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EVEN IF IT'S FAIR, IT FAILS
Judicial and legislative attempts to reform asbestos litigation have led nowhere.
The problems with asbestos litigation have been well known for over 20 years,
but Trial Lawyers, Inc. has successfully blocked repeated efforts at reform.
As early as 1986, Manhattan Institute Senior Fellow Peter Huber wrote: “The
problem is lawyers—lawyers for the plaintiffs and the defendants, lawyers
for the insurance companies and the government, lawyers for the bench, the back
bench and the bankruptcy masters. One trial in California involved so many lawyers
it had to be held in a large auditorium.”[229]
Of course, with so many lawyers profiting from the asbestos litigation business,
it should come as no surprise that they have marshaled their resources to maintain
their profit center. So even though the Judicial Conference Ad Hoc Committee
on Asbestos Litigation called the situation “critical and getting worse”[230]
as early as 1991, little headway has been made since then toward a comprehensive
fix.
Judicial Consolidation Proves Slow and Ineffective
In 1991, a group of federal judges transferred 26,000 asbestos cases from federal
courts nationwide to U.S. District Court Judge Charles Weiner in Philadelphia
under the federal multidistrict litigation (MDL) laws. Seventeen years later,
MDL 875 is moving forward—slowly. It now has a new judge, James T. Giles,
two special masters, and a docket sheet that in late March 2008 filled 407 pages
with 5,127 filings. Court records comprise hundreds of thousands of pages.[231]
As of 2006, more than 30,000 cases involving more than 90,000 individual plaintiffs
were pending.
The MDL was supposed to streamline discovery. Progress, however, proved to
be excruciatingly slow—that is, until 2007, when defense attorneys contended
that the sole medical basis for many cases was a possibly false diagnosis.[232]
On May 30, 2007, Judge Giles issued an order requiring plaintiffs’ attorneys
to disclose key information on each individual plaintiff. The data range from
date of birth to key medical records to information indicating whether individuals
have prosecuted or are prosecuting claims not included in the MDL.[233]
Although he has granted repeated extensions, Judge Giles has also dismissed
thousands of cases with prejudice for failure to turn over material referred
to in his May 30 order.[234] The defendants’ liaison
counsel committee has urged Judge Giles to set and enforce “a final deadline”
for production of the data sought. But even under the defendants’ timetable,
it would be as late as September 3 of this year before cases that had not offered
a valid reason for failing to comply could be dismissed.[235]
The docket continues to evolve and is being closely watched.
Settlement Efforts Strike Out
 Also
back in 1991, a group of defendant companies calling themselves the Center for
Claims Resolution (CCR) decided that they could dispose of all present and future
claims by striking a deal with the devil—in this instance, two long-standing
leaders of Trial Lawyers, Inc.’s asbestos business,Ron Motley and Gene
Locks, who represented 14,000 asbestos claimants. The CCR would settle with
Motley’s and Locks’s clients for a generous $215 million, of which
$70 million would go to these attorneys and their co-counsel.[236]
Motley and Locks would then file a mandatory class action that would dispose
of all future claims against the CCR’s members. To provide notice to members
of the potential class, who had a limited period in which to opt out of it,
there were even commercials that ran during football telecasts.
By the January 24, 1994, deadline, more than 236,000 people had rejected membership.[237]
Reacting against the $70 million in legal fees, and the meager payouts the
remaining members of the class would subsequently receive, a rival faction of
the plaintiffs’ bar, led by Fred Baron, attacked the Motley-Locks plan
as an unethical alliance with the defendants.[238]
In 1997, the U.S. Supreme Court rejected a global asbestos settlement
engineered by Ron Motley and Gene Locks.
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Ultimately, the U.S. Supreme Court, in 1997, ruled that the settlement agreement
did not meet the requirements of “common issue predominance and adequacy
of representation.”[239] These vital class action
rules entitled every asbestos claim to a separate, fact-intensive inquiry into
injury and causation.
Writing for the majority, Justice Ruth Bader Ginsburg noted: “The argument
is sensibly made that a nationwide administrative claims processing regime would
provide the most secure, fair and efficient means of compensating victims of
asbestos exposure.” But such a regime, the Court found, required action
by Congress.[240]
Congress Unable to Reach a Solution
AN UN-FAIR FINISH
Republican Arlen Specter (left) and Democrat Patrick Leahy, the ranking
members on the Senate Judiciary Committee, failed in their efforts to
pass federal asbestos reform.
