Jay Rockefeller

Mr. ROCKEFELLER

Mr. ROCKEFELLER. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. I was trying to discuss product.

Mr. ROCKEFELLER. Is the Senator discussing product or malpractice?

Mr. ROCKEFELLER. I apologize; I was not here.

Mr. ROCKEFELLER. Yes.

Mr. ROCKEFELLER. Mr. President, I thank the Senator from the State of Utah for his very nice closing sentence and also his general argument. Mr. President, I have been--in case nobody has noticed--trying to enact what I call moderate product liability for many years--8 or 9-- because I am convinced that consumers and businesses alike are ill served by the current disjointed State-by-State legal system. Under this patchwork system of State laws that we have--glorified by those who propose this--victims are forced to wait far too long for compensation after their injury, and far too often it is the lawyers who benefit more from the awards, the settlements received, than the victims, which is not what I thought America was about. This is simply unjust. I am absolutely convinced that the flow of goods in interstate commerce is severely hampered by the patchwork of product liability laws across this Nation. Businesses of every size and type simply have no way of knowing, under the current system, what rules they need to follow. How could they? They have 50 States to deal with. Businesses are hard pressed these days, small businesses in particular. This is especially onerous on those same small and startup enterprises which, in my State of West Virginia and most of the rest of the Nation, are in fact the backbone of the economy. I daresay that the Presiding Officer would say that that is true for his State of Montana. The amendment by the Senator from Tennessee, the very distinguished Senator Thompson, seeks to limit the bill's application to only those cases brought in Federal court. Make no mistake about it, this amendment would effectively kill product liability reform. It is a bill killer. The reasons we must reject this amendment are the very same reasons we need product liability reform in the first place. I have stated that many times during the debate. The overwhelming majority--and this was said more ably by my colleague from the State of Washington, Senator Gorton--about 95 percent of product liability cases, are brought in State courts now. He suggests that number might go down closer to 1 percent. They would be totally untouched if this amendment were approved. Additionally, it is very likely that even fewer cases would be brought in Federal courts because plaintiffs would keep their options open for forum shopping, as we call it, for better rules in some other State courts. Consumers lose under the current system and that would not change if the Thompson amendment were adopted. Why do they lose? Consumers lose because they receive inadequate compensation under current State law. Consumers lose because they have to wait far too long to receive compensation. Far too often, injured consumers are forced into poverty while waiting for their cases to be resolved. They have to depend on their own insurance or their own individual resources, if they have any. Consumers lose because they are forced to pay outrageous legal fees under a State-by-State system. Consumers also lose because the patchwork of State statutes of limitation are so severe under the current law and result in barring legitimate claims. That is the subject I will discuss in a moment. The underlying bill would correct these problems by replacing the State-by-State patchwork with a far more uniform system. The Thompson amendment would completely unravel that new uniform system. In earlier debate, I have also set forth why manufacturers lose under the current State-by-State system. But I think this bears repeating. Manufacturers lose simply because they face unpredictable and escalating costs of litigation. These stifle research, these stifle development, they prevent investment, they cause products to be withdrawn, they cause products not to We have been working hard, very hard. The Senator from Washington and Senators on his side of the aisle and Senators on my side of the aisle have been working very, very hard to find the right balance. Senator Gorton is not an extremist. The Senator from West Virginia is not an extremist. We are trying to find the right balance between consumers, plaintiffs, and businesses, with a special attention to small businesses, which is the majority of our businesses. We have been working very, very hard to find that right balance, to assure that the rights of the injured are fully protected while we meet the needs of business to manufacture and to invest. We need both in this country. A person cannot just say, well, it is only consumers that count and business does not count, because if we did not have business, nobody would work. They would have no income. It is also equally silly to say it is only business that counts, because then that might take America back to a day when business practiced differently than they do today. We have developed, I think, in America, a system whereby we try to protect consumers, and we do in the bill that the Senator from Washington and I suggest. The Gorton-Rockefeller substitute strikes that important balance for consumers and business. The Thompson amendment, I say again, would destroy that balanced solution. The amendment of the Senator from Tennessee has a familiar and, I think, a very curious ring to it: Familiar because so far, the only suggestion concerning the problems of the product liability maze that I have heard from the opponents to this bill is the idea embodied in this amendment; curious because where is the logic in limiting the surgery proposed in our product liability bill to the equivalent of only one finger, when the problem plagues both hands? We should face it. This amendment is based on a refusal to acknowledge the ridiculous cost, delays, and burdens of a very big problem called the patchwork of 55 sets of product liability rules and laws across the States and the territories. I might add at this point that in earlier years, in hearings in the Commerce Committee, those opposing product liability reform always said that there will be this massive confusion if we have some kind of uniformity at the Federal level in certain areas, everything else being reserved to the States, which we do in this bill. They always say, well, imagine a higher court trying to interpret 50 sets of laws. It is a specious argument. It needs to be said that it is a specious argument. Right now, we are plagued by the 50 sets of laws, all different, to all States. So people forum shop, and I guess it is fairly well-known that if a person wants to go for punitive damages, there are three States to go to, and that is where most of the amount of the punitive damages come from. If they can find a way to drag somebody in--and Alabama is one of those States, curiously, ironically, interestingly-- then people go there and they get very good results. There are two other States, in particular, also. The point is that the Federal courts will not take very long--and a Federal judge pointed this out a couple of years ago--to figure out when we get uniformity and they have to take these 50 State laws, that there will now only be one law in a certain area and 50 laws in other areas. It will not be confusing very long. It is permanently confusing now because everybody is running all over the place. Judges are smart folks. They do not get there because they cannot pass an SAT test; they get there because they are smart and they have to figure things out quickly. They will be able to do it. This will actually make the whole process of interpreting State laws easier, more efficient, and better. Let that be said, because it has not been said in this debate. The argument that uniformity somehow confuses this by throwing open all of these State laws is specious. I pick that word for no particular reason. I suggest to the Senators opposing the bill before the Senate and supporting this amendment, they should both vote against the amendment of the Senator from Tennessee. Face it: This amendment guts the purpose of this product liability reform bill. We are trying to respond to problems that States on their own simply cannot fix themselves. What can the State legislature of West Virginia, for example, do about