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Bi-Partisan $140 Billion Asbestos Trust Fund Bill Floated

WASHINGTON, DC, April 21, 2005 (ENS) - A bill to end the ordeal of litigation over asbestos injury and death claims was introduced in the U.S. Senate Tuesday by Senator Arlen Specter of Pennsylvania, chairman of the U.S. Senate Judiciary Committee. The product of months of meetings and mediation with industry stakeholders, the legislation is designed to provide compensation to asbestos victims without litigation.

The legislation is co-sponsored by a bi-partisan group of senators including Republicans Mike DeWine of Ohio, Charles Grassley of Iowa, Orrin Hatch of Utah, and George Voinovich of Ohio, as well as Democrats Max Baucus of Montana, Dianne Feinstein of California, and Patrick Leahy of Vermont.

Specter

Senator Arlen Specter heads the Senate Judiciary Committee. (Photo courtesy Office of the Senator)
Senator Specter said, "There is a will in the Senate to enact legislation that should put an end to the ongoing rash of bankruptcies growing monthly, diverting resources from those who are truly sick; endangering jobs and pensions; and creating the worst litigation crisis in the history of the American judicial system."

"The Senate plainly wants a more rational asbestos claims system," Specter said.

Under this legislation, the federal government would establish a national trust fund that would be privately funded by asbestos defendant companies and insurers, with no liability by the United States government.

The trust fund, administered by the Department of Labor, would be available to claimants who meet the medical criteria for the asbestos related cancer mesothelioma or other diseases caused by asbestos exposure.

The total dollar amount for the fund is set at $140 billion. If the fund is unable to pay all claims, victims will also have the option to return to the tort system to seek compensation. If there is a reversion to the tort system, suits may be filed in federal court, the state court in which the plaintiff resides, or in the state court where the asbestos exposure occurred.

Asbestos is the name given to a group of six different fibrous minerals that occur naturally in the environment. Asbestos minerals have separable long fibers that are strong and flexible enough to be spun and woven and are heat resistant. Asbestos has been used in building materials, automobile clutch, brake, and transmission parts, heat-resistant fabrics, packaging, gaskets, and coatings. Some vermiculite or talc products may contain asbestos.

Most in danger of asbestos exposure are people working in industries that make or use asbestos products, or who are involved in asbestos mining, or people living near these industries.

asbestos

Chrysotile, one of six forms of asbestos. Once released into the environment, asbestos does not dissolve in water or evaporate in air. (Photo courtesy New York DEC)
Asbestos fibers may be released into the air by the disturbance of material containing asbestos during product use, demolition work, building or home maintenance, repair, and remodeling. Drinking water may contain asbestos from natural sources or from cement pipes containing asbestos.

Asbestos affects the lungs and the membrane that surrounds the lungs, and breathing asbestos can increase the risk of lung cancer in people, according to the federal Agency for Toxic Substances.

For more than 20 years, a solution to the asbestos crisis has eluded Congress and the courts. Over 75 companies have gone bankrupt, thousands of individuals who have been exposed to asbestos have deadly diseases and are not being compensated.

"Asbestos leaves many victims in its wake," Specter said. "First and foremost, the sick and their families have suffered. But the flawed asbestos litigation system not only hurts the sick and their chance at receiving fair compensation, but also claims other victims. These include employees, retirees and shareholders of affected companies whose jobs, savings and retirement plans are also jeopardized by the tide of asbestos cases. With asbestos litigation affecting so many companies, this also impacts the overall economy, including jobs, pensions, stock prices, tax revenues and insurance costs."

"This legislation provides substantial assurances of acceptable compensation to asbestos victims and substantial assurances to manufacturers and insurers to resolve, with finality, asbestos claims," Specter said.

Senator Specter and Chief Judge Emeritus Edward R. Becker, of the United States Court of Appeals for the Third Circuit, held 36 meetings on this subject, dating back to August 2003, with representatives of business, manufacturers, insurance companies, the AFL-CIO, and trial lawyers. These meetings were designed to mediate controversial issues in previous asbestos legislation introduced in the 108th Congress and to build consensus in drafting the proposed legislation.

Leahy

Senator Patrick Leahy worked on drafting the asbestos bill and introduced it with Senator Specter on Tuesday. (Photo courtesy Office of the Senator)
Senator Leahy said the legislation, "is not the bill that I would have written, were I alone responsible for its drafting, nor is it the bill that Senator Specter might have produced. Nor should anyone be surprised to hear that the interested groups the labor organizations, the industrial participants in the trust fund, their insurers, the trial bar are each less than pleased with some portion of the bill or another."

"That is the essence of legislative compromise," Leahy said. "We have kept the ultimate goal of fair compensation to victims as the lodestar of our efforts, and we have all had to make sacrifices on a variety of subsidiary issues as we worked together to resolve this emergency. What we have achieved is important and a significant step toward a better, more efficient method to compensate asbestos victims."

The proposed legislation was hit by criticism from FreedomWorks, a group headed by former Republican Congressman Dick Armey that advocates market solutions to public policy problems.

Armey

Former House Majority Leader Republican Dick Armey now heads FreedomWorks. (Photo courtesy Premiere Speakers Bureau)
Armey said, "There's no doubt that asbestos litigation is out of control, but Senator Specter's trust fund is the wrong solution. Let's fix the underlying problem, not create a new government program funded by new taxes. Through grassroots and media campaigns, FreedomWorks is urging Congress to reject the Asbestos Trust Fund and instead enact strict medical criteria legislation."

