Tobacco - Asbestos Bailout Legislation
**** URGENT! ****
Senator Inouye has introduced an Amendment to the Proposed Tobacco Legislation that purports to assist asbestos victims but in fact does just the opposite.
The Amendment provides a windfall credit to the asbestos companies and allows them to cease paying any of their own insurance or money to settle cases. The bill creates an enormous financial incentive for the asbestos companies to slow down the rate at which they resolve asbestos cases. If the Amendment is included in the tobacco legislation, the asbestos companies will receive a BAILOUT at the expense of asbestos victims.
The Amendment is not being backed by asbestos victims. Instead, it is being promoted by lobbyists who are financed by The Alliance, a consortium of asbestos companies, including Owens Corning Fiberglas, Owens Illinois, W.R. Grace & Co. and the Manville Trust. The last thing our government should be doing is bailing out an industry that has recklessly caused the deaths of hundreds of thousands of Americans, and the death toll from mesothelioma is not expected to decline until the year 2050.
What the Asbestos Amendment does:
Two "Tobacco Asbestos Trust Funds" are created:
Fund I is basically a 10 billion dollar bail-out fund set up for the benefit of the asbestos companies. Fund I "credits" the asbestos companies for billions of dollars in compensation they have supposedly paid over the years to asbestos victims for what was really tobacco disease, and for which, they contend, they deserve and have a legal right to reimbursement!! The asbestos companies could have sued the tobacco companies for reimbursement years ago, but only now -- when Tobacco has put money on the table -- are the asbestos companies angling for a cut.
According to the bill, the 10 billion dollars credited to the asbestos companies in Fund I must be used to pay persons with asbestos claims. HOWEVER, nothing requires that this money be paid in addition to, rather than INSTEAD OF, the money that the asbestos defendants would otherwise have been spending to resolve cases.
Thus the asbestos defendants get a 10 billion dollar bailout through the creation of FUND I which they will use INSTEAD OF THEIR OWN MONEY, to pay asbestos disease claims. NONE of the 10 billion dollars in FUND I ever inures to the benefit of any victim of asbestos or asbestos/tobacco disease. It is merely used by the asbestos companies IN PLACE OF the payments which they otherwise would have been making. {Thereby indirectly increasing profits and dividends for the asbestos companies in violation of Sec. XX 02.(f) (1) of the Amendment}!
Current victims of asbestos disease get nothing of benefit from this legislation and are likely to be worse off if it passes!
Why?
The legislation creates a tremendous financial incentive for asbestos companies to slow down the rate at which cases are resolved so that only Fund I money, and NEVER THEIR OWN, is used to pay claims in any given year. Sec. XX 02. (F) (2) (A) {One easy way for the asbestos companies to slow down the rate at which cases are paid is simply to try more cases!} How does creating an enormous economic reward for minimizing the number of cases resolved in any given year help anyone or anything, other than the asbestos companies!
Fund II is set up under the guise of paying FUTURE plaintiffs with combined asbestos/tobacco disease for the tobacco portion of their injuries. However, the provisions for Fund II render most future plaintiffs ineligible for Fund II payments!
In order for the victims of combined asbestos/tobacco disease to get any money from Fund II, for the tobacco portion of their injuries, they must first meet:
-
Criteria establishing a minimum degree of ASBESTOS DISABILITY OR IMPAIRMENT that MUST be demonstrated in order for a claimant to receive compensation under this Section. Sec. XX 03.(e) (4).
So if the plaintiffs' ASBESTOS disease does not meet the ASBESTOS disease DISABILITY OR IMPAIRMENT criteria, the plaintiff gets no money for the tobacco portion of his combined asbestos/tobacco disease, no matter how serious the tobacco disease may be. The more serious the asbestos victims tobacco disease, the less likely the person is to get any money from Fund II. However, if a claimant does manage to qualify for a Fund II payment, it is still a Hobson's choice.
The formula wrongly assumes that there is an accepted method for distinguishing tobacco disease from asbestos disease. The Amendment would allow a jury to pro rate damages between tobacco and asbestos based on statistical evidence, although the courts have never allowed this. The effect would be to destroy joint and several liability and give the asbestos companies what they have desparately wanted for the past twenty years -- the apportionment of damages in joint and several injury cases. The asbestos victim would only be able to collect the (ficticious) "asbestos portion" of the injury. So If the jury allocated a large percentage of the damages to Tobacco, the asbestos defendants walk away from the table without paying the bill.
If a claimant accepts money from Fund II, he is then faced with the prospect of not being able to "recover from an asbestos defendant in any civil action any damages for any portion of the harm caused by exposure to tobacco." Sec. XX 05. (D) (1). That means the end of joint and several liability for the indivisible injury caused by exposure to asbestos and tobacco.
