59-006
2d Session
Part 1
--WORKPLACE GOODS JOB GROWTH AND COMPETITIVENESS ACT OF 2006
[To accompany H.R. 3509]
[Including cost estimate of the Congressional Budget Office]
- The Committee on the Judiciary, to whom was referred the bill (H.R. 3509) to establish a statute of repose for durable goods used in a trade or business, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass.
- The amendment is as follows:
- Strike all after the enacting clause and insert the following:
SECTION 1. SHORT TITLE.
- This Act may be cited as the `Workplace Goods Job Growth and Competitiveness Act of 2006'.
SEC. 2. STATUTE OF REPOSE FOR DURABLE GOODS USED IN A TRADE OR BUSINESS.
- (a) In General- Except as otherwise provided in this Act--
- (1) no civil action may be filed against the manufacturer or seller of a durable good for damage to property allegedly caused by that durable good if the damage to property occurred more than 12 years after the date on which the durable good was delivered to its first purchaser or lessee; and
- (2) no civil action may be filed against the manufacturer or seller of a durable good for damages for death or personal injury allegedly caused by that durable good if the death or personal injury occurred more than 12 years after the date on which the durable good was delivered to its first purchaser or lessee and if--
- (A) the claimant has received or is eligible to receive worker compensation; and
- (B) the injury does not involve a toxic harm (including, but not limited to, any asbestos-related harm).
- (b) Exceptions-
- (1) IN GENERAL- A motor vehicle, vessel, aircraft, or train, that is used primarily to transport passengers for hire, shall not be subject to this Act.
- (2) CERTAIN EXPRESS WARRANTIES- This Act does not bar a civil action against a defendant who made an express warranty in writing, for a period of more than 12 years, as to the safety or life expectancy of a specific product, except that this Act shall apply at the expiration of that warranty.
- (3) AVIATION LIMITATIONS PERIOD- This Act does not affect the limitations period established by the General Aviation Revitalization Act of 1994 (49 U.S.C. 40101 note).
- (4) ACTIONS INVOLVING THE ENVIRONMENT- Subsection (a)(1) does not supersede or modify any statute or common law that authorizes an action for civil damages, cost recovery, or any other form of relief for remediation of the environment (as defined in section 101(8) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601(8)).
- (5) REGULATORY ACTIONS- This Act does not affect regulatory enforcement actions brought by State or Federal agencies.
- (6) ACTIONS INVOLVING FRAUDULENT CONCEALMENT- This Act does not bar a civil action against a manufacturer or seller of a durable good who fraudulently concealed a defect in the durable good.
- (c) Effect on State Law; Preemption- Subject to subsection (b), this Act preempts and supersedes any State law that establishes a statute of repose to the extent such law applies to actions covered by this Act. Any action not specifically covered by this Act shall be governed by applicable State or other Federal law.
- (d) Transitional Provision Relating to Extension of Repose Period- To the extent that this Act shortens the period during which a civil action could otherwise be brought pursuant to another provision of law, the claimant may, notwithstanding this Act, bring the action not later than 1 year after the date of the enactment of this Act.
SEC. 3. DEFINITIONS.
- In this Act:
- (1) CLAIMANT- The term `claimant' means any person who brings an action covered by this Act and any person on whose behalf such an action is brought. If such an action is brought through or on behalf of an estate, the term includes the claimant's decedent. If such an action is brought through or on behalf of a minor or incompetent, the term includes the claimant's legal guardian.
- (2) DURABLE GOOD- The term `durable good' means any product, or any component of any such product, which--
- (A)(i) has a normal life expectancy of 3 or more years; or
- (ii) is of a character subject to allowance for depreciation under the Internal Revenue Code of 1986; and
- (B) is--
- (i) used in a trade or business;
- (ii) held for the production of income; or
- (iii) sold or donated to a governmental or private entity for the production of goods, training, demonstration, or any other similar purpose.
- (3) FRAUDULENTLY CONCEALED- With respect to a durable good, the term `fraudulently concealed' means that--
- (A) the manufacturer or seller of the durable good had actual knowledge of a defect in the durable good;
- (B) the defect in the durable good was the proximate cause of the harm to the claimant; and
- (C) the manufacturer or seller of the durable good affirmatively suppressed or hid, with the intent to deceive or defraud, the existence of such defect.
- (4) SELLER- The term `seller' means any dealer, retailer, wholesaler, or distributer in the stream of commerce of a durable good concluding with the sale or lease of the durable good to the first end-user.
- (5) STATE- The term `State' means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, any other territory or possession of the United States, and any political subdivision of any of the foregoing.
SEC. 4. EFFECTIVE DATE; APPLICATION OF ACT.
- (a) Effective Date- Except as provided in subsection (b), this Act shall take effect on the date of the enactment of this Act without regard to whether the damage to property or death or personal injury at issue occurred before such date of enactment.
- (b) Application of Act- This Act shall not apply with respect to civil actions commenced before the date of the enactment of this Act.
PURPOSE AND SUMMARY
The `Workplace Goods Job Growth and Competitiveness Act of 2006' is premised on the notion that a product which is used safely for a substantial period of time is not likely to be defective at the time of manufacture, sale, or delivery. Thus any injury it causes after some reasonably long period of time is likely to have been due to either misuse or improper maintenance by someone other than the manufacturer. However, the passage of time makes it more difficult to disprove the existence of a defect at the time of manufacture. Memories of witnesses fade after several years, evidence is difficult to retrieve and past employees and managers are not easy to track down. Although manufacturers often win cases based on injuries from old products, the litigation costs of defending these cases may be enormous and can divert resources from job creation, research and development.
H.R. 3509 addresses this problem by creating a uniform federal statute of repose for cases involving injuries caused by workplace durable goods. This statute of repose would bar a cause of action against the manufacturer of such a product after 12 years from the date the product was placed in the stream of commerce, regardless of when the injury occurred.
BACKGROUND AND NEED FOR THE LEGISLATION
H.R. 3509 is intended to eliminate the economic inefficiency of litigation that seeks to hold manufacturers of durable goods 1
[Footnote] liable for harms caused by machinery they have not controlled for over twelve years. Manufacturers almost always prevail in such litigation when they go to trial, but costs associated with defending the design of machines produced a decade or more ago are often enormous. Knowledgeable personnel have often retired, died or changed jobs, and design and production records have often been lost. Without careful explanation, old machinery may appear poorly designed when measured against modern counterparts, even if `ultra-modern' at the time of sale. Misuse or alteration of the machine, disabling or removal of safety devices, or failure to properly train workers often do not provide a defense at trial. 2
[Footnote] The result is a great incentive for manufacturers to settle even the weakest cases, so long as the settlement is less than or approximately equivalent to the defense costs. 3
[Footnote]
[Footnote 1: Durable goods are defined as those which (1) have a normal life expectancy of at least 3 years or are of a character subject to allowance for depreciation under the Internal Revenue Code, and (b) are used in a trade or business, held for the production of income, or sold or donated to a governmental or private entity for production of goods, training, demonstration, or any similar purpose. H.R. 3509, 109th Cong. Sec. 3(2) (2006).]
[Footnote 2: In many jurisdictions, a subsequent owner's contributory fault in altering a machine cannot be used as a defense by the machine manufacturer. See, e.g., Alm v. Aluminum Co. of America, 687 S.W. 2nd 374, 381-82 (Tex. App. 1985) (the fact that the bottler-employer was responsible for creating risk by its failure to properly maintain capping machines did not preclude holding the designer of the machines liable for negligence), aff'd in part, 717 S.W.2d 588 (Tex. 1986).]
[Footnote 3: See Legislative Hearing on H.R. 3509, `The Workplace Goods Job Growth and Competitiveness Act of 2005,' Hearing Before the Subcomm. on Comm. Admin. Law, 109th Cong. 8 (2006) (statement of Elizabeth Sitterly, Legal Counsel, Giddings & Lewis LLP) (`Honestly, given the nature of injuries sustained on machine tools, I am hard pressed to take a case to trial.').]
A recent survey of machine tool manufacturers reveals the magnitude of transaction costs involving litigation over these older products. Twenty-five percent of respondents in an Association for Manufacturing Technology (AMT) survey reported having claims filed against them in 2005. 4
[Footnote] None of the claims that year reached trial. Fifty percent of the claims were dropped without any payment of the award; the other 50 percent of the claims were settled for an average of $146,100. 5
[Footnote]
[Footnote 4: Legislative Hearing on H.R. 3509, `The Workplace Goods Job Growth and Competitiveness Act of 2005,' Hearing Before the Subcomm. on Comm. & Admin. Law, 109th Cong. 22 (2006) (statement of James H. Mack, Vice President of Tax and Economic Policy, AMT--Association for Manufacturing Technology).]
[Footnote 5: Id.]
Little of the overall costs incurred by defendants in these cases went to the injured claimant. For every 100 claims, about $10.4 million was spent by manufacturers. 6
[Footnote] Of this total, $5.1 million was spent on defense costs, and another $2.3 million was spent on subrogation to employers or their insurance companies to reimburse them for money already paid to employees under worker compensation laws (even if the employer was primarily at fault). 7
[Footnote] Claimants (those who are actually hurt in workplace accidents) only receive $3 million of the money spent on these claims, and, of that amount, approximately one-third goes to their lawyers. According to the survey, a 12-year statute of repose would have barred 84 percent of AMT members' closed and pending cases, resulting in a savings of approximately $6.4 million over the same 100 claims. 8
[Footnote]
[Footnote 6: Id. at 23.]
[Footnote 7: Id.]
[Footnote 8: Id.]
These statistics demonstrate three crucial facts:
- The magnitude of the transaction and subrogation costs imposed on the durable goods manufacturing industry is substantial in absolute terms and in relation to the overall revenues and profits of the machine tool industry;
- The amount of money that ends up with lawyers, employers, and insurance companies in these cases far outweighs the amount that goes to claimants themselves;
- Barring cases involving durable goods over 12 years after initial sale or lease would eliminate 84 percent of the cases and save millions of dollars in transaction costs. These cases are clearly the least productive for claimants and the most costly to defend. Their value to society and the economy is minimal at best.
Tort costs and competitiveness
Product liability costs are like any other costs that manufacturers must take into account when pricing a product. In the United States, product liability costs are staggering. According to a Tillinghast survey released on March 14, 2006, U.S. tort costs reached a record $260 billion in 2004, or approximately $886 per person. 9
[Footnote] That same survey shows that our foreign competitors' product liability costs are significantly lower than those of U.S. firms. Steve Lowe, leader of Tillinghast's global insurance consulting practice said `tort costs in the U.S. far surpass those of the other countries we examined, partly [as] a result of different health care systems and legal systems. However, this difference may raise the issue of competitiveness of U.S. products in a global marketplace.' 10
[Footnote]
[Footnote 9: Tillinghast-Towers Perrin, U.S. Tort Costs and Cross-Border Perspectives: 2005 Update 4 (2006) (available at http://www.towersperrin.com/tp/getwebcachedoc?webc=TILL/USA/2006/200603/2005XTort.pdf).]
[Footnote 10: Press Release, Tillinghast-Towers Perrin, U.S. Tort Costs Reach a Record $260 Billion According to Tillinghast Study (March 2006) (available at http://www.towersperrin.com/tp/jsp/ tillinghastXwebcacheXhtml.jsp?webc=Tillinghast/UnitedXStates/PressXReleases/2006/20060313/2006X03X13.htm&selected=press).]
According to a December 2003 study by the National Association of Manufacturers, American manufacturers have costs 22 percent higher than their foreign competitors, of which 3.2 percent of the overall percentage increase was due to U.S. legal costs. 11
[Footnote] One of the reasons for the cost discrepancy between U.S. manufacturers and foreign competitors is that our international competitors all have the benefit of statutes of repose for manufactured goods. For example, the European Union, Japan, South Korea, and Australia all have 10 year statutes of repose. Therefore, manufacturers in those countries are able to pass on the cost savings from the liability protections they enjoy in their home market to consumers in this country, where they compete against U.S. manufacturers who do not have the same liability protections.
[Footnote 11: National Association of Manufacturers, How Structural Costs Imposed on U.S. Manufacturers Harm Workers and Threaten Competitiveness (2003) (available at http://www.nam.org/sXnam/bin.asp?CID=201715&DID=227525&DOC=FILE.PDF).]
While foreign companies that export to the U.S. are subject to U.S. tort law, the preponderance of foreign capital imports into the U.S. have occurred within the last 25 years. As a result, American manufacturers' foreign competitors do not have the exposure of thousands of older machines present in the U.S. market, nor are they exposed to the same open-ended product liability exposure that U.S. manufacturers face.