the fact that most of my State manufacturers sell their products in other States, where the rules dealing with punitive damages, with joint and several liability, with the statute of limitations, et cetera, come in every conceivable form? It is chaos. I hear the Senator from Tennessee talk about innovation in the States, and I want to get on to the subject of innovation, since we do not have a time agreement on this. And I think the Senator from Washington and I would be glad to agree to a time agreement if any person shows any interest. Let me discuss a little bit about product liability. I think the reason why the bill needs to pass and why I think the bill will pass, is that consumers lose, Mr. President, under the current system. Consumers receive inadequate compensation. That is, people who are injured, through product litigation, severely injured people-- consumers--only recover about one-third of their actual damages. Just think about that, severely injured, chewed up in a machine, or something of that sort, and they end up averaging only about a third of what they should actually get. While those who are mildly injured, who are also important, recover approximately five times their economic losses. That is totally unjust. And anyone on this floor who would defend that should choose not to. Consumers have to wait a long time to get any kind of justice under the current system. Injured consumers in need of assistance must suffer through approximately 3 years of litigation before they receive a nickel of compensation. That is not the American way. And where we can improve it we ought to do so. Consumers pay outrageous costs. To put it another way, the current tort system which rules the Nation at this point, and which the Senator from Washington and I are trying reasonably and in a balanced fashion to change, pays more to lawyers than it does to claimants. It pays more to lawyers than it does to claimants? Yes. That is wrong. This is America--that is wrong. If there are those on this floor who choose to defend that and say that is good for injured people, that is good law, that is exactly the way we should leave the law, that we should leave that entirely unfettered so that lawyers make more off of this than do the people who are injured whom they purport to be defending, then let them defend that. Let them defend that. I am interested in their argument. They always talk about something else. They bring up Victor Schwartz, or they bring up some little thing here or there, but they never defend these things because they cannot, because they are dead wrong and they know it. Another reason we need to change the product liability system in this country is because consumers face closed courthouse doors. What do I mean by that? A lot of people who are injured in this country by a product cannot file a claim because of something called the statute of limitations. I am not a lawyer, but I at least know what that means. And if, for example, I am injured in Virginia, my time for filing a claim runs out after 2 years from the time that I am injured. I have had several debates with the Senator from California, Senator Boxer, about DES. She has said anybody involved with DES hates this bill. She has used that word many times--hates this bill. Hates the bill. Hates the product liability reform bill the Senator from Washington and I are trying to get passed. What I cannot seem to make clear enough is that under our bill, anybody who faced the kind of problems that somebody who faces DES faces, or somebody who faces asbestos, or somebody who faces some other kind of toxic harm or chemical harm--the Persian Gulf war syndrome, agent orange, all of this--wherein they do not discover they are injured for maybe 4 years, 5 years, 6 years, 7 years, 12 that is the time you can make application to file suit against the manufacturer, that person who injured you or that company that injured you--the two year limitation--should not start until you know that you are injured and you know what caused your injury. Which means all the DES people would have been fine under our bill, while they are completely cut off under the current law if the State has a statute of limitations which runs out, as most of them do, before DES would have been discovered. I posit that, as lawyers say. I posit that. It is fact. People can say it is not true, I do not like the bill. There is a mindset around here on this whole subject which is very surprising and disturbing to me. I think this is not true--reasonable people, I am just looking at the Senator from Tennessee whom I consider a very reasonable person. I think he is thoughtful, he weighs things. But a lot of people in the fighting of this battle over the years have become so hardline that any kind of a change, any suggestion of a new fact, any suggestion that maybe the law could be improved, brings 100 percent disapproval and anger. It is like somebody just puts out an idea and somebody is afraid the idea might be good so they immediately squash the idea. They just pound it down into the ground with their fists and crush the idea for fear it might be good or develop into something which is good and useful for the American people and for business. It is a tendency which I regret in this body, which I do not consider worthy of the U.S. Senate. It is encouraged, I think, by a sort of hard-line mentality, and a lack of civility even, in discussing all of this. Again, we want to open the courthouse doors through the statute of limitations. The opponents want the courthouse doors closed. Let them explain otherwise. Let them explain otherwise. States with statutes of limitation that begin to run out at the time of injury, there are four of them: Arkansas, Virginia, Hawaii, Wyoming. States with statutes of limitation which begin to run when the injury is discovered or should have been discovered, there are 16 of them. So that does not mean when the cause was discovered, that just means when the injury was discovered. That is not enough. It has to be when it was discovered and when the cause was discovered. We know from the Persian Gulf war veterans--and I do not know whether this applies to them or not--but we know they know when they are sick. But we also know that the U.S. Government and Department of Defense says that they are not sick. I go visit them and their hands are trembling, they cannot sleep, they cannot keep their marriages together, they are tired all day, they cannot keep their jobs, and they cannot focus their eyes on a newspaper for more than 5 minutes. But the Department of Defense says there is nothing wrong. I beg to differ because I visit these people when I go back to my State of West Virginia, because I care about this and this is a cause of mine, to unmask Persian Gulf war syndrome. They know they are sick, but they cannot say why. What caused it? Was it Pyridostigmine? Was it some other kind of vaccine? So you have 16 States--20 States--automatically where people are shut out. If those who oppose this legislation want to say, ``We are for that, let them continue to be shut out,'' then let them get up and say so. Or if they say I am wrong, the Senator from West Virginia is wrong, then let them get up and say that. Let them get up and say we do not open the courthouse doors and that they do not close them--as they do, the courthouse doors--and keep them closed. It is cruel. It does not make sense. It is based upon old-time life when it was all machines. Now a lot of the stuff is chemicals, toxins, and all kinds of things. That is where a lot of accidents happen. The industrial age has evolved. Just as you can sue somebody under current law for a piece of machinery that was built in the 19th century and that has passed through 15 different owners, all of whom have altered it. That was made for that time, that generation, that industrial revolution period. That idea is not made for the current times at all. So we are trying to open the courthouse doors to consumers. Manufacturers lose under this current system. We are talking about people and manufacturers, yes, a balanced bill. Liability stifles research and development. This country is great because of our research and development, our spirit, our entrepreneurial spirit, which is embodied in research and development. Japan does not do basic research. The United States does. Then they come and buy it from