Order Code RL31649
Report for Congress
Received through the CRS Web
Homeland Security Act of 2002:
Tort Liability Provisions
November 27, 2002
Henry Cohen
Legislative Attorney
American Law Division
Congressional Research Service ˜ The Library of Congress

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Homeland Security Act of 2002: Tort Liability Provisions
Summary
The Homeland Security Act of 2002, P.L. 107-296 (H.R. 5005), contains the
following provisions that limit tort liability, and this report examines each of them.
! Section 304 immunizes manufacturers and administrators of smallpox
vaccines from tort liability. It makes the United States liable, but not strictly
liable, as manufacturers and administrators would be under state law. Rather,
the United States will be liable only for the negligence of vaccine
manufacturers and administrators.
! Section 863 limits the tort liability of sellers of anti-terrorism technologies.
It prohibits punitive damages, joint and several liability for noneconomic
damages, and application of the collateral source rule; in addition, it permits
the government contractor defense.
! Section 890 limits the tort liability of air transportation security companies
and their affiliates for claims arising from the September 11, 2001 air crashes.
It limits it to the amount of their liability insurance coverage on that date.
! Section 1201 limits the tort liability of air carriers for acts of terrorism
committed on or to an air carrier. Through 2003, if the Secretary of Homeland
Security certifies that an act of terrorism occurred, then air carriers shall not
be liable for losses that exceed $100 million for all claims, but the government
shall be liable for losses above that amount.
! Section 1402 immunizes air carriers from liability arising out of a Federal
flight deck officer’s use or failure to use a firearm, and immunizes Federal
flight deck officers from liability, except for gross negligence or willful
misconduct, for acts or omissions in defending the flight deck of an aircraft.
! Sections 1714-1717 limit the tort liability of manufacturers and administrators
of the components and ingredients of various vaccines. They require victims
to file a petition for limited no-fault recovery under the National Vaccine
Injury Compensation Program before they may sue. These sections reportedly
were designed to benefit pharmaceutical manufacturer Eli Lilly in suits against
it concerning Thimerosal.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Smallpox Vaccine Manufacturers and Administrators . . . . . . . . . . . . . . . . . 1
No strict liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Some Other Features of Section 304 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Sellers of Anti-Terrorism Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Exceptions to the Application of State Law . . . . . . . . . . . . . . . . . . . . . 4
Air Transportation Security Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Air Carriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Federal Flight Deck Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Vaccine Components and Ingredients Manufacturers and Administrators . . 7
National Childhood Vaccine Injury Act of 1986 . . . . . . . . . . . . . . . . . . 8
Homeland Security Act Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 8

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Homeland Security Act of 2002: Tort Liability
Provisions
Introduction
Tort liability is traditionally governed by state law, but Congress has the power
to regulate it when it affects interstate commerce. Past instances in which Congress
has limited tort liability include the National Childhood Vaccine Injury Act of 1986,
which is discussed below, and the September 11th Victim Compensation Fund of
2001.1 The Homeland Security Act of 2002, Public Law 107-296, contains the
following provisions that limit tort liability, and this report examines each of them.
! Section 304 immunizes manufacturers and administrators of smallpox
vaccines from tort liability.
! Section 863 limits the tort liability of sellers of anti-terrorism technologies.
! Section 890 limits the tort liability of air transportation security companies
and their affiliates for claims arising from the September 11, 2001 air crashes.
! Section 1201 limits the tort liability of air carriers for acts of terrorism
committed on or to an air carrier.
! Section 1402 immunizes air carriers from liability arising out of a Federal
flight deck officer’s use or failure to use a firearm, and immunizes Federal
flight deck officers from liability, except for gross negligence or willful
misconduct, for acts or omissions in defending the flight deck of an aircraft.
! Sections 1714-1717 limit the tort liability of manufacturers and administrators
of the components and ingredients of various vaccines; these sections
reportedly were designed to benefit pharmaceutical manufacturer Eli Lilly in
suits against it concerning Thimerosal.
Smallpox Vaccine Manufacturers and Administrators
Section 304(c) of the Homeland Security Act of 2002 amended the Public
Health Service Act by adding 42 U.S.C. § 233(p), which provides that “a covered
person shall be deemed to be an employee of the Public Health Service with respect
to liability arising out of administration of a covered countermeasure [e.g., a vaccine]
against smallpox to an individual during the effective period of a declaration [of a
1Others are listed in CRS Report 95-797, Federal Tort Reform Legislation: Constitutionality
and Summaries of Selected Statutes.

