Federal Tort Reform Legislation: Constitutionality and Summaries of Selected Statutes

Congressional research reportMar 9, 2005

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Order Code 95-797 A

CRS Report for Congress

Federal Tort Reform Legislation:

Constitutionality and Summaries

of Selected Statutes

Updated March 9,2005

Henry Cohen

Legislative Attorney

American Law Division

Prepared for Members and

Committees of Congress

Federal Tort Reform Legislation: Constitutionality and

Summaries of Selected Statutes

Summary

This report considers the constitutionality of federal tort reform legislation, such

as the products liability and medical malpractice reform proposals that have been

introduced for the last several Congresses. Tort law at present is almost exclusively

state law rather than federal law, although, as noted in the appendix to this report,

Congress has enacted a number of tort reform statutes.

Part I of this report concludes that Congress has the authority to enact tort

reform legislation generally, under its power to regulate interstate commerce, and to

make such legislation applicable to intrastate torts, because tort suits generally affect

interstate commerce. However, it may be unconstitutional for tort reform legislation

to be applied to particular intrastate torts that do not substantially affect interstate

commerce.

In concluding that Congress has the authority to enact tort reform "generally,"

we refer to reforms that have been widely implemented at the state level, such as caps

on damages and limitations on joint and several liability and on the collateral source

rule. More specialized types of reforms are not necessarily immune from

constitutional challenge. For example, some state courts have struck down statutes

that provide that a portion of punitive damages awards must be paid to state funds

(although other state courts have upheld such statutes).

Part I also concludes that there would appear to be no due process or federalism

(or any other constitutional) impediments to Congress's limiting a state common law

right of recovery. The only exception concerns requiring alternative dispute

resolution that limits the right to a jury trial.

Part II considers alternative dispute resolution alternatives, some of which could

have constitutional problems. The Seventh Amendment would preclude Congress

from eliminating the right to a jury trial in common law tort actions brought in

federal court. Congress may, however, eliminate the right to bring common law tort

actions in federal court, or eliminate common law tort actions themselves.

Congress apparently may create Article I tribunals, such as arbitration panels,

to hear tort claims, if it alters tort claims so that they are no longer traditional

common law actions (but rather are like no-fault workers' compensation claims), or

if it allows de novo review by an Article 111 court, with the right to a jury trial, of

traditional common law tort actions (rather than allow merely traditional appellate

review). It apparently may also opt for a middle ground by altering the common law

cause of action somewhat but not wholly, and by pro-viding for something less than

de novo review by an Article 111 court, provided that the Article 111 court is not

required to be too deferential to the findings of the Article I tribunal.

Finally, a strong argument may be made that Congress has the power to

eliminate jury trials in tort actions brought in state court, but this is uncertain.

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Part I: Tort Reform Generally ........................................2

A . Commerce Power ...........................................2

B. Dueprocess ...............................................4

C. Federalism ................................................4

Part II: Alternative Dispute Resolution ................................. 7

A . SeventhAmendment ........................................ 7

B. ArticleIII .................................................9

C. Article III / Seventh Amendment Equivalence .................. 10

D. Applying Article 111and the Seventh Amendment . . . . . . . . . . . . . . . . . 11

E. Constitutionality of Establishing Federal Non-Article 111

Forums: Conclusion ...................................15

F. Constitutionality of Prohibiting States from Using Jury Trials,

Without Establishment of a Federal Non-Article 111Forum . . . . . . . . 16

PartIII: Conclusion ............................................... 18

A . Tort Reform Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

B. Alternative Dispute Resolution ............................... 18

Appendix: Selected Federal Tort Reform Statutes ....................... 19

Employers Liability Act of 1908. 35 Stat. 65. c. 149 .............. 19

Price-Anderson Act. 42 U.S.C. 5 2210(e) ......................19

Atomic Testing Liability Act. 42 U.S.C. 5 2212 . . . . . . . . . . . . . . . . . 19

Other Statutes that Substitute the United States as Defendant ...... 20

National Childhood Vaccine Injury Compensation Act of 1986

42 U.S.C. $8 300aa-1- 300aa-34 ........................ 21

Comprehensive Environmental Response. compensation. and

Liability Act (Superfund) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

General Aviation Revitalization Act. P.L. 103-298 (1994).

49 U.S.C. 5 40101 note ................................21

Cruise Ship Liability. P.L. 104-324. 5 1129 (1996) . . . . . . . . . . . . . . .21

Bill Emerson Good Samaritan Food Donation Act. P.L. 104-210

(1996). 42 U.S.C. 5 1791 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

Volunteer Protection Act of 1997. P.L. 105-19 (1997).

42 U.S.C. $5 14501-14505 ............................. 22

Arntrak Reform and Accountability Act of 1997. P.L. 105-134.

5 161 (1997). 49 U.S.C. 5 28103 ......................... 23

Aviation Medical Assistance Act of 1998. P.L. 105-170 (1998).

49 U.S.C. 5 44701 note ................................23

Biomaterials Access Assurance Act of 1998. P.L. 105-230

(1998). 21 U.S.C. $$ 1601-1606 . . . . . . . . . . . . . . . . . . . . . . . . .23

Y2K Act7P.L. 106-37 (1999). 15 U.S.C. $5 6601-6617 ........... 23

Cardiac Arrest Survival Act of 2000. P.L. 106-505. 5 404

(2000). 42 U.S.C. $ 238q ...............................23

Air Transportation Safety and System Stabilization Act,

P.L. 107-42 (2001), 5 201(b) ............................ 2 4

September 11th Victim Compensation Fund of 2001,49 U.S.C.

§40101note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 4

Paul D. Coverdell Teacher Protection Act of 2001, P.L. 107-110,

§§2361-2368 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 5

Multiparty, Multiforum Trial Jurisdiction Act of 2002, P.L. 107-273,

511020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 5

Homeland Security Act of 2002, P.L. 107-296, 5s 304,863,890,

l201,1402,and1714-1717 .............................25

PROTECT Act, P.L. 108-21,s 305 ........................... 2 6

Class Action Fairness Act of 2005, P.L. 109-2 ..................26

Federal Tort Reform Legislation:

Constitutionality and Summaries

of Selected Statutes

Introduction

This report considers the constitutionalityof federal tort reform legislation, such

as the products liability and medical malpractice reform proposals that have been

introduced for the last several Congresses. A tort is a civil (as opposed to a criminal)

wrong, other than a breach of contract, that causes injury for which the victim may

sue to recover damages. Torts include negligent acts, such as medical malpractice,

and acts, such as selling defective products, for which one can be held strictly liable

(liable even in the absence of negligence). Tort law at present is almost exclusively

state law rather than federal law, although, as noted in the appendix to this report,

Congress has enacted a number of tort reform statutes.

Part I of this report concludes that enactment of tort reform legislation generally

would appear to be within Congress's power to regulate commerce, and would not

appear to violate principles of due process or federalism. However, it may be

unconstitutional for tort reform legislation to be applied to particular intrastate torts

that do not substantially affect interstate commerce. In concluding that Congress has

the authority to enact tort reform "generally," we refer to reforms that have been

widely implemented at the state level, such as caps on damages and limitations on

joint and several liability and on the collateral source rule. More specialized types

of reforms are not necessarily immune from constitutional challenge. For example,

some state courts have struck down statutes that provide that a portion of punitive

damages awards must be paid to state funds (although other state courts have upheld

such statutes).

Part I1 of this report considers alternative dispute resolution alternatives, some

of which could have constitutional problems. Part 111 is a conclusion. The report

ends with an appendix describing selected federal tort reform statutes.

Part I: Tort Reform Generally

A. Commerce Power

A federal statute is constitutional if it is enacted pursuant to a power of Congress

enumerated in the Constitution and if it does not contravene any provision of the

Constitution. The enumerated power pursuant to which federal tort reform could be

enacted is Congress's power "To regulate Commerce with foreign Nations, and

among the several States" (Art. I, 9 8, cl. 3).' One might ask, however, whether tort

law is "commerce," and, if it is, whether federal tort reform legislation would be

constitutional as applied to purely intrastate torts.

The Supreme Court has held that Congress's power to regulate interstate

commerce includes the power to regulate any activity that "exerts a substantial effect

on interstate commerce" (Wickard v. Filburn, 317 U.S. 111,125 (1942)), or is within

a "class of activities . . . within the reach of federal power" (Perez v. United States,

402 U.S. 146,154 (1971) (emphasis in original)). Furthermore, "when Congress has

determined that an activity affects interstate commerce, the courts need inquire only

whether the finding is rational." Hodel v. Virginia Surface Mining & Reclamation

Association, Inc., 452 U.S. 264,277 (1981).2

The Supreme Court has held that the business of insurance constitutes interstate

commerce for purposes of the Commerce Clause (United States v. South-Eastern

Underwriters Association, 322 U.S. 533 (1944)), and, whether or not tort reform

would in fact substantially affect the business of insurance, it would not appear

irrational for Congress to conclude that it would. Consequently, there seems little

doubt that tort reform legislation, in general, would be within Congress's commerce

power.

