Henry Hyde

Mr. HYDE

Mr. HYDE. Mr. Chairman, we have heard for the last 2 days capping noneconomic damages and liability suits would hurt women. The reason given is that women stay at home, so juries cannot calculate economic damages for them in the way they can for men who work. This is a strange argument, even a bizarre argument, coming from women who have spent their political careers telling us the traditional family is dead and we had better get used to it. I never thought I would hear the gentlewoman portray an ``Ozzie and Harriet'' view of America. The facts are, in fact, just the opposite. Many women now, of course, work. There is no problem in calculating the economic damages there. But even more striking, juries now regularly calculate what the market value of a woman's services to a household would cost on the open market. Every woman has done this calculation in her head. I dare say the gentlewoman from Colorado has: chauffeur, cook, nanny, housecleaner, manager of the family budget, child care professional; the list goes on and one. I am told that when juries make this calculation, they regularly come up with six figures; in other words, more than what most families make through their jobs. Juries respect and honor the economic role of women, including homemakers. Mr. Chairman, I am amazed that those in this Chamber who have been so self-righteous for so long about their role in defending women would make arguments that essentially demean the role of women in our society. This amendment severely weakens the much-needed punitive damages reform. It will undermine the punitive damages reform contained in the bill by lumping in highly speculative, noneconomic damages such as pain and suffering, and emotional distress, into the basis for determining punitive damages. This will result in a continuation of inflated punitive damages awarded, exactly what this bill is seeking to contain. Mr. Chairman, I respectfully request my colleagues to vote no on the amendment offered by the gentlewoman from Colorado [Mrs. Schroeder].

Mr. HYDE. I have only one speaker left, Mr. Chairman, and I reserve the balance of my time.

Mr. HYDE. Mr. Chairman, does the gentleman from Illinois have the right to close debate?

Mr. HYDE. Mr. Chairman, I am pleased to yield 2 minutes to the distinguished gentleman from Ohio [Mr. Oxley].

Mr. HYDE. Mr. Chairman, I am pleased to yield 3 minutes to the gentleman from Wisconsin [Mr. Sensenbrenner], a valued member of the committee.

Mr. HYDE. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, the amendment offered by the gentlewoman from Colorado eliminates the protection against disproportionate liability for subjective, nonmonetary losses and weakens the protection of the punitive damages cap. For these reasons I urge the defeat of the pending amendment. It was offered in committee and was defeated in committee. Section 107, in the interests of fairness, protects a defendant from being held liable for noneconomic losses that are attributable to the fault or responsibility of another individual or entity. The concept of a defendant paying for its own proportionate share of fault or responsibility sounds self-evident to most people. Many States, however, give expression in their law to the principle of joint and several liability, which in its unrestricted form means that a party with relatively nominal responsibility, perhaps 1 percent, can be held liable for the fault attributable to the others, perhaps 99 percent. The result of the principle of joint and several liability is that litigation imposes severe risks for solvent businesses, often necessitating excessive settlement offers, increasing liability insurance costs, and making goods more expensive for consumer. All of these factors have negative implications for our competitiveness in international markets and our ability to keep enterprises, with all of the jobs involved, in the United States. Section 107 essentially is a compromise between the principle of joint and several liability with its disproportionate attendant costs, and the concept of liability limited to degree of fault or responsibility. Under section 107, a defendant can only be held liable for noneconomic losses in proportion to its share of the total fault or responsibility, but can continue to be held liable to the extent authorized by State law for economic losses that exceed its proportionate share. This bill does not impinge on the rights of claimants to recover noneconomic damages from a defendant for the harm it inflicts, but appropriately safeguards one party from having to pay for the harm others inflict. Disproportionate liability for noneconomic damages not only is unfair, but results in expenses that are passed on to all Americans. I strongly recommend defeat of this amendment. Mr. Chairman, I reserve the balance of my time.

Mr. HYDE. Mr. Chairman, indeed there is. I rise in opposition to the amendment.

Mr. HYDE. Mr. Chairman, will the gentleman yield?

Mr. HYDE. Mr. Chairman, this amendment amplifies and is consistent with an amendment offered in the committee by the gentleman from Illinois [Mr. Flanagan]. We find it perfectly acceptable, and I am pleased to accept the amendment.