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public health emergency] by the Secretary [of Homeland Security] . . . .” This
language immunizes from tort liability any “covered person,” which the statute
defines to include manufacturers and distributors of a smallpox vaccine, health care
entities under whose auspices a smallpox vaccine is administered, and licensed health
professionals or other individuals who are authorized to administer the vaccine.
The reason that the provision just quoted immunizes covered persons from tort
liability is that it deems such persons to be employees of the Public Health Service
for tort liability purposes. The Public Health Service is a federal agency, and the
Federal Tort Claims Act (FTCA) makes all federal employees immune from liability
for torts they commit within the scope of their employment.2 They are immune, that
is, from liability under state tort law; they may be held liable for violating the U.S.
Constitution or a federal statute that authorizes them to be sued.
At the same time that the FTCA immunizes federal employees (and those
deemed federal employees for liability purposes) from liability for torts they commit
within the scope of their employment, it makes the United States government liable
for such torts, under the law of the state where the tort occurred, in the same manner
that private employers are generally liable for the torts of their employees.3 The
FTCA, however, does not permit awards of punitive damages, and does not allow
jury trials. It also contains exceptions under which the United States may not be held
liable even though a private employer in the same situation could be held liable under
state law. Even when one of these exceptions precludes the United States from being
held liable, the FTCA continues to immunize federal employees from liability for
torts they commit within the scope of their employment.4
No strict liability. The exceptions under which the United States may not be
held liable include suits by military personnel for injuries sustained incident to
service (the Feres doctrine), suits based on the performance of a discretionary
function (i.e., a policy judgment), suits for assault or battery or specified other
intentional torts, claims arising out of combatant activities, claims arising in foreign
countries, and others.
For present purposes, however, the FTCA’s most significant exception to
federal government liability is that the United States may not be held liable in
accordance with state law imposing strict liability.5 Strict liability means liability
regardless of negligence, and manufacturers and sellers of defective products,
228 U.S.C. § 2679(b). See CRS Report 97-579, Making Private Entities and Individuals
Immune From Tort Liability by Declaring Them Federal Employees.
328 U.S.C. §§ 1346(b), 2674. See CRS Report 95-717, Federal Tort Claims Act: Current
Legislative and Judicial Issues.
4United States v. Smith, 499 U.S. 160 (1991).
5Under 28 U.S.C. § 1346(b), liability must be based on a “negligent or wrongful act or
omission,” and the Supreme Court has construed this to preclude strict liability. See,
Dalehite v. United States, 346 U.S. 15, 44-45 (1953).

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including vaccines, may be held strictly liable under state law.6 A product may be
found defective under state law not only when it was defectively manufactured, but
when it was defectively designed in the sense that it feasibly could have been
designed to be safer, or when a warning that might have prevented injury was not
provided. The fact that the FTCA does not permit strict liability apparently means
that, under the Homeland Security Act of 2002, the government will not be liable for
injuries caused by a smallpox vaccine unless the plaintiff proves that the vaccine
manufacturer or other “covered person” had been negligent, in which case the
government may be held liable, if no other exceptions in the FTCA preclude liability.
Some Other Features of Section 304. Section 304 also provides that the
United States may be held liable for injuries caused by a smallpox vaccine only if the
vaccine was administered by a “qualified person” (a person authorized by state law
to administer the vaccine) during the effective period of a declaration of a public
health emergency by the Secretary of Homeland Security, and only if the person
receiving the vaccine “was within the category of individuals covered by the
declaration” or the person administering the vaccine “had reasonable grounds to
believe” he was.
If a person who did not receive the vaccine contracts vaccinia (the smallpox
virus), and resides with an individual who did receive the vaccine, then he shall be
“rebuttably presumed” to have contracted vaccinia from the individual who received
the vaccine. This means that, unless the government proves that the person who did
not receive the vaccine contracted vaccinia from a source other than the individual
who did receive the vaccine, the person who contracted vaccinia may sue the
government as if he had contracted vaccinia from the vaccine.
Sellers of Anti-Terrorism Technologies
Section 863 of the Homeland Security Act of 2002, titled “Litigation
Management,” created a federal cause of action against sellers of anti-terrorism
technologies for claims arising out of “an act of terrorism when qualified anti-
terrorism technologies have been deployed in defense against or response or recovery
from such an act . . . .” Prior to enactment of this section, suits against sellers of anti-
terrorism technology would have been brought under state law, but the new federal
cause of action is “exclusive,” which means that it precludes suits from being brought
under state law. Nevertheless, the substantive (as opposed to procedural) law that
governs liability under the new federal cause of action is the law of the state in which
the acts of terrorism occur.7 The significance of creating a federal cause of action is
6In the case of some vaccines, not including smallpox, one may not file a civil action for
damages in an amount greater than $1,000 against a vaccine or administrator until one first
files a petition for compensation under the National Childhood Vaccine Injury Act of 1986,
42 U.S.C. § 300aa-11(a)(2), and the United States Court of Federal Claims issues a
judgment on the petition. This statute is discussed below, under “Vaccine Components and
Ingredients.”
7This includes “choice of law principles,” which means that, under section 863, if a state’s
law calls for the application of another state’s law, then the first state may apply the second
(continued...)

