[ql06] TORT: Immunity for shoddy merchandise?
- From: "K.K. Campbell -- LAW'06" <2kc16@xxxxxxxxxxxxxxxx>
- To: <ql06@xxxxxxxxxxxxx>
- Date: Mon, 20 Oct 2003 17:01:46 -0400
Anti-terror firms get lawsuit immunity
By Shaun Waterman
UPI Homeland and National Security Editor
10/20/2003 12:26 PM
WASHINGTON, Oct. 20 (UPI) -- Makers of anti-terrorist technology are
lining up to register under a new government scheme that provides them
with immunity from lawsuits brought if their products malfunction or
don't work during a terrorist attack.
Supporters say the plan, buried in a little-noticed section of last
year's Homeland Security Act, is vital to get companies on the cutting
edge of the fight against terror to develop and sell new technologies.
They point to lawsuits like the one launched last week by postal workers
against the makers of the antibiotic Cipro. The suit alleges that the
drug -- given to thousands of people thought exposed when anthrax-laced
letters were sent through the mail -- had harmful side effects.
"The law is absolutely necessary," government contract attorney Jacob B.
Pankowski told United Press International. Without it, he said, "fears
of unlimited liability would make industry reluctant to introduce
anti-terrorist goods and services into the marketplace."
"It's important to the country to try to take advantage of these
technologies," the department's undersecretary for technology, Charles
E. McQueary, told UPI in an interview.
But opponents paint the law as a get-out-of-court-free card for the
makers of shoddy merchandise, and as a backdoor step toward the
administration's declared goal of tort reform. Some others say the act
is unnecessary and new technologies would have come to market anyway.
"The American public is going to be shocked when they realize how much
this immunizes companies," Joan Claybrook, president of Ralph Nader's
Public Citizen lobby group, told Congressional Quarterly recently.
Last week, the Department of Homeland Security began accepting
applications from private sector companies for their products and
services to be either "designated" or "certified" by officials under the
provisions of the Support Anti-Terrorism by Fostering Effective
Technologies Act, passed last year by Congress as part of the law
setting up the new department.
The law covers goods and services that, in words of the department's Web
site are "aimed at preventing, detecting, identifying, or deterring acts
of terrorism, or limiting the harm that such acts might otherwise
cause."
Any technology considered effective, necessary and available immediately
can be "designated" if officials believe that the risk of liability
might stop the manufacturer from taking it to market.
Designation limits the liability in lawsuits "arising out of, relating
to, or resulting from an act of terrorism" of the makers, sellers and
users of products in several ways.
Those who want to sue can only do so in federal courts -- generally
considered less sympathetic to plaintiffs than their state
counterparts -- and can only win awards for actual injuries or loss.
There are no punitive damages, intended to punish the defendant.
Any damages that are awarded are reduced by the amount of any other
compensation -- workers' compensation for example -- that the plaintiff
is entitled to, and are capped at the level of insurance that the
defendant has. The law gives the department the right to tell firms how
much insurance they need to carry.
In addition, if the department decides that -- as well as meeting the
criteria for designation -- products are safe for use as intended, they
can be "certified."
Certification, says Pankowski, grants complete immunity on a "very
broad" basis. "It basically covers any kind of lawsuit."
Like designation, certification protects what the department calls
"others in the supply and distribution chain" as well as makers and
sellers. In effect, the law protects not just the makers and any
subcontractors, but the firms that sell, install, staff and deploy the
technology.
McQueary says the department will rely "primarily on data provided by
the manufacturers," when deciding whether products fit the criteria for
immunity or not.
The only way the maker of a certified technology can be sued is if it
can be proved that they fraudulently obtained the certification, by
providing the department with bogus or misleading information, or that
they didn't make the product to their own specifications.
McQueary acknowledges questions about whether the act goes too far.
"If someone is hurt in some way, you're denying them the opportunity for
judicial recourse, which this country is built upon," he says.
"There's a balance that has to be struck. Both sides of the equation are
important."
But Pankowski says the act comes down -- rightly in his view -- on one
side of that equation.
"In determining the balance between a plaintiff's legitimate interest in
recovering damages and the public interest in having access to effective
new technologies for fighting terrorism, the act quite properly strikes
the balance in favor of the public interest," he says.
But some question whether the act is really necessary.
"Frankly, it's debatable," says Mike Tuite, a government contracts
lawyer. "In my view, if anyone thought they could make a profit selling
these kinds of technologies, they would have got insurance and gone out
into the market and done so, whether or not they had these incentives."
He suggests that one way of testing the hypothesis is to watch what
companies who are denied designation do. "If they put their products out
there anyway, that would suggest that they would have done so without
(the new law)."
McQueary says the rules implementing the act, which the department
published earlier this month, can still be redrawn if officials decide
they haven't got the balance right.
"This is an interim set of rules, it's not an irrevocable act," he says.
"We are detecting some concern in some quarters, people are worried
they'll be stuck with something they don't like, so we consciously
decided to provide an opportunity for more comment."
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