However, it may be unconstitutional for tort reform legislation to be applied to

particular intrastate torts that arguably do not substantially affect interstate

commerce. An example might be an assault by one individual upon another where

the assault has no connection with organized crime or any commercial activity. This

is because, in United States v. Lopez, 514 U.S. 549 (1995), the Supreme Court, for

the first time since 1936, declared a federal statute unconstitutional for exceeding

Congress's Commerce Clause authority. In Lopez, it struck down the Gun-Free

School Zones Act of 1990, which made it a federal offense "for any individual

knowingly to possess a firearm at a place that the individual knows, or has reasonable

cause to believe, is a school zone."

In addition, under its power to spend for the "general Welfare of the United States" (Art.

I, 3 8, cl. I), Congress may require the states to implement tort reform as a condition of their

acceptance of federal funds. South Dakota v. Dole, 483 US. 203, 206 (1987) (Congress

"may attach conditions on the receipt of federal funds, and has repeatedly employed the

power 'to further broad policy objectives by conditioning receipt of federal moneys with

compliance by the recipient with federal statutory and administrative directives"').

In United States v. Lopez, 514 US. 549,559 (1995), the Supreme Court made clear that,

to be subject to federal regulation, an activity must "substantially affect" and not merely

"affect" interstate commerce.

The Court in Lopez "identified three broad categories of activity that Congress

may regulate under its commerce power. First, Congress may regulate the use of the

Congress is empowered to regulate and

channels of interstate c ~ m m e r c e .Second,

protect the instrumentalities of interstate commerce, or things in interstate commerce,

even though the threat may come only from intrastate activities. Finally, Congress's

commerce authority includes the power to regulate those activities having a

substantial relation to interstate commerce, i.e., those activities that substantially

affect interstate commerce." Id. at 558-559 (citations omitted).

The Court in Lopez then noted that, if the Gun-Free School Zones Act of 1990

was "to be sustained, it must be under the third category as a regulation of an activity

that substantially affects interstate commerce." Id. at 559. The Act, however, had

"nothing to do with 'commerce' or any sort of economic enterprise . . . [and] is not

an essential part of a larger regulation of economic activity, in which the regulatory

scheme could be undercut unless the intrastate activity were regulated." Id. at 561.

The same apparently could be said of some torts, such as the assault example

suggested above. But it does not appear that it could be said with respect to torts that

substantially affect commerce, such as the manufacture of defective products or

medical malpractice.

There has been one Supreme Court case since Lopez that addressed the reach

of the Commerce Clause. In United States v. Morrison, 529 U.S. 598 (2000), the

Court struck down a section of the Violence Against Women Act of 1994 that created

a federal cause of action against any person "who commits a crime of violence

motivated by gender," whether interstate or intrastate. In striking down the

provision, the Court noted that "a fair reading of Lopez shows that the noneconomic,

criminal nature of the conduct at issue was central to our decision in that case" (id.

at 610), and "[glender-motivated crimes of violence are not, in any sense of the

Id. at 613.

phrase, economic a~tivity."~

In Lopez, the Court noted that "Congress normally is not required to make

formal findings as to the substantial burdens that an activity has on interstate

commerce." 514 U.S., at 562. It added, however:

But to the extent that congressional findings would enable us to evaluate the

legislative judgment that the activity in question substantially affected interstate

commerce, even though no substantial effect was visible to the naked eye, they

are lacking here.

This power enables Congress to regulate noncommercial activities that cross state lines.

Thus, in Caminetti v. United States, 242 U.S. 470 (1917), the Court upheld a federal statute

that it a crime knowingly to transport in interstate commerce "any woman or girl for the

purpose of prostitution or debauchery, or for any other immoral purpose," even though the

statute, as interpreted by the Court, was not limited to "commercialized vice." Id. at 484.

The Court added: "While we need not adopt a categorical rule against aggregating the

effects of any noneconomic activity in order to decide these cases, thus far in our Nation's

history our cases have upheld Commerce Clause regulation of intrastate activity only where

that activity is economic in nature." Id. at 613. By contrast, the Court will uphold

Commerce Clause regulation of interstate activity that is not economic in nature; see note

3, supra.

Id. at 563. In Morrison, the Court found Congress's findings "substantially

weakened" by their reliance on a "but-for causal chain from the initial occurrence of

violent crime . . .to every attenuated effect upon interstate commerce." 529 U.S., at

615.

B. Due Process

At one time, it might plausibly have been suggested that limitations on tort

reform might violate the Fifth Amendment's protection against federal deprivations

of property without due process of law. However, in 1978, the Supreme Court,

upholding the Price-Anderson Act's limitation on liability for accidents resulting

from the operation of privately owned nuclear power plants, wrote:

Our cases have clearly established that "[a] person has no property, no vested

interest, in any rule of common law." The "Constitution does not forbid the

creation of new rights, or the abolition of old ones recognized by the common

law, to attain a permissible legislative object," despite the fact that "otherwise

settled expectations" may be upset thereby. Indeed, statutes limiting liability are

relatively commonplace and have consistently been enforced by the courts.

Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59, 88, n.32

(1978) (citations omitted).

In 1985, the Supreme Court, without written opinions, upheld the constitutionality of California statutes that placed caps in medical malpractice cases on,

respectively, noneconomic damages and lawyers' contingent fees.5

C. Federalism

In National League of Cities v. Usery, 426 U.S. 833,855 (1976), the Supreme

Court held that the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., which

prescribes the federal minimum wage, could not constitutionally be applied to

employees of state and municipal governments. There was no contention that

Congress's commerce power was not broad enough to encompass this sort of

regulation. The contention, rather, which the Court accepted, was that the

Constitution contained an affirmative limitation on this exercise of the commerce

power. The Court did not name any particular provision of the Constitution as

imposing the limitation in this case, but did quote an earlier case that said that the

Tenth Amendment "expressly declares the constitutional policy that Congress may

not exercise power in a fashion that impairs the States' integrity or their ability to

function effectively in a federal system."6

Fein v. Permanente Medical Group, 38 Cal.3d 137, 211 Cal. Rptr. 368, 695 P.2d 665

(1985), appeal dismissed, 474 U.S. 892 (1985) (Justice White dissenting); Roa v. Lodi

Medical Group, Inc., 37 Cal.3d 920, 211 Cal. Rptr. 77, 695 P.2d 164 (1985), appeal

dismissed, 474 U.S. 990 (1985).

426 U.S. at 843, quoting Fry v. United States, 421 U.S. 542,547 n.7 (1975). The Tenth

Amendment states: "The powers not delegated to the United States by the Constitution, nor

(continued...)

In any event, the Court held that the Commerce Clause did not authorize

Congress "to directly displace the States' freedom to structure integral operations in

areas of traditional governmental functions." Id. at 852. The only example the Court

gave of an integral governmental function was the structuringof "employer-employee

relationships in such areas as fire prevention, police protection, sanitation, public

health, and parks and recreation." Id. at 851. It added, however, that "[tlhese

examples are obviously not an exhaustive catalogue." Id. at 851 n.16.

In Garcia v. San Antonio Metropolitan TransitAuthority, 469 U.S. 528 (1985),

the Court overruledNationalLeague of Cities, holding that the Fair Labor Standards

Act could be applied to state and municipal employees. It concluded that the

National League of Cities test for "integral operations in areas of traditional

governmental functions" had proven both "impractical and doctrinally barren," and

that the Court in 1976 had "tried to repair what did not need repair." Id. at 557. The

Court found that it had "no license to employ freestanding conceptions of state

sovereignty when measuring congressional authority under the Commerce Clause."

Id. at 550. The Court did, however, "recognize that the States occupy a special and

specific position in our constitutional system and that the scope of Congress's

authority under the Commerce Clause must reflect that position." Id. at 556.

Subsequently, the Court took a step back in the direction of National League of

Cities. In New York v. United States, 505 U.S. 144 (1992), the Court invalidated a

provision of the Low-Level Radioactive Waste Policy Amendments Act of 1985

because it required states not participating in a regional waste disposal compact to

"take title" to waste or accept liability for generators' damages. The Court readily

acknowledged that Congress may regulate the interstate market in disposal of lowlevel radioactive waste, but noted that the Commerce Clause "authorizes Congress

to regulate interstate commerce directly; it does not authorize Congress to regulate

state governments' regulation of interstate commerce." Id. at 166.

The Court discussed two methods "by which Congress may urge a State to adopt

a legislative program consistent with federal interests. . . . First, under Congress'

spending power, 'Congress may attach conditions on the receipt of federal funds.'