Statutes of repose and product liability reform
To combat this problem, manufacturers have promoted the use of a statute of repose to limit the duration of their liability exposure. 12
[Footnote] Statutes of repose have been enacted in a number of States, under State law, to counter the long tail of liability that American manufacturers must shoulder. Approximately a dozen States currently have a statute of repose for products, and among those States the clear consensus is that the period of repose should be 12 years or less. 13
[Footnote] Another seven States have a so-called `soft' statute of repose that extends for the useful life of the covered product. 14
[Footnote] However, as manufacturers sell goods in all fifty states, a national statute of repose is needed to effectively address their liability exposure.
[Footnote 12: See, id., at 280-284.]
[Footnote 13: See, e.g., COLO. REV. STAT. ANN. Sec. 13-80-107 (seven year statute of repose on manufacturing equipment); CONN. GEN. STAT. ANN. 52-577a (ten year statute of repose on manufacturing equipment); GA. CODE ANN. 51-1-11 (ten year statute of repose for products); 735 ILL. COMP. STAT. ANN. 5/13-213 (12 year statute of repose for products); IND. CODE 34-20-3-1 (ten year statute of repose for products); IOWA CODE ANN. 614.1(2A) (fifteen year statute of repose for products); NEB. REV. STAT. ANN. 25-224 (ten year statute of repose for products); N.C. GEN. STAT. ANN. 1-50(a)(6) (six year statute of repose for products); OR. REV. STAT. 30.905 (ten year statute of repose for products); TENN. CODE ANN. 29-28-103 (ten year statute of repose for products); and TEX. CIV. PRAC. & REM. CODE ANN. 16.012 (fifteen year statute of repose for products).]
[Footnote 14: See, e.g., IDAHO CODE ANN. Sec. 6-1403(2) (creating a rebuttable presumption that the `useful life' of the product is 10 years); ARK. CODE ANN. 16-116-105 (use of a product beyond its anticipated useful life can be used as evidence of fault on part of consumer); KAN. STAT. ANN. 60-3303(b) (creating a rebuttable presumption that the `useful life' of the product is 10 years); KY. REV. STAT. ANN. 411.310(1) (creating a rebuttable presumption that product was not defective if the injury occurs more than 5 years after first purchased by user or 8 years after it was first manufactured); MICH. COM. LAWS ANN. 600.5805(13) (plaintiff must prove prima facie case without benefit of any presumptions if injured by product over 10 years old); and WASH. REV. CODE ANN. 7.72.060(2) (creating a rebuttable presumption that the `useful life' of the product is 12 years).]
Congress has considered and enacted a national statute of repose before. In 1994, Congress responded to concerns that the liability of small aircraft manufacturers was leading to the demise of that industry in the United States by passing the General Aviation Revitalization Act (GARA) 15
[Footnote] , creating an 18-year statute of repose to manufacturers of small non-commercial aircraft. 16
[Footnote] That Act is widely credited with reviving the general aircraft business in America without compromising safety. 17
[Footnote]
[Footnote 15: Pub. L. 103-298.]
[Footnote 16: See Lyon v. Agusta S.P.A., 252 F3.3d 1078, 1085-1088 (9th Cir. 2001) (holding that the 18-year statute of repose does not violate the Due Process Clause of the 5th Amendment).]
[Footnote 17: See Victor E. Schwartz & Mark A. Behrens, A Proposal for Federal Product Liability Reform in the New Millennium, 4 Tex. Rev. L. & Pol. 261, 280-284 (2000); James F. Rodriguez, Note, Tort Reform & GARA: Is Repose Incompatible With Safety?, 47 Ariz. L. Rev. 577, 598-602 (2005) (noting that general aviation manufacturing employment increased by 25,000 in the five years after passage of GARA).]
Congress has also federalized a number of other State causes of action when the circumstances have proven amenable. 18
[Footnote] Significantly, in the 106th Congress, the House passed a predecessor bill, H.R. 2005, which had an 18-year statute of repose, by a vote of 222-194 on February 2, 2000. 19
[Footnote]
[Footnote 18: See, e.g., Volunteer Protection Act of 1997, Pub. L. 105-19 (1997); Y2K Act, Pub. L. 106-37 (1999); and Protection of Lawful Commerce in Arms Act, Pub. L. 109-92 (2005).]
[Footnote 19: 146 CONG. REC. H183-84 (daily ed. Feb. 2, 2000).]
Statutes of repose and federalism
Because manufacturers of durable goods sell their products across State lines, out-of-State manufacturers often bear the brunt of litigation initiated by local claimants. Faced with these circumstances, State legislatures have difficulty effectively balancing the interests of manufacturers and claimants. The resulting disparity in State laws encourages forum-shopping, with unpredictable and inequitable results for claimants and defendants alike.
Moreover, some State statutes of repose have been struck down under State constitutional provisions that guarantee a `right to a remedy,' a provision that has no counterpart in the United States Constitution. This has led some courts to refuse to apply even the statute of repose of another State when standard choice-of-law rules would apply the law of the place of the injury. 20
[Footnote]
[Footnote 20: See, e.g., Sharp v. Case Corp., 573 N.W.2d 899 (Ct. of Appeals, Dist. 2, 1997) (`The policy of Wisconsin's tort law is to provide full compensation to persons who are injured by negligent conduct and to deter such conduct by imposing the full monetary consequences on the tortfeasor.' If [the] Oregon [statute of repose] applied, these policies would not be fulfilled.'), aff'd on other grounds, 595 N.W.2d 380 (1999).]
Finally, these varied State-by-State enactment of statutes of repose do not reduce durable good product liability insurance rates in the way a uniform national statute of repose would. Durable goods manufacturers typically ship the vast majority of their products out of State, so insurance carriers are unable to predict potential liability accurately. This difficulty in determining liability is due to uncertainty about where the durable good will be sold initially and where it will eventually end up when resold. When insurers set liability rates, they must account for the worst case scenario, which drives up rates even for durable goods manufacturers in States that have enacted statutes of repose.
H.R. 3509 is tailored to address the liability vulnerability of U.S. manufacturers and to level the playing field with foreign competitors
H.R. 3509 represents a narrowly formulated statute of repose. Because the death and personal injury section of the bill is limited to cases where the claimant is eligible for worker compensation, H.R. 3509 ensures that no claimant will ever go empty-handed. 21
[Footnote] Contrary to the assertions by some opponents, worker compensation is not a stingy remedy. In most States, worker compensation benefits include not only all medical, rehabilitation expenses and wage replacement (for life in the case of permanent injuries), but also `scheduled payments' for designated injuries, such as loss of use of limbs, hands, or serious disfigurement. These scheduled payments are designed to be a functional substitute for `pain and suffering' awards in court litigation.
[Footnote 21: H.R. 3509, 109th Cong. Sec. 2(a)(2)(A).]
The Act respects warranty periods on durable goods, ensuring that purchasers will continue to obtain the benefit of their negotiated bargains with durable good manufacturers or sellers. 22
[Footnote] In the event that the product's warranty period is longer than 12 years, the Act will allow suit to be filed until the conclusion of the warranty period. It also takes into consideration the fact that some injuries may be caused by a durable good within the 12-year period of repose, but because of their nature, will not manifest themselves for many years after the exposure to the product. In recognition of the unfairness that a statute of repose might work on a claimant harmed by such `latent' injury, H.R. 3509 does not apply to personal injury or wrongful death claims where the injury involves a toxic harm. 23
[Footnote]
[Footnote 22: Id. Sec. 2(b)(2).]
[Footnote 23: Sec. 2(a)(2)(B).]
As a practical matter, the design and construction of a machine to function smoothly for 12 years is effectively an effort to design and construct a machine to last as long as technically possible. Competitive market pressures further encourage manufacturers to design and build the best possible durable goods. Imposing a strict statute of repose for these products will provide no incentive for manufacturers to design or produce an inferior product, because they would be fully subject to suit for those products for the first 12 years of its life.
In sum, H.R. 3509 provides a balanced solution to the problem of open-ended and often debilitating liability exposure by U.S. firms, while protecting a claimant's right to bring suit for injuries incurred during the repose period. It places a reasonable outer time limit on litigation involving older products used in the workplace, where injured claimants will have recourse to benefits from the worker compensation system.
HEARINGS
The Committee's Subcommittee on Commercial and Administrative Law held a legislative hearing on H.R. 3509 on March 14, 2006. Ms. Elizabeth Sitterly, Legal Counsel to Giddings & Lewis, a Division of Cincinnati Manufacturing; Mr. Kevin P. McMahon, Partner at Nelson, Mullins, Riley & Scarborough, testifying on behalf of the National Association of Manufacturers; and Mr. James H. Mack, Vice President of Economic and Tax Policy at AMT--The Association for Manufacturing Technology--testified in favor of the bill. Professor Andrew F. Popper of the American University Washington College of Law testified in opposition to the bill.
COMMITTEE CONSIDERATION
On March, 29, 2006 and July 19, 2006, the Committee met in open session and ordered favorably reported the bill H.R. 3509 with an amendment by a recorded vote of 21 yeas to 12 nays, a quorum being present.
VOTE OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of the House of Representatives, the Committee notes that the following rollcall votes occurred during the committee's consideration of H.R. 3509.
1. An amendment was offered by Ranking Member Conyers that would eliminate the protections of the Act for any manufacturer who moved jobs from the United States to another country. The amendment failed by a vote of 12 yeas to 16 nays. Date: March 29, 2006.
ROLLCALL NO. 1
----------------------------------------------
Ayes Nays Present
----------------------------------------------
Mr. Hyde
Mr. Coble X
Mr. Smith X
Mr. Gallegly
Mr. Goodlatte X
Mr. Chabot X
Mr. Lungren X
Mr. Jenkins X
Mr. Cannon X
Mr. Bachus
Mr. Inglis X
Mr. Hostettler X
Mr. Green X
Mr. Keller
Mr. Issa
Mr. Flake
Mr. Pence
Mr. Forbes X
Mr. King X
Mr. Feeney X
Mr. Franks X
Mr. Gohmert X
Mr. Conyers X
Mr. Berman X
Mr. Boucher
Mr. Nadler X
Mr. Scott X
Mr. Watt X
Ms. Lofgren
Ms. Jackson-Lee X
Ms. Waters X
Mr. Meehan X
Mr. Delahunt
Mr. Wexler
Mr. Weiner
Mr. Schiff X
Ms. Sanchez X
Mr. Van Hollen X
Mrs. Wasserman Schultz X
Mr. Sensenbrenner, Chairman X
Total 12 16
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2. An amendment was offered by Rep. Scott that would eliminate the protections of the Act for any manufacturer that acted willfully, recklessly, or with wanton disregard for the plaintiff's safety. The amendment failed by a vote of 14 yeas to 15 nays. Date: March 29, 2006.
ROLLCALL NO. 2
----------------------------------------------
Ayes Nays Present
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Mr. Hyde
Mr. Coble X
Mr. Smith
Mr. Gallegly
Mr. Goodlatte X
Mr. Chabot X
Mr. Lungren X
Mr. Jenkins X
Mr. Cannon X
Mr. Bachus
Mr. Inglis X
Mr. Hostettler X
Mr. Green X
Mr. Keller X
Mr. Issa
Mr. Flake
Mr. Pence
Mr. Forbes X
Mr. King X
Mr. Feeney X
Mr. Franks X
Mr. Gohmert
Mr. Conyers X
Mr. Berman X
Mr. Boucher
Mr. Nadler X
Mr. Scott X
Mr. Watt X
Ms. Lofgren X
Ms. Jackson-Lee X
Ms. Waters X
Mr. Meehan X
Mr. Delahunt
Mr. Wexler
Mr. Weiner X
Mr. Schiff X
Ms. Sanchez X
Mr. Van Hollen X
Mrs. Wasserman Schultz X
Mr. Sensenbrenner, Chairman X
Total 14 15
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3. An amendment was offered by Rep. Jackson-Lee that would eliminate the protections of the Act for any manufacturer that did not pay a minimum wage of at least $7.25 per hour. The amendment failed by a vote of 15 yeas to 20 nays. Date: July 19, 2006.