Mr. HYDE

Mr. HYDE. Mr. Chairman, I move that the Committee do now rise.

Mr. HYDE. Mr. Chairman, I shall have to talk fast. Mr. Chairman, 33 States have abolished joint and several liability. That is the problem. There are 33 different laws, different methods of avoiding and evading joint and several liability, which is very unfair. The serious problem of inconsistency in the tort laws of the 50 States is there. This seeks uniformity, which makes legal common sense. Mr. Chairman, let me briefly address the federalism aspect that I have heard so much about today. I have heard from Members on our side of the aisle who are troubled by our preempting of State laws. They insist that the States are important and should not be administrative districts of the Federal Government. I just want them to know what the passing of time has done to that notion. We have the Environmental Protection Agency, Food and Drug Administration, Occupational Safety and Health Administration, Consumer Product Safety Commission, Equal Employment Opportunity Commission, National Labor Relations Board, Federal Trade Commission, Federal Energy Regulatory Commission, the Securities and Exchange Commission, the Commodities Futures Trading Commission. Every aspect of life is regulated by the Federal Government. I have not mentioned the Americans with Disabilities Act, ERISA. The only facet of our great economy that is left untouched is the multibillion-dollar litigation industry. It seems to me it is eminently justified that we try to put some common sense and rationality, predictability, into this big business of lawsuits. That is what the gentleman is trying to do. I support it wholeheartedly.

Mr. HYDE. I thank the gentleman for yielding this time to me. Mr. Chairman, the amendment offered by the gentleman from Ohio [Mr. Hoke] provides for 75 percent of punitive damages awards in excess of $250,000 to be deposited to the treasury of the State in which the particular Federal or State court sits. Since punitive damages are limited under Section 201(b) to $250,000 or 3 times the damages awarded for economic loss--whichever is greater--punitive damages can exceed $250,000 only if the damages for economic loss exceed $83,333.33. I support this proposal because it effectuates the public interest in allowing large punitive damages awards to benefit the appropriate State without either compromising the rights of claimants to full compensation for injuries sustained or eliminating incentives to seek punitive damages. Punitive damages are designed to punish or deter egregious misconduct--in contrast to compensatory damages that compensate claimants for both economic and non-economic losses. Compensatory damages cover such monetary items as medical expenses and lost wages and such non-monetary items as pain and suffering. Claimants who are fully compensated for both monetary and non-monetary losses receive windfalls when they also collect punitive damages. It makes eminent good sense for punitive damages to be allocated for public purposes-- which essentially is what we accomplish by directing such funds to state treasuries. The States in turn can decide on the best uses to be made of these funds. Although in theory all of these awards should go to the appropriate State, we recognize the practical need to retain incentives for claimants to seek such awards. For that reason, the amendment leaves untouched State law schemes that allow claimants to collect punitive damages up to $250,000. The claimant's share of amounts in excess of $250,000 will equal 25 percent provided the law of the particular State permits the claimant to collect it. The amendment includes sufficient incentives for claimants to continue seeking punitive damages in appropriate cases while recognizing the public interest in retaining benefits from large punitive damages awards. The amendment is meritorious and represents a positive contribution to this legislation.

Mr. HYDE. Mr. Chairman, I yield back the balance of my time.

Mr. HYDE. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, this amendment consists primarily of technical corrections to the text of H.R. 1075. It is almost exclusively technical in nature. In section 101, Findings and Purposes, the amendment changes the tense of words, corrects typographical errors, and makes a plural word singular. In section 105, Misuse or Alteration, it removes the reference to a nonexistent subsection (c) and says ``a'' defendant, rather than ``the'' defendant. In the heading for subsection 201(f) the amendment makes the word ``Consideration'' plural, because there is a list of nine different factors that the jury is directed to consider. In section 303 which is the Definitions section of the Biomaterials Suppliers title, the amendment makes it clear that a person would not be a ``biomaterials supplier'' within the meaning of title III, if it has ``or should have'' registered with the Secretary of Health and Human Services pursuant to section 510 of the Federal Food, Drug, and Cosmetic Act, or has ``or should have'' included a medical device on the list of devices filed with the Secretary of HHS pursuant to section 510(j) of the same law.

