Resolving an internal administration dispute, President Reagan yesterday gave his Cabinet members the go-ahead to support a business campaign for legislation that would set uniform federal standards for product liability suits, thereby preempting long-held states' rights.
At a Cabinet meeting yesterday, Reagan agreed with Commerce Secretary Malcolm Baldrige that there is an urgent need for federal legislation to replace the widely conflicting state product-liability laws to encourage product development products, an administration source said.
In so doing, Reagan overrode the objections of several Cabinet officials who feared that any endorsement of federal legislation would run counter to the administration's "federalism" drive, in which Reagan is trying to return much of the government's operations to the states.
An official who attended the Cabinet meeting said that the major opposition came from Attorney General William French Smith and Labor Secretary Raymond J. Donovan, both of whom argued that more study was needed before the administration endorsed a federal law.
Administration sources say the Justice Department has been concerned that any change in product-liability laws could adversely affect the government in product liability suits against it. Similarly, the Labor Department has been concerned that pending legislation in Congress could make employers more susceptible to product-liability suits than they now are.