[Congressional Record Volume 140, Number 29 (Wednesday, March 16, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: March 16, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
GENERAL AVIATION REVITALIZATION ACT OF 1994
The Senate continued with the consideration of the bill.
The ACTING PRESIDENT pro tempore. Who yields time?
The Senator from Ohio. The Senator controls 27 minutes.
Mr. METZENBAUM. Madam President, although I still have fundamental
problems with the bill offered by the Senator from Kansas, we have
indeed reached an agreement--in the form of a modification to the
original bill, S. 1458--that addresses some of the concerns with the
statute of repose bill.
For example, I and many of my colleagues feel that the arbitrary cut
off of 15 years in Senator Kassebaum's original bill is too short. This
modified bill would extend the statute of repose to 18 years. In my
view, that is still inadequate because the average age of general
aviation aircraft is 26 years.
In addition, I believe that many dangerous, possibly unintended,
consequences could result from a flat immunity from liability in all
cases. As the bill of the Senator from Kansas was drafted, the statute
of repose provision would provide an incentive for aircraft or parts
manufacturers to misrepresent to the FAA or conceal or withhold from
the FAA critical information about known defects.
Because there would be complete immunity from private suits after the
statutory period, if a manufacturer learned of a defect or other
problem, it could simply sit on the information and hope that an
accident does not occur within the timeframe.
Frankly, in my view, that is not enough. It is not enough that if a
manufacturer were to engage in such unscrupulous conduct, it would be
subject to regulatory penalties. History shows that while regulatory
penalties help, they are quite inadequate as far as deterring
fraudulent conduct. Private actions are necessary to create truly
strong incentives for manufacturers to be forthcoming about safety
information.
We are talking about the lives of individuals. When you have airplane
crashes, people lose their lives. Regulatory agencies simply lack the
resources to ferret out all cases of concealed fraud.
If private suits are barred, manufacturers would be tempted to
conceal information concerning defects in the hope that such defects
would not manifest themselves within the statutory period and
regulatory agencies usually would have no way of independently
uncovering concealed information.
It is unfair to allow manufacturers of general aviation aircraft or
parts to escape liability for a defect if that manufacturer had
knowledge or information of the defect that caused the accident in
advance, yet failed to come forward with the information. I do not
believe we should grant total immunity to manufacturers for such highly
egregious conduct, regardless of the age of the aircraft.
I do not think we should leave victims uncompensated and insulate
manufacturers where the manufacturer engaged in any kind of intentional
or truly outrageous fraudulent conduct. The only real form of
protection that consumers currently have against dangerous aircraft is
the ability to file a lawsuit against the manufacturer. The threat of a
product liability suit plays a crucial role in deterring manufacturers
from marketing defective aircraft. Take away this protection for
consumers and there will be little incentive for manufacturers to think
about protecting consumers instead of protecting their balance sheets.
Now, the modified bill that I have worked out with the distinguished
Senator from Kansas does not completely address this concern, but I am
frank to say that we have worked cooperatively and she has made a very
strong effort, as have I, to bring about the result that we have before
us today. That result addresses the problem in part by creating a
limited exception to the statute of repose in some cases in which the
manufacturer knowingly misrepresented to the Government, or concealed
or withheld from the Government, information concerning the
performance, maintenance, or operation of an aircraft.
This exception contains certain procedural and substantive hurdles
that will be difficult for victims to overcome in many, if not most,
cases.
So this modified bill is a compromise on the issue of fraud. The
modified bill also partially addresses a concern that innocent victims
who, unlike pilots, know nothing about the age or condition of the
aircraft they happen to fly in should not be deprived of just
compensation for damages suffered as a result of defective aircraft.
Unfortunately, the bill only addresses this concern with respect to one
limited category of passengers: Passengers who must be airlifted to
receive treatment for a medical or other emergency.
