Howell Heflin

Mr. HEFLIN

Mr. HEFLIN. Madam President, how much time is remaining on our side?

Mr. HEFLIN. I reserve the balance of my time.

Mr. HEFLIN. Mr. President, I would like to address the Dole amendment and its relationship to other parts of the bill. The Dole amendment, of course, extends the provisions of this proposed bill to all civil actions involving interstate commerce. That includes almost every automobile accident, and every conceivable type of accident, not just product liability cases. And, as we know, the language ``interstate commerce'' has been so liberally construed up until the very recent Lopez case that it includes almost any situation. There are many examples, too numerous to cite here, that can demonstrate the liberal construction of the interstate commerce clause. Let me first recite the provision not only in the Dole amendment but in the overall bill pertaining to punitive damages, that if you seek punitive damages and any party can call for a bifurcated trial which means that at the request consider in a separate proceeding as to whether punitive damages should be awarded. By the way, bifurcated proceedings will result in an increase in transitional costs which is somewhat ironic in as much as the proponents of this legislation have maintained that one of the bill's objectives is to reduce, not increase, transactional costs. If there is evidence of punitive misconduct, it is inconceivable to me that any defendant would not take advantage of a bifurcated trial. So, all punitive damage cases will have two trials. In the first trial, which is the trial in regard to underlying liability, compensatory damages will be sought, which includes noneconomic damages and economic damages, and all of its component aspects. There is this provision in the Dole amendment, and also in the overall bill--it is just a repetition put here--that evidence relative only to the claim of punitive damages as determined by applicable State law shall be inadmissible--not admissible, but inadmissible--in any proceedings to determine whether compensatory damages are to be awarded. That means that in an automobile accident case or in a truck/ automobile case, you could prove negligence in the trial in chief, but you could not prove gross negligence. Basically, what that means--and every defendant who would come along would argue--yes, you can argue that the truck that caused the accident, that did the wrongdoing, crossed the center line and hit an individual. But you could not prove that the driver had three beers or had a pint of whiskey, because that issue would go to the punitive damage aspect of the case. You could not prove basically that the owner of the truck knew, under these circumstances, that that driver had been convicted four times before of drunk driving. You could not prove in the trial in chief that the driver of that motor vehicle--and it was known to the owner of the truck, the truck company, that defendant had been convicted twice of reckless driving. You could not go into any aspect that would be evidence relating punitive damages and punitive misconduct. Now, you could not prove in the Pinto automobile cases that there was a memorandum to the effect that a company will come out financially better rather than having a recall because of the location of the fuel tank and the certain danger that would result in the case of a rear end collisions. The memorandum in question showed that the company would come out better financially and with less expense to just pay off the claims that might arise from rear end collisions. Now, how does this relate also to the Snowe amendment which is in the Dole amendment? We have to go in and look to several liability for noneconomic loss. Under the Snowe cap, the cap on punitive damages is twice the amount of economic and noneconomic damages. Section 109 of the bill on the matter of several liability reads Each defendant shall be liable only for the amount of noneconomic loss allocated to the defendant in direct proportion to the percentage of responsibility of the defendant determined in accordance to the harm to the plaintiff with respect to which the defendant is liable. Therefore, in a motor truck and automobile accident, if a person were suing for punitive damages in a particularly egregious situation and trying to prove noneconomic damages, such as pain and the suffering, for example, and being aware of the basis for the cap of the Snowe amendment, that person could not prove against the owner of the truck that the owner knew of four convictions of drunk driving and two convictions of reckless driving in his efforts to establish the several liability of the driver and the owner of the truck. How can a person establish under not only the Dole amendment but under the bill as a whole the amount of noneconomic damage, for example, against the owner of the truck? Now, that is just one example, and there are probably a multitude of other examples. There are other aspects, but these two relate together in that, together, they put an injured party at a terrible disadvantage. It in effect says, regardless of the injury or the human element in this, we are interested in profits. To me, as I look at all of this, and every time I see more and more instances which raise serious questions in my mind, there are all sort of provisions throughout this particular bill that just really shock the conscience as regards to the issue of fairness. I am deeply concerned that people do not really understand how the provisions interrelate and what ultimate impact the bill will have on the individual and his or her rights to seek fair redress for injuries he or she may have received. How much time is remaining on our side?

Mr. HEFLIN. Mr. President, I ask for the yeas and nays on the Shelby amendment.

Mr. HEFLIN. In other words, it is not controlling on actions that are tried in State courts, such as the Senator's State and such as Senator Cochran's State.

Mr. HEFLIN. Mr. President, I certainly join Senator Hollings with regard to the remarks that have been made by the distinguished Senator from Tennessee and the distinguished Senator from Mississippi. The Senator from Mississippi talked about the fact that here we are really going with this, a product liability to, in effect, change all civil actions; changing the tort laws. All of a sudden, we have adopted the Dole amendment which extends to all civil actions affecting commerce. Of course, under the laws pertaining to commerce, it does not say ``interstate commerce.'' It says ``commerce.'' I mean some people resent the decision pertaining to the Lopez case that was handed down. But this does not say ``interstate commerce.'' It says affecting ``commerce''--the language in the Dole amendment. I wonder, how far does this go? Of all civil actions? Civil actions, if there are civil rights cases, based on State law? Is it covered by this? Does this apply to that? If there are civil rights cases under Federal law, are they affected by this? There are so many questions that are raised. There have been, for example, longstanding railroad laws pertaining to FELA cases. Are they affected by that? There are longstanding admiralty laws which are civil cases; are they affected by these amendments? Is the Jones Act, which is another matter pertaining to seafarers, affected by this act? There are so many things that just immediately come to mind that raise concerns in my mind. Consider, for example, the antitrust laws that are enacted by States. You have the standard of three times damages, and as the bill is now amended, it is reduced down to two times. Economic? If there are no noneconomic damages, then it is reduced down to twice. Are we changing the antitrust laws in reducing the penalties pertaining to those? Senator Cochran mentioned that here we are attempting to change all of these laws on the floor of the Senate. I said there have been groups that have studied the tort law. There is the American Law Institute that has published the restatement of torts. They have published the restatement of a great number of various fields of law. This product liability bill, the underlying bill, has no resemblance to that study group which has over the years included defense counsel, plaintiff's counsel, professors, scholars, and people who have worked on the concept of tort law, including product liability law. But this has been written by lawyers that are interested in trying to save themselves money, and they are trying to save themselves money at the expense of injured people. And now it is being extended to all civil actions. Now, I am not exactly sure what the Thompson amendment does, and I would like to sort of engage in a colloquy and ask the Senator some questions pertaining to it. From what I have been able to read and in listening to my colleague speak, really the Senator's amendment, as I understand it, limits the application of the underlying bill as now amended to Federal courts only. Is that correct?

Mr. HEFLIN. All right, I yield to the Senator from Illinois.

Mr. HEFLIN. Are there any objections to that?

