BILL ANALYSIS SENATE RULES COMMITTEE SB 67 Office of Senate Floor Analyses 1020 N Street, Suite 524 (916) 445-6614 Fax: (916) 327-4478 . UNFINISHED BUSINESS . Bill No: SB 67 Author: Kopp (I), et al Amended: 6/19/97 Vote: 21 . SENATE JUDICIARY COMMITTEE : 6-1, 4/8/97 AYES: Burton, Calderon, Leslie, Lockyer, O'Connell, Sher NOES: Wright NOT VOTING: Haynes, Lee SENATE FLOOR : 28-9, 4/17/97 AYES: Alpert, Ayala, Burton, Calderon, Costa, Dills, Greene, Hayden, Hughes, Johannessen, Johnston, Karnette, Kopp, Lee, Leslie, Lockyer, McPherson, O'Connell, Peace, Polanco, Rainey, Rosenthal, Schiff, Sher, Solis, Thompson, Vasconcellos, Watson NOES: Brulte, Haynes, Hurtt, Johnson, Kelley, Knight, Maddy, Mountjoy, Wright NOT VOTING: Craven, Lewis, Monteith ASSEMBLY FLOOR : Not Available . SUBJECT : Repeal of immunity for tobacco products SOURCE : Author . DIGEST : This bill would repeal the current immunity conferred upon manufacturers and sellers of tobacco products, as specified in Civil Code Section 1714.45, for products liability. Assembly Amendments : 1. Add co-authors. 2. Add legislative intent language relative to common law rules. 3. Add language to ensure the bill does not chapter ut any provisions of AB 1603 (Bustamante). ANALYSIS : In 1987, the Legislature enacted Civil Code Section 1714.45 to provide an immunity to manufacturers and sellers in a products liability if: (1) the product was "inherently unsafe" and commonly known to be unsafe; and (2) the product is a common consumer product intended for personal consumption, such as sugar, castor oil, alcohol, tobacco and butter, as identified in Comment (i) to Section 402A of the Restatement (Second) of Torts. In American Tobacco Co. v Superior Court (1989) 208 Cal.App.3d 480, the First District Court of Appeal stated that Section 1714.45 was "poorly drafted" and construed the statute to provide an unconditional immunity to tobacco products. More recently, in Richards v. Owens Corning, Inc. (1997) 14 Cal.4th 985, the California Supreme Court construed Section 1714.45 to "negate liability to voluntary users....In other words, under the conditions of Section 1714.45, a tobacco supplier simply commits no tort against knowing and voluntary smokers by making cigarettes available for their use.'' Richards noted that a determination of the exact substantive scope of Section 1714.45 was not necessary for the case at hand and that it "takes no position of the correctness of the American Tobacco decision" construing section 1714.45 to provide a "nearly complete immunity." Existing law provides an immunity to a manufacturer or seller in a product liability action if (1) the product is inherently unsafe and is known to be unsafe by the ordinary consumer with common community knowledge who consumes the product, and (2) the product is a common consumer product intended for personal consumption, such as sugar, castor oil, alcohol, tobacco, and butter, as identified in Comment (i) to Section 402A of the Restatement (Second) of Torts. The term "product liability action" is defined to mean "any action for injury or death caused by a product, except that the term does not include an action based on a manufacturing defect or breach of an express warranty." This bill would delete tobacco from the list of illustrative examples and provide that Section 1714.45 does not exempt tobacco products from product liability actions. The bill provides that it is the intention of the Legislature in enacting the amendments to this section adopted at the 1997-98 Regular Session to declare that there exists no statutory bar to, or immunity from, tobacco-related personal injury, wrongful death, or other tort claims by California smokers or others who have suffered or incurred injuries, damages, or costs arising from the promotion, marketing, sale, or consumption of tobacco products. It is also the intention of the Legislature to clarify that such claims which were or are brought shall be determined on their merits, without the imposition of any claim of statutory bar or categorical defense. The Legislature finds and declares that to the extent that the common law rules as to product liability actions with respect to tobacco were superseded by the version of Section 1714.45 of the Civil Code, this bill restores those common law rules. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 7/3/97) California Medical Association American Lung Association American Heart Association American Cancer Society City of Los Angeles Retired United Pilots Association California Nurses Association California Alliance for Consumer Protection Americans for Nonsmokers' Rights California Healthcare Association OPPOSITION : (Verified 7/3/97) California Chamber of Commerce Philip Morris: R. J. Reynolds Association for California Tort Reform The Tobacco Institute ARGUMENTS IN SUPPORT : According to the author's office, this bill is intended to restore products liability law as it relates to tobacco products prior to the enactment of Civil Code Section 1714.45. In support of the repeal, he writes, "Evidence has now become available showing tobacco companies may have deliberately manipulated the level of nicotine, a powerfully addictive substance, in tobacco products so as to create and sustain addiction in smokers. In addition, evidence shows the tobacco companies have systematically suppressed and concealed material information and waged an aggressive campaign of disinformation about the health consequences of tobacco use." In support, the California Medical Association, one of the main participants in the tort liability reform package of 1987, writes: "At the time, it was not anticipated that the California courts would interpret this provision [Section 1714.45] so broadly. Over the last decade, we have also learned much regarding the addictive nature of tobacco and the industry's intentional efforts to mislead the public on the health effects of tobacco. This, coupled with the courts' broad interpretation of the California statute, has precipitated the need to change that statute and remove tobacco's liability protections." ARGUMENTS IN OPPOSITION : Opponents assert that Civil Code Section 1714.45 provides manufacturers appropriate protection from lawsuits from individuals who choose to use an inherently dangerous product. The California Chamber of Commerce writes: "We do not believe that individuals should be able to engage in inherently dangerous activities and then sue someone for the harm which results from that activity. The current law requires that individuals accept responsibility for the known consequences of their actions which we believe is sound policy." The Tobacco Institute argues that, "this bill would make several unnecessary changes to the products liability statute enacted by the California Legislature in 1987. The current statute limits, in clear and understandable terms, the liability of manufacturers and sellers of certain consumer products whose inherent dangers are common knowledge to the ordinary consumer. "This bill would alter this common sense rule by eliminating tobacco from the illustrative list of products which are covered by the statute and by making other unnecessary changes. In addition to removing tobacco from the illustrative list, SB 67 as amended on February 14, 1997, explicitly states that the statute will not apply to tobacco liability actions." RJG:sl 7/3/97 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****