us, or we sell it to them, however you want to characterize it. And on that the Senator from South Carolina would agree. We sell them our technology. But we do the basic research. That is the heart of America's greatness, the basic research we have done and the uses to which we put it. But because of the current law, the fact is that many businesses spend far more money on litigation than they do on research and development. That is bad for business. That is bad for America. The fact remains that many companies these days--I think it is something like 47 percent of companies--have withdrawn products because of litigation fears. And a lot of companies now, if this is possible to believe, are afraid to improve their current products because by the act of improving their current products, it would imply that the previous iteration of that product was somehow defective and, therefore, they could be sued and, therefore, they do not improve the product so they cannot be sued. How ridiculous. How unlike America. If those who oppose this bill want to defend that, then let them go ahead and do that. Phyllis Greenberger, who is the executive director of the Society for Advancement of Women's Health Research, in testimony before the Senate Commerce Committee on March of this year said: Liability concerns are stifling research and development of products for women. She said: Contraceptive development in the U.S. provides an excellent example of how the threat of litigation can devastate an entire industry. Thirty years ago there were 13 companies in this country putting their resources towards research and development of new contraceptives. Today, there are only two. And then what does she say? This is not because there is no market demand. Liability concerns are keeping products which have already been developed off the market despite a known therapeutic need. I will use an example which I have used before. It is a very good one. It is Benedictine. Benedictine is the only prescription medicine ever approved in the United States for the treatment of nausea and vomiting during pregnancy. None other has ever been approved. It was approved by the Food and Drug Administration. The drug was used by 30,000 women until assertions arose that it caused birth defects. While scientific evidence failed to demonstrate any link and the FDA continued to back the product. Remember this is still Phyllis Greenberger talking: While . . . the FDA continued to back the product, the manufacturer voluntarily removed Benedictine from the market due to the overwhelming cost of defending the product. Currently, therefore, there is no approved product available to treat pregnant women who experience severe and prolonged nausea, which can be harmful to the mother and to the fetus. If that is what the opponents of this legislation want, let them defend it. They are using Benedictine all over the world--all over the world but not in the good old U.S.A. because of the fear of product liability litigation under our present system, which some of us are trying to change. I think the United States loses under the current system. Insurance rates disable U.S. manufacturers. American manufacturers pay 10 to 50 times more for product liability insurance than their foreign competitors. You have the European Economic Community, which has adopted uniform product liability laws. I believe, although I am not 100 percent sure, that 60 affiliated countries have done the same. So we will continue to pay as a country 10 to 50 times more in insurance because we have all of these State laws, which all compete with each other, and other countries will have a uniform law, and they all will be our main competitors for exports and imports in this workers, American business. America loses. In a single year, Mr. President, the liability system cost the State of Texas 79,000 jobs. If that is the case, then let those who want to see that current system continue to get up and defend it. When people run for office, they talk about the need for jobs. Texas is losing jobs because of this. They have a lot of research and development in Texas, which is a very progressive, industrial State. So they are very much hurt by this. Interestingly, when I say the United States loses under the current system, part of this is that the current system does not enhance product safety. I will have something to say about that. I would beg those listening to listen to this one sentence. Though the number of torts--that is, suits--in product liability rose dramatically in the 1980's, consumer interest steadily declined during the 1980's as it did during the 1970's. So to link this with product safety is open to some substantial question. Let me just make some more points. I go back to this problem of injured people having to wait so long to receive compensation. Mr. President, after I ran for Governor of West Virginia, an event little noticed and not long remembered, I gave my inaugural speech on the steps of the capitol. It was on a day in which the temperature was 37 degrees below zero. So in order for me to say it, I had to really mean it because people were just freezing all over the place. I made four promises to the people of West Virginia. I talked about education. I talked about roads. I said I wanted to remove the sales tax from food, at that time 3 percent, which I eventually moved to zero. And I wanted to make the workers compensation system, which at that time we called the workmen's compensation system, more efficient because I was offended that in the State of West Virginia when a worker was injured it took the State 77 days on average to get a check to an injured worker. I said, how can we be a humane State and do that? And I pledged in my inaugural address, which is sort of like your constitution, that I would get it done in 4 days. Well, I did. I got it down to 4 days. If I am offended by the 77 days it took under the old West Virginia workers compensation system, what am I meant to feel about a 3-year period of time on average for an injured worker under U.S. laws, and State law in particular, to receive compensation for the first time. Three years later. An Insurance Service Office study found that it took 5 years to pay claims with the average dollar loss and that ``larger claims''--that is, the more seriously injured victims--``tend to take much longer to close than the smaller ones.'' Now, this is interesting. ``Several injured victims cannot afford to wait years to receive compensation.'' So what do they do, Mr. President? They know they are going to have to wait a long time while the lawyers rake in the money and they wait. They know they are going to have to wait a long time. They know they do not have the resources. So what do they have to do? The delays force them to settle, to not use the system as it is meant to be used but to settle for inadequate amounts of money. That is shameful. That is shameful. If those who oppose this bill want to stand up and defend that, I will be here to hear their argument. That is shameful. They have to settle because they know they cannot go through the business of paying the lawyers the money. Let us talk about the business of bringing the lawsuit, and costs being so high. The GAO--who I think people respect pretty much throughout this Hill--estimated that 50 to 70 cents of every jury- awarded dollar goes to lawyers and legal costs. Fifty to 70 cents of every jury-awarded dollar goes to lawyers and legal costs. That is wonderful news for the injured person. It leaves him or her maybe 30 cents, maybe 50 cents. They are hurt. They are the ones hurting. The lawyers are just running these things through. I am not picking on trial lawyers in particular. I have always made a point of saying lawyers on both sides--the trial lawyers and defense lawyers. They are both part of the act. Defense lawyers are very, very good at stringing it out, putting in more paper, asking for more information. They are very, very good at it. But the point is the people do not get the money. The injured person does not get the money. The lawyers and the legal process get the money. A further illustration came in 1994 in a survey by the Association of Manufacturing Technology. This is hard to follow, so I would ask people just listen. It found that every 100 claims filed against its members result in outlays of $4.45 million in defense