Asbestos Litigation

Asbestos Litigation
Jim Hough, HFO & Associates

May 3, 2002

Wisconsin senators Herb Kohl and Russ Feingold, both members of the Senate Judiciary Committee, are being urged to co-sponsor legislation to address what is commonly referred to as the "asbestos litigation mess." Some startling facts:

Since the 1970's, companies have paid an estimated $20 billion in settlements and legal fees related to asbestos litigation.
There are more than 200,000 cases pending today with the number of people expected to file injury claims possibly reaching 2.5 million.
According to the Los Angeles Times (1/27/02), "the economic toll of asbestos could run as high as $200 billion, higher than estimates for all Superfund sites combined, Hurricane Andrew or the Sept. 11 terrorist attacks".
In the past two years there has been a proliferation of claims by unimpaired plaintiffs alleging marginal medical conditions or "possible" future illnesses.
On April 25, 2002, The Wall Street Journal reported, "Since January, 2000, the wave of less severe claims has pushed at least 20 companies that sold or used asbestos products into bankruptcy". (This is in addition to approximately 40 other asbestos related bankruptcies since the mid-1970s.)
There are, obviously, fewer companies around to pay the claims, but, as The Wall Street Journal also observed, "virtually any industrial company old enough to have been in business when asbestos was ubiquitous has something to worry about."

In addition to the above referenced companies forced into bankruptcy (and those companies left holding the bag), other victims of this litigation crisis include, first and foremost, those persons (and there are many) who are truly sick from asbestos containing products. Joining them as victims are employees, retirees, shareholders and bondholders, vendors and customers and insurance companies.

Local Wisconsin businesses, including many small companies, are vulnerable to potential asbestos claims. The tremendous increase in litigation has, in great measure, targeted peripheral companies even though most of them have not produced asbestos or asbestos-containing products.

Among the larger companies that have facilities in Wisconsin and which are currently threatened by asbestos litigation are: Federal Mogul, Dana Brake & Chassis, General Motors, Daimler Chrysler, 3 M, General Electric, PPG Industries and Georgia Pacific.

The United States Supreme Court, has, at three different times, called upon Congress to step up and find a legislative solution to the asbestos litigation crisis. A bill was introduced last session, which failed, in large measure based on the opposition of the plaintiffs' bar. There is a new effort being launched by The Asbestos Alliance that: preserves the right to sue; does not contain "tort reform" proposals most objectionable to plaintiff lawyers; and, does not substitute federal bureaucracy for state and federal courts. In fact, the Alliance proposal has the support of a number of plaintiffs' lawyers, particularly those who represent cancer victims. The Alliance is primarily composed of asbestos defendant companies, trade associations and other third parties including victims' groups.

Key elements of the proposed legislation include:

Establishing objective medical criteria for asbestos-related impairment to allow the sick to pursue their claims immediately and others only when and if they become sick.
Liberalizing statutes of limitations and other technical rules to remove any incentive for premature filings.
Eliminating consolidations that lead to settlements with thousands of people who are not sick.
Eliminating abusive forum shopping that today concentrates thousands of claims in jurisdictions that have no connection with the claims. (Claims could continue to be brought in any state where the plaintiff resides or where the exposure allegedly occurred.)

There is a legislative proposal, with the above elements included, but the legislation, to be successful, needs co-sponsorship by one or more key Democratic Senators. Senators Kohl and Feingold are prime candidates as experienced members of the Senate as well as members of the Judiciary Committee. Also, this legislation is not traditional "tort reform" and is aimed at assisting those persons who have legitimately suffered asbestos caused illness while providing some level of certainty, stability and fairness within our civil justice system.

Those of you who are concerned that this litigation mess be fixed are urged to contact senators Kohl (senator_kohl@kohl.senate.gov) and Feingold (russell_feingold@feingold.senate.gov) to express your support for having Wisconsin's senators take the lead in helping to solve this crisis.