In my view, this is not enough. All passengers who have no basis to
know or evaluate the condition of the aircraft they ride in--those who
cannot be presumed to make an informed decision on whether an aircraft
is safe to fly, or who have no choice but to travel on a particular
aircraft--these passengers should not be deprived of their legal
rights.
Another concern I had with the original bill was that it ignored
innocent victims on the ground who are injured or killed when a
defective aircraft crashes, when the plane drops out of the sky, an
innocent victim is on the ground, not a party to any action at all, and
suddenly that individual is very seriously injured or loses his or her
life.
What if a plane crashes into a school or a residential area? Innocent
bystanders should not be left uncompensated when they are injured or
killed by defective aircraft that just fall out of the sky.
This modified bill remedies that inequity and preserves the legal
rights of innocent bystanders.
So this modified bill fills in some of the gaps concerning unintended
and unfair consequences that would result from Senator Kassebaum's
original bill.
This modified bill still is far from being an ideal piece of
legislation in my view, but it would be an improvement on the original
Kassebaum bill. I appreciate the Senator from Kansas' responsiveness to
my concerns and her willingness to make a few modifications to her
legislation.
But all things considered, I believe it to be bad legislation and
hope the House will see fit to make needed changes.
As a matter of fact, I pose a question to the Chair. Has a rollcall
been ordered in connection with passage of this measure?
The ACTING PRESIDENT pro tempore. The yeas and nays have not been
ordered.
Mr. METZENBAUM. It is my understanding that the Senator from Kansas
intends to ask for a rollcall.
Mrs. KASSEBAUM. Madam President, the Senator from Ohio is correct.
Perhaps now is the time to ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
Mr. METZENBAUM. Under those circumstances, Madam President, I am
going to vote for it, not because I think it is the right bill, but
because I think it is just as well to pass it, I assume unanimously, in
this body, send it over to the House where they can give it more
attention and look at it more fully than we have on the floor of the
Senate.
I still do not believe it to be good legislation. I do indeed hope
that the House will see fit to provide the necessary protection for
those who might be adversely affected by the impact of this
legislation. But notwithstanding that, by reason of the understanding
and cooperation of the Senator from Kansas, I will not stand in the way
of its passage and will vote for it with tongue in cheek and with the
strong hope that the House will do that which the Senate should have
done.
I yield the floor.
The ACTING PRESIDENT pro tempore. Who yields time?
Mr. METZENBAUM. Madam President, how much time does the Senator from
Ohio have left?
The ACTING PRESIDENT pro tempore. Eighteen minutes 16 seconds.
Mr. METZENBAUM. And the Senator from Kansas?
The ACTING PRESIDENT pro tempore. Seven minutes 30 seconds.
Mr. METZENBAUM. I yield 10 minutes to the Senator from North Dakota.
The ACTING PRESIDENT pro tempore. I have recognized Mrs. Kassebaum,
the Senator from Kansas. Could you perhaps withhold for a moment?
The Senator from Kansas.
Mrs. KASSEBAUM. I will be happy to yield. I was going to yield time
to the Senator from Texas [Mrs. Hutchison] but she is happy to wait. We
will proceed.
The ACTING PRESIDENT pro tempore. The Senator from Ohio?
Mr. METZENBAUM. Madam President, it is my understanding that the
Senator from North Dakota does not intend to address himself to the
issues of this bill. So I suggest that the Senator from Kansas proceed,
and we will conclude our remarks on the bill, and then the Senator from
North Dakota could proceed.
The ACTING PRESIDENT pro tempore. The Senator from Kansas.
Mrs. KASSEBAUM. I yield 3 minutes to the Senator from Texas [Mrs.
Hutchison], but also to add that Mrs. Hutchison, while being the junior
Senator from Texas now, was once a very important member of the
National Transportation Safety Board and knows well the issues
affecting aviation and the importance of safety.
The ACTING PRESIDENT pro tempore. The Senator from Texas is
recognized.
