|Office of Management and Budget||Print this document|
February 1, 2000
The Administration strongly opposes H.R. 2005. If the bill were presented
to the President, his senior advisers would recommend that he veto it.
H.R. 2005 would adopt a national 18-year statute of repose for "durable
goods," which includes any product used by a business, trade, or government
that is expected to last more than three years. H.R. 2005 would, in most
cases, bar the courtroom doors to any person or business seeking to recover
for personal injury or property damage caused by a defective durable good
if that product is more than 18 years old.
The proponents of H.R. 2005 argue that manufacturers of old machinery too often are compelled to settle suits for harm to workers or property from durable goods, although they should prevail on the merits, in order to avoid the costs of litigation. The Administration supports efforts to eliminate frivolous lawsuits, but does not believe that a Federally enacted bar of all lawsuits involving older machinery is the solution. H.R. 2005 will cut off legitimate lawsuits along with frivolous ones, and this flat denial of court access will fall most heavily on American workers -- the ones most likely to be injured by older, defective machinery. The scope of the bill's bar on personal injury lawsuits is also unprecedented -- it reaches all "civil actions" (not just product liability suits), and does not give workers injured in a machine's 18th year any extension of time to prepare their lawsuit. In addition, H.R. 2005 would preempt State tort law, an area of policy-making that has traditionally been left to the States.
H.R. 2005 would do more than harm injured workers, however. H.R. 2005 would also harm the American businesses, particularly small businesses, that it purports to protect. The bill's bar on lawsuits for property damage is even more onerous than its bar on lawsuits for personal injury damage. The personal injury bar has narrow exceptions for persons who are not already covered by worker's compensation or who suffer "toxic harm," but the property damage bar is absolute. Thus, for example, H.R. 2005 would seem to bar all lawsuits for the removal of asbestos and lead paint, both of which are products used by businesses, expected to last more than three years, and installed more than 18 years ago. As a result, this bill would leave American businesses seeking remediation and removal of these hazardous materials from their buildings without any legal recourse in all 50 States. Its impact would fall hardest upon small businesses and individuals, those least able to shoulder the costs of remediation themselves. Further, H.R. 2005 appears to preclude Federal and State public health and environment enforcement actions related to property damage. No sufficient reason has been advanced to justify this broad extinguishment of legal liability and its resulting impact on Government and businesses -- both large and small.
Because H.R. 2005 would work a radical shift in the allocation of tort liability, to the detriment of American businesses and workers alike, the Administration strongly opposes its passage.