By Seidlits                                            H.B. No. 373
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to products liability.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Title 4, Civil Practice and Remedies Code, is
    1-5  amended by adding Chapter 82 to read as follows:
    1-6                    CHAPTER 82.  PRODUCTS LIABILITY
    1-7        Sec. 82.001.  DEFINITIONS.  In this chapter:  (1) "Claimant"
    1-8  means a party seeking relief, including a plaintiff,
    1-9  counter-claimant, or cross-claimant.
   1-10              (2)  "Products liability action" means any action
   1-11  against a manufacturer or seller for recovery of damages arising
   1-12  out of personal injury, death or property damage allegedly caused
   1-13  by a defective product whether the action is based in strict tort
   1-14  liability, strict products liability, negligence,
   1-15  misrepresentation, breach of express or implied warranty, or any
   1-16  other theory or combination of theories.
   1-17              (3)  "Seller" means a person who is engaged in the
   1-18  business of distributing or otherwise placing, for any commercial
   1-19  purpose, in the stream of commerce for use or consumption a product
   1-20  or any component part thereof.
   1-21              (4)  "Manufacturer" means a person who is a designer,
   1-22  formulator, constructor, rebuilder, fabricator, producer,
   1-23  compounder, processor, or assembler of any product or any component
    2-1  part thereof and who places the product or any component part
    2-2  thereof in the stream of commerce.
    2-3        Sec. 82.002.  MANUFACTURER'S DUTY TO INDEMNIFY.  (a)  A
    2-4  manufacturer shall indemnify and hold harmless a seller against
    2-5  loss arising out of a products liability action, except for any
    2-6  loss caused by the seller's negligence, intentional misconduct or
    2-7  other act or omission, such as negligently modifying or altering
    2-8  the product, for which the seller is independently liable.
    2-9        (b)  For purposes of this section, "loss" includes court
   2-10  costs and other reasonable expenses, reasonable attorney's fees,
   2-11  and any reasonable damages.
   2-12        (c)  Damages awarded by the trier of fact shall, on final
   2-13  judgment, be deemed reasonable for purposes of this section.
   2-14        (d)  For purposes of this section, a wholesale distributor or
   2-15  retail seller who completely or partially assembles a product in
   2-16  accordance with the manufacturer's instructions shall be considered
   2-17  a seller.
   2-18        (e)  The duty to indemnify under this section:
   2-19        (1)  applies without regard to the manner in which the action
   2-20  is concluded; and,
   2-21        (2)  is in addition to any duty to indemnify established by
   2-22  law, contract or otherwise.
   2-23        (f)  A seller eligible for indemnification under this section
   2-24  shall give reasonable notice to the manufacturer of a product
   2-25  claimed in a petition or complaint to be defective, unless the
    3-1  manufacturer has been served as a party or otherwise has actual
    3-2  notice of the action.
    3-3        (g)  A seller is entitled to recover from the manufacturer
    3-4  court costs and other reasonable expenses, reasonable attorney's
    3-5  fees and any reasonable damages incurred by the seller to enforce
    3-6  the seller's right to indemnification under this section.
    3-7        Sec. 82.003.  LIABILITY OF CERTAIN VACCINE MANUFACTURERS AND
    3-8  SELLERS.  (a)  A manufacturer or seller of a vaccine is not liable
    3-9  in a products liability action based on an alleged marketing or
   3-10  design defect if adequate warning or instruction is provided.
   3-11        (b)  This section applies only to a vaccine manufactured and
   3-12  labeled in accordance with the terms of an approval or license
   3-13  issued by, or other requirements of, the federal Food and Drug
   3-14  Administration and which is:
   3-15        (1)  included in the Vaccine Injury Table of the National
   3-16  Vaccine Program prescribed by 42 United States Code Section
   3-17  300aa-14 or any valid regulation promulgated under that section;
   3-18  or,
   3-19        (2)  a vaccine for use against or treatment of Human
   3-20  Immuno-deficiency Virus or Acquired Immune Deficiency Syndrome.
   3-21        (c)  This section is not declarative, by implication or
   3-22  otherwise, of the common law with respect to any product and shall
   3-23  not be construed to restrict the courts of this state in developing
   3-24  the common law with respect to any product which is not subject to
   3-25  this section.
    4-1        Sec. 82.004.  INHERENTLY UNSAFE PRODUCTS.  (a)  In a products
    4-2  liability action, a manufacturer or seller shall not be liable if:
    4-3              (1)  the product is inherently unsafe and the product
    4-4  is known to be unsafe by the ordinary consumer who consumes the
    4-5  product with the ordinary knowledge common to the community; and
    4-6              (2)  the product is a common consumer product intended
    4-7  for personal consumption, such as sugar, castor oil, alcohol,
    4-8  tobacco, and butter, as identified in Comment i to Section 402A of
    4-9  the Restatement (Second) of Torts.
   4-10        (b)  For purposes of this section, the term "products
   4-11  liability action" does not include an action based on manufacturing
   4-12  defect or breach of an express warranty.
   4-13        Sec. 82.005.  DESIGN DEFECTS.  (a)  In a product liability
   4-14  action in which a claimant alleges a design defect, the burden is
   4-15  on the claimant to prove by a preponderance of the evidence that:
   4-16              (1)  there was a safer alternative design; and,
   4-17              (2)  the defect was a producing cause of the personal
   4-18  injury, property damage or death for which the claimant seeks
   4-19  recovery.
