T. Gorton

Mr. GORTON

Mr. GORTON. This is particularly true----

Mr. GORTON. Mr. President, among other things, the distinguished Senator from California spoke about special interests. I find that remarkable in light of an article which appeared a couple of weeks ago in the Wall Street Journal, and a followup report on campaign contributions to congressional candidates which shows that the largest single special interest involved in campaigns for Congress is the American Trial Lawyers Association and its members. In their contributions, they outdo the Fortune 500; they outdo organized labor; they outdo, multiplied by 4 or 5 times, oil and gas lobbyists' contributions. They are, by a significant margin, the No. 1 special interest from the point of view of contributions to political campaigns in the United States. Now, Mr. President, I do not normally argue this point of view. I am inclined to think that most of these lobbying organizations support the people who are already on their sides. But to attack the legislation as being special interest legislation, when the opponents are supported by the largest of all of the special interests, seems to me somewhat paradoxical.

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

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GORTON. Mr. President, we are now under a time agreement of 1 hour for the final debate on all of the second-degree amendments to the McConnell amendment on medical malpractice. Seeing no Senator prepared to debate, I suggest the absence of a quorum and ask unanimous consent that it be charged equally against both sides.

Mr. GORTON. I will yield a minute to the Senator.

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

Mr. GORTON

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

Mr. GORTON. Mr. President, this amendment is identical to an amendment which was adopted by a rollcall vote earlier today to the medical malpractice sections of the bill. We have discussed it. Everyone has agreed that we do not need another rollcall vote on it. I believe all debate is concluded. I ask the President to put the question. the question occurs on agreeing to the amendment No. 620 to amendment No. 596.

Mr. GORTON. Is the Snowe amendment to the Gorton amendment also pending?

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

Mr. GORTON

Mr. GORTON. Mr. President, having completed work on all of the amendments relating to medical malpractice, the floor of the Senate is now open for other amendments to the product liability legislation. I understand that serious amendments are to be proposed extending the punitive damages provisions of this bill to all litigation and extending the rules related to joint liability to all litigation. At the same time, there are a number of other amendments, both those which would broaden the legislation and those which would narrow it, which is appropriate and is relative to be discussed in connection with this bill. I do hope at this point, after more than a week of debate, that proponents and opponents to these amendments will be willing to consider adequate, but relatively brief, time agreements, so that we can move the legislation forward. As Members come to the floor to present their amendments, I intend to make that suggestion to them, and we can have first-rate debate and votes and perhaps fewer quorum calls than we have had for some time. Mr. DOLE addressed the Chair.

Mr. GORTON. Assuming there is later today an order for votes on all amendments dealing with punitive damages, that the Snowe amendment

Mr. GORTON

Mr. GORTON. Mr. President, for the information of all Senators, there will be a series of stacked votes beginning at 11:15 tomorrow morning on or in relation to any second-degree amendments to the Dole amendment No. 617. Members should be on notice that two cloture motions were just filed tonight on the underlying Gorton substitute. Therefore, two cloture votes will occur during Thursday's session of the Senate at a time to be determined by the two leaders.

Mr. GORTON

Mr. GORTON. Mr. President, I ask unanimous consent that the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, be authorized to meet at 10 a.m., during the session of the Senate on Tuesday, May 2, 1995 to hold hearings on the Navy T-AO-187 Kaiser Class Oiler Contract.

Mr. GORTON

Mr. GORTON. Mr. President, the balance of the day will be used to debate the McConnell amendment which proposes to add detailed provisions with respect to medical malpractice legislation to the substitute which is currently before the Senate, primarily on the subject of product liability. All amendments, except for leadership amendments, that deal with medical malpractice under the order are to be offered today and debated throughout the day. There will also be approximately 1 hour for debate on all of those amendments tomorrow before 11 o'clock in the morning, when there will be votes on everything leading up to and including the McConnell amendment, after which time, with certain narrow exceptions, medical malpractice will no longer be discussed as a part of this bill. So I want to express the hope that Members who wish to speak on the subject of medical malpractice or to offer additional amendments to the McConnell amendment will come to the floor and debate those issues today. Nothing in the order prohibits speeches or discussions on the legislation broader than medical malpractice, but this is So we are open and ready for business for any Member who wishes to discuss that issue or to offer an amendment relating to that issue. With that, for the time being, Mr. President, I suggest the absence of a quorum.