. . . Second, where Congress has the authority to regulate private activity under the

Commerce Clause, we have recognized Congress' power to offer States the choice

of regulating that activity according to federal standards or having state law preempted by federal regulation." Id. at 167.

But if states decline to participate in a federal scheme, Congress may not force

them to do so; to have its way, Congress must preempt state law and regulate

directly. The "take title" provision, rather than presenting states with a choice

between regulatory participation or accepting federal preemption, required states to

choose "between two unconstitutionallycoercive regulatory techniques . . . . Either

(...continued)

prohibited by it to the States, are reserved to the States respectively, or to the people."

way, 'the Act commandeers the legislative processes of the States by directly

compelling them to enact and enforce a federal regulatory program. "' Id. at 176.7

Under New York v. United States, the only significant federalism restraint on

exercise of the commerce power is that state regulatory processes may not be

"commandeered" for federal purposes; there is no federalism restraint on federal

regulation of businesses and individuals in areas traditionally regulated by states.

The fact that Congress has traditionally deferred in large measure to state regulation

of the insurance industry, for example, does not mean that Congress must continue

to do so; Congress does not invade areas reserved to the states by the Tenth

Amendment "simply because it exercises its authority. . .in a manner that displaces

the States' exercise of their police powers." Hodel v. Virginia Surface Mining &

Reclamation Association, Inc., 452 U.S. 264,291 (1981) (upholding "steep slope"

and other federal regulations of surface mining in spite of traditional state role in

regulating land use).

In the case of federal tort reform proposals such as reducing awards by amounts

recovered from collateral sources, Congress would not be commandeering state

regulatory processes. Congress would merely be enacting federal law that preempted

substantive state law, and requiring states to enforce the federal law. In New York v.

United States, the Court cited four cases that discuss "the well established power of

Congress to pass laws enforceable in state courts." Id. at 178. The Court added:

These cases involve no more than an application of the Supremacy Clause's

provision that federal law "shall be the supreme Law of the Land," enforceable

in every State. More to the point, all involve congressional regulation of individuals, not congressional requirements that States regulate. Federal statutes

enforceable in state courts do, in a sense, direct state judges to enforce them, but

this sort of federal "direction" of state judges is mandated by the text of the

Supremacy Clause.

Id. at 178-179. One of the four cases the Supreme Court cited, Second Employers'

Liability Cases, 223 U.S. 1(1912), involved what today would be called tort reform.

The case was a challenge to the Employers' Liability Act of 1908, which regulated

the liability of common carriers by railroad to their employees; it was essentially a

federal workers7compensation statute that preempted state tort law by, among other

things, its "abrogation of the fellow-servant rule, the extension of the carrier's

liability to cases of death, and the restriction of the defenses of contributory

negligence and assumption of risk. .. ." Id. at 49. One question before the Supreme

Court was "whether rights arising under the congressional act may be enforced, as

of right, in the courts of the States when their jurisdiction, as prescribed by local

laws, is adequate to the occasion." Id. at 55. The Court answered the question as

follows:

When Congress, in the exertion of the power confided to it by the Constitution,

adopted that act, it spoke for all the people and all the States, and thereby

Subsequently, in Printz v. United States, 521 U.S. 898, 935 (1997), the Court held that

Congress may not "circumvent" the prohibition on commandeering a state's regulatory

processes "by conscripting the State's officers directly."

established policy for all. That policy is as much the policy of Connecticut as it

the act had emanated from its own legislature, and should be respected

accordingly in the courts of the State.

Id. at 57.

Part II: Alternative Dispute Resolution

One tort reform that may be considered by Congress is to require that tort

claims - particularly medical malpractice claims - be decided by alternative

dispute resolution (ADR) procedures, such as binding arbitration, rather than by

traditional jury trials. When Congress creates a federal cause of action, it is generally

free to prescribe any procedure for its enforcement, with or without a jury trial.'

Traditional tort actions, however, such as medical malpractice and products liability,

are not federal causes of action; they are governed by state law, even when they are

brought in federal court on diversity grounds.9 State laws generally provide for jury

trials in tort cases brought in state courts,1° and the Seventh Amendment to the

United States Constitution generally provides for jury trials of cases arising under

state law that are brought in federal court." The question has arisen, therefore, as to

the extent to which the Constitution permits Congress to require alternative dispute

resolution, in federal or state forums, of tort claims arising under state law.

A. Seventh Amendment

If Congress were to require ADR procedures in lieu of jury trials, then the

Seventh Amendment would become a consideration. The Seventh Amendment

guarantees the right to trial by jury "In Suits at common law, where the value in

controversy shall exceed twenty dollars."12 Tort actions are suits at common law, so

the Seventh Amendment applies to them.13 However, the Seventh Amendment,

"[Wlhen Congress creates new statutory 'public rights,' it may assign their adjudication

to an administrativeagency with which a jury trial would be incompatible,without violating

the Seventh Amendment's injunction that jury trial is to be 'preserved' in 'suits at common

law."' Granfinanciera, S.A. v. Nordberg, 492 U.S. 33,51 (1989).

Suits based on state law may be brought in federal court only if the matter in controversy

exceeds $75,000 and the plaintiff and defendant are domiciled in different states. This is

known as "diversity of citizenship." 28 U.S.C. 5 1332.

lo "The constitutions of 48 states . . . have civil jury provisions roughly analogous in form

and substance to the seventh amendment." Paul B. Weiss, Reforming Tort Reform: Is There

Substance to the Seventh Amendment?, 38 Catholic University Law Review 737, 739

(1989).

Simler v. Connor, 372 U.S. 221 (1963).

12 r r

Common law" refers to law created by state courts, on a case-by-case basis.

l 3 This does not mean that juries must operate exactly as they did at common law. In

Colgrove v. Battin, 413 U.S. 149 (1973)' the Supreme Court upheld rules adopted in a

federal district court authorizing civil juries composed of six persons. By the reference in

(continued...)

unlike most of the Bill of Rights, does not apply in state courts,14where most tort

actions are brought. It does apply, however, to cases arising under state law that are

brought in federal court on diversity grounds.15

Therefore, Congress may not eliminate the right to a jury trial in common law

tort actions brought in federal court. It may, however, eliminate the right to bring

common law tort actions in federal court. One way to do this would be to abolish

diversity jurisdiction in tort suits; i.e., to prohibit tort suits arising under state law

from being brought in federal courts.16 Another way would be to alter tort suits to the

point that they could no longer be considered "Suits at common law" to which the

Seventh Amendment would apply.

Congress has done the latter with respect to torts inflicted upon federal workers

in the workplace. The Federal Employees' Compensation Act, 5 U.S.C. $8 8101 et

seq., provides for compensation to federal employees for disability or death resulting

from work-related injuries, whether the result of a tort or otherwise. Employees can

recover without proof of fault on the part of the government or its employees, but are

prohibited from bringing a tort action arising under state law against the government

or its employees.17An injured employee seeking recovery must file a claim with the

Secretary of Labor, who determines whether the employee is entitled to an award.

There is no right to a jury trial, nor to judicial review. The Supreme Court has held

that such an arrangement does not violate the Seventh Amendment because it

"abolishes all right of recovery in ordinary cases, and therefore leaves nothing to be

tried by jury."18

It appears, therefore, that Congress may prohibit common law tort suits from

being brought in federal court, but may not take the less radical step of allowing them

to be brought in federal court but prohibiting them from being heard by juries. If

Congress may not require common law tort suits to be heard by a federal court

without a jury, then it also may not require them to be decided by a federally

l3 (...continued)

the Seventh Amendment to the "common law," the Court wrote, "the Framers of the Seventh

Amendment were concerned with preserving the right of trial by jury in civil cases where

it existed at common law, rather than the various incidents of trial by jury." Id. at 155-156

(emphasis in original). Presumably, allowing a less than unanimous verdict would also be

permissible, even though a unanimous verdict was required at common law.

Minneapolis & St. Louis R.R. Co. v. Bombolis, 241 U.S. 211 (1916). The Seventh

Amendment does apply in District of Columbia courts. Capital Traction Co. v. Hof, 174

U.S. 1 , 5 (1899).

Simler v. Connor, supra note 11.

l6 Congress, pursuant to the Constitution (Art. 111,s 1) "may from time to time ordain and

establish," and hence limit the jurisdiction of, "inferior" federal courts. (Art. I, $ 3 , directly

establishes the Supreme Court.)

See 5 U.S.C. $ 8116(c) (United States' liability under FECA is exclusive); 28 U.S.C.

5 2679(b)(l) (federal employees are immune from tort actions arising under state law).

Mountain Timber Co. v. Washington, 243 U.S. 219,235 (1917).

established arbitration panel or other federally established non-judicial forum.19 To

do so would violate not only the Seventh Amendment; it would violate Article 111of

the Constitution.