ROLLCALL NO. 1
----------------------------------------------
Ayes Nays Present
----------------------------------------------
Mr. Hyde
Mr. Coble X
Mr. Smith X
Mr. Gallegly X
Mr. Goodlatte X
Mr. Chabot X
Mr. Lungren X
Mr. Jenkins X
Mr. Cannon X
Mr. Bachus X
Mr. Inglis X
Mr. Hostettler X
Mr. Green
Mr. Keller X
Mr. Issa X
Mr. Flake
Mr. Pence X
Mr. Forbes X
Mr. King X
Mr. Feeney X
Mr. Franks X
Mr. Gohmert X
Mr. Conyers X
Mr. Berman X
Mr. Boucher
Mr. Nadler X
Mr. Scott X
Mr. Watt X
Ms. Lofgren X
Ms. Jackson-Lee X
Ms. Waters X
Mr. Meehan X
Mr. Delahunt
Mr. Wexler X
Mr. Weiner X
Mr. Schiff X
Ms. Sanchez X
Mr. Van Hollen X
Mrs. Wasserman Schultz X
Mr. Sensenbrenner, Chairman X
Total 15 20
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4. An amendment was offered by Rep. Waters that would eliminate the protections of the Act in any case in which an employee is injured by a machine that he was required to operate by his employer. The amendment failed by a vote of 15 yeas to 20 nays. Date: July 19, 2006.
ROLLCALL NO. 2
----------------------------------------------
Ayes Nays Present
----------------------------------------------
Mr. Hyde
Mr. Coble X
Mr. Smith
Mr. Gallegly X
Mr. Goodlatte X
Mr. Chabot X
Mr. Lungren X
Mr. Jenkins X
Mr. Cannon X
Mr. Bachus X
Mr. Inglis X
Mr. Hostettler X
Mr. Green X
Mr. Keller X
Mr. Issa X
Mr. Flake
Mr. Pence X
Mr. Forbes X
Mr. King X
Mr. Feeney X
Mr. Franks X
Mr. Gohmert X
Mr. Conyers X
Mr. Berman X
Mr. Boucher
Mr. Nadler X
Mr. Scott X
Mr. Watt X
Ms. Lofgren X
Ms. Jackson-Lee X
Ms. Waters X
Mr. Meehan X
Mr. Delahunt
Mr. Wexler X
Mr. Weiner X
Mr. Schiff X
Ms. Sanchez X
Mr. Van Hollen X
Mrs. Wasserman Schultz X
Mr. Sensenbrenner, Chairman X
TOTAL 15 20
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5. Motion to report H.R. 3509 favorably as amended was agreed to by a vote of 21 yeas to 12 nays. Date: July 19, 2006.
ROLLCALL NO. 3
----------------------------------------------
Ayes Nays Present
----------------------------------------------
Mr. Hyde
Mr. Coble X
Mr. Smith X
Mr. Gallegly X
Mr. Goodlatte X
Mr. Chabot X
Mr. Lungren X
Mr. Jenkins X
Mr. Cannon X
Mr. Bachus X
Mr. Inglis X
Mr. Hostettler X
Mr. Green X
Mr. Keller X
Mr. Issa X
Mr. Flake
Mr. Pence X
Mr. Forbes X
Mr. King X
Mr. Feeney X
Mr. Franks X
Mr. Gohmert X
Mr. Conyers X
Mr. Berman X
Mr. Boucher
Mr. Nadler
Mr. Scott X
Mr. Watt X
Ms. Lofgren X
Ms. Jackson-Lee
Ms. Waters
Mr. Meehan X
Mr. Delahunt
Mr. Wexler X
Mr. Weiner X
Mr. Schiff X
Ms. Sanchez X
Mr. Van Hollen X
Mrs. Wasserman Schultz X
Mr. Sensenbrenner, Chairman X
Total 21 12
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COMMITTEE OVERSIGHT FINDINGS
In compliance with clause 3(c)(1) of rule XIII of the Rules of the House of Representatives, the Committee reports that the findings and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report.
NEW BUDGET AUTHORITY AND TAX EXPENDITURES
Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new budgetary authority or increased tax expenditures.
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
In compliance with clause 3(c)(3) of rule XIII of the Rules of the House of Representatives, the Committee sets forth, with respect to the bill, H.R. 3509, the following estimate and comparison prepared by the Director of the Congressional Budget Office under section 402 of the Congressional Budget Act of 1974:
Hon. F. JAMES SENSENBRENNER, Jr.,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3509, the Workplace Goods Job Growth and Competitiveness Act of 2005.
If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contacts are Daniel Hoople (for federal costs), Melissa Merrell (for the state and local impact), and Paige Piper/Bach (for the private-sector impact).
Sincerely,
Donald B. Marron,
Acting Director.
Enclosure.
H.R. 3509--Workplace Goods Job Growth and Competitiveness Act of 2005
Summary: H.R. 3509 would limit the length of time manufacturers and sellers of durable goods would be liable for injury and damages resulting from the use of their products. Because only a handful of these cases are filed in the federal courts, CBO estimates that enacting this bill would have no significant impact on the federal budget. Enacting the bill would not affect direct spending or revenues.
H.R. 3509 contains an intergovernmental mandate as defined in the Unfunded Mandates Reform Act (UMRA) because it would preempt certain state liability laws. CBO estimates that the preemption would impose no costs on state, local, or tribal governments; therefore, the annual threshold established in UMRA would not be exceeded ($64 million in 2006, adjusted annually for inflation).
H.R. 3509 contains a private-sector mandate, as defined in UMRA, because it would prohibit certain property damage and personal injury lawsuits against manufacturers and sellers of durable goods. CBO estimates that the direct cost of complying with the mandate would fall below the annual threshold established by UMRA ($128 for private-sector mandates in 2006, adjusted annually for inflation).
Estimated cost to the Federal Government: Under current law, there is no uniform federal law establishing a statute of repose (the length of time after which a manufacturer is no longer liable) for durable goods, although at least 20 states have set such liability limits. H.R. 3509 would set the statute of repose for durable goods at 12 years past the first point of delivery. Under the bill, the statute would only apply in cases of death and personal injury where the claimant is not covered by worker compensation. It would not apply in cases where a manufacturer or seller fraudulently concealed a defect in a durable good, or where a written warranty had guaranteed the safety or life expectancy of the product beyond 12 years.
While some product liability cases are tried in federal court, the majority of those that could be covered under this bill are handled in state courts. CBO estimates that enacting H.R. 3509 would have no significant impact on the number of cases that would be referred to federal courts and, thus, would have no significant impact on the federal budget.
Estimated impact on state, local, and tribal governments: H.R. 3509 would establish that, in certain circumstances, a civil action may not be filed in any court after 12 years against the manufacturer or seller of certain durable goods. That provision would constitute a mandate as defined by UMRA because it would preempt state laws that have established different time periods for filing these types of civil suits. CBO estimates that this preemption would impose no costs on state, local, or tribal governments; therefore, the annual threshold established in UMRA would not be exceeded ($64 million in 2006, adjusted annually for inflation).
Creating a federal standard of liability in these cases may affect the ability of state, local, and tribal governments to recoup payments made for worker's compensation benefits from private individuals who file such suits. CBO expects any changes in those collections that result from this bill's enactment would be small.
Estimated impact on the private sector: H.R. 3509 would impose a private-sector mandate by prohibiting certain property damage and personal injury lawsuits against manufacturers and sellers of durable goods as defined in the bill. Generally, the bill would prevent firms and individuals from recovering damages in cases where the accident involving a durable good occurred more than 12 years after that good was delivered to its first purchaser or lessee. The mandate would not affect existing claims or claims filed within one year of enactment. The bill also would provide exceptions to the prohibition for claims involving certain passenger vehicles and general aviation aircraft and claims involving manufacturer warranties.
The cost of the mandate for an affected firm or individual would be the forgone net value of awards and settlements they would otherwise receive under current law. Based on information from industry sources regarding such awards and settlements, CBO estimates that the direct cost of complying with the mandate would fall below the annual threshold established by UMRA ($128 for private-sector mandates in 2006, adjusted annually for inflation).
Estimate prepared by: Federal costs: Daniel Hoople. Impact on State, local, and tribal governments: Melissa Merrell. Impact on the private sector: Paige Piper/Bach.
Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.
PERFORMANCE GOALS AND OBJECTIVES
The Committee states that pursuant to clause 3(c)(4) of rule XIII of the Rules of the House of Representatives, H.R. 3509 will reduce the effects of long tail liability on American manufacturers by enacting a nationwide statute of repose of 12 years on workplace durable goods. This reduction in long tail liability will make American manufacturers more competitive against foreign manufacturers who enjoy similar statutes of repose in their home jurisdictions.
CONSTITUTIONAL AUTHORITY STATEMENT
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House of Representatives, the Committee finds the authority for this legislation in article I, section 8 of the Constitution.
SECTION-BY-SECTION ANALYSIS AND DISCUSSION
The following discussion describes the bill as reported by the Committee.
Section 1. Short title
This section states that this Act may be cited as the `Workplace Goods Job Growth and Competitiveness Act of 2006.'
Section 2. Statute of repose for durable goods used in a trade or business
Subsection 2(a) sets out the basic rule of the statute of repose that no civil action arising out of an accident involving a durable good may be filed against a manufacturer or seller of a durable good more than 12 years after it was delivered to its first purchaser or lessee. In the case of death or personal injury claims, the scope of the bar is limited to circumstances where (A) the claimant has received or is eligible to receive worker compensation, and (B) the injury does not involve a toxic harm.
The bill specifies that `toxic harm' includes, but is not limited to, all asbestos-related harm. The `toxic harm' exclusion is intended to cover all claims involving asbestos and other latent diseases; that is, diseases that do not manifest themselves for many years after the ingestion, inhalation, or absorption of the toxic substance.
Subsection 2(b) sets out five exceptions where the Act does not apply: (1) where the injury involves a motor vehicle, vessel, aircraft, or train, that is used primarily to transport passengers for hire; (2) where the durable good has been warranted by the manufacturer as to safety or life expectancy for a period longer than 12 years (in which case suit may be brought until the expiration of the warranty period); and (3) where the case is governed by the limitations period in the General Aviation Revitalization Act. At markup, the Committee adopted two other exceptions to the Act. The first clarifies that it does not apply to State or Federal regulatory enforcement actions. The second exception is for cases where the manufacturer or seller of a durable good fraudulently concealed a defect in the durable good.
Subsection 2(c) specifies that the Act preempts and supersedes any State law that establishes a statute of repose for actions covered by the Act. This subsection establishes a uniform national repose period longer than that of all but three existing State laws with fixed-time statutes of repose. Thus, all the current statutes of repose governing durable goods will be superceded by the Act, giving claimants in those States an additional number of years in which to bring claims against the manufacturers and sellers of durable goods used in the workplace. Existing and future State statutes of repose will continue to apply to actions that are not covered by this Act, such as injuries or deaths involving durable goods where the claimant is not eligible for worker compensation or involving consumer goods.
Subsection 2(d) provides that if any provision of this Act would shorten the period during which a product liability action could otherwise be brought pursuant to another provision of law, the claimant may, notwithstanding this Act, bring an action within one year after the effective date of this Act. This transitional period is intended to protect a claimant who upon the date of enactment of the Act has already been injured by a workplace durable good, but has not yet filed suit on that claim. If the statute of limitation on that claim has not expired prior to the enactment date, the claimant would be granted the shorter of the limitation period or one year after enactment to file the claim, regardless of the age of the durable good which allegedly caused the injury.
Section 3. Definitions
`Claimant' is defined as any person who brings an action covered by this Act or on whose behalf such an action is brought, including an injured person's employer, insurance carrier or other subrogated party, the estate of a decedent, and the guardian of a minor or incompetent person.
`Durable good' is defined as a product or component that meets two criteria: (a) it must have a normal life expectancy of at least 3 years or be of a character subject to allowance for depreciation under the Internal Revenue Code, and (b) it must actually be used in a trade or business, held for the production of income, or sold or donated to a governmental or private entity for production of goods, training, demonstration, or any similar purpose.
`Fraudulently Concealed' is defined to mean that the manufacturer or seller had actual knowledge of the defect which was the proximate cause of the claimant's harm and that the manufacturer or seller affirmatively suppressed or hid, with the intent to deceive or defraud, the existence of that defect.
`Seller' is defined as any dealer, retailer, wholesaler, or distributor in the stream of commerce of a durable good concluding with the sale or lease of the durable good to the first end-user.
`State' is defined as any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, and any other territory or possession of the United States or any of their political subdivisions.
Section 4. Effective date; application of act
The Act takes effect immediately upon enactment, regardless of whether the damage, death, or injury occurred before that date, except that it does not affect pending litigation.
CHANGES IN EXISTING LAW BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of the House of Representatives, the Committee notes H.R. 3509 makes no changes to existing law.
MARKUP TRANSCRIPT
House of Representatives,
Committee on the Judiciary,
--Washington, DC.
The Committee met, pursuant to notice, at 10:09 a.m., in Room 2141, Rayburn House Office Building, the Honorable F. James Sensenbrenner, Jr. (Chairman of the Committee) presiding.
[Intervening business.]
Chairman SENSENBRENNER. Next up is H.R. 3509. I call the bill up for purposes of markup and move its favorable recommendation to the House. Without objection, the bill will be considered as read and open for amendment at any point.
