Asbestos bankruptcy trust bill - FACT Act - passes House

WASHINGTON – By a vote of 221-199, legislation designed to bring transparency to the asbestos bankruptcy trust system has passed in the U.S. House of Representatives.

Proponents say the Furthering Asbestos Claim Transparency (FACT) Act will reduce fraud by preventing "double-dipping" from both the trust and tort systems.

The bill’s sponsor, Rep. Blake Farenthold, R-Texas, said the legislation is simple and does not require any action be taken by asbestos claimants.

"The trusts are the only ones required to do something," he said during today's debate. "This doesn’t involve broad release of information.

“It just requires them to tell who they’re paying money to and what they’re paying, so there is no double dipping. No medical records will be released.”

The proposal advanced to the full House after having passed the Judiciary Committee in May. The legislation – HR 982 – would require asbestos personal injury settlement trusts authorized by federal bankruptcy law to disclose information on their claims on a quarterly basis and respond to information requests from parties to asbestos litigation.

HR982 also would require the trusts to file public reports providing information with each claim for compensation they receive and would require the trusts to provide information about claims to parties in an asbestos suit upon request.

The Illinois Civil Justice League (ICJL) was quick to react, praising the bill's passage and saying in a press release that the legislation will "further justice and diminish the damaging economic ripple effect of asbestos lawsuit abuse."

“Fraud and abuse in the asbestos compensation system is draining the funds available to deserving claimants and forcing solvent companies to pay on bogus claims,” stated Ed Murnane, president of the ICJL.  "More importantly, these types of inconsistent and fraudulent claims are hurting businesses that could otherwise provide new and meaningful jobs to our economy."

Opponents of the bill, however, argue that victims’ privacy will be harmed.

“(The Republicans) now are willing to throw privacy rights under the bus,” said John Conyers Jr., D-Mich. during floor debate. “They now stand with big asbestos and again trample on the victims and their families.

“This is just an unfair and unnecessary advantage bestowed on asbestos manufacturers. Why is it necessary for a claimant to give up their right to privacy just because they seek compensation?”

Rep. Nancy Pelosi, D-Calif., called the FACT Act “mean-spirited” and said it would deny cancer victims “simple justice.”

“There is no need for this bill. State laws require for adequate disclosure,” Pelosi said. “This bill is unnecessary.”

A spokesman for Rep. Rodney Davis, R-13, who supports the legislation, said the bill was “very carefully crafted” and designed to help people who need the most help.

Its purpose is to eliminate fraud in the system, said Davis’s spokesperson Andrew Flach.

(Chris Dickerson contributed to this report).