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ATLA Congressional Update

As it enters the Fall with few accomplishments to show for its efforts, the Congress is now turning its attention to a number of matters of interest to consumers, including managed care legislation as well as small business liability protection and asbestos and car rental company immunity bills.

Managed Care - Patients' Bill of Rights

The possibility is now very real that legislation may be approved by the U.S. House of Representatives to expand consumers' rights by eliminating the ERISA preemption of state causes of action and allowing injured patients to hold managed care insurers legally accountable for delay or denial of needed medical care that results in death or injury.

The Republican leadership had planned to bring managed care legislation to the floor for consideration soon after Labor Day, and it encouraged the writing of the GOP's bill (H.R. 2824 by Reps. Coburn and Shadegg) as an alternative to the Bipartisan Consensus Managed Care Improvement Act (H.R. 2723 by Reps. Norwood and Dingell). However, the U.S. Chamber of Commerce, the National Federation of Independent Business (NFIB), managed care insurers, and many House Republicans think even the GOP bill goes too far in terms of patient protection.

The Norwood-Dingell measure alone, however, provides for an independent external appeals process and suits against insurers under state law. In certain, very limited, circumstances, the Coburn-Shadegg bill would permit suits in federal court; this bill would also cap non-economic damages at $250,000.

ATLA and a coalition of 400 organizations of consumers and health professionals are actively working for a favorable vote on the bipartisan Norwood-Dingell bill. The House leadership delayed consideration and Speaker Hastert has indicated that he intends to schedule floor consideration of managed care bills the week of October 4.

Small Business Liability Protection

A hearing on the Small Business Liability Relief Act (H.R. 2366 by Reps. Rogan and Holden) was held in the U.S. House Committee on the Judiciary on September 29. The bill would eliminate joint and several liability and cap punitive damages at the lesser of $250,000 or three times compensatory damages in all civil actions for businesses with 25 or fewer employees. It also provides seller vicarious liability protection.

ATLA is opposed to this unnecessary measure, which would only succeed in preventing children and other injured consumers from recovering the full costs of injuries caused by those rare small businesses which manufacture or sell very dangerous products or harmful services. ATLA president Richard H. Middleton, Jr., testified against HR 2366. His extensive, fact-filled testimony can be found here.

Asbestos Immunity

Efforts are currently under way to re-write the Fairness in Asbestos Compensation Act (H.R. 1283 by Rep. Hyde) in anticipation of a House markup. An initial hearing, at which ATLA testified against the bill, was held in the House on July 1 (click here for a summary of this testimony). A Senate hearing on Sen. Ashcroft's S. 758 has been set for October 5. ATLA president Richard H. Middleton, Jr., testified against this bill. His testimony and statement can be found here.

While most asbestos companies believe the current system is working well for all parties (only 55 cases came to trial in 1998, while Owens Corning, for example, settled 217,000 cases that year), the GAF Corporation, which no longer has insurance coverage, is the principal advocate of the measure. The proposed bill would set up an elaborate bureaucracy and medical criteria prepared by corporate lawyers to screen out 60 to 80 percent of potential claimants.

ATLA will continue to vigorously oppose this measure, which assures not one penny of compensation to even one asbestos victim, while shielding from liability an industry responsible for the injury or death of millions of workers and consumers.

Car Rental Company Immunity

On September 30, the Senate Committee on Commerce, Science and Transportation held a hearing on S. 1130, "The Motor Vehicle Rental Fairness Act," which would protect car rental companies from liability by abolishing the principle of vicarious liability in the several states which have applied it to these rental agencies.

Vicarious liability ensures that injured parties are compensated for the harm they have suffered, and encourage renters and lessors of cars, and other merchants, to monitor their products and services more carefully, thereby ensuring safer products in the marketplace. This bill chooses to protect a thriving car rental industry rather than preserve a long-standing legal principle, and derogates state prerogatives on behalf of special interests. Former ATLA president Larry S. Stewart testified against S. 1130. His testimony can be found here.

Note: For the latest version of these bills and their status, see and search at the top of the page for the bill number.


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