Democracy and Product Liability Deform

[Robert Weissman <rob@essential.org>]

While President Clinton instructs China on the merits of democracy, back
on 1600 Pennsylvania Avenue the president and his staff have cut a deal to
erode one of the fundamental pillars of American democracy: the civil
justice system.

The White House has signed off on legislation introduced by Senators Slade
Gorton, R-Washington, and Jay Rockefeller, D-West Virginia, (a major
recipient of corporate PAC money with more than $1 million from 1995 to
1996) to give business a breakthrough victory in its long-running crusade
to eliminate consumers' ability to hold companies accountable through the
tort system for selling dangerous products.

Business hates citizen access to the tort system for several crucial
reasons.

First, it provides citizens with a direct means to hold manufacturers of
dangerous products responsible for the harm the cause. Consumers injured
by a dangerous medical device, for example, do not have to petition the
Food and Drug Administration and wait for the federal agency to act. They
can sue the company directly, and let the case be decided by a jury of
their peers.

Second, the civil justice system's discovery process -- which provides an
injured party suing a manufacturer with the right to demand copies of
internal company documents -- gets corporate dirty secrets out into the
open. As the documents discovered in tobacco litigation illustrate, airing
those dirty secrets often spurs civic, regulatory and legislative
initiatives to force changes in corporate manufacturing and other
practices. 

Third, jury verdicts, while generally conservative, are relatively
unpredictable. And in the case of egregious corporate conduct, there is
always the possibility of a large punitive damages award.

To erode public support for the civil justice system, Big Business has
waged a high-priced, deceitful propaganda effort. Corporate flacks and
rented experts spread misleading and sometimes fraudulent anecdotes to
discredit the system. They point to an explosion in product liability
litigation, though in fact product liability suits make up only
approximately .2 percent of all civil cases filed in stated courts. They
allege punitive damage awards regularly threaten companies' well being --
even though there are only about 13 punitive awards damages a year in
federal and state products liability suits.

The Rockefeller-Gorton-White House bill would not give business everything
it wants in products liability deform, but it is a far-reaching and
dangerous start. Among its key provisions:

* A $250,000 cap on punitive damages for businesses with fewer than 25
employees and less than $5 million in annual revenues. Small business may
deserve some breaks from government -- but not an effective exemption from
one of the most important deterrents to corporate wrongdoing. This is
especially the case given the hazards posed by small gun makers, fireworks
manufacturers and others. In any case, if small business gets the
exemption, big business will immediately demand it be extended to large
companies as well.

* A sharp limit on company liability for durable goods used in the
workplace and intended to last for a long time (for example, machinery,
elevators). Under the bill, workers injured by the defective product could
not sue the product manufacturer if the elevator, machine or other item
was more than 18 years old and the worker's injury was covered -- however
inadequately -- by workers' compensation.

* A massive cutback in liability for sellers of dangerous products.
Consumers will now have the burden to show a seller operated negligently
in selling a dangerous product (for example, by selling an item they
should have known was defective). Sellers will no longer have a duty to
inform customers of known product defects.

These and other provisions would preempt state law, making a mockery of
Congressional Republicans' purported agenda of devolving power to the
states.

However, many Big Business factions -- including the Auto Manufacturers
Association, the Chemical Manufacturers Association and the American
Petroleum Institute -- are actually opposing the bill, which they claim
does not go far enough and contains some provisions that might interfere
with state efforts to limit consumers' rights. An ironic Big
Business-consumer group coalition may yet engineer the bill's defeat.

Senate Majority Leader Trent Lott has announced that he intends to ram the
bill through Senate, by cutting of debate -- before it has even begun --
as the first order of business when the Senate returns after its July 4
break. If the Senate approves the bill, the House of Representatives is
expected to follow in short order.

The Gorton-Rockefeller-White House bill would significantly close off
citizen access to the court house, blocking perhaps the chief means of
direct democracy in the United States. The Senate can offer a genuine
lesson in democracy by defeating Lott's attempt to cut off debate on the
bill (with a "no" vote on cloture), and then voting it down. 

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor.

(c) Russell Mokhiber and Robert Weissman

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