Mr. GORTON

Mr. GORTON. Mr. President, I would like to speak for a few moments on the underlying bill on product liability--the debate on which began a week ago today--on some aspects of the amendments which are before us at the present time on medical malpractice, and respond to two questions raised by the Senator from Minnesota during one of his sets of remarks on product liability earlier during the course of the day. But I can begin in no better fashion than to share with you, Mr. President, and with my colleagues, a remarkably eloquent essay which appeared in last Friday's Washington Post. Its author, Bernadine Healy, was Director of the National Institutes of Health during most of the Bush administration and is a senior policy advisor at the Cleveland Clinic Foundation. Mr. President, rather than simply to put that essay into the Record, in order that our Members, in making their judgments on the important votes they are going to cast tomorrow and the rest of the week, I intend to read that essay, because I was so moved by it, with simply the caveat in the beginning. The essay, entitled ``Tort Tax on Women's Health,'' is primarily about the impact of this bill and these amendments on women. And I trust, Mr. President, that you will remember, as I read it, that it speaks from Dr. Healy's female perspective. I am quoting and I will be until I bring this to an end: As the move to fix the broken tort system gains steam in the Senate, we're hearing a tired refrain: Legal reform will hurt women. This political gimmick to paint women as victims is precisely the opposite of the truth: Perpetuation of the litigation lottery, not its reform, hurts most women in the long run. In dire need of reform is the current system's imposition of massive and arbitrary fines under the guise of ``punitive damages.'' In product liability cases, punitive damages are intended to punish a company that manufactures a dangerous product. In medical malpractice cases, these fines are cloaked as non-economic damages, such as those for ``pain and suffering.'' Juries are asked to impose these damages on a purely subjective, emotional basis. They are in excess of the amounts needed to pay for the harm actually done. One juror told the Legal Times her reasons for awarding $10 million against a Washington, D.C. doctor and hospital: ``[Q]uite honestly, I think it had something to do with sounding like a round figure.'' It is this open-ended freedom to punish that creates a legal lottery, one in which many trial lawyers scoff at smaller claims in favor of the winning ticket of a million- dollar contingency fee. How could reforming this system hurt women? Protectors of the current system claim that, because society places women at a lower economic value, economic compensation for an injury will never be enough. They point to lower wages for women than men in comparable jobs, as well as to the pathetically low wages identified for women who care for the children and home in a family. Women always must stand firm for equal wages for equal work. We also must fight for economic respect for our work within the family unit. (This might even include calculating compensatory damages based on the total income of the family unit, not just the market value of domestic services). But our struggle for economic equality should not be used as a smokescreen to justify a liability system that threatens women's health. Women live longer and suffer from chronic diseases (such as osteoporosis) to a greater extent than men. More than men, we will rely on new drugs and therapies to combat these debilitating diseases. Unfortunately, unpredictable and excessive product liability costs are forcing drug and medical device companies to withdraw needed products, or even to decline to develop them. Some products used exclusively by women--namely, those for pregnancy and contraception--are particularly susceptible to withdrawal by companies fearing lawsuits. For example, the price of Bendectin, a drug approved by the FDA for morning sickness, skyrocketed 250 percent after lawsuits to birth defects was ever found, the manufacturer withdrew the drug from the market. There are no other drugs for morning sickness. Improvement to contraceptive products also have been stalled by the product liability system. While there was a need to compensate women for problems associated with the Dalkon Shield intrauterine device (which physicians--not lawsuits--first called to the attention of the FDA), the lengthy, hyperadversarial and profit-oriented stream of lawsuits seriously wounded the development and acceptance of an improved version. The same may become true for Norplant. Liability intimidation over minor problems in the first generation of this useful contraceptive may foreclosure the development of an updated version. Another threat to women's health comes from the current medical malpractice system. The American College of Obstetricians and Gynecologists found that malpractice premiums increased 237 percent between 1982 and 1991. Added on are the indirect costs of defensive medicine (like too many Cesarean sections) and fewer doctors choosing to go into obstetrics. No one pays a higher price for this system than the poor. The Institute of Medicine reports that physicians' fear of lawsuits has left many rural communities without obstetrical care. The National Council of Negro Women reports the same for urban low-income areas. Who gains from this tort tax on women's health? Only 40 percent of malpractice insurance premiums goes to injured patients, while the remaining 60 percent goes to lawyers' fees and administrative costs. Instead of health care by lottery, women need good science and the aggressive pursuit of medical advances by the NIH, academia and the private sector. We don't need women's advocates who protect a liability system that limits our health care choices by turning businesses away from women's health. Nor do we need the same people who rightly argue for women to pilot F-16s then to characterize us as too delicate to weight our health risks. It is time to recognize that women, armed with solid research and medical information, can make their own intelligent choices about their health, from choosing