B. Article Ill

Article III, section 1,provides that the judicial power of the United States shall

be vested in one supreme court, and in such inferior courts as Congress may

establish, and that the judges of both the supreme and inferior courts shall hold life

tenure "during good Behavior," at an irreducible compensation. Federal courts

created under this provision are commonly known as "Article 111courts." In addition,

however, Congress, pursuant to its powers enumerated in Article I, may establish

Article I "legislative" courts in "specialized areas having particularized needs and

warranting distinctive treatment."20 Article I judges need not be granted life tenure

or irreducible salaries.

However, since only Article 111 courts may exercise the judicial power of the

United States, Congress's power to create Article I courts is limited to the above

"specialized areas." Except in these areas, Congress may not provide for federal

judicial power to be exercised by federally established arbitration panels, or by any

federal forum other than an Article III court.

In Northern Pipeline Construction Co. v. Marathon Pipeline Co., the Supreme

Court "identified three situations in which Art. 111 does not bar the creation of

legislative courts."21 These three situations are territorial courts, military courts, and

courts created to adjudicate cases involving "public rights."22 With respect to the

third situation, Marathon elaborated:

[A] matter of public rights must at a minimum arise "between the government

and others." In contrast, "the liability of one individual to another under the law

as defined," is a matter of private rights. Our precedents clearly establish that

only controversies in the former category may be removed from Art. I11 courts

and delegated to legislative courts or administrative agencies for their

determination. Private-rights disputes, on the other hand, lie at the core of the

historically recognized judicial power.23

Subsequently, the Court rejected the notion that public rights must at a

minimum arise between the government and others.24 In Granfinanciera, S.A. v.

Nordberg, the Court wrote:

l9 Whether Congress may require the use of non-federally established arbitration panels is

considered in Section F, below.

Palmore v. United States, 411 U.S. 389,408 (1973).

458 U.S. 50,70 (1982).

Id. at 64-70.

Id. at 69-70 (emphasis in original; citations omitted).

Thomas v. Union Carbide Agricultural Products Co.,473 U.S. 568,586 (1985).

The crucial question, in cases not involving the Federal Government, is whether

"Congress, acting for a valid legislative purpose pursuant to its constitutional

powers under Article I, [has] create[d] a seemingly 'private' right that is so

closely integrated into a public regulatory scheme as to be a matter appropriate

for agency resolution with limited involvement by the Article I11 judiciary." If

a statutory right is not closely intertwined with a federal regulatory program

Congress has power to enact, and if that right neither belongs to nor exists

against the Federal Government, then it must be adjudicated by an Article I11

C. Article 111 / Seventh Amendment Equivalence

T h e constitutional problem with placing common law tort actions in an Article

I tribunal is equivalent to the constitutional problem with denying jury trials in such

cases. In Granfinanciera, S.A. v. Nordberg, the Court noted that Congress cannot

conjure away the Seventh Amendment by mandating that traditional legal [i.e.,

common law] claims be . . . taken to an administrative tribunal. In certain

situations, of course, Congress may fashion causes of action that are closely

analogous to common-law claims and place them beyond the ambit of the

Seventh Amendment by assigning their resolution to a forum in which jury trials

are unavailable. Congress' power to do so is limited, however, just as its power

to place adjudicative authority in non-Article I11 tribunals is c i r c u m s ~ r i b e d . ~ ~

That is, the situations in which Congress may deny the right to a jury trial are

the same situations in which Congress may place a matter outside of an Article 111

court. In the Court's words:

[I]f a statutory cause of action is legal [i.e., common law] in nature, the question

whether the Seventh Amendment permits Congress to assign its adjudication to

a tribunal that does not employ juries as factfinders requires the same answer as

the question whether Article I11 allows Congress to assign adjudication of that

cause of action to a non-Article I11 tribunal. . . . [I]f the action must be tried

under the auspices of an Article I11 court, then the Seventh Amendment affords

the parties a right to a jury trial whenever the cause of action is legal [i.e.,

common law] in nature. Conversely, if Congress may assign the adjudication of

a statutory cause of action to a non-Article I11 tribunal, then the Seventh

Amendment poses no independent bar to the adjudication of that action by a

nonjury fa~tfinder.'~

492 U.S. 33,54-55 (1989) (citation omitted).

Id. at 52 (emphasis in original; citations omitted).

Id. at 53-54.

D. Applying Article Ill and the Seventh Amendment

Whether a federal statute requiring tort claims to be decided by an Article I

tribunal would violate Article 111, and whether it would violate the Seventh

Amendment, amount to the same question. But what is the answer? Before

examining some Supreme Court decisions that may shed light on it, we should

emphasize that the question arises only if Congress were to establish a federal nonArticle 111forum to hear traditional tort claims. If Congress instead were simply to

prohibit states from using jury trials in tort cases, but did not establish an Article I

forum for such cases, then it might raise another constitutional issue (which is

discussed in Section F, below) but it would not raise an Article 111 / Seventh

Amendment issue.28This is because state courts were created pursuant to state laws

or constitutions and do not exercise federal judicial power, and because the Seventh

Amendment does not apply to them.

But to what extent may Congress require that tort claims be decided by an

Article I tribunal? In Thomas v. Union Carbide Agricultural Products Co., the

Supreme Court noted that Northern Pipeline had established "that Congress may not

vest in a non-Article III court the power to adjudicate, render final judgment, and

issue binding orders in a traditional contract action arising under state law, without

consent of the litigants, and subject only to ordinary appellate review."29 The same

undoubtedly applies to traditional tort actions arising under state law. However, this

quotation suggests that Congress may vest tort claims in a non-Article 111forum if it

does at least one of two things: (1) alters tort claims so that they are no longer

traditional common law actions, or (2) allows de novo review, with the right to a jury

trial, of traditional common law tort actions, rather than allow merely traditional

appellate review. In other words, Congress apparently may require that traditional

common law tort actions initially be heard in a federal non-Article 111forum, without

a jury, provided it allows a dissatisfied party to then seek a jury trial.30 However, if

Congress wishes to limit judicial review of tort claims, then it apparently must alter

tort claims so that they are no longer traditional common law tort actions.

To what extent must Congress alter tort claims in order to place them in a nonArticle 111forum and not provide de novo review? In Granfinanciera, the Court held

that "Congress may fashion causes of action that are closely analogous to commonlaw claims and place them beyond the gambit of the Seventh Amendment" if, in

cases not involving the federal government, the private right that Congress creates

"is so closely integrated into a public regulatory scheme as to be a matter appropriate

Prohibiting states from using jury trials in tort cases, without establishing a federal forum

to decide such cases, might be done in various ways, such as by requiring binding arbitration

or by allowing ordinary state court trials but requiring that judges be factfinders.

29 473 U.S. 568,584 (1985).

In the National Childhood Vaccine Injury Act of 1986, as amended, 42 U.S.C.

$9 300aa-1- 300aa-34, Congress required that vaccine-related injury claims be heard by a

special master designated by the United States Claims Court. However, the statute both

alters the traditional common law action to a no-fault claim with limited recovery, and

allows a dissatisfied claimant to bring a traditional state tort action, with some

modifications.

for agency resolution with limited involvement by the Article III j~diciary."~' In

Thomas, the Court indicated that such limited involvement may consist in judicial

review that is something less than de novo review with the right to a jury trial.

In Thomas, the Court rejected the notion that a matter of public rights must at

a minimum arise between the government and others.32Instead, it held "that practical

attention to substance rather than doctrinaire reliance on formal categories should

inform application of Article III.7733Thomas involved a provision of the Federal

Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. $5 136et seq. FIFRA

requires manufacturers, as a precondition for registration of a pesticide, to submit

research data to the Environmental Protection Agency (EPA) concerning the

product's health, safety, and environmental effects. Congress wished to allow the

EPA to consider data submitted by one registrant to support the registration of the

same or a similar product by another registrant, and therefore "provided statutory

authority for the use of previously submitted data as well as a scheme for sharing the

costs of data g e n e r a t i ~ n . " ~In~order to avoid a "logjam of litigation that resulted

from controversies over data compensation," Congress provided for "a system of

negotiation and binding arbitration to resolve compensation disputes among

registrants.7735"The arbitrator's decision is subject to judicial review only for 'fraud,

misrepresentation, or other misconduct. 77736

The Court considered several factors in determining that an Article III tribunal

was not required to resolve these disputes. It found mandatory binding arbitration

permissible in part because the right to compensation for shared data "does not

depend on or replace a right to . . . compensation under state law.7737

The right created by FIFRA is not purely a "private" right, but bears many of the

characteristics of a "public"right. Use of a registrant's data to support a followon [i.e., subsequent] registration serves a public purpose as an integral part of a

program safeguarding the public health. Congress has the power, under Article

I, to authorize an agency administering a complex regulatory scheme to allocate

costs and benefits amongvoluntary participants in the program without providing

an Article I11 adj~dication.~~

Thus, to use the words of the Court in Granfinanciera a few years later, Thomas

involved a private right that was "closely integrated into a public regulatory

492 U.S. at 52,54.

473 U.S. at 586.

33 Id. at 587.

34 Id. at 572.

35 Id. at

573.