Mr. HYDE. Mr. Chairman, I ask unanimous consent to delete lines 1 through 9 on page 1 of my amendment in subparagraph E, and on page 2, lines 1 through 4.

Mr. HYDE

Mr. HYDE. Mr. Chairman, I yield the remainder of the time to the distinguished gentleman from Wisconsin [Mr. Sensenbrenner].

Mr. HYDE. Mr. Chairman, I yield 3 minutes to the gentleman from Iowa [Mr. Ganske]. While Mr. Ganske is approaching the well, I might add that the case that the gentleman from Massachusetts [Mr. Markey] mentioned, the lifetime diminution of earnings for the young girl, would amount to a lot more than what the gentleman has on the chart.

Mr. HYDE. Mr. Chairman, I am pleased to yield 4 minutes to the gentleman from Virginia [Mr. Goodlatte], and I would hope the gentleman could tell us some insurance companies that cover punitive damages. My understanding is they will cover negligence, but they do not cover punitive. But apparently they do; the gentleman from Oregon said so.

Mr. HYDE. Mr. Chairman, I am pleased to yield 3 minutes to the distinguished gentleman from Ohio [Mr. Hoke], a member of the committee.

Mr. HYDE. Mr. Chairman, this amendment eliminates one of the most important features of this bill: the cap on punitive damages. Under section 201(b), a punitive damages award cannot exceed three times the award for economic loss, or $250,000, whichever is greater. Without a cap on punitive damages, our ability to compete in international markets is compromised, the settlement value of cases is inflated, consumers pay higher prices, and defendants face risks out of proportion to injuries sustained. U.S. competitiveness is compromised because many countries of the world do not recognize the concept of punitive damages at all. We, in the United States, allow virtually unlimited punitive damages. The settlement value of cases is greatly inflated because defendants feel pressure to settle cases with very tenuous liability rather than face the possibility of high punitive damages awards. American consumers pay higher prices because American businesses, from manufacturers to service providers, factor their punitive damages exposure into their costs. Punitive damages are not designed to compensate for losses. They are designed to punish wrongdoers, not compensate victims. The provisions in H.R. 956 do not affect, in any way, a victim's full recovery of complete economic damages, such as medical costs and lost wages, or noneconomic damages, such as for pain and suffering and emotional distress. Even, would you believe, the Washington Post editorial staff supports punitive damages reform. Just last Wednesday they wrote that punitive damages reform is ``long overdue, guidelines and limits must be set.'' Due process must limit States' authority to impose punitive damages. In a recent case, Pacific Mutual Life Insurance versus Haslip, the U.S. Supreme Court held that the due process clause limits the ability of States to impose punitive damages. The Court expressed concern about punitive damages, which have run wild, and made it clear that this was an area calling for reasonable and rational reform. Punitive damages impede quick settlements. Under today's system, punitive damages vary so greatly and are so uncertain they get in the way of quick settlements. These damages are a total wild card in today's lawsuits. Because under the current system, no one has any idea of what a final punitive damage verdict might be, both sides find it difficult to reach the agreement necessary for speedy resolution. I urge a ``no'' vote on the Furse amendment which removes from the bill the reasonable limits on punitive damage awards. Mr. Chairman, I reserve the balance of my time.

Mr. HYDE. Mr. Chairman, I rise in opposition to the Furse amendment.

Mr. HYDE. Mr. Chairman, I yield the balance of my time to the distinguished gentleman from Wisconsin [Mr. Sensenbrenner].

Mr. HYDE. Mr. Chairman, I yield 2 minutes to the distinguished gentleman from Ohio [Mr. Hoke], a member of the committee.

Mr. HYDE. Mr. Chairman, would the Chair advise how much time I have left?

Mr. HYDE. Reclaiming my time, Mr. Chairman, there is a great interest in standardizing the elements of proof. We are trying to have a products liability and litigation standard that transcends the 50 boundaries, so as to not have 50 separate standards. It seems to me, when you get to the subject of punitive damages, which can affect the entire stream of commerce, it is beneficial to have a standard level of proof. Mr. Chairman, I reserve the balance of my time.