Mrs. HUTCHISON. Thank you, Madam President. I thank the Senator from
Ohio and the Senator from North Dakota, and most especially I thank the
Senator from Kansas for working very hard for this important
legislation.
Indeed, I do understand this industry, and I do understand how very
important it is to America that we have a strong general aviation
manufacturing base. In fact, the average piston engine aircraft made in
America is over 28 years old, and one-third of our fleet is 33 years
old. Yet, U.S. airplane manufacturers still face exorbitant design and
manufacture product liability costs for these planes. So these
manufacturers are, in effect, being penalized for having a durable
product.
Madam President, I would like to add my support to the General
Aviation Revitalization Act offered by my distinguished colleague from
Kansas, Senator Kassebaum. This bill has 50 cosponsors, and I am proud
to be one of them.
The concept of this legislation is quite simple: rescue the U.S.
general aviation industry from the escalating product liability costs--
which are killing what used to be one of the most thriving industries
in America.
The average piston-engine aircraft is over 28 years old and one-third
of the fleet is over 33 years old. Yet U.S. airplane manufacturers
still face exorbitant design and manufacture product liability costs
for these planes. In effect, these manufacturers have been penalized
for the durability of their product.
A brief review of the statistical history of this industry is
startling. In 1978, 6,000 American workers were involved in the
manufacture of 18,000 general aviation airplanes. In 1992, the industry
manufactured only 900 general aviation aircraft and employed only 1,000
workers. Over this same period of time, thousands of jobs in aircraft
sales and service have been lost.
What happened? the application of strict liability doctrine in
product liability cases arising out of aircraft accidents. The cost of
legal claims and defense for light aircraft airframe and component
manufacturers went from about $24 million in the 1970's to over $200
million during the 1980's--a seven-fold increase. This cost is directly
reflected in the price of the product; Beech Aircraft estimates that
the costs of litigation added $70,000 to the cost of each new aircraft.
That is more than the market will bear, and the three largest
manufacturers of piston-engine aircraft virtually have abandoned that
line of business.
That is hard on the general aviation manufacturers and their
employees, but it is also a disaster for the U.S. balance of trade. In
1978, the light aircraft industry ran a trade surplus of $340 million.
In 1981, the industry experienced a balance of trade deficit of $200
million, in 1992 this industry's trade deficit is $800 million.
American-made general aviation aircraft are of the highest quality in
the world and the most in-demand, but our manufacturers cannot afford
to stay in this business to satisfy this demand at home or abroad. So,
foreign competitors now have the business.
By enacting the 15 year statute of repose contained in Senator
Kassebaum's bill, we level the playing field for U.S. manufacturers of
light airplanes versus their foreign competition--without changing the
product liability laws related to the rules of evidence, punitive
damages, standards of care, or comparative fault.
Let me say, however, that I strongly support pending product
liability legislation that does address these issues, and I look
forward to debating that measure on the floor of the Senate at another
time in the very near future. I have talked to leaders of major
American corporations which do business all over the world--and they
say litigation costs are many times higher for the American operations
than their foreign operations--and this is one more incentive for them
to move jobs overseas. Senator Kassebaum's bill gives me and the many
other supporters of broad product liability reform in the Senate much
hope for restoring rationality to free-wheeling product liability
litigation.
Senator Kassebaum's bill will create thousands of new high-paying
private sector jobs in general aviation, the kind of jobs for which the
members of our armed services who are transitioning out of active duty
are highly qualified. These jobs do not come with a Federal price tag,
and they do not require the involvement of a Federal agency. They are
generated by giving this important industry only what it needs--relief
from litigation.
In its recent report, the National Commission to Ensure a Strong
Competitive Airline Industry strongly supported this measure, and
called it an important jobs and international competitiveness issue.
Senator Kassebaum's amendment also has the support of labor and every
aviation consumer group. I join my colleagues, the aviation industry,
its workers, and consumers in calling for passage of this important
measure--and I commend my colleague for working very hard to keep this
bill alive and pushing for its passage. It has been a struggle and she
has done a commendable job.
