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Mr. HERMAN. Thank you very much. I ought to note that your entire statement will be included in the record.

In the interest of time, I have a number of general questions that I might throw out to the panel as a whole. Additional questions will be addressed to you in writing for your individual responses.

There seems to be unanimity in this panel that the expedited settlement process would not work as intended. Earlier today, we had testimony from Mr. Scott discussing a mandatory mediation process that has been in operation in Wayne County and Detroit, MI. Would any of you like to comment on the appropriateness of that type of process?

Mr. GOFFMAN. We have only just heard about this process from Mr. Scott's testimony, but speaking personally I think that it is a very intriguing idea and ought to be explored because it seems from his description that it focuses on just what we are most concerned with, speeding adequate compensation to injured victims.

Obviously, the penalties or sanctions involved are keyed to determining whether or not it on the one hand would be effective and, on the other hand, would be fair and that is something we would have to look at more closely. But what is noteworthy about his description is it does not seem to preclude or reduce victims' rights in the court system.

Mr. HERMAN. To the extent that sanctions would be placed upon parties that did not abide by the mediator's recommendations because they acted arbitrarily, in bad faith, or that the final settlement was virtually identical to the recommended mediation findings, are sanctions appropriate in those cases? Does that curtail the rights of the plaintiffs or defendants?

Mr. KIMMELMAN. I think our feeling in general is that there may be ways of putting appropriate incentives on plaintiffs without sanctions. One key element that was not raised in the Michigan example was the timing element. There is some indication that claims are resolved more quickly there, but still not very quickly. They are still talking about a 3- to 4-year time period.

One of our chief goals is trying to make sure that these disputes are resolved more quickly and in a cheaper fashion for the system itself. So I think from our perspective there is already ample incentive for plaintiffs to settle. I believe the statistics for Michigan showed that most cases are settled there under this system, but not really more than under the tort systems of other States. I think we would be looking for the kind of sanctions that would get money to people more quickly without impeding their rights to go ahead and litigate the claim if they thought that they had not been treated fairly.

Mr. HERMAN. Any other comments on that?

Ms. LIPSEN. I just have one comment. Under some of the settlement systems that have been proposed to the Senate Commerce Committee before the imposition of caps, there was a recognition that manufacturers were indeed getting something out of a settlement system. They were getting the benefit of a trial without jury. They are getting the benefit of the collateral source rule and other procedures that were very beneficial to them. Also they were getting the benefit of not having to pay 10 years in legal fees. So I think that it works really for both sides. It is just a matter of perception as to what both sides are getting out of it.

65-678 0-87-20

Mr. HERMAN. Thank you.

Mr. Kimmelman, if I might direct a specific question to you: In the past, CFA has organized conferences on this issue that have endeavored to bring the various parties closer together. Is that process continuing and has there been any success in that effort?

Mr. KIMMELMAN. Yes, that process is continuing. We have, I think, six conferences this year and we have been discussing the possibility of doing one on product liability next year. Unfortunately, our staff cannot handle more than that number in 1 year and we have a number of other issues that have been very active, but we have been considering putting it back on the list because we think it is extremely important to try to resolve the issue.

Mr. HERMAN. The topic of joint and several liability has been a sensitive one in this proceeding, and I would like to raise the question of whether it could equitably be modified in some fashion. Joint and several liability is a vestage of what is generally deemed to be a distributive form of justice in this society, allowing the insurance mechanism or the marketing of goods and services to pay for the costs of compensating victims. How much is enough? How much is too much? How much can consumers bear to allow these costs to be placed upon them through this mechanism? At what point is there an injustice to consumers? Does anybody want to pick that up?

Mr. KIMMELMAN. Well, I think that what we believe is fair are some of the comparative fault notions that have been discussed in legislation where it is quite reasonable to assume that any plaintiff who is responsible for part of the harm should actually bear that risk.

What we are opposed to in the joint and several areas is shifting the burden of proof and burden of going out and finding additional parties when one defendant or a number of defendants have already been found to be at fault for the harm. So if it is the question of how much is enough, we cannot answer directly that way. It is really the question of what is the fair burden on each party to the suit.

We have nothing against requiring the plaintiff to own up to his or her own fault for the injury that occurred. Our difficulty is in who must prove what, once you already have one defendant adjudicated a wrongdoer by the court.

Mr. HERMAN. So you have no difficulty in a situation in which a number of parties that are preponderantly responsible for harm, that are judgment proof, not having their proportion of liability and responsibility and cost passed along to other parties as long as the standards that they had to adhere to are reasonable?

Mr. GOFFMAN. I think the key for us even in that situation is insuring that whatever solution is reached does not result in the victim being deprived of full compensation for the injuries that were proved. As long as that party that ends up paying the cost was in fact demonstrated to be a true wrongdoer, there is no unfairness there.

The key I think would be to examine some way, either providing alternative compensation or correcting imbalances among wrongdo

ers, but not without taxing the victim-rather not by taxing the victim with undercompensation.

