Bill would save firms billions

By Andrew Schneider Of the Post-Dispatch 01/31/2004 WASHINGTON - As Congress returns to work, the White House is cranking up pressure for legislation that would save major corporations billions of dollars by barring thousands afflicted with asbestos disease from suing for damages. While the debate bounces between the Oval Office and congressional hearing rooms, federal agencies continue to document that asbestos remains a problem in this country. Most of the industrialized world has banned the use of what were once called "miracle fibers" for their fireproof properties. But Commerce Department figures show that U.S. importation of asbestos has increased 300 percent in the last decade, with much of the cancer-causing material being used in automotive brakes. The Environmental Protection Agency has cautioned millions of homeowners who may have vermiculite insulation contaminated with asbestos to stay out of their attics. And federal health investigators have begun a survey of 250 plants that handled asbestos-contaminated products from a vermiculite mine in Montana. They are warning people that were involved with the operations in any way to see their physicians. President Bush has repeatedly expressed concern that some of America's largest corporations have been the targets of hundreds of thousands of lawsuits from people exposed to asbestos in their plants or in the products they manufacture. In his Dec. 15 press conference on the capture of Saddam Hussein, Bush also talked about the need for pro-growth-actions to help the economy. "It was a mistake not to get asbestos reform," Bush said, adding, "we need more regulatory relief." The legislation that Bush wants would create a government-operated trust fund to which those suffering from asbestos disease would apply for relief rather than suing company that used asbestos. The legislation was first introduced in 2000 and called the "Asbestos Fairness Act," but Republicans couldn't muster enough support to get it to the floor for a vote. Last year, Judiciary Committee Chairman Orrin Hatch, R-Utah, reintroduced the legislation, this time calling it the Fairness in Asbestos Injury Resolution Act. Passage of the bill would severely limit the number of people who could file claims and corporations would save billions in payouts of settlements to which they'd already agreed. Opponents of the bill call it a corporate bailout. Suits are rampant Thousands of asbestos damage suits have overloaded courthouse dockets throughout the country. The Rand Corp. reported that 600,000 people have filed suit. It often takes years for people to get their day in court. Many die before their case is heard. There is strong evidence that that many of those suits are without merit. They are brought by dozens of law firms across the country who target thousands of retired automotive, aviation, construction and electrical workers. They use questionable medical screening techniques in an effort to show that their clients have asbestos disease. These firms file suits on behalf of clients who show little or no sign of disease. Those supporting the legislation push the belief that these fraudulent suits are the norm and attempt to demonize all the trial lawyers involved. But an examination of court records and bankruptcy filings of companies plagued with asbestos complaints shows that thousands of suits are filed on behalf of former workers or family members who are clinically sick, disabled or have died from asbestos poisoning. Many of these people have or had asbestosis, where the lungs harden like a football, so they can no longer breathe and often drown in their own fluids. Others have lung cancer or mesothelioma, an always fatal, rapidly-spreading cancer of the outer lining of the lungs that is caused only by exposure to asbestos. While some of the targets are small companies that may have used asbestos in something they sold, most of the defendants are among the nation's largest corporations. Tens of thousands of pages of internal documents show that many of the companies knew for years that their workers were being killed or sickened by asbestos and did little or nothing to warn them. Critics of the suits say that huge law firms stamp out claims in cookie-cutter fashion, with little real care for the injured client they represent. But many lawyers, some from small firms in small towns, will often work for months or years to gather enough evidence to bring a case to court, which is often the only hope these people have. The legislation The White House-backed legislation proposes that a "national trust," be created and corporations that used asbestos and their insurance companies donate $120 billion over the next 20 years. This money will go into a government-monitored fund which would pay awards to those injured by asbestos. Critics, including some in the insurance industry, say the fund would be far too small to cover the claims. The major sticking point is debate over what medical criteria would be used to identify those afflicted with the disease. The American Bar Association surprised almost everyone last February, when Dennis Archer, then the president-elect of the group, said he would take it upon himself to gather experts to provide medical criteria to Congress for inclusion in the legislation. Archer, who was mayor of Detroit for eight years, was then chairman a 200-person Detroit-based law firm which defended several corporations against asbestos suits. He collected a group of physicians, some from industry and some who were leading private practitioners from universities and major medical centers. Archer said that all views were sought. But the final medical criteria endorsed by the bar association and embraced by Hatch's legislation ignored almost all the input from nonindustry backed physicians, said members of the American Thoracic Society who were on the panel. They are the physicians most experienced in detecting and treating asbestos-related disease. "The criteria they adopted excluded almost all the recommendations made by those of us without ties to industry. What