Copyright 1999 Federal Document Clearing House, Inc.
Federal Document Clearing House Congressional Testimony
July 21, 1999
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 3104 words
HEADLINE:
TESTIMONY July 21, 1999 THOMAS L. BANTLE HOUSE JUDICIARY CLASS
ACTION IN FEDERAL COURT AND PENDING BILLS
BODY:
TESTIMONY OF THOMAS L. BANTLE LEGISLATIVE COUNSEL, PUBLIC CITIZEN'S CONGRESS
WATCH BEFORE THE HOUSE COMMITTEE ON THE JUDICIARY REGARDING H.R. 2005, TO
ESTABLISH A STATUTE OF REPOSE FOR DURABLE GOODS USED IN A TRADE OR BUSINESS July
21, 1999 Chairman Hyde, Ranking Member Conyers, and members of the Committee:
Thank you for the opportunity to appear today in opposition to H.R. 2005, to
Establish a Statute of Repose for Durable Goods Used in a Trade or Business.
Because of the bill's extraordinary elimination of workers' access to the courts
to seek compensation for injuries cause by defective products, I will
concentrate on that provision of the bill. Equally unsettling is the bill's
radical interference with the traditional authority, under our federal system,
of state legislatures and state court judges and juries in civil cases. H.R.
2005 would preempt state law to create a new federal law of products liability
that would discriminate against working people injured or killed on the job by
defective older products by arbitrarily cutting off the responsibility of a
manufacturer for its defective products when the product is 18 years old. The
bill provides that no civil action for damage to property arising out of an
accident involving a durable good may be filed against the manufacturer or
seller of the product more than 18 years after the durable good was delivered to
its first purchaser or lessee. No civil action for damages for death or personal
injury arising out of an accident involving a durable good may be filed against
the manufacturer or seller of the durable good more than 18 years after the
durable good was delivered to its first purchaser or lessee if the injured
person is eligible to receive workers' compensation, and the injury does not
involve a toxic harm. There are a few exceptions. The bill does not provide a
statute of repose for passenger vehicles, boats, aircraft, and trains used
primarily to transport passengers for hire. If a defendant made an express
warranty in writing that the safety or life expectancy of a specific product was
longer than 18 years, the bill does not apply until the expiration of that
warranty. And the bill does not affect the shorter statute of repose established
by the General Aviation Revitalization Act of 1994 (49 U.S.C. 40101 note).
Shifting the Costs of Defective Products to Workers and Their Families Mr.
Chairman, this bill would shift the burden of defective products from the
manufacturers who designed, built, and profited from them to the worker who is
injured by them. The bill would return us to 19th Century doctrine that
employees should not recover for work place injuries because they assume the
risks inherent in the workplace when they take their jobs. The bill would
reverse a century of state tort jurisprudence that fashioned doctrines holding
manufacturers responsible for the injury their products cause because they have
a greater ability than the injured person to know if a product is safe, to
design and build it so that it is safe, and to insure against losses caused by a
product. This bill proposes to unfairly shift the risk of defective products to
workers. It does not propose that the products be required to have a warning
prominently stamped on them saying "Do not use this product after July 21, 2017,
because it will be 18 years old and the manufacturers will no long be
responsible for its design or manufacture." No, it simply takes remedies away
from workers who use defective products if the durable good is more than 18
years old, whether the worker knows the age of the product or not. For instance,
under the bill, a construction worker injured by a defective crane that was just
one day older than 18 years would have no legal recourse whatsoever against the
machinery manufacturer -- even if the manufacturer knew the crane was still in
wide use, knew that the crane was subject to malfunction, and had a way to fix
the defect, but still failed to warn the users or take any steps to remedy the
problem. What could possibly be the justification for stripping workers of their
ability to be fully compensated for injuries? On its website, the Association
for Manufacturing Technology, one of the bills' proponents claims the bill will:
Promote American Competitiveness. Reduce Transaction Costs Without Hurting
Workers. Promote Fairness. I will rebut each of these assertions. H.R. 2005 Will
Not Promote American Competitiveness Although competitiveness is a popular
catchword, this bill will not affect American competitiveness. Global
manufacturers and domestic manufacturers are all subject to the same state tort
laws when their defective products injure workers in the United States.
