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Clinton Looks Ready To Cut A Deal On Product Liability Reform

Washington Outlook


American manufacturers' 20-year quest for product-liability reform looked like Beltway roadkill last year. Faced with a measure limiting the damages consumers could collect from makers of defective products, President Clinton put his foot on the veto pedal. And no one cheered louder than the trial lawyers who were big Bill backers.

That was then. Now the White House and Senate Republicans are suddenly searching for a compromise, and business has its hopes up. The President, who has always favored the idea of reforming the legal system, wants to sign something--as long as it doesn't look like a flip-flop.

Clinton's complaint last year was that the bill went too far in protecting companies from multimillion-dollar jury awards, especially by setting a $250,000 ceiling on punitive damages. That limit remains in dispute, but business was buoyed on May 1 when the Senate Commerce Committee approved a bill that addressed other Presidential objections. For instance, the revised measure wouldn't limit damages in cases where a gun dealer sells a weapon to a felon. Nor would it impose limits in cases involving suppliers of raw materials for silicone breast implants. And the GOP is hinting at more flexibility: Commerce Committee Chairman John McCain (Ariz.) says the measure could be reworked further on the Senate floor. Moreover, Hill sources say Majority Leader Trent Lott (Miss.) is eager for an agreement.

The White House seems inclined to deal as well. Clinton has named a high-level task force headed by National Economic Council chief Gene Sperling and White House Deputy Counsel Bruce R. Lindsey to work on revised legislation. On June 19, Sperling and Lindsey met with Caterpillar CEO Donald V. Fites, Tenneco CEO Dana G. Mead, and National Association of Manufacturers head Jerry J. Jasinowski. "We said there is a window of opportunity for bipartisan collaboration," Jasinowski says. "They were interested in seeing if we can get a bill." Negotiations with Senate Republicans could start in July.

Some of Clinton's closest Democratic allies also favor product-liability reform. Senators John D. Rockefeller IV of West Virginia, and Christopher J. Dodd and Joseph I. Lieberman of Connecticut have pressed him to support legislation, and he would like to come to their aid this time. After the last veto, Rockefeller accused Clinton of repaying the Association of Trial Lawyers of America, which gave Dems $581,000 for the 1996 campaign. Now with the election behind him, Clinton is more willing to work with business. "The White House has always been uncomfortable with the President being so closely identified with trial lawyers," says a Democratic Hill staffer.

VAGUE VETO. But talking compromise and reaching one are two different matters. Besides keeping the $250,000 cap, the bill would prohibit juries from holding one company liable for all noneconomic damages, such as pain and suffering, if it was found only partly responsible for a defective product. Clinton is opposed to both changes. An aide says any shift in position would have to be "consistent with the President's veto statement." But both Clintonites and the GOP say the vagueness of his veto left plenty of wiggle room.

A Clinton compromise is sure to trigger protests from trial lawyers and consumer groups. They claim manufacturers would have less incentive to make safe products if the right to sue is curtailed. Clinton bought that argument last time--and he may yet again. But for now, he seems to enjoy being the Dealmaker-in-Chief who worked with the GOP to overhaul welfare and balance the budget. Product-liability reform could be another notch on his legacy belt.EDITED BY OWEN ULLMANN By Susan B. Garland, with Mike McNameeReturn to top


The 259-173 House vote on June 24 backing most-favored-nation trade status for China signals a shift to the center by younger Democrats. Some 64% of Democratic freshmen and sophomores backed MFN, compared with 51% of the remaining Dems. Overall, 112 members split with Minority Leader Richard A. Gephardt (D-Mo.). Gephardt also lost a majority of his caucus in May, when Dems voted 132-72 in favor of the balanced-budget accord, which he opposed. Conclusion: The liberal base supporting an expected Gephardt Presidential bid in 2000 is shrinking.Return to top

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