1-1 By: Parker, et al. S.B. No. 4 1-2 (In the Senate - Filed January 14, 1993; January 14, 1993, 1-3 read first time and referred to Committee on Economic Development; 1-4 January 26, 1993, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 11, Nays 0; 1-6 January 26, 1993, sent to printer.) 1-7 COMMITTEE VOTE 1-8 Yea Nay PNV Absent 1-9 Parker x 1-10 Lucio x 1-11 Ellis x 1-12 Haley x 1-13 Harris of Dallas x 1-14 Harris of Tarrant x 1-15 Leedom x 1-16 Madla x 1-17 Rosson x 1-18 Shapiro x 1-19 Wentworth x 1-20 COMMITTEE SUBSTITUTE FOR S.B. No. 4 By: Parker 1-21 A BILL TO BE ENTITLED 1-22 AN ACT 1-23 relating to products liability. 1-24 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-25 SECTION 1. Title 4, Civil Practice and Remedies Code, is 1-26 amended by adding Chapter 82 to read as follows: 1-27 CHAPTER 82. PRODUCTS LIABILITY 1-28 Sec. 82.001. DEFINITIONS. In this chapter: 1-29 (1) "Claimant" means a party seeking relief, including 1-30 a plaintiff, counterclaimant, or cross-claimant. 1-31 (2) "Products liability action" means any action 1-32 against a manufacturer or seller for recovery of damages arising 1-33 out of personal injury, death, or property damage allegedly caused 1-34 by a defective product whether the action is based in strict tort 1-35 liability, strict products liability, negligence, 1-36 misrepresentation, breach of express or implied warranty, or any 1-37 other theory or combination of theories. 1-38 (3) "Seller" means a person who is engaged in the 1-39 business of distributing or otherwise placing, for any commercial 1-40 purpose, in the stream of commerce for use or consumption a product 1-41 or any component part thereof. 1-42 (4) "Manufacturer" means a person who is a designer, 1-43 formulator, constructor, rebuilder, fabricator, producer, 1-44 compounder, processor, or assembler of any product or any component 1-45 part thereof and who places the product or any component part 1-46 thereof in the stream of commerce. 1-47 Sec. 82.002. MANUFACTURER'S DUTY TO INDEMNIFY. (a) A 1-48 manufacturer shall indemnify and hold harmless a seller against 1-49 loss arising out of a products liability action, except for any 1-50 loss caused by the seller's negligence, intentional misconduct, or 1-51 other act or omission, such as negligently modifying or altering 1-52 the product, for which the seller is independently liable. 1-53 (b) For purposes of this section, "loss" includes court 1-54 costs and other reasonable expenses, reasonable attorney fees, and 1-55 any reasonable damages. 1-56 (c) Damages awarded by the trier of fact shall, on final 1-57 judgment, be deemed reasonable for purposes of this section. 1-58 (d) For purposes of this section, a wholesale distributor or 1-59 retail seller who completely or partially assembles a product in 1-60 accordance with the manufacturer's instructions shall be considered 1-61 a seller. 1-62 (e) The duty to indemnify under this section: 1-63 (1) applies without regard to the manner in which the 1-64 action is concluded; and 1-65 (2) is in addition to any duty to indemnify 1-66 established by law, contract, or otherwise. 1-67 (f) A seller eligible for indemnification under this section 1-68 shall give reasonable notice to the manufacturer of a product 2-1 claimed in a petition or complaint to be defective, unless the 2-2 manufacturer has been served as a party or otherwise has actual 2-3 notice of the action. 2-4 (g) A seller is entitled to recover from the manufacturer 2-5 court costs and other reasonable expenses, reasonable attorney 2-6 fees, and any reasonable damages incurred by the seller to enforce 2-7 the seller's right to indemnification under this section. 2-8 Sec. 82.003. LIABILITY OF CERTAIN VACCINE MANUFACTURERS AND 2-9 SELLERS. (a) A manufacturer or seller of a vaccine is not liable 2-10 in a products liability action based on an alleged marketing or 2-11 design defect if adequate warning or instruction is provided. 2-12 (b) This section applies only to a vaccine manufactured and 2-13 labeled in accordance with the terms of an approval or license 2-14 issued by, or other requirements of, the federal Food and Drug 2-15 Administration and which is: 2-16 (1) included in the Vaccine Injury Table of the 2-17 National Vaccine Program prescribed by 42 U.S.C. Section 300aa-14 2-18 or any valid regulation promulgated under that section; or 2-19 (2) a vaccine for use against or treatment of human 2-20 immunodeficiency virus infection or acquired immune deficiency 2-21 syndrome. 2-22 (c) This section is not declarative by implication or 2-23 otherwise of the common law with respect to any product and shall 2-24 not be construed to restrict the courts of this state in developing 2-25 the common law with respect to any product which is not subject to 2-26 this section. 