Product Liability Reform: Boondoggle or Boon?

Backers of reform say lawsuits are harming businesses and consumers; opponents say they are the only way to hold manufacturers accountable

By , who lives in Montana, is a regular contributor to Global Network Navigator's WebReview. Mr. Hipschman welcomes e-mail comments to: dochip@cyberport.net.

AMERICANS traditionally back the little guy. Think back to the Miracle Mets taking the World Series from Baltimore in 1969 and remember the fervor the ''underdog'' engenders.

This sentiment is especially strong if the ''big guy'' is a corporation that lies in the name of profit.

That's why I can't understand support for the ''Product Liability Reform Bill'' (S 565). It passed the House of Representatives and the Senate Commerce Committee. If passed by the Senate, it will reduce the redress available to each citizen and limit the ability to sue businesses -- even if the businesses do great harm.

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Sadly, most of us don't understand product liability law and punitive damages. Punitive damages are not to compensate an injured party, but to punish wrongful actions that a jury decides were intentional or malicious. Punitive damages also deter wrongful conduct. So who wants this bill to become law? I'll tell you: the same kinds of companies that knowingly manufactured and sold cars with fuel tanks in the ''crush zone,'' defective birth control devices, and the like.

This ''reform'' bill is nothing more than an attack on the jury system by corporations. A lobbying group, the National Association of Manufacturers, said the committee vote was a ''strong step toward ... reforming America's legal system.''

Funny thing about the people we keep electing. I don't remember asking them to reform America's legal system. I wonder which corporate lobbyists convinced ''our'' senators and representatives that ''we'' need reform?

Supporters of the bill argue that product liability and punitive-damage lawsuits are ''antibusiness,'' and that without the legislation US companies can't compete with foreign firms.

Have I got this right? In some countries it's OK to manufacture dangerous things because you can get away with it. And some US businesses think we should ''reform'' our laws so they will be able to manufacture dangerous things too.

One of the myths used by supporters of the legislation is the ''product liability crisis'' that's snarling our courts with ''frivilous'' lawsuits. It just isn't so.

Product liability filings in federal court declined 36 percent between 1985 and 1991 (excluding asbestos cases). The vast majority of civil cases involve domestic relations, bankruptcies, or contracts. Let's look closely at Montana, one of the least populated states, and California, one of the most populated:

In Montana, civil cases claiming personal injury have declined 10.5 percent since 1991. Nor are lawsuits against doctors driving up medical costs. In the last 25 years, only one doctor has been assessed punitive damages by a Montana jury -- for withholding information that he had left a foreign object inside a patient.

In California, personal injury and wrongful death filings in state courts dropped from 137,379 cases in 1987 to 88,346 cases in 1993. In that period the state's population grew from 27.8 million to 31.5 million. On a per capita basis, that's a 43 percent drop in cases.

It's strange that the Republican governor of California, Pete Wilson (a probable contender for the presidential nomination), has complained of ''a plague of lawsuits ....'' Oh, now I remember, one of Wilson's sources of political (or should I say financial) support is the insurance industry. Insurance companies, with manufacturers, are spending millions to sell you the myth that courts are choked with lawsuits.

There is only one place that an individual citizen is on equal footing with a corporation. That's in front of a jury.

Sadly, it's the huge awards that shape public perception. You've heard of Stella Liebeck, the 82-year-old New Mexican who won a $2.9 million jury verdict after she spilled hot coffee on herself as she drove away from a McDonald's. But how many of you also know that McDonald's received more than 700 complaints about its coffee being too hot and ignored them? How many of you know that the judge reduced Liebeck's award to $480,000?

Tell your senators to vote against this bill because:

r Product liability lawsuits have helped prevent the manufacture and distribution of unsafe products.

r The legislation would create a single law superseding the laws of all 50 states -- at a time when Republicans give lip service to giving power back to the states.

r It applies only to individuals. When businesses sue businesses, their suits won't be subject to the new rules.

Two infamous cases, the Ford Pinto and the Dalkon Shield contraceptive device, are examples of how corporations can behave and how punitive damages function. Both companies were involved in horrific practices of deception and mismanagement that placed corporate pride and profit over the health and well-being of the people who bought their products.

It was citizens suing that stopped those companies, not laws or government regulations.

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