Engineering Inc. - March/April 2003 - 31

Proposals are underway to apportion the cost of tort liability based on
fault, rather than wealth. duties that are executive, admin- b e redefined
or dropped. The r e s p o n s i b l e defendants are s o l i d , they'll be
dragged into i s t r a t i v e or professional in terms shag bosses'' and
employ- unable to pay. product liability lawsuits. n a t u r e . Many
companies are ment by small country elevators,'' Pr o p o s a l s are
underway to For instance, there was a time having trouble interpreting the
for example, have little meaning apportion the cost of tort liabil- when
people sued manufacturers regulation calling it both con- to U.S.
businesses today. ity based on fault, rather than o f piston-engine
aircraft after fusing and outdated. McCutchen also could change wealth,
and to put national class accidents happened on planes A lot of people
think that just t h e salary threshold from the action lawsuits under the
juris- t h a t had flown 40 years or b e c a u s e someone is salaried,
current $13,000 a year, though d i c t i o n of the feds. This is longer.
During the 1990s, Con- t h e y 'r e exempt,'' says Ellen differing
interest groups have yet because federal courts have more gress passed a
law barring law- K e a r n s , a partner with New t o agree on what that
new uniform rules than states do for suits after such planes had flown
York's Epstein Becker & Green, threshold should be. Or she may deciding
which defendants are for 18 years. and editor-in-chief of a Bureau a l l
ow businesses to use comp responsible for paying damages. In addition, the
Federal Trade Tax Reform of National Affairs publication time instead of
overtime pay. o n federal labor laws. Well Congress will also be looking
Commission has recently taken As for tax reform, President Bush t h a t's
not true. There's still a at FLSA reform this year. Sen. a keen interest
in class-action has proposed an economic stim- duties test out there. And
there's and former Rep. Lindsey Gra- lawsuits scr utiniz- ulus plan that
would a lot of litigation now about ham R-S.C. the sponsor of ing many to
ensure eliminate the tax on w h a t duties are high-level A C E C 's FLSA
legislation in t h a t they are not corporate dividends. enough to meet
that test.'' both the 107th and 108th Con- s i m p l y designed to This
could provoke S u c h lawsuits are typically g re s s e s g i ve s the
Council an be windfalls for per- sweeping changes in b r o u g h t on by
workers or a i m p o r t a n t ally in the Senate. sonal injury lawyers
the way companies group of workers who claim And Senate Health, Education,
a t the expense of r a i s e money and they were refused overtime pay Labor
and Pensions Committee c o n s u m e r s . Such h e l p to prevent that was
rightfully theirs. Court Chairman Judd Gregg R-N.H re f o r m s are certain
A m e r i c a n corpora- judgments have awarded some has indicated that
FLSA reform to get tough opposi- t i o n s from going of them millions of
dollars. will be a priority for his com- t i o n from trial broke in bad
times. Tom Nielsen The way the law is currently mittee this year. l a w ye
r s , who wield D e m o c r a t s will Erdman Anthony & structured has
gotten a number Of course, members of Con- g r e a t influence in l i k e
l y argue that Associates of our companies in trouble,'' g r e s s may
wait and see what s t a t e h o u s e s and eliminating the tax says Steve
Hall, director of gov- McCutchen proposes before tak- C o n g r e s s , due
to w i l l help only the ernment affairs for ACEC. You i n g final action.
Unless [her their healthy funding and their wealthy. Nielsen disagrees:
For have a statute that hasn't kept up idea] is so far out of the box as
to t i e s to lawmakers many of those corporations that pay div- with the
realities of today's mar- engender some Republican oppo- whom are former
lawyers them- idends, [a change] would mean ketplace and certainly not
kept sition, my guess is that she would selves. quite a bit. But there are
a lot of up with the unique aspects of be pretty much veto-proof,'' says
Engineering firms also could m i d d l e - c l a s s Americans today
engineering firms.'' William Kilberg, a partner with benefit from efforts
to shorten who own stock. The woman in charge of Pres- Gibson, Dunn &
Crutcher who statutes of repose the period of The president also would
raise ident Bush's mission to stem the heads a coalition of large corpora-
time after a product is manufac- the amount of equipment pur- tidal wave of
lawsuits resulting tions and trade associations work- tured when consumers
can no chases that small businesses can from this confusion is Tammy ing
on FLSA reform. longer sue. Some litigation has w r i t e off to $75,000,
and Mc Cu t c h e n , administrator of involved products or construc-
exempt companies from foreign Tort Reform the Labor Department's Wage tion
developed as long as a cen- income taxes until their foreign and Hour
Division. McCutchen Also important to engineering tury ago. profits are
distributed to U.S. will soon release a draft of her companies this year
will be an We often hear about [litiga- shareholders. proposed FLSA
changes. e f f o r t to reform how courts t i o n pertaining to] products
These measures are likely to While some have suggested apportion
responsibility in lia- built during World War I, says get full support in
the House, t r a d i n g the duties test for a b i l i t y cases. In some
states Mike Hotra, director of legisla- but may lack enough votes to
straight salary test, McCutchen s u c h as Pennsylvania, where t i o n and
communications for force debate in the Senate. In has indicated she is
likely to keep Tom Nielsen's firm was sued a the American Tort Reform
Asso- that case, says Hotra, It will be both as a means for determining
company may be deemed 1 per- c i a t i o n , which will pressure up to
[reformers] to work at the exemption from overtime pay. cent responsible
for an accident, Congress for change this year. grass-roots levels in the
states, Still, some of the duties described but it can be forced to pay
100 I f the firm that designed or and to educate voters about the in the
current act clearly need to p e r c e n t of damages if other b u i l t
[those products] is still need for [tax] reform.'' l April 2003
ENGINEERING INC. 3 1 March
Engineering Inc. - March/April 2003

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