costs and $8 million in subrogation paid to employers or their workers compensation insurers. Claimants, therefore, received only $8.35 million of these 100 claims in the Association of Manufacturing Technology survey, and since plaintiffs' attorneys usually received one-third of the awards, injured people get to keep about $2.2 million while transaction and legal costs totaled $8.6 million. Something that bothers me greatly about the current system is that the current system discourages the development of innovative products. This is where I got off when I was talking about the amendment of the Senator from Tennessee. I used the word ``innovation'' in the States. The chairman and CEO of Biogen, Jim Vincent, stated to the Senate Commerce Committee in September 1993 that he has decided not to pursue research into the development of an AIDS vaccine because of the current U.S. product liability system. The Immune Response Corp. of California is attempting to develop an AIDS vaccine, but in 1992 it had to delay important clinical trials because of liability concerns, and I believe they are not doing it anymore. An Office of Technology Assessment study found that liability fears are a barrier to research testing and marketing of AIDS vaccines and called for Federal action. Health Industry Manufacturers Association Vice President Ted Mannon told a House Energy and Commerce subcommittee that joint liability law is having an adverse effect on the ability of medical device manufacturers to obtain biomaterials--the raw materials that make products such as hip replacements and pacemakers. I will just do one or two more of these. In 1994, April 25, the New York Times reported: Big chemical companies and other manufacturers of materials used to make heart valves, artificial blood vessels, and other implants have been quietly warning medical equipment companies that they intend to cut off deliveries because of fear of lawsuits. Now, if we simply want to stop that stuff and the people who have pacemakers and all the things that we can do in modern medicine do not matter anymore, then let those who oppose this bill defend that; that the very essence of modern research and the very essence of modern medical innovation is being cut off or cut down or cut back or cut out by the product liability system that we currently have in this country. One more. The fear of exposure to product liability lawsuits again has diminished investment in basic scientific research. The reason I mention the word ``basic'' is because it has always distinguished us from other countries. We are the ones who do the basic research. The other countries do the applied research, particularly Japan, and Asian countries. We do the really hard stuff, which costs a lot of money. You do the basic research and you come up with materials or products or possibilities. Then during the applied research and getting it to commercialization--here the Senator from South Carolina and I would agree completely--that has been our American problem, the commercialization of products. But not basic research. That has been our strength. Well, Mark Skolnick, who is a professor of biophysics at the University of Texas, has noted that areas where litigation has occurred will not receive support for exploration and development. Producers fearful of possible suits simply make that impossible. The Conference Board, as I indicated earlier, said that 47 percent of U.S. companies have withdrawn products from the marketplace because of product liability concerns. Gallup, in a 1994 survey, said that one in five small business executives report not to improve an existing one out of concern for product liability litigation. What are we doing to ourselves, Mr. President? Why is it that such a small group can prevent our country from progressing while, at the same time, we protect our people? I want to say a word about punitive damages. I want to discuss the punitive damages concept, what it actually is, so that it becomes clearer. Again, I am not a lawyer, so I have to look at these things from the point of view of somebody who is not a lawyer. I do not think the Presiding Officer is a lawyer, although he has all the attributes sometimes of that kind of sharp insight. But, as far as I know, I do not think he is a lawyer. There are a few of us in this body who are not. The U.S. Supreme Court--which I do not consider to be a trivial body--has said that punitive damages have run wild in the United States. Jay Rockefeller, representing the people of West Virginia, did not say that. The U.S. Supreme Court said that. There are virtually no standards for when punitive damages may be awarded under the current law and no clear guidelines as to their amount. Good behavior is swept in with bad. The result is uncertainty and instability and a chilling effect on innovation. Now, I go back to Science magazine, 1992. A Science magazine article reported that at least two companies have delayed AIDS vaccine research and another company abandoned one promising approach as a result of liability concerns. European parents can place children in built-in baby seats in cars. American parents cannot as easily, because the companies who make baby seats do not want to improve them on the fear that they will get sued because a previous iteration might therefore have been inferred to have been deficient. That's crazy. So clear, rational rules are needed to promote innovation and responsible manufacturing practices while, at the same time, providing assurances that wrongdoers will be justly punished and deterred from future misconduct. Please let us not have this as an argument between those who care about business and those who care about consumers. In fact, and I believe my colleague from the State of Washington would agree, those of us who are trying to reform the system care a whole lot more and are willing to do a whole lot more to help plaintiffs who are injured than are those who oppose this. Although they claim that they wear the halo for consumers, they do not. We are trying to help them. They are trying to keep the system as it is. They say that status quo is perfect; just leave it exactly as it is. I have not done it every year, but I have routinely called in the American Trial Lawyers Association to my office to say: ``Is there some way that we can work with you to try to work out some compromise on this subject?'' The answer has always been no. Clear, but not encouraging. No. Into which I read, therefore, they want the system to be exactly as it is. Little changes? Big changes? Halfway changes? No. No changes. No changes. I remember once one of the leaders of one of the consumer groups several years ago brought a woman from West Virginia who had been injured to my office. I guess the idea was to shame me, and to show me what anguish I had caused this woman. She came in and I saw them. And at the end of the meeting, the woman was in fact sobbing, holding onto my hand, saying, ``Your bill would have helped me, perhaps saved me.'' Now, the leader of the consumer group was, obviously, at something of a loss. But I have to note that, for the Record, this is the case. So a clear understanding of the nature of punitive damages is an essential prerequisite to meaningful reform. Punitive damages are punishment. They are quasi-criminal in nature and developed in England and the United States to serve as an auxiliary or helper to the criminal law. They have nothing to do with compensating a person who has been harmed and are not in any way intended to make the plaintiff whole. That purpose is served by compensatory damages, which provide recovery for both economic--which is lost wages--and medical expenses. Let me make a point here, too. A lot of people say, ``Oh, economic damages. Persons making $35,000 a year. They are 30 years old. Now they cannot work.'' Which, of course, is horrible, if it comes to that. But they say, ``Well, gee; I guess that is going to be $35,000 for economic wages.'' No, no, no. It is $35,000 for every year that that person would have deemed to have been able to work, plus all benefits, plus all retirement, and all the rest of it. In fact, if you did that, let us say somebody was making $30,000 a year, and is 30 years old. They could work for another 35 years. I am not very good at math, but that would be many, hundreds of thousands of dollars; way above $250,000.