Similarly, domestic companies have the benefit of the liability limitations in
foreign countries. In an open world marketplace, this bill does not affect
global competitiveness. Indeed, the Association for Manufacturing Technology's
own 1998 Product Liability Survey confirms that there is no liability crisis
threatening American manufacturers. The survey of their members indicates that
only six products liability cases were tried in 1998 and the plaintiff won in
only one case, receiving an award of $215,000, a substantial, but not
overwhelming sum. Sixty percent of the claims were settled and 35 percent were
dropped without any payment. The survey noted that the average liability
insurance premium for its machine tool building firms was down 31 percent from
1997, continuing the downward trend that began in 1987. This bill is a drastic
"solution" to a nonexistent problem. Workers Will Be Hurt: Workers' Compensation
Alone is an Inadequate Remedy The bill's proponents say, in effect, "Don't
worry. The bill only applies to workers who will receive workers compensation."
The implication that injured workers won't be financially hurt only shows that
the bill's proponents haven't had to support a family on workers' compensation
benefits. As Chairman Hyde pointed out in a hearing last month, workers'
compensation is a tradeoff -- a small payment, but without a requirement to
prove fault. Workers' compensation laws allow for only partial recovery from
employers -- usually only medical costs and limited disability payments to cover
lost wages. Although each state law is different, many states provide workers
with only a few years of disability payments for a permanent, lifetime injury.
They do not provide compensation for non-economic damages such as loss of
fertility, loss of a limb, permanent disfigurement and other non- monetary
losses. Every reputable study continues to show that workers' compensation does
not make injured workers whole. For example, a 1998 study of California's
workers' compensation systems by the RAND Institute for Civil Justice concluded
"that workers who suffer workplace injuries resulting in a permanent disability
experience large and sustained wage losses." Workers' compensation benefits
cushion workers from reduced wages and time away from work only for a short
period after the injury. Because wage losses persist and because benefit
payments run out, benefits compensate slightly less than 40 percent of workers'
full losses over a five-year period after the accident (RAND Research Brief
summarizing research published as Compensating Permanent Workplace Injuries: A
Study of the California System, by Mark A. Peterson, Robert T. Reville, and
Rachel Kaganoff Stern, with Peter S. Barth, RAND, 1998). To claim that cutting
off recoveries other than workers' compensation doesn't hurt workers is simply
false. Who will be hurt by this bill? Injured workers whose cases would be
barred under the proposed bill. For example: Frankie Martin, a Vietnam War
Veteran and employee of the State of New York at the Central Islip Psychiatric
Laundry facility, was injured on the job by a 33-year-old defective ironing
machine. Mr. Martin lost all four fingers of his left hand after it became
caught in the machine's chain and sprocket system. Though Mr. Martin received a
small workers' compensation award, he subsequently sued the manufacturer of the
machine for defective design and failure to warn of the defect. The matter was
settled for $250,000, significantly more than his workers' compensation award.
(Martin v. American Laundry Machinery Inc., Supreme Court, Suffolk County, NY,
Index # 92-7429.) Joseph Curiel was severely injured by a 34-year-old defective
tin- finishing machine at United State Steel's facility in Pittsburgh, PA. Mr.
