Senate Panel May Vote Thursday On Asbestos

By Arthur D. Postal, Washington Bureau Chief

NU Online News Service, April 26, 10:09 p.m. EDT,Washington?Sen. Arlen Specter, R-Pa., chairman of theSenate Judiciary Committee, said today that his committee would actThursday on legislation to create an alternative claims processingsystem for workers injured by exposure to asbestos?andsilica.[@@]

Sen. Specter seemed confident he has the votes to get a bill outof committee, although he added that he needs to "check the biddingon his own side" apparently meaning he would check to see if enoughRepublicans support its release.

The measure would involve an insurer-bankrolled trust fund topay claimants will illness from workplace asbestos exposure.

Should he be successful it would be a major success. Over theyears prior attempts to move asbestos legislation have been andbottled up by Congress.

He voiced his optimism after a long hearing on the bill beforethe committee despite opposition by some of the largeststakeholders in the legislation, including organized labor and thevast majority of the insurance industry. Those groups have calledthe bill flawed and in need of major revisions to meet theirneeds.

And Sen. Ted Kennedy, D-Mass., surprisingly joined the negativechorus, even though the bill is bipartisan, and Sen. Patrick Leahy,D-Vt., ranking minority member of the committee, supported it andhelped draft it.

"We cannot allow what justice requires to be limited by what thewrongdoers are willing to pay," Sen. Kennedy said in a statementreleased at the hearing. "Unless substantial improvements are madeto the legislation at the committee's markup, I intend to vote ?no'and I urge my colleagues to do the same."

One insurance industry lobbyist said he believed the bill willbe reported out of the committee Thursday, but only as a courtesyto the chairman, and that afterward it will languish in the face ofopposition from insurers, the AFL-CIO, some large defendants, andlawyers for several existing court-created trusts for injuredworkers.

Lawyers for the trusts said in a letter to a member of thecommittee last week that the bill represented an unconstitutionaltaking of assets from the trusts, and that they would file suit infederal court to block shifting of the trusts' assets if the billis enacted by Congress.

Sen. Specter, in comments to reporters after the hearing,dismissed the threat. He said it would be "an insult to a redherring to call this a red herring."

During the hearing, Judge Edward Becker, former chief judge ofthe 3^rd U.S. Court of Appeals, said the bill should besupported, not criticized.

Judge Becker made his comments in discussing the bipartisanbill, the Fairness in Asbestos Injury Resolution Act of 2005 (FAIRAct), S. 852.

Judge Becker lauded the bill as the opening witness. He saidthat among its improvements from earlier versions is that becauseof changes in who is eligible to win judgments under the bill, thetrust fund that will be created "is more than adequate to payclaims." He said that under an estimate by analysts at GoldmanSachs, the fund has more than $5 billion in cushion to handleclaims than before.

He said that under the claims criteria, the "most significant"is a decision not to pay claims to those exposed to asbestos orsilica who have developed lung cancer because they are smokers andcannot prove the cancer is due to exposure to asbestos orsilica.

Regarding language in the bill that doesn't require claimants tocount against their awards amounts they received in workmen'scompensation claims, Judge Becker dismissed the fact "a number ofpeople are unhappy about that." He called it just a "tradeoff"necessary in crafting compromise legislation.

Judge Becker said complaints by trial lawyers that their feesare being cut, to 5 percent for normal claims and 10 percent forappeals, is "inappropriate, estimating that trial lawyers have wonfees of more than $3 billion over the last 10 years for handlingasbestos cases.

Speaking for the insurance industry, Craig A. Berrington, seniorvice president and general counsel of the American InsuranceAssociation (AIA), said that while the bill contains a fewimprovements over previous drafts, it still "falls significantlyshort" of meeting core goals that would earn it insurance industrysupport. Mr. Berrington also spoke on behalf of the the ReinsuranceAssociation of America (RAA).

"A well constructed trust fund would provide not only anefficient and exclusive remedy for victims, but equity, certaintyand finality for all stakeholders," Mr. Berrington said. "While S.852 as introduced does contain important improvements over priorproposals, we believe it still falls significantly short of theselaudable, core goals for reform."

Mr. Berrington added that "a national trust fund must provide anexclusive remedy for resolution of all asbestos claims. Otherwise,there is no real certainty or finality for insurers or otherfunding participants. In fact, we could find ourselves paying bothsubstantial sums into the fund and in the tort system for claimspermitted to ?leak' outside the fund."

Amongst the naysayers at the hearing was Sen. Richard Durbin,D-Ill. He criticized Sen. Specter for failing to include anyvictims of asbestos exposure among the witnesses called to testify,referring to the proceedings as "bloodless" and "sterile."

"This is a hearing about money," he added.

Sen Specter responded that Sen. Durbin had been given theopportunity to call witnesses, that the three witnesses he hadrequested had been called and that none of those witnesses were thevictims he noted in his opening statement.

The chairman also took issue with Durbin's comments suggestingthat not enough time and energy had been expended on the asbestosissue, noting that approximately 40 hearings and meetings had beenheld on the issue and the asbestos reform bill. "This bill has notsuffered from a lack of consideration," he said.

Sens. Durbin and Specter also argued over the transparency ofthe negotiations leading to the asbestos bill for other lawmakers,as Sen. Durbin suggested there was "not an open invitation tomembers of this committee" to participate in talks and Sen. Spectercountering that other members had always been welcome.