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Advocates praise asbestos trust bill; critics decry ‘double-dipping’ claim

By Rob Lenihan

A bill that would revise disclosure requirements in the nation’s asbestos-related personal injury trust fund system is being hailed by its supporters for bringing much-needed transparency to the process, while opponents charge it will needlessly expose asbestos victims’ vital information.

On March 9 on a 220-201 vote, the House of Representatives passed H.R. 985, The Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017, or FACT, which seeks, in part, to end so-called “double dipping,” where the bill’s supporters say an individual makes multiple claims against multiple asbestos trusts that were established to compensate asbestos victims.

H.R. 985 combines two separate acts, one addressing class actions and the other addressing asbestos compensation.

KCIC L.L.C., a Washington-based consultancy, published a study entitled “Asbestos Litigation: 2016 in Review,” which it said includes over 90% of all lawsuits in asbestos litigation nationwide. The firm said that while there has been a downward trend in the total number of asbestos lawsuit filings, the decline is being driven by nonmalignant disease types, while mesothelioma and lung cancer filings are steady and increasing.

“We have started to see a few claims filed against new defendants, but the majority of defendants are still related to the typical industries such as construction, manufacturing and automotive,” Megan Shockley, senior manager at KCIC said Friday in an email. “Many complaints filed are due to primary occupational exposures where people were exposed while working in factories or at specific locations/jobsites. We also see cases where people were working on their cars or homes and were exposed to asbestos that way. Further, there are secondary exposures where the injured party was allegedly exposed from contact with another person who had direct exposure to asbestos (such as the wife or child of a worker directly exposed).”

The Washington-based American Insurance Association praised Congress’ actions, saying the bill’s requirement for the trusts to file quarterly reports disclosing information on claims and payments to the bankruptcy courts are modest disclosures that “protect the confidentiality of the victims, while deterring fraudulent and duplicative claims.”

“We have started to see a few claims filed against new defendants, but the majority of defendants are still related to the typical industries such as construction, manufacturing and automotive.”

“The bill is pretty simple in its nature,” said Tom Santos, AIA’s vice president for federal affairs. “It simply requires that the trusts disclose information about the claimants that have gone to the trusts to seek remuneration as a way to offset the costs from their health effects of asbestos.”

The intent of the bill, Mr. Santos said, “is to make sure that those victims who are suffering illness from asbestos are compensated by their trust fund but they’re also not ‘double dipping’ into other litigation.” 

In January 2014, U.S. Bankruptcy Judge George Hodges in the Western District of North Carolina ruled in a landmark decision that plaintiffs’ attorneys had been withholding evidence that could have been submitted to trusts while pursuing lawsuits against Garlock Sealing Technologies L.L.C.

Garlock was permitted full discovery into the claims of 15 individuals and eventually filed racketeering lawsuits against the law firms that represented them. Judge Hodges ordered Garlock to put $125 million in its trust — about 90% less than plaintiffs attorneys had requested.

Joanne Doroshow, executive director of the Center for Justice & Democracy at New York Law School in New York City, said the bill “would force a lot of very private information about asbestos victims and family on to the public court docket, which is basically a public website.”

She added that making this type of information available on a public website leaves asbestos victims open to identity theft and other crimes.

“These people are dying,” Ms. Doroshow said. “They have primarily mesothelioma, which is a lethal cancer, so they will be dead within 18 months. And it’s an outrage that their personal information should be exposed like that for no reason because the asbestos companies in lawsuits have access to this information due to discovery process anyway.”

Ms. Doroshow maintained that “there’s no such thing as double-dipping in these cases,” explaining that a former Navy service member may have come into contact with several ships and several asbestos products over the course of his or her career.

“They have a right to go to each trust or company that contributed to their disease and get their share of compensation from the trust,” she said. “The companies that set up trusts have already conceded liability.”

In a Feb. 14 letter, several U.S. representatives and military organizations, including the Air Force Association, Jewish War Veterans of the USA and the Military Order of the Purple Heart, condemned the FACT Act.

“Veterans across the country disproportionately make up those who are dying and afflicted with mesothelioma and other asbestos-related illnesses and injuries,” the letter said. “Although veterans represent only 8% of the nation’s population, they comprise 30% of all known mesothelioma deaths.”