Curiel's leg was caught and trapped in the machine for 45 minutes and he
suffered multiple fractures to his leg. He had to undergo eleven separate
surgeries before trial and will need an ankle fusion and knee replacement in the
future. Mr. Curiel was awarded $2.1 million in his suit against the
manufacturer. (Curiel v. Wean United, Inc and Clark Controller Company, Contra
Costa County, CA, No. 27842.) George Navarro, a 60-year-old steelworker from
Pittsburgh, was injured at a U.S. Steel plant by a defective tin-making machine
which was more than 20 years old. Mr. Navarro's hands were crushed when they
were caught between two rollers of the machine as he tried to remedy a problem
of solution splashing from the machine. He was left with no use of his left hand
and only limited use of his right. His case against the manufacturer was
settled, before trial, for $800,000. (Navarro v. Pannier Corporation, Wean
United, Inc. and Westinghouse Corporation, Contra Costa County Superior Court,
No. C 88-04037.) Kanya Shimizu, a 22-year old student and agricultural trainee,
was severely injured while using a defective corn roller mill, more than 20
years old, at his employer's feed lot. Mr. Shimizu's hand was pulled into the
corn roller and doctors were forced to amputate. His case against the
manufacturer of the machine settled before trial for $875,000. (Shimizu v.
Bluffton Agri-Industrial Corporation, et al., Santa Clara County, CA, No.
706885.) These are just a few examples. There are thousands of workplace
injuries caused each year in this country by defective products, many of them
over 18 years old. This bill is not only unfair to injured workers and their
families, but it forces the workers' compensation system to subsidize the costs
that should be charged to the manufacturers of older defective equipment. Under
state workers' compensation laws, if a third party is found responsible for
causing an injury, the cost of any workers' compensation or employer-paid health
benefits paid to the injured party are reimbursed out of the settlement with or
judgment against that third party. This reimbursement policy ensures that
employers and workers' compensation systems do not subsidize manufacturers of
defective products. By shifting the cost of injury to workers and employers,
this bill removes the legal and financial incentive that the manufacturers of
durable workplace machinery currently have to ensure that their products remain
safe throughout their useful lives. The Statutes of Repose Bill Unfairly Singles
Out Workers and Takes Away Fundamental Rights H.R. 2005 unfairly discriminates
against workers. If a bystander were injured by the same defective older product
that a worker, the bystander could still sue the manufacturer and receive full
compensation, since their injuries would not be covered by workers' compensation
and hence not barred by this federal statute of repose. For example, if a
24-year-old elevator malfunctions and crashes, killing the building's custodian
and a visitor to the building, the visitor's survivors could bring a civil
action against the manufacturer of the elevator. The family of the custodian,
killed while on the job, could not receive anything in addition to survivors'
benefits under workers' compensation - even if they would otherwise be able to
bring a suit under their state's wrongful death statute. Moreover, while the
bill would eliminate employer suits for property damages, employers would still
be able to sue a manufacturer of a defective product covered by the statute of
repose to recover commercial losses, such as loss of sales, caused by the
defective product, if allowed by state law. It is only workers who are totally
shut out by the bill. An even more fundamental fairness issue is demonstrated by
the fact that in almost half the states that enacted statutes of repose in
products liability actions (including Alabama, Arizona, Kentucky, New Hampshire,
North Dakota, Rhode Island, South Dakota, and Utah), the highest state courts
have overturned state- imposed statutes of repose as violative of their state
constitutions. At least ten states have found that these arbitrary cut-off dates
for manufacturers' liability for defective products are inconsistent with the
state's dues process or equal protection clauses, or the state's constitutional
requirement that the courts be open to injured people to seek redress. In
Alabama, that court held that the state's ten year statute of repose was
arbitrary and violated the "fundamental principle of fairness" that limited "the
power of the government to infringe upon individual rights." Lankford v.
Sullivan, Long and Hagerty, 416 So.2d 996 (Ala. 1982). The Supreme Court of New
Hampshire stated that the right to recover for personal injury is "an important
substantive right" and that the state's twelve year statute of repose was
inherently unreasonable because it "eliminates a plaintiff's cause of action
before the wrong may reasonably be discovered" and unfair because it
discriminated between classes of injured plaintiffs, barring the claims of those
injured by defective products but not those harmed by other tortious conduct.