a contraceptive to getting breast implants. During the House debate, a congresswoman characterized liability reform as a male conspiracy, comparing the ``second-class status'' of non-economic damages under a reformed system to what she viewed as a ``second-class status'' for women. But just as women's health has finally been upgraded to first class, we cannot abide a liability system that holds women back in the dark ages of medicine. Mr. President, two principal points in Dr. Healy's essay, I think, deserve special emphasis. The first has almost been ignored entirely since the opening salvos in this debate. That is, the tremendous cost of the present system, a tremendous cost which does not go to victims under any set of circumstances. Dr. Healy speaks of medical malpractice as producing 40 percent of all the insurance premiums that go into medical malpractice insurance to victims and 60 percent to lawyers and to administrative costs, the rest to the costs of the system itself. Mr. President, that figure is not limited to medical malpractice. It is endemic across the board in product liability litigation. I am astounded that we have not been met with an outrageous attack on this system by the very Members of this body who, instead, are arguing for its preservation without change. They who speak of victimization, they who speak of appropriate compensation seem overwhelmingly content with a system where 60 percent of the money that goes into it ends up in the pockets of people who are not victims but who are lawyers or expert witnesses or insurance investigators or the like. In almost any other aspect of our lives, we would be outraged by a 60-percent administrative cost. If anything, Mr. President, that 60 to 40 percent split underestimates the cost of the system. That is only what is reflected in medical malpractice premiums. It does not reflect at all the unnecessary defensive medicine that is practiced in order to try to prevent such claims from coming up in the first place. If there were no other reason for change, to make more effective compensating the actual victims of negligence, either in product liability or medical malpractice, we should be demanding reform instead of fighting that reform. At the same time, Mr. President, if this split in favor of overwhelming administrative costs is shocking, it seems to me especially shocking is the other principal point made by Dr. Healy and by others, the tremendously adverse impact of the present system on research, on the development of new products, whether National Institutes of Health related, machine tools--a wide range of products and the marketing of those products. First, of course, is that the price of every such product includes an insurance premium, a product liability insurance premium. More significant than that--more significant than that --are the choices made by companies faced with this lottery system. My distinguished friend and colleague from New Mexico last Friday read a statement by retired U.S. Supreme Court Justice Lewis Powell, which I can only paraphrase here, saying that the most irrational form of business regulation is the product liability system. We have in this Government a large number of regulatory bodies, many of which are devoted to the safety and effectiveness of the kinds of articles, the kinds of products that we use in our lives every day. Those agencies, of course, are not infallible. By comparison, a jury system dealing with a specific instance only, in every case is a pure lottery. The argument that somehow or another this system, which on identical facts can come up with a verdict for a defendant after a huge investment in the costs, or a multimillion-dollar punitive damage claim for actions deemed by the jury to have been deliberate or close to deliberate, is exactly that; it is a lottery. What is the rational response of a small business or, for that matter, a very large business in the field of producing new and improved items, especially related to our health? Well, the response is, in many cases, the flame is not worth the candle. Why should we as a company subject ourselves to tens of millions of dollars in attorney's fees, even in cases in which we are successful, and the possibility, however remote, of multi-million dollar judgments and terrible publicity in punitive damages in connection with a product which sells for a relatively low profit margin? Companies will, under those circumstances, not so much weigh the question of the safety of a particular device or medicine or product, they will weigh their potentials for successful business against the potential of all of these large attorney's fees and potential punitive damage awards. And what happens? What happens is many companies simply get out of the business; 90 percent of all of the companies manufacturing football helmets, for example, have abandoned the business during the course of the last 20 years. Major national laboratories and developers have abandoned the search for drugs that will have a positive impact on the AIDS epidemic because their calculation was that the legal costs of introducing such drugs, even with the approval of the Food and Drug Administration, vastly exceeded any profit that they can make on them. Other companies have gotten out of the business, as Dr. Healy says in one particular case here, ``. . . have gotten out of the business of producing traditional immunizations and the like because of the potential cost of either verdicts or even the cost of successfully defending lawsuits.'' We have discussed on this floor the dramatic impact of product liability litigation against companies manufacturing piston driven aircraft, a 95-percent reduction in the production of that kind of aircraft in the United States over a 20-year period all because of product liability litigation. Not successful lawsuits, Mr. President; in the overwhelming majority of these cases, the lawsuits were unsuccessful. But the costs of a successful defense are often more than the costs of a judgment. So that industry was practically destroyed until a modest change was made by this Congress last year and we have, in that one industry, the beginning of a recovery. Mr. CRAIG assumed the chair.

