CLINTON VETOES BILL LIMITING PRODUCT LIABILITY LAWSUITS.

Byline: Robert A. Rankin Knight-Ridder Tribune News Wire

In a move lauded by consumer groups and attacked by business organizations, President Clinton vetoed a bipartisan bill Thursday that sought to limit the amount of money juries can award people injured by faulty business products.

Clinton conceded that some such reform is necessary, but insisted the version Congress passed ``would hurt families without truly improving our legal system.''

His veto spotlighted a seemingly arcane bit of Washington business that has powerful special interests lined up on both sides of the issue. Sponsors of the measure concede they lack the two-thirds majorities needed to override Clinton's veto.

Sen. Bob Dole of Kansas, the apparent Republican nominee for president, said Clinton's veto proved ``it is the trial lawyers who are calling the shots at the White House.''

Trial lawyers fought hard to defeat the product-liability reform bill, and lawyers gave Clinton's re-election campaign $2.5 million in the first nine months of 1995, according to the Center for Responsive Politics, a watchdog group that monitors campaign financial records.

Democrats charged that the bill was a Republican payoff to big tobacco companies, which would win some insulation from costly lawsuits by it.

``Tobacco, tobacco, tobacco. . . . For Bob Dole and (House Speaker) Newt Gingrich, this was about tobacco,'' said David Eichenbaum, communications director of the Democratic National Committee.

In fact, trial lawyers and tobacco companies were but two of many special interests with big stakes in the vetoed bill. The U.S. Chamber of Commerce and the National Association of Manufacturers fought hard for it. But most national consumer organizations, the American Cancer Society and other victims-rights groups opposed the measure and supported Clinton's veto.

The bill would have limited jury awards intended to punish businesses for negligence in making and selling faulty products. Punitive awards would be limited to $250,000 or to two times the amount of damages suffered - such as from lost wages - whichever was greater. Its rules would have governed product liability lawsuits in state and federal courts.

The House passed the bill 259-158, with 35 Democrats in support. The Senate approved it 59-40, with 12 Democrats joining the majority.

Clinton said the bill ``would arbitrarily cap punitive damages which are paid by a corporation that has engaged in egregious conduct, such as knowingly making or selling the public a dangerous product. A cap on punitive damages can reward wrongdoers.''

Clinton noted that many juries today are being asked to consider whether tobacco companies misled customers about the harmful effects of cigarettes. The vetoed bill would have limited punishment of tobacco companies even if a jury found them guilty, he said.

As the president spoke before TV cameras in the Oval Office, behind him stood several people with product-liability claims against big businesses.

One was Mississippi Attorney General Mike Moore, who is suing tobacco companies to reimburse his state's Medicaid program for expenses paid to treat illnesses related to smoking. Seventeen other states are following his lead.

Also with Clinton was Jeanne Yanta of Minneapolis, who said a poorly designed intrauterine device (IUD) almost killed her and left her unable to bear children.

``If it weren't for punitive damages these IUDs would still be on the market injuring everyone else's daughters right now,'' Yanta told reporters.

Bruce Johnsten, vice president of the U.S. Chamber of Commerce, protested that ``this bill has nothing to do with compensatory damages, at all, zero. It has nothing to do with removing your right to sue a company if it has a bad product. It has to do only with punitive damages,'' which Johnsten said often have ``gotten out of hand.''