2-27 Sec. 82.004. INHERENTLY UNSAFE PRODUCTS. (a) In a products 2-28 liability action, a manufacturer or seller shall not be liable if: 2-29 (1) the product is inherently unsafe and the product 2-30 is known to be unsafe by the ordinary consumer who consumes the 2-31 product with the ordinary knowledge common to the community; and 2-32 (2) the product is a common consumer product intended 2-33 for personal consumption, such as sugar, castor oil, alcohol, 2-34 tobacco, and butter, as identified in Comment i to Section 402A of 2-35 the Restatement (Second) of Torts. 2-36 (b) For purposes of this section, the term "products 2-37 liability action" does not include an action based on manufacturing 2-38 defect or breach of an express warranty. 2-39 Sec. 82.005. DESIGN DEFECTS. (a) In a products liability 2-40 action in which a claimant alleges a design defect, the burden is 2-41 on the claimant to prove by a preponderance of the evidence that: 2-42 (1) there was a safer alternative design; and 2-43 (2) the defect was a producing cause of the personal 2-44 injury, property damage, or death for which the claimant seeks 2-45 recovery. 2-46 (b) In this section, "safer alternative design" means a 2-47 product design other than the one actually used that in reasonable 2-48 probability: 2-49 (1) would have prevented or significantly reduced the 2-50 risk of the claimant's personal injury, property damage, or death 2-51 without substantially impairing the product's utility; and 2-52 (2) was economically and technologically feasible at 2-53 the time the product left the control of the manufacturer or seller 2-54 by the application of existing or reasonably achievable scientific 2-55 knowledge. 2-56 (c) This section does not supersede or modify any statute, 2-57 regulation, or other law of this state or of the United States that 2-58 relates to liability for, or to relief in the form of, abatement of 2-59 nuisance, civil penalties, cleanup costs, cost recovery, an 2-60 injunction, or restitution that arises from contamination or 2-61 pollution of the environment. 2-62 (d) This section does not apply to: 2-63 (1) a cause of action based on a toxic or 2-64 environmental tort as defined by Sections 33.013(c)(2) and (3); or 2-65 (2) a drug or device, as those terms are defined in 2-66 the federal Food, Drug and Cosmetic Act (21 U.S.C. Section 321). 2-67 (e) This section is not declarative, by implication or 2-68 otherwise, of the common law with respect to any product and shall 2-69 not be construed to restrict the courts of this state in developing 2-70 the common law with respect to any product which is not subject to 3-1 this section. 3-2 Sec. 82.006. FIREARMS AND AMMUNITION. (a) In a products 3-3 liability action brought against a manufacturer or seller of a 3-4 firearm or ammunition that alleges a design defect in the firearm 3-5 or ammunition, the burden is on the claimant to prove, in addition 3-6 to any other elements that the claimant must prove, that: 3-7 (1) the actual design of the firearm or ammunition was 3-8 defective, causing the firearm or ammunition not to function in a 3-9 manner reasonably expected by an ordinary consumer of firearms or 3-10 ammunition; and 3-11 (2) the defective design was a producing cause of the 3-12 personal injury, property damage, or death. 3-13 (b) The claimant may not prove the existence of the 3-14 defective design by a comparison or weighing of the benefits of the 3-15 firearm or ammunition against the risk of personal injury, property 3-16 damage, or death posed by its potential to cause such injury, 3-17 damage, or death when discharged. 3-18 SECTION 2. Subchapter A, Chapter 16, Civil Practice and 3-19 Remedies Code, is amended by adding Section 16.012 to read as 3-20 follows: 3-21 Sec. 16.012. PRODUCTS LIABILITY: MANUFACTURING EQUIPMENT. 3-22 (a) In this section: 3-23 (1) "Claimant," "products liability action," "seller," 3-24 and "manufacturer" have the meanings assigned by Section 82.001. 3-25 (2) "Manufacturing equipment" means equipment and 3-26 machinery used in the manufacturing, processing, or fabrication of 3-27 property but does not include agricultural equipment or machinery. 3-28 (b) Except as provided by Subsection (c), a claimant must 3-29 commence a products liability action against a manufacturer or 3-30 seller of manufacturing equipment before the end of 15 years after 3-31 the date of the sale of the equipment by the defendant. 