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Asbestos Litigation: Is U.S. Government Involvement A Solution or Just a Waste of Money?

INDEPENDENT ANALYSTS Perhaps it is better to let individual firms litigate the issue with forcefulness than have Congress force everyone to deal with the issue.

by LEONARD M. KARPEN, JR.

31.01.2005 - Over the past six years this analyst has witnessed the impact of asbestos litigation on companies, such as Honeywell in the U.S. and various domestic subsidiaries of European firms, such as Hanson Plc and Smiths Group Plc. It has become apparent that in many cases a vigourous defense of asbestos claims has resulted in lower costs and, perhaps more importantly, lower cash outlays with regard to asbestos litigation.

Honeywell took the more expensive route in my opinion -- perhaps because the bankrupt ex-subsidiary was a drag on their own efforts to show the market that the company was improving. HON took some substantial hits for asbestos reserves and the deal they set up seemed to make some sense for their particular situation but it surely cost money. It also reminds me of what would happen if the U.S. Congress were sucessful in setting up some kind of "fund" that companies must contribute to: it becomes a "black hole" into which a lot of money is thrown and a lot of lawyers benefit but the spectre of litigation doesn't go away (see 1/27/05 article in the Economist for similar concerns voiced by others).

There is another way and one that has worked even for some companies with equally onerous asbestos issues -- albeit not as large but on a relative basis just as much a concern. The one I look to is Hanson Plc. A review of their financial reports over the past several years will show an alternative way of dealing with the issue: fight every suit that comes your way. If you do you may find that a large number are dismissed without merit. In other situations you may find that the original claim was outsized due to the fact that there were multiple defendants and thus you can get the amount of the specific claim that relates to your company reduced.

Then, if you do have to settle, do it on a case-by-case basis and pay out as needed. Hanson will likely have to dip into cash flow in coming years to handle its litigation but in the past the company has done an excellent job of using insurance to cover its payouts. Its defensive stance should actually be applauded by the insurance industry since by forcing the issues to really be delved into, it has reduced the overall claims level.

Food for thought as Congress debates this expensive issue. Many smaller companies would be well advised to think about the extent of their direct, specific liability and whether being "lumped in" with others -- based on industry classification or other method -- and assessed a potentially damaging "surcharge" to be in the program would be worth the potential panacea to asbestos litigation that U.S government involvement appears to provide.



Inquest hears tumour killed ex-plumber, 67

Published on 31/01/2005

A PENSIONER who came into contact with deadly asbestos during his working life died of a lung tumour.

Donald Cameron had worked as an apprentice plumber and stripped boilers lagged with asbestos, using hammers and chisels.

At an inquest on Friday, Ian Morton, HM Coroner for north and east Cumbria, read out a statement which Mr Cameron made just weeks before his death on July 2 last year.

Mr Cameron said when he was an apprentice no-one believed what they were doing was dangerous and they wore no protection.

Mr Cameron moved to Cumbria towards the end of his life because of his love for bird-watching and walking in the Lakes.

He took a job driving buses with Stagecoach but became ill towards the end of 2003. He was treated with chemotherapy but died in the Cumberland Infirmary aged 67. Mr Morton recorded a verdict that Mr Cameron, of Brampton, died of an industrial disease.


Report finds asbestos risk in 15 states

July 31, 2005 - Over 300 locations in 15 eastern states have been identified by federal geologists as possible sources of naturally occurring asbestos. Asbestos has been identified as the primary cause of mesothelioma, a rare and fatal form of lung cancer. After a recent California report of elevated asbestos air levels near naturally occurring veins, this is a concern for many residents.

Asbestos exposure has typically occurred in the workplace, with numerous professions being heavily exposed. Formerly, it was believed that naturally occurring asbestos was not harmful if not disturbed by mining or other heavy activity. However, there is evidence that asbestos in exposed mines and quarries could pose a threat.

The Maryland state Department of the Environment has stated that residents living near the sites are not in danger. Although the state does know the locations of the sites, they also acknowledge that the asbestos levels are not monitored.

Asbestos typically occurs as a formation in rock, and has previously been considered safe as long as the rock was not crushed. Recently, studies published have shown that day to day activities, such as hiking or bike riding can stir up asbestos dust and increase airborne concentrations.


Need for More Lung Cancer Awareness

(Ivanhoe Newswire) -- With the recent death of longtime ABC news anchor Peter Jennings and the startling announcement from actress Dana Reeve, comes the reminder of how prevalent lung cancer is among men and women. The Society for Women's Health Research (SWHR) notes it is important to be aware of the differences between lung cancer in each sex.

Lung cancer is the leading cancer killer in the United States, causing about 160,000 deaths each year, including 86,000 women. However, women, in general, have a better prognosis than men.