Mr. GORTON. The goal of product liability legislation is the recovery and development of those industries which make our lives better, which provide new and more effective treatment for medical conditions to which all of us are subject, more and better products for our enjoyment, for our transportation, for every other aspect of our lives. And when we can do that without the right to recover all of the actual damages that a jury awards to that plaintiff--all of the actual damages--and when we can do that at so low a cost to anyone except those who benefit from the litigation itself, it would not seem to me that this debate should have lasted as long as it did or that its result should still be so highly unpredictable. So, I congratulate Dr. Healy on her particular insight into this question, and say that insight can be expanded across the entire scope of the legislation with which we are dealing here and urgently speaks for its passage. I did want to remark briefly on two questions which were propounded by the Senator from Minnesota to the supporters of this legislation an hour or so ago. The Senator from Minnesota asks, and I hope I paraphrase him accurately, ``What projections are there for how many people will be denied how much money as a result of the cap on punitive damages included in this legislation?'' The second question was, ``What is the extent of adverse effects of the bill on the deterrent effect of uncapped punitive damages?'' In a sense, each of those questions is the same. Ironically, the answer to the first question, how many people will be denied how much money by some kind of limitations on punitive damages, has probably been answered most eloquently by the opponents to the bill. Opponents to the bill have been at great pains to say that there is no litigation explosion with respect to product liability litigation. That is an interesting argument, since the contrary argument has never been made on the floor of this Senate during the course of the last week. And that only a relative handful of punitive damages judgments had been entered in the last 10 to 12 to 20 years in product liability litigation. Of course, not all of those awards would be affected by this cap. A number of them are less than the cap is in the bill in its present form. So the answer is, ``Not very many people directly through the litigation system will be denied very much money by the passage of this bill in this form.'' But what is not asked in the question is, no one, not a single individual, will be denied $1 of the actual damages that they suffer and have proved to a judge and jury by this litigation because punitive damages, by its very definition, is an award above and beyond the damages suffered by a claimant in a particular case. The importance of this legislation in connection with punitive damages is not so much in connection with actual awards as it is with the effect of the threat of potential awards against sound business judgment about the marketing, particularly of new and improved articles, items, and products; and the fear of losing such a lottery on the settlement of lawsuits for more money than can justly be found due to a given claimant in order to prevent that lottery from going against a particular defendant. While we can probably come up with an accurate and relatively low count of the number of major punitive damage judgments in product liability cases, it is impossible to come up with the number of product liability cases in which punitive damages have been alleged for $1 million, for $10 million, for $100 million. It costs very little for the word processor to add another zero to the prayer in a complaint for damages. And in every case, that complaint must be taken seriously by a potential defendant. There is no way to predict the outcome and therefore many settlements are made for claims which are not justified, in significant amounts of money, and it is that uncertainty which has so constricted the desire of many businesses to make valid business judgments, not only from the point of view of the businesses themselves but to the great gain of the people who would otherwise have used those new products. Again, we can simply go back to the one area in which we know what the impact has been and will be, piston driven aircraft, 95 percent destroyed by the system, significantly restored already last year since the modest reform in the system has been made. That, too, answers the second question propounded by the Senator from Minnesota. What is the extent of the adverse effects of the bill on the deterrent effect of uncapped punitive damages? Again to paraphrase Justice Powell, this is the most irrational system of business regulation that can be imagined. It lacks any general principle whatsoever. It lacks any certainty whatsoever. It is utterly arbitrary. Mr. President, I am sure that the Senator from Minnesota would not for 1 minute countenance our changing the Criminal Code to one in which no matter what the crime the jury could impose whatever sentence it thought appropriate--capital punishment for an assault, life imprisonment for running a stop sign. Yet, that is by analogy exactly what we do with a punitive damages system, unlimited in every case except by the judgment of the jury itself. Moreover, the criminal justice system at least requires proof beyond a reasonable doubt, something not required as far as I know by any State having punitive damages. The deterrent effect: Well, Mr. President, the State I represent in this body does not now and never has allowed punitive damages in the bulk of civil litigation, nor have four or five other States. And there is no evidence that there is any greater carelessness or willfulness on the part of business enterprises in that State in dealing with consumers in our State because of the entire absence of punitive damages. So my answer to the question, ``What is the extent of the adverse effects of the bill on the deterrent effect of uncapped punitive damages?'' is: None. Not a conditional answer whatsoever; the answer is none. We have far better and far more just ways of dealing with rogue business enterprises than to deal with any such businesses in this fashion and in a fashion which deter the State's legitimate businesses and those who would wish to use such, to benefit from what those businesses will produce in the way of products and treatments and the like. So, Mr. President, I think we are perhaps winding up our day on this subject. I repeat once again, for the benefit of all of my colleagues, that today we must have all of the amendments introduced to the McConnell amendment, the amendment seeking to limit malpractice to a product liability bill. There will be a brief time of debate, approximately 1\1/2\ hours and a half tomorrow in the morning and then a series of votes on all of those amendments, after which we will go on to other amendments dealing with the general bill itself. Seeing no Member who wishes to offer an amendment or a comment on the floor at the present time, Mr. President, I suggest the absence of a quorum.

