President to veto bill to limit damage awards for products He says GOP measure fails to offer consumers enough protection

March 17, 1996|By NEW YORK TIMES NEWS SERVICE

WASHINGTON - President Clinton said yesterday that if Congress approved pending legislation to limit damage awards in lawsuits involving faulty products, he would veto the measure because it did not provide enough protection for consumers.

In breaking a yearlong silence on the issue, Mr. Clinton appeared DTC to deal a crippling blow to a largely Republican-inspired effort to overhaul the nation's civil litigation system and aid the business community.

Mr. Clinton's statement that the bill as currently written would put consumers at a disadvantage comes just two days before a crucial vote in the Senate. Supporters of the measure have been working to preserve a fragile coalition with a razor-thin margin to approve the bill.

The bill's opponents, a coalition of trial lawyers and consumer groups, have been pressing the White House and some wavering senators.

Intrudes on state power

The White House statement said Mr. Clinton believed that the bill, as drafted, "would unfairly tilt the playing field to the disadvantage of consumers" and be an unwarranted intrusion into a field of law traditionally reserved to the states.

"In this bill Congress has intruded on state power, and done so in a way that peculiarly disadvantages consumers," Mr. Clinton said in a letter to congressional leaders.

The measure would cover product liability lawsuits in all federal and state courts. It would affect state courts under the theory that nearly all products manufactured in the nation are involved to some degree in interstate commerce and thus fall under federal jurisdiction.

The bill, as drafted, would limit punitive damages in lawsuits involving dangerous products, a category that would cover such diverse items as toasters that explode, respirators that malfunction or cars that have dangerous design flaws.

It would, for the first time, set a nationwide standard for such suits in state and federal courts.

Anyone who sued successfully under the law could be compensated for his actual damages, typically medical expenses and lost wages and any damaged property.

A $250,000 limit

Punitive damages, which are awarded by juries in cases of egregious misconduct, would be limited in most cases to $250,000 or two times actual damages, whichever is greater.

Yesterday's statement also puts Mr. Clinton in conflict on the issue with Sen. Bob Dole, the majority leader and likely Republican presidential nominee. Mr. Dole had tried and failed to enact even broader legislation to limit punitive damages in all civil lawsuits, not just those involving faulty products.

Groups such as the National Association of Manufacturers have pressed the view that the nation's civil litigation system is out of control because juries, spurred on by greedy lawyers, are awarding exorbitant sums.

But consumer advocates such as Joan Claybrook, the president of Public Citizen, have said that large punitive damage awards are needed to discourage manufacturers from producing dangerous products.

Mr. Clinton said that limiting punitive damage awards would make it easier to produce dangerous products.

"For those irresponsible companies willing to put profits above all else, the bill's capping of punitive damages increases the incentive to engage in the egregious misconduct of knowingly manufacturing and selling of defective products," he said.

The bill has also pitted powerful interests against each other with the trial lawyers opposing the manufacturers association and the U.S. Chamber of Commerce. The American Association of Trial Lawyers has been one of Mr. Clinton's strongest political and financial supporters.

Rockefeller 'disappointed'

The suggestion that he decided to oppose the bill to pay a political debt to the lawyers was made yesterday not by a Republican but by a fellow Democrat, Sen. John D. Rockefeller IV of West Virginia, who has worked for years to enact a law to limit product liability lawsuits.

In an unusually harsh statement, Mr. Rockefeller said he was, "extremely disappointed the president has taken such a short-sighted political view of a serious bipartisan effort that would restore common sense to the American legal system."

He attributed the decision to "special interests and obvious raw political considerations" in the White House.

Mr. Clinton's announcement, as Mr. Rockefeller seemed to suggest, is likely to discourage some Democrats from supporting the bill.

Pub Date: 3/17/96

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