Id. at 573-574.

Id. at 584.

38 Id.

at 589.

scheme."39 In addition, the Court in Thomas cited the fact that "no unwilling

defendant is subjected to judicial enforcement power as a result of the agency

'adjudi~ation,'"~~

and that FIFRA, while it limits judicial review, it "does not

preclude review of the arbitration proceeding by an Article III court."41

In Commodity Futures Trading Commission v. Schor, the Supreme Court again

emphasized that, in determining whether an Article 111tribunal is required, it

has declined to adopt formalistic and unbending rules. Although such rules

might lend a greater degree of coherence to this area of law, they might also

unduly restrict Congress' ability to take needed and innovative action pursuant

to its Article I powers. Thus, in reviewing Article I11 challenges, we have

weighed a number of factors, none of which has been deemed determinative,

with an eye to the practical effect that the congressional action will have on the

constitutionally assigned role of the federal judiciary?'

The opinion in Schor reveals how nonformalistic the Court's approach is in this

area:

Among the factors upon which we have focused are the extent to which the

"essential attributes of judicial power" are reserved to Article I11 courts, and,

conversely, the extent to which the non-Article I11 forum exercises the range of

jurisdiction and powers normally vested only in Article I11courts, the origins and

importance of the right to be adjudicated, and the concerns that drove Congress

to depart from the requirements of Article III?3

The Court in Schor upheld a congressional grant of adjudicatory powers to a

federal agency, the Commodity Futures Trading Commission (CFTC). The Court

emphasized that the CFTC's

adjudicatorypowers depart from the traditional agency model in just one respect:

the CFTC's jurisdiction over common law counterclaims. . . . Aside from its

authorization of counterclaim jurisdiction, the [statute] leaves far more of the

"essential attributes of judicial power" to Article I11 courts than did that portion

of the Bankruptcy Act found unconstitutional in Northern P i ~ e l i n e . ~ ~

Specifically, CFTC orders are reviewed under the "weight of the evidence"

standard, "rather than the more deferential standard found lacking in Northern

492 U.S. at 54.

473 U.S. at 591.

Id. at 592.

478 U S . 833, 851 (1986) (citations omitted).

Id.

Id. at 852.

Pipeline." Furthermore, "[tlhe legal rulings of the CFTC . . . are subject to de novo

review."45

In Northern Pipeline the Court found unconstitutional the delegation to an

Article I tribunal -the United States Bankruptcy Court -of the adjudication of the

right to recover contract damages. Although discharge in bankruptcy "may well be

a 'public right"' and if it is may be delegated to an Article I court, the right to recover

contract damages is a state-created private right and as such may not be delegated to

an Article I court.46 In response to the argument that "the bankruptcy court is merely

an 'adjunct' to the district court, and that the delegation of certain adjudicative

functions to the bankruptcy court is accordingly consistent with the principle that the

judicial power of the United States must be vested in Art. 111courts,"47the Supreme

Court observed that "the judgments of the bankruptcy courts are apparently subject

to review only under the more deferential 'clearly erroneous' standard."48 Such

limited review gave the bankruptcy courts more power than was permissible for an

"adjunct."

In Granfinanciera, the Court held that the Seventh Amendment requires a jury

trial in a suit by a trustee in bankruptcy to recover an allegedly fraudulent monetary

transfer. It reached this conclusion because

a bankruptcy trustee's right to recover a fraudulent conveyance under 11U.S.C.

§ 548(a)(2) seems to us more accurately characterized as a private right rather

than a public right as we have used those terms in our Article I11 decisions. In

Northern Pipeline Construction Co. . . . the plurality noted that . . . state-law

causes of action for breach of contract or warranty are paradigmatic private

rights, even when asserted by an insolvent corporation in the midst of Chapter

11reorganization proceeding^.^^

It was not sufficient that Congress had "reclassified a pre-existing, common-law

cause of action. . . . Congress cannot eliminate a party's Seventh Amendment right

to a jury trial merely by relabeling the cause of action to which it attaches and placing

exclusive jurisdiction in an administrative agency or a specialized court of equity."s0

"Nor," the Court added, "can Congress' assignment be justified on the ground

that jury trials of fraudulent conveyance actions would 'go far to dismantle the

statutory scheme,' or that bankruptcy proceedings have been placed in 'an

administrative forum with which the jury would be inc~mpatible."'~~

Id. at 853.

458 U.S. at 71.

47 Id. at 77.

Id. at 85.

492 U.S. at 55-56.

Id. at 60-61.

Id. at 61 (citations omitted).

Furthermore, "[ilt may be that providing jury trials in some fraudulent

conveyance actions. ..would impede swift resolution of bankruptcy proceedings and

increase the expense of Chapter 11 reorganizations. But 'these considerations are

insufficient to overcome the clear command of the Seventh ~mendment.'"'~

E. Constitutionality of Establishing Federal Non-Article Ill

Forums: Conclusion

In Thomas, the Court upheld the use of a non-Article 111forum because, among

other things, the right created was "not purely a 'private' right," and limited judicial

review by an Article III court was ~ermitted.'~In Schor, the Court upheld the use of

a non-Article 111 forum because, among other things, its adjudicatory powers over

common law actions were limited, its orders were reviewed by an Article 111 court

under a relatively non-deferential standard, and its legal rulings were subject to de

novo review.

In Northern Pipeline, the Court struck down the use of an Article I forum

because it was allowed to decide state-created private rights, and its decisions were

subject only to deferentialjudicial review. In Granfinanciera, the Court struck down

the use of an Article I forum because the right that was adjudicated was a private

right.

These cases show that, as the Court wrote in Schor, "in reviewing Article 111

challenges, we have weighed a number of factors, none of which has been deemed

determinative, with an eye to the practical effect that the congressional action will

have on the constitutionally assigned role of the federal j~diciary."'~However, the

major factors appear to be the extent to which the cause of action constitutes a private

right, and the degree of review by an Article 111tribunal that is provided. If a cause

of action is a traditional common law cause of action, not closely integrated into a

federal regulatory scheme, then de novo review by an Article 111 court, with a jury

trial, would apparently be required. If the cause of action is altered somewhat, but

still resembles a common law action, then something less than de novo review by an

Article 111court might be adequate, provided the Article 111court is not required to

be too deferential to the finding of the non-Article 111forum. If the cause of action

is altered to the point that it no longer resembles a common law tort, and is closely

integrated into a federal regulatory scheme, then adjudication by an Article I forum,

without judicial review, may be permissible. It does not seem possible to be more

specific than this, as "bright-line rules cannot effectively be employed to yield broad

principles applicable to all Article 111inq~iries."~'

Id. at 63.

53 473 U.S. at 589.

478 U.S. at 851.

Id. at 857.

F. Constitutionality of Prohibiting States from Using Jury

Trials, Without Establishment of a Federal Non-Article Ill

Forum

As noted above, if Congress were to prohibit the states from using jury trials in

tort cases, but did not establish a federal non-Article III forum to hear such cases,

then it would raise no Article III / Seventh Amendment issue, but it would raise

another constitutional issue. This issue is whether Congress, even where it would

otherwise have the power to regulate under the Commerce Clause, may alter the

procedures that state courts use to adjudicate state causes of action. In New York v.

United States, discussed at page 5, above, the Court prohibited Congress from using

its commerce power to commandeer state regulatory processes. Although, as noted,

this restriction would not seem to preclude Congress from preempting substantive

state law, it might be argued that eliminating jury trials, constituting as it would an

interference with state court procedure, might amount to commandeering state

regulatory processes.

This distinction between substance and procedure also finds support in the

Supreme Court's approach to diversity cases, which are cases arising under state law

which, because they are between citizens of different states and the amount in

controversy exceeds $50,000, may be heard in federal court. 28 U.S.C. 5 1332. In

Erie Railroad Co. v. Tompkins, 304 U.S. 64,78 (1937), the Supreme Court held that,

in diversity cases, a federal court is bound by the substantive, as opposed to the

procedural, law of the state in which it sits, "whether the law of the State shall be

declared by its Legislature in a statute or by its highest court in a decision."56

In Guaranty Trust Co. v. New York, 326 U.S. 99 (1945), the Supreme Court held

that statutes of limitations are substantive for this purpose, and that therefore federal

courts must apply state statutes of limitations in diversity cases. By "substantive,"

the Court meant that the statute could substantially affect the outcome of the

litigation. A statute of limitations can substantially affect the outcome of litigation

because it can preclude an action from even being brought. By contrast, the right to

a jury trial does not have a comparably substantial effect, because in a non-jury trial

a judge presumably applies the same law to the same facts as a jury would in a jury

trial.

