President Bush Calls for Bill To Establish Trust Fund, Limit Damage Awards for Asbestos-Related Lawsuits
President Bush on Friday "threw his weight behind" a proposed bill that would limit the number of lawsuits from workers who claimed to have been injured from asbestos and compensate the most injured plaintiffs through an industry-financed trust fund -- "an effort to resolve the longest-running mass tort litigation in U.S. history," the Los Angeles Times reports (Chen, Los Angeles Times, 1/8).
A RAND study in 2002 found that more than 600,000 people had filed asbestos-related claims, costing businesses a total of more than $54 billion. The study also found that 64% of compensation paid over the past decade was given to people with noncancerous conditions and that as many as 2.4 million more claims could be filed in the future, costing companies as much as $210 billion. Experts estimate that more than 100,000 asbestos claims were filed in 2003 (Labaton, New York Times, 1/8).
Inhalation of asbestos fibers can cause lung cancer, asbestosis, mesothelioma and other lung diseases. Asbestos-related illnesses can take decades to emerge, and the Supreme Court in 2003 ruled that some healthy workers who had been exposed to asbestos could file suit even if they may never develop related diseases (AP/St. Louis Post-Dispatch, 1/8).
Although Congressional Democrats and others say that an asbestos claims trust fund would be "woefully inadequate" and "hamper [victims'] ability to seek legal redress," the Los Angeles Times reports that nearly all sides of the debate now "concede that the legal system has been strained by three decades" of asbestos-related litigation (Los Angeles Times, 1/8).
Speaking in Michigan, Bush on Friday concluded three days of campaigning for personal injury and medical malpractice liability reform by "urging swift Congressional approval" of legislation that would "sharply limit" asbestos claims that he said have "bankrupted a lot of companies" and cost the "truly sick" their "day in court," the New York Times reports (New York Times, 1/8). Bush "offered only the broad outlines" of his proposal and "embraced no specific legislation," but aspects of his plan mirror GOP efforts that have previously stalled in Congress, the AP/Post-Dispatch reports (AP/St. Louis Post-Dispatch, 1/8).
Sen. Arlen Specter (R-Pa.) is writing a measure that would create an industry-financed trust fund, and, as chair of the Senate Judiciary Committee, he plans to hold a hearing on the issue Tuesday.
Bush described principles in his proposal that would include efforts to direct funds to plaintiffs and away from trial lawyers; speeding the process through the use of the trust fund; and providing, as Bush said, "certainty in the system" in order to protect businesses that "had nothing to do with the creating asbestos problem" (Heil, CongressDaily, 1/7).
"This is a national problem. It's not fair to those who have been harmed. It's not fair to those who are trying to employ people. It's just not fair," Bush said in Michigan, where more than 1,100 residents have died from asbestos diseases over the past two decades (New York Times, 1/8). The president, who spoke alongside two business leaders, added that "the vast majority of claims" were filed by those with no major medical condition (Los Angeles Times, 1/8). "Most of the money isn't going to those people who have been truly sick, it's going to people who think they might be sick," Bush said (AP/St. Louis Post-Dispatch, 1/8).
While Bush has "long argued" for such changes to the tort system, critics say that his administration has had to be "less visible" on the subject because until recently, a "main beneficiary" of such legislation could have been Halliburton, an oil company formerly headed by Vice President Dick Cheney, the New York Times reports.
According to the New York Times, Halliburton recently formalized a $4.7 billion asbestos settlement of legal liabilities related to Dresser Industries, which the company, under Cheney, acquired in 1998 (New York Times, 1/8).
Specter expected to circulate a draft of his "long-stalled" asbestos bill on Friday, and "stakeholders are hoping" that the legislation will "bridge wide gulfs" among affected businesses over the trust fund, including disputes over the fund's size and whether victims should be allowed to seek compensation in court should the fund run out of money, CongressDaily reports. In addition to adhering to the president's stated principles, Specter's bill would establish medical criteria that victims would have to meet for compensation and specify award amounts according to the severity of the plaintiff's illness.
According to CongressDaily, the proposal still includes "'blanks' to be filled in later, leaving some stakeholders unsure how far the debate has moved." Senate Judiciary Ranking Member Patrick Leahy (D-Vt.) said he hoped the Bush administration will become more involved in the issue and help Congress "enact an effective trust fund that fairly compensates victims," adding that the White House "has never offered any specific legislation or provided any detailed guidance on its views of this important matter" (CongressDaily, 1/7).
Senate Majority Leader Bill Frist (R-Tenn.) said he plans to move a measure to the floor quickly (New York Times, 1/8).
"I am deeply troubled that the president spoke of ending liability for companies that have used asbestos without addressing the need to ban the deadly substance," Sen. Patty Murray (D-Wash.) said on Friday, adding, "The current asbestos liability crisis is not just a function of a high number of lawsuits. It is also a function of the deadly nature of asbestos and the long latency period for asbestos disease, which can be up to 40 years."
Congressional Democrats, unions and trial lawyers have previously criticized asbestos trust fund legislation for not providing enough money to victims, unfairly shielding certain companies from liability and potentially hindering nearly completed asbestos liability cases (New York Times, 1/8).
The American Trial Lawyers Association claimed 300,000 people have died from asbestos exposure -- not 100,000 as Bush and others have said -- and said the president was "attacking the legal rights of millions of Americans" (AP/St. Louis Post-Dispatch, 1/8). While Bush said asbestos litigation has forced 74 companies into bankruptcy, ATLA said many of those companies were reorganized, not liquidated, adding that only 50 to 60 such cases actually go to trial annually
"That's hardly clogging the courts," ATLA spokesperson Carl Carlton said, adding, "Why isn't the president of the United States standing up for the hundreds of thousands of Americans who were poisoned by these companies that knew precisely what they were doing? They continued to expose their workers and their customers to this dangerous substance. Now the president wants to reward them" (Riechmann, AP/Las Vegas Sun, 1/7).
The Asbestos Disease Awareness Organization, which represents people with asbestos-related diseases and their families, said in a statement, "The asbestos industry must be held accountable for its actions. ... It is unacceptable for meetings to be held with industry, the companies and all of the corporate interests who would benefit from the asbestos industry bailout bill, and not those who suffer as a result of asbestos exposure" (Los Angeles Times, 1/8).