Mr. HEFLIN

Mr. HEFLIN. Mr. President, I would like to address some of the underlying provisions in the product liability bill which I feel are unfair. No. 1 is that in the definition of claimant and person, the language brings within the purview of this bill a Government entity. This means cities, counties, State Government, the Federal Government. The statute of repose could be very important as we look at the United States Army relative to damages it might suffer. I think most of the vehicles in the Army we know are designed to last a long time--helicopters, NASA vehicles, and so forth. Why the proponents want to include a Government entity within the provisions of this statute raises a lot of questions to me. Now they pretty well exempt rental cars, lease property from product liability. I gave an illustration earlier that you might have a situation in which a recall is sent by the manufacturer, but the rental car agency decides to continue to lease the car with knowledge that there are dangers that might be in the car. I just mention that. bill itself and in the Abraham amendment, there is language to the effect that in the several liability and the percentage of harm, that it does not have to be a party to the lawsuit. Therefore, you have situations where there could be companies in bankruptcy where you could not get jurisdiction. And then you could have a situation where, in the absence of service, you could not bring it; or it could be that the statute of limitations has run before someone recognizes that part of it is not to the lawsuit, to get service on, relative to that matter. Under most workman's compensation laws, it not only means that you cannot bring a lawsuit against your employer, but also against coemployees. Yet, you have the right under this, whether party to a lawsuit or not--the jury would be obligated to set a percentage of the fault against that party. And that party would not be there to defend themselves. They would not want to become involved in a lawsuit. They are the only ones who really know their defenses and the amount of their responsibility pertaining to the fault that might occur. So, in effect, therefore, they would gang up against a party who was not a defendant in the lawsuit. Then there is language in regard to misuse or alteration, which is a defense that reduces the damage. But, again, it is carefully worded for an advantage. It says, ``. . . misuse or alteration by any person, regardless of whether they are a defendant in the lawsuit.'' And then you have, in this bill, to show you how it is worded, in the lawsuit if you have several defendants and they are not parties--the employer and the employee cannot be made--in most instances, the coemployee cannot be made a party to a lawsuit and is protected because of workman's compensation. Then it says that the last issue to be tried in the lawsuit is the percentage of the fault that falls on the employer or the coemployee. So they want it to be fresh in the minds of the jury as being the last issue that is tried. That is another slight advantage that they are always working in regard to this. The draftsmen of this are keen people who have represented defendants, and they are knowledgeable about defending lawsuits and are trying to get an advantage rather than trying to be fair to the injured party. And then it has the provision that you cannot settle without the insurance company or the workman's compensation agreement. If you want to settle for 75 cents on the dollar, the workman's compensation insurer will not let you do that because they want 100 percent. That is another example of the bill's unfairness. Now, there are a lot of lawsuits on asbestos injury. It would apply to asbestos, except there is some provision pertaining to the statute of repose relative to asbestos, calling it a ``toxic'' matter. The bill has a provision for businesses coming under the provisions of the Uniform Commercial Code regarding commercial loss, where businesses are therefore given an advantage. Well, under the uniform commercial code, it has generally, under warranties, a 4-year statute of limitations; whereas, under this bill, the injured worker has only 2 years in a statute of limitations. That is another advantage that is put in there for the benefit of the manufacturer. Another aspect relates to implied warranty. The bill abolishes the concept of implied warranty as a cause of action. Implied warranty basically is a concept that says that the product is fit for the purpose for which it is sold. But under the language of the bill, there are several implied warranties. There is an implied warranty of merchantability, and other implied warranties are involved. Under this language, it allows the only warranty that you can, have a cause of action for or sue on is an express warranty. So, therefore, all a seller of goods has to do, if he has knowledge of defects, is to keep his mouth shut. He just does not say anything. Under the normal law, if he says nothing, but he has knowledge, then the implied warranty could be found. But unless a seller expressly warrants a product, he is exempt from liability. Then there could be an instance in regard to the Uniform Commercial Code relative to privity of contract. You have to have privity of contract, actual contractual relations; it would be a limited effect where it would come into play, but it is still an advantage the bill's proponents are seeking. I wanted to mention those. Of course, as the bill presently stands, the drug companies are almost completely immune from any lawsuit. Regarding pharmaceutical companies--drugs--there is just about an impossibility the way it is presently framed to recover against them. The biomaterial section is still one where they have written it in such a manner that it has language that is most unusual. They say that if a material comes in contact with bodily fluids or with tissue and remains for less than 30 days, less than 30 days could be 1 minute. It could be 5 minutes. When it talks about less than 30 days, it says that that comes in contact through a surgical opening. What is a surgical opening? A surgical opening could be a needle that is stuck into you, a needle, a hypodermic device that goes in the body to draw blood or administer a drug or medicine. That is, in effect, a surgical opening. If it stays there 30 seconds, then it comes under the classification, the way this is written, of being an implant. And, therefore, if you are a component part of the implant under the biomaterials section that we have here, you have just about a complete immunity. The only way you could do it would be that you have to prove that the component part was not made by a different party but was made by the manufacturer, or that the component part was made by the seller--component parts, many times, are made by many and different people--or that it was according to specifications. A lot of times, there are defects relative to specifications on these. I point out that there are a lot more snakes, as I call them, involved in this. Every time you read it, you discover another one of these snakes wiggling in the grass. Each of them are big issues. I think we have concentrated too much relative to punitive damages, because there are so many other issues involved in this that are just as big in taking away the rights of injured persons. I wanted to point those out. I thought some others would be on the floor but, as usual, some will leave before too long. Maybe I made a point in that regard. I yield the floor.

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

Mr. HEFLIN. Mr. President, I have just read a copy of the Abraham- McConnell-Kyl amendment. I would like to discuss some of the language that I find in here. Basically it says: Notwithstanding any other section of this act, in any civil action whose subject matter affects commerce brought in a Federal or a State court on any theory that liability of each defendant for economic damages shall be several only and shall not be joined. So this is a much broadening of the issue than what was in the underlying product liability bill. It says in any civil action whose subject matter affects commerce--it does not say ``interstate commerce,'' it says ``commerce''--brought under any theory. I want to include that in my discussions with Senator Thompson on what is a civil action. We concluded that any action which is not a criminal action is a civil action. This in effect preempts State law. State laws have many aspects that affect noneconomic damages. Noneconomic damages are defined herein as meaning subjective nonmonetary damages resulting from harm, including pain, suffering, inconvenience, mental suffering, emotional distress, loss of society companionship, loss of consortium, injury to reputation, and humiliation. That would mean, for example, that all suits that we might be talking about that are nonmonetary, including libel, defamation, slander, etc. If there is one or more publication by a writer or contributing writer, all of those, then under this amendment you would have to pick the percentage of harm or the percentage of fault on each defendant. It would also mean that in the punitive damages in calculating the Snowe amendment, which is now a part of the underlying bill, you would have to consider this. And you would have to pick out each defendant. There is also the provision that does not allow for you to introduce any evidence of punitive damage or wrongdoing in a case at chief. So I gave the illustration this morning of the truck company that knows that the driver has had four drunk driving charges, two reckless driving charges, and, therefore, you could not the driver and as to the owner of the trucking company, and all that might be the owner of the trucking company, in calculating the damages. You would not be able to do it. It might well be that they say, ``Well, the truck owner has just 5 percent of the damage,'' because the jury did not know anything about the fact that he had knowledge of those four convictions, and, therefore, it can affect it in a lot of different ways. But I want to get also into what this includes. I just read it. I have not had time to do adequate research. But I do have questions, and I think they ought to be answered. Does this include noneconomic damages such as pain and suffering, or the emotional distress that could occur to an American with a disability or a State law that has certain disability acts? Does this apply to those States that have laws against sexual harassment? Sexual harassment is not a type of injury that you show in economic terms. It is a subjective damage that you have to evaluate. The discrimination cases that come up in employment, sometimes you may be able to prove monetary damages on that. But there are other elements of emotional distress, pain and suffering, and humiliation. Then I also wonder what about antitrust litigation under a State law? There are so many unanswered questions about how this would apply. You wonder to what extent it would go. This amendment particularly seems to be, as it was under the product liability underlying bill, directed toward the non-wage earner, the retired person, the elderly who are going to spend, hopefully, their days in their retirement, their sunset years in life with emotional peace and enjoyment. And yet they are deprived of that, and you have someone over here that you cannot even prove the gross negligence or the recklessness or the wanton conduct in a trial in chief in trying to calculate whatever the noneconomic damages might be. The woman who is deprived of the right to bear children comes under noneconomic damages--whether or not it occurs from a product or whether it would occur from the automobile accident or any type of cause of action that might arise pertaining to this amendment. This is a very broad, sweeping amendment that covers so many aspects of the tort laws of the States, and we have had, I suppose, no hearings on this, as far as I know. I do not know whether this amendment was ever the subject of a hearing beyond the scope of the underlying product liability bill. I would like to ask the distinguished chairman of the Commerce Committee, were there any hearings ever held outside of product liability as to the effect of eliminating joint and several liability for noneconomic damages for all civil actions?