[The bill, H.R. 3509, follows:]
Chairman SENSENBRENNER. The Chair recognizes the sponsor of this legislation, the gentleman from Ohio, Mr. Chabot, for 5 minutes to explain the bill.
Mr. CHABOT. Thank you, Mr. Chairman.
As the author of the Workplace Goods Job Growth and Competitiveness Act, I wanted to say just a few words about the need for this type of liability reform.
American manufacturers of durable goods are constant targets for litigation over products that are decades old and have met all the safety standards when released into the market. The endless tale of liability puts U.S. manufacturers at a disadvantage to their foreign counterparts, who have only been in the U.S. market for the past few decades, and both the EU and Japan have 10-year statutes of repose.
Most often when these suits are brought to trial, defendant companies win. However, because it costs so much to litigate these claims, companies are often forced to settle within their insurance limits. In addition, industries like the machine tool industry must pay half of their litigation costs to defense lawyers. Claimants themselves see less than 30 percent of the monies paid out by the manufacturers, and that amount has been reduced by a third or more.
This bill will help save millions of dollars that would have otherwise been spent on these types of frivolous lawsuits. These resources could thus be used to compete in the global marketplace and thus create jobs not only in my district, but in districts all over this country.
I also want to highlight the three core aspects of this bill. Number one, H.R. 3509 imposes a nationwide statute of repose. This national standard will provide needed stability in the marketplace because these goods are not just sold in one place, but enter into the stream of commerce throughout the country. In addition, 38 States currently have no statute of repose, which encourages forum shopping among plaintiffs to find a friendly statute of repose State.
Secondly, because the bill would only apply to plaintiffs who are eligible to receive worker's compensation, no one will go uncompensated.
And third, 12 years is an adequate amount of time to test a product's viability without needlessly barring victims from the courthouse.
Since the 106th Congress I have worked to pass a national statute of repose for durable goods in the workplace, and back in the 106th Congress the legislation passed this Committee and then passed the House, and then later passed both bodies of Congress in product liability legislation that unfortunately was ultimately vetoed by President Clinton.
Since that time, a number of us have continued to work with national groups, like the National Association of Manufacturers, and small groups located in districts all over the country who continue to pay settlements in frivolous cases because it will cost more to defend the case than to settle.
Jobs in congressional districts all over the country are continually threatened by these lawsuits. In fact, back in 2001, a local company, Madison Grinder, was forced to close its doors after a product liability suit. The machine tool industry employs over 1,500 workers in just one district, mine, in Cincinnati, for example, but they are all over the country.
After the passage of several tort reform measures this year, I am pleased to see that we are once again highlighting the runaway litigation costs that businesses in our country face at the expense of the average consumer and at the expense of a loss of many jobs. Many people as a result of these lawsuits actually lose their jobs.
I want to thank Chairman Sensenbrenner in particular for the opportunity to bring this bill before the Committee for consideration.
I yield back the balance of my time.
And I will try to be brief in many of my responses if there are amendments, because I know some of our colleagues have other important markups that they have to attend to this morning.
Yield back, Mr. Chairman.
Chairman SENSENBRENNER. The gentleman from Michigan, Mr. Conyers.
Mr. CONYERS. Thank you, Mr. Chairman.
Well, wait till the working people of America hear about this measure. Here is a measure that preempts State law to establish a nationwide 12-year statute of repose for durable goods, taking away the rights of working families, the rights of their employers, even, and the rights of the States. It throws workers out of court even before the injury has occurred.
This is a measure that denies American workers injured or killed on the job adequate compensation for their injuries. It cuts off their legal rights to hold manufacturers accountable for injuries by a defective product that is more than 12 years old, regardless of how long the product was built to last and regardless of when the worker suffers the injury.
This measure, 3509, would provide that these workers would only have access to their State worker's compensation system, which typically only allows for lost wages and medical expenses, not loss of limb or permanent disfigurement and other forms of pain and suffering.
The bill unfairly singles out American workers, treating them differently from other injured persons. If an innocent bystander, who happens to be standing nearby, is injured by the same piece of machinery as the worker, under this measure the bystander can sue for lost wages, medical expenses, future lost wages, all forms of pain and suffering, loss of limb, and permanent disfigurement. Thus the bystander can receive full compensation, while the worker's recovery under this measure would be drastically limited. That is why working families are currently permitted under State law to sue the responsible third party, the manufacturer. This bill, however, illogically and most unfairly cuts off this right.
Employers will also suffer if this bill is enacted. They won't be able to recover for any property damage they suffer when older equipment fails and damages the workplace. Employers would no longer be able to recover funds paid to an injured employee through worker's compensation.
And finally, the bill raises federalism concerns because it could easily run afoul of the Commerce Clause limiting congressional authority to the regulation of interstate commerce, and the Tenth Amendment, which reserves all of the enumerated powers to the States.
It is telling to me that in almost half of the States that have enacted statutes of repose, the State supreme courts have overturned them because they were found to violate State constitutional requirements relating to due process, equal protection, and open access to courts. Why should the Federal Government rush in to effect statutes of repose in States that have either declared them unconstitutional or determined that they do not need them?
Folks, we have more to do here than to impose this kind of legislation nationally. This bill is not about growth nor about competitiveness; it is about limiting the rights of American workers and their employers in a large way. And when they find out about it, we are all going to hear from them.
I urge my colleagues to resist this measure, and turn back the balance of my time.
Chairman SENSENBRENNER. Without objection, all Members' opening statements will be placed in the record at this time. Are there amendments?
Mr. CHABOT. Mr. Chairman?
Chairman SENSENBRENNER. The gentleman from Ohio.
Mr. CHABOT. Mr. Chairman, I have a manager's amendment at the desk.
Chairman SENSENBRENNER. The clerk will report the amendment.
The CLERK. Amendment to H.R. 3509----
Mr. CHABOT. Mr. Chairman, I ask unanimous the amendment be considered as read.
Chairman SENSENBRENNER. Without objection, so ordered.
[The amendment follows:]
Chairman SENSENBRENNER. The gentleman is recognized for 5 minutes in support of his amendment.
Mr. CHABOT. Thank you, Mr. Chairman. I will be brief.
I am introducing this manager's amendment to further clarify some of the aspects of the bill. The first change would streamline the language, Section 2(a)(1) and Section 2(a)(2) to avoid definitional questions regarding the phrase `arising out of an accident involving.'
Second, in response to some concerns raised at the hearing on this bill a couple of weeks ago, the amendment would add a new exception to the bill that would clarify that the statute of repose does not apply to regulatory enforcement actions brought by State or Federal agencies.
Thirdly, the amendment would add a definition for the term `seller' to clarify that the protections of this bill do not apply to downstream re-sellers of used machinery.
And finally, the amendment would clarify that the bill does not preempt other Federal legal reforms and makes a technical change to the bill's title; to wit, it says `2005,' it is now obviously 2006.
I urge my colleagues to accept this amendment and support the underlying measure.
Mr. SCOTT. Would the gentleman yield?
Mr. CHABOT. I would be happy to yield.
Mr. SCOTT. I was trying to figure out Section 2, what it applied to. Section 2(a)(1) is just property damage. Number 2 is personal injury or death if you are covered by worker's compensation. If you are not--if you have two people injured in the same situation, one is an employee and one is an innocent bystander, do I understand that the bystander can still sue but the employee can't?
Mr. CHABOT. That is correct. You have to be covered by worker's compensation in order to receive the protections of this bill. So by definition, the person who is a bystander wouldn't be covered by worker's compensation. So he could still sue, or she.
Chairman SENSENBRENNER. Does the gentleman yield back?
Mr. CHABOT. I yield.
Chairman SENSENBRENNER. The question is on the amendment offered by the gentleman from Ohio, Mr. Chabot. Those in favor will say aye?
Opposed, no?
The ayes appear to have it. The ayes have it. The amendment is agreed to.
Are there further amendments?
Mr. CONYERS. Mr. Chairman?
Chairman SENSENBRENNER. The gentleman from Michigan.
Mr. CONYERS. I have an amendment at the desk.
Chairman SENSENBRENNER. The clerk will report the amendment.
The CLERK. Amendment to H.R. 3509 offered by Mr. Conyers of Michigan.
Page 3, after line 14, add the following new paragraph:
Offshoring of Jobs. In general, this Act does not bar a civil action against a manufacturer or seller that, on or after the date of the enactment of this Act----
Mr. CONYERS. Mr. Chairman, I ask unanimous consent the amendment be considered as read.
Chairman SENSENBRENNER. Without objection, the amendment is considered as read.
[The amendment follows:]
Chairman SENSENBRENNER. The gentleman from Michigan is recognized for 5 minutes.
Mr. CONYERS. Members of the Committee, this is a very elementary amendment in that it would specify that the bill's protections do not apply to those companies that fail to provide even cursory notice to their workers, their own workers, that their jobs are about to be offshored to a foreign company or foreign workers. In other words, this is a requirement that notice be given when workers' jobs are about to be offshored.
In a more perfect world there would be a lot of other things that we could do to make this amendment work. But today I am merely proposing that we take the modest and common-sense first step: Give notice to workers so that they and their families can plan their futures. We already do this for plant closings, so there is not a reason I can think of that we should not do it for offshoring.
If we don't approve this amendment, we are, in a very real sense, adding insult to injury for American workers. First we tell them that they are second-class citizens when it comes to legal liability when they are harmed in the workplace. We will be placing them in an inferior position to consumers and others who are injured by simple negligence. But also, we will be saying to them that even if you lose your job to foreign offshoring after you have been forced to train your foreign counterpart to do your work, after you have lost your job in the middle of the night without any notice for you or your family to plan for your futures, that you may also have lost the ability to bring suit for workplace injuries.
So the proponents of this bill cannot talk about competitiveness. They claim this bill is needed because it is too difficult for U.S. firms to compete against foreign manufacturers. Well, what about the level playing field for the American worker? What about some basic fairness and dignity for them? That is what the amendment is all about.
We have just learned from the Office of Technology Assessment that they spent $335,000 and issued a 200-page report examining the effects of outsourcing. They refused to release the taxpayer-funded report to either the Congress or to this Committee or the American people. And yesterday, the majority, on a party-line basis, refused to even ask the Administration to turn this report over. I think this is insulting the interests of our workers.
Offshoring is a controversial subject. I know that some legislators believe it is a positive force in our economy, while others are more concerned about the impact on United States workers, their families, and their communities. But I hope we can all agree that, whatever its merits, those workers who are about to lose their jobs to offshoring are entitled to the decency and respect of some notice.
I urge that the author of this amendment and the Committee join me in this very modest step for workplace justice.
I return the balance of my time.
Mr. CHABOT. Mr. Chairman?
Chairman SENSENBRENNER. The gentleman from Ohio.
Mr. CHABOT. Move to strike the last word.
Chairman SENSENBRENNER. The gentleman is recognized for 5 minutes.
Thank you, Mr. Chairman. I rise in opposition to the amendment. I believe it is a bad idea because it would condition the application of the bill on the employer's choice of where it does its production. It introduces a complicated set of factual determinations that would have to be pled and then proved in court, thus putting companies back in the position that they are today, which is facing massive defense costs for largely meritless litigation.
This amendment could cost jobs by creating an incentive for manufacturers to move their entire operations overseas because, in doing so, they would avoid entirely the liability the base bill would place within reasonable limits. This amendment is yet another command-and-control amendment that impairs the free market and will cost American jobs.
Even though I have the greatest respect for the gentleman from Michigan, I have to rise in opposition to this amendment.
I yield back the balance of my time.
Mr. NADLER. Mr. Chairman?
Chairman SENSENBRENNER. The gentleman from New York, Mr. Nadler.
Mr. NADLER. Thank you, Mr. Chairman. I move to strike the last word.
Chairman SENSENBRENNER. The gentleman is recognized for 5 minutes.
Mr. NADLER. Thank you. I rise in support of this amendment, for several reasons.
First of all, the ostensible purpose--and, I am sure, the real purpose, although I don't think it will that purpose--but the purpose of this bill, we are told, is to try to save companies and to save American jobs. It is perfectly reasonable to say, hey, wait a minute--if the company is moving the jobs out of the country anyway, why give them this protection, whose sole purposes, presumably, is to save American jobs?
Now, I read recently that 56 percent, economists believe that 56 percent of all jobs in the United States today can be shipped to foreign countries and will be shipped to foreign countries if we don't change our policies in various ways over the next decade or so. Fifty-six percent of all American jobs.