Eighty percent of lung cancer deaths in women are a result of smoking. "Nonsmoking women are more likely than nonsmoking men to develop lung cancer," says Sherry Marts, vice president of scientific affairs for the Society for Women's Health Research.

"Environmental factors other than smoke play a role in the development of lung cancer in nonsmoking women. The small amount of research available suggests that, when exposed to an environmental carcinogen, nonsmoking women are more susceptible to DNA damage than nonsmoking men," Marts says.

Extensive differences in the development, genetics and biology, and implications of those differences on prevention and treatment exist between men and women. More information can be found on the SWHR website at http://www.womenshealthresearch.org/hs/facts_cancer.htm.

"We clearly need more research into these differences so that we can reduce the cancer rate and some day find a cure," Marts says.

SOURCE: Society for Women's Health Research


Experts say Kodak's dust truly clean

No implosion ever takes place until all that's toxic has left the building

Steve Orr
Staff writer

(August 26, 2007) — When Kodak buildings 65 and 69, at the corner of West Ridge Road and Dewey Avenue, come tumbling down on Sept. 22, all that will remain of the 1950s-era research and engineering structures will be a huge pile of masonry rubble.

Like the rubble, the dust cloud accompanying the implosion is harmless, so air sampling is not needed, Kodak and state officials say. "The cloud is simply concrete dust," Eastman Kodak Co. spokesman Christopher Veronda said. "The record of hundreds of previous successful implosions around the country does not suggest any need to do so."

Officials are confident that the dust is nontoxic and implosions safe, they said, because so much work is done beforehand.

"If there was a concern, then it would have been addressed prior to the demolition," said Maureen Wren, a spokeswoman for the state Department of Environmental Conservation.

The DEC, which has environmental oversight of Kodak Park, requires the company to study each building slated to come down and inventory all hazardous content.

"As buildings are targeted, there are some that are singled out for special treatment based on past use. They (Kodak) go floor by floor to determine what sampling must be done for potential contamination, plus to characterize the waste for proper disposal," Wren said.

Furniture, carpeting, interior dividers and ceiling tiles are taken out, as are lead paint, electrical equipment and plastics.

If chemicals or other potentially dangerous materials had been used in the building, all traces must be eliminated, and testing is done to verify compliance, Kodak officials said.

Asbestos, used as insulation, is removed by licensed subcontractors who must follow regulations designed to prevent the spread of the dangerous fibers.

Once the asbestos is gone, interior demolition, roof removal and the like is done. Metal is segregated for recycling. Fire hoses and mist generators are used to keep down dust.

The gutted building is swept, small items such as plastic signs and rubber gaskets are excised, and DEC inspectors then do a final walk-through.

The final building checks are "extraordinarily rigorous," said Scott M. Summers, vice president for health, safety and environment in Kodak's Worldwide Film Products Group. "You can't believe, when you walk through those buildings, how clean they really are. They are stripped bare."

The prime asbestos contractor also must certify in writing that all asbestos is gone before permits are issued for demolitions in the city, said Joseph Stracko, the city's technical services manager.

Generally, officials say, the demolition program has gone very well. "From our NET offices and from the people in the city that might receive complaints, there's been very little resident or neighbor kind of complaints coming to the city," said Mark Gregor, manager of Rochester's environmental quality division. "From my observations, they've done those very professionally and carefully."

Kodak has placed monitoring equipment around buildings being dismantled to measure dust in the air, Stracko said. "I thought they did a pretty good job with trying to calm the fears of the neighborhood."

After inspections earlier this year, the DEC cited Kodak in July for 61 violations of hazardous waste management regulations. Wren said some of the violations involved materials being removed during building prep work, though none involved the actual demolitions.

The agency has not decided whether to seek fines for any of the violations, she said.

The state Department of Labor ensures compliance with asbestos-abatement rules. But spokeswoman Marie Murray declined recently to answer any questions about Kodak Park.

Summers said he was aware of some violations involving asbestos subcontractors that were "mostly paperwork issues." They were corrected, he said.

In its 2006 annual report filed with the Securities and Exchange Commission earlier this year, Kodak reported it had "asset retirement obligations" — largely, anticipated asbestos removal costs — of $101 million. Veronda said "much of it" related to Kodak Park buildings.

Overall, Kodak has spent about $200 million in the last four years on demolitions and refurbishing of existing buildings at Kodak Park, Veronda said. By year's end, 100 of the park's 212 structures will have been eliminated.

A building's prior use dictates how the rubble must be disposed of, Wren said. Material impregnated with chemicals would wind up in a hazardous waste landfill. Other material, such as double-bagged asbestos, would be shipped to a solid waste landfill. Some mixed building material could go to a construction and demolition landfill.

If a building's remnants are clean enough, as buildings 65 and 69's will be, they can be used as fill at Kodak Park. And the future will be built atop the past.

 


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