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MAGIC MINERAL MAYHEM
Once known as the indispensable insulator, asbestos has become Trial Lawyers,
Inc.'s longest-running bonanza.
When American commercial mining of an obscure mineral known as asbestos began
in 1874[13], nobody could have foreseen the magnitude of
the industry that would grow up around it, the harm it would cause, its eventual
exploitation by the $20 billion-plus asbestos bar—an industry in its own
right—or its role in launching the careers of the following advocates:
- Richard Glasser filed Virginia’s first asbestos lawsuit in 1976; by
2001, he had filed over 10,000 cases and collected $267 million for clients.[14]
 Ron
Motley, whose firm now uses the grandiose slogan “Litigating Today for
a Better Tomorrow,” filed his first asbestos case in 1976 in federal
court in Charleston, South Carolina, settling it within 18 months for over
$100,000.[15] By January 1993, he was working on a deal
to resolve between 250,000 and 2 million asbestos claims.[16]- Mississippi tort king Richard “Dickie” Scruggs, who recently pled
guilty to conspiring to bribe the presiding judge in a case involving a multimillion-dollar
fee dispute, used his asbestos winnings to finance the tobacco litigation
that made him a billionaire.[17]
- Texas lawyer Fred Baron is now a leading Democratic Party fund-raiser.[18]
The firm he founded, Baron & Budd, boasts of winning over $140 million
for clients claiming to have mesothelioma, an asbestos-caused cancer, but
doesn’t mention that its fees in that litigation were between $69 million
and $92 million.[19]
Despite its current reputation, asbestos helped make America a world power
and protected both warriors and civilians from the age-old scourge of death
by fire. Nevertheless, asbestos’s legacy has also been death—and,
in response, an epidemic of lawsuits, many riddled with fraudulent allegations,
has distorted our economy while endangering relief for those who need it most.
The “Indestructible” Mineral Comes of Age
Humans have used asbestos for centuries: its name comes from the Greek word
for “indestructible,”[20] and the ancient world
used asbestos for everything from fabrics[21] to lamp wicks.
In more modern times, asbestos ceiling and floor tiles have protected millions
of schoolchildren from fire,[22] and asbestos insulation
fireproofed America’s fleet. Indeed, at the 1939 World’s Fair, in
New York, asbestos  was
highlighted as the “magic mineral” (see photo).
The asbestos industry in the United States grew astronomically in the twentieth
century: asbestos consumption went from only 956 metric tons in 1890 to a peak
of 803,000 tons in 1973. At its height, asbestos-related industries may have
employed as many as 2.5 million Americans.[23] In chronicling
the asbestos industry that developed around the construction of naval vessels
in World War II, Virginian-Pilot reporter Bill Burke noted that workers
“came by the tens of thousands, called to arms in the shipyards . . .to
help build the armada that would keep the world safe.”[24]
Health Risks Surface
Tragically, however, “working in an American shipyard during
World War II would prove to be almost as deadly as fighting in the war,”
with a proven death rate of at least 14 per thousand —only somewhat less
than the rate for combat troops.[25] That asbestos might
be harmful to one’s health is hardly a modern discovery: the ancient Roman
naturalist Pliny the Elder allegedly reported a lung sickness among slaves who
wove asbestos into cloth.[26] At the dawn of the twentieth
century, asbestos was listed along with lead and quicksilver mining as “among
the most injurious processes known to us now.” [27]
Still, health concerns were not buttressed by strong scientific evidence, and
in 1918, the U.S. Department of Labor said merely that there was an “urgent
need for more qualified extensive investigation” into asbestos’s health
effects.[28]
Dr. W. E. Cooke reported the first modern asbestos-related death
in the British Medical Journal in 1924 and named the disease asbestosis.