Mr. ROCKEFELLER. I move to lay that motion on the table. The motion to lay on the table was agreed to. Vote on Amendment No. 622

Mr. ROCKEFELLER. My answer to the distinguished Senator from Tennessee is that this particular Senator is trying to work to find a way in which there will not be caps as classically defined on punitive damages. I say to the Senator from Tennessee that I voted, for example, with Senator Dorgan on his amendment to remove caps. And the Senator did that for a very specific purpose, because I think we can find a way, because I do not think we can pass the bill without finding that way, and I am convinced that we can find a way to do this so that I would have been as comfortable or as uncomfortable in that room with your constituent as I was with mine. Now, I also want to say, when I talk about pain and suffering, the State of Washington has no punitive damages whatsoever. They have no punitive damages. Is it not interesting then that within the last 6 weeks that the State of Washington came down with a jury award for economic and pain and suffering of $40 million? The only reason I mention that is to say, one, that economic is much more than people think of it as. It is the rest of your life's wages. It includes the raises that you might have gotten. It even presumes promotions you might have gotten, as well as the benefits, insurance, retirement and all the rest of it. But pain and suffering is where a jury can get very subjective and where and, in this case, a $40 million award. I do not think anybody who opposed this bill could have guessed there would have been a $40 million award out of a State that does not even have punitive damages. That happened 6 weeks ago in Washington. So, Senator Gorton's and my bill understands and accepts the basic premise that punitive damages are punishment and provides the fundamentals that are part of any criminal punishment; a definition of the crime establishing a level of proof necessary for punishment and making the sentence fit the crime. So let us define the crime. S. 565 defines the crime as conduct specifically intended to cause harm or conduct manifesting a conscious, flagrant indifference to the safety of those persons who might be harmed by the product. The standard is fair and is similar to the standards of many States, in fact. It conveys that punitive damages are to be awarded only in the most serious cases of extremely outrageous conduct. Level of proof: S. 565 explains how a claimant must prove the crime and requires that the proof be clear and convincing. This standard reflects, I think properly, a middle ground between the burden of proof standard ordinarily used in civil cases, which is proof by a reponderance of the evidence and criminal law standard which is proof beyond a reasonable doubt. So this is in between, clear and convincing. The U.S. Supreme Court has endorsed clear and convincing evidence burden of proof standards in punitive damage cases. In addition, each of the principal groups to analyze the law of punitive damages since 1979 has recommended the standard, including the American Bar Association, which the Senator from South Carolina mentioned some time ago is bipartisan if anything ever was bipartisan, and the American College of Trial Lawyers. Recently, the standard was recommended in a 5-year study of scholars by the American Law Institute and, incidentally, the standard is now law in 24 States. Making the sentence fit the crime: Most importantly, we try to put reasonable parameters on sentencing to make it fit the crime; an established principle of law. Even very serious crimes, such as larceny, robbery and arson have sentences defined with a maximum sentence in statute. As a result of adopting the amendment by the Senator from Maine and drawing on the interest expressed by colleagues on this side, we modified the bill to allow punitive awards to go as high as two times compensatory damages. Opponents to this bill have argued that unlimited punitive damages are necessary to police corporate wrongdoing. Absolutely unlimited. This is not necessarily supported by facts. There is no credible evidence that products are any less safe in either those States that have set reasonable limits on punitive damages or in six States-- Louisiana, Nebraska, Washington, New Hampshire, Massachusetts, and Michigan--that do not permit punitive damages at all. In fact, Brookings makes no link whatsoever between what is happening in punitive damages and product safety. That is an argument which is used by the opponents often. Furthermore, plaintiffs in those States have no more difficulty obtaining legal representation than in those States where the sky is the limit. I am coming to a close. Bifurcation: This is a general remedy proposed to ease adverse impacts of punitive damages awards that permits a trial to be divided into segments, and this makes sense. The first part of the trial is addressing compensatory damages, the second dealing with punitive damages. One has to do with helping the person. The second with punishing the manufacturer. Judicial economy is achieved by having the same jury determine liability and amounts of both compensatory damages and punitive damages. This remedy we give the shorthand name of ``bifurcation.'' Bifurcation trials are equitable because they prevent evidence that is highly prejudicial and relevant only to the issue of punitive damages-- that is, the wealth of the defendant--from being heard by jurors and properly considered when they are determining basic liability. Bifurcation also helps jurors compartmentalize the trial, allowing them to easily separate the lower burden of proof required for compensatory damages and the higher burden of proof, clear and convincing evidence, for punitive damages. So, Mr. President, I will soon yield the floor. First, I simply conclude by saying that product liability reform--the bill before the Senate--is not a child, a stepchild, not even a foster child of the Contract With America. It is the result of people of both sides of the aisle here in the Senate agreeing that the legal system, where it deals with interstate commerce, needs to be fixed, and it is precisely Congress' role, and only Congress' role, to step in where the States cannot do the job on their own, which is why we need to pass the bill. I thank the Chair and yield the floor. Mr. GORTON addressed the Chair.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 609