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that suits may be brought in federal court regardless of the domicile of the parties and
regardless of the amount of damages that the plaintiff seeks.8 In fact, section 863
requires that suits be brought in federal court; though federal causes of action
generally may also be brought in state court, this particular cause of action may not
be, as section 863 provides that the “appropriate federal district court” shall have
“exclusive jurisdiction.”9
Exceptions to the Application of State Law. Although the substantive
law of the state in which the acts of terrorism occur governs the new federal cause
of action, section 863 prescribes some rules that preempt state law.
! Section 863 prohibits awards of punitive damages and of interest prior to
judgment.
! Section 863 prohibits joint and several liability for noneconomic damages.
Noneconomic damages are damages for pain and suffering and other losses
that do not constitute monetary expenses, such as medical bills and lost wages.
Joint and several liability is the rule that, if more than one defendant is found
liable for a plaintiff’s injuries, then each defendant may be held 100 percent
liable. (The plaintiff may not recover more than once, but he may recover all
his damages from one defendant, with that defendant then entitled to seek
contribution from other liable defendants.) The reason for joint and several
liability is that the common law viewed it as preferable for a wrongdoer to pay
more than his share of the damages than for an injured plaintiff to recover less
than the full compensation to which he is entitled. Under section 863, in lieu
of joint and several liability for noneconomic damages, “[n]oneconomic
damages may be awarded against a defendant only in an amount directly
proportional to the percentage of responsibility for the harm to the plaintiff.”
Joint and several liability will continue to apply to economic damages, except
when state law provides otherwise.
! Section 863 eliminates the collateral source rule. This is the rule that allows
an injured party to recover damages from the defendant even if he is also
entitled to receive them from a third party (a “collateral source”), such as a
health insurance company or an employer. The collateral source rule may
allow double recovery for the plaintiff, but the common law viewed it as better
for the victim than for the wrongdoer to profit from the victim’s prudence (as
in buying health insurance) or good fortune (in having some other collateral
7(...continued)
state’s law.
828 U.S.C. § 1332 allows state causes of action to be brought in federal court only if the
plaintiffs and defendants are from different states and the amount in controversy exceeds
$75,000.
9The reason that the statute created a federal cause of action, rather than simply requiring
state causes of action to be brought in federal court, may be that it might have been
unconstitutional to allow state causes of action between plaintiffs and defendants from the
same state to be brought in federal court. See, In re TMI Litigation Cases Consol. II, 940
F.2d 832, 848-851 (3d Cir. 1991).