The U.S. Public Health Service established a Threshold Limit Value for asbestos
exposure in 1938 that lasted as a good-practice guideline for the next three
decades. The standard was defined as “tentative … until better data
are available.”[29] In 1964, Dr. Irving Selikoff,
of Mount Sinai Hospital in New York, definitively established links between
asbestos exposure and high cancer and asbestosis rates among insulation installers.[30]
Asbestos Lawsuits Gain a Toehold
Lawsuits over asbestos-related injuries have a history almost
as long as that of the asbestos industry itself. Between 1929 and 1933, attorney
Samuel Greenstone filed 11 lawsuits against the Johns-Manville Corporation seeking
$50,000 apiece for workers he alleged had been totally disabled after being
denied a safe working environment at the company’s Manville, New Jersey,
plant. The company settled all 11 cases for $30,000 and got Greenstone to agree
not to be involved “directly or indirectly” in any further actions
against the company.[31]
Another 20 cases filed two years later involving the company’s
Waukegan, Illinois, plant were eventually tossed out of court. The Illinois
legislature quickly expanded the workers’ compensation law to cover occupational
disease.[32]
The first modern asbestos lawsuit involved a single lawyer meticulously
building a case for a single client. [33] Ward Stephenson,
a well-known trial lawyer in Orange, Texas, filed his case on behalf of asbestos
insulator Claude Tomplait in December 1965, one year after Selikoff ’s
landmark study.[34] Four years later, seven defendants
paid a combined $75,000, of which $7,500 went toward reimbursing the Texas workers’
compensation system and its insurers.[35] Tomplait wound
up with $37,500 after nine years; Stephenson with $30,000, less his expenses
and costs.[36]
TOO MUCH TRUST
H. W. Johns’s 1890 patent for a process to create a superior insulating
product by blending previously unusable short asbestos fibers with magnesia
started an empire—and a nightmare.[64] Thomas
F. Manville took control of the newly merged Johns-Manville Company in
1901.[65] Under him, the firm reached over $40 million
in annual sales before the Depression, and $60 million by 1937.[66]
Lewis H. Brown led the company out of the Depression; its unstoppable
growth drew the notice of Time magazine, which placed Brown on
its April 3, 1939, cover.[67]
By 1982, Johns-Manville was ranked 181 on the Fortune 500, with $2.2
billion in sales[68]—but by that time, it had
also racked up more than 16,500 asbestos-related lawsuits.[69]
Facing more than 400 new cases a month and projections of up to 200,000
in all, the company filed for Chapter 11 bankruptcy reorganization in
August 1982.[70]
Emerging from bankruptcy was something called the Manville Personal Injury
Settlement Trust, which was set up in 1988 to compensate current and future
asbestos claimants.[71] But plaintiffs’ attorneys
more or less dictated trust provisions that favored their interests and
ease of processing over the rights of future claimants, and scanted verification
of actual injury or significant contact with Manville products.[72]
The fund settled more than 12,600 claims for about $500 million during
its first nine months of operation, but officials soon realized that it
didn’t have enough assets to handle all claims, which numbered 89,000
by the end of 1989.[73] The trust was redefined as
a limited fund in 1990, which meant that it paid damages arising from
only seven disease categories. In 1995, compensation per plaintiff was
reduced to just 10 percent of the damages claimed; payouts were further
reduced to 5 percent of damages in 2001 (see graph). As of June 30, 2006,
the trust had received more than 773,000 claims and paid out about $3.4
billion—just $4,400 per claimant.[74]
 The
trust was severely depleted by specious claims arising from mass screenings
sponsored by plaintiffs’ attorneys.[75] A 1996
audit found a 41 percent error rate in the medical data, resulting in
a possible loss of $190 million.[76] In 2005, the
trust stopped accepting medical reports from certain doctors and screening
facilities that were facing congressional and grand jury investigations
for fraud.[77]
With the Manville cash cow weakened, plaintiff ’s lawyers went looking
for new deep pockets. In order to transfer liability to financially stronger
defendants such as suppliers and other manufacturers, new cases had to
minimize Manville’s role, which a comparison of testimony before
and after the Manville bankruptcy indicates occurred. Manville’s
share of asbestos-product exposure alleged in
tort claims fell from 80 percent to as low as 10 percent, a change that
an expert is convinced was “orchestrated by various plaintiff lawyers.”[78]
The U.S. Supreme Court’s rejection of mandatory class action settlements
and Congress’s failure to adopt an administrative compensation scheme
left bankruptcy as the only viable measure for many companies with major
asbestos exposure, despite the apparent abuses committed against the Manville
Trust.[79] Congress acknowledged the reality of the
situation by adopting special Chapter 11 trust provisions for companies
with asbestos liabilities.[80] Many trusts based
on the Manville model have suffered the same abuses.