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

Mr. GORTON

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

Mr. GORTON

Mr. GORTON. Mr. President, I ask unanimous consent that Subcommittee on Housing Opportunity and Community Development, of the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Thursday, April 27, 1995, at 9:30 a.m., to conduct a hearing on the Reinvention of HUD and Redirection of Housing Policy. The Presiding Officer. Without objection, it so ordered. subcommittee on readiness

Mr. GORTON. Mr. President, I ask unanimous consent that the Subcommittee on Readiness of the Committee on Armed Services be authorized to meet at 9 a.m. on Thursday, April 27, 1995, in open session, to receive testimony on the Near and Long Term Readiness of the Armed Forces as It Relates to the Future Years Defense Plan.

Mr. GORTON. Mr. President. I ask unanimous consent that the Subcommittee on Superfund, Waste Control, and Risk Assessment be granted permission to conduct an oversight hearing Thursday, April 27, 9 a.m. regarding the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

Mr. GORTON

Mr. GORTON. I am authorized to report that the majority leader does not intend to take advantage of his right to offer an amendment at this point. As a consequence, the floor is open for amendments. I understand that the Senator from Kentucky intends to offer an amendment on medical malpractice, which is a very broad and significant amendment, and I hope can be concluded during the course of the day but nevertheless deserves considerable debate. I think I also should like to announce that, of course, it is really the turn of the opponents to this bill to offer an amendment, and if any of them wish to do so at the conclusion of this debate, I would appreciate their informing me or my colleague from West Virginia so that we can try to see to it that amendments are dealt with in a fair order. Before I yield the floor, Mr. President, I should like to say how much I admire the forceful and cogent and persuasive remarks of my friend from Connecticut, Senator Dodd. If I may make one or two more comments on a point of the Senator from Connecticut. Perhaps the most important of all of the points had to do with the balance that adheres in this bill. It is the result of the work of many years and work among Members of somewhat varying opinions other than the proposition that something is broken and needs to be fixed in connection with our product liability laws. So we have not gone all the way as far as we might in drafting this bill. We have attempted not to go from one extreme to the other extreme, but to come up with a solution that is fair to litigants, and that nonetheless will encourage the research and development of new products, marketing the new products, and the creation of economic opportunity in this country. I was particularly struck by the forceful way in which the Senator from Connecticut spoke of the balance, the way we reached these goals. I also understand his concern with the present provisions on punitive damages. We and others are working together to see whether or not we cannot come up with a superior solution to that which is included in the bill at the present time. But I do want to thank him for his most eloquent statement.

Mr. GORTON

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