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The Senate fails on asbestos
February 17, 2006 - The U.S. Senate came tantalizingly close Tuesday night to approving a $140 billion trust fund that would help people stricken by asbestos-related diseases, but the move failed. It was a bad night for business, a bad night for victims, and a good night for trial lawyers.
The fund would be a vast improvement over the endless litigation that has put companies out of business and delayed payments to many of those who are ill.
Before the health dangers of asbestos became known in the mid-1970s, the fibrous material was widely used in construction and manufacturing. That stopped many years ago, but asbestos-related illnesses can take decades to develop. In the ensuing years hundreds of thousands of asbestos lawsuits have been filed.
This has been an imperfect search for justice. Lawsuits have driven 77 American companies into bankruptcy, costing thousands of jobs. Yet, many victims are still waiting for compensation and some payouts have gone to people who haven't shown symptoms of being sick.
Nearly 60 percent of the $70 billion paid in settlements has gone to lawyers' fees and administrative costs.
The trust fund would move asbestos claims from the court system into a no-fault administrative program run by the Labor Department. It would compensate the sick and monitor those who were exposed and might become sick. The $140 billion would be paid by companies and their insurers, companies that either made asbestos or sold products containing it.
It would cut the massive legal fees and speed compensation to victims. And yes, it would help some companies that have been devastated by asbestos claims.
That includes Chicago-based USG Corp., which once sold a type of joint compound that contained about 3 percent asbestos. USG took it off the market 30 years ago. In ensuing years, though, it has been overwhelmed by lawsuits, and it filed for bankruptcy five years ago. It agreed in January to settle the tens of thousands of claims against it.
The trust fund would cap USG's liability at $900 million. Without the trust fund, USG estimates its potential liability could be another $3 billion.
The trust fund could come back for another vote, thanks to procedural maneuvering Tuesday night. And it appears there are 60 votes in favor of it. But it still faces many hurdles (including opposition from Sen. Dick Durbin and Sen. Barack Obama).
Nearly seven years ago, the U.S. Supreme Court pleaded with Congress to fix the "elephantine mass" of asbestos litigation clogging the nation's courts. Sen. Arlen Specter (R-Pa.) and Sen. Pat Leahy (D-Vt.) put a tremendous, bipartisan effort into crafting a legislative solution. It deserves to be approved. If it isn't, the "elephantine mass" of asbestos litigation will just continue to grow, to the enrichment of a few who have already profited well.
Racicot-led group fights asbestos bill
Feb 17, 2006 - Former Gov. Marc Racicot, who grew up in Libby, represents one of the many organizations opposing the Fairness in Asbestos Injury Resolution Act being debated in the U.S. Senate.
Racicot, president of the American Insurance Association, wrote a letter last month to Senate Majority Leader Bill Frist, R-Tenn., saying “we want to reiterate our association’s strong opposition to the bill as reported out of the Judiciary Committee.”
Property-casualty insurers are committed to a solution to the national asbestos litigation crisis, Racicot wrote to Frist, but “since the Senate decided to pursue a trust fund, our industry has stressed that this approach must provide insurers with both certainty and finality for our asbestos exposure.”
The legislation includes a $140 billion trust fund for people diagnosed with an asbestos-related disease. The national fund for asbestos compensation would be financed by asbestos-related corporations and their insurers.
Insurance industry concerns focus on language in the bill that says if the administrator of the trust fund cannot resolve a case within a specified period of time, it will be allowed to return to the court system.
“Our industry would inevitably find itself paying both substantial sums to the fund and additional large sums in the tort system for claims permitted to leak outside of the fund,” Racicot wrote.
The RAND Institute, a policy research group, reported in 2005 that more than 700,000 asbestos-related lawsuits have been filed in recent decades, costing businesses tens of billions of dollars.
Advocates of the legislation seek to absolve corporations of the legal liability that has forced companies into bankruptcy because of the number of asbestos-related lawsuits against them. The initial intent of the law was to prevent further asbestos-related lawsuits.
Under the proposed legislation, rather than taking their cases to court, asbestos victims would file claims with the Department of Labor, which then would judge whether the claims warrant compensation and allocate money according to the severity of the harm caused by exposure.
The legislation stalled Tuesday. Senators hope to schedule another vote next week.
Provisions in the legislation would pay former Libby-area residents who have asbestos-related diseases as much as $1.1 million each.
The Libby provisions were included because the criteria for determining who was ill with an asbestos-related disease would have eliminated hundreds of victims affected by W.R. Grace’s vermiculite mine and mill operations in Libby.
The Libby vermiculite, which was contaminated with tremolite asbestos, was shipped to more than 300 locations in the United States for processing.
Racicot’s letter to Frist lists six critical concerns that the insurance industry has with the asbestos relief bill. One of the concerns is about the section that allows the fund administrator to apply special eligibility provisions for Libby victims to other sites throughout the country — if a study by the Agency for Toxic Substances and Disease Registry warrants it.
The insurance association is worried that extending the Libby provisions to other places could threaten the solvency of the $140 billion trust fund. It suggests taking away the authority of the administrator to make that decision and give it to Congress.
Racicot, a former resident of Libby, was Montana governor when the Libby asbestos problem first became a national issue in 1999 and 2000.
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