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The Tomplait case itself was not particularly lucrative
for Ward Stephenson, but in a subsequent case in 1973, representing mesothelioma
victim Claude Borel, Stephenson obtained from the United States Fifth Circuit
Court of Appeals a unanimous opinion effectively demolishing the moat and castle
walls that had historically protected the asbestos industry. The court ruled
that strict liability applied up and down the chain (i.e., that plaintiffs need
not show defendant corporations were negligent), that the statute of limitations
did not bar the claim (i.e., that defendants could be sued even for long-ago
asbestos exposures), and that even though Borel bore some responsibility for
his injuries, the defendants were not relieved of theirs.[37]
Asbestos Litigation Goes Big-Time
 After
Stephenson, the trial lawyer who next advanced asbestos litigation was New Jersey
plaintiffs’ attorney Karl Asch. Asch noticed that asbestos manufacturer
Raybestos-Manhattan’s 1974 annual report stated: “As early as 1930,
Raybestos-Manhattan commissioned Metropolitan Life Insurance Company to survey
all its factories and to make recommendations for the elimination of conditions
which might present health hazards.”[38] The report
also described supposedly similar joint industry efforts that began in the same
decade.[39] Asch observed that these assertions seemed
to conflict with industry claims that the 1964 Selikoff study was the first
hard evidence of the dangers posed by asbestos,[40] though,
to be fair such industry claims were typically made only about cancer, not asbestosis,
the risks of which had long been known.[41]
Asch followed up his suspicions, and what he discovered jump-started
asbestos litigation as we know it: in response to a discovery request Asch made,
he received access to a box of documents that had been meticulously maintained
by Raybestos-Manhattan.[42] Now known as the Sumner-Simpson
papers, Asch’s cache of documents described in great detail the efforts
of Raybestos, Johns-Manville, and other manufacturers to find out about the
hazards of asbestos, develop strategies to deal with them, and—most important—to
keep that knowledge from the public and workers.[43] Although
Asch was the first one to introduce the damning documents in court,[44]
it was Ron Motley who used them to persuade a South Carolina judge to reverse
a defense victory in a jury trial.[45] Many see that reversal
as precipitating today’s asbestos litigation avalanche.
Two court decisions in the early 1980s gave that avalanche additional
momentum.
Defendant manufacturers had traditionally benefited from a “state
of the art” defense, which insulated them from liability as long as their
practices were the best available to the industry at the time that injuries
occurred. In 1982, however, the New Jersey Supreme Court unanimously threw out
this long-standing doctrine with regard to product liability, holding:
The burden of illness from dangerous products such as asbestos should be
placed upon those who profit from its production and, more generally, upon
society at large which reaps the benefits of the various products our economy
manufactures. That burden should not be placed on the innocent victim. . .
. At the same time, we believe this position will serve the salutary goals
of increasing product safety research and simplifying tort trials.[46]
Somehow, it didn’t quite work out the way the opinion’s author, Justice
Morris Pashman, and his five colleagues anticipated.
Perhaps even more stunning was the federal D.C. Circuit’s 1981 ruling
that exposed insurers facing asbestos lawsuits to unprecedented liability. Instead
of limiting recovery to the maximum payout that the policy’s terms permitted
in the year when symptoms were diagnosed, the court added together the maximums
for every year between the date of exposure and diagnosis.[47]
Since such a time interval is often longer than two decades, the court in effect
created a honey pot for plaintiffs[48] worth tens of billions
of dollars.[49] Circuit Judge Patricia Wald warned that
the court’s decision “require[d] a leap of logic from existing precedent,
for it concerns diseases about which there is no medical certainty as to precisely
how or when they occur.”[50]
The Cost of the Litigation Onslaught
The decade after Borel saw 25,000 asbestos cases filed.[51]
By 1981, more than 200 companies and insurers had been sued; by 1982, defendants’
costs had topped $1 billion.[52] Many companies, Johns-Manville
among them, resorted to filing for bankruptcy or forming special trusts to pay
claimants (see box, opposite page).
In Borel, the U.S. Fifth Circuit Court of Appeals demolished the castle walls that had protected the asbestos industry.