We are told the way out of that is by more education, and yet the number of college graduates is increasing much faster than the number of jobs that require college degrees, for example. Because in fact increasingly, unless it is a service delivery job, everything--manufacturing, computer programming, what Secretary Rice used to call symbolic analysts, that would be our strength--is exportable. So we should do anything we can to try to stop the export of American jobs, and that certainly means passing the amendment offered by the gentleman from Michigan.
I would say that the bill as a whole is ill-conceived because, remember--statute of repose or no statute of repose--the only time there is liability is if you find, if the jury finds, if the court finds that the injury was caused by negligent manufacture on the part of the manufacturer. And the manufacturer should not be protected from that.
Now, we are told, of course, that the manufacturers of the durable good should be protected from the excessive cost of litigation--the companies can be destroyed by the cost of litigation whether they are guilty or innocent of the underlying charge. It is probably true, but I suggest that the energy of this Committee would be better spent on figuring out how to lessen the cost of litigation so that middle-class people can afford to sue or be sued and have access to the courts so that small companies can afford to have access to justice and can afford to sue or be sued, rather than saying because litigation is so expensive, we are going to close the courthouse door to people who are injured. Which is what this bill does.
But if we are going to pass this bill, which we shouldn't do, the least we can do is tie it to say that the benefit of this bill, which is aimed, presumably, at saving American jobs, should not go to companies that are energetically exporting the jobs overseas. Otherwise, we might call this the Chinese or the British or the French or whoever job saving act. Which might be good for Parliament to pass, but not for this House.
I yield back.
Chairman SENSENBRENNER. The question is on the amendment offered by the gentleman from Michigan, Mr. Conyers. Those in favor will say aye?
Opposed no? The noes barely have it.
Mr. CONYERS. rollcall, Mr. Chairman.
Chairman SENSENBRENNER. A record vote is requested. The question is on agreeing to the Conyers amendment. Those in favor will, as your names are called, answer aye. Those opposed, no. The clerk will call the roll.
The CLERK. Mr. Hyde?
[No response.]
The CLERK. Mr. Coble?
[No response.]
The CLERK. Mr. Smith?
Mr. SMITH OF TEXAS. No.
The CLERK. Mr. Smith, no. Mr. Gallegly?
[No response.]
The CLERK. Mr. Goodlatte?
Mr. GOODLATTE. No.
The CLERK. Mr. Goodlatte, no. Mr. Chabot?
Mr. CHABOT. No.
The CLERK. Mr. Chabot, no. Mr. Lungren?
Mr. LUNGREN. No.
The CLERK. Mr. Lungren, no. Mr. Jenkins?
Mr. JENKINS. No.
The CLERK. Mr. Jenkins, no. Mr. Cannon?
Mr. CANNON. No.
The CLERK. Mr. Cannon, no. Mr. Bachus?
[No response.]
The CLERK. Mr. Inglis?
[No response.]
The CLERK. Mr. Hostetler?
[No response.]
The CLERK. Mr. Green?
Mr. GREEN. No.
The CLERK. Mr. Green, no. Mr. Keller?
[No response.]
The CLERK. Mr. Issa?
[No response.]
The CLERK. Mr. Flake?
[No response.]
The CLERK. Mr. Pence?
[No response.]
The CLERK. Mr. Forbes?
Mr. FORBES. No.
The CLERK. Mr. Forbes, no. Mr. King?
Mr. KING. No.
The CLERK. Mr. King, no. Mr. Feeney?
Mr. FEENEY. No.
The CLERK. Mr. Feeney, no. Mr. Franks?
Mr. FRANKS. No.
The CLERK. Mr. Franks, no. Mr. Gohmert?
Mr. GOHMERT. No.
The CLERK. Mr. Gohmert, no. Mr. Conyers?
Mr. CONYERS. Aye.
The CLERK. Mr. Conyers, aye. Mr. Berman?
[No response.]
The CLERK. Mr. Boucher?
[No response.]
The CLERK. Mr. Nadler?
Mr. NADLER. Aye.
The CLERK. Mr. Nadler, aye. Mr. Scott?
Mr. SCOTT. Aye.
The CLERK. Mr. Scott, aye. Mr. Watt?
Mr. WATT. Aye.
The CLERK. Mr. Watt, aye. Ms. Lofgren?
[No response.]
The CLERK. Ms. Jackson-Lee?
Ms. JACKSON-LEE. Aye.
The CLERK. Ms. Jackson-Lee, aye. Ms. Waters?
Ms. WATERS. Aye.
The CLERK. Ms. Waters, aye. Mr. Meehan?
Mr. MEEHAN. Aye.
The CLERK. Mr. Meehan, aye. Mr. Delahunt?
[No response.]
The CLERK. Mr. Wexler?
[No response.]
The CLERK. Mr. Weiner?
[No response.]
The CLERK. Mr. Schiff?
Mr. SCHIFF. Aye.
The CLERK. Mr. Schiff, aye. Ms. Sanchez?
Ms. SANCHEZ. Aye.
The CLERK. Ms. Sanchez, aye. Mr. Van Hollen?
Mr. VAN HOLLEN. Aye.
The CLERK. Mr. Van Hollen, aye. Ms. Wasserman Schultz?
Ms. WASSERMAN SCHULTZ. Aye.
The CLERK. Ms. Wasserman Schultz, aye. Mr. Chairman?
Chairman SENSENBRENNER. No.
The CLERK. Mr. Chairman, no.
Chairman SENSENBRENNER. Members who wish to cast or change their votes--the gentleman from North Carolina, Mr. Coble.
Mr. COBLE. No.
The CLERK. Mr. Coble, no.
Chairman SENSENBRENNER. The gentleman from Indiana, Mr. Hostetler.
Mr. HOSTETLER. No.
The CLERK. Mr. Hostetler, no.
Chairman SENSENBRENNER. Further Members? The gentleman from California, Mr. Berman?
Mr. BERMAN. Aye.
The CLERK. Mr. Berman, aye.
Chairman SENSENBRENNER. Further Members in the chamber who wish to cast or change their votes? If not, the clerk will report. The gentleman from South Carolina, Mr. Inglis?
Mr. INGLIS. Am I recorded?
The CLERK. No.
Mr. INGLIS. No.
The CLERK. Mr. Inglis, no.
Chairman SENSENBRENNER. The clerk will try again to report. The gentleman from Florida, Mr. Feeney.
Mr. FEENEY. No.
The CLERK. Mr. Feeney, no.
Mr. Chairman, there are 12 ayes and 16 nays.
Chairman SENSENBRENNER. And the amendment is not agreed to.
A reporting quorum is present. The chair will take up the motion to report H.R. 3049, the Asian Carp bill, favorably. Those in favor of the motion to report the bill favorably will say aye.
Opposed, no.
The ayes appear to have it. The ayes have it. The motion to report favorably is agreed to. Without objection, the staff is directed to make any technical and conforming changes and all Members will be given 2 days, as provided by the House rules, in which to submit additional dissenting, supplemental, or minority views.
Consideration will once again resume on the bill H.R. 3509. Are there further amendments?
Mr. SCOTT. I have an amendment.
Chairman SENSENBRENNER. The gentleman from Virginia, Mr. Scott.
Mr. SCOTT. Mr. Chairman, I have an amendment at the desk----
Chairman SENSENBRENNER. The clerk will report the amendment.
Mr. SCOTT. --designated `number one' in the upper right-hand corner.
The CLERK. Amendment to H.R. 3509 offered by Mr. Scott. Page three, after line 14, add the following new paragraph. Section 5: Willful, reckless, or wanton disregard for life or property. This Act does not bar----
Chairman SENSENBRENNER. Without objection, the amendment is considered as read.
[The amendment follows:]
Chairman SENSENBRENNER. The gentleman from Virginia is recognized for 5 minutes.
Mr. SCOTT. Thank you, Mr. Chairman. Mr. Chairman, this amendment would make the proposed period inapplicable to injury caused by willful, reckless, and wanton disregard for life, person, or property.
Mr. Chairman, manufacturers are in the best position to discover defects and recognize hazards that are likely to cause serious injury or death. An injured worker should not be barred from bringing a claim when injury has been caused because of the willful, reckless, or wanton disregard of a manufacturer on life, person, or property.
Mr. Chairman, many manufacturers may make willful, reckless, and wanton decisions not to repair, recall, or replace a part if they can save money. A manufacturer who is fully aware of a defect should not get the benefit of making this irresponsible decision whether the product is two, 12, or 20 years old. In order to discourage manufacturers from making irresponsible decisions which they know will endanger the public, we should not limit the claims of individuals who have been harmed because of the manufacturer's willful, reckless, and wanton acts. We need to encourage manufacturers to exercise due care in the design of their products, and therefore I would hope that my colleagues would support this amendment.
I yield back.
Chairman SENSENBRENNER. The gentleman from Ohio, Mr. Chabot.
Mr. CHABOT. Mr. Chairman, I move to strike the last word.
Chairman SENSENBRENNER. The gentleman is recognized for 5 minutes.
Mr. CHABOT. Thank you, Mr. Chairman. I rise in opposition to this amendment and I will be brief, again, because I know that some of our Members have other commitments.
This amendment should be defeated. The base bill precludes lawsuits only when the harm is caused by the product, not by a human being. Adopting this amendment would imply to a court that it does something that it doesn't, and therefore it should be defeated.
I yield back the balance of my time.
Mr. WATT. Mr. Chairman?
Chairman SENSENBRENNER. The gentleman from North Carolina, Mr. Watt.
Mr. WATT. I move to strike the last word.
Chairman SENSENBRENNER. The gentleman is recognized for 5 minutes.
Mr. WATT. Thank you, Mr. Chairman. I am going to take this opportunity to speak on this amendment in support of the amendment and on the bill. I have elected not to try to offer any amendments, but this is a very frustrating day for those of us who don't support this bill, not so much because of the substance of the bill, but because we believe that it is an extreme imposition on States' rights. I am disappointed that my colleague from North Carolina is not here, Mr. Coble, because I want the Committee to understand the impact that this bill has on North Carolina.
First of all, North Carolina has a 6-year statute of repose. This bill has a 12-year statute of repose. So if this were about the substance of what we are doing, I would be more likely to support the 12-year statute than North Carolina's 6-year statute. For me, this is not about substance. It is about what States have the prerogative to do and what the Federal Government has the prerogative to do.
Second, in North Carolina, if you are an employee and you are injured and workers' comp pays, workers' comp is subrogated to the claim of the employee against a third party, so in effect, the workers' comp carrier gets to recover against the negligent manufacturer of a machine under the theory of subrogation and so the responsibilities have been sorted out so that the person who actually has responsibility for causing the injury ends up paying, which is the whole theory on which tort law and liability law should be based.
And this bill is going to destroy that. Basically, it's going to raise workers' comp rates because workers' comp carriers won't have the ability now to recover against the person who's actually responsible for the injury as we do under North Carolina law.
Now, I don't accept all of the arguments in favor of a statute of repose of any duration, but I've got to assume that the members of my State legislature, House and Senate, in North Carolina have as much interest and as much intelligence to protect the rights and interests and relative responsibilities, including the business interests and the relative insurance interests, workers' comp and general liability interests, that I do as a Member of Congress. I don't always agree with them. I think I'd rather have a 12-year statute of repose than a 6-year statute of repose. But this strikes me as being just the most ultimate disregard of rights of States.
Tort law has always been a matter of State law. Statutes of limitations for tort law have always been a matter of State law. Statutes of repose have always been matters of State law. And I, for the life of me, haven't seen a justification for making an exception to that proposition in this case, and I, for the life of me, can't understand how Members of Congress who got elected to Congress claiming to be advocates of Government and decision making close to the people and claiming to be advocates of States' rights could possibly be supporting this.
I ask unanimous consent for one additional minute, Mr. Chairman.
Chairman SENSENBRENNER. Without objection.
Mr. WATT. Now, on this amendment, it is also true that because the apparently fairly intelligent members of the State House and Senate in North Carolina agree that if somebody wantonly and willfully and recklessly injures a resident of North Carolina, whether they are an employee or somebody who is not an employee, that there is an exception in North Carolina, and so I, you know, I can't understand why, even if we were going to federalize this, which I think there's no justification for doing, why we wouldn't at least be responsible enough to say that a manufacturer who wantonly, willfully, recklessly injures somebody in my State ought not be held liable in damages when the North Carolina legislature has said that unless we have decided, as I believe this Congress has on a number of occasions----
Chairman SENSENBRENNER. The time of the gentleman has once again expired.
Mr. WATT. I ask unanimous consent for one additional minute.
Chairman SENSENBRENNER. Without objection again.
Mr. WATT. --unless we have decided that we are God in this Congress. I just don't understand the arrogance of a group of people here who think that for some reason, we are so much brighter than the folks who serve us in our State legislature, so much more righteous than the people who serve us in our State legislature, and I, for the life of me, can't understand why Members who rode into this institution on a States' rights platform, when are you going to stand up and defend the States' rights? I just don't understand it.
