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Clinton vetoes limits on liability awards Rejection of bill was to aid lawyers, Republicans say

WASHINGTON — WASHINGTON -- In a move fraught with election-year politics, President Clinton yesterday vetoed a bill that would limit how much money can be awarded to people who claim they were hurt by faulty products.

In announcing his veto, Mr. Clinton said that while he agreed that the legal system needs reform, this bill "would deprive Americans of the ability to recover fully when they are injured by defective products.

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"It would mean more unsafe products in our homes," he said. "It would let wrongdoers off the hook. I cannot allow it to become law."

It was the 15th veto of his presidency, and the second in which Mr. Clinton has come down on the side of one of the Democratic Party's most powerful and controversial constituencies: the nation's trial lawyers. The bill passed both the House and Senate by margins short of the two-thirds needed to override the veto.

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Republicans wasted little time in portraying the veto as repayment for the millions of dollars in campaign contributions given to the president by attorneys, who benefit from lawsuits that produce huge damage awards. The legal profession has contributed far more money to Mr. Clinton's campaign than to that of Sen. Bob Dole, his likely opponent in the November election.

"Why will President Clinton veto this important legislation? The answer can be summed up in three words: the trial lawyers," Mr. Dole said on the Senate floor. "It is the trial lawyers who are calling the shots at the White House."

The Senate majority leader has said he will make the president's ties to the legal community a campaign issue.

The measure vetoed yesterday would limit punitive damages in product-liability suits to $250,000 or twice the amount of actual economic damages, whichever is greater. In cases involving small businesses, the cap would be the smaller amount.

The bill would also abolish "joint" liability, in which numerous defendants can be held liable but with the damages being paid by the defendant that can best afford them, not necessarily the one most culpable. That doctrine would be replaced by a "proportional liability" system that holds defendants liable only for the damages -- or portion of the damage -- they actually caused.

dTC Business leaders favored bill

Business leaders had hailed the bill as a cure for frivolous lawsuits, windfall jury verdicts and a climate that they said has encouraged litigation and stifled American innovation.

Lawyers' groups, joined by some consumer advocates, countered that the risk of punitive damages is often the only threat that prevents dangerous products from being marketed and sold to unsuspecting consumers.

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"The product liability bill is an attack on the ability of consumers and workers to hold manufacturers of defective products fully accountable for the injuries they cause," said Mary Griffin, insurance counsel for Consumers Union, the publisher of Consumer Reports magazine.

Those advocating change reply that it is consumers themselves who have to pay for jackpot verdicts that activist juries hand down, such as the $3 million in damages awarded by a New Mexico jury to a woman who sued McDonald's after she spilled coffee on herself.

That verdict was cut by an appeals court to about $500,000, but business leaders say there is a lot more wrong with the tort system than just runaway juries. Among the problems they cite:

The prodigious cost of defending the 700,000 lawsuits filed each year -- even when there is no wrongdoing.

The cost to society of allowing lawsuits against companies, such as manufacturers of small airplanes, over products made decades ago -- and in cases where the primary cause of death or injury lay with the plaintiff.

The proliferation of class-action lawsuits in which businesses are forced by insurance companies and stockholders into huge settlements even if they don't believe they are at fault, because to do otherwise would jeopardize the company.

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The refusal of high-technology or medical companies, such as Du Pont and Dow Corning, to market certain life-saving products, because they fear class-action suits. Dow Corning, for example, is the only supplier of raw silicone for a medical device known as a brain shunt. That device is the only treatment for hydrocephalus, also known as "water on the brain." Untreated, the condition can lead to blindness, mental retardation and death.

But after the costly experience of silicone makers with breast implants, the company is shying away from investing in experimental or possibly risky devices.

Earlier veto

Earlier this year, Mr. Clinton sided with trial lawyers in vetoing a bill that would have made it more difficult for lawyers to put together class-action securities lawsuits against high-technology companies that were not performing well on the stock market.

That veto was the only one of Mr. Clinton's vetoes to be overridden. Overriding this one appears to be more difficult. It passed the House on a vote of 259-158 on March 29, a week after the Senate's 59-40 vote. Both margins are short of the two-thirds required to override a veto.

"We may make a stab at it," said Tony Blankley, House Speaker Newt Gingrich's spokesman, but he wasn't optimistic.

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Pub Date: 5/03/96


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