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Consumers Win on Product Liability Consumers Win on Product Liability Senator Ernest F. "Fritz" Hollings (D-SC) differing views on proposals to establish Exon, who was hospitalized, was one of crafted a major upset victory for alternative compensation systems which the senators whose proxies Hollings pro- American consumers when his lead- would reduce the need for lawsuits. duced in his masterful strategic victory. ership blocked anti-consumer product liabili- Senators Slade Gorton (R-WA) and Christo- "The bill is not dead," says Kimmelman, ty legislation in the Senate Commerce, pher Dodd (D-CN) have proposed that an "but the committee vote is both a fantastic Science and Technology Committee. administrative procedure be established victory for victims and a significant set- Hollings' masterful strategy surprised the whereby persons injured by defective prod- back to those who would impede recovery proponents of S. 100 and denied a majority ucts could recover damages directly from for injuries caused by defective products to the bill, which would wipe out essential the manufacturer without going to court. and reduce incentives to manufacture safe consumer protections contained in current Damages, however, would be limited to costs ones—both of which S. 100 would do." state product liability laws. such as lost wages and medical care, pro- Kimmelman characterized the commit- In recognition of his role in a victory hibiting payments for pain and suffering tee vote as a "major embarrassment" for that was totally unforeseen, Hollings will or punitive damages. business representatives who were clearly receive a special Distinguished Public In seeking votes for S. 100, Danforth "outfoxed" by Hollings. Service Award at Consumer Federation of promised hearings on the latter proposals "The momentum is now going against America's 15th annual Awards Dinner on before attempting to bring the Kasten bill the business alliance which had already June 19. to the Senate floor. started to work the House side on this It didn't work. Senator J. James Exon issue," Kimmelman said, "assuming that their Senator Ernest F "Fritz" Hollings (DSC) (D-NE), who backed the bill last year, wrote position would prevail in the Senate." "The committee vote is Priest of the Yale University School of Law in a statement accompanying his proxy "no" "Fritz" Hollings upset that assumption and a fantastic victory for and Professor Keeton, former Dean of the vote: "This matter is too important to rush earned the gratitude of consumers which University of Texas School of Law, criti- a bill to the floor with the assumption CFA will publicly express June 19 at the victims and a significant cized the Kasten bill while explaining their that problems will be worked out later." Awards Dinner. setback, to those who would impede recovery for injuries caused by UN Passes Consumer defective products" Protection Guidelines-At Last The product liability bill, which would set federal standards for lawsuits brought by victims injured by defective products, The world consumer movement scored the principles—a common understanding was introduced in Congress for the third a significant and long-sought victory worldwide—of what constitutes basic, fair time by Senator Robert Kasten (R-WI). with the unanimous adoption of the United and sound consumer protection standards Though opposed by a broad-based coali- Nations Guidelines on Consumer Protec- and measures." tion of consumer groups, unions, trial tion by the UN General Assembly. IOCU consistently stresses concern for lawyers, state judges and attorneys general, "The overwhelming support in the all people of the world and its victory state- the bill was backed by a powerful and General Assembly sends a signal far and ment said "the Guidelines represent a solid well-financed business alliance of manufac- wide that consumerism is, indeed, global," new basis for our work to make the market- turers, distributors and wholesalers in the said Esther Peterson, America's First Lady place safer and more responsive to con- pharmaceutical, chemical, automobile, of Consumerism and a tireless worker for sumer needs—wherever the marketplace machine tool and insurance industries. the Guidelines as a volunteer UN lobbyist is located." That alliance prevailed in 1984 when the for the International Organization of Con- Opposition to the Guidelines came mainly Kasten bill passed in committee by an 11-5 sumers Unions (IOCU). from the United States. Though eventually vote, but it never reached the Senate floor. The Guidelines were finally adopted 10 agreeing to the consensus, Ambassador Alan A similar outcome was expected this time, years after the IOCU World Congress in L. Keyes, Alternate United States Represen- Esther Peterson though by a lesser margin. But