Don't Mix Asbestos With Tort Reform: Leahy

By Steven Brostoff, Washington Editor

NU Online News Service, Sept. 25, 3:16 p.m. EST, Washington?A solution to the asbestos litigation problem is possible if members of Congress focus on that issue without expanding it into tort reform, Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., said.

During an often emotional hearing before the Committee, senators generally agreed on the need to develop a fair and more efficient means of compensating those exposed to asbestos.

Sen. Leahy called for an "honest and constructive debate" on the issue that involves asbestos litigation and improving compensation to victims.

But he said past efforts to find a solution failed because they were "thinly veiled attempts" to enact national tort reform.

He singled out the insurance industry as one stakeholder that must participate in the process and cooperate with the Committee to reach a better solution on asbestos litigation.

"I know that the insurance industry enjoys a one-of-a-kind statutory exemption from our antitrust laws," Sen. Leahy said.

"With that special privilege comes a special responsibility to the public. I hope and expect that they will be up to the task," he said.

Sen. Leahy emphasized his view that corporate America is responsible for the current problems.

"Simply put, corporate America has been on notice that asbestos carried significant health risks for its workers and customers," he said.

"Some corporate executives ignored these warnings and manufactured, mined or used asbestos because it was inexpensive and profitable," Sen. Leahy charged.

But Sen. Orrin Hatch, R-Utah, the Ranking Republican on the Committee, noted that many companies that never manufactured or marketed asbestos are going bankrupt paying damages to people who are not sick and may never be sick.

"Let me be clear," Sen. Hatch said. "I do not advocate denying deserving claimants timely and appropriate compensation.

"But I do think that we have to make some choices here about prioritizing who is paid now and who is paid later," he said.

Indeed, Sen. Hatch said, noting the string of asbestos-related corporate bankruptcies, unless Congress acts, there will not be a "later," and the victims of asbestos exposure, as well as the companies' employees and pensioners, will pay the price.

But Sen. Max Baucus, D-Mont., said that any legislation must hold accountable those who are truly responsible for the pain and suffering of those afflicted with asbestos-related illnesses.

He told the story of a small town in Montana, named Libby, which bore the brunt of what Sen. Baucus called "one of the grossest cases of corporate irresponsibility and down-right criminal negligence that I have ever seen."

Sen. Baucus charged that Columbia, Md.-based W.R. Grace, which operated a mining and milling operation in Libby, knowingly contaminated the air with a deadly form of asbestos and yet told its workers and the town that it was harmless.

The people of Libby, Sen. Baucus said, suffer from mesothelioma at a rate 100 times greater than the rest of the nation.

Now, he said, W.R. Grace has filed for bankruptcy and is "wringing its hands" over escalating asbestos claims.

Through all this, Sen. Baucus charged, W.R. Grace has shielded billions of dollars in assets from the bankruptcy proceeding and has yet to step up and do the right thing for the people of Libby.

"It is an outrage," he said.

Sen. Baucus said he would agree that it is not fair for companies like W.R. Grace to shift the burden of their action onto other companies that have not filed for bankruptcy and that do not share its liability or responsibility.

But any legislation addressing asbestos litigation should not insulate "bad actors" like W.R. Grace from their fair share of liability and responsibility, Sen. Baucus said.

W.R. Grace did not appear at the hearing, but in a fact sheet posted on its web site, the company said it is working to resolve the problems associated with Libby.

Specifically, the company said it will donate $250,000 a year for as long as necessary to provide independent health screening for all Libby residents who want it.

In addition, the company said it will provide medical coverage to anyone in Libby who is diagnosed with an asbestos-related disease following the screening.

W.R. Grace also said it is cooperating fully with government agencies to determine if there is an ongoing risk to Libby residents.

But Sen. E. Benjamin Nelson, D-Neb., said the current system is not working.

"It's been overwhelmed by a flood of cases, some from individuals who are not yet sick, but could potentially get sick in the future," he said.

"We don't want to prevent these individuals from recovering down-the-road," Sen. Nelson said, "but we also need to work toward allowing those who are sick now to recover now."

He noted that over 90,000 new asbestos lawsuits were filed in 2001, an increase of 30,000 from the previous year.

Because of transaction costs, he said, only about one-third of the money spent on asbestos litigation reaches the claimants.

Moreover, Sen. Nelson said, as insurance is depleted and an increasing number of asbestos defendants declare bankruptcy, it is inevitable that many asbestos victims who develop cancer in the future will go uncompensated.

Providing just compensation for the victims of asbestos exposure does not require a change in the tort system, Sen. Nelson said.

Rather, he said, it requires the restoration of the system's true purpose of providing relief to those who need it most.

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Don't Mix Asbestos With Tort Reform: Leahy

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