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source available). Section 863 provides: “Any recovery by a plaintiff . . . shall
be reduced by the amount of collateral source compensation, if any, that the
plaintiff has received or is entitled to receive. . . .”
! Section 863 permits the government contractor defense. This is a defense,
created by the Supreme Court pursuant to “federal common law,” that product
manufacturers may use in products liability cases that allege design defects.10
These are cases, brought under state law, in which the plaintiff alleges that his
injuries were caused by a product that was defective in that the manufacturer
failed to use the safest feasible design for the product. In its defense, the
manufacturer may assert that it manufactured the product pursuant to a
government contract and that the design it used was required by contract
specifications. When it successfully asserts this defense, it may not be held
liable.
The government contractor defense under section 863 may be broader than this.
It provides: “Should a product liability or other lawsuit be filed . . . relating to
. . . qualified anti-terrorism technologies approved by the Secretary . . . there
shall be a rebuttable presumption that the government contractor defense applies
in such a lawsuit. This presumption shall only be overcome by evidence
showing that the Seller acted fraudulently or with willful misconduct in
submitting information to the Secretary . . . .” On its face, this language seems
to immunize government contractors from liability for injuries caused defects
that were not necessarily required by contract specifications, including defects
that were not even design defects but that occurred in the manufacturing
process. In other words, it appears to provide immunity to sellers in all cases
in which the seller did not engage in the specified fraud or misconduct. One
might argue, however, that, when section 863 says that “the government
contractor defense applies,” it means only that it applies in the general
circumstance in which it ordinarily applies, namely in design defect cases in
which the defendant followed government contract specifications. The courts
will have to decide how to interpret this provision of section 863, should the
issue arise.
Air Transportation Security Companies
Section 890 of the Homeland Security Act of 2002 limits the liability of air
transportation security companies and their affiliates for claims arising from the
September 11, 2001 air crashes. It limits their liability to the amount of liability
insurance they had on that date.
Section 890, more precisely, limits the liability of “persons engaged in the
business of providing air transportation security and their affiliates,” if they are
employees or agents of “a citizen of the United States undertaking . . . to provide air
transportation” and, if agents, “have contracted directly with the Federal Aviation
Administration on or after and commenced services no later than February 17, 2002,
to provide such security and have not been or are not debarred for any period within
10Boyle v. United Technologies Corp., 487 U.S. 500, 504 (1988).

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6 months from that date.” Section 890 limits the liability of such persons (i.e., air
transportation security companies and their affiliates) only for claims “arising from
the terrorist-related crashes of September 11, 2001,” and it limits it to the “amount
of liability insurance coverage maintained by that . . . person.”11
The September 11th Victim Compensation Fund of 200112 already provides this
liability limitation for air carriers. What section 890 of the Homeland Security Act
of 2002 does is to redefine “air carrier” to include the persons referred to in the
preceding paragraph.
Air Carriers
Section 1201 of the Homeland Security Act of 2002 limits the liability of air
carriers “[f]or acts of terrorism committed on or to an air carrier” through 2003. This
section, in effect, reenacted section 201(b)(2) of the Air Transportation Safety and
System Stabilization Act, Public Law 107-42, which was enacted on September 22,
2001. (Title IV of this Act created the September 11th Victim Compensation Fund
of 2001.)
Section 201(b)(2) of Public 107-42 conferred a liability limitation on air carriers
for terrorist attacks that might have occurred after September 11, 2001. It provides
that, “[f]or 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)(1)
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.”
The section in the Code of Federal Regulations that section 201(b) mentions
refers to “persons, including non-employee cargo attendants, other than passengers”;
these are apparently the “third parties” to whom section 201(b) refers, for whose
losses above $100 million the government, but not an air carrier, would be
responsible. Public Law 107-42, as noted, was enacted on September 22, 2001,
which means that it sunset on March 21, 2002.
11It is not apparent the circumstances in which an air transportation security company would
both be an agent of a citizen of the United States who provides air transportation and have
contracted directly with the FAA. It is also not apparent why companies who provided air
transportation security on September 11, 2001 are required to have contracted with the FAA
by February 17, 2002 in order to benefit from the liability limitation.
1249 U.S.C. § 40101 note; P. L. 107-42, title IV, as amended by P. L. 107-71, title II. See
CRS Report RL31179, The September 11th Victim Compensation Fund of 2001.

