S. 2537 (103rd): Multiple Punitive Damages Fairness Act

103rd Congress, 1993–1994. Text as of Oct 07, 1994 (Introduced).

Status & Summary | PDF | Source: GPO

S 2537 IS

103d CONGRESS

2d Session

S. 2537

To regulate interstate commerce by providing uniform principles to address the multiple imposition of punitive damages, and for other purposes.

IN THE SENATE OF THE UNITED STATES

October 7 (legislative day, SEPTEMBER 12), 1994

Mr. DANFORTH introduced the following bill; which was read twice and referred to the Committee on the Judiciary


A BILL

To regulate interstate commerce by providing uniform principles to address the multiple imposition of punitive damages, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Multiple Punitive Damages Fairness Act’.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

      Sec. 1. Short title.

      Sec. 2. Table of contents.

      Sec. 3. Findings.

      Sec. 4. Purpose.

      Sec. 5. Definitions.

      Sec. 6. General rule.

      Sec. 7. Applicability; preemption; jurisdiction of Federal courts.

      Sec. 8. Effective date.

SEC. 3. FINDINGS.

    The Congress finds the following:

      (1) Multiple or repetitive imposition of punitive damages for harms arising out of a single act or course of conduct may deprive a defendant of all of the assets or insurance coverage of the defendant, and may endanger the ability of claimants to receive compensation for basic out-of-pocket expenses and damages for pain and suffering.

      (2) The detrimental impact of multiple punitive damages exists even in cases that are settled, rather than tried, because the threat of punitive damages being awarded results in a settlement that provides for a higher award amount than would ordinarily be obtained. To the extent that this premium exceeds what would otherwise be a fair and reasonable settlement for compensatory damages, assets that could be available for satisfaction of future compensatory claims are dissipated.

      (3) Fundamental unfairness results when anyone is punished repeatedly for what is essentially the same conduct.

      (4) Federal and State appellate and trial judges, and well-respected commentators, have expressed concern that multiple imposition of punitive damages may violate constitutionally protected rights.

      (5) Multiple imposition of punitive damages may be a significant obstacle to global settlement negotiations in repetitive litigation.

      (6) Limiting the imposition of multiple punitive damages awards would facilitate the resolution of mass tort claims involving thousands of injured claimants.

      (7) Federal and State trial courts cannot provide solutions to problems caused by the multiple imposition of punitive damages because they lack the power or authority to prohibit subsequent awards in other courts.

      (8) Individual State legislatures can create only a partial remedy to address problems caused by the multiple imposition of punitive damages, because each State lacks the power to control the imposition of punitive damages in other States.

SEC. 4. PURPOSE.

    The purpose of this Act is to provide a fair and balanced resolution to the problem of multiple imposition of punitive damages in interstate commerce.

SEC. 5. DEFINITIONS.

    As used in this Act--

      (1) the term ‘punitive damages’ means damages awarded against any person or entity to punish or deter such person or entity, or others, from engaging in similar behavior in the future;

      (2) the term ‘specific findings of fact’ are findings in written form focusing on specific behavior of a defendant that demonstrates a conscious, flagrant, indifference to the safety or welfare of the claimant; and

      (3) the term ‘claimant’ means--

        (A) any person who brings a civil action and any person on behalf of whom such action is brought;

        (B) if such action is brought through or on behalf of an estate, the term includes the claimant’s decedent; and

        (C) if such action is brought through or on behalf of a minor or incompetent, the term includes the claimant’s parent or guardian.

SEC. 6. GENERAL RULE.

    (a) GENERAL RULE- Except as provided in subsection (b), punitive damages shall be prohibited in any civil action in Federal or State court in which such damages are sought against a defendant based on the same act or course of conduct for which punitive damages have already been awarded against such defendant.

    (b) CIRCUMSTANCES FOR AWARD-

      (1) SUBSTANTIAL NEW EVIDENCE- If the court determines in a pre-trial hearing that the claimant will offer new and substantial evidence of previously undiscovered, additional wrongful behavior on the part of the defendant, other than the injury to the claimant, the court may award punitive damages in accordance with subsection (c).

      (2) INSUFFICIENT AWARD- If the court determines in a pre-trial hearing that the amount of punitive damages previously imposed were insufficient to either punish the defendant’s wrongful conduct or to deter the defendant and others from similar behavior in the future, the court may award punitive damages in accordance with subsection (c).

    (c) LIMITATIONS ON AWARD- A court awarding punitive damages pursuant to subsection (b) shall--

      (1) make specific findings of fact on the record to support the award;

      (2) reduce the amount of the punitive portion of the damage award by the sum of the amounts of punitive damages previously paid by the defendant in prior actions based on the same act or course of conduct; and

      (3) prohibit disclosure to the jury of the court’s determination and action under this subsection.

SEC. 7. APPLICABILITY; PREEMPTION; JURISDICTION OF FEDERAL COURTS.

    (a) APPLICABILITY TO PUNITIVE DAMAGES ACTIONS-

      (1) IN GENERAL- Except as provided in paragraph (2), this Act shall apply to any civil action brought on any theory where punitive damages are sought based on the same act or course of conduct for which punitive damages have already been awarded against the defendant.

      (2) STATUTORY EXCEPTION- This Act shall not apply to any civil action involving damages awarded under any Federal or State statute that prescribes the amount of punitive damages to be awarded.

    (b) PREEMPTION- Except as provided in subsection (a)(2), this Act shall supersede any Federal or State law regarding recovery for punitive damages.

    (c) JURISDICTION OF FEDERAL COURTS- The district courts of the United States shall not have jurisdiction over any civil action pursuant to this Act based on sections 1331 or 1337 of title 28, United States Code.

SEC. 8. EFFECTIVE DATE.

    (a) IN GENERAL- This Act shall take effect on the date of its enactment.

    (b) PENDING ACTIONS- This Act shall apply to--

      (1) any civil action pending on the date of enactment of this Act; and

      (2) any civil action commenced on or after such date, including any action in which the harm or the conduct which caused the harm occurred prior to such date.