Mr. ROCKEFELLER. I thank the Chair. Mr. President, as a chief advocate and sponsor and manager of the product liability reform bill, which, as far as I know, is still being debated on the floor, I want to comment on the situation on the floor as I see it now. From just about every corner of the Senate floor, an amendment of some kind dealing with malpractice--not product liability, but malpractice--has been offered. So much so, in fact, that we now have 12 amendments on malpractice in the pipeline. I am hoping that the Senate will not have to vote on 12 amendments, and I hope indeed some of them can be worked out, dropped, or whatever. As I also said on Thursday when I last spoke, I share my colleagues' interest in malpractice reform. In fact, I daresay that I more than share my colleagues' interest on this subject. To me, it is part of the problem with our health care system. It is intimately related to cost and psychology and whether doctors' kids or anyone's children want to go into medicine or not. And malpractice reform is something I want very much to do. But I do not want to do it at the risk of killing product liability reform. It is as simple as that. I think if we were to adopt malpractice reform in conflict, not only would it fail, but so would product liability. So in the interest of bringing malpractice reform into the discussion, everything would lose. We can win product liability on a clean bill, which Senator Gorton and I want. But we cannot win product liability if there are substantial or unsubstantial amendments attached to it, and malpractice reform is a very substantial amendment. We cannot win both. As I said, I think at some point Senators have to choose: Do they want product liability reform? Do they want medical malpractice reform? Do they want nothing? Of course, there are many who want nothing. I just do not see 12 amendments on medical malpractice to a product liability reform bill as the way to produce actual results, results which will be signed into law. It may make a lot of people feel good to offer their own iterations on medical malpractice to this bill. We have had some terrific speeches. As somebody trying to enact something called a product liability bill for the last 9 years, it just does not make me feel very confident that this is the route to actually enacting either product liability reform or medical malpractice reform. I repeat, I hope my colleagues understand this: If malpractice reform were to pass, and I do not think it will, if it were to pass and become part of the product liability bill, the product liability bill would lose. It is 100 percent guaranteed it would lose. So we would lose malpractice and we would lose product liability. I do not understand that. I do not understand that. I think malpractice reform ought to be pursued just the way a bipartisan team of Senators have tried to enact this product liability reform bill. It ought to be done in the same manner--separately. That is, by getting a bill reported out of committee, onto the Senate Calendar, having the majority leader call it up, debating it on its own terms and with the time needed to work out any differences and issues that can be resolved here in the Senate. Trying to enact malpractice reform by amending a product liability reform bill with enough issues of its own, for Heaven's sakes, just does not make sense to me. Maybe I will be proven wrong. I think the chances of that are almost zero percent. Maybe some kind of consensus will emerge around here on what form of malpractice reform should be attached to the product liability reform bill and we will suddenly have about 70 votes for a bill with both. That was the original conversation, because of the surge of that nature in the House. People said malpractice will help products. That is what Jim Todd with the American Medical Association said to me and Dick Davidson of the American Hospital Association, and Tom Scully of the Federation of American Health Systems. They all said that to me; it will help. All of the product liability alliance folks who surged in the House make the same assumption about the Senate. We are just very different. We are a very different body. It will not work here. This talk about getting 70 votes for a bill with both--I am highly skeptical. As somebody who has worked very hard, as have Senator Gorton and many others here, on trying to enact product liability reform, I want to send a very clear signal to the Senators and to the citizens who also want to see a law enacted to achieve this result, this is no time for loading up this bill--neither now with these malpractice amendments nor after they have been disposed of. After they have been disposed of, there will be a chance for more amendments. Then there will also be not the time to load up the bill. This is no time for amendment proliferation. This is no time to use this bill to make speeches on other issues to try to satisfy other interests, to try to feel good about writing amendments on other priorities, like malpractice reform. This is the time to focus on the job at hand, and it is called product liability. We have a large, good group of Senators on both sides of the aisle who are prepared to vote for product liability reform, one of the most contentious issues that we face in any year in which we take this subject up, which is every other year. Up until this time we have lost every single year. We have lost nefariously, we have lost flat out, we have just sort of lost, but we have lost. It has always been close. The majority of the Senate has always wanted product liability, but we have just fallen short, for one reason or another, of cloture. This year we can get it. This year we can do cloture and we can get a product liability bill which, in turn, will put the opposition in substantial disarray, and then we can move on to other aspects like malpractice reform, securities, that kind of thing, all of which I strongly favor, particularly malpractice. So, again, this is the time to focus on the job at hand. I think that malpractice reform, in fact, is such a serious subject that it deserves far more attention than it has gotten. It deserves far more debate than it has gotten. I am not convinced that there are 10 percent of the Senators who will vote on these amendments who understand what malpractice reform is all about. I do not mean that to insult any of my colleagues, but just as I think product liability reform is extremely complicated--particularly for nonlawyers such as myself--malpractice becomes more so because we are dealing with humans in a different way. It is a hard subject that deserves a very serious effort, but not on this bill. Again, and in concluding, I am more than anxious to take up a bill on malpractice reform. I understand the urgency and the voices of the doctors and the health care institutions in my State of West Virginia and elsewhere. It is not right that it has to take so long to do something about problems with malpractice. It is the No. 1 subject on the minds of physicians, the No. 1 subject on the minds of hospitals. They desperately want it. It also is not right to pretend that we can act on malpractice reform when trying to enact a serious piece of legislation on a different issue, which is called product liability. My hope is that we simply will concentrate on product liability, that we will try to keep away amendments, that we will drive this thing through to a conclusion and get one excellent piece of work done. I thank the Chair. I yield the floor. Mr. President, I suggest the absence of a quorum and ask the time be divided equally between the opponents and the proponents.