The fair way to have done this would have been to reduce the asbestos companies' responsibility DOLLAR FOR DOLLAR for whatever payment was made to the claimant from Fund II. Anything more is a windfall bailout for the asbestos companies at the expense of the innocent victim! Of course, this bill is not intended to be fair.
It also now appears that the Tobacco Asbestos Fund Amendment has the additional purpose of acting as a stalking horse for federal legislation which is being promoted to the staff of the Senate Judiciary Committee by the asbestos company members of the "Alliance", to create a mandatory Federal ADR for asbestos cases. This Federal ADR will use "criteria establishing a minimum degree of asbestos disability or impairment that must be demonstrated in order for a claimant to receive compensation" just as is required for a Fund II payment.
If they can pass the Tobacco Asbestos Fund Amendment with language conditioning Fund II payments on meeting arbitrary disability or impairment criteria for asbestos disease, the asbestos company members of the "Alliance" believe it will greatly improve their chances at getting some form of Federal asbestos legislation. This would virtually lock the courthouse door for asbestos victims.
The pressure in Washington to pass tobacco legislation makes this bill a real threat to victims of asbestos disease. Please write a letter to your representative in Congress, the Senate or in the Department of Labor. Write them now!
[The above was written in large part by Shephard A.
Hoffman, Esq. of Baltimore, Maryland, May 1, 1998]
Please contact your senators and representatives about this legislation. Also, write Senators McCain and Inouye, their respective staff members and members of the Committee on Commerce, Science and Transportation at the following addresses. Please remind them that the last industry that needs a bailout is the asbestos industry, which is responsible for the deaths of thousands of Americans and the death count is still rising.
Senator Daniel K. Inouye
722 SHOB
Washington, DC 20510-1102
Senator John McCain
241 SROB
Washington, DC 20510-0303
Ms. Chrystn Alston
Legislative Assistant
Sen. Daniel K. Inouye's Office
722 SHOB
Washington, DC 20510-1102
Mr. Brian Roth
Staff Assistant
Senator John McCain's Office
241 SROB
Washington, DC 20510-0303
Mr. John Raidt
Staff Director
Committee On Commerce,
Science and Transportation
254 SROB
Washington, DC 20510-6125
Mr. Moses Boyd
Democratic Senior Counsel
Committee On Commerce,
Science and Transportation
5164 SDOB
Washington, DC 20510-6125
Mr. Mark Buse
Policy Director
Committee On Commerce,
Science and Transportation
254 SROB
Washington, DC 20510-6125
Mr. Lance D. Bultena
Counsel
Committee On Commerce,
Science and Transportation
427 SHOB
Washington, DC 20510-6125
The Key labor people at the national level
to whom you should write include:
John Sweeney
President AFL-CIO
815 16th Street, NW
Room 807
Washington, DC 20006
Jonathan Hiatt, Esq.
General Counsel AFL-CIO
815 16th Street, NW
Room 807
Washington, DC 20006
Robert A. Georgine
Building & Construction
Trades Dept., AFL-CIO
1155 15th Street, NW
4th Floor
Washington, DC 20008
Connerton & Ray
Fourth Floor
1920 L. Street, NW
Washington, DC 20036-5004
Elihu I. Leifer, Esq.
Sherman, Dunn, Cohen, et al.
Suite 801
1125 15th Street, NW
Washington, DC 20005
** POSTED MAY 5, 1998 **
Update on Tobacco/Asbestos Bailout Legislation
by Shep Hoffman, Esq.
May 26, 1998
There is absolutely nothing in the tobacco asbestos bill which requires that the 10 billion dollars in Fund I be paid out in addition to RATHER THAN INSTEAD OF the money which the asbestos defendants would have had to pay out if no Fund I existed. This is my definition of a "bail out." A massive reward to the asbestos companies for killing hundreds of thousands of people without anything in the legislation to require them to continue paying out, what for some of them, are vast resources of their own money which they well can afford and should be required to pay if they want to have the benefit of Fund I.
In addition, because Fund I gives the asbestos defendants a massive amount of money with which to pay asbestos disease claims, one must wonder why those defendants would not simply use that money instead of, rather than in addition to, their own. What is there about the history of the way the asbestos companies have handled claims which leads anyone to believe that they would process settlements at a rate which caused them to pay out more than their Fund I allocation in any given year?
I don't know about you, but in the entire history of this litigation, I have never seen any defendant come forward with a proposal which called upon it to spend any more than the absolute minimum it had to in any given year in order to deal with cases. There is no reason to believe that this has changed. Thus, the language of the legislation regarding Fund I should be changed to require that every asbestos defendant and asbestos trust first pay out an appropriate amount of its own money in any given year or it cannot have any access to or benefit from Fund I money.
