When people think about product liability lawsuits, they sometimes visualize people who have been hurt by defective products. They overlook the many lives threatened by product liability overkill.
One example is 9-year-old Tara Ransom of Phoenix. Tara lives with hydrocephalus, a condition that causes excess fluid to build around her brain. She, like many others, is kept alive by a simple tube, called a shunt, that must be replaced periodically, often in emergency procedures.
Unfortunately for Tara, life-saving medical devices like the shunt may not be available when they are needed because manufacturers can no longer obtain supplies of basic raw materials. This is because of product liability overkill.
Julie Nimmons, CEO of Schutt Sports Group in Illinois, a manufacturer of protective sporting goods equipment, wants to put a new, safer baseball batting helmet on the market. Product liability abuse deters her from doing so.
Clinical trials to develop a vaccine for acquired immune deficiency syndrome have been delayed and in some cases abandoned. And, American women are unable to obtain a drug (Bendectin) approved almost everywhere in the world to prevent morning sickness during pregnancy. Again, this is because of product liability overkill.
Product liability overkill is a national problem and federal legislation is needed to address it. Fair and balanced legislation, the Product Liability Reform Act of 1997, has been introduced in Congress. The new bill addresses a few key areas of product liability law that are unfair to both businesses and ordinary consumers.
The reform bill would end the ridiculous situation of allowing people who cause injury to themselves and others while drunk or under the influence of illegal drugs to be rewarded through the product liability system. The bill also would hold people who misuse products accountable for their actions.
Retailers and distributors of products would be held liable if a harm is their fault, but not if the harm is the fault of the manufacturer, unless the manufacturer is insolvent. This approach reduces unnecessary costs for consumers while assuring that injured people will always have an avenue for recovery.
The product liability reform proposal would eliminate stale claims against manufacturers of very old products that have proven themselves not to be defective by withstanding years of use. Manufacturers almost always win these cases, but the cost of responding to litigation is very expensive and takes resources away from job creation and research and development.
The new reform bill would set clear standards for punishment obtained by lawyers and reasonable limits to assure that punitive damages awards are fair. This will help encourage medical research for vaccines against serious illnesses, such as AIDS.
Following a law adopted 10 years ago by voters in California, the bill also would hold manufacturers liable for their "fair share" of "pain and suffering" damages. This will help people like Julie Nimmons who want to make safer, better products, but cannot afford "deep pocket" liability.
Finally, the new product liability reform bill would help assure that critical raw materials are available to make medical devices. This will help people like Tara Ransom.
All of these common sense objectives can be achieved while enhancing consumer safety. There is now proof in the "real world" that federal product liability can work. In 1994, the general aviation industry was struggling to survive as a consequence of "long tail" product liability. A hundred thousand jobs were lost between 1978 and 1993.
In August 1994, President Clinton signed the General Aviation Revitalization Act of 1994, which set an 18-year limit on lawsuits against manufacturers of non-commercial small aircraft. GARA has produced more than 9,000 new jobs. And the planes being made are among the safest in general aviation history.
Clinton has repeatedly said that he supports "meaningful federal product liability reform." Last year, he vetoed a bill. Senate Majority Leader Trent Lott has listed product liability reform as a "high priority" for this Congress and has reached out to the president to address his concerns.
The Product Liability Reform Act of 1997 gives the president a new opportunity to show his support for "meaningful federal product liability reform" and to build on the impressive achievement of GARA. The public should watch closely to see whether Congress and the president can agree that the immediate needs of the American people should be placed above "politics as usual."
Victor Schwartz and Mark Behrens are co-counsel to the Product Liability Coordinating Committee, the principal coalition of the business community seeking federal product liability reform.
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