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

Mr. HEFLIN

Mr. HEFLIN. Mr. President, I would like to add my voice to those which have already lamented the passing of our dear former colleague from Mississippi, John Stennis. About 25 of us went down to Mississippi last week to his funeral to say goodbye to one of the true giants in the history of this institution. I recall about 10 years ago, some Senators, including myself, went to Senator Stennis' hometown of De Kalb, MS, where the people of De Kalb and surrounding areas had gathered to help celebrate his birthday. There was a great outpouring of love and genuine affection from friends and neighbors who had known him, his father, and others before him. No one really knows an individual in the same way that the people of his hometown do, and you could see that as they came together that day. There was an authentic feeling of closeness and friendship. De Kalb is a small community, probably smaller than the one I come from. The people there--the salt of the earth--knew their favorite son, John Stennis, for his character and integrity. The great outpouring of affection which was on display that day was the best evidence anyone ever needed of his graciousness, honesty, decency, and dedication to principle. All of us there could see that he stood very tall with those who knew him best. John Stennis and I had much in common, both of us from southern families that go back for many generations. I used to enjoy the stories he would tell about his early years and how his father would raise cotton, transport it over to Alabama, and ship it down the river to Mobile. We were both judges at one time, which gave us a unique perspective on government, individuals, and human nature in general. John Cornelius Stennis was born on August 3, 1901, in Kemper County, in the red clay hills of eastern Mississippi. He graduated Phi Beta Kappa from what is now Mississippi State University in 1923 and 4 years later, received his law degree from the University of Virginia. Just 1 year later, he was elected to the Mississippi Legislature. He later went on to serve as a district prosecuting attorney and circuit judge. After 10 years on the bench, he ran in 1947 for the Senate seat held by the flamboyant Senator Theodore G. Bilbo and was elected over five opponents in November. His campaign theme was ``I want to plow a straight furrow right down to the end of my row,'' and that philosophy guided the rest of his career in public service. Until his last campaign, in 1982, he was never seriously challenged for reelection. Even then, facing future Republican National Committee Chairman Haley Barbour, then only 34, he won by a 2-to-1 margin. In his early days in the Senate, John would work 16 hours a day, staying in the Senate until it adjourned and then studying in the Library of Congress. He was meticulous in his work, someone who would go over something again and again until he finally mastered its complexities. He was a commanding such resonance. Even after we had microphones, he would often speak without one. John Stennis served in the Senate longer than all but one other person in its history. When he retired on January 3, 1989, he had served for 41 years, 1 month, and 29 days. During the 1960's and 1970's, he was the most influential voice in Congress on military affairs. He was chairman of the appropriations Committee, and was instrumental in the development of the Tennessee-Tombigbee Waterway, which was extremely important to both our States economically. He changed with the times, and began to support civil rights measures. Due to his integrity, diligence, and judgment, he was often called upon to investigate controversial political matters. It became routine to refer to him as the conscience of the Senate. He was a patriarch and teacher to younger Members. It his later years, while his voice remained clear and his mind sharp, he experienced serious physical problems. He was shot and seriously wounded by a burglar at his home in 1973, and had a leg amputated in 1984 due to cancer, but each time, he returned to his beloved Senate much sooner than had been expected. After he retired, Senator Stennis moved to the Mississippi State University campus, home of the John C. Stennis Institute of Government and the John C. Stennis Center for Public Service, created by Congress to train young leaders. In one of his last interviews, he said, ``I do believe the most important thing I can do now is to help young people understand the past and prepare for the future.'' At that birthday celebration for John Stennis a decade ago, I had the honor and pleasure of speaking. I ended my speech with an old Irish prayer, which goes: May the road rise to meet you. May the wind always be at your back. May the Sun shine warm on your face And the rains fall soft on your shoulders, And may the Good Lord hold you in the hollow of his hand during the remainder of your days. He was a deeply religious man, and he told me he was particularly glad I used the prayer as a closing on that occasion. John Stennis' days are now over, and his passing gives us reason to pause, reflect, and remember that this body is a decidedly better institution, and the United States a better nation, for having had the benefit of this statesman's service for so many years.

Mr. HEFLIN

Mr. HEFLIN. I assume that, in regards to that, it is to the managers, between the managers. That means that people who are opponents to the various amendments rather than the managers would be-- -- [[Page S5993]] Mr. DOLE. I think that provision is set to accommodate the Senator from Alabama. If the Senator from West Virginia has no objection, I can say to the Members in opposition----

Mr. HEFLIN. Why not put it that half of the time be under control of Senator Hollings or his designee?

Mr. HEFLIN. Just a moment. I reserve the right to object. I mean if the final--oh, I see; in the sequence in relationship. So it does not mean that that is the final vote of the day or anything like that?

Mr. HEFLIN

Mr. HEFLIN. Mr. President, I want to pay tribute to Sheldon L. Morgan, who recently retired as senior vice president after 23 years with the First Alabama Bank. He was manager of the included national accounts, industrial development, private banking, and corporate cash management. He had also served as head of First Alabama's marketing division. Prior to joining the bank in 1972, Sheldon was manager of industrial trade development for the Mobile, AL Area Chamber of Commerce. His colorful career also carried him to the Alabama State docks, where he served as public relations director, and to the Mobile County schools, where he taught. He was in the U.S. Air Force from 1948 to 1952. Sheldon received his bachelor's and a master's degrees from Auburn University. He also graduated from the Stonier Graduate School of Banking at Rutgers University in New Jersey. His thesis was selected for placement in the libraries of the American Bankers Association and the Harvard business school. In addition to being an outstanding manager and banker, Sheldon Morgan has served his community through a wide variety of civic and professional organizations, including his service as president of the advisory board of the Providence Hospital School of Nursing; the Mobile Azalea Trail Festival; the Mobile Kiwanis Club; Senior Citizens Service; and the Industrial Developers Association of Alabama, which he founded. He has also served as a member of the Junior Chamber of Commerce, the American Cancer Society; and the Mobile Economic Development Council. I congratulate Sheldon for his illustrious career and for his many contributions to his community and state. I wish him all the best for a happy, healthy, and long retirement.