As for Fund II, if a claimant elects to take money from Fund II, then joint and several liability is gone. That has not been deleted from the bill, and any suggestion by proponents of the change to the contrary is simply wrong. If a claimant takes money from Fund II, then the asbestos companies get a windfall automatic apportionment reduction in any damages which the claimant can recover from the asbestos companies. This automatic apportionment reduction is contrary to the state laws in almost every state in the country. There is no reason for it.
Why not have settlement with the tobacco companies through Fund II simply be treated the way any normal settlement would be with one or more defendants within a group of defendants? If a claimant were to accept money from Fund II, then the claimant should simply execute a release for the tobacco companies who are released by accepting the money from Fund II and the impact of that release should have whatever effect it should have on the case under the state law in the jurisdiction where the claim against the asbestos companies is proceeding. Anything more, especially the language in the legislation, is a windfall to the asbestos companies that they do no deserve and just about guarantees that most plaintiffs will never be made whole for their injuries.
The asbestos lobbyists contend that this bill will put 21 billion dollars into the pockets of victims. This claim is without merit. The 10 billion dollars that goes to Fund I right now goes to Fund I instead of, rather that in addition to, money to victims. There is nothing in the legislation to prevent the asbestos companies from simply making this a dollar-for-dollar set-off of what they otherwise would have been paying. If the asbestos companies would never do such a thing, then language should be put in the bill that limits the amount of money that an asbestos trust/defendant can claim equal to the amount it actually pays out in its own money first.
As for the money in Fund II, it comes at such a high price by way of people giving up their common law and state law rights to compensation that it is not worth the price.
As for the "stalking horse" language in the bill which requires that there be minimum criteria for disability and impairment from asbestos disease in order for someone to get access to Fund II for tobacco disease, at least we now know that the legislation is exactly that, even it the players who are pushing it (GAF, Westinghouse, Georgia Pacific, and some others) may not be the exact same people who are pushing the tobacco asbestos fund legislation.
There is no good reason to have this arbitrary language which requires some minimum criteria for impairment or disability in order for an asbestos tobacco disease victim to get money from Fund II for the tobacco portion of his disease. It should simply be enough that a person has asbestos disease as well as tobacco disease, in order to get access to Fund II for the tobacco portion of his injury. Legislation which endorses and indeed mandates the creation of arbitrary minimum criteria for impairment or disability from asbestos disease, in order to get access to Fund II tobacco money is exactly what the asbestos companies have been trying to get through Congress for over 15 years.
Do you really think that if this language is made into federal law, that we will not shortly see similar language in another federal law which is designed to take all asbestos cases and place them in some federally mandated ADR with Georgine style criteria. If some of the asbestos company members of the "alliance" are currently opposing this effort, it is only because that opposition is necessary if they have any hope of getting the asbestos/tobacco fund bill passed. Once the asbestos/tobacco fund bill becomes legislation, you can be sure that they will then turn their attentions to getting the minimum criteria for disability of impairment from asbestos language placed into federal law, which takes all asbestos cases out of the courts.
Indeed, that is exactly what I was told by legislative assistant to Senator Inouye, who is responsible for much of the drafting work on the bill. She specifically told me that all the members of the "Alliance", which includes The Manville Trust, have agreed that there is an asbestos litigation crisis and that "something must be done to get these cases out of the courts."
When she told me that, I was so shocked that I wrote it down verbatim. I made sure to have her reiterate that this was the position of the "Alliance" members who were sponsoring the tobacco/asbestos fund legislation and she reiterated that to me.
Finally, the cutting edge of the entire tobacco bill, including the tobacco/asbestos fund amendment, is political and financial expediency. Neither public health issues, not the welfare of asbestos victims is of any concern to the asbestos companies. All one has to do is to read the tobacco/asbestos fund amendment to know that this is true.
Shep Hoffman
** POSTED MAY 28, 1998 **
"STOP THE PASSING OF THIS BILL" - Daughter of Asbestos Victim
May 13, 1998
My Father died of this horrid disease on September 25, 1988. I watched him die for over 25 years. To pass this Bill is wrong and a slap in the face to this man and all of the people and their families. It not only affects the person directly but the families also. You watch your parent struggle to walk across a room, to breath without tubes, not being able to go outside, go to the store, a family gathering. They have to live with the thought that they are a living time bomb and their time is short.
Please stop the passing of this Bill.
Victoria L. Bell daughter of Everett E. Johnson, Sr. 1911-1988
mickey2@gte.net