Mr. DuBESTER. I agree with that statement. I would expand it briefly just to point out that in terms of our concern that any solution that is worked out in this area does not deprive victims of their entitlement to be compensated fairly and fully. The problem associated with occupational diseases, of course, -even produces a more difficult burden upon victims in terms of establishing causation, and to that extent I think it would be something that this committee should be very sensitive to in terms of establishing any modification that would make that burden in that particular area more difficult to find injured victims.

Mr. HERMAN. Mr. DuBester, you included in your statement an outline of the AFL-CIO's policy position in this area attributing the current crisis to multiple causes. Has the AFL-CIO developed any proposals or models as to how these issues ought to be addressed?

Mr. DuBESTER. We do not have any proposals or models per se. We have general guidelines obviously in terms of what we consider the essential prerequisites to any consideration of the problems associated with this area. But again, as we pointed out, what we are concerned with is multifaceted proposals.

We cite, for example, a couple of actions that have been taken by State legislatures which we note only for the purpose of pointing out that they are more comprehensive-types of approaches,' not that we agreed with all the remedies that were effectuated there with regard to the modification of the tort law, but they were coupled with some meaningful reforms in the insurance industry area and to that extent we looked to those kinds of comprehensive approaches.

Again, also we are very concerned in terms of addressing any kind of modification at all with regard to the product liability law area that we have sufficient provisions that address the very serious problems associated again to the matter I just raised, which is toxic chemicals producing occupational diseases. So those are some of the general considerations we have, but we do not have specific proposals per se in terms of model law.

Mr. HERMAN. Thank you very much.

I think we are ready to proceed to our last panel. The first spokesman on this panel is David Owen of the University of South Carolina.


Mr. OWEN. Thank you, Mr. Counsel.

My name is David Owen and I am a law professor at the University of South Carolina, where I teach and have taught courses in product liability and tort law for some time. I am pleased to appear before you today to present a petition to the Congress, on behalf of myself and nearly 200 law professors and law school deans from around the country, all professors of product liability or tort law, advocating that S. 2760 or any other general product liability bill include a provision setting forth uniform standards of manufacturer liability.

We believe that the central problem-by no means the only problem but the central problem-of product liability law today involves the uncertainty in definition of the basis of manufacturer responsibility; the nature and test of liability for manufacturers.

Federal intervention in product liability law is said to be appropriate to promote clarity, uniformity, fairness, and predictability in the law. Much of the confusion, uncertainty, unfairness in the present law derives from the fact that most States have a variety of definitions from tort law and contract law, from common law and statute law, on the standard of manufacturer liability. Moreover, these standards change even within the same State from year to year as new judges and new crops of law clerks prove themselves unable to resist the urge to try their hands at unraveling anew the mysteries of product liability doctrine. The problem with all of this, of course, is that manufacturers selling nationally cannot, as a result of these disparate standards, comprehend their legal responsibilities in any meaningful way, nor can their insurers, nor can the plaintiff's bar, nor can the public, nor even the trial or appellate courts.

The very first thing, therefore, that any Federal law in this area must do is to establish a uniform standard of manufacturer liability. While agreement on just what such a standard should provide may be politically difficult, the absence of such a standard from any product liability law is in our judgment a fatal flaw. A Federal law so drafted might be likened to a Federal criminal code that contained no standard for criminal intent. In each case, the absence of a central provision defining the prohibited misconduct would leave the law an empty shell, a miscellany of secondary provisions surrounding an empty core. Accordingly, we academic lawyers take the position that any principled Federal bill purporting to address broadly the law of product liability must include a standard, reasonable of course, of manufacturer liability.

We think that the particular standard proposed in the petition is both reasonable in itself and a fair compromise between the competing extremes. First, it provides for both fault and no-fault manufacturer responsibility, similar to the law in all States today. Second, it defines liberally the no-fault basis of liability, truly removing the question of fault from the liability determination. Third, and finally, responsibility on a no-fault basis is strictly limited to a claimant's true economic loss.

We believe that this combined approach defining liability broadly but restricting damages provides the most promise for a fair and sensible uniform basis of liability for manufacturers, and that a standard along these lines should be included in S. 2760 or other similar Federal product liability legislation.

Thank you, Mr. Counsel, and staff of the committee. I hereby present to you the endorsed petition and request that the petition with its endorsements be included in the record.

- Ρ Ε Τ Ι Τ Ι Ο Ν Τ Ο Τ Η Β


We, the undersigned torts and products liability law professors, recommend to the Congress that a provision like the following, governing Standards of Manufacturer Liability, be included in any products liability legislation it may enact. This petition does not endorse or oppose the concept of a federal products liability act, nor any particular bill, but only recommends the inclusion of such a provision if such a law be enacted.



A manufacturer may be liable for harm caused by a
product only if the claimant proves by a preponderance
of the evidence that:


the product was unreasonably dangerous,
because the aspect of the product that caused
the claimant's harm was: (a) more dangerous
than was reasonably to be expected, or (b)
caused more harm than benefit; or


the manufacturer was negligent in the manufacture
or design of the product or in the provision
or failure to provide information concerning
product dangers or methods of safe use.


A prevailing claimant's damages under subsection
Ali) are limited to economic losses, including
reasonable litigation expenses.

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