3-32 (c) If a manufacturer or seller expressly represents that 3-33 the manufacturing equipment has a useful safe life of longer than 3-34 15 years, a claimant must commence a products liability action 3-35 against that manufacturer or seller of the equipment before the end 3-36 of the number of years represented after the date of the sale of 3-37 the equipment by that seller. 3-38 (d) This section does not reduce a limitations period that 3-39 applies to a products liability action involving manufacturing 3-40 equipment that accrues before the end of the limitations period 3-41 under this section. 3-42 (e) This section does not extend the limitations period 3-43 within which a products liability action involving manufacturing 3-44 equipment may be commenced under any other law. 3-45 (f) This section applies only to the sale and not to the 3-46 lease of manufacturing equipment. 3-47 SECTION 3. (a) Sections 82.002 through 82.004, Civil 3-48 Practice and Remedies Code, as added by this Act, apply only to a 3-49 cause of action commenced on or after the effective date of this 3-50 Act. A cause of action commenced before the effective date of this 3-51 Act is governed by the law in effect at the time the action 3-52 accrued, and that law is continued in effect for that purpose. For 3-53 purposes of Section 82.003, Civil Practice and Remedies Code, a 3-54 cause of action is commenced when a claim is filed pursuant to the 3-55 requirements of the federal National Vaccine Injury Compensation 3-56 Program, 42 U.S.C. 300aa-10 et seq. 3-57 (b) Sections 16.012, 82.005, and 82.006, Civil Practice and 3-58 Remedies Code, as added by this Act, apply only to a cause of 3-59 action that accrues on or after the effective date of this Act. A 3-60 cause of action that accrued before the effective date of this Act 3-61 is governed by the law in effect at the time the action accrued, 3-62 and that law is continued in effect for that purpose. 3-63 (c) Section 82.001, Civil Practice and Remedies Code, as 3-64 added by this Act, takes effect on the effective date of this Act. 3-65 SECTION 4. This Act takes effect September 1, 1993. 3-66 SECTION 5. The importance of this legislation and the 3-67 crowded condition of the calendars in both houses create an 3-68 emergency and an imperative public necessity that the 3-69 constitutional rule requiring bills to be read on three several 3-70 days in each house be suspended, and this rule is hereby suspended. 4-1 * * * * * 4-2 Austin, 4-3 Texas 4-4 January 26, 1993 4-5 Hon. Bob Bullock 4-6 President of the Senate 4-7 Sir: 4-8 We, your Committee on Economic Development to which was referred 4-9 S.B. No. 4, have had the same under consideration, and I am 4-10 instructed to report it back to the Senate with the recommendation 4-11 that it do not pass, but that the Committee Substitute adopted in 4-12 lieu thereof do pass and be printed. 4-13 Parker, 4-14 Chairman 4-15 * * * * * 4-16 WITNESSES 4-17 FOR AGAINST ON 4-18 ___________________________________________________________________ 4-19 Name: Shannon Ratliff 4-20 Representing: Texas Civil Justice League 4-21 City: Austin x 4-22 Name: J. Donald Bowen 4-23 Representing: Texas Trial Lawyers 4-24 City: Houston x 4-25 Name: Wade Thomason 4-26 Representing: American Lung Assoc. of Texas 4-27 City: Austin x 4-28 Name: Joel S. Dunnington, M.D. 4-29 Representing: Texas Interagency Council on Smoking & Health 4-30 City: Houston x 4-31 Name: Eric Solberg 4-32 Representing: Doc (Drs. Ought To Care) 4-33 City: Houston x 4-34 Name: Cindy Antolik 4-35 Representing: American Cancer Society 4-36 City: Austin x 4-37 Name: Tom Smith 4-38 Representing: Public Citizen 4-39 City: Austin x 4-40 Name: Mark Ellison 4-41 Representing: Department of Agriculture 4-42 City: Austin x 4-43 Name: Reggie James 4-44 Representing: Consumers Union 4-45 City: Austin x 4-46 Name: H. P. Whitworth 4-47 Representing: Texas Chemical Council 4-48 City: Austin x 4-49 Name: Rob Looney 4-50 Representing: Mid. Cont. Oil & Gas 4-51 City: Austin x 4-52 Name: Joe C. Tooley 4-53 Representing: Texas Assoc. of Defense Counsel 4-54 City: Dallas x 4-55 NAME: James H. Holmes, III 4-56 Representing: Texas Assoc. Defense Counsel 4-57 City: Dallas x 4-58 NAME: Ralph Wayne 4-59 Representing: Texas Civil Justice League 4-60 City: Austin x 4-61 NAME: Durwood Tucker 4-62 Representing: Texas Farm Bureau 4-63 City: Austin x 4-64 NAME: Michael White 4-65 Representing: Greater Houston Partnership 4-66 City: Houston x 4-67 NAME: Gerald Holtzman 4-68 Representing: Jobs for Texas 4-69 City: Houston x 4-70 NAME: Robert Howden 5-1 Representing: Nat. Fed. of Ind. Businessmen 5-2 City: Austin x 5-3 NAME: Larry Milner 5-4 Representing: Texas Chamber of Commerce 5-5 City: Austin x 5-6 NAME: Chris Shields 5-7 Representing: Texas Chamber of Commerce 5-8 City: Austin x