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This was not the end of it, however. Although by 1992, 100,000 claims had been
resolved, 100,000 new ones had been filed, and “for each claim resolved,
[there were] two to three new claims.”[53] The situation
triggered speculation that the judicial system was, in effect, creating a national
health-insurance system for at least one disease.[54] By
2005, an estimated 322,000 claims were pending in state and federal courts.[55]
Producing an accurate count of cases, claims, and plaintiffs is almost impossible
because their numbers are not identical; they vary widely, preventing inferences
about one another from being drawn. For example, RAND, a highly reliable source,
estimates that 56,454 people filed asbestos injury claims in 2000,[56]
while a study based on a review of the SEC filings of 12 major corporations
showed almost ten times as many claims filed against just those 12 in the same
year.[57]
RAND estimates that by 2002, 8,400 defendants had been sued by at least 730,000
individual plaintiffs.[58] In the years before 1983, fewer
than 5,000 plaintiffs filed suit annually, but the number grew to 15,000 in
1986 and 59,000 in 1989.[59] As of today, as many as 10
million claims may have been filed,[60] and the ultimate
cost may hit $265 billion,[61] more than double the cost
of the total Superfund cleanup program.[62]
Because the length of the average latency period for asbestos-related lung
cancer is 25 years and the interval for other asbestos-related cancers is even
longer,[63] the ultimate defendants were typically uninvolved
in the product’s actual manufacture, just as many of the later-filing plaintiffs
were unlikely to be symptomatic. We will explore that sad irony in the pages
that follow.
<<previous section | next section>>
13. John Udd, A Chronology of Minerals Development in Canada (National
Resources Canada, 1998), available at http://www.nrcan.gc.ca/ms/stude-etudi/chro_e.htm.
Many sources list the date as 1879, apparently based on what appears to be a
typographical error in a 2001 newspaper series published by the Virginian-Pilot
newspaper. See Bill Burke, Shipyards, a Crucible for Tragedy, Virginian-Pilot
(Norfolk, Va.), May 6, 2001.
14. Bill Burke, Lawyers Go to Court for Asbestos Victims, Virginian-Pilot
(Norfolk, Va.), May 10, 2001.
15. See http://www.motleyrice.com
(last visited Aug. 18, 2007); Paul Brodeur, Outrageous Misconduct: The Asbestos
Industry on Trial 136 (1985).
16. See http://www.motleyrice.com
(last visited Aug. 18, 2007). The Asbestos Litigation History page provides
a stunning summary of how asbestos claims ballooned from a handful of cases
to a major national industry.
17. See Chris Joyner et al., Scruggs, Partner Enter Guilty Pleas,
Clarion-Ledger (Jackson, Miss.), March 14, 2008; see also Joseph B. Treaster,
A Lawyer Like a Hurricane, N.Y. Times, March 16, 2007; John Mintz and
Cecil Connolly, Wounding the Giant: Small-Town Blow Exposed Cigarette Industry’s
Soft Side, Wash. Post, March 30, 1998.
18. See Jason Embry, Lawyer Plants Seeds of Future Democrat Wins,
Amer.-Statesman (Austin, Tex.), at A1.
19.The firm’s website lists 70 cases with verdicts or settlements exceeding
$1 million net to clients. The total value is $139,054,643. At 33 percent, a
standard contingency fee, the firm would have collected an additional $69.5
million in fees (i.e., 50 percent of net to clients). Some cases went to trial,
where fees of 40 percent or more often apply; at that rate the fees would be
$92.7 million. See http://www.baronandbudd.com
(last visited Aug. 19, 2007).
20. Asbestos, http://www.heritageresearch.com/asbestos.htm
(last visited Aug. 20, 2007).
21. Asbestos: History and Uses,
http://dnr.wi.gov/air/compenf/asbestos/asbes3.htm (last visited Aug. 20,
2007).
22. The ABCs of Asbestos in Schools (EPA 2003) (noting that most asbestos in
schools is best handled by being left alone as long as it is not damaged in
such a way that fibers become airborne).
23. Jock McCulloch, Beyond the Factory Gates: Asbestos and Health in Twentieth
Century America, 32 J. Health Pol. Pol’y & L. 543, 543 (2007).
24. Bill Burke, Horrible Toll Could Have Been Avoided, Virginian-Pilot
(Norfolk, Va.), May 6, 2001.
25. Bill Burke, How the War Created a Monster, Virginian-Pilot (Norfolk,
Va.), May 6, 2001.
26. Earliest Known Facts About Asbestos, http://www.umt.edu/libbyhealth/introduction/background/asbestos_timeline.htm.
27. Barry L. Castleman, Asbestos: Medical and Legal Aspects 1 (5th ed. 2005).
28. Earliest Known Facts About Asbestos, supra note 26.
29. See id.; Castleman supra note 27, at 226. Castleman, however,
ridicules the standard with a quote from Dr. James P. Keogh introducing the
chapter on Thresholds and Standards: “If you poison your boss a little
bit each day it’s called murder; if your boss poisons you a little each
day it’s called a Threshold Limit Value.” Id.