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In the years following the Supreme Court’s decision, bills were introduced
in Congress to establish medical criteria for evaluating asbestos claims and
to provide a range of alternatives for resolving those claims.[241]
But a legislative body that couldn’t enact a ban on asbestos products[242]
had no chance of solving the far more complex challenge of devising a universally
acceptable compensation plan. Asbestos reform legislation was reported out of
the House Judiciary Committee in March 2000, but with mid-term elections looming,
and predatory lawyers launching a public-relations campaign depicting it as
an asbestos industry bailout, the legislation quietly disappeared.[243]
An effort to legislate a global settlement mechanism also failed.[244]
In the eyes of some legislators, notwithstanding the overwhelming evidence that
asbestos litigation had become unworkable, the “time was not yet right.
The situation had not gotten bad enough.”[245]
By 2003, Senator Orrin Hatch, the Utah Republican who then chaired the Judiciary
Committee, was promoting a legislative solution centered on an asbestos trust
fund financed by government and industry.[246] His efforts
failed, and the legislation was handed off to Senator Arlen Specter (R-Pa.).
Specter brought in Third Circuit Judge Edward R. Becker to help mediate among
various stakeholders. Specter also wanted to create a $140 billion fund over
30 years.[247]
When a reconstituted Senate convened in 2005, Specter reintroduced the Fairness
in Asbestos Injury Resolution (FAIR) Act,[248] which again
followed the trust fund and medical criteria model. FAIR spent a year in committees
and hearings, and floor debate began on February 6, 2006.[249]
By then, it was the subject of furious public-relations campaigns waged by
all sides.
Specter’s bill died in a procedural vote on Valentine’s Day 2006,
the victim of attacks by trial lawyers, labor unions, and some key corporate
defendants unhappy with the legislation’s structure.[250]
Judge Becker died on May 19,[251] shortly after the deadline
for reconsideration had passed.[252]
Ten days later, Senator Specter introduced a new bill, S. 3274, but it never
got out of committee. The Democrats’ current control of the Senate is likely
to doom any substantive action during the 110th Congress.
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229. Huber, supra note 30, at 41.
230. Report of the Judicial Conference Ad Hoc Committee on Asbestos Litigation
2 (1991).
231. In re: Asbestos Product Liability Litigation, MDL 875 (E.D. Pa.) (Pacer
accession no. 2:01-md-00875-jg).
232. See MDL 875 (Jan. 31, 2007) (Hr’g Tr.).
233. See MDL 875 (Admin. Order No. 12).
234. See Telephone conversation with Marcy Croft, partner, Forman Perry
Watkins Krutz & Tardy, March 20, 2008.
235. See MDL 875 (March 7, 2008) (Submission of the Defendants’
Liaison Counsel Committee by Walter G. Watkins, Jr., partner, Forman Perry).
236. See Castleman, supra note 27, at 748.
237. See id. at 749.
238. See id.
239. Amchem Products, Inc. v. Windsor, 521 U.S. 591, 613-29.
240. Id. at 628-29.
241. See Hanlon & Smetak, supra note 86, at 558.
242. As outlined in the legislative findings of S. 742, the Ban Asbestos in
America Act of 2007, EPA has given asbestos its highest cancer classification.
Congress passed the Toxic Substances Control Act (15 U.S.C. § 2601) in
1976 based in large part on testimony about asbestos dangers, and 13 years later
EPA promulgated final regulations under Title II of the act to phase out asbestos
products in 1997. But in 1991 the U.S. 5th Circuit Court of Appeals overturned
the regulation in Corrosion Proof Fittings v. EPA, 947 F.2d 1201, and no appeal
was filed. Senator Patty Murray (D-Wa.) worked six years to get an asbestos
ban to the Senate floor, and succeeded when S. 742 cleared the Energy and Public
Works Committee on a 19-0 vote on July 31, 2007. The measure cleared the full
Senate overwhelmingly, and a companion bill, H.R. 3285, was introduced in the
House. Besides banning asbestos, the measures call for investment in research
and treatment and the launching of a public education campaign. But they do
nothing to address the critical issue of how to compensate individuals harmed
by asbestos. Sen. Specter was quoted in the Seattle Post-Intelligencer of August
1 as suggesting the bill should be held up until it addresses that issue, but
Murray is adamant about keeping the issues separate.
243. See Hanlon & Smetak, supra note 86, at 558.
244. See id. at 559.
245. Id. at 547.
246. See id. at 564.
247. See id. at 581.
248. See The Fairness in Asbestos Injury Resolution Act of 2006, S. 3274,
109th Cong. (2005).
249. See Hanlon & Smetak, supra note 86, at 582.
250. See Stephen Labaton, Asbestos Bill Is Sidelined by the Senate,
N.Y. Times, Feb. 15, 2006.
251. Tim Weiner, Edward R. Becker, 73, Judge on Federal Court of Appeals,
N.Y. Times, May 20, 2006.
252. See Hanlon & Smetak, supra note 86, at 583.
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