Mr. HEFLIN

Mr. HEFLIN. Mr. President, I rise in support of the Shelby amendment. In all of the 50 States, Alabama has a different and unique recovery in the event that a decision is made by a court or jury in regard to the death of an individual, whether it be brought by negligence or any form of action. Alabama's wrongful death statute is unlike any other State's wrongful death statute because its damages are punitive only. A person cannot prove, in a wrongful death case in Alabama, compensatory damages. An Alabama plaintiff cannot show his wages, his doctor bills, or anything similar of an economic or noneconomic nature. Alabama's statute is very unique and different from any other State. The language of the Shelby amendment was included in a number of previous bills that were reported out of the Commerce Committee. In the 102d Congress, in the bill that was reported out, S. 640, and in several bills that were reported out of the Commerce Committee on product liability previous to that, they contained the exact language of the pending Shelby amendment. This had been worked on, and there had been several drafts and everybody agreed that it was a proper amendment to be included. I suppose since I have opposed the overall product liability, this provision may have been taken out. What I am saying is that the citizens of Alabama ought not to be at a disadvantage in regard to recovery under whatever product liability bill is passed. The language of this amendment was agreed to and was in previous bills but has been omitted from this bill. Basically, it allows for punitive damages as the element of damages that is allowable. A person is not allowed to have compensatory damages. A wrongful death statute does not allow even for the matters pertaining to loss of wages or pain and suffering or anything else. It is strictly a matter left to the jury on the wrongful death issue, and has been in existence for a long time. The defense bar, the plaintiff bar, have all agreed that this is a type of damage that ought to prevail, pertaining to wrongful death in Alabama. This concept was developed many years ago in what we know as the Lord Campbell Act. The Lord Campbell Act was passed because English jurisprudence realized that a defect existed in common law in that there were questions as to whether or not when someone died, that the cause of action survived. Many States passed wrongful death statutes, and following the Lord Campbell Act that was passed in England, the Alabama Supreme Court a number of years ago, well over 100 years ago, interpreted that act as being punitive in nature only and compensatory damages could not be proved. As a result, under the current language of punitive damage provisions in the product liability bill, unless the Shelby amendment is adopted, then a person who is killed in my State in a wrongful manner could not recover any damages. I support the Shelby amendment. I think it ought to be adopted. I think if we look back into the past history and those that have dealt with it, we see that everybody at a previous time who worked on this came up with an agreement language, and it is one, I think, I want Members to check with various people involved in this, and I think it is a legitimate amendment. It ought to be passed, or otherwise the people in the State of Alabama will be the only State in the Nation that could not recover when an individual is killed by negligence or by gross negligence or recklessness or wantonness or any type of proof that is necessary to prove a cause of action. I suggest the absence of a quorum.

Mr. HEFLIN

Mr. HEFLIN. Mr. President, first let me apologize to Senator Brown, when I said that he had not filed a bill on this. It was my understanding--I was told that, that was done after a reasonable search. My staff or someone, must not have done it. That sort of illustrates why there ought to be discretion in regards to facts, sometimes, that might be stated or alleged. You ought to have an opportunity to correct a mistake. There ought to be discretion when a party makes an honest mistake. But basically this is an issue on whether or not we should return to a rule that was in effect for 10 years from 1983 up until December 1, 1993. The Judicial Conference, through an advisory committee, looked at the way rule 11 then was operating and it felt that there ought to be some changes made. So they proposed changes and the Judicial Conference of the United States agreed that there ought to be some changes made in rule 11, and that the rule ought not to be mandatory, but should be discretionary. It went to the Supreme Court and six out of the nine members of the Supreme Court, agreed with the Judicial Conference and the Supreme Court recommended the changes to the Congress. And the 6-month deadline went by and therefore the new rules of civil procedure, including rule 11 went into effect because there was no vote trying to amend them or trying to prevent them from going into effect. So we have a situation in which I feel we ought to see how rule 11 is going to work. The judiciary studied it for 10 years, the 10 years that the old rule operated and basically this amendment attempts to take us back to the old rule. Basically, the Brown amendment has a lot of different language but it really comes down to whether or not rule 11 ought to be mandatory in every instance or whether it ought to be discretionary with the judge. Senator Grassley talked about the milkshake case. There are bad cases. They say bad cases make bad law. You will have, probably, 1 out of 1,000 bad cases, but that ought not to necessarily be the controlling factor relative to a determination of whether or not the discretionary. I think the procedure that was followed by the judiciary was a very deliberate procedure. It involved a studied approach, and scholars spent hours and days considering this issue. And here we are going to consider this bill on the floor of the Senate, highly technical in nature, in about 1 hour and 10 minutes and are going to vote on it. It seems to me that the proper course that we ought to follow is to follow what the advisory committee of the Judicial Conference did, and what the Supreme Court recommended to the Congress. So, in my judgment I feel it is a mistake to adopt the Brown amendment. Mr. BROWN addressed the Chair.