Thank you, Madam President.
Madam President, let me reiterate that in 1978, 6,000 American
workers were involved in the manufacture of 18,000 general aviation
airplanes. In 1992, however, Madam President, this industry only made
900 general aviation aircraft and employed only 1,000 workers. What
happened? The strict liability doctrine in product liability cases that
can go on for years and years and years has crippled this very
important industry for America. In fact, Beech Aircraft estimates that
the cost of litigation has added $700,000 to the cost of each new
aircraft. This bill will help that situation.
We have seen the U.S. balance of trade from 1978, when the light
aircraft industry ran a trade surplus of $340 million for our country,
to 1981 when the industry experienced a balance of trade deficit of
$200 million, and in 1992, Madam President, this industry's trade
deficit was $800 million.
By enacting this 15-year statute of repose that Senator Kassebaum has
put forward, we are going to level the playing field between U.S.
manufacturers of light aircraft planes versus our foreign competition.
Senator Kassebaum's bill will create thousands of new private sector
jobs, not with Government programs, not with taxpayer dollars, but by
relief from litigation.
Madam President, I have talked to several leaders of companies that
do worldwide business. They tell me that litigation is so much more a
problem in America than anywhere else they do business. It is an issue
we are going to have to address in all industries. But today we are
going to be able to take one very small step toward helping the general
aviation manufacturing business, and I hope it is a step that we can
take toward really reforming all of the product liability laws for the
future of our country.
I want to commend the Senator from Kansas for working very hard in
keeping this bill alive.
I yield the floor, Madam President.
Thank you very much.
The ACTING PRESIDENT pro tempore. Who yields time?
Mr. METZENBAUM. Madam President, I yield the remainder of time the
Senator from Ohio has but not to go beyond 10 o'clock, it being my
understanding that there is a general agreement that there will be a
vote at 10 o'clock. In fact, I ask unanimous consent that the vote be
ordered at 10 o'clock.
The ACTING PRESIDENT pro tempore. Is there objection?
Mrs. KASSEBAUM. Madam President, reserving the right to object, I
will not, but just to clarify, we have 7 more minutes on this side. I
have a few more minutes that I would like to use, and there are others
who would like to speak or said they would like to speak. How will this
interact with supposedly a vote at 10?
The ACTING PRESIDENT pro tempore. The Senator still has 4 minutes of
her time, if she wishes to use those minutes.
Mrs. KASSEBAUM. If we go back to morning business time, will we have
time past 10 o'clock? That is my question.
Mr. METZENBAUM. Madam President, I withdraw my request and would like
to suggest that the Senator from Kansas go forward and use her 4
minutes, and then we yield the remainder of the time to Senator Dorgan,
who wishes to speak on another subject.
The ACTING PRESIDENT pro tempore. Is there objection?
Mrs. KASSEBAUM. I thank the Senator from Ohio, Madam President.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The Senator from Kansas.
Mrs. KASSEBAUM. Madam President, I would like to make a few
additional comments, one being in response to the Senator from Ohio
[Mr. Metzenbaum] saying he hopes that when this comes to the House of
Representatives more attention could be focused on the general aviation
product liability bill and ways that perhaps it could be further
amended.
I would just like to suggest that the 15-year statute of repose which
was introduced last fall represented only about 20 percent of the
general aviation product liability legislation that I originally
introduced in 1986.
We have already compromised and moved along. We have gone through a
number of changes, and I have been very appreciative of Senator
Metzenbaum's efforts to help work out some compromises. But we had
numerous hearings in the Commerce Committee, and it has been reported
out three times over the years. It has also been reported out of the
Judiciary Committee.
So it is my hope that this latest compromise will be the last and
that the bill will pass in the House of Representatives. I have great
confidence that it will since there are 275 cosponsors now over in the
House of Representatives. If further modifications are made, we will
remove all the teeth that we have believed were important to revitalize
the general aviation industry.