30. See Peter Huber, The Risk Race, The New Republic, February
3, 1986, at 40.
31. Castleman, supra note 27, at 144 (noting that the settlement was
possible in part because of “questionable practices Mr. Greenstone used
in soliciting these cases”).
32. See id. at 145.
33. See Brodeur, supra note 15, at 8-10.
34. See id. at 6.
35. Templait v. Combustion Engineering, Settlement Agreement, Mar. 8, 1969.
36. See Brodeur, supra note 15, at 34.
37. See Borel v. Fibreboard Paper Products Corp., 493 F.2d 1076, 1083.
38. Brodeur, supra note 15, at 107.
39. See id.
40. See id. at 103-04.
41. See Huber, supra note 30, at 40 (“In his account of who
knew what when—the core of his cover-up theory—Brodeur systematically
obscures the difference between asbestosrelated cancer and asbestosis, usually
a much less serious disease, and understood and discussed in the Manville boardrooms
much earlier.”).
42. See Brodeur, supra note 15, at 110-11; Castleman, supra
note 27, at 492.
43. See Brodeur, supra note 15, at 103-04.
44. Castleman, supra note 27, at 493-98.
45. See id. at 493. Citing Billetz v. Johns-Manville, Civ. No. 80-2976,
Castleman notes that the documents led New Jersey federal Judge Harold Ackerman
to allow a jury trial on negligence, fraud and conspiracy claims against Metropolitan
Life.
46. Beshada v. Johns-Manville Products Corp., 442 A.2d 539 (N.J. 1982).
47. See Keene Corp. v Insurance Co. of North America, 667 F.2d 1034 (D.C.
Cir. 1981).
48. See id.
49. Lester Brickman, On the Theory Class’s Theories of Asbestos Litigation:
The Disconnect Between Scholarship and Reality, 31 Pepperdine L. Rev. 33,
55 (2004).
50. 667 F.2d at 1057.
51. Michelle J. White, Asbestos Litigation: The Problem of Forum Shopping
and Procedural Innovations and Potential Solutions, Transcript, Manhattan
Institute Lecture, Sept. 14, 2005, at 3.
52. Castleman, supra note 27, at 739.
53. Lester Brickman, The Asbestos Litigation Crisis: Is There a Need for
an Administrative Alternative?, 13 Cardozo L. Rev. 1819, 1819 (1992).
54. See id. at 1823.
55. Overview, supra note 3, at 5 & n.55.
56. Carroll, supra note 2, at 71 & tab. 4.1.
57. Michelle J. White, Asbestos Litigation: Procedural Innovations and Forum
Shopping, 35 J. Legal Stud. 365, 366 (2006).
58. Carroll, supra note 2, at 70-71.
59. See id. at 71 tab. 4.1.
60. See White, supra note 57, at 365.
61. Overview, supra note 3, at Executive Summary.
62. See White, supra note 57, at 366 & n.2.
63. See Castleman, supra note 27, at 102.
64. See David Kotelchick, Asbestos: “The Funeral Dress of Kings”—and
Others, in Dying for Work 192, 193 (Gerald Markowitz ed., 1989).65. See
id. at 194.
65. See id.at 194.
66. See id.
67. See id. at 198.
68. See Roger Parloff, The $200 Billion Miscarriage of Justice,
Fortune, May 4, 2002.
69. See Mariana S. Smith, Resolving Asbestos Claims: The Manville
Personal Injury Settlement Trust, 53 L. & Contemp. Probs. 27, 29 (1990).
70. See id. at 29.
71. See id. at 27-28.
72. See Brickman, supra note 49, at 75 n.120.
73. See Insurance Information Institute, Issue Update: Asbestos Liability
(June 2007).
74. See id.
75. See Brickman, supra note 49, at 129-30.
76. See id. at 132-33.
77. See Memorandum from David Austern, President, CRMC (Sept. 12, 2005),
available at http://www.claimsres.com/documents/9%2005%20Suspension%20Memo.pdf.
78. Brickman, supra note 49, at 138.
79. See Michelle J. White, Why the Asbestos Genie Won’t Stay
in the Bankruptcy Bottle, 70 U. Cin. L. Rev. 1319, 1321 (2002).
80. See id.
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