After $140 billion is gone asbestos will come right back to state courts, say Democrats

Steve Korris Aug. 3, 2005, 9:52am

Sen. Ted Kennedy

Mike Angelides

Four Democrats on the U.S. Senate Judiciary Committee predict that if Congress creates a $140 billion trust fund to take asbestos cases out of dockets across the country, the money will run out quickly, sending cases right back to where they started--our clogged state courts.

“The fund’s liabilities will outstrip its revenues from the beginning,” Senators Ted Kennedy of Massachusetts, Joe Biden of Delaware, Russ Feingold of Wisconsin and Richard Durbin of Illinois wrote in a minority report to the committee.

In June, the committee approved a bill to raise $42 billion in the short term and $98 billion in the long term for a trust fund to compensate asbestos victims.

The bill would immediately stay hundreds of thousands of cases in state and federal courts for two years. Those cases would transfer to the trust fund.

According to the four Democrats, those cases should remain in courts until the trust fund starts paying claims.

After the trust fund has paid out $140 billion, they say, all cases pending before it should return to courts.

Their report even promised that when the trust fund runs out and cases go back to courts, “a torrent of bankruptcies will surely follow.”

They see the bill not as the end of asbestos litigation but as a brief interruption. They anticipate an endless stream of claims from past, present and future exposure.

Making their case

To cinch their case that claims would overwhelm the trust fund, the senators pointed out that doctors have developed new treatments for mesothelioma, a lung disease caused by asbestos.

“These treatments are very expensive,” they wrote.

They warned that committee estimates of claims and payments may turn out as faulty as those behind the Manville Trust, a legacy of the nation’s first asbestos bankruptcy.

In 1986, experts forecast that the trust would receive 83,000 to 100,000 claims by 2049. Already it has received 620,000.

“Currently the Manville Trust is paying mesothelioma victims only $17,500, instead of the $1,050,000 that it predicted at its inception,” the Democrats wrote.

They pointed to another parallel in the Black Lung program that Congress created for coal miners. Supporters estimated a maximum annual cost of $100 million, they wrote, but in its first ten years the program spent $8 billion.

“Though supporters of the Black Lung law argued that there would be several thousand claimants in total, in fact, in the first two years of the program, 350,000 claims were submitted,” they wrote.

Who ever said $140 billion was enough?

They blamed former Senate Minority Leader Tom Daschle of South Dakota for the $140 billion figure. They wrote that in the last term of Congress, Daschle negotiated the figure with Senate Majority Leader Bill Frist of Tennessee.

The senators complained that it bears no relation to the amount needed to fully fund the benefits the bill would provide.

“Just based on the hundreds of thousands of claims the program will face right away, the proposed $140 billion is insufficient,” they wrote.

So many claimants, so little...

The trust fund would run out even faster if the four Democrats set the eligibility rules.

The bill would exclude lung cancer victims if they cannot show evidence of asbestosis or thickening, plaque or calcification in the lungs. Republican Senators said lung cancer in the group was more likely caused by tobacco than by asbestos.

The Democrats responded that, “There is a powerful synergistic effect between asbestos and tobacco in the causation of lung cancer.”

They wrote that, “…smoking is not a valid reason to exclude the victim from all compensation, when he or she also had substantial asbestos exposure.”

A provision that would require a worker to prove that asbestos was a substantial contributing factor to disease, rather than a contributing factor, was strongly challenged by the senators.

“…Victims will now have to address the relative impact of asbestos and other potential factors. That hurdle will be difficult for many of them,” they wrote.

Libby, Mont. and exponential exposure

The senators' minority report also protested against limits on the rights of those whose exposure to asbestos did not happen on the job.

The bill would allow a limited right of recovery for spouses and children of exposed workers, but no one would have the same rights as exposed workers--except the residents of Libby, Mont.

Libby, a town of about 2,000, sits on one of the world’s largest asbestos deposits. Its mines have shipped asbestos all over the nation.

When committee Republicans extended eligibility to Libby, Democrats proposed to extend it to every city that has received large amounts of Libby asbestos.

The Democrats would have added Los Angeles, Phoenix, Dallas, St. Louis, Denver, Minneapolis, Honolulu, New Orleans, Portland, Tampa, and 17 other cities. They would have expanded an exception for 2,000 to an exception for more than 10 million.

Although they failed, their report advised that residents of those cities “are likely to have strong claims based on the Fourteenth Amendment’s Equal Protection clause.”

They also expect court challenges not only from victims but also from the Manville Trust. Its directors have declared that a transfer of its assets to the trust fund would amount to a taking of property without due process.

In the committee, Sen. Biden offered an amendment that would have kept asbestos claims in court in the event that a judge imposed a stay on the new asbestos law. The committee defeated the amendment.

It also defeated a Biden amendment that would have kept cases in courts until the trust fund adopts a financing plan.

And, Biden's “sunset” amendment that would have applied when the $140 billion runs out also was defeated by the committee. The amendment would have returned cases to courts or automatically raised more money.

Biden’s son, Joseph R. Biden III, is a partner in a Delaware firm that began representing asbestos plaintiffs this year.

The firm of Bifferato, Gentilotti and Biden filed 21 asbestos suits in New Castle County courthouse at Wilimington, Delaware, in May and June.

The suits listed Mike Angelides, of the Alton firm of SimmonsCooper, as “of counsel.”

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