I also want to express my particular appreciation to Ed Bolen of my
staff; Guy Clough, Tiger Joyce, and Alan Maness with the Commerce
Committee; Chris Paul and Brad Belt with Senator McCain; Gene Kimmelman
with Senator Metzenbaum, Brett Francis with Senator Hatch; and Greg
Schacke with Senator Dole.
I yield the floor, and I yield my remaining time to the Senator from
Montana.
Mr. BURNS. I thank my friend from Kansas.
Madam President, I rise today to voice my support for one of the most
important issues facing our aviation industry, product liability
reform. The general aviation community in the United States is
struggling, and for years Washington has ignored the needs of this
vital link in our Nation's transportation infrastructure.
Just over a decade ago, U.S. manufacturers were the world leaders in
general aviation--selling an average of 13,000 light airplanes per
year. Today, annual sales have decreased to barely 500, and tens of
thousands of workers have lost their jobs. This decline is the result
of laws which hold manufacturers liable for planes that were built
years, even decades ago.
Even though the industry's safety record has improved steadily for
four decades and all aircraft must meet the certification standards of
the Federal Aviation Administration, product liability costs for
airplane builders have soared in recent years--jumping from $24 million
in 1977 to $210 million in less than a decade.
Today, the typical domestic plane manufacturer faces product
liability costs that are 20 to 50 times higher than its foreign
competitors. This additional cost demands that the manufacturers
increase their prices, and consequently, manufacturers lose market
shares to foreign competition and lay off American workers. This is a
competitiveness issue and a jobs issue.
I support Senator Kassebaum in her efforts to revitalize the all-but-
dead general aviation industry in the United States, and I am an
original cosponsor of her legislation to amend the Federal Aviation Act
of 1958 to impose an 18-year statute of repose to block product
liability suits in cases involving most existing general aviation
aircraft. Such suits would be prohibited if an accident occurred more
than 18 years after the aircraft was manufactured.
U.S. airplane manufacturers should not be held responsible,
indefinitely, for products that are operated, repaired, serviced, and
modified by others. The absence of reform in this area is just another
glaring example of who is running the show in Washington: lawyers.
They, and the frivolous lawsuits that have made them rich, are hurting
people like you and me. I want changes in these laws that are good for
those of us who have to travel across long distances to conduct our
business. The aviation industry needs our help, and I am pleased to see
the time has come for these important changes.
Madam President, I want to congratulate the Senator from Kansas, who
has been on this issue ever since I came to the U.S. Senate. She is a
great champion of it. When you look at where our aircraft manufacturing
industry has gone in the last 10 years, it does not take a rocket
scientist to figure out that we have a problem and this is one of the
problem areas.
Domestic plane manufacturers face product liability costs that are 20
to 50 times higher than our foreign competitors'. If you want to call
this bill, S. 4, that we have been talking about, a competitiveness
issue, this really is. The additional cost demands that manufacturers
increase their prices, and consequently, manufacturers lose market
shares to foreign competition and lay off American workers; this is
really a competitiveness and jobs issue.
I want to remind the American people how important this is. We can
draw two conclusions about not only airplane liability and
manufacturers' liability, but also the quality of work of the American
worker, because we have lost some awfully good friends to foreign
aircraft in the last 2 years--and I mean close friends. One is a very
close friend to the Senator from Kansas. So this is how important this
issue really is when you boil it down to: Can we make airplanes, and do
we have the ability to market those airplanes in a world that is very
competitive?
I thank the Chair, and I yield the floor.
The ACTING PRESIDENT pro tempore. Who yields time?
Mr. DORGAN. Madam President, it is my understanding that the Senator
from Ohio had indicated to the Chair, previous to recognizing the
Senator from Kansas, that I was allowed to speak as in morning
business.
The ACTING PRESIDENT pro tempore. The Senator is recognized.
____________________