Lawmakers hear testimony on Kay's asbestos 'double-dipping' bill

There might not have been a vote, but lawmakers heard testimony this week over legislation aimed at preventing “double-dipping” by asbestos claimants.

Sponsored by Rep. Dwight Kay, R-Glen Carbon, House Bill 153 would require plaintiffs seeking compensation for their asbestos-related injuries to disclose their trust claims information within 30 days of the start of discovery in their lawsuits.

The bill, modeled after recently-passed legislation in Ohio, intends to prevent plaintiffs from filing suits against businesses in court and going after money in the trusts bankrupted companies created to compensate asbestos victims.

Kay previously said he was “flabbergasted” that there are two avenues for claimants to seek damages and that more transparency is needed given the size of asbestos dockets in Cook and Madison counties.

He testified in support of his bill on Wednesday in the House Judiciary Committee, which also heard from Todd Maisch with the Illinois Chamber of Commerce; Brian McGuire, the president of Tooling & Manufacturing Association; and Mark Behrens, an attorney with Shook, Hardy & Bacon in Washington D.C.

Behrens testified on behalf of the U.S. Chamber of Commerce’s Institute for Legal Reform, which owns The Record.

He told members of the Judiciary Committee that by the end of 2011, nearly 100 companies with asbestos liabilities had filed bankruptcy. A recent trend in asbestos litigation, he said, involves the creation of trusts set up in bankruptcy to pay claims against former asbestos defendants.

“Over 60 trusts have been established to collectively form a $36.8 billion privately funded asbestos personal injury compensation system that operates parallel to, but wholly independent of, the civil tort system,” Behrens said in his prepared testimony.

Because these trusts operate independent of the court system, Behrens said the current system “is fertile ground for inequity.”

As an example, Behrens pointed to Garlcok Sealing Technologies, a gasket manufacturer currently in bankruptcy who reported some inconsistences in the claims filed against it.

“Of the255 Garlock mesothelioma plaintiffs who filed claims against Pittsburgh Corning, only 19 had disclosed their exposure to Pittsburgh Corning asbestos to Garlock,” he said, noting that both plaintiffs and trusts, many of which he claims are involved in governing these trusts, have “resisted  making this information available.”

Behrens said that more transparency is needed in order to prevent claimants from double-dipping and help “asbestos trusts and solvent defendants alike to assess claims based on accurate and reliable exposure information.”

The transparency proposed in Kay’s bill could also “help ensure that solvent defendants are held responsible only for their fair share of the liability, whether through proper set-off credits post-verdict or by proving that the now bankrupt entity was the sole proximate cause of the harm,” he said

As president of the Tooling & Manufacturing Association (TMA), McGuire testified this week in support of HB153.

“Myriad Illinois-based companies, including many small and medium sized manufacturers, are being hurt by the current lack of trust claims transparency,” he said in a prepared statement. “As a state with a strong manufacturing sector, Illinois feels the impact of abusive asbestos litigation more directly than many other states.”

Pointing to reports from the Government Accountability Office and RAND Institute, TMA contends that having a dual compensation system for asbestos plaintiffs “promotes fraudulent and inconsistent claims.”

“It is evident that asbestos claimants are presenting the trusts with one set of facts while telling solvent defendants something entirely different,” the group claimed in a new release regarding the legislation.

As an example, the group pointed to a case in Ohio, where “a claimant told a trust he was exposed to its asbestos as a World War II shipyard worker. But in his tort suit he claimed he only passed though the shipyard and that his injuries were the result of exposure to asbestos-containing consumer products.”

TMA asserts similar situations have occurred in Delaware, Louisiana, Maryland, New York, Oklahoma and Virginia.

When plaintiffs file their trust claims after their lawsuits have been resolved, the group claims that businesses are denied the “opportunity to fully and fairly defend themselves” and that solvent defendants “end up paying more than their fair share of liability.”

It is unclear when, or if, HB153 will be called to a committee vote. As of Thursday, it remained assigned to the House Judiciary Committee. The language of Kay's bill can be found at ilga.gov.