Mr. HEFLIN. Mr. President, I rise in opposition to the Brown amendment. Let me first explain a little bit about the procedure, what happens regarding the Federal Rules of Civil Procedure, which include rule 11. There has been controversy over the history of this country as to how courts ought to take care of its rule making authority. The prevailing view is that the judiciary--and this includes the States--has inherent power to determine its own rules. However, Congress felt it had a role, and so it adopted the Rules Enabling Act by which rules of procedure would be changed by first having a committee appointed by the Judicial Conference of the United States, to study any proposed change or changes. After the committee made its report to the Judicial Conference, which is a body composed of judges from all levels of the judiciary, the Judicial Conference would study any proposals and then make recommendations to the Supreme Court of the United States. Then the Supreme Court of the United States would consider the issue and make recommendations to Congress. Under the Rules Enabling Act, Congress has 6 months to either adopt the recommendations, to modify them, or to delete them. This particular rule 11 that came up was submitted to the Congress and the 6-month time period expired prior to Congress taking any action, and so all of the proposed Rules of Civil Procedure, including rule 11, went into effect on December 1, 1993. We knew toward the end of the Congress in 1993 that if any changes had to be made, they had to be made before December 1, 1993. If a Senator was interested in making a change to a rule, he or she could introduce a bill, but no bill was introduced proposing to change rule 11. During that 6-month period in 1993 in the House or in the Senate, if there were reasons for change, a bill could have been introduced in the House or the Senate. In all fairness to Senator Brown, he said that he did not like rule 11, but he never took the steps to modify the proposed changes, and now he is now belatedly taking steps on this particular bill, which is unrelated and not germane to the pending legislation. My colleague from Colorado raises issues about frivolous lawsuits and let me say that this has been considered by many concerned groups of people. The Brown amendment is completely opposed by the civil rights community. The Brown amendment is opposed by the Department of Justice. Six members of the Supreme Court approved rule 11 that is now in effect. Senator Brown quoted from Justice Scalia's dissent. There are always going to be dissents over at the Supreme Court, but if you have a 6 to 3 vote in the Supreme Court of the United States, that is a pretty good vote. As I have listened to the criticisms of the new rule 11 from Senator Brown and others, I do not agree with them. I have before me a memorandum from the Administrative Office of the U.S. Courts which says: I am writing to address criticism raised during the markup of H.R. 2814 that the amendments to Rule 11 of the Federal Rules of Civil Procedure will eviscerate the rule's effect on parties filing frivolous proceedings and papers. core principle to ``stop and think'' before filing: By broadening the scope of Rule 11 coverage and tightening its application, the amendments reinforce the rule's deterrent effect and also eliminate abuses that have arisen in the interpretation of the rule. Although the amendments strike a balance between competing interests, the changes strengthening the rule have been neglected by those critical of the amendments and need to be highlighted. First, the amendments expand the reach of the rule by imposing a continuing obligation on a party to stop advocating a position once it becomes aware that that position is no longer tenable. What they would like to go back to under the old rule, as I interpret it, would be to allow ``a party to continue advocating a frivolous position with impunity so long as it can claim ignorance at the time the pleading was signed, which could have been months or years ago.'' Second, the amendments specifically extend liability to a law firm rather than limiting the liability to the junior associate who actually signs the filing. Third, the amendments specifically extend the reach of Rule 11 sanctions to individual claims, defenses, and positions, rather than solely to a case in which the ``pleading-as-a- whole'' is frivolous. Some court decisions have construed the rule to apply only to the whole pleading, relieving a party of the responsibility for maintaining a single or several individual frivolous positions. So rule 11 that went into effect on December 1, 1993 was designed to strengthen this matter. Fourth, the amendments equalize the obligation between the parties by imposing a continuing obligation on the defendant to stop insisting on a denial contained in the initial answer. Frequently, answers are general denials based on a lack of information at the time of the reply. The amendments impose a significant responsibility on the defendant to act accordingly after relevant information is later obtained. It is also important to highlight the provisions of the rule that the amendments retain. A party must continue to undertake ``an inquiry reasonable under the circumstances'' before filing under the amendment. In those cases where a party believes that a fact is true or false but needs additional discovery to confirm it, the amendments allow filing but only if such ``fact'' is specifically identified. The provision does not relieve a party of its initial duty to undertake a reasonable prefiling investigation. In cases of abuse, the court retains the power to sanction sua sponte and the aggrieved party can seek other remedies, e.g., lawsuit for malicious prosecution. The existing rule does not require a court to impose a monetary sanction payable to the other party. Instead, the rule does provide a court with the discretion to impose an appropriate sanction, including an order requiring monetary payments to the opposing party and to the court. Now, as to the hearings that we had in the Judiciary Committee, the old rule 11--that is one that was in effect before December 1 of 1993-- had language that said that signature to a pleading demonstrated that the pleading ``is well grounded in fact.'' Senator Brown at the subcommittee hearings on July 28, 1993, grilled the chairman of the Rules Advisory Committee that had proposed to the Judicial Conference this aspect of the rule change. Senator Brown claimed that under the new rule 11, a party ``no longer has to research a claim and know that it is true.'' He feels that a party ``no longer has to know his facts'' before bringing a lawsuit. Well, what Senator Brown ignores from the testimony and the response the chairman of the committee, Judge Sam Pointer, gave is that the new rule 11 ``still calls for and demands that attorneys have made a reasonable investigation under the circumstances.'' As Judge Pointer demonstrated, oftentimes a party does not get all the facts until the discovery is finished, and the new rule does, indeed, require high standards and is not an egregious loosening of standards. The point is that under this new rule 11, ``if a plaintiff is going to make an allegation that he does not have hard support for, the plaintiff should say, I do this on information and belief, and be under a responsibility to withdraw that or not continue to assert it, if after reasonable opportunity for discovery, it turns out there is no basis for it.'' Now, the new rule 11 has changes from the old rule in that if a violation regarding a pleading is found, then the court may impose sanctions. Under the old rule, the language was that a court must impose a sanction if it found a violation of the rule. As Judge Pointer demonstrated in his testimony, a court needs the flexibility or discretion to impose sanctions because a complaint, or for that fact an answer or motion to dismiss may contain a technical violation, but the rest of that pleading could be perfectly acceptable. Why, then, should a court be required to impose a sanction? Such discretion would not, in my judgment, giveaway to mass, irresponsible pleading. Obviously, those who are purporting to change rule 11 raise the possibility that a party could intentionally bring a frivolous action and, upon a finding of such by the court, might escape a penalty. The response to that concern is that well, yes, there could be no penalty, but in that type of egregious intentionally frivolous pleading a court will most likely impose a sanction. Under the new rule-- [I]f warranted, the court may award to the party prevailing on the motion the reasonable expenses and attorney's fees incurred in presenting or opposing the motion. Also, a court on its own initiative may begin a show-cause proceeding as to whether a party has violated the rule. This should take care of concerns by Senator Brown that plaintiffs could irresponsibly plead, claim, et cetera. The court has its own power to initiate an inquiry as to whether rule 11 has been violated. As the Senate can clearly see, this is a highly technical matter that we are being called upon to consider, and it is attempting to be amended onto an unrelated bill without the Members of this body having an adequate opportunity to study the issues. For us here in Congress to have to consider this amendment on an unrelated bill seems to me to be an irresponsible way of legislating. So it is my opinion that we ought not to be involved in this at this time. The Judiciary Committee had hearings, and there was ample opportunity for action to be taken. But no action was brought forth through the form of a bill being introduced to make any changes to rule 11. There are always efforts to look at matters and matters can always be considered by this body. But the Judicial Conference is designed and is much better equipped than this body to make the decisions pertaining to that matter. It seems to me that it is just improper and an inappropriate time to bring this matter up at such a late stage as this. If there had been a real sincere effort, it could have been done within the 6-month time period allowed pursuant to the Rules Enabling Act. It seems to me that we ought not to be dealing with this amendment at this time on this unrelated bill. It may be that a bill could be introduced later, if they wanted to, and at other times go through the process. But I feel that the new rule is a flexible rule and has provisions that strengthen--not weaken--the efforts to prevent frivolous lawsuits. The new rule is expected to reduce the number of inappropriate motions requesting sanctions, thereby allowing courts to focus more attention on legitimate sanction requests. Mr. President, let me read from Rule 11 as it now exists. This is about representations in a pleading. By presenting to the court, whether by signing, filing, or submitting, or later advocating a pleading, a written motion, or other paper, the attorney or unrepresented party is certifying to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, that it is not being presented for any improper purpose, such as to harass, or to cause unnecessary delay, or needless increase in the cost of litigation. The claim, the defenses, and other legal contentions therein are warranted by existing law, or by nonfrivolous argument for the extension, modification, or reversal of existing law, or the establishment of the new law. The allegation and other factual contentions have evidentiary support, and if specifically so identified are likely to have evidentiary support of a reasonable opportunity for further investigation or discovery. The denials of fact show contentions are warranted to the evidence, and, if specifically so identified, are reasonably based on a lack of information or belief. This is strong language. I want to point out basically what the difference is. The current rule 11 allows a judge some discretion rather than making sanctions mandatory. ought to have some discretion pertaining to a matter or whether, on the other hand, it ought to be absolutely mandatory. This is being opposed by the civil rights community and by a number of others. I ask unanimous consent that a letter that was addressed to the Honorable George J. Mitchell, from the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States, Judge Alicemarie H. Stotler, be printed in the Record. I ask unanimous consent that a letter from the Alliance for Justice relative to this issue also be printed in the Record.