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Section 1201 of the Homeland Security Act of 2002 extended the period during
which section 201(b) would apply to December 31, 2003. It also gave certifying
authority for operation of the liability limitation to the Secretary of Homeland
Security instead of the Secretary of Transportation, and it codified the section in 49
U.S.C. § 44303.
Federal Flight Deck Officers
Section 1402 of the Homeland Security Act of 2002 created 49 U.S.C. § 44921
to “establish a program to deputize volunteer pilots of air carriers providing
passenger air transportation or intrastate passenger air transportation as Federal law
enforcement officers to defend the flight decks of aircraft of such air carriers against
of criminal violence or air piracy. Such officers shall be known as ‘Federal flight
deck officers.’” Subsection (h) of section 44921 provides: “(1) An air carrier shall not
be liable for damages in any action . . . arising out of a Federal flight deck officer’s
use of or failure to use a firearm,” and “(2) A Federal flight deck officer shall not be
liable for . . . acts or omissions . . . in defending the flight deck of an aircraft unless
the officer is guilty of gross negligence or willful misconduct.”
Subsection (h)(3) provides: “For purposes of an action against the United States
with respect to acts or omissions of a Federal flight deck officer in defending the
flight deck of an aircraft, the officer shall be treated as an of the Federal
Government.” This means (as explained above under “Smallpox Vaccines”) that the
federal government may be sued under the Federal Tort Claims Act. This is
apparently the case even when a Federal flight deck officer is guilty of gross
negligence or willful misconduct, except that, among the FTCA’s exceptions to
government liability is that the government may not be held liable for claims based
on assault or battery.
Note that, ordinarily, when a person is treated as a federal employee for liability
purposes, he becomes totally immune from tort liability. Section 1402 makes Federal
flight deck officers an exception, as it leaves them liable for gross negligence or
willful misconduct. Subsection (h)(3) recognizes this by treating Federal flight deck
officers’ as federal employees only “[f]or purposes of an action against the United
States”; it does not treat them as federal employees for purposes of an action against
themselves.
Vaccine Components and Ingredients Manufacturers and
Administrators
Sections 1714-1717 of the Homeland Security Act of 2002 amended the
National Childhood Vaccine Injury Act of 1986,13 which is part of the Public Health
Service Act. We first explain the 1986 Act and then the Homeland Security Act’s
amendments to it.
1342 U.S.C. §§ 300aa-1 – 300aa-34.

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National Childhood Vaccine Injury Act of 1986. This statute created the
National Vaccine Injury Compensation Program and provides that one may not sue
a vaccine manufacturer or administrator for more than $1,000, for death or injury
caused by vaccines set forth in the statute’s Vaccine Injury Table, unless one first
files a petition for compensation under the Program, and the United States Court of
Federal Claims issues a judgment on the petition. The Program, which is funded by
a tax on vaccines, provides more limited recovery than is generally allowed under
state tort law, but provides relatively fast, no-fault compensation. It was hoped that
“the relative certainty and generosity of the system’s awards will divert a significant
number of potential plaintiffs from litigation.”14
Recovery under the Program is limited to actual unreimbursable expenses, up
to $250,000 for pain and suffering and emotional distress, $250,000 in the event of
a vaccine-related death, actual and anticipated loss of earnings, and attorneys’ fees
and other costs, but no punitive damages. A petitioner dissatisfied with his recovery
under the Program may sue a vaccine manufacturer or administrator under state tort
law, with some limitations. Manufacturers are not liable for failure to provide
warnings directly to the injured party, as a warning to the vaccine administrator is
deemed sufficient. There are rebuttable presumptions that manufacturers who
comply with federal regulations are not subject to suit for failure to warn or to
punitive damages.
Homeland Security Act Amendments. Sections 1714-1716 of the
Homeland Security Act of 2002 make the Program applicable not only to vaccines
in the Vaccine Injury Table, but to “any component or ingredient of any such
vaccine.” Section 1717 make sections 1714-1716 applicable “to all actions or
proceedings pending on or after the date of enactment of this Act,” which was
November 25, 2002. An action or proceeding is no longer pending when a court has
entered a judgment that entirely disposes of it, regardless of whether the time for
appeal has expired.
The statute does not state whether a claim that was pending on November 25,
2002 may be pursued if the statute of limitations in the National Childhood Vaccine
Injury Act of 1986 had already run on that date.15
Although sections 1714-1717 apply to the components and ingredients of every
vaccine listed in the Vaccine Injury Table, press reports indicate that this provision
was intended to benefit pharmaceutical manufacturer Eli Lilly, which has been “a
major target in a spate of lawsuits filed since 2000” concerning Thimerosal, which
14H.R. Rep. No. 99-908, Part I, 99th Cong., 2d Sess. 13 (1986); reprinted in 1986
U.S.C.C.A.N. 6354.
15The statute of limitations is three years from “the date of the occurrence of the first
symptom or manifestation of onset or of the significant aggravation of such injury,” except
that if a death occurred as a result of the vaccine, then the statute of limitations is two years
from the date of death and four years from “the date of the occurrence of the first symptom
or manifestation of onset or of the significant aggravation of the injury from which the death
resulted.” 42 U.S.C. § 300aa-16(a)(2),(3).

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is a preservative used in some childhood vaccines. Thimerosal contains mercury,
which allegedly has caused autism in some vaccinated children.16
16“Homeland Bill Rider Aids Drugmakers,” Washington Post, Nov. 15, 2002, p. A7.

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