I yield back.
Mr. SMITH. Mr. Chairman?
Chairman SENSENBRENNER. The gentleman from Texas, Mr. Smith.
Mr. SMITH. Mr. Chairman, I move to strike the last word.
Chairman SENSENBRENNER. The gentleman is recognized for 5 minutes.
Mr. SMITH. Mr. Chairman, I will yield my time to the gentleman from Ohio, Mr. Chabot.
Mr. CHABOT. I thank the gentleman for yielding and I won't take the full 5 minutes, but this argument about preemption and how it's inappropriate and the whole federalism argument, I just wanted to respond to that briefly here.
Some argue, especially citing the United States Supreme Court, that tort law is inherently in the purview of the individual States. However, even the Supreme Court has acknowledged that there are times when it makes sense for Congress to preempt State tort law, such as in the case of asbestos claims. Congress has federalized a number of other State causes of action when the circumstances have proved appropriate, such as the Volunteer Protection Act of 1997, such as the Y2K Act, such as the Protection of Lawful Commerce in Arms Act, and Congress has also considered and enacted a national statute of repose before in the General Aviation Revitalization Act, which extended an 18-year statute of repose to manufacturers of small non-commercial aircraft which, at a time when that particular industry was really on a downward spiral, it took off and created an awful lot of jobs, American jobs. That Act is widely credited with reviving the general aircraft business in America without compromising safety.
The case for Congressional action here is strong. While a number of States have enacted a statute of repose for workplace goods, others have not. Durable goods manufacturers typically ship the vast majority of their products out of State, and in many cases to all 50 States. Therefore, State-by-State enactment of statutes of repose do not reduce durable good product liability insurance rates in the way a uniform national statute of repose would.
Insurance carriers, for example, are unable to predict potential liability accurately due to the uncertainty about where the durable good will be sold initially and where it will eventually end up when resold. So I think that this is an incident when it makes perfect sense for this level of Government to be involved, and I think this bill, having been in this Committee and in the House before many times, I think this is the time for us to get the job done.
I yield back the balance of my time.
Mr. SMITH. Mr. Chairman, I yield back the balance of my time.
Ms. WATERS. Mr. Chairman?
Chairman SENSENBRENNER. The gentlewoman from California, Ms. Waters.
Ms. WATERS. Thank you very much.
Chairman SENSENBRENNER. Are there further amendments, by the way?
Ms. WATERS. I move to strike the last word.
Chairman SENSENBRENNER. We will go to amendments first. The gentleman from California, Mr. Schiff.
Ms. WATERS. Mr. Chairman, we are in the middle of an amendment.
Chairman SENSENBRENNER. Okay. The gentlewoman from California, Ms. Waters.
Mr. SCOTT. Parliamentary inquiry, Mr. Chairman.
Chairman SENSENBRENNER. State your----
Mr. SCOTT. Is my amendment still pending?
Chairman SENSENBRENNER. Yes, it is.
Ms. WATERS. Thank you----
Chairman SENSENBRENNER. The question is on the adoption of the amendment by the gentleman from Virginia, Mr. Scott. The gentlewoman from California, Ms. Waters.
Ms. WATERS. Thank you very much, Mr. Chairman. I had not intended to speak on the preemption aspect of this bill. It's all about preemption, and I think Mr. Watt absolutely made the case. And the reason that I'm choosing to speak on this aspect of the legislation is we see a pattern in the Congress of the United States, not only in this Committee, but in the Financial Services Committee where I also serve, where we have a whole slew of legislation that's coming from the opposite side of the aisle to undo consumer rights. And I think it's a dangerous pattern that we see and it's absolutely a pattern that's overriding State laws and it all seems to be a building body of law to undermine the ability of consumers in this country to get justice.
Now, what's absolutely ridiculous about this bill, aside from the fact that it preempts State law and it has this arbitrary limit for 12 years, I took a look further at this bill to see that there is a Section B on transitional provision relating to extension of repose period. Not only do they say that they replace limitations on the amount of time that one could bring a civil action, if, for example, in your State there is a law that would allow for a 25-year period or a 30-year period or anything more than the 12-year period, they would disregard that altogether and grant you generously one additional year by which you could bring an action against the manufacturers.
And so I would just ask my colleagues to pay close attention to this preemption and understand that this joins a long list of preemption bills that are finding their way through the Congress of the United States that is absolutely taking away the authority of the States to determine what is in the best interest of their consumers, and I would ask you to vote aye on Mr. Scott's amendment.
I yield back the remainder of my time.
Chairman SENSENBRENNER. The gentlewoman from Florida, Ms. Wasserman Schultz.
Ms. WASSERMAN SCHULTZ. I move to strike the last word.
Chairman SENSENBRENNER. The gentlewoman is recognized for 5 minutes.
Ms. WASSERMAN SCHULTZ. Thank you, Mr. Chairman. Can I just try to bring the discussion back to the amendment at hand, because if you read the language of the amendment, what the gentleman from Virginia is asking here is to exempt willful, reckless, or wanton disregard for life or property.
Now, the gentleman from Ohio's argument against adopting this amendment was that people--that this legislation doesn't have anything to do with people, it has to do with products or equipment. Now, the last time I checked, with all due respect, products don't manufacture themselves. People manufacture products, and if there is a person or a corporate officer or a design by people who make these products and they willfully, recklessly, or wantonly have a disregard during the manufacture of that product for life or property, then even in Florida, in my home State, where we have a 12-year statute of repose for products with a 10-year or less life, we have adopted this amendment, because how could you not?
How could you not adopt an amendment that ensures that when someone does--manufactures a product on purpose, willfully, recklessly, and wantonly disregards life or property when manufacturing a product and that is discovered after the 12-year statute of repose proposed in this legislation, that we would not ensure that a lawsuit could go forward? That is insanity.
I mean, with all due respect, the gentleman of Ohio does not have a very strong argument when he says that this legislation doesn't apply to people. Of course it applies to people. It's people that are harmed by this legislation when they are harmed by a product that was willfully, recklessly, or wantonly manufactured without regard for life or property. So I would hope----
Mr. GOODLATTE. Would the gentlewoman yield?
Ms. WASSERMAN SCHULTZ. I would be happy to yield.
Mr. GOODLATTE. I hear what you are saying. I am wondering if you have examples of products manufactured that were willfully or wantonly violative of tort law and they were latent for 12 years or more. I mean, I understand what you are saying, but this is a long period of time----
Ms. WASSERMAN SCHULTZ. Reclaiming my time, I'd be glad to answer that question. I don't have specific examples right here, but I'd be glad to get some for you. But even if I was not able to produce examples, do you want to look the mother or father in the face, or the wife or sister or child of the person harmed by a product that was manufactured willfully, recklessly, or wantonly, without regard for life or property, and tell them, I'm sorry, I didn't support that amendment because I couldn't get an example out of somebody prior to the passage of this law----
Mr. SCHIFF. Will the gentlelady yield?
Ms. WASSERMAN SCHULTZ. --where that had happened.
Mr. SCHIFF. Will the gentlelady yield?
Ms. WASSERMAN SCHULTZ. I would be happy to yield.
Mr. SCHIFF. Isn't the question and the burden on the sponsors of the legislation, if there are not the examples of this being a problem, then what is the purpose of the legislation? You can't have it both ways. You can't say that the gentlelady doesn't have examples of someone doing something that would be affected by this law. Isn't it the burden of you to say why it is that you are doing it? If there is such an absence or you are so curious about the instance of this, why are you passing the legislation?
Mr. WATT. Would the gentlelady yield?
Ms. WASSERMAN SCHULTZ. Reclaiming my time, I would be happy to yield to the gentleman from North Carolina.
Mr. WATT. I happen to have the burden of having practiced law in this area for 22 years, so I can cite the gentleman a situation, and here's the situation. The manufacturer becomes aware that a minor shield installed on a piece of equipment would make it safe, absolutely disregards that, recklessly and wantonly, and we litigated case after case after case where that occurred, just absolutely made a decision they're not going to do it.
Ms. WASSERMAN SCHULTZ. Reclaiming my time, I absolutely can produce an example for you. In Florida, there is a Florida case that would have been barred by the present law. Priscilla Williams, a 55-year-old woman who was permanently disabled when a 14-year-old Ajax steam press she was using at a dry cleaners seared her right hand to the bone. If Ajax had installed an inexpensive safeguard to this product, she would not have been injured and she had a valid claim under Florida law. Now she can no longer work due to her disability, and because Florida law specifically exempts willful, reckless, or wanton disregard for life or property, which they would no longer be able to do if this law passes without this amendment, she was able to make a claim.
Mr. WATT. Will the gentlelady yield?
Ms. WASSERMAN SCHULTZ. I would be happy to yield.
Mr. WATT. It is amazing that the same case has happened in Florida that happened in North Carolina. You all pretend they don't happen, but these things happen every day, and if you don't have the right provisions in the statute, which is exactly why the North Carolina legislature----
Chairman SENSENBRENNER. The time of the gentlewoman from Florida has expired.
Mr. NADLER. Mr. Chairman?
Chairman SENSENBRENNER. The gentleman from New York, Mr. Nadler.
Mr. NADLER. Thank you, Mr. Chairman. I simply want to say a couple of things very rapidly. Number one, I am glad to learn from Mr. Chabot that the asbestos bill has passed both houses. I wasn't aware of that.
But number two, I think that I just want to associate myself with the remarks that say that you cannot defend a company and say they should not be liable for someone's injury even after 12 years if the injury is a result of their willful, reckless, or wanton disregard for life or property. Combine that with the fact that in 16 States, workers' compensation benefits for workers severely on the job are below the poverty level.
I might have a little more regard for this bill, not enough to vote for it, but a little more regard if as part of federalizing this law, we also mandated minimum workers' comp levels so we were not impoverishing workers who were injured because of the tortuous conduct of the manufacturer by subjecting them only to workers' comp level, which in 16 States are less than the poverty level.
So I urge the adoption of this amendment. I urge defeat of the bill, and I yield to the gentleman from Virginia, Mr. Scott.
Mr. SCOTT. Thank you. Thank you, Mr. Chairman. Mr. Chairman, we are talking about the kinds of cases that might constitute willful, reckless, and wanton disregard. This would be the entire category of cases where a business just makes a cold-blooded calculation that it's cheaper to let people die and be maimed rather than fix a product. And with the statute of repose, there is no cause. It is just letting the people, if you are fully aware that there is a danger, just let it go.
Now, somebody mentioned the airline industry. I didn't support that, either. I thought that was a bad idea. But at least in that case, there was a specific industry with a specific problem and specific findings to justify it. This just covers everything.
And you ask whether or not the manufacturer can predict this. This is wanton, reckless, and wanton disregard. I mean, certainly you can predict when you're acting that kind of way.
I certainly don't understand the explanation where you say that products kill people, people don't kill people. This amendment deals with injuries that arise from a defendant's willful, reckless, and wanton disregard for life or property. I think we ought not be rewarding people in that category and I'd hope the amendment would be adopted.
Mr. NADLER. Thank you. I yield back.
Chairman SENSENBRENNER. The gentleman from California, Mr. Lungren.
Mr. LUNGREN. Mr. Chairman, I rise to strike the requisite number of words.
Chairman SENSENBRENNER. The gentleman is recognized for 5 minutes.
Mr. LUNGREN. And I yield to the gentleman from Ohio.
Mr. CHABOT. I thank the gentleman for yielding, and again, I will be brief. Just a couple of points here. I would hope that this argument would stick to the facts and the application of this bill. When this bill was considered back in the 106th Congress, opponents brought forth a number of claimed horror stories where injured workers would be, in their words, harmed by this bill. However, upon closer inspection, the facts of the cases they actually were, including an employer's modification of machinery as well as the employee's contributory negligence in the action, were conveniently eliminated from the opponents' description of the cases.
And I'm not going to try to refute every case that the opponents of the bill would bring forth, but I'll say that, again, no one will go uncompensated under this bill. You only get protection from this bill if the employee is covered by workers' compensation, and it will protect a number of innocent manufacturers and their employees who face bankruptcy from so many of these meritless suits.
And I also want to just refer briefly here to Black's Law Dictionary under strict product liability. I mean, we are talking here under the gentleman's amendment about willful and reckless and wanton disregard for life or property, again, a person doing something active and callous. When we are talking about strict products liability, Black's Law Dictionary says products liability arising when the buyer proves that the goods were unreasonably dangerous and that, one, the seller was in the business of selling goods; two, the goods were defective and when they were in the seller's hands; three, the defect caused the plaintiff's injury; and four, the product was expected to and did reach the consumer without substantial change in condition.