Mr. HEFLIN

Mr. HEFLIN. Mr. President, there are many other aspects, and I will speak further in regard to it but, at this time, I yield the floor. Exhibit 1 Forget About the Millions Won By Sue-Happy Lawyers (By Roger Simon) Just about everybody knows about the woman who spilled a cup of coffee on herself and sued McDonald's because it was too hot. Just about everybody knows a jury awarded her millions of dollars and this is what is wrong with America. It is so wrong, in fact, that the Republican ``Contract with America'' has promised to fix it and hearings are now under way before Congress to make it much harder for consumers to sue for large amounts of money. But the real story of what happened to that much-maligned woman tells us something else about America: Stella Liebeck was 79 years old in 1992 and sitting in her grandson's car when she bought a 49-cent cup of coffee at as McDonald's drive-through window in Albuquerque, N.M. The car was stationary when she lifted the lid to put in cream and sugar, but she spilled the coffee on her lap. She received third-degree burns on her groin, thighs and buttocks. She was hospitalized for eight days and underwent skin grafts. According to her lawyer, she was disabled for more than two years. Her hospital bills were in excess of $10,000. McDonald's offered Mrs. Liebeck $800. She sued. At trial, Liebeck's attorney, S. Reed Morgan of Houston, told the jury that McDonald's serves its coffee at between 180 and 190 degrees, which, he argued, is more than 40 degrees hotter than most food establishments. McDonald's says coffee tastes better at the higher temperature. (McDonald's declined to be interviewed for this column.) Morgan presented an array of expert witness who testified that serving coffee at such a high temperature presents an unacceptable risk to consumers. The jurors also learned that between 1982 and 1992 more than 700 claims had been filed against McDonald's for coffee burns and that McDonald's had settled claims for more than $500,000. After a six-day trial, the jury awarded Mrs. Liebeck $200,000 in compensatory damages for her injuries, but reduced that by 20 percent because the jury felt the spill was 20 percent her fault. Then the jury awarded her $2.7 million in punitive damages, a figure it did not pick out of a hat. Having been told during the trial that McDonald's sold $1.35 million worth of coffee per day, the jurors assessed McDonald's fine equal to two days of gross coffee sales. The trial judge, however, reduced the amount of punitive damages to $480,000 or triple Mrs. Liebeck's actual damages. Both sides could have appealed. But it was now 1994, Mrs. Liebeck was 81, and her lawyer felt McDonald's was hoping she would die before the case was concluded. So he negotiated a settlement with McDonald's. He is not allowed to say for how much, but let's say it was roughly $500,000. Mrs. Liebeck's attorney would get one-third of that amount and the expert witnesses, who can cost tens of thousands of dollars, would be paid out of Mrs. Liebeck's share. So Mrs. Liebeck did not become a millionaire or anything close to it. Which is typical of such cases. ``I have been an attorney for 20 years and I have received two awards for punitive damages in all that time.'' Morgan told me in a telephone interview yesterday. ``And you know how many times I have gotten full punitive damages as the jury intended? Never.'' An American Bar Association study of over 25,000 jury awards between 1981 and 1985 found that the median punitive damage award was only $30,000. According to a U.S. News & World report, the current average award in personal injury cases if $48,000. And, contrary to claims that there has been an explosion of personal injury lawsuits, the number of such suits has been dropping since 1990. It is important to keep in mind, however, that punitive damages are supposed to serve a purpose. ``It's all economics,'' Morgan said. ``If some companies can make more money injuring you with a bad product than keeping you safe with a good one, they will injure you. I am not saying all companies; I am saying some companies.'' In other words, the fear of being socked with large punitive damages is all that keeps some companies from doing us harm. So why should we ``reform'' away our ability to hit them where it hurts?