In diversity cases, "[ilt is now clear that federal law determines whether there

is a right to a jury trial in a case in federal court and that state law is wholly

i r r e l e ~ a n t . " ~ ~Although the Seventh Amendment, rather than the substantive/procedural distinction, is the main factor here, one could nevertheless argue that,

if federal courts may use the federal rule with respect to jury trials of state causes of

In Kline v. Wheels by Kinney, Inc., 464 F.2d 184, 187 (4" Cir. 1972), a federal court

wrote: "With no North Carolina case directly on point, our judicial chore is to 'determine

the rule that the North Carolina Supreme Court would probably follow, not fashion a rule

which we, as an independent federal court, might consider best."'

Wright & Miller, FEDERAL

PRACTICE

AND PROCEDURE

: CIVIL5 2303.

action, then state courts may not be preempted from using their own rules with

respect to jury trials of state causes of action.

In addition, "[tlhe general rule, bottomed deeply in belief in the importance of

state control of state judicial procedure, is that federal law takes the state courts as

it finds them. For example, state rules about the ways in which claims for relief, or

defenses, or counter-defenses, must be asserted may ordinarily be applied also to

federal claims and defenses and counter-defenses, providing only that the rules are

not so rigorous as, in effect, to nullify the asserted rights."''

This general rule seems to have operated in a 1950 case in which the Supreme

Court held that a state may "deny access to its courts to persons seeking recovery

under the Federal Employers' Liability Act if in similar cases the State for reasons

of local policy denies resort to its courts and enforces its policy impartially . . . so as

not to involve a discrimination against Employers' Liability Act suits . . . ."59

There is an apparently strong argument, however, in support of Congress's

power to eliminate jury trials in state causes of action heard in state courts. The

Supreme Court has held that section 2 of the Federal Arbitration Act, 9 U.S.C. 5 2,

preempts conflicting state law. This statute provides that agreements to arbitrate

"shall be valid, irrevocable, and enforceable," and thus effectively eliminates the

right to a jury trial in some state cases. In Southland Corp. v. Keating, 465 U.S. 1,

11(1984), the Supreme Court found that "[tlhe Federal Arbitration Act rests on the

authority of Congress to enact substantive rules under the Commerce Clause," and

that it preempted a state statute that had been interpreted to require judicial

consideration of claims brought under a state statute. In Perry v. Thomas, 482 U.S.

483 (1987), and in Doctor'sAssociates, Inc. v. Casarotto, 517 U.S. 681 (1996), the

Supreme Court again found the Federal Arbitration Act to preempt conflicting state

law. If Congress can eliminate judicial consideration of a case, then arguably it can

eliminate jury consideration while retaining judicial consideration.

'* Hart, The RelationsBetween State and Federal Law, 54 Columbia Law Review 489,508

(1954). The Supreme Court has qualified this rule, writing: "Federal law takes state courts

as it finds them only insofar as those courts employ rules that do not 'impose unnecessary

burdens upon rights of recovery authorized by federal laws.'" Felder v. Casey, 487 U.S. 131,

150 (1988). However, federal rights of recovery would not be at issue if Congress sought

to eliminate jury trials of state tort claims, and the Court's qualificationwould be irrelevant

in such a case.

Missouri ex rel. Southern Railway Co. v. Mayfield, 340 U.S. 1, 4 (1950). The Court

continued, however: "No such restriction is imposed upon the States merely because the

Employers' Liability Act empowers their courts to entertain suits arising under it," thus not

addressing the issue of the constitutionality of Congress's imposing such a restriction.

Part Ill: Conclusion

A. Tort Reform Generally

Congress has the authority to enact tort reform legislation generally, under its

power to regulate interstate commerce, and to make such legislation applicable to

intrastate torts, because tort suits generally affect interstate commerce. However, it

may be unconstitutional for tort reform legislation to be applied to particular

intrastate torts that arguably do not substantially affect interstate commerce.

There would appear to be no due process or federalism (or any other

constitutional) impediments to Congress's limiting a state common law right of

recovery. The only exception concerns requiring alternative dispute resolution that

limits the right to a jury trial.

B. Alternative Dispute Resolution

The Seventh Amendment would preclude Congress from eliminating the right

to a jury trial in common law tort actions brought in federal court. Congress may,

however, eliminate the right to bring common law tort actions in federal court, or

eliminate common law tort actions themselves.

Congress apparently may create Article I tribunals, such as arbitration panel, to

hear tort claims, if it alters tort claims so that they are no longer traditional common

law actions (but rather are like no-fault workers' compensation claims), or if it allows

de novo review by an Article 111court, with the right to a jury trial, of traditional

common law tort actions (rather than allow merely traditional appellate review). It

apparently may also opt for a middle ground by altering the common law cause of

action somewhat but not wholly, and by providing for something less than de novo

review by an Article 111court, provided that the Article 111 court is not required to be

too deferential to the findings of the Article I tribunal.

Finally, a strong argument may be made that Congress has the power to

eliminate jury trials in tort actions brought in state court, but this is uncertain.

Appendix: Selected Federal Tort Reform Statutes

Employers Liability Act of 1908, 35 Stat. 65, c. 149. This statute

regulated the liability of common carriers by railroad to their employees; it was

essentially a federal workers' compensation statute that preempted state tort law by,

among other things, its "abrogation of the fellow-servant rule, the extension of the

carrier's liability to cases of death, and the restriction of the defenses of contributory

negligence and assumption of risk . . . . " Mondou v. New York, N.H. & H.R. Co.,

223 U.S. 1 , 4 9 (1912). In this case, the Supreme Court upheld the constitutionality

of the statute, including the power of Congress to regulate commerce to override state

tort law. The Court wrote:

When Congress, in the exertion of the power confided to it by the Constitution,

adopted that act, it spoke for all the people and all the States, and thereby

established policy for all. That policy is as much the policy of Connecticut as it

the act had emanated from its own legislature, and should be respected

accordingly in the courts of the State.

Id. at 57.

Price-Anderson Act, 42 U.S.C. § 2210(e). This statute limits the tort

liability of Nuclear Regulatory Commission licensees (such as nuclear power plants)

and Department of Energy nuclear contractors for a single "nuclear incident." For

example, for nuclear power plants, the liability limit is pegged to the amount of

financial protection required of the licensee under a two-tiered system of privately

available insurance plus industrywide pro-rata contributions. That total, including

a 5 percent "surcharge" provided for in the Act, is currently $9.09 billion.

In Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59,88,

n.32 (1978), the Supreme Court upheld the constitutionality of the Act, writing:

Our cases have clearly established that "[a] person has no property, no vested

interest, in any rule of common law." The "Constitution does not forbid the

creation of new rights, or the abolition of old ones recognized by the common

law, to attain a permissible legislative object," despite the fact that "otherwise

settled expectations" may be upset thereby. Indeed, statutes limiting liability are

relatively commonplace and have consistently been enforced by the courts

[citations omitted].

Atomic Testing LiabilityAct, 42 U.S.C. § 2212. This 1990 statute, which

reenacted the Warner Amendment, 9 1631 of P.L. 98-525 (1984), made the Federal

Tort Claims Act the exclusive remedy for suits against government contractors who

carried out atomic weapons testing programs that caused injury or death due to

exposure to radiation. In other words, this law immunized the contractors from

liability under state tort law and made the United States liable in their place.60 Two

federal courts of appeals upheld the constitutionality of the Warner Amendment.61

Other Statutes that Substitute the United States as Defendant. The

Atomic Testing Liability Act is only one of many statutes that substitute the United

States as the defendant in place of a private entity or person in suits arising under

state tort law. The Federal Tort Claims Act itself immunizes federal employees from

suits under state tort law for acts committed within the scope of employment. 28

U.S.C. 5 2679(b)(l). The National Swine Flu Immunization Program of 1976, P.L.

94-380, made the United States liable for injuries arising out of the administration

of the swine flu vaccine to the extent that vaccine manufacturers or distributors

would be liable under state law, though it allowed the United States, if it paid any

claim, to sue a vaccine manufacturer or distributor whose negligent conduct had

caused the injury giving rise to such claim.62

Congress has also enacted more than 50 statutes that provide that various nonfederal individuals or entities shall be treated as federal employees for purposes of

liability.63 These statutes generally apply to volunteers with various federal

programs, including federally funded medical clinics and their officers and

employees, "free clinic health professional^,"^^ members and personnel of the

National Gambling Impact Study Commission, Peace Corps volunteers, and

volunteers under the Volunteers in the National Forests Act of 1972 and the

Volunteers in the Parks Act of 1969. A recent enactment of this type of provision

was section 304 of the Homeland Security Act of 2002, Public Law 107-296, which

treats manufacturers and administrators of smallpox vaccine as federal employees for

liability purposes.