Again, the whole idea relative to products liability, there's really no room for this reckless disregard argument that the gentleman has made in his amendment, and I yield back to the gentleman from California.
Mr. LUNGREN. I yield back the balance of my time.
Chairman SENSENBRENNER. The question is on the amendment offered by the gentleman from Virginia, Mr. Scott. Those in favor will say aye.
Opposed, no.
The noes appear to have it. A rollcall will be ordered. Those in favor of the Scott amendment will, as your names are called, answer aye. Those opposed, no. The clerk will call the roll.
The CLERK. Mr. Hyde?
[No response.]
The CLERK. Mr. Coble?
[No response.]
The CLERK. Mr. Smith?
[No response.]
The CLERK. Mr. Gallegly?
[No response.]
The CLERK. Mr. Goodlatte?
Mr. GOODLATTE. No.
The CLERK. Mr. Goodlatte, no. Mr. Chabot?
Mr. CHABOT. No.
The CLERK. Mr. Chabot, no. Mr. Lungren?
Mr. LUNGREN. No.
The CLERK. Mr. Lungren, no. Mr. Jenkins?
Mr. JENKINS. No.
The CLERK. Mr. Jenkins, no. Mr. Cannon?
Mr. CANNON. No.
The CLERK. Mr. Cannon, no. Mr. Bachus?
[No response.]
The CLERK. Mr. Inglis?
Mr. INGLIS. No.
The CLERK. Mr. Inglis, no. Mr. Hostetler?
[No response.]
The CLERK. Mr. Green?
[No response.]
The CLERK. Mr. Keller?
[No response.]
The CLERK. Mr. Issa?
[No response.]
The CLERK. Mr. Flake?
[No response.]
The CLERK. Mr. Pence?
[No response.]
The CLERK. Mr. Forbes?
[No response.]
The CLERK. Mr. King?
Mr. FORBES. No.
Mr. KING. No.
The CLERK. Mr. Forbes, no. Mr. King, no. Mr. Feeney?
Mr. FEENEY. No.
The CLERK. Mr. Feeney, no. Mr. Franks?
Mr. FRANKS. No.
The CLERK. Mr. Franks, no. Mr. Gohmert?
[No response.]
The CLERK. Mr. Conyers?
[No response.]
The CLERK. Mr. Berman?
[No response.]
The CLERK. Mr. Boucher?
[No response.]
The CLERK. Mr. Nadler?
Mr. NADLER. Aye.
The CLERK. Mr. Nadler, aye. Mr. Scott?
Mr. SCOTT. Aye.
The CLERK. Mr. Scott, aye. Mr. Watt?
Mr. WATT. Aye.
The CLERK. Mr. Watt, aye. Ms. Lofgren?
Ms. LOFGREN. Aye.
The CLERK. Ms. Lofgren, aye. Ms. Jackson-Lee?
[No response.]
The CLERK. Ms. Waters?
Ms. WATERS. Aye.
The CLERK. Ms. Waters, aye. Mr. Meehan?
[No response.]
The CLERK. Mr. Delahunt?
[No response.]
The CLERK. Mr. Wexler?
[No response.]
The CLERK. Mr. Weiner?
[No response.]
The CLERK. Mr. Schiff?
Mr. SCHIFF. Aye.
The CLERK. Mr. Schiff, aye. Ms. Sanchez?
Ms. SANCHEZ. Aye.
The CLERK. Ms. Sanchez, aye. Mr. Van Hollen?
Mr. VAN HOLLEN. Aye.
The CLERK. Mr. Van Hollen, aye. Ms. Wasserman Schultz?
Ms. WASSERMAN SCHULTZ. Aye.
The CLERK. Ms. Wasserman Schultz, aye. Mr. Chairman?
Chairman SENSENBRENNER. No.
The CLERK. Mr. Chairman, no.
Chairman SENSENBRENNER. Further Members who wish to cast or change their votes? The gentleman from Massachusetts, Mr. Meehan.
Mr. MEEHAN. Aye.
The CLERK. Mr. Meehan, aye.
Chairman SENSENBRENNER. The gentleman from California, Mr. Berman.
Mr. BERMAN. Aye.
The CLERK. Mr. Berman, aye.
Chairman SENSENBRENNER. The gentleman from Florida, Mr. Keller.
Mr. KELLER. No.
The CLERK. Mr. Keller, no.
Chairman SENSENBRENNER. The gentleman from Wisconsin, Mr. Green.
Mr. GREEN. No.
The CLERK. Mr. Green, no.
Chairman SENSENBRENNER. The gentleman from Indiana, Mr. Hostetler.
Mr. HOSTETLER. No.
The CLERK. Mr. Hostetler, no.
Chairman SENSENBRENNER. The gentleman from North Carolina, Mr. Coble.
Mr. COBLE. No.
The CLERK. Mr. Coble, no.
Chairman SENSENBRENNER. The gentleman from Michigan, Mr. Conyers.
Mr. CONYERS. Aye.
The CLERK. Mr. Conyers, aye.
Chairman SENSENBRENNER. The gentlewoman from Texas, Ms. Jackson-Lee.
Ms. JACKSON-LEE. Thank you, Mr. Chairman. Aye.
The CLERK. Ms. Jackson-Lee, aye.
Chairman SENSENBRENNER. Further Members who wish to cast or change their votes?
Mr. WEINER. Mr. Chairman, how am I recorded?
Chairman SENSENBRENNER. The gentleman from New York, Mr. Weiner.
The CLERK. Mr. Chairman, Mr. Weiner is not recorded.
Mr. WEINER. Aye.
The CLERK. Mr. Weiner, aye.
Chairman SENSENBRENNER. Further Members who wish to cast or change their votes? If not, the clerk will report.
[No response.]
The CLERK. Mr. Chairman, there are 14 ayes and 15 nays.
Chairman SENSENBRENNER. And the amendment is not agreed to. Are there further amendments? The amendment from California, Mr. Schiff.
Mr. SCHIFF. Mr. Chairman, I have an amendment at the desk.
Chairman SENSENBRENNER. The clerk will report the amendment.
The CLERK. Amendment to H.R. 3509 offered by Mr. Schiff of California. Page three, after line 14, add the following new paragraph. Section 5----
Chairman SENSENBRENNER. Without objection, the amendment is considered as read.
[The amendment follows:]
Chairman SENSENBRENNER. The gentleman from California is recognized for 5 minutes.
Mr. SCHIFF. Thank you, Mr. Chairman. This amendment is a relatively simple and straightforward amendment. The purpose of the bill, as outlined in the majority analysis, is to address an alleged injury associated with use of a product after some reasonably long period of time. It is likely to have been due to either misuse or improper maintenance by someone other than the manufacturer. That is the premise of the bill.
This amendment would provide that in actions involving the fraudulent concealment of a defect, that this statute of repose would not apply. It very simply provides that the act doesn't bar civil action against the manufacturer or seller of a durable good who fraudulently conceals a defect in that durable good. So where you have a situation where there is an affirmative effort to fraudulently conceal a defect, there is no reason to give repose to someone who's guilty of that. That also results in an injury.
I think this is a very narrowly-crafted exception to this bill. It doesn't at all draw away from the purported premise of the bill, and that is to protect those who aren't responsible, who through no fault of their own and through misuse or improper maintenance of the product shouldn't be held liable. I think where it can be shown that someone fraudulently concealed a defect so that maybe the person injured didn't find out about this defect until after the period in the statute of repose, they shouldn't be barred from having some form of recovery.
So that is, in essence, what this narrow amendment does and I would urge my colleagues to support it and yield back the balance of my time.
Chairman SENSENBRENNER. The amendment from Ohio, Mr. Chabot.
Mr. CHABOT. I move to strike the last word, Mr. Chairman.
Chairman SENSENBRENNER. The gentleman is recognized for 5 minutes.
Mr. CHABOT. Thank you, Mr. Chairman. I rise in opposition to the amendment for the reason that this amendment is really unnecessary. This bill as amended only covers injury claims that are caused by the workplace durable good. To the extent that the manufacturer knowingly or fraudulently withholds pertinent information to end users of its products, the harm is caused by the concealment of facts, and as a consequence, claims of fraudulent concealment are not barred by this Act.
The fraudulent concealment exception to the General Aviation Revitalization Act was very narrow and only applied to knowing misrepresentations made to the Federal Aviation Administration. That exception is not relevant here because there is no Federal equivalent to the FAA for durable goods.
To the extent that a manufacturer of a workplace durable good knowingly misrepresents information to a State or Federal regulator, that could certainly be the subject of regulatory action which would not be protected under this bill. Further, in some jurisdictions, knowingly making a false statement to an administrative agency or legislative body is a crime.
The fraudulent concealment exception in the general aviation bill that I mentioned before is a form of Government compliance defense based on the principle that an entity should not be allowed to be sued if it cooperates fully with a Government entity charged with regulating its product and complies with such Government entity's requirements. The Government compliance defense exists in several parts of Federal law, including GARA, but only in contexts in which there is a Government entity charged with regulating the relevant product.
Mr. SCHIFF. Would the gentleman yield?
Mr. CHABOT. Let me finish. There is no such Government entity at the Federal level charged with regulating durable goods generally, so the amendment is not relevant here. And in any case, the manager's amendment explicitly provides that any State governmental entity can proceed with enforcement actions against the manufacturers of any durable good over which that governmental entity has jurisdiction, and I'd be happy to yield to the gentleman.
Mr. SCHIFF. I thank the gentleman for yielding. I guess my question is this. Let's say that I'm injured by a product at the workplace. It's during the 12-year period, so it's not barred by the statute of repose. I go to the seller of the product or the manufacturer of the product and I say, I've been injured in this way. Have you had any experience with any other people being injured in this way? Maybe it was unique to me. And the seller of the good or the manufacturer says, no, we've never heard of any problem like this. It must have been improper use at the workplace. But, in fact, the seller and manufacturer both know there are many other cases of exactly the same injury. So they have fraudulently concealed from me the facts.
Now, I learn in year 13 that, in fact, there are 15 other people that have been injured in exactly the same way. Am I barred under your bill? It seems to me that I am----
Mr. CHABOT. Reclaiming my time, in my opinion, you would not be barred, because you could still go under fraudulent concealment, and under my--in my opinion.
Mr. SCHIFF. All this amendment says is that where there's fraudulent concealment, I would not be barred. So if you think that's----
Mr. CHABOT. I mean, it's unnecessary. It doesn't say you can't murder people, either. It's just not necessary to have in this bill. So I think it just confuses it. You're having verbiage in there that's just unnecessary. So I would agree, if somebody does fraudulent conceal information and they're outside the year, they could still be brought under State regulatory action. They could still be criminally charged----
Mr. SCHIFF. Well, if the gentleman would yield, I'm not talking about criminal charges or State regulatory action. I'm saying, I'm the injured party. I've been lied to by that manufacturer, that seller. Are you barring me----
Mr. CHABOT. Reclaiming my time, no, I don't think you're barred at all under this bill.
Mr. SCHIFF. Then let's make it explicit. That's all this amendment does. If you're saying that's what you intend to do anyway, let's make it explicit.
Mr. CHABOT. Well, this is part of the Congressional record, this discussion here. I'm talking as the proponent of this legislation that, in my view, you would not be barred. But I also am saying that I don't think you need to say a lot of things in there unnecessarily. You could add all kinds of things, and that's generally what we try to avoid in these bills, is just excess verbiage that's unnecessary, and I yield back the balance of my time.
Mr. SCOTT. I move to strike the last word.
Chairman SENSENBRENNER. The gentleman from Virginia is recognized for 5 minutes.
Mr. SCOTT. Mr. Chairman, I'm just reading the bill trying to look for that fraud exception. Other than in the amendment that's before me, all I see is no civil action may be filed. I don't see any kind of exception for fraud. You certainly decided that if it's wanton disregard for life and limb, that doesn't matter. But there's nothing in here--where, other than this discussion that it would be a good idea, where in the bill do you have a limitation that if the defect is fraudulently concealed, where in it do you have a right to continue--the language is, no civil action may be filed, with exception, and I yield----
Mr. SCHIFF. Will the gentleman yield?
Mr. SCOTT. I yield.
Mr. SCHIFF. I will be happy to yield to my colleague if you want to respond, too, but I sat in on a Supreme Court argument yesterday and it was interesting to listen to the Justices talk about what weight they should give legislative committee discussion or legislative history, and the bottom line was, not much. If it's not in print, there's not much interest they show in legislative intent.
This would put it in print, and I don't understand why we'd want to incentivize a manufacturer or seller to deny a history of defect with a product. That doesn't meet the purposes of the bill. And if, indeed, this is the goal the gentleman has in the legislation, not to preclude this kind of action, then let's make it explicit so we don't have the Supreme Court wondering what we intended to do.