Heath v. Sears, Roebuck & Co. 464 A.2d 288 (N.H. 1983). The "harshness" of
an absolute "date-of-use" statute of repose was noted by the North Dakota
Supreme Court, which overturned that state's twelve year limitation because of
its constitutional concern "about statutes which arbitrarily deny one class of
persons important substantive rights to life and safety which are available to
other persons." Hanson v. Williams County, 389 N.W. 2d 319 (N.D. 1986). Another
27 states have chosen not to shut the courthouse door to those injured by
defective products by never adopting or repealing statutes of repose. These
states include the home states of many members of the Judiciary Committee
including: Arkansas, California, Indiana, Massachusetts, Michigan, New Jersey,
New York, Pennsylvania, South Carolina, Virginia, Wisconsin. This bill would
overturn the determinations of all these state legislatures and courts without
any demonstration of the need for federal intervention. Asbestos Claims May Be
Preempted by the Bill In addition to the deliberate elimination of workers'
rights contemplated by the bills' proponents, the bill may also inadvertently
wipe out the legal rights of workers harmed by asbestos. Asbestos was a part of
many durable goods. The personal injury section of the bill contains an
exception for injuries caused by "toxic harm," but toxic harm is not defined,
leaving substantial uncertainty to whether courts will consider asbestos a toxin
that causes "toxic harm." Without a definition, its meaning will be determined
on a case by case basis and there is considerable uncertainty whether asbestos
would be treated, as a matter of law, as a toxic substance. As stated in a 1964
Journal of the American Medical Association article, "Asbestos is not currently
considered a toxic substance since it does not produce systemic poisoning."
Instead, it is a naturally-occurring mineral which causes a slowly progressive
fibrotic reaction in the lungs that can induce cancer, often 30 to 40 years
after inhalation. Thus, this loosely-drafted exception may not provide any
protection to workers with asbestosis and related diseases. Because many
asbestos exposures occurred over 18 years ago, and H.R. 2005 would apply to
injuries that occurred before the date of enactment of the bill, this
legislation could effectively wipe out virtually all asbestos exposure cases.
Conclusion: The Real Agenda of this Bill is to Federalize Tort Law, Making it
Easier to Diminish Corporate Responsibility Like all federal products liability
bills introduced over the past 16 years, H.R. 2005 would represent a major
interference with the traditional authority of state legislatures and state
court judges and juries in civil cases. Tort law has been the province of the
states since this country began. Such preemption of the proper role the states
has been strongly opposed by the Conference of Chief Justices in past testimony.
It was stated best by the Honorable Stanley Feldman, Chief Justice of the
Supreme Court of Arizona, who has told Congress that "tort remedies must lie
with State courts and legislatures, which are most aware of and best suited to
determine the social and economic impact of present law on their own
communities." The genius of American state tort law has been its ability to
evolve to meet changing risks and changing societal norms about acceptable
corporate and personal behavior. In this evolution, some state legislatures have
decided that they wish to cut off manufacturers' liability for older products
after a certain date. But most others have not. But proponents of all so-called
"tort reform" legislation find state tort law inconsistent,
uncertain, and unpredictable. They seek ways to limit their liability. In a
continuing attack on consumers' rights to safe products, the same coalition that
supports this bill has worked over the past decade to whittle away the ability
of injured persons to be fairly compensated. Failing in their sweeping attacks
on state courts earlier this decade, their new approach is to nibble away at
consumer protections, federalizing remedies industry by industry, starting with
general aviation in 1994, biomaterials last year, and Y2K defects this year. Now
they seek to abolish or limit consumers' rights, remedy by remedy (witness
today's hearings on class actions and this statute of repose bill). In sum,
there is no crisis and thus no basis for fundamentally altering the American
federal system of jurisprudence by intruding into matters traditionally governed
by state legislatures and state courts. There is no justification for this
unfair denial of rights, leaving workers and their families without full
compensation for their injuries. I urge the Committee to reject this unfair and
unwise legislation. Thank you again for the opportunity to testify on this
important matter.
LOAD-DATE: July 26, 1999