Hollings' Sydney, Australia, called for development tative, left no doubt that the U.S. would mastery of the Congressional committee and passage of a worldwide Model Code have preferred to leave consumer ques- has a truly useful role to play in the process and his quiet collection of proxies for Consumer Protection. tions to individual nations and the power regulatory area," Ambassador Keyes said. resulted in an eight-to-eight tie vote, effec- The final compromise document contains of the free market. Peterson cited the 'outstanding leader- tively scuttling the bill for the present. separate guidelines dealing with physical U.S. objections included concerns that ship" of Qazi Shaukat Fersed of Pakistan Committee Chairman Senator John C. safety, protection of economic interests, the Guidelines are biased toward govern- and the active support of the Swedish dele- Danforth (R-MO) conceded that "we missed safety and quality standards, distribution ment intervention in the marketplace and gation with bringing about the final it" and said he had assumed the bill would facilities, rights of redress and consumer might be used as a rationale for protec- compromise. pass by 9-7. education. Food, water and pharmaceuticals tionist measures and/or discrimination Characteristically, she says little about her CFA Legislative Director Gene Kimmel- are dealt with in short, special sections against foreign investors. It also was un- own role. But she's obviously pleased that man said one of the factors in the turn- as "areas of essential concern for the health happy with the specificity of the sections the Guidelines are finally a"reality. "Accep- around was Danforth's organization of this of the consumer;' on food, water and pharmaceuticals. It tance of these principles, and strong infor- year's deliberations in which academics In hailing the victory, Lars Broch, IOCU's would have preferred that references to mation links on products that have been played a major role. Director, said: "Although the Guidelines do risks and hazards be stated and interpreted banned or severely restricted in various Twenty-four law school professors signed not contain all that we wanted, for the throughout as "unreasonable risks and countries, will be a great help to countries a letter opposing the bill. Key evaluations, first time ever, the world's most repre- hazards." without adequate consumer protections of requested by Danforth, from Professor sentative international body has agreed on "The U.S. remains dubious that the UN their own," she said. CONSUMER FEDERATION OF AMERICA Page 2 May/June 1985 • CFAnews Consumers Want to Know: Will Interstate Banking Improve Service? " Tf interstate banking is approved, con- CFA's testimony did not urge or endorse JLsumers are entitled to expect concrete any Congressional action. Fox said con- improvements in service." sumers want some answers before endors- That was the message Alan Fox, Con- ing any interstate banking proposal. The sumer Federation of America's Legislative questions he raised, stemming from the Representative, brought to a Congressional vast changes in financial services over the hearing on regional interstate banking past few years, are: before the House Subcommittee on Finan- • Will interstate banking hold down serv- cial Institutions Supervision, Regulation and ice costs which have made it increasingly Insurance. «•>»- ^F difficult for low- and moderate-income Federal Reserve Chairman Paul Volcker, families to maintain access to basic bank- Representative Fernand St Germain (D-RI), ing services? chairman of both the subcommittee and • Will it open new service opportunities its parent Committee on Banking, Finance for all in our communities—the 40 percent and Urban Affairs, and Fox all stressed of our families with under $1,000 in finan- the need for safeguards in any interstate cial assets as well as those with higher banking legislation. incomes which the system seems to serve St Germain called for "hard, essential so well already? f H^H ^n^^ ^B^^l and fast ground rules" in conjunction with • Will interstate banking reduce the time any further geographical banking expan- WJ/fiJOZ HM ' banks hold our checks? sion. "The ground rules," he said, "must =». 1 • Will interstate banking result in safe American Bankers Association President, James G. Cairns, Jr., left, listens as Legislative Representative assure the safety and soundness of the Alan Fox delivers CFA testimony on interstate banking to House subcommittee and soundly managed banks? banking industry, community and con- Fox reiterated CFA's continuing concern sumer services and benefits, and the preser- (2) It must require that service to all con- concentration of economic resources, and that broadening interstate banking could vation and strengthening
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