Mr. HEFLIN. Mr. President, I rise in opposition to this bill. It is entitled the Product Liability Fairness Act. In my judgment, that is the biggest misnaming of any bill that I have seen come before this body. It is a misnomer because, in my judgment, it is very unfair and one-sided. It is sort of like you have seen in the fine print--you know, everybody's choice--they say it is a contract you entered into. It is one of those take-it-or-leave-it sort of things, in that here we have a very unfair bill. I will be going into that as we discuss this over the next several days. I want to discuss several things. First, my friend from the State of Washington says that he would like to do away with all punitive damages, and I wonder if he has thought that when a company hires employees--chemists, engineers, and so forth--who have had a record of alcoholism or drug abuse and nevertheless the manufacturer exposes the public to those types of people and a person is injured, should not that company be punished? Let us consider a case--this is not in product liability situation-- where a person is driving where an automobile accident occurs, and the driver of one car has 10 beers, crosses the center line, causes an accident, and man loses his leg, as compared to an accident in which a bare distraction causes damage to someone. I think both the people who lose legs regardless should be entitled to recover compensation, but the man who was under the influence of 10 beers, and who got behind the wheel and injured someone, ought to be punished. The concept of tort liability is that there is a wrongdoer and someone is injured as a result thereof. The whole basis of our law that has developed over the common law over the years is being that the wrongdoer must pay. So are we talking about a situation in which we want to put all wrongdoers on the same level? Human beings differ. In regard to injuries, the loss of one, two, three fingers--if I were to be injured by a machine that did not have a proper guard on it--those three fingers that I lose may be different from the three fingers that a violinist loses. So we make distinctions in regard to individuals. There are a lot of aspects of noneconomic damage that we fail to give appropriate attention to. A young woman who loses the capacity to have a child, a young woman whose face is scarred in a fire--all of those are noneconomic pain and suffering. In Russia, when Chernobyl, the nuclear plant, experienced a meltdown, the people who suffered radiation and who suffered in many ways, many of those suffered noneconomic damages, but they ought not to be limited in their compensation. Now, I realize that in some aspects there have been changes in the bill before the Senate. Changes that have been made, designed to be able to get it passed in the Senate. I do not think anybody here fails to realize that the House of Representatives passed a bill that was written with one purpose in mind--to see that awards are substantially reduced and that the injured party does not receive what they really are entitled to. Whatever the Senate were to pass, if cloture is obtained, will go to conference. What will come out of conference will be the bill that will go to the President. Looking at who the players are, the cast of characters, who will be in conference, I do not think there is much question as to who will prevail. I think the Speaker of the House will prevail, relative to the bill that comes out of conference. There is no question that he has shown superb leadership in getting legislation passed in the House and in being able to bring about party discipline and to attract others. I do not sell him short on what the conference version of this bill will be like. Now, I want to go over a few things in this bill and in the House- passed bill, and list what in my judgment I think the final version will be. business--which includes loss of profits, destruction to facilities, everything else--does not come under this bill or the House bill. Why, then, if the provisions of this bill are so great and so needed that corporate America is excluded from it? There are a lot of examples. We have a machine that blows up in a factory because of defective manufacturing. That machine blows up and people on the sidewalk and other places are injured. They come under the provisions of this bill. However, the company itself can sue the manufacturer of the machine for lost profits, for the destruction done to the physical property, for numerous elements of damage. They do it outside the purview of this particular bill. If something is good for the goose, it ought to be good for the gander. But businesses do not want to come under this bill. Where have the large damage verdicts occurred? The biggest one that we know about was Pennzoil versus Texaco, for $11 billion. It was not a product liability case, but a commercial case. Go down the list and we will see most of the largest verdicts that have occurred relative to civil litigation are where businesses suing businesses. They do not attempt to take care of that in this bill. They do not want to be put under this bill. The fact that they do not want to be put under this bill indicates that there are provisions that they do not want that could affect their lawsuits, when they suffer a loss, and when they sue a wrongdoer, to have to live with and to have to comply with. When we stop and think, there are other aspects we should consider. The bill does exclude airlines for hire, but there are other aircraft that we ought to look at. Two planes crash in the air. Persons that are injured in those planes come under this proposed bill as to their damages. The airplane does not. One of the planes drops parts of its body down on Yankee Stadium and Yankee Stadium suffers a financial loss. The spectators are injured. They come under this bill; the owner of the Yankees for the loss of business profits, destruction to grandstands or to bleachers or what else might be, they do not come under it. What is good for the goose is good for the gander. The bill talks about an ongoing business. I even got to thinking about it, and this may apply or may not apply, but if part of that airplane falls on a house of ill repute, if it is legitimate in a town--and there are States and towns where they are--then the ongoing business can recover for the loss of profits. That may be an extreme example, but it shows you how they have crafted this bill to take care of situations pertaining to commercial use, to business losses, yet the human elements of loss of limbs and of pain and suffering are restricted under this bill. In the product liability bill during the 103d Congress, there was a provision for a defense against punitive damages where the FDA had given premarket approval to a drug or medical device. Last time there were several Senators who were very concerned about this provision, so this time the proponents left it out with the idea of picking up some votes. The House, on the other hand, left it in. They left in the FDA provision whereas statistics have shown, over a 10-year period 51.6 percent of all products that have been approved for the market by FDA have been recalled. But when this gets to conference, you can rest pretty well assured that the House provisions on that will control and be maintained. This bill has a 20-year statute of repose. A statute of repose says that regardless of what happens, after 20 years of it being built--and where it says ``construct''--that thereafter, regardless of what was the reason, you cannot bring a lawsuit. You have a complete defense. This language of the bill is broad enough, in my judgment, with the use of the word ``construct'' to include a bridge, which if it collapses, will be subject to a statute of repose of 20 years. Yet the House bill has a statute of repose of only 15 years, and I think it will end up being 15 years. You had the general aviation awhile back, where a bill was passed, agreement was worked out by most of the people involved here. They put in an 18-year statute of repose, which I think was a serious mistake since the figures show that 60 percent of the small planes in use were 20 years old or older. But, anyway, the House would even reduce that down further--20 years or 15 years. I mentioned a nuclear power plant, Chernobyl, and the pain and suffering that had incurred. Practically every nuclear powerplant in the United States today is at least 15 years of age. Most of them are older than 20 years. Maybe it might not cover it. It uses the word ``construct'' and as I read the various language, I think it does. But regardless whether it does as a unit object as a whole, component parts in a nuclear powerplant which have been there for 20 years or longer, or 15 if the House prevails and I think they will. I am not sure, but it seems to me I read awhile back the last nuclear power plant that was started in construction was more than 20 years ago. I think we do not realize the breadth of this bill and its effort to try to encompass all situations and what it will do. I think there was testimony before the Commerce Committee on machine tools. The indications were that over 50 percent were at least 30 years old or older. Design conflicts, metal stress on airplanes and metal stress on airplanes that cause damages frequently, in the decision of the national safety investigation board--I do not remember the exact name--would indicate that metal stress on airplanes does not occur until after 15 or 20 years. On the House side there are caps on noneconomic damages on drug companies, on pharmaceuticals. That cap is $250,000 on noneconomic damages, and there are provisions throughout on pharmaceuticals and drugs. This new section that was added, this biomaterials section, you first read it and it looks like raw materials. I was told that is like a fluid such as silicone that is in a breast implant, or the tissue that is sewed together in regards to making it, that gives them some immunity and protection against these suits. But then you read further in that and it says ``component parts.'' I have a pacemaker. I do not know all the component parts. But, as I understand it, it has batteries and some computers and other component parts. There are wires that go down from that pacemaker, and its battery, into my ventricle--into the chambers of my heart. There are several component parts. If it is defective, it would mean that for implants--and this biomaterial provision deals with implants--that an individual would practically have no way of recovering for defective products. In pharmaceuticals, manufacturers are just almost given complete immunity in any suits. Drugs, and those implants I was mentioning a while ago, the silicone breast implant, the Copper IUD, and the Dalkon shield, as I understand it, are implants. So some people were worried about those as it would affect women for punitive damages. We ought to be concerned about this new section that they put in the bill on biomaterials. The House bill abolishes joint and several liability for noneconomic damages as to all civil lawsuits. The House-passed bill, which again I think will prevail in conference, does not limit it to products but it says to all civil suits. I do not know who is responsible for the Oklahoma City bombing, but someone could bring a civil suit. I know in my home State that civil action was brought against the Ku Klux Klan and really did a great deal to stop the Ku Klux Klan through that civil lawsuit because the Klan had some land and other assets that were collectible. In the Oklahoma City situation, in the Alfred Murrah Building, if there were four people that were involved in it and a court would have to determine the part that each played relative to a conspiracy. But what if one of the conspirators happens to inherit 5,000 acres of land or has other assets, and it is determined that he is the one with the most knowledge, it may be that a plaintiff could not collect damages. The present law is let the parties themselves determine among themselves the apportionment of the damage rather than having the plaintiff responsible relative to the apportionment of damages and the determination on each and every individual case. I think they have worked it out over the years. joint tort feasors. There are others that do not. But as a general rule, it has been worked out in a manner where it is not a difficult situation that has caused any tremendous injustice among the defendants to apportion that responsibility. We mention caps on punitive damages, and the House has caps on noneconomic damages on drug companies, pharmaceuticals. The language is that it is a cap of $250,000, or three times the economic loss. How does that apply? Let us take an example. We have a 55-year-old CEO of a company. He has 10 years of work expectancy say, and at 65 he would retire. He makes $5 million a year. So you take $5 million, multiply it by the annuity tables, which would we will say 10 years is what he would have. You have $50 million that would be then a part of his cap. You then multiply it by three. He would have a $150 million cap on punitive damage, or on the matter of the cap on noneconomic damages that the House has on drugs. Then we compare the $150 million, which takes care of the wealthy, to the housewife. She has no economic loss because she does not work outside the home. So the housewife has a cap of $250,000, as opposed to $150 million for the CEO. The 65- or 70-year-old retired person has no economic loss, and he is not working. Mr. President, $250,000 is the cap. The CEO 55 years of age is capped at $150 million. And you can go on down the list of the inequities. The provisions as it would apply on factual situations shock your conscience. There is a provision that allows you to collect workers compensation. Perhaps you collect under the workman's compensation, $40,000 or $30,000. You get your medical bills paid and other expenses. They are subrogated. That means, if a claimant recovers against a third-party wrongdoer, the insurer is entitled to get its workman's compensation insurance back. But this bill has the language that a claimant cannot settle his lawsuit without that workman's compensation insurer's permission. You have to have the permission of the insurer to settle, unless that workman's compensation insurer is paid in full. You come to the point that, well, I do not want to gamble. The case is probably worth $500,000. Maybe if somebody does not want to go through a lawsuit so they say, ``Well, I will settle my damages for basically about two- thirds on the dollar. But the workman's compensation company says, ``No. I want 100 percent on the dollar,'' and this is shocking to one's conscience. I also remind you that we have an exemption under antitrust laws for insurance companies, and they can get together and in effect reach some sort of an agreement. There is also the situation that it could well be that they are the same insurance company for the employer as well as the manufacturer. Therefore, they are bargaining for a cheaper figure, putting a claimant in a disadvantageous situation. There are all sorts of factual situations that can arise which show this question is which really shocks your mind to consider from a viewpoint of what is right and wrong and gives them a hammer over a claimant's head. Shocking your conscience further, there is a provision in this bill that says that if you sue for punitive damages, then either party, the plaintiff or defendant or any of the defendants, has a right to have a separate trial on the issue of punitive damages as opposed to the trial in chief in which compensatory damages are sought. This bill provides for bifurcated, separate trial. Then the language of this bill provides that you cannot prove the elements of culpability, the fault, the evidence of punitive damages in the compensatory damage lawsuit. So you have evidence of a drunk chemist that was involved with a company making a drug. That evidence would go to punitive damages, but it could not be introduced in the compensatory damage lawsuit. I think that shocks your conscience. Consider the example of where a person is intoxicated. The bill has a provision which gives a complete bar to recover if the intoxication of the plaintiff amounted to 50 percent of the causation and the damages. On the other hand, if a punitive damage case was brought under this bill, the drunkenness or the alcoholic activity of the chemist or whoever the actor might be that was involved in the production of the product could not be shown in the compensatory damage lawsuit. You would have to show it only in the punitive damage part of the lawsuit. Now, this bill does not have the loser pay in regard to the attorney's fee. But when it comes out of conference, I think you better be extremely watchful as to whether the conference report will contain such a provision. I think it is important that we look at this bill carefully. I pointed out some of the provisions, and every time I read the bill I see more and more fine print, methods by which there is an advantage that is sought for manufacturers. I have not had the time to review this yet, but in the punitive damage aspect of it, they have changed the language where it was generally accepted throughout as either willful or wanton or gross negligence depending on the State standards. It uses the words ``conscious, flagrant indifference to the safety of others,'' and so on. I am interested in seeing where that language came from and the reason. I do not in my recollection remember the use of conscious, but I remember that under certain circumstances--and I am hazy on this, and I have asked staff to do some research, to contact a tort professor at a university pertaining to this--there seems to me to be a body of law that for a corporation to be conscious, it requires activity on the part of the board of directors. I am vague on that, and I do not want to make a statement because I am not sure as to that. But that is something that is troubling and something that I wish to look at further and perhaps say something else at a later time. But these words are new words. And, of course, they would be interpreted by the courts as they come along, and there may be basic case law in regards to it at the present time that has given some type of interpretation which means that there is an existing precedent. It may not have to be followed from one State to another. But that brings up the interpretation which to me is just entirely inconsistent by the original motivation that brought forth the idea of some federalized tort law. That was the concept that we live in a world in which interstate commerce goes from one State to the other and products are sold and everything else. Therefore, we need a uniform Federal products liability. Well, this is far from being uniform. First, it only preempts the State laws in the specific matters that are listed within the bill. The interpretation that is given is placed upon the State court system and in diversity cases on the circuit court of appeals. Under the original bill that they proposed, they had the State courts reviewing this as well as the territories. You could have had 55 different interpretations of law and of with little uniformity in that regard. The proponents made a change somewhat in that whereby it says that the 11 Federal circuit courts will be involved in interpretations. So you have got all of at least 11 circuits that could have different interpretations, and you could have conflicts of law. They made a change which says basically does away with the concept of the old line of cases of Erie which say that the Federal courts shall follow the State law and they say now the State laws pertaining to interpretation of this shall follow each circuit, but instead of uniformity you can still have at least--well, it would take, in my judgment, 20 to 25 years before you would finally get the matter to the Supreme Court, and you would have uniform interpretation of a particular language or particular provision. It is devoid of uniformity. There is no uniformity except for the few instances in which they preempt in this, and the ones they preempt are in effect the guts of a civil lawsuit. But you have a situation where you do not have uniformity relative to the motivation that many businesses argued for relative to that. So there is no uniformity that is involved here. There has been this lawsuit about McDonald's and the woman with the cup of coffee, and there is an article by Roger Simon in the Baltimore Sun on February 22, 1995. He says: Forget about the millions won by sue-happy lawyers. Just about everybody knows about the woman who spilled a cup of coffee on herself and sued McDonald's because it was too hot. her millions of dollars and this is what is wrong with America. It is so wrong, in fact, that the Republican ``Contract With America'' has promised to fix it and hearings are now under way before Congress to make it much harder for consumers to sue for large amounts of money. But the real story of what happened to that much-maligned woman tells us something else about America. Stella Liebeck was 79 years old in 1992 and sitting in her grandson's car when she bought a 49-cent cup of coffee at a McDonald's drive-through window in Albuquerque, N.M. The car was stationary when she lifted the lid to put in cream and sugar, but she spilled the coffee on her lap. She received third-degree burns on her groin, thighs, and buttocks. She was hospitalized for 8 days and underwent skin grafts. According to her lawyer, she was disabled for more than 2 years. Her hospital bills were in excess of $10,000. McDonald's offered the woman $800 to settle, and she had a $10,000 hospital bill. She sued. At trial, Liebeck's attorney, S. Reed Morgan of Houston, told the jury that McDonald's serves its coffee between 180 and 190 degrees, which, he argued, is 40 degrees hotter than most food establishments. McDonald's says coffee tastes better at the higher temperature. Morgan presented an array of expert witnesses who testified that serving coffee at such a high temperature presents an unacceptable risk to consumers. The jurors also learned that between 1982 and 1992, more than 700 claims had been filed against McDonald's for coffee burns and that McDonald's had settled claims for more than $500,000. After a 6-day trial, the jury awarded Mrs. Liebeck $200,000 in compensatory damages for her injuries, but reduced that by 20 percent because the jury felt the spill was 20 percent her fault. Then the jury awarded her $2.7 million in punitive damages, a figure it did not pick out of a hat. Having been told during the trial that McDonald's sold $1.35 million worth of coffee per day, the jurors assessed McDonald's a fine equal to 2 days of gross coffee sales. The trial judge, however, reduced the amount of punitive damages to $480,000 or triple Mrs. Liebeck's actual damages. Both sides could have appealed, but it was now 1994. Mrs. Liebeck was 81, and her lawyer felt McDonald's was hoping she would die before the case was concluded. So he negotiated a settlement with McDonald's. He is not allowed to say for how much, but let's say it was roughly $500,000. Mrs. Liebeck's attorney would get one-third of that amount and the expert witnesses, who can cost tens of thousands of dollars, would be paid out of Mrs. Liebeck's share. So Mrs. Liebeck did not become a millionaire or anything close to it. Which is typical of such cases. ``I have been an attorney for 20 years and I have received two awards for punitive damages in all that time''-- The lawyer Morgan told Roger Simon. in a telephone interview * * *. ``And you know how many times I have gotten full punitive damages as the jury intended? Never.'' An American Bar Association study of over 25,000 jury awards between 1981 and 1985 found that the median punitive damage award was only $30,000. According to a U.S. News & World Report, the current average award in personal injury cases is $48,000. And, contrary to claims that there has been an explosion of personal injury lawsuits, the number of such suits have been dropping since 1990. It is important to keep in mind, however, that punitive damages are supposed to serve a purpose. ``It's all economics,'' Mr. Morgan said. ``If some companies can make more money injuring you with a bad product than keeping you safe with a good one, they will injure you. I am not saying all companies; I am saying some companies.'' In other words, the fear of being socked with large punitive damages is all that keeps some companies from doing us harm. So why should we ``reform'' away our ability to hit them where it hurts? I ask unanimous consent that this article be printed in the Record at the conclusion of my remarks.

