Transparency laws spreading across country; Some in asbestos ‘ground zero’ calling for reform

By Record News | Apr 26, 2017

JACKSON, Miss. – Laws requiring asbestos plaintiffs to disclose separate claims against trusts of bankrupt companies have spread through 11 states in five years, most recently to Mississippi.

JACKSON, Miss. – Laws requiring asbestos plaintiffs to disclose separate claims against trusts of bankrupt companies have spread through 11 states in five years, most recently to Mississippi. 

Gov. Phil Bryant signed an asbestos transparency bill on April 18, following similar results in Iowa and South Dakota earlier this year. 

The Mississippi law declares that limited coordination between civil actions and bankruptcy trusts resulted in suppression of evidence. 

It requires that within 30 days after filing an action, plaintiffs must swear that they made all the claims they could make on trusts. 

Plaintiffs must provide all trust claim materials from their own law firms, referring firms, and firms that filed their trust claims. 

Those who allege second hand exposure must provide trust claim materials for household members with direct exposure. 

They also face a continuing duty to supplement trust claim materials. 

No judge may set an asbestos action for trial until at least 180 days after a plaintiff has met the requirements. 

At least 30 days before trial, a judge must enter into the record a document identifying every asbestos claim the plaintiff has made. 

Defendants can then determine whether a plaintiff passed up a chance to make a claim against a trust that pays all claims for his zone and occupation. 

If a plaintiff hasn’t pursued an apparently automatic trust claim, a defendant can move to stay proceedings. 

At trial, a judge must presume that trust claim materials and governance documents are relevant and authentic. 

The law provides that exposure worthy of a trust payment is sufficient to support a jury finding of exposure to the predecessor’s products. 

If a plaintiff files a trust claim after obtaining a court judgment, a defendant can move to adjust the judgment. 

Ohio legislators passed the first asbestos transparency bill in 2012, and former governor John Kasich signed it. 

A legislative analysis stated, “Ohio courts have already experienced the problems of instances of claimants failing to provide information and materials regarding asbestos trust claims that they have commenced.” 

Ohio provided for adjustment of judgments, as Mississippi has done. 

Sensing a turn of a tide, lawyers at the Washington firm of Caplin and Drysdale composed a protest for Mealey’s Litigation Report. 

“It is a fundamental principle of American law that an injured person can recover damages from every entity that has harmed him, and as litigation progresses can settle his claim against one or another of the wrongdoers as he and they may agree,” they wrote. 

They further wrote that defendants created a myth of double dipping as a pretext for “their latest affirmative effort to evade responsibility for their own malfeasance.” 

Their argument carried no weight in Oklahoma, which copied Ohio in 2013. 

Wisconsin followed in 2014. 

Arizona, Texas and West Virginia followed in 2015. 

Tennessee and Utah followed last year. 

The tort reform group Illinois Civil Justice League (ICJL) highlighted the lack of transparency between the asbestos bankruptcy trust system and the courts in a report it issued this week.

The ICJL is calling for legislation requiring reasonable disclosure of claimants' exposure between the two systems.

Its report says the trust transparency problem may be more pronounced in Illinois than in any other state because the state is “ground zero” for asbestos litigation.

Without transparency, the ICJL says, claimants and their attorneys can obtain inflated recoveries which is not only unfair to solvent companies but to future claimants as well.

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