Just catching up today on our earlier post about the series of hearings held this week by various subcommittees of the U.S. House Judiciary Committee. So let’s discuss Wednesday.
Actually, this leads right to the Wednesday afternoon hearing on asbestos poisoning. Talk about the struggles of the sick and injured! But let’s begin with secrecy, shall we? Since without that, hundreds of thousands of people would not have died from asbestos exposure, and millions more would not face illness or death from asbestos disease, and the lethal cancer known as mesothelioma.
As a result of hundreds if not thousands of so-called “tort reform” laws that have passed around the country in the last 30 years, a series of recent Supreme Court decisions that have stripped everyday people of their legal rights (including providing corporations with the ability to ban all class actions) and other action and inaction by Congress, the sick, injured and violated struggle even to get into civil court today.
Since at least the 1930s, asbestos manufacturers and their insurers deliberately hid the dangers of asbestos from their own workers and the public. For example, in 1933, the Johns-Manville Company settled with an attorney for 11 former Manville employees, all asbestosis victims. The attorney received $30,000 for the victims, in exchange for a written promise that he would not “directly or indirectly participate in the bringing of new actions against the Corporation.” This fact did not come to light for more than 45 years. In the meantime, the company was able successfully to avoid damages suits while continuing to poison people. Had the public known about this settlement, the hazards of asbestos would have come to light decades earlier. (Learn more by reading this incredible book by Paul Brodeur.)
In other word, lives would have been saved and lawsuits prevented if Big Asbestos had been even the slightest bit transparent about the dangers almost a century ago.
After killing and sickening all these people, the asbestos industry then used special bankruptcy laws to get rid of all of their asbestos liability through the creation of trusts. These trusts, set up to compensate victims, have always been underfunded. As a result, most asbestos victims are grossly undercompensated.
Usually, multiple asbestos products and companies are responsible for each persons’ exposure. State laws ensure that every defendant, whether a traditional defendant or a trust, only pays its share of liability. At Wednesday’s hearing, Caplin & Drysdale attorney Elihu Inselbuch, who has 25 years experience representing victims’ rights in asbestos bankruptcy proceedings, explained:
Think of the shipyard worker, for example, assisting in the repair of countless U.S. Navy warships. The asbestos - containing products which were causes of his injury included boilers, pipe and thermal insulation, gaskets, and many others. A person so injured can legally recover from every company responsible, including both those he sues in the tort system and the trusts that stand in the shoes of bankrupt defendants. The current efforts by ALEC and its members are nothing more than an attempt to shift solvent defendants’ share of responsibility to the insolvent defendants and leave the innocent victims with the resulting shortfall in recovery.
According to a major General Accountability Office study in 2011, the trusts are doing a great job carefully examining evidence of claims before making payments while also preventing any possible fraud. GAO wrote:
According to the officials we interviewed at all 11 trusts we selected, each trust is committed to ensuring that no fraudulent claims are paid by the trust, which aligns with their goals of preserving assets for future claimants. Although the possibility exists that a claimant could file the same medical evidence and altered work histories with different trusts, each trust’s focus is to ensure that each claim meets the criteria defined in its TDP, meaning the claimant has met the requisite medical and exposure histories to the satisfaction of the trustees. Of the trust officials that we interviewed that conducted audits, none indicated that these audits had identified cases of fraud.
Unfortunately, the Wall Street Journal has its own “interpretation” of this statement, publishing some articles lately that instead rely on unnamed, unidentified “politicians, judges and defense lawyers” who claim that the “opportunity for abuse flourishes,” and then unfairly tying this politically-based perspective to anomalies likely paperwork or “keystroke” errors (which are themselves pretty rare, especially for such a vast system).
But all this is apparently to provide support for federal legislation called the FACT Act, on which there were hearings Wednesday afternoon – a topic about which we’ve written before. Testified asbestos bankruptcy expert Elihu Inselbuch,
Asbestos defendants and insurance companies, under the guise of creating increased “transparency,” are introducing proposed legislation in state legislatures [and now Congress] to grant solvent asbestos defendants new rights and advantages to be used against asbestos victims in court. Some of these bills would also burden the asbestos trusts with unnecessary reporting requirements, slowing their ability to pay claims, and further draining them of the resources needed to make their already diminished payments. In general, the bills are an attempt to change the rules of the tort system to provide defendants with an advantage, using the existence of the trusts and claims of a lack of “transparency” as a subterfuge. …
It is also important to note that the bill only changes what the trust must report with respect to an asbestos victim; the bill says nothing of the right of asbestos defendants to demand confidentiality. A typical asbestos defendant who settles a case in the tort system demands confidentiality as a condition of settlement in order to ensure that other victims do not learn how much the defendant paid. Trust payments represent settlements of former a asbestos defendants. The remaining asbestos defendants now want the trusts to disclose specific settlement amounts and other information that they themselves do not provide and that the bankrupt asbestos defendants who created the trusts did not provide when they were defendants in the tort system . …
Here is his conclusion:
Under the rubric of arguing that “transparency” is necessary to prevent supposed fraud, asbestos companies continue their efforts to change the laws at a state and federal level to receive whatever benefits they can from the existence of the trusts. These laws that seek to enforce disclosure, regulate timing of trust claims, and put additional burdens on these trusts, such as the FACT Act, are unjust and unfair to asbestos victims.
These laws were never designed — nor intended — to address fraud in the trust system. Indeed, there is not a scintilla of evidence of any such problem. The real purpose of these laws is to allow solvent defendants to take advantage of the bankruptcies of their co - tortfeasors by shifting to plaintiffs the burdens of the shortfalls caused by the bankruptcies, as well as the burdens of discovery and proof of the bankrupt tortfeasors’ responsibility. These laws are simply the latest stratagem by corporations that produced and distributed asbestos - containing products to avoid responsibility for the deaths and injuries of millions of Americans caused by those products.
Legislators should not allow public policy to be hijacked by special interests, and should be vigilant to protect the rights of injured workers and their families.