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The Cutting Edge^™ December 2004

Public Policy

Tort Reform
By John Satagaj, WMMA Legislative Counsel, email@jsatlaw.com

Say what you want about the elections, whether you are happy with the outcome or not, it definitely improved the prospects for tort reform. Not only did the Republicans increase their overall majority to a 55 to 45 ratio, but two trial lawyers, Senators Fritz Hollings (D-SC) and John Edwards (D-NC) won't be back for the 109th Congress. Now, it does not mean we will get all 55 Republicans to vote with us (more on that in a moment) but it puts us very close to the 60 votes we need to break a filibuster.

The other potential complicating factor is that Senator Arlen Specter (R-PA) is in line to be the chairman of the Senate Judiciary Committee. He has never been a friend of tort reform, so not only can we not count him among the 55 votes, but he will hold considerable influence over the process for consideration of tort reform measures.

The WMMA Public Policy Committee and the Board of Directors already had decided that lining up sponsors and co-sponsors for a bill to set a federal statute-of-repose will be one of our top five priorities for our legislative day in February. We will probably use as our model the legislation introduced by Representative Steve Cabot (R-OH) two congresses ago.

The bill in the 107th Congress would have prohibited the filing of any civil action against the manufacturer or seller of a durable good for damage to property arising from an accident involving that durable good if the accident occurred more than 18 years after the date on which the durable good was delivered to its first purchaser or lessee. No civil action could be filed against the manufacturer or seller of a durable good for damages for death or personal injury arising out of an accident involving that durable good if the accident occurred more than 18 years after the date on which the durable good was delivered to its first purchaser or lessee and if the claimant has received or is eligible to receive worker compensation.

The bill would not bar a civil action against a defendant who made an express warranty in writing as to the safety or life expectancy of a specific product which was longer than 18years, except that this bill shall apply at the expiration of that warranty. The bill would have preempted and superseded any state law that establishes a statute-of-repose to the extent such law applies to actions covered by this bill. Any action not specifically covered by the bill would be governed by applicable state law. The term "durable good" means any product, or any component of any such product, which has a normal life expectancy of three or more years; or is of a character subject to allowance for depreciation under the Internal Revenue Code of 1986; and issued in a trade or business; held for the production of income; or sold or donated to a governmental or private entity for the production of goods, training, demonstration, or any other similar purpose.

In 2001, twenty states had some type of product liability statute-of-repose legislation on their books. For 13 of these states, the 18-year statute-of-repose contained in the last version of the bill would have been longer than their existing law. However, the bill would have established a statute-of-repose in 30 states that do not have any statute-of-repose. It would have also clarified ambiguities in several state statute-of-repose laws. Some states use what is referred to as a "soft" statute-of-repose approach, whereby the length of the statute-of-repose is defined by the "useful safe life" of the durable good. The term "useful safe life" is ambiguous and often times has to be litigated, resulting in costly legal fees for defendants. A federal "bright line," fixed-time limit would avoid these costs.

We will be competing with other tort reform measures. High on the President's list is medical malpractice reform. High on the list of U.S. Chamber of Commerce is class-action reform. High on the list of Senator Bill Frist (R-TN), majority leader of the Senate, is asbestos litigation reform. High on the small business community's list is a general cap on damages and limitations on the exposure of product sellers in product liability cases.

If there was ever time for us to be successful, this is the time. Hope you will help us help you by letting your Senators and Representative know you expect action on a statute-of-repose bill in the 109th Congress!

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