all of the transaction costs of the system. So we have a system which not only penalizes volunteers and restricts the operation of our health care system and restricts research and development and the production and sale of goods, but one which is extraordinarily inefficient in compensating the actual real victims of breakdowns in the system itself. To say, as opponents do, that somehow or another this presents no national issue whatever just seems to me to beg the question. There is a problem. In a national economy, it is appropriate that at least there be a partial national solution to the problem. Yes, we have not attempted to move all of these cases into Federal courts with the requirement that we probably double the number of our judges and courthouses. We have not made an entirely uniform system. However, we have created in this bill a considerably greater degree of uniformity than there is now. We have even, in one section, said that the interpretation of this statute by circuit courts of appeals are going to be strong precedents for all State courts and all other Federal courts in those given circuits. So the degree of uniformity as a result of this bill will not by any means be 100 percent. It is not designed to be 100 percent. However, it will be far greater than it is at the present time, and the predictability of the result will be greater than it is at the present time, and the lottery aspects of the business will be fewer than they are at the present time. If we learn from the experience of this bill that greater uniformity is not necessary, we can go ahead and change it in the future. This is not an unchangeable law, by any stretch of the imagination. We can at least find out, by this cautious and partial experiment, whether or not the evils ascribed in this legislation are true, but whether or not there is a cure or a partial cure as a result of this legislation. I come back to one initial point, Mr. President. We have already tried this solution in one modest area of our Nation's economy: The reforms we made just a year ago in connection with the manufacture and sale of piston-driven aircraft. It is now clear beyond any argument that that business, that manufacturing business, was for all practical purposes destroyed by product liability litigation. The production of such aircraft declined 95 percent in the United States of America over a 20-year period, ascribed by the manufacturers to product liability litigation. recovery if we reformed the system. We did reform the system a year ago, more modestly than the product liability system is reformed here, but in a significant fashion. Already, there has been a significant recovery, including the planning and construction of new plants and an increase in the production and sale of U.S.-built piston-driven aircraft. This side in the debate is able to argue not from theory but from experience. That experience would, it seems to me, give extraordinarily heavy weight to saying that if we expand it, if we expand it to other areas, we will have a similar, if perhaps not so striking, increase in the creation of jobs in this country, in the development and marketing of new products, of voluntarism, if the Dole amendment passes and the like. I hope we will be able to go forward, Mr. President, and cast votes on these various amendments and the other amendments before the Senate, and reach a positive conclusion to this debate within the immediate and foreseeable future.

Mr. GORTON

Mr. GORTON. Mr. President, I ask for the yeas and the nays.

Mr. GORTON. Mr. President, I move to reconsider the vote and move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 603, As Amended

Mr. GORTON. Mr. President, I move to reconsider the vote.

Mr. GORTON. Mr. President, I move to table the Kennedy amendment and ask for the yeas and nays.

Mr. GORTON. Mr. President, I move to reconsider the vote.

Mr. GORTON. Mr. President, I move to reconsider the vote.

Mr. GORTON. Mr. President, this is also a noncontroversial amendment. So the amendment (No. 613) was agreed to.

Mr. GORTON. Mr. President, I move to reconsider the vote.

Mr. GORTON. Mr. President, this is a noncontroversial amendment. So the amendment (No. 612) was agreed to.

Mr. GORTON. Mr. President, I move to reconsider the vote.

Mr. GORTON. Mr. President, I move to reconsider the vote.

Mr. GORTON. Mr. President, I move to reconsider the vote.

Mr. GORTON. Mr. President, I move to reconsider the vote by which the motion to lay on the table was agreed to.

Mr. GORTON. Mr. President, I move to table the Wellstone amendment and ask for the yeas and nays.

Mr. GORTON. Mr. President, I move to reconsider the vote, and I move to lay that motion on the table.

Mr. GORTON. Mr. President, for the information of all Senators, there is a potential for as many as 12 back-to-back votes, beginning now. All Senators are urged to remain on the floor during this voting sequence. I ask unanimous consent that, notwithstanding the consent for the recess at 12:30, the Senate stand in recess immediately following the disposition of the McConnell amendment.

Mr. GORTON. I now ask for regular order. Amendment No. 604

Mr. GORTON. Mr. President, I ask unanimous consent that, following the conclusion of the first rollcall vote, all remaining consecutive rollcall votes be limited to 10 minutes.

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

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

Mr. GORTON. Mr. President, yes, the Senator from Washington is quite aware of that list of organizations. Of course, there are all kinds of organizations that are on both sides of this case. The point made by the Senator from Washington was that overwhelmingly of these special interests, the largest single special interest in the United States, when one measures that influence by the amount of money put into the political system, is ATLA, the trial lawyers. This is not surprising, given the fact that they are the principal beneficiaries to a considerably larger degree than the very victims whom they claim to be representing. That is the point from the perspective of organizations. The biggest special interest, the richest special interest, the special interest that gives the greatest amount of money leads the opposition to this view and contributes to many of the other organizations which are opposed to it. But that does not, as this Senator said, necessarily mean that they are wrong or that the other side is right. When, however, we have a system which hurts innovation, destroys American competitiveness in some industries, and gives 60 percent of all the money in the system to those who game the system rather than victims, there is something wrong, and that something ought to be corrected. preemption in the mcconnell-lieberman-kassebaum amendment

Mr. GORTON. I understand the question now.

Mr. GORTON. This is particularly true, Mr. President, when we reflect on the fact that it is that special interest which is the greatest beneficiary of the present system as, of all of the money that goes into medical malpractice, only 40 percent gets to the victims and 60 percent goes to the transactions costs; that is to say, the attorneys, the expert witnesses, the insurance adjusters and the like who involve themselves in the question. The greatest amount of money by far goes not to victims but to transaction costs. In my view, that is the great scandal of the present system, whether we are dealing with medical malpractice or with product liability. The costs of the system outside of the compensation provided for any of the parties is so overwhelmingly on one side that I think it would be those who speak about victims and victims' rights who would be most in favor of a dramatic and drastic reform of the present system, most in favor of it, to create a system in which the transaction costs, the lawyer's fees were dramatically less, and a much greater percentage went to those who were victims. I will be perfectly happy to yield to the Senator from California for a question.

Mr. GORTON. No, not right now.