NAM testimony backs federal statute of repose

Testifying Tuesday before a House Judiciary subcommittee, a representative of the National Association of Manufacturers and its thousands of member companies

expressed support for a federal statute of repose, H.R. 3509, that would place a 12-year time limit beyond which a manufacturer could no longer be held liable for the functioning of workplace durable goods.

"It's a sad commentary on today's U.S. legal system that a statute of repose even needs to be contemplated," said Kevin McMahon, a partner in the law firm of Nelson Mullins Riley & Scarborough, who has litigated on behalf of Owens-Illinois and several other NAM members. He also recently served as chairman of the American Tort Reform Association and still sits on its board of directors and executive committee.

"But unfortunately, the plaintiff's bar in America continues to bring lawsuits against products that are decades, if not more than a century old," McMahon explained to members of the Subcommittee on Commercial and Administrative Law. "Incredibly, both federal and state judiciaries have allowed these lawsuits to go forward. Nothing lasts forever. Every perfectly designed and manufactured product will eventually fail. Our law should recognize the fact that, as products age, the responsibility for their integrity and operability shifts to those who exercise control over them. It is not fair or reasonable to hold a manufacturer liable for long-term, ordinary wear and tear, for natural degradation of materials, or the effects of the environment or other outside forces. Like manufacturers, users have a responsibility to ensure that the products and tools they use are safe and effective for the job."

McMahon said the NAM would prefer a broader and shorter statute of repose but is willing to work with sponsors and other supporters of the Workplace Goods Job Growth and Competitiveness Act to craft a final bill that can make it through the Senate where such legislation has stalled in the past.

Moving from politics to practical economics, McMahon reported that annual tort costs in the U.S. have now reached $260 billion. 

"A statute of repose of 10 or fewer years applicable to all goods, therefore, would

help level the playing field with international competitors," he said. "Japan and

the European Union (EU), for example, each have 10-year statutes that cover all goods. And since many foreign firms have only entered the U.S. market in the relatively recent past, they've got a big advantage over long established domestic companies that have and continue to face higher legal costs defending lawsuits against older products."

McMahon's full testimony is posted at:

http://www.nam.org/s_nam/bin.asp?CID=457&DID=236557&DOC=FILE.PDF.