A monumental proposal to establish a national trust fund to compensate hundreds of thousands of asbestos victims collapsed Thursday in the Senate Judiciary Committee under the weight of 82 amendments.The proposal’s failure leaves in doubt whether there will be a solution to the nation’s growing mass of asbestos litigation.
The bill would create a $143.5 billion trust fund for victims of asbestos exposure, removing their personal injury claims from the civil justice system and taking away the rights to sue of future claimants. Rather, supporters say, claimants would apply directly to the fund for faster, fairer payments.
But the bill, a 300-plus page tome sponsored by committee Chairman Sen. Arlen Specter, R-Pa., and ranking Democratic member Sen. Patrick Leahy of Vermont, suffered a torrent of criticism Thursday from Democrats and Republicans on the panel who wanted their last-minute amendments approved.
By the end of the two-hour meeting, which was interrupted twice by Senate activity, the senators had slogged through 13 of the amendments.
The bill’s chief sponsor nonetheless remained positive.
“As I hear some of the amendments being offered, I’m optimistic we can accept some ... without protracted debate,” Specter said when the meeting was over. “It is my hope that in our next session we will be able to answer the concerns.”
More than 10,000 asbestos claims have been filed in Alabama over the last 30 years, according to Manufacture Alabama, which advocates for state manufacturing companies. Nearly 300,000 claims still are pending in courts throughout the nation. The rising tide of asbestos claims has forced 74 companies into Chapter 11 reorganization in the last several years — more than a quarter of them since 2000. But double that number — at least 600,000 claims — could be filed against asbestos manufacturers in the next few decades, as people exposed to the cancer-causing material continue to get sick.
Asbestos-caused illnesses such as asbestosis, lung cancer and mesothelioma can take as long as 20 to 40 years to develop. So symptoms are only appearing now in many people exposed during the height of asbestos use in the mid-1970s and after.
Meantime, asbestos still is being used in the construction, defense, and automotive industries, meaning more claims can be expected in the future.
“This whole thing is an incredible, colossal, legal fiasco, it is completely out of control,” said Sen. Jeff Sessions, R-Mobile, ticking through the problems with the current litigation system after the Judiciary Committee meeting.
People who have settled asbestos lawsuits and who later develop a worse form of asbestos-related disease are unable to get more money, Sessions said. Others who have had favorable verdicts have not been able to collect. The trust funds set up by bankrupt companies to compensate victims are so overwhelmed with claims, some pay only a few cents on the dollar.
Meanwhile, cases take years to litigate, people suffer and die without ever being compensated, thousands of people file lawsuits who aren’t sick, and, worst of all, those who do receive settlements get only about 40 percent of the money. The rest goes to legal fees.
“There’s no reason we cannot come up with a mechanism that will put more money in the hands of victims quicker and more equitably than is happening today,” Sessions said. “That’s just real clear to me. And I believe it is immoral … There’s no way that continuing to allow this to operate in the legal system can bring any justice.”
In theory, the proposed fund would satisfy current and future victims and their lawyers as well as business and insurance interests.
The injured would be able to keep tens of billions of dollars more than they currently do under the court system.
Businesses and insurers, on the other hand, would be protected from bankruptcy and the stock damage caused by multi-million-dollar jury awards.
The current bill, S. 852, which is modeled on last year’s Fairness in Asbestos Injury Resolution Act, would do the following if it were enacted:
— Provide $140 billion from asbestos companies, insurers and already established trust funds of bankrupt companies for a period of 30 years.
— Increase victims’ awards, giving $1.1 million for mesothelioma and less for other illnesses.
— Cap attorney fees at 5 percent, or $7.2 billion — a decrease of 15 percent from the previous bill.
— Increase eligibility criteria, including medical screening, to keep out claimants who show no signs of illness.
— Enact a five-year statute of limitations from time of diagnosis for those seeking claims against the fund.
— Exclude victims of lung cancer if they were exposed to asbestos but don’t show the characteristic plaques or thickening of the lung lining, a provision aimed at eliminating cancers that are caused by smoking.
— Disallow the subtraction of other workers-compensation benefits from asbestos awards.
— Create “sunset provisions,” safeguards that return the claims to the court system if the fund becomes insolvent. The bill would allow nine months to set up payments for serious illnesses and two years for less-urgent claims.
— Exclude asbestos claims that have been settled out of court, that have reached a verdict or that are in the evidence-gathering stage of trial.
— Ensure transparency by requiring all contributors to publish in the Federal Register what they’ve donated to the fund.
— Ban the use of asbestos in the United States.
Specter and Leahy spent the last few months in about 40 meetings with senators and interest groups to arrive at the compromise plan. The negotiations continued right up until 11 o’clock the night before.
But Thursday morning several lawmakers still had concerns.
Sen. Edward Kennedy, D-Mass., wanted to include smokers who have lung cancer and were exposed to asbestos but don’t show any characteristic signs.
“Mr. Chairman, as I said before, the real crisis that confronts us is not an asbestos litigation crisis, it’s an asbestos-induced disease crisis,” Kennedy said, adding, “They are being told, in effect, to suffer in a legally imposed silence.”
Kennedy’s amendment to put exposed smokers back in the bill was voted down.
Others on both sides of the aisle questioned the chairman’s call for quick passage.
“With all the amendments, to get it finished by the end of the day, you are either going to be arbitrary or there’s going to be a nuclear explosion,” said Sen. Joseph Biden, D-Delaware. “Stay here as long as you want, for as many days as necessary.”
Sen. Jon Kyl, R-Arizona, echoed his concerns.
“Most people who would be affected by this bill are not aware of the contents of this bill,” he said. “Daily we are discerning new things that we need to modify in order to make sure this would be operational.”
Kyl introduced an amendment to give the Department of Defense an exception on the asbestos ban. The military needs to use the mineral for certain things such as brake pads in F-16 fighter jets, he told the panel. But the discussion was postponed.
A main worry of senators was that the bill would fail to provide enough money for all present and future claims and thus cases would revert to the courts, making all their hard work an exercise in futility.
Sen. Tom Coburn, R-Oklahoma, said the medical eligibility criteria would have to be foolproof to prevent false claims from getting into the system.
“If only 1 percent of the lung cancers in this country come through this fund, you’ve added $34 billion,” he said following the meeting. “That’s why medical criteria are so critical.”
Some also questioned the constitutionality of a provision in the bill that would give special compensation to the residents of Libby, Mont., which has been contaminated with asbestos from a W.R. Grace mine. The hundreds of communities around the United States that received that company’s asbestos, however, would not be compensated, a fact that raised the question of equal protection under the law.
Asbestos manufacturers have pushed for a legislative solution to the asbestos litigation issue for several years. Most major interest groups, including insurers and labor organizations, have at times given the trust fund their tentative support.
But at a hearing earlier in the week, the traditional stances didn’t seem to apply. The AFL-CIO opposed the bill while the Automobile, Aerospace and Agricultural Implement Workers of American favored it. Insurance companies hammered the bill while the National Association of Manufacturers, a group representing insurance companies, came out in support.
Meantime, some senators are withholding their backing until they can see what emerges in two weeks, when the Senate returns from recess.
The Judiciary Committee plans to take up the bill again May 12.
“I believe we can get there,” Sessions said. “I believe we can make it better.”