The group objects to the trust fund proposal because it "places a compulsory $140 billion levy on businesses - many only remotely related to asbestos - in order to create an enormous new government program to manage asbestos payouts." Saying that trial lawyers, not victims will get the money, the group warns that the trust fund approach "possibly threatens the constitutional rights of both businesses and victims and will likely result in years of litigation." The group supports "enacting strict medical criteria to provide prompt and just compensation to the truly injured."

FreedomWorks is mobilizing a national campaign to defeat the asbestos trust fund bill. Beginning this week, the group is calling its members in key states to generate 350 live telephone calls a day in opposition to the trust fund. The group has purchased full-page ads entitled, "Another Government Black Hole," in "The Washington Times," "Roll Call," and "The Wall Street Journal."

The Environmental Working Group (EWG) is critical of the proposal for different reasons. Saying that the Specter bill would "override legal protections for the terminally ill in at least 12 states, and court customs in at least eight more," the research and advocacy organization says this proposal to limit the liability of asbestos makers would cut benefits to people dying of the fatal asbestos cancer, mesothelioma.

The laws vary from state to state, but in general they guarantee a trial date for the terminally ill within three to six months of a medical certification of illness. The EWG points out that these statutory protections are particularly relevant to victims of mesothelioma because half of all mesothelioma victims die within 14 months of diagnosis.

"Younger victims, who are more likely to have dependent children, huge medical bills, and substantial wage loss are hit hardest by the cuts in compensation. Everyone dying of mesothelioma, some 2,500 people in 2002, would have their cases thrown out of court and be forced to wait for nine months before they could restart their cases or file a claim with the national asbestos trust. Many hundreds of these people would die waiting," the EWG said in its analysis of the Specter bill.

The average amount awarded through the current system of litigation and trusts is $2.2 million, the EWG pointed out. At that level, "taking care of mesothelioma victims alone would bankrupt the proposed $140 billion national asbestos trust fund, leaving no money to help the hundreds of thousands of additional people who will die of other asbestos cancers, or from the debilitating and often fatal asbestosis," the group said.

worker

An asbestos worker inspects bagged asbestos at the Fernald Scrap Recovery Plant, where recycled residues and scrap from the uranium production process were handled. April 2003, Fernald, Ohio. (Photo courtesy Fernald Closure Project)
An estimated 40,000,000 workers were exposed to asbestos on the job through about 1990. If half of these workers are alive today, and 10 percent of those contract asbestos disease, some two million people will need assistance. Yet to date, says the EWG, there has been no effort to identify these people, or screen them for signs of asbestos disease. "Indeed, to a great degree, the financial solvency of the trust fund depends on not trying to identify all of people inured or killed by asbestos," the group says.

Asbestos is still not banned, and asbestos exposures today will produce fatal asbestos cancers as far down the road as 50 years from now, the EWG says.

But Senator Leahy explains that under a provision authored by Senator Patty Murray of Washington that was accepted during the last Congress by the Judiciary Committee, this bill will ban the use of asbestos. "We must halt the harm asbestos creates, and ameliorate the harm it has already caused," Leahy said.

The EWG says that any national asbestos fund established by Congress must meet "basic standards of fairness and equity."

At a minimum, the EWG recommends, such a fund must:

  • Not terminate assistance to people killed or injured by asbestos disease at an arbitrary future date.
  • Not be capped at a specific payout amount, but instead contain a funding mechanism that provides for adequate and equitable assistance to all asbestos victims, particularly those most severely injured, as long as these injuries continue to occur.
  • Not reduce the amount of assistance provided to asbestos victims below the amounts awarded currently via the courts and the asbestos trust system.
  • Not delay payment to individuals who already have been awarded assistance through the courts of from asbestos trusts.
"The $140 billion dollar compromise asbestos fund in the Senate would fail all of these tests, and with each failure, work to the advantage of asbestos companies and their insurers," the EWG says, "while leaving tens of thousands of those most grievously harmed by asbestos with little or no financial assistance and no viable recourse for a remedy."

By contrast, Senator Leahy said the bill has won a "favorable reception" from many quarters. He has received letters of support from the International Union, United Automobile, Aerospace & Agricultural Implement Workers of America (UAW), the Veterans of Foreign Wars of the United States (VFW), the Asbestos Study Group, and others.

In its April 13 letter, the UAW states that the Specter-Leahy proposal, "will provide more equitable, timely and certain compensation to the victims of asbestos-related disease."

The VFW letter of April 14 declares, "The national trust fund that you are proposing offers our members who are sick and dying the opportunity to secure timely and fair compensation for the injury they suffered in the course of serving their country."

The National Association of Manufacturers (NAM) also released a statement expressing hope that the legislation will engender broad support. NAM President John Engler, a former governor of Michigan, said, "There is much to like in the Chairman's draft, Im encouraged by the renewed commitment on both sides of the aisle, and I am more hopeful about prospects for consensus than I have been in weeks."

Engler said, "We look forward to working with Chairman Specter and other Senators toward final passage of a bill that fairly resolves compensation problems and ends the scandal of asbestos lawsuit abuse once and for all."

Find out more about asbestos exposure on the job at: http://www.osha.gov/SLTC/asbestos/index.html



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