Business Can Taste Victory on Tort Reform : Congress: But Senate approval is anything but assured for aggressively sought legislation to limit damage awards.

WASHINGTON — U.S. business executives are anticipating a huge victory in Congress in coming weeks as a result of their prodigious push to make it tougher for aggrieved consumers to win multimillion-dollar damage awards against product manufacturers.

“We will spend whatever it takes to win,” promised Frank Coleman, a spokesman for the U.S Chamber of Commerce, which is spearheading an aggressive business coalition pushing hard for change.

The business allies spent at least $4 million on lobbying and advertising to promote passage of a House bill, and they are likely to spend even more during the Senate battle.

But passage of legislation in the Senate is by no means a certainty, even though it had smooth sailing in the House. More than a dozen senators are undecided, and the new Republican majority is not large enough to shut off a threatened filibuster.

“This is very close, a matter of one or two or three votes one way or another,” Sen. Paul Wellstone (D-Minn.) said at a rally in front of the Senate at which he urged opponents of the bill to intensify their lobbying efforts.

The fight centers on what’s known as tort reform, a bit of legal shorthand that understates a historic struggle pitting consumer groups and trial lawyers against much of American business.

Business groups want a cap on punitive damages for defective products, limiting the awards to $250,000 or three times the economic damages, whichever is higher. Lawyers and consumer groups say the legislation would lead to a flood of unsafe products.

The Senate today will complete the opening week of debate over the unprecedented effort to limit product-liability awards. The Republican majority in the House easily passed its version of the bill as an integral part of the GOP’s “contract with America.”

Now that both sides have fired opening volleys in the Senate, the struggle has moved on to vote counting and calculating whether amendments will help proponents achieve their final goal.

The House voted to cap punitive damages for all civil lawsuits, not just manufactured products, as specified in the Senate bill. The House also voted to exempt drugs and medical devices from punitive damages if they have already been approved for the market by the Food and Drug Administration.

But the Senate is a very different institution, a place where having a majority doesn’t necessarily mean automatic victory.

“I expect considerable resistance, including a filibuster, and many attempts to weaken the bill,” said Sen. Slade Gorton (R-Wash.), the floor manager for the bill. He acknowledged that any successful measure must be bipartisan, because 60 votes are needed to shut down debate, and there are only 54 GOP senators.

Determined opponents, including Sen. Barbara Boxer (D-Calif.), will try to talk the bill to death via a filibuster, and they can block any other action in the Senate unless the supporters can round up 60 votes for “cloture,” the Senate’s formal phrase for stopping a filibuster.

“I’ll do everything I can to stop this bill,” Boxer said. “I don’t think the federal government should dictate the maximum payment in a lawsuit. . . . Why should Congress say we know better than local judges and juries?”

The strategic questions are tricky for both sides:

* The current version of the Senate bill covers only manufacturers and their products. The question is: Should it cover retailers and other businesses too?

“We as business people live with a certain amount of paranoia,” fearful, for example, of customers who spill their tea or soup on the floor, trip leaving the restaurant and then file suit, said Herman Cain, president of Godfather’s Pizza and the National Restaurant Assn., which is seeking a broader bill.

But will an amendment to expand the coverage--and match the House bill--win or lose the last handful of vital votes in the Senate?

* The House version would apply a $250,000 ceiling to “pain and suffering” awards in medical malpractice cases. But the Senate bill is silent on the issue, and several senators who support product-liability reform in general are nervous about addressing this concern.

* Opponents are trying to decide whether to fight to the bitter end to prevent any legislation this year, or whether there is any version they can accept.

As many as 15 or 18 senators are “in play,” their votes as yet undecided, according to knowledgeable strategists for both sides. The key swing votes include Sen. Dianne Feinstein (D-Calif.), Sen. Carol Moseley-Braun (D-Ill.), Sen. Sam Nunn (D-Ga.), Sen. Olympia Snowe (R-Me.), Sen. Barbara A. Mikulski (D-Md.) and Sen. Arlen Specter (R-Pa.).

The debate may last three weeks or more, depending on the number of amendments, and the determination of opponents to wage a filibuster.

The tone of the debate in the Senate this week has been high-pitched, with consumer and labor groups arguing vociferously that a new federal law preempting state jurisdiction would give a green light to unsafe products.

“Look at the magnificent good that the tort system has done over many, many years,” said Sen. Ernest F. Hollings (D-S.C.). “I have a whole documentary of product after product after product being made more safe than ever before” because of the legal system, he said during the intense Senate floor debate.

But for the business community, which has been pushing for liability reform for many years, just debating the issue on the Senate floor amounts to a victory of sorts.

Victor E. Schwartz, general counsel for the Product Liability Coordinating Committee, said that for years, the Democratic-controlled House never allowed the issue to be debated, even though some bills had as many as 200 co-sponsors. “There was a tremendous sense of frustration,” he said.

With the simple act of bringing a bill to the Senate floor “we have already proceeded further on legal reform than ever before,” Sen. Gorton said. “It seems quite evident to most citizens that the operations of our society and of our economy are often inhibited by the amount and the nature of much of the litigation with which the people of America are faced.”

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Tort Reform

For the first time ever, Congress is considering legislation that would limit the amount of money plaintiffs can win in product-liability or medical malpractice cases. The legislation would also change provisions regarding what plaintiffs can sue for and who pays the damages. These so-called tort cases have traditionally been handled exclusively under state law. The House has passed a tort reform bill and the Senate is considering one.

Economic damage (medical bills, wages, loss of services, property):

Current Law: States allow

Bill House passed: No change

Bill Senate debating: No change

*

Punitive damages:

Current Law: Varies by state

Bill House passed: Three times economic losses, or $250,000

Bill Senate debating: Same cap as House

*

Current Law:

Bill House passed:

Bill Senate debating:

*

Medical malpractice: pain and suffering awards on top of medical expenses and lost wages:

Current Law: $250,000 limit in California; varies by state

Bill House passed: Adopts California standard

Bill Senate debating: No provision; will debate

*

Who pays:

Current Law: Varies by state but usually each party liable for all losses

Bill House passed: No more joint liability; each party pays only its share

Bill Senate debating: Same as House

*

Liability for drugs and medical devices:

Current Law: State law prevails

Bill House passed: Exempt from punitive damages if product approved by FDA

Bill Senate debating: No provision in Senate; to be debated

*

Statute of limitations for machinery and equipment:

Current Law: State law prevails

Bill House passed: 15 years after manufacture

Bill Senate debating: 20 years after manufacture