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(b) In any civil action subject to this Act in which not all 2 defendants are manufacturers or product sellers and the trier 3 of fact determines that no liability exists against those de4 fendants who are not manufacturers or product sellers, the 5 court shall enter a judgment notwithstanding the verdict in 6 favor of any defendant which is a manufacturer or product 7 seller if it is proved that the claimant was under the influence 8 of intoxicating alcohol or any drug and that such condition 9 was more than 50 per centum responsible for such claimant's 10 harm.

11

(c)(1) For purposes of this section, the determination of 12 whether a person was under the influence of intoxicating al13 cohol shall be made pursuant to applicable State law.

14

(2) As used in this section, the term "drug" means any 15 non-over-the-counter drug which has not been prescribed by 16 a physician for use by the claimant.

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18

19

TITLE IV

PRODUCT LIABILITY INSURANCE REPORTING

SEC. 401. (a) The Secretary of Commerce (hereinafter

20 referred to as "the Secretary") shall provide to the Congress 21 before June 30 of each year after the date of enactment of 22 this Act a report analyzing the impact of this Act on insurers 23 which issue product liability insurance either separately or in 24 conjunction with other insurance; and on self-insurers, cap25 tive insurers and risk retention groups.

$ 2760 PCS

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1

(b) To carry out the purposes of this section, the Secre

2 tary shall collect from each insurer all data considered neces

3 sary by the Secretary to present and analyze fully the impact 4 of this Act on such insurers.

5

(c) Within one hundred and twenty days after the date 6 of enactment of this Act, the Secretary shall issue such regu7 lations as may be necessary to implement the purposes, and 8 carry out the provisions, of this section. Such regulations 9 shall be promulgated in accordance with section 553 of title 10 5, United States Code. Such regulations shall—

(1) require the reporting of information sufficiently comprehensive to make possible a full evaluation of the impact of this Act on such insurers;

(2) specify the information to be provided by such insurers and the format of such information, taking into account methods to minimize the paperwork and cost

burdens on such insurers and the Federal Government; and

(3) provide, to the maximum extent practicable, that such information is obtained from existing sources, including, but not limited to, State insurance commissioners, recognized insurance statistical agencies, the Administrative Office of the United States Courts and

the National Center for State Courts.

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1 (d) The Secretary may subpoena witnesses and records 2 related to the report required under this section from any 3 place in the United States. If a witness disobeys such a sub4 poena, the Secretary may petition any district court of the 5 United States to enforce such subpoena. The court may 6 punish a refusal to obey an order of the court to comply with 7 such a subpoena as a contempt of court.

S 2760 PCS

STATEMENT OF HON. RICHARD K. WILLARD, ASSISTANT

ATTORNEY GENERAL, DEPARTMENT OF JUSTICE

Mr. WILLARD. Thank you, Mr. Chairman.

It is a pleasure to be here today. I would ask if my prepared statement and the accompanying letter could be placed in the record, I would like to just briefly summarize it at this time.

Senator HATCH. Without objection, we will put all complete statements in the record as though they were completely delivered. We do appreciate summaries. Thank you.

Mr. WILLARD. Thank you, Mr. Chairman.

As I stated before this committee in earlier hearings on S. 2046, Senator McConnell's tort reform measure, the administration strongly supports tort reform, in particular, reform in the area of product liability at the Federal level.

In fact earlier this year, the administration suggested three tort reform measures. Our product liability bill was introduced by Senator Kasten as an amendment to S. 100, and Senator McConnell introduced the other two bills, S. 2440 and S. 2441, together with Chairman Thurmond, and the bills are now pending before this committee.

All three bills were based on the recommendations of the administration's Tort Policy Working Group which was formed last year to examine the crisis in the availability and affordability of liability insurance. That report which the group issued found that there were a number of problems with the functioning of our tort system. We believe that many of the reform measures that we recommended would be successful in alleviating the problems that we have seen in liability insurance. In fact, we are pleased that many States have adopted a number of those measures this year with regard to their State tort law.

I would like to just mention three basic concerns we have with regard to S. 2760 as reported by the Commerce Committee.

The first is that it does not insure that fault remain central to product liability law. The trend to de facto no fault liability which our report comments on, and which we have seen in many courts with regard to product liability law, does not deter harmful conduct but instead serves to punish innocent companies and individuals by subjecting them to liability for what is often beneficial conduct.

Thus, in an earlier letter to the committee we strongly urged the Senate to remedy this defect in S. 2760 by putting in a provision such as that found in section 5 of the Product Liability Reform Act of 1986 which was proposed by the administration and introduced by Senator Kasten.

In this regard we understand that an amendment to add a faultbased liability provision will be pursued by Senators Kasten, Lugar and Kassebaum when S. 2760 is considered by the full Senate.

Our second major concern is, that while S. 2760 alleviates part of the problem with joint and several, or "deep-pocket liability," we do not believe it goes far enough to solve the problem.

The bill eliminates joint and several or "deep-pocket liability" for noneconomic damages in product cases, but not with regard to eco

We understand that Senator Pressler has indicated his intention to offer an amendment to S. 2760 to deal with this problem, and we certainly recommend that that be favorably considered.

The third and final consideration that I would like to raise is that of preemption. The preemption language of section 103(b) of the bill, we believe, is far more intrusive of State law than necessary.

As we explained in our letter, we think the justification for Federal legislation is to remove unnecessary burdens on interstate

commerce.

However, where a State law is more protective of interstate commerce than the proposed Federal legislation, we see no reason for preemption. Therefore, we would strongly urge the Senate to adopt the kind of approach in section 4(b) of the administration's product liability bill, instead of that in S. 2760.

Our letter discusses a number of other detailed concerns which we hope will also be corrected when the bill is taken up by the full Senate. We do, however, strongly support the idea of Federal product liability legislation, and we would encourage the Senate to take favorable action on this legislation this year. Thank you, Mr. Chairman.

[The statement follows:]