Volunteers and entities covered by these statutes and others may not be sued for

torts committed within the scope of their employment, but victims of their negligence

may sue the United States under the Federal Tort Claims Act. The United States7

liability, however, is limited in various ways. The United States may not, for

example, be held liable for discretionary functions (i.e., policy decisions), or for

punitive damages.

60 A

s it happened, because of exceptions in the Federal Tort Claims Act, the United States

could not be held liable, and Congress as a consequence enacted the Radiation Exposure

Compensation Act, 42 U.S.C. 3 2210 note, a compensation program for individuals exposed

to radiation between specified dates in 1951 and 1962.

In re Consolidated United States Atmospheric Testing Litigation, 820 F.2d 982 (9" Cir.

1987), cert. denied, 485 U.S. 905 (1988); Hammond v. United States, 786 F.2d 8 (1st Cir.

1986).

The Swine Flu law made the United States liable not only for the negligence but for the

strict liability of manufacturers and distributors, even though the United States ordinarily

may not be held strictly liable under the Federal Tort Claims Act, regardless of state law.

63 Many of these statutes are listed in CRS Report 97-579, Making Private Entities and

Individuals Immune from Tort Liability by Declaring them Federal Employees.

For additional information on these first two categories, see CRS Report RS20984, Public

Health Service Act Provisions Providing Immunity from Medical Malpractice Liability.

National Childhood Vaccine Injury Compensation Act of 1986 42

U.S.C. §§ 300aa-1 300aa-34. This statute prohibits suits under state tort law

against manufacturers and administrators of specified vaccines unless the claimant

first files a claim for limited (e.g., $250,000 cap on pain and suffering) no-fault

compensation with the National Vaccine Injury Compensation Program, which is

"administered by a Director selected by the Secretary" of Health and Human

Services. Claims are adjudicated by the United States Court of Federal Claims and

are paid by the Vaccine Injury Compensation Trust Fund, which is funded by a tax

on vaccines.

A claimant dissatisfied with recovery under the Program may sue under state

tort law, but the statute imposes various limitations on such suits; for example,

manufacturers are not liable for failure to provide warnings directly to the injured

party, as warnings to the person administering the vaccine are made sufficient. 42

U.S.C. § 300aa-22(c).

Comprehensive Environmental Response, Compensation, and

Liability Act (Superfund). This statute overrides state tort law in sections 112(e)

and 309(a), 42 U.S.C. §§ 9612(e) and 9658(a). Section 112(e) provides that,

"[r]egardless of any State statutory or common law to the contrary," no person who

asserts a claim against the Fund shall be deemed to have waived any other claim

arising from the same transaction. Section 309(a) provides that, "[iln the case of any

action brought under State law for personal injury, or property damages, which are

caused or contributed to by exposure to any hazardous substance. ..if the applicable

limitations period for such action (as specified in the State statute of limitations or

under common law) provides a commencement date which is earlier than the

federally required commencement date," then the federally required commencement

date shall govern.

General Aviation Revitalization Act, P.L. 103-298 (1994), 49 U.S.C.

§ 40101 note. P.L. 103-298 bars any products liability suit against a manufacturer

involving planes more than 18 years old with fewer than 20 seats that are not used

in scheduled service.

Cruise Ship Liability, P.L. 104-324, § 1129 (1996). This section of the

Coast Guard Authorization Act of 1996 (P.L. 104-324) added 46 U.S.C. App.

§ 183(g):

In a suit by any person in which the operator or owner of a vessel or employer

of a crewmember is claimed to have vicarious liability for medical malpractice

with regard to a crewmember occurring at a shoreside facility. . . such operator,

owner, or employer shall be entitled to rely upon any and all statutory limitations

of liability . . . in the State of the United States in which the shoreside medical

care was provided.

Section 1129 also added 46 U.S.C. App. 9 183c(b) to allow:

contracts, agreements, or ticket conditions of carriage with passengers which

relieve a crewmember, manager, agent, master, owner, or operator of a vessel

from liability for infliction of emotional distress, mental suffering, or

psychological injury . . . .

Such liability, however, may not be limited if the emotional distress, mental

suffering, or psychological injury was the result of physical injury to the claimant or

the result of the claimant's having been at actual risk of physical injury, if such injury

or risk was caused by the negligence or fault of a crewmember or the manager, agent,

master, owner, or operator. Such liability also may not be limited if it the emotional

distress, mental suffering, or psychological injury was intentionally inflicted, or

involved sexual harassment, sexual assault, or rape by a crewmember or the manager,

agent, master, owner, or operator.

Bill Emerson Good Samaritan Food Donation Act, P.L. 104-210

(1996), 42 U.S.C. 5 1791. P.L. 104-210 provides that a person or gleaner ("a

person who harvests for free distribution to the needy"), except in cases of gross

negligence or intentional misconduct, "shall not be subject to civil or criminal

liability arising from the nature, age, packaging, or condition of apparently

wholesome food or an apparently fit grocery product that the person or gleaner

donates in good faith to a non-profit organization for ultimate distribution to needy

individuals." The nonprofit organization that receives the donation shall also not be

liable, except in cases of gross negligence or intentional misconduct. The statute

defines "gross negligence" as "voluntary and conscious conduct (including a failure

to act) by a person who, at the time of the conduct, knew that the conduct was likely

to be harmful to the health or well-being of another person."

Volunteer Protection Act of 1997, P.L. 105-19 (1997), 42 U.S.C.

59 14501-14505. P.L. 105-19 provides immunity for ordinary negligence to

volunteers for nonprofit organizations or governmental entities acting within the

scope of their responsibilities, provided that, "if appropriate or required, the volunteer

was properly licensed, certified, or authorized by the appropriate authorities . . . ."

The immunity does not apply to "willful or criminal conduct, gross negligence,

reckless misconduct, or a conscious, flagrant indifference to the rights or safety of the

individual harmed by the volunteer." This liability limitation does not apply to

nonprofit organizations or governmental entities; they may be held vicariously liable

for the ordinary negligence of their volunteers, even if volunteers are immune.

Nonprofit organizations and governmental entities, however, may continue to benefit

from any liability limitations provided by state law.

The Volunteer Protection Act of 1997 also eliminates joint and several liability

for noneconomic damages with respect to volunteers' work for nonprofit

organizations and governmental entities, and allows punitive damages only where the

plaintiff establishes "by clear and convincing evidence that the harm was proximately

caused by an action of such volunteer which constitutes willful or criminal

misconduct, or a conscious, flagrant indifference to the rights or safety of the

individual harmed."

The Volunteer Protection Act of 1997 preempts inconsistent state laws except

to the extent that such laws provide additional protection from liability to volunteers,

nonprofit organizations, or governmental entities. In addition, it allows states to

enact statutes "declaring the election of such State that this Act shall not apply to

such civil action in the State." If they do so, then the statute would not apply in any

action if all parties to the action are citizens of the state.

Amtrak Reform and Accountability Act of 1997, P.L. 105-134, 5 161

(1997), 49 U.S.C. 5 28103. P.L. 105-134 limits damages in rail accidents. It

permits punitive damages to be awarded, to the extent permitted by applicable state

law, "only if the plaintiff establishes by clear and convincing evidence that the harm

that is the subject of the action was the result of conduct carried out by the defendant

with a conscious, flagrant indifference to the rights or safety of others." It also

provides: "The aggregate allowable awards to all rail passengers, against all

defendants, for all claims, including claims for punitive damages, arising from a

single accident or incident, shall not exceed $200,000,000."

Aviation Medical Assistance Act of 1998, P.L. 105-170 (1998), 49

U.S.C. 5 44701 note. P.L. 105-170 provides that an air carrier shall not be liable

for damages "arising out of the performance of the air carrier in obtaining or

attempting to obtain the assistance of a passenger in an in-flight medical emergency,

or out of the acts or omissions of the passenger rendering the assistance, if the

passenger is not an employee or agent of the carrier and the carrier in good faith

believes that the passenger is a medically qualified individual." In addition, an

individual in such circumstances shall not be liable unless he or she "is guilty of

gross negligence or willful misconduct."

BiomaterialsAccess Assurance Act of 1998, P.L. 105-230 (1998), 21

U.S.C. 55 1601-1606. P.L. 105-230 limits the products liability under state law

of biomaterials suppliers, which it defines as "an entity that directly or indirectly

supplies a component part or raw material for use in the manufacture of an implant."