   4-20        (b)  In this section, "safer alternative design" means a
   4-21  product design other than the one actually used that in reasonable
   4-22  probability:
   4-23              (1)  would have prevented or significantly reduced the
   4-24  risk of the claimant's personal injury, property damage or death
   4-25  without substantially impairing the product's utility; and,
    5-1              (2)  was economically and technologically feasible at
    5-2  the time the product left the control of the manufacturer or seller
    5-3  by the application of existing or reasonably achievable scientific
    5-4  knowledge.
    5-5        (c)  This section does not supersede or modify any statute,
    5-6  regulation or other law of this state or of the United States that
    5-7  relates to liability for, or to relief in the form of, abatement of
    5-8  nuisance, civil penalties, cleanup costs, cost recovery, an
    5-9  injunction or restitution, that arises from contamination or
   5-10  pollution of the environment.
   5-11        (d)  This section does not apply to:
   5-12              (1)  a cause of action based on a toxic or
   5-13  environmental tort as defined by Section 33.013 (c)(2) and (3),
   5-14  Civil Practice and Remedies Code; or,
   5-15              (2)  a drug or device, as those terms are defined in
   5-16  the federal Food, Drug and Cosmetic Act, 21 U.S.C. Section 321.
   5-17        (e)  This section is not declarative, by implication or
   5-18  otherwise, of the common law with respect to any product and shall
   5-19  not be construed to restrict the courts of this state in developing
   5-20  the common law with respect to any product which is not subject to
   5-21  this section.
   5-22        Sec. 82.006.  FIREARMS AND AMMUNITION.  (a)  In a products
   5-23  liability action brought against a manufacturer or seller of a
   5-24  firearm or ammunition that alleges a design defect in the firearm
   5-25  or ammunition, the burden is on the claimant to prove, in addition
    6-1  to any other elements that the claimant must prove, that:
    6-2              (1)  the actual design of the firearm or ammunition was
    6-3  defective, causing the firearm or ammunition not to function in a
    6-4  manner reasonably expected by an ordinary consumer of firearms or
    6-5  ammunition; and
    6-6              (2)  the defective design was a producing cause of the
    6-7  personal injury, property damage, or death.
    6-8        (b)  The claimant may not prove the existence of the
    6-9  defective design by a comparison or weighing of the benefits of the
   6-10  firearm or ammunition against the risk of personal injury, property
   6-11  damage, or death posed by its potential to cause such injury,
   6-12  damage, or death when discharged.
   6-13        SECTION 2.  Subchapter A, Chapter 16, Civil Practice and
   6-14  Remedies Code, is amended by adding Section 16.012 to read as
   6-15  follows:
   6-16        Sec. 16.012.  PRODUCTS LIABILITY:  MANUFACTURING EQUIPMENT.
   6-17        (a)  In this section:
   6-18              (1)  "Claimant," "products liability action," "seller,"
   6-19  and "manufacturer" have the meanings assigned by Section 82.001.
   6-20              (2)  "Manufacturing equipment" means equipment and
   6-21  machinery used in the manufacturing, processing, or fabrication of
   6-22  property, but this section does not include agricultural equipment
   6-23  or machinery.
   6-24        (b)  Except as provided by Subsection (c), a claimant must
   6-25  commence a products liability action against a manufacturer or
    7-1  seller of manufacturing equipment before the end of 15 years after
    7-2  the date of the sale of the equipment by the defendant.
    7-3        (c)  If a manufacturer or seller expressly represents that
    7-4  the manufacturing equipment has a useful safe life of longer than
    7-5  15 years, a claimant must commence a products liability action
    7-6  against that manufacturer or seller of the equipment before the end
    7-7  of the number of years represented after the date of the sale of
    7-8  the equipment by that seller.
    7-9        (d)  This section does not reduce a limitations period that
   7-10  applies to a products liability action involving manufacturing
   7-11  equipment that accrues before the end of the limitations period
   7-12  under this section.
   7-13        (e)  This section does not extend the limitations period
   7-14  within which a products liability action involving manufacturing
   7-15  equipment may be commenced under any other law.
   7-16        (f)  This section applies only to the sale, and not to the
   7-17  lease, of manufacturing equipment.
   7-18        SECTION 3.  TRANSITION.  (a)  Sections 82.002 through 82.004,
   7-19  Civil Practices and Remedies Code, as added by this Act, apply only
   7-20  to a cause of action commenced on or after the effective date of
   7-21  this Act.  A cause of action commenced before the effective date of
   7-22  this Act is governed by the law in effect at the time the action
   7-23  accrued and that law is continued in effect for that purpose.
   7-24        (b)  Sections 16.012, 82.005 and 82.006, Civil Practices and
   7-25  Remedies Code, as added by this Act, apply only to a cause of
    8-1  action that accrues on or after the effective date of this Act.  A
    8-2  cause of action that accrued before the effective date of this Act
    8-3  is governed by the law in effect at the time the action accrued and
    8-4  that law is continued in effect for that purpose.
    8-5        (c)  Section 82.001, Civil Practices and Remedies Code, as
    8-6  added by this Act, takes effect on the effective date of this Act.
    8-7        SECTION 4.  This Act takes effect September 1, 1993.
    8-8        SECTION 5.  The importance of this legislation and the
    8-9  crowded condition of the calendars in both houses create an
   8-10  emergency   and   an   imperative   public   necessity   that   the
   8-11  constitutional rule requiring bills to be read on three several
   8-12  days in each house be suspended, and this rule is hereby suspended.