remains is criteria that excludes thousands and thousands of people actually ill with asbestos-related disease," said Dr. Mike Harbut, one of the nation's leading asbestos specialists. As originally written, the criteria exclude thousands of people in Libby, Mont., whom federal testing showed had clinical signs of asbestos disease from a contaminated vermiculite mine. It would have excluded a Libby woman on her death bed in a Seattle hospital, because Hatch's act only allows those with occupational exposure to bring suit. The fact that the woman had been contaminated with asbestos that her late husband had carried home from the W.R. Grace mine would have made no difference. Harbut, who has treated thousands of patients with asbestos disease, agrees that the present system of adjudicating asbestos claims is in need of repair. But, he says, "To deny people who have contracted asbestosis or cancer simply by living in a house where it was dumped in as insulation or washing a spouse's clothing or by living in a neighborhood where a vermiculite processing plant is located is just plain wrong." Bad for business? The White House and other supporters say the legislation must be passed because 60 or more companies have been forced into bankruptcy, and unemployment is soaring because of it. "The torrent of asbestos litigation has wreaked havoc on asbestos victims, on American jobs, and this havoc has extended into our economy," said Senate leader Bill Frist. The Tennessee Republican added he has "made it a personal priority" that the Senate pass the legislation. Few dispute that the bankruptcies have caused a problem. But the claims of disruption to jobs and sales have been exaggerated in many cases. The Post-Dispatch found that a different picture emerges in Securities and Exchange Commission filings and press releases from the five largest asbestos targets who have filed for bankruptcy. The most recent reports from Armstrong, W.R. Grace, Federal Mogul, Owens Corning and U.S. Gypsum show that with a single exception, all have increased sales and have the same or a greater number of employees than before they filed Chapter 11. Hatch's act not only would prevent most future suits against enormous corporations, it also would put some of them billions of dollars ahead of the game. For example, in December, 2002, the Halliburton Corp. reached a settlement of $3.6 billion with thousands of people with asbestos diseases who had sued one of its subsidiaries. Documents submitted to the Judiciary Committee say that under the proposed fairness legislation, no company would be forced to pay more than $25 million per year for 27 years into the compensation fund. Thus, the most a corporation would have to shell out would be $675 million. In Halliburton's case, it would have saved nearly $3 billion if the legislation goes into effect. Fair to whom? On Statehouse steps in Denver, Little Rock, Ark., Providence, R.I., and three other cities, union members held demonstrations last month to tell their senators and representatives to vote against the bill. "The bill is grossly unfair to people whose exposure to asbestos did not occur at work and to tens of thousands of workers with asbestos-related injuries that do not meet the bill's arbitrary definition of asbestos disease," said Joel Shufro, executive director of the New York Committee for Occupational Safety and Health. Shufro, whose organization is supported by 400 unions and provides health and safety training, said he is concerned about the thousands of people who lived downwind from one of Grace's hundreds of vermiculite processing plants or those caught in the dust cloud that enveloped Lower Manhattan on Sept. 11. "Don't forget the rescue and recovery workers at the World Trade Center. All of these people will be completely ineligible for any compensation if they develop asbestos-related disease," he said. "If you don't meet the bill's arbitrary standards, you have no recourse." Sen. Patrick Leahy, D-Vt., the ranking minority member of the Judiciary Committee, told the Post-Dispatch, "Any bill that short-changes victims should not and will not pass. "To be fair, a national trust fund has to be sufficiently funded by contributions from defendants and insurers, and must provide victims with adequate compensation for their diseases." Asbestos still imported Many members of Congress say it's bizarre to be considering legislation to ban suits from asbestos exposure while the material is still being imported. Asbestos is banned in most of the industrialized world, but not in the United States. Sixteen years ago, the EPA issued a ban, but less than two years later, an appellate court, responding to a suit brought by the American and Canadian asbestos industries, overturned it on a technicality. For the past three years, Washington Sen. Patty Murray has tried to introduce the "Ban Asbestos in America Act." The Democrat's hearings have been dramatic and emotional, but, so far, no Republicans have agreed to co-sponsor Murray's bill as written. "It would be irresponsible for Congress to consider a bill addressing the fallout from asbestos exposure that does not include a ban on its future use," said Leahy, who co-sponsored Murray's bill. "Too many innocent people have been poisoned by asbestos already." Hatch - in his latest bill - accepted part of Murray's bill as a peace offering to Democrats opposed to the Fairness Act. But Hatch gutted Murray's provisions that would protect people like the miners in Libby, and at the talc and taconite mines elsewhere in the country, who are also exposed to asbestos contamination. Frist said last week that he hopes Hatch's bill will reach the floor for a vote "shortly." But some judiciary committee staffers says the presidential race is getting hot and the louder the unions object to the bill, the less likely it is that Republicans will allow the asbestos bill to the floor for a vote before the fall elections. Post-Dispatch editor Andrew Schneider has investigated environmental issues throughout the country. Andrew Schneider E-mail: aschneider@post-dispatch.com Phone: 314-340-8101