A biomaterials supplier may be held liable under state law only if it is the

manufacturer of the implant; if it is the seller of the implant in certain limited

situations; or, if it is neither the manufacturer nor seller of the implant, then only if

it supplied raw materials or component parts for use in the implant that either did not

constitute the product described in the contract or failed to meet specifications as

provided in the statute. The statute also contains special procedures for the dismissal

of civil actions against biomaterials suppliers.

Y2K Act, P.L. 106-37 (1999), 15 U.S.C. 95 6601-6617. P.L. 106-37 limits

contractual and tort liability under state law in suits, other than those for personal

injury or wrongful death, "in which the plaintiff's alleged harm or injury arises from

or is related to an actual or potential Y2K failure . . . ." Limitations on tort liability

include (1) a cap on punitive damages, of the lesser of three times the amount

awarded for compensatory damages or $250,000, but the cap applies only to

defendants who are individuals whose net worth does not exceed $500,000 or

organizations with fewer than 50 full-time employees, (2) a "clear and convincing

evidence" standard for the recovery of punitive damages, (3) the elimination of joint

and several liability except in cases of specific intent to injure or knowing

commission of fraud, and except in some cases in which damages against a defendant

are uncollectible, and (4) except in the case of an "intentional tort arising independent

of a contract," a prohibition on damages for economic loss, including lost profits or

sales.

Cardiac Arrest Survival Act of 2000, P.L. 106-505, 5 404 (2000), 42

U.S.C. 5 238q. P.L. 106-505 provides good Samaritan protections regarding

automated external defibrillators (AEDs). It provides that, with exceptions, "any

person who uses or attempts to use an automated external defibrillator device on a

victim of a perceived medical emergency is immune from civil liability; and in

addition, any person who acquired the device is immune from such liability," except

in specified circumstances.

A defendant shall not have immunity under this statute if the defendant (1)

commits willful or criminal misconduct or gross negligence, (2) is a licensed or

certified health professional acting within the scope of employment or agency, (3) is

a hospital or clinic whose employee or agent used the AED while acting within the

scope of employment or agency, or (4) is an acquirer of the AED who leased it to a

health care entity, and the harm was caused by an employee or agent of the entity.

This statute supersedes state law only to the extent that a state has no statute or

regulations that provide persons within the class protected by this statute with

immunity for civil liability arising from the use of AEDs.

Air Transportation Safety and System StabilizationAct, P.L. 107-42

(2001), § 201(b). P.L. 107-42 provides that, "[flor acts of terrorism committed on

or to an air carrier during the 180-day period following the date of enactment of this

Act, the Secretary of Transportation may certify that the air carrier was a victim of

an act of terrorism and. . .shall not be responsible for losses suffered by third parties

(as referred to in section 205.5(b)(l) of title 14, Code of Federal Regulations) that

exceed $100,000,000, in the aggregate, for all claims by such parties arising out of

such act." If the Secretary so certifies, making the air carrier not liable for an amount

that exceeds $100,000,000, then "the Government shall be responsible for any

liability above such amount. No punitive damages may be awarded against an air

carrier (or the Government taking responsibility for an air carrier under this

paragraph) under a cause of action arising out of such act."

This Act was enacted on September 22,2001, and § 201(b) therefore sunset on

March 21, 2002. It was extended, however, through 2003, by section 1201 of the

Homeland Security Act of 2002, Public Law 107-296. The section in the Code of

Federal Regulations that 8 201(b) mentions refers to "persons, including nonemployee cargo attendants, other than passengers"; these are apparently the "third

parties" to whom 5 201(b) refers.

September Il t h Victim Compensation Fund of 2001, 49 U.S.C.

5 40101 note. P.L. 107-42, Title IV, as amended, created a federal program to

compensate victims of the September 11, 2001 terrorist attacks. A victim or the

victim's estate may seek no-fault compensation from the program or may bring a tort

action against an airline or any other party, but may not do both, except that a victim

or the victim's estate may recover under the program and also sue "any person who

is a knowing participant in any conspiracy to hijack an aircraft or commit any

terrorist act." The number of people who may recover by way of lawsuits may be

limited, however, as the statute limits the liability of air carriers (including air

transportation security companies and their affiliates), aircraft manufacturers, airport

sponsors, or persons with an interest in the World Trade Center on September 11,

2001, to the limits of their liability insurance coverage. The statute gives the United

States a right of subrogation with respect to any claim it pays under the compensation

program. This means that the United States can recover amounts it pays under the

compensation program from any party whom the victim could sue (i.e.,a terrorist)

or would have been able to sue had she or he not filed a claim under the program.

The United States' subrogation rights, however, are limited to the caps mentioned

above.

On March 7,2002, the Department of Justice issued its final rule implementing

Victim Compensation ~ u n d . ~ ~

the September llth

Paul D. Coverdell Teacher Protection Act of 2001, P.L. 107-110,

99 2361-2368. P.L. 107-110 limits the liability of teachers, which it defines to

include instructors, principals, administrators, members of a school board, and other

educational professionals or nonprofessionals who work in a school and who are

called on to maintain discipline or ensure safety. The liability limitations, however,

apply only in states that receive funds under "this Act" (apparently P.L. 107-110) and

that do not enact a statute declaring that the Act shall not apply in the state.

The Act provides that no teacher shall be liable for ordinary negligence in

performing actions that are legal and "in furtherance of efforts to control discipline,

expel, or suspend a student or maintain order or control in the classroom or school."

A teacher may be liable for "willful or criminal misconduct, gross negligence,

reckless misconduct, or a conscious, flagrant indifference to the rights or safety of the

individual harmed by the teacher." The Act does not limit liability for harm caused

by a teacher operating a motor vehicle, vessel, aircraft, or other vehicle for which the

state requires an operator or owner to possess an operator's license or to maintain

insurance, and it does not apply "to misconduct during background investigations,

or during other actions, involved in the hiring of a teacher."

In cases in which a teacher may be held liable, punitive damages may not be

awarded "unless the claimant establishes by clear and convincing evidence that the

harm was proximately caused by . . . willful or criminal misconduct, or a conscious

flagrant indifference to the rights or safety of the individual harmed." In addition,

joint and several liability shall not apply to noneconomic damages.

Multiparty, Multiforum Trial Jurisdiction Act of 2002, P.L. 107-273,

5 11020. P.L. 107-273, at 28 U.S.C. 5 1369, provides that, under specified

circumstances, federal "district courts shall have original jurisdiction of any civil

action involving minimal diversity between adverse parties that arises from a single

accident, where at least 75 natural persons have died in the accident at a discrete

l~cation."~~

HomelandSecurity Act of 2002, P.L. 107-296, §§ 304,863,890,1201,

1402, and 1714-1717. P.L. 107-296 includes six different tort liability provisions

(some mentioned as amendments to statutes listed above), which limit the liability

28 C.F.R. Part 104 [http://www.usdoj.gov/victimcompensation/finalrule.pdfJ. For

additional information on this statute and the Department of Justice's implementation of it,

see CRS Report RL31179, The September 11th Victim Compensation Fund of 2001.

66 For additional information see CRS Report RS20861, Multiparty, Multiforum Trial

Jurisdiction Act of 2002, P.L. 107-273.

of, respectively, smallpox vaccine manufacturers and administrators, sellers of antiterrorism technology, air transportation security companies and their affiliates, air

carriers, Federal flight deck officers, and manufacturers and administrators of

components and ingredients of various vaccines.67 This last liability limitation - an

amendment to the National Childhood Vaccine Injury Act of 1986, which appeared

in $5 1714-1717 of the Homeland Security Act of 2002 - was repealed by Public

Law 108-7, Division L, 5 102.

PROTECT Act, P.L. 108-21, 5 305. Section 305 of the Prosecutorial

Remedies and Other Tools to end the Exploitation of Children Today Act of 2003,

or the PROTECT Act (P.L. 108-21), provides that neither the National Center for

Missing and Exploited Children, nor any of its officers, employees, or agents, shall

"be liable for damages in any civil action for defamation, libel, slander, or harm to

reputation arising out of any action or communication," unless it or he or she "acted

with actual malice, or provided information or took action for a purpose unrelated to

an activity mandated by Federal law."

Class Action Fairness Act of 2005, P.L. 109-2. P.L. 109-2, which is not

applicable only to tort actions, amended 28 U.S.C. 5 1332 to provide that the federal

district courts shall have exclusive jurisdiction over any class action in which the

matter in controversy exceeds $5 million and any member of a class of plaintiffs is

a citizen of a state different from any defendant. Among the statute's other

provisions is a new 28 U.S.C. 5 1453 to govern removal of class actions from state

court to federal district court.68

67 All six provisions are examined in CRS Report RL31649, Homeland Security Act of 2002:

Tort Liability Provisions.

For additional information see CRS Report RL32761, Class Actions and Legislative

Proposals in the 109th Congress: Class Action Fairness Act of 200.5.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.