Mr. ROCKEFELLER. Mr. President, I yield 7 minutes to the Senator from California.

Mr. ROCKEFELLER. I move to lay that motion on the table. The motion to lay on the table was agreed to. Unanimous-Consent Request

Mr. ROCKEFELLER. I move to lay that motion on the table. The motion to lay on the table was agreed to. Vote on Amendment No. 613

Mr. ROCKEFELLER. I move to lay that motion on the table.

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

Mr. ROCKEFELLER. I move to lay that motion on the table. The motion to lay on the table was agreed to. Vote on Motion to Table Amendment No. 611

Mr. ROCKEFELLER

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

Mr. ROCKEFELLER. Mr. President, I ask unanimous consent to speak as if morning business.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, I am here to talk about the Medicare Program. In the recent days, I have noticed all kinds of people expressing deep concern for Medicare. That is comforting, because there is more than enough reason to be concerned. Let me get right to the point. The Republican leaders in Congress, and the chairs of both Budget Committees in Congress, want to balance the budget in 7 years. If they keep their word and leave Social Security and defense spending completely alone, that will require cuts totaling $1.2 trillion. If they throw in the tax cuts for top income-earners that will require another whopping $345 billion to finance those cuts. Now here's the key point for anyone concerned about Medicare: as we have seen in papers distributed by the Senate Budget Committee itself, this drive for a balanced budget--and presumably some tax cuts--will require cuts in Medicare to the tune of $250 to $300 billion in 7 years. Medicaid will also have to help out with $160 to $190 billion in cuts. The recent talk about Medicare is not really saying this. It is all about the need to shore up the Medicare trust fund, because it could be insolvent in 7 years. It is all about the idea of restructuring Medicare to save the program. The argument we are hearing is that Medicare has to be drained of $300 billion to save the program. A curious argument. Somehow, I think we need to make sure Americans, especially the 37 million senior citizens and disabled citizens who rely on Medicare, aren't being sold a bill of goods. The fact is that the terms set by the leadership on the other side of the aisle--balance the budget by 2002, leave defense alone, and throw in some tax cuts--may require a raid on Medicare to get the job done. That is why I am here. My basic reaction to all this talk is to urge the Republican leaders to simply show us precisely what you mean. I am speaking as someone who cast my vote, several times, for a very precise, very specific plan to reduce the federal deficit by $600 billion. It included savings in Medicare. The 1993 budget and deficit reduction plan was based on the simple concept of shared responsibility, and spread the burden fairly. Along with spending cuts to reduce the deficit, it did important things like expand the tax credit for working families to make sure work is a better choice than welfare in this country. But for all of the fire and brimstone heard this year about the need to balance the budget and now ``save'' the Medicare Program, we have yet to see a budget resolution, a budget plan, a single detail on just how everyone making the noise intends to achieve these impressive goals. Of course, the President is reacting by saying essentially ``show me.'' He submitted his budget on time. He offered a health care plan that tied Medicare savings to comprehensive health care reform. He rejected the idea of a constitution amendment on the Republicans' terms, and so of course, he is asking for some specifics. I cannot conceive of a budget that meets the conditions of the other side touch defense, no new revenue, and tax cuts for corporations and the wealthy--without huge cuts in Medicare. And make no mistake about it, $250 to $300 billion of cuts in Medicare will mean higher deductibles and premiums for seniors, lower fees for hospitals and doctors, and a lot worse. If there is such a budget that can side-step Medicare, we are simply saying ``show us.'' We have put our cards on the table for the past 2\1/2\ years when it comes to health care, Medicare, and deficit reduction. While all of this talk and born-again interest in Medicare's solvency gets sorted out, I am here to lay out proposals that I think are bottom-line ways to act in the best interests of Medicare. I do this as someone who has tried to protect Medicare for a long time, and will keep fighting to do exactly that. I do this as the former chair of the Medicare Subcommittee on the Finance Committee, and now the ranking member--the majority leader is the chairman of that subcommittee now. I do this as someone who smells a rat when the same people who have talked for months about stepping up to the plate, with specifics on how the budget can be balanced by 2002 with tax cuts thrown in and defense off the table, but now suggest that the $300 million in Medicare cuts they are talking about is their new plan for saving Medicare. Something is not quite right about this picture, I suggest. I agree that Medicare has to be put on better financial footing. But that effort should not be a smokescreen for using it to finance other agendas like tax cuts for corporations. First, I am introducing legislation to create a National Commission on Medicare modeled after the National Commission on Social Security Reform that President Reagan chartered in 1981. The charge given to the Social Security Commission was to propose ``realistic, long-term reforms to put Social Security back on a sound financial footing; and to forge a working bipartisan consensus so that the necessary reforms can be passed into law.'' We need this kind of bipartisan process to shore up Medicare. We need to jump off the current rhetorical, budget-driven track to one where we can resolve the real question: how best to keep Medicare dependable for seniors over the next generations. If Medicare is cut by unprecedented amounts of money to pay for anything but Medicare, the consequences will be disastrous for health care providers and beneficiaries. Rural hospitals will close in droves. Doctors will be forced to turn away the elderly. Medicare will no longer be reliable insurance for seniors in West Virginia. As my second proposal, I will offer an amendment to the budget resolution when it comes to the Senate floor that will put Medicare in a lock-box to protect it from looting. This isn't the blueprint we need to get Medicare back on solid ground for the long term, but it will buy a few more years of solvency and ensure it will not be used for anything but the promises made to senior citizens. Medicare is not a slush fund to finance tax cuts or other Government programs. I will tell you why I am concerned about Medicare. I am worried its true purpose is getting lost. It is a promise, a pledge, to the American people that they will be able to live their lives in dignity and security past their working years. Instead of treating Medicare like a checking account in this budget process, we need to remember it is an investment. The Medicare trustees sounded the alarm about the short-term insolvency of the Medicare Program more than 3 years ago. In fact, the Medicare trustees urged action on comprehensive health care reform to address the country's systemic problem of rising health care costs that are draining the Medicare hospital trust fund and the pockets of American families and businesses. But comprehensive reform was rejected by the Congress last year. I should note that up until very recently, the Medicare Program outperformed the private sector in holding down its costs. Over the past 2 years, Medicare costs have been slightly higher than the private sector costs. But, and this is a big ``but,'' the private sector is insuring fewer and fewer people, while Medicare's enrollment is increasing; and Medicare pays for home care services and skilled nursing home care, types of services that are not normally covered by private insurance policies. Mr. President, I have heard lots of talk about needing to move the Medicare Program into the 21st century by ``restructuring'' it so it looks more like insurance in the private sector. So far, I just cannot share in the enthusiasm for copying something that is leaving out so many hard-working people and families from any kind of health care security. In fact, Medicare was first established because the private insurance industry had failed so miserably to provide affordable insurance to senior citizens. While many of my colleagues like to talk about the ``miracles of the marketplace,'' I still see cherry-picking and redlining, medical underwriting and policy cancellations, job-lock, and families paying more and more money for fewer and fewer health benefits. Just think about sending 37 million people with pre-existing medical conditions to the private insurance market with vouchers called choice- clerk and medi-check. High administrative costs in the private sector will eat up the value of Medicare benefits right off the bat. Will the senior citizens living in small towns across West Virginia end up paying more of their own money for their health care or be forced to join an HMO--if one is even available in the area? To ``save'' Medicare we need comprehensive proposals to address these issues, not just blind cutting of Medicare. Last year, we offered proposals to fix these myriad problems. Republicans disagreed with our approach, and celebrated the defeat of our proposals. Our opponents' television ads stated again and again that there's ``a better way.'' Slashing $250 to $300 billion out of Medicare is not a better way. Mr. President, cutting $250 billion out of Medicare over 7 years is not the way to guarantee the long-term solvency of the Medicare Hospital Trust Fund. It might add a few more years of solvency--5 to 8 tops, CBO thinks--to the trust fund. We need to rise to the challenge met when Medicare was created and Social Security was rescued, and chart a long-term prescription for Medicare's health over the next 25 years of more. I make my two suggestions as a way to get started. Protect Medicare from raids to pay for anything, especially tax cuts, but what its intended for--the promise of health care security for the seniors of West Virginia and the country. And while we know Medicare is safe, let us replicate the approach used to save Social Security and really prepared Medicare for the challenges of the next century. I thank the Presiding Officer and yield the floor. I suggest the absence of a quorum.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. That will be fine.