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

Mr. HEFLIN

Mr. HEFLIN. Mr. President, Mrs. Nelle M. Bigbee, a native of Tuscumbia, AL, passed away on March 8 at the age of 92. An accomplished writer, news commentator, artist, poet, and public speaker, Nelle was the first female newscaster in the State of Alabama. Her daily radio and television programs, which were such a fixture of the Tuscumbia community, won many awards from the American Women in Radio and Television Organization. Nelle Bigbee wrote for numerous publications and received many awards from the Associated Press as well. She participated in many community, church, civic, and professional activities, including the American Cancer Society, American Heart Association, and United Way, just to name a few. She was instrumental in organizing the first Helen Keller play, and acted the part of ``Aunt Ev'' for several years. She held the distinction of being the first female candidate to run for elected representative to the Alabama Legislature. She was a wonderful neighbor of mine. She and her departed husband Hatton were great friends. She was admired and loved by all who knew her. Nelle Bigbee indeed lived a long, rich, and multifaceted--even trailblazing--life. The talented Alabama journalists and commentators of today owe her a great deal of thanks for her pioneering spirit and determination. I extend my condolences to her entire family in the wake of their loss, and join her many friends and admirers in reflecting on the many outstanding accomplishments that defined her life and work.

Mr. HEFLIN

Mr. HEFLIN. Mr. President, each year, the Alabama Minority Supplier Development Council holds a major event known as Alabama Business Connections. This year, it will be held in Birmingham June 27-29, when more than 5,000 individuals and businesses will be actively participating. During Alabama Business Connections, suppliers and purchasing personnel from majority and government organizations network and exchange information in order to develop mutually-beneficial business opportunities. This important event also furthers the year-round efforts of the Alabama Minority Supplier Development Council. The council is dedicated to providing economic and educational opportunities for certified suppliers and corporate-government members. I am proud to call the attention of my Senate colleagues to the vital work [[Page S5389]] accomplished each year during Alabama Business Connections, and wish the Alabama Minority Supplier Development Council all the best for a successful event this summer. They are to be commended for their outstanding work toward the cause of furthering business opportunities for minority suppliers.