Madison - St. Clair Record

Friday, August 23, 2019

Should Madison County adhere to bankruptcy trust disclosure requirements in CMO?

By Ann Maher | May 2, 2017

While Madison County's asbestos docket puts Edwardsville on the map as the busiest place for lawsuits against solvent companies, the court's location does not factor on a map showing a growing concern over transparency between what's being paid to claimants in court systems and how much is being paid to them through bankruptcy trusts.

Twelve states now have laws requiring asbestos plaintiffs to disclose separate claims against trusts of bankrupt companies, a development that began with Ohio in 2012 through this year, with Mississippi being the latest to demand transparency between the two compensation systems in order to prevent "double dipping."

The potential for problems in what is considered the nation's epicenter for asbestos litigation is not lost on the new chair of the county's Judiciary Committee, county board member Mike Walters, a Republican from Godfrey.

"Something's got to get done," said Walters, who indicated he is open to the concept of transparency.

He said that people aren't coming to Madison County for "fair rulings," they come for "good rulings" for plaintiffs and their attorneys.

"If this was a fair jurisdiction, why would they come here?" Walters said.

Outside his role in county government, Walters heads the Southwestern Illinois Employers Association, which lobbies in Springfield on behalf of employers' interests. Among other things, the SIEA seeks reform to the state's workers' compensation system and it recently fought against a proposed 1 cent sales tax increase.

"Let's face it, trial lawyers flock here for the settlements not the speed (of resolving cases)," he said.

A recent report prepared by the Illinois Civil Justice League (ICJL) described the lack of transparency as a problem that's unfair to solvent companies as well as to future claimants because of a tendency toward inflated recoveries when full disclosure is not required.

The ICJL report, “Illinois Asbestos Trust Transparency: The Need to Integrate Asbestos Trust Disclosures with the Illinois Tort System,” says the trust transparency issue may be more pronounced in Illinois than in any other state because of the high volume of cases filed in Madison, St. Clair and Cook counties.

Recent analysis of asbestos litigation in courts across the country, shows that Madison County in 2016 carried three times more claims than the next busiest court in the country in Baltimore City, Md.

John Pastuovic, president of the ICJL, said his organization will take a two-pronged approach toward advancing asbestos trust transparency in Illinois.

He said that legislation requiring reasonable disclosure of claimants' exposure between the two systems is necessary, but given the makeup of the state legislature - controlled by a Democratic majority sympathetic to concerns of the trial bar - "passage of legislation doesn't seem viable at this point."

Illinois law presently allows claimants a longer time period to file a claim with an asbestos trust as compared to filing a lawsuit. Plaintiffs may also ask the trust to defer processing a claim for up to three years.

Pastuovic said that he also would welcome a dialogue with Madison County Chief Judge Dave Hylla regarding adhering to language in the court's asbestos case management order (CMO) that addresses production of filed claim forms.

The court's asbestos CMO contains a provision, identified as Interrogatory 28, under the "Asbestos interrogatories directed to plaintiffs" section. It reads:

"Have you received any remuneration or compensation of any nature from any source for conditions of ill-being which are the subject matter of this lawsuit, including any compensation benefits, settlements with any bankruptcy trust, a co-defendant or a person or entity who potentially could have been a co-defendant? If your answer is 'yes,' for each said payment state:

(a) The name of the party making said payment;

(b) The amount of said payment;

(c) The date of said payment; and

(d) The name, address, and telephone number of the person having custody of documents relating to such payment."

To illustrate why double dipping is a potential problem in Madison County, a firm that conducted research for the ICJL's report looked at a sample of 100 local cases.

One of the most critical findings of its review was a comparative analysis of asbestos trust disclosures in states that have adopted transparency legislation in recent years to states without such legislation.

Cases filed in state’s with trust transparency legislation disclose an average of 10 to 15 trust claims during the litigation stage while more than 90 percent of plaintiffs in the sample Illinois cases failed to identify or disclose even one trust claim submission while the court case was in progress.

The firm looked at a December 2014 case filed against 130 defendants by plaintiff firm Gori Julian & Associates in which plaintiff Dennis Robertson alleged he developed mesothelioma while working at a car dealership and secondary exposure from his mechanic stepfather.

However, testimony and related case disclosures “largely discounted Robertson’s forty-year career in the U.S. Steelworkers union and potential exposures to non-friction asbestos-containing products while working as a laborer and crane operator at Granite City Steel in Granite City, Illinois, from 1973-2014,” the report states.

Pastuovic said the ICJL's planned outreach to the Madison County court system is expected in the near future.

In the meantime, Hylla said on Tuesday that he would listen to what the ICJL has to say.

He said he was not familiar with the transparency issue between courts and asbestos bankruptcy trusts.

"Any laws that are passed, the judges always, including me, follow," he said.

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Illinois Civil Justice League (ICJL)