Mr. ROCKEFELLER. The Senator from West Virginia will do it in any way that is equitable.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, I rise again to report to my colleagues on our situation and to make a reflection. This morning, we conducted a series of rollcall votes. I believe there were eight. They all had to do with something called malpractice reform, which is not part of the product liability reform. We were able to accept two amendments, which means that we did not accept others. Those were on fairly minor issues, I might say. Of the eight amendments that required votes, the Senate adopted three by sort of an interesting variety of margins. The net result is that the product liability bill, which is the sole focus of the concern of the Senator from West Virginia, as well as the Senator from the State of Washington, now includes the malpractice proposal as offered by the Senator from Kentucky, which prevailed with 53 votes. So that means we now have a bill which has product liability in it, has malpractice reform in it. I have indicated before that I think at some point Senators are going to have to make a choice. I do not think when it comes right down to it, we are going to be voting on a bill that has these two elements in it. We may be voting on no bill that has, therefore, nothing in it. Or we may be voting on a bill that has both elements in it which causes both elements to lose, products and malpractice, which is in nobody's interest. Now we found another one. I say this with all respect and without anything but respect. But we are debating an amendment by the majority leader, with a number of other Senators as cosponsors, to limit punitive damages in all civil actions, not just product liability. So now this comes from the House. This, again, opens up an entire new range of problems and possibilities for product liability and the chances of passage. This is opening the whole thing up. It is all civil torts. I recognize the basis of the amendment. There is a very impressive array of organizations, including municipalities, small businesses, nonprofit groups--they want to curb the costs--and problems associated with punitive damages in our legal system. They have that right in a democracy, and they are exercising that right. And now we are seeing the results of that. I am not going to get into the substance of the amendment or into the merits of the amendment. I simply want to indicate that this is not product liability as it has been introduced. It is, again, trying to open it up so that other things can be attached to it. Some may think that helps it. Some may think that by adding other extraneous areas it shows that they are abreast of everything that is going on in the House and fighting with equal vigor, and I understand that; I understand it politically, substantively, and every other way. But it does not help product liability to pass. I would remind Senators, as I have on a number of occasions and I will continue, that the underlying amendment here is the Product Liability Reform Fairness Act of 1995. For both those who oppose it and who favor it and who have invested a lot of time in it, it is this bill which we want to see acted upon. So I just make this point at the beginning of the debate. And I am perfectly willing to have a time agreement. I understand the majority leader will be very amenable to a time agreement. I think that is being shopped on both sides. I do not expect this debate to go on for a very long time. But, again, it is an extraneous amendment. I simply point that out. It hurts the possibilities of product liability reform. I think it has almost no chance of passing. Of course, a vote will tell that, but I forecast that. Thus, I wonder what it is in fact we are accomplishing by all of this. I thank the Chair and yield the floor. Mr. HOLLINGS addressed the Chair.

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

Mr. ROCKEFELLER. Mr. President, I suggest absence of a quorum.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. I move to lay that motion on the table. The motion to lay on the table was agreed to.