Asbestos Defendants Oppose Sen. Specter's Asbestos Trust Fund Bill Proposal

Date: 7 January 2005 (from Harris Martin Publishing, http://www.harrismartin.com)

WASHINGTON -- Several asbestos defendants have sent a joint letter to Sen. Arlen Specter (R-Pa.), calling the senator's recent asbestos legislation proposal 'fatally flawed' and expressing concern that his plan for a national trust fund is a step backward for efforts aimed at curtailing asbestos litigation.

In a Jan. 3 letter, nearly 10 companies named as defendants in pending asbestos litigation outlined concerns with Sen. Specter's drafted proposal for an asbestos trust fund, specifically with the allocation of payment obligations on defendant participants, the separation of companies from their insurance coverage, the possibility of claims returning to litigation, the imposition of joint and several liability and the opportunity for claimants to assert other mixed dust claims.

Last year, Congress adjourned without voting on a proposed trust fund measure that would have created a $140 billion trust to pay asbestos claims outside of the tort system.

'We continue to support efforts to reform the current asbestos litigation system in a manner that would address the needs of the truly sick,' the defendants' letter stated. 'However, in view of the dramatic number of current asbestos-related claims by those who are not now and many never become sick, we remain concerned that the current discussion draft would result in a program that would set us back rather than forward.'

The letter was signed by E.I. du Pont de Nemours and Company, Exxon Mobil Corp., Federal-Mogul Corp. and the Official Committee of Unsecured Creditors of Federal Mogul Corp., Foster Wheeler, Hopeman Brothers, IU North America, National Service Industries Inc. and Oglebay Norton Co.

In a press release, Federal-Mogul said it 'cannot support a national trust that imposes a grossly disproportionate payment obligation on Federal-Mogul while providing a bailout to a small number of companies that are responsible for the lion's share of the most serious asbestos claims in the tort system.'

Under Sen. Specter's current proposal, the trust fund would impose payment obligations on companies that would exceed their asbestos-related costs, in addition to precluding those companies from insurance coverage, the letter claims. Because of this, asbestos defendants would benefit more from continuing to litigate asbestos claims within the current judicial system, the defendants claim.

Additionally, the defendants argue that, as currently written, the draft of the bill would falsely stress a final resolution of all asbestos suits, as claims could revert back to the tort system should funding for the trust run out.

Finally, the defendants expressed concern that the draft legislation would allow plaintiffs to 'recast' asbestos claims as silica or other mixed dust claims, leaving certain defendants, such as premises owners, subject to continuing litigation.

'We encourage you to consider alternative approaches, specifically medical criteria legislation, to resolve the issue without penalizing companies with minimal out-of-pocket asbestos-related costs and sufficient insurance to cover them,' the letter concludes.

On Jan. 11, Sen. Specter is set to preside over a Senate Committee on the Judiciary hearing on 'The Fairness in Asbestos Injury Resolution Act.' On Thursday, a spokesperson for the senator said that the final details for both the legislation proposal and the hearing have yet to be finalized.

** POSTED JANUARY 7, 2005 **