IMF H.B. 912 75(R)BILL ANALYSIS STATE AFFAIRS H.B. 912 By: Hirschi 4-19-97 Committee Report (Unamended) BACKGROUND Presently, tobacco companies are protected under the 1993 Products Liability Act, which prevents Texans from suing companies for injuries caused by the use of tobacco products. Under the Products Liability Act of 1993, a manufacturer of tobacco is not liable if the product is "inherently unsafe" or "is known to be unsafe by the ordinary consumer who consumes the product with the ordinary knowledge common to the community." There are two important exceptions to the protections of the Act: 1. The "inherently unsafe" product defense does not apply in cases where a defendant has suppressed material information relevant to a product's safety, so that the consumer does not possess full knowledge of the product's inherent dangerousness. 2 The "inherently unsafe" defense does not apply where an otherwise dangerous product contains especially hazardous ingredients, or in cases where the defendant has failed to make the product safer. After the passage of the Act, information surfaced through Food and Drug Administration and Congressional testimony that the tobacco industry has failed to disclose its knowledge of the health risks of tobacco use. In addition, technology exists to reduce nicotine in cigarettes to insignificant levels, yet tobacco companies have chosen to control nicotine levels in order to maintain market addiction. Individuals, states, and municipalities have already named tobacco companies as defendants in many tort lawsuits. The lawsuits address the failure of the manufacturers to make clear the inherent dangers of tobacco products. Public entities, in particular, have filed suits against tobacco companies in order to recoup public and private health costs. Texas filed suit against the top tobacco companies last year, hoping to recapture the $14 billion in state and federal Medicaid costs it claims to have paid in tobacco-related illnesses since 1968. Many states have also filed suit in order to help recapture their rising costs in public health expenditures due to tobacco related illnesses. PURPOSE To amend the Product Liability Act of 1993, by removing "tobacco " from the list of "common consumer products intended for personal consumption," allowing the tobacco industry to become liable for product deception. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 82.004, Civil Practice and Remedies Code, amending Subsection (a) by adding Subsection (c) that states that tobacco is not a common consumer product intended for personal consumption. SECTION 2. Effective date: September 1, 1997. Applies only to action taken after this date. Actions that precede this date are subject to the law preceding this Act. SECTION 3. Emergency clause.