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Key Bill Approved as House Finishes Legal Reform Push : Legislation: Limits on punitive damages in personal injury suits advance to Senate. Sweeping measure easily overcomes opposition from lawyers, consumer groups.


WASHINGTON — Easily overcoming opposition by trial lawyers and consumer groups, the House on Friday approved a landmark legal reform bill that sets the first national rules for personal injury cases and promises to give businesses significant relief from costly litigation.

By a 265-161 vote, the House endorsed the third and final element of the legal reforms proposed in the GOP "contract with America" legislative agenda. The measure now goes to the Senate, where many--but not all--of its provisions are likely to win approval.

The personal injury measure is the most sweeping bill in the package, and House Speaker Newt Gingrich (R-Ga.) had predicted that it would encounter the fiercest opposition of any measure that the Republicans intend to debate during the first 100 days of the 1994 session.

If enacted, the bill would limit punitive damage awards to $250,000, or three times a victim's monetary losses, whichever is greater. Plaintiffs injured by a doctor's negligence or by an unsafe drug or medical device would be allowed to recover no more than $250,000 for their pain and suffering.

Advocates said that the limits are needed to address an escalating caseload of personal injury suits that are clogging the nation's civil courts and, in some cases, forcing businesses and professionals to pay damages far in excess of the tangible losses incurred by plaintiffs.

President Clinton has not yet said whether he would veto the bill in its current form. But Clinton's legal advisers characterized it as an "unfair" measure that "tilts the legal playing field dramatically to the disadvantage of consumers and middle-class citizens."

The bill could have far-reaching effects in Orange County, home to a thriving biomedical industry and base of such drug makers as ICN Pharmaceuticals Inc. in Costa Mesa.

Consumer advocates and trial lawyers have contended that ordinary Americans will be adversely affected by the legislation if they are gravely injured by a product but find themselves unable to win adequate compensation in court.

"The overall attempt to reform the court system is out of proportion to reality," said Irvine lawyer James T. Capretz, who represents patients implanted with faulty Shiley Inc. heart valves. "There are very few punitive damage awards of any significant amount that are upheld through the appeal process."

Friday's vote culminated a decade-long drive by business advocates to rein in the excesses of the nation's civil litigation system. From manufacturers to retailers, from accountants to insurers, similar horror stories are repeated time and again. Reform advocates said that a flood of personal injury suits--and the specter of huge damage verdicts--have been driving up the cost of doing business and forcing the adoption of defensive strategies that are not necessarily in the best interest of customers or clients.

New products, from contraceptives to heart valves, have been kept off the market because of potentially bankrupting damage verdicts, the bill's supporters said, while some older products, such as small airplanes, are no longer even produced in the United States because of high litigation costs.

Since there are no national statistics tracking civil verdicts and settlements, it is difficult to say just how much of an effect the "litigation explosion" has had on the private sector. What is clear is that the complaints of business advocates fell on mostly deaf ears while Democrats were in the majority in Congress. Before Republicans assumed control of both houses this year, key committees refused even to hear testimony about proposals to limit lawsuits.

Now, the new Republican majority and the broad business coalition that supports it is moving with extraordinary speed to make far-reaching changes in the law, sometimes without bothering to conduct hearings on their proposals.

For example, Rep. Christopher Cox (R-Newport Beach) won passage Thursday night of an amendment placing a $250,000 limit on the amount of "non-economic" damages that can be recovered by victims of medical malpractice or defective drugs or medical devices. There were no hearings on the far-reaching change. In fact, Cox had not even proposed it until the day before the floor vote.

Several Orange County biomedical companies had no immediate comment on the bill. They wanted time to study it first.

"We do not comment on legislation but applaud any event that enhances innovation in health care," said Jay Steffenhagen, a vice president at medical device manufacturer Beckman Instruments Inc. in Fullerton.

In the wake of the bill's passage, consumer advocates said they intend to focus their attack on the medical malpractice provision.

"Suppose you have a child who has been brain-damaged or disfigured for life because of an unsafe drug. For that child and her parents, $250,000 for pain and suffering doesn't go a long way," said Mary Griffin, insurance counsel for the Consumers Union.

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