PMI POSITION STATEMENT
ON PRODUCT LIABILITY
Issue:
Sellers and manufacturers of all types of products are vulnerable to suspect products liability claims. The current products liability laws serve no one's interests well. Businesses and manufacturers face a legal system that imposes strict liability, gives disproportionately large awards to plaintiffs, and presents a patchwork of legal doctrines in the 55 States and territories. As a result, manufacturers find it difficult to do business in multiple jurisdictions, to innovate, and to invest in research and development. Some businesses are even dissuaded from starting operations because of the huge legal costs of the present system.
In 1996 both the House and the Senate passed a bill that would have limited punitive damage awards against large businesses at $250,000 or two times the total of economic damages, whichever is greater. Small businesses would have been subject to a cap of the lesser of the two. President Clinton vetoed this legislation.
Legislative Outlook:
Representative Bob Goodlatte (R-VA) introduced H.R. 2341 this summer that would give federal courts jurisdiction over interstate class action lawsuits and assure that attorneys do not receive a disproportionate share of settlement amounts.
Senator Mitch McConnell (R-KY) with Senator Joe Lieberman (D-CT) and Representative Asa Hutchinson (R-AR) have introduced legislation, S. 865 and H.R. 1805, respectively, that would, for firms with fewer than 25 employees, provide for reasonable standards before punitive damages can be awarded and limit liability only to the extent that the small business is truly responsible. In addition, it holds non-manufacturing product sellers liable only for damages for which they are directly responsible, thereby preventing plaintiff's attorneys from suing a retailer in a plaintiff-friendly venue in order to name a manufacturer in the lawsuit.
PMI Position:
The Plumbing Manufacturers Institute (PMI) supports the legislation discussed above, and it supports balanced products liability reform that places limits on runaway liability awards for both small and large businesses and that makes punitive damages proportionate to economic damages. PMI also supports other reforms including a statute of repose that would protect manufacturers from liability for products that have proven their overall safety through considerable years of use, holding persons who misuse or alter products accountable for their actions, andand voluntary, non-binding alternative dispute resolution processes that would help clear court dockets and dramatically reduce expenses.
Revision of original statement adopted in February 1997