Mr. SCOTT. Reclaiming my time, I'd just say it's absolutely clear that no action may be filed if it occurred 12 years ago and if you had workers' comp, period. It doesn't say fraud. It doesn't say anything. I don't see an exception. Maybe there is. This is a quick reading, and I've asked the gentleman from Ohio to point out where in the bill he can find language to support what he just said.
Mr. NADLER. Would the gentleman yield?
Mr. SCOTT. I will yield.
Mr. NADLER. I would simply point out that if the gentleman from Ohio is saying this is in the bill, we can't find it in the bill, it does no harm to make it explicit. It's very difficult to see how you can justify giving this kind of relief to someone who fraudulently concealed the defect in durable goods. So why not make it explicit? Adopt the gentleman's amendment and have done with this debate as to whether it's there or not. Since apparently there's agreement it ought to be there, put it there clearly. I yield back.
Chairman SENSENBRENNER. The question is on the amendment offered by the gentleman from California.
Mr. NADLER. Mr. Chairman----
Mr. SCOTT. I yield to the gentleman from North Carolina.
Chairman SENSENBRENNER. Okay. The gentleman is recognized.
Mr. WATT. I was just going to suggest that since it's now clear that there's no exception for willful, wanton, and reckless, either, that we also put that in----
Mr. CHABOT. Will the gentleman yield?
Mr. WATT. --while you're in the process.
Mr. CHABOT. Will the gentleman yield? Is it the gentleman from California's time, or whose time is it? Would the gentleman yield?
Mr. SCOTT. I yield.
Mr. CHABOT. I think the gentleman has raised some interesting issues, and we're not doing anything here which we're trying to harm workers or anybody that has a legitimate claim, so I'd be happy to work with the gentleman between now and the bill getting to the floor if the gentleman would consider withdrawing his amendment.
Mr. WATT. Will the gentleman yield?
Mr. CHABOT. I would be happy to yield. Well, it's not my time, but----
Mr. WATT. I just wonder, since you're working with us, can we just put the language in the bill and continue to work? [Laughter.]
I mean, I think that's the way to do it. Right now, it's absolutely clear that there's no language in the bill that either deals with fraudulent concealment or willful, wanton, or reckless activity. Regardless of what you read from Black's Law Dictionary, there's nothing in this bill that covers that. So if you want to put it in the bill, let's put it in the bill and then you can continue to clean it up between now and the floor, but----
Mr. WEINER. Will the gentleman yield?
Mr. WATT. --if you are asking us to vote for this, I don't know how you could be asking us to vote on the bill like that.
Mr. WEINER. I am curious, perhaps a good time to make changes in the bill to perfect it is during markup. It's this process in Congress after you have the hearing on the bill, you have a markup on the bill where the Members get together, find perfections that are needed. We'll call it a markup. We'll put it on the schedule. We'll all gather together. We'll make suggestions, then have votes on it. And if you support it and we support it, then I think this might--this concept, I know, is perhaps evolutionary for this Committee, but what the heck. Let's try it out. Let's see if it works. I yield back.
Mr. CHABOT. Let me--would the gentleman yield?
Mr. SCOTT. I yield.
Mr. CHABOT. Once again, we'll make one more try. We're willing to work with the gentleman. We're talking about--you know, this bill basically deals with products liability. You're talking about fraudulent concealment here. And, you know, you won't take yes for an answer, but we're willing----
Chairman SENSENBRENNER. The time of the gentleman from Virginia has expired. The question is on agreeing----
Mr. SCHIFF. Mr. Chairman, may I pose a parliamentary inquiry, since there's not enough time? I think the gentleman's question is directed to me----
Chairman SENSENBRENNER. The gentleman will state a parliamentary inquiry.
Mr. SCHIFF. Mr. Chairman, what does my colleague on the other side of the aisle have in mind?
Chairman SENSENBRENNER. That is not a proper parliamentary inquiry. The chair has learned for a long time never to read anybody's mind on what's going on here, including his own. So the question is on agreeing to the amendment offered by the gentleman from California, Mr. Schiff. Those in favor will say aye.
Opposed, no.
The ayes appear to have it. The ayes have it and the amendment is agreed to.
We are about ready to come up on a vote and we have seven more amendments pending, so I think it's time to break. We will start again next week, and without objection, the Committee stands adjourned.
[Whereupon, at 11:21 a.m., the Committee was adjourned.]
The Committee met, pursuant to notice, at 10:09 a.m., in Room 2141, Rayburn House Office Building, the Honorable F. James Sensenbrenner, Jr. (Chairman of the Committee) presiding.
Chairman SENSENBRENNER. The Committee will be in order. A working quorum is present.
[Intervening business.]
Chairman SENSENBRENNER. The next item on the agenda, and pursuant to notice, I call up the bill H.R. 3509, the `Workplace Goods Job Growth and Competitiveness Act of 2005,' for purposes of markup.
When the Committee met and began consideration of this legislation on March 29 of this year, the Chair had moved that the Committee favorably recommend H.R. 3509 to the House, and the bill was considered as read and open for amendment at any point.
A manager's amendment offered by the gentleman from Ohio, Mr. Chabot, had been adopted, as well as an amendment offered by the gentleman from California, Mr. Schiff.
The Committee will now resume consideration of amendments to H.R. 3509. Are there further amendments?
Mr. LUNGREN. Mr. Chairman?
Chairman SENSENBRENNER. The gentleman from California?
Mr. LUNGREN. Mr. Chairman, I have an amendment at the desk.
Chairman SENSENBRENNER. The clerk will report the amendment.
The CLERK. `An amendment to H.R. 3509 offered by Mr. Daniel E. Lungren of California. Page 5, after line 11'----
[The amendment follows:]
Mr. LUNGREN. Mr. Chairman, I ask unanimous consent that the amendment be considered as read.
Chairman SENSENBRENNER. Without objection, so ordered. The gentleman is recognized for 5 minutes.
Mr. LUNGREN. Mr. Chairman, thank you for the time.
Let me remind Members of the Committee that our last markup session of this bill we adopted an amendment offered by our colleague, Mr. Schiff, which provides that nothing in the bill would constitute a bar to a civil action against a manufacturer or seller of a durable good who fraudulently concealed a defect in the durable good.
I supported this amendment because I agreed with the amendment that someone who fraudulently conceals a defect does not warrant the protection otherwise provided under this bill. That seems common-sensical.
However, the premise of H.R. 3509 is based on the absence of a legal blameworthiness of someone who manufactures or sells a durable good which operates successfully for more than 12 years. If a machine has functioned for such an extended period of time, it is unlikely that it was improperly designed. However, one who fraudulently conceals a defect does not possess the same equities and should be held liable for such culpability.
At the same time, however, I think we can further improve upon the bill by clarifying what is meant by the phrase `fraudulent concealment.' Therefore, I am now offering an amendment to accomplish that very thing. It is a technical amendment in the sense that it furthers the purpose of the bill as amended during our last markup. However, I realize that what is considered to be technical in nature is often in the eyes of the beholder.
So let me explain. My amendment would define the term `fraudulent concealment' to mean that the manufacturer or seller of the durable good had actual knowledge of a defect. Secondly, the defect must be the proximate cause of the harm to the claimant. And third, the manufacturer or seller affirmatively suppressed or hid with the intent to deceive or defraud the existence of such defect.
I think this goes to what the gentleman from California was attempting to do in his amendment last time, and that is why I supported his amendment. But I believe this further clarifies the purpose. In my estimation, it captures the kind of conduct which should not be protected by this bill.
I would add that this is a commonly used definition of `fraudulent concealment.' As a matter of fact, it is virtually identical to that language found in Black's Law Dictionary.
In conclusion, I think that this proposed language preserves the aims of H.R. 3509, preserves the intent of the gentleman from California with his amendment, which we supported and I supported, while denying bad actors any safe harbor. I would ask for your support.
With that, I yield back the balance of my time.
Mr. CHABOT. Mr. Chairman?
Chairman SENSENBRENNER. The gentleman from Ohio, Mr. Chabot?
Mr. CHABOT. I move to strike the last word.
Chairman SENSENBRENNER. The gentleman is recognized for 5 minutes.
Mr. CHABOT. Thank you, Mr. Chairman. I will be very brief.
I strongly support this amendment. As Mr. Lungren stated at the last markup of the bill in March, the Committee accepted by voice vote an amendment by our colleague, Mr. Schiff, that would create an exception to the immunity protections of this bill for manufacturers that fraudulently concealed defects in their products.
At the time of that amendment, and it being accepted, I had indicated that I would like to work with Mr. Schiff to clarify some of the terms in that amendment. Mr. Lungren's amendment does just that by defining `fraudulently concealed' in such a way that it is consistent with Black's Law Dictionary in its definition of the term, as well as the way that the term is used in State statutes and in case law.
It also ensures that this fraudulent concealment exception does not swallow the very sensible rule that we are trying to establish with this bill. For that reason, I strongly support the amendment, and I would urge my colleagues to do so as well.
I yield back the balance of my time.
Mr. SCOTT. Mr. Chairman?
Chairman SENSENBRENNER. For what purpose does the gentleman from Virginia seek recognition?
Mr. SCOTT. Well, to ask the sponsor of the amendment, how does this----
Chairman SENSENBRENNER. The gentleman from Virginia strikes the last word and is recognized for 5 minutes.
Mr. SCOTT. Thank you, Mr. Chairman.
Mr. Chairman, I would ask how this changes the present law on fraudulent concealment? `Fraudulent concealment' is in there. If we don't pass this amendment, what would the, how would this be different?
Mr. LUNGREN. Well, this clarifies exactly what we mean. I don't think it essentially changes what is commonly understood as `fraudulent concealment.' That is why I have gone to the commonly used language. But it prevents courts from adopting various different definitions of this, since this is added in the law by our statute that we are considering here today.
This basically defines, I believe, what would commonly be understood as `fraudulent concealment.' Particularly, it makes it clear in the context of this bill. As the gentleman from Ohio suggested, we want to make sure that when we added `fraudulent concealment,' it doesn't swallow up the purpose of the bill, but rather goes towards specific types of conduct that I think we would all agree should not have the protection of this bill.
Mr. SCOTT. Reclaiming my time, Mr. Chairman.
Some of the provisions like the defect was the proximate cause of the harm would have to be part of the case anyway. I am not, I am just seeing this for the first time. So if the intent is not to change the present law definition of `fraudulent concealment,' I wouldn't have a problem with it. But if it is changing the law, we would have to discuss what the change is.
Mr. LUNGREN. If the gentleman would yield?
I do not believe it does change the law. As I said, this is the commonly accepted definition. It makes it clear that that is what we intend and nothing else. That is why I described it as a technical amendment, but then went on to explain it, to try and assure you that I am not attempting to change what the law is as we understand it.
Mr. CHABOT. Would the gentleman yield?
Mr. SCOTT. I yield.
Mr. CHABOT. I thank the gentleman for yielding.
I would just quote Black's Law Dictionary here: `Fraudulent concealment: the affirmative suppression or hiding with the intent to deceive or defraud, of a material fact or circumstance that one is legally or sometimes morally bound to reveal.'
So it just clarifies the law, and I would commend the gentleman from California for offering the amendment.
Mr. SCOTT. Reclaiming my time, it sounds like you are restating the law, which would obviously be acceptable.
I yield to the gentleman from North Carolina.
Mr. WATT. Could I just follow up on the concern that is being raised? I think there is nothing in the definition that you read that requires actual knowledge, as opposed to constructive knowledge. Is this a change in the existing law in that respect? Or is that the current law?
Mr. LUNGREN. If the gentleman would yield? I do not believe it does change the law. If you will recall, the language in Black's Law Dictionary refers to affirmative suppression or hiding, which would----
Mr. WATT. But you could affirmatively hide something that you----
Mr. LUNGREN. You didn't know about?
Mr. WATT. Well, that you should have known about, with any kind of reasonable diligence. Or you can hide something that you actually knew about, which is what your amendment says. So actual knowledge is one thing. The question I am asking is, does the current fraudulent concealment standard require actual knowledge, or is it sufficient that one should have known using any degree of reasonable diligence?
Mr. LUNGREN. Again, I would say this is not an attempt to change the law, as I understand it, as I understand the way the Supreme Court has interpreted the law where they have read knowledge into a statute, whether it was expressly stated or not. Again, I support the Schiff amendment. I supported it the last time we considered this bill. I thought it was good. This clarifies what current law is.
Again, we are dealing with something that happens 12 years after it has left the hands of the individual involved. It is not my attempt to try and change the law. This is my best attempt to try and ar