Excerpts from Asbestos Trust Fund Bill 4/26 Hearing by Senate Judiciary Committee


SENATOR EDWARD KENNEDY:

....The problem is that powerful corporate interests responsible for the asbestos epidemic have fought throughout this process to escape full accountability for the harm that they've inflicted. The real crisis which confronts us is not an asbestos litigation crisis. It's an asbestos-induced disease crisis.

All too often, the tragedies these workers and their families are enduring become lost in a complex debate about the economic impact of asbestos litigation. We can't allow that to happen. The litigation did not create these costs. Exposure to asbestos created them.

They are the costs of medical care, the lost wages of incapacitated workers, the costs of providing for the families of workers who died years before their time. Those costs are real. No legislative proposal can make them disappear.

All legislation can do is shift those costs from one party to another. Any proposal which would shift more of a financial burden onto the backs of injured workers is unacceptable to me, and it should be unacceptable to every one of us.

The legislation before us would close the courthouse doors to asbestos victims on the day it passes, long before the trust fund will be able to pay their claims, as Peg Seminario just illustrated.

Their cases will be stayed immediately. Seriously ill workers will be forced into legal limbo for up to two years. Even those victims who have less than a year to live will be forced to stop their cases for nine months, and many will die without receiving either their day in court or compensation from the trust fund.

Experts tell us the asbestos trust created by the legislation is seriously under-funded. It is $13 billion less than the amount provided in the committee's 2003 legislation, even though many of the award values have been increased.

The funding plan in this bill relies on very substantial borrowing in the early years as the only way to pay the flood of claims. The result of this will be a huge debt service cost over the life of the trust fund that could reduce the $140 billion intended to pay the claims by 40 percent or more, according to testimony we'll hear today.

The amount remaining would be far too little to pay claims to cover all of those who are entitled to compensation under the terms of the bill. We cannot allow seriously injured workers with valid claims not to be paid fully, in a timely manner, by the trust. That would be a shameful injustice.

I am particularly upset by the change in the way the lung cancer victims are treated. Under the medical criteria adopted by the committee overwhelmingly two years ago, all lung cancer victims who had at least 15 years of weighted exposure to asbestos were entitled to receive compensation from the fund. That provision now has been removed.

Under this bill, the lung cancer victims who have had very substantial exposure to asbestos over long periods of time are denied any compensation unless they can show scarring on their lungs.

The committee heard expert medical testimony that prolonged asbestos exposure dramatically increases the probability that a person will get lung cancer even if they do not have scarring on their lungs.

Deleting the Level VII category will deny compensation to approximately 40,000 victims suffering with asbestos-related lung cancer, and under that legislation as now drafted these victims are losing their right to go to court but receiving nothing from the fund. How can any of us support such an unconscionable provision?

The bill also tampers with the agreed-upon medical criteria by raising the standard of proof for each disease category. The new language requires the workers to prove that asbestos was a substantial contributing factor to their disease instead of just a contributing factor.

This is a major increase in the burden workers must overcome to receive compensation, and it's a serious step in the wrong direction, raising the bar even higher on injured workers.

This bill shifts more of the financial burden of asbestos-induced disease to the injured workers by unfairly and arbitrarily limiting the liability of defendants.

It does not establish a fair, reliable system that will compensate all those who are seriously ill due to asbestos, lacks a dependable funding stream which can ensure that all who are entitled to compensation actually receive full and timely payment. These are very basic shortcomings. We cannot allow what justice requires to be limited by what the wrongdoers are willing to pay.

Unless substantial improvements are made in the legislation to the committee's markup, I intend to vote no.


SENATOR RICHARD DURBIN:

Mr. Chairman, I want to thank you and Senator Leahy not only for your hard work on this bill but also for your courtesy in allowing this hearing. When I suggested it last week, you were prompt to say yes, we should have a hearing. And I'm heartened by that. You've been eminently fair throughout this process, and I thank you for that.

Senator Leahy, though we may disagree on this bill, you are my friend and we have had a courteous and constructive relationship which I'm sure is going to continue even as we debate this bill.

I also want to thank Judge Becker. I know you have -- you're not on the payroll, but you might as well be. You've done an awful lot of hard work to try to bring this to this day, and though I may disagree with your work product, I certainly respect your contribution to public service in so many different ways.

What troubles me about this hearing is that it is so sterile and so bloodless. It is a hearing about money, who pays, how much do they pay. I just see this issue so differently. This is about more than money. It's about justice. It's about fairness.

And as Senator Kennedy has said, it's about innocent people. Who, among these victims, knowingly exposed themselves to deadly asbestos? At best, a small, small percentage may have. But most of the people who are victims of this illness didn't even know they were being exposed at the time. They're innocent workers, innocent bystanders, innocent family members doing the laundry of workers.

Through no fault of their own, they have been exposed to this deadly poison, and we know that companies like Libby and W.R. Grace knew long ago the danger of asbestos, kept mining it, kept producing it, kept making profits on it, willing to take the risk that no matter how much they were sued for they were going to make more money selling the product. That's what it was all about.

What is unfortunate in the hearing today is we don't see the faces of victims who could tell us stories that may, just may, touch the hearts of some of the members of this committee to think twice, not just about how much companies and insurance companies are going to give to this fund or trust funds are going to give up, but, rather, how much victims and their families will recover as a result of what we do today, saying to them that they can no longer go to the courtroom, no longer appeal to their neighbors and friends for fairness and justice, but rather be turned into this administrative law system.

A couple of those victims are here today, and since I have not spoken to them ahead of time, I am not going to ask them to stand unless they want to. But their stories -- one in particular here -- Paul Zigglebaum (ph), I believe, is here today. Paul, if you want to stand up, you are welcome to.

My friends on the committee, this is the face of a mesothelioma victim. And if you look at it, look at Paul standing here, you may not know that a year ago he went through a surgery in Omaha, Nebraska that lasted 10 hours, and as a result of that surgery removing tumors and other organs and things from his body, he weighed 33 pounds less at the end of that 10-hour surgery.

He is fighting mesothelioma. His wife is with him today, I believe -- not with you? But you have said in the statement that you sent to me you think there are possibly four different exposures in your life that could have resulted in this mesothelioma. You've recovered some money from some.

You're hoping to recover money from others so that your wife can be taken care of, you can be taken care of, from this point forward. Understand what this bill does. Paul, thank you for standing up.

But understand what this bill does. It says that whatever Paul has recovered from those who are culpable and have exposure will be set off and deducted from the maximum amount he can receive under this bill. It means that even if there are companies still liable to him for what he has gone through, we are cutting off their responsibility to pay him and to pay his family.

Ellen Patton (ph) is here from Annapolis, Maryland, and, Ellen, I thank you for standing up. This is the face of a mesothelioma victim, 45 years old. She was exposed to it, she believes, because her father did home repairs and used materials that exposed her to asbestos.

She's been through five different bouts of aggressive chemotherapy, struggling at great expense to keep living every day, never knowing if this is going to come back. Ellen, thank you for being here today, and thank you for sending along this little blue band as a reminder that this debate is about people. Thank you for standing up.

It's about what they'll recover. And though $1.1 million seems so large and so generous, it's not. The medical bills which these people have incurred are in the hundreds of thousands of dollars.

And so while we are saying that the companies and insurance companies are going to battle one another now as to who is going to pay into this trust fund, I would just say to Judge Becker, you said earlier if you have a mesothelioma case in trial, you're OK, finish your trial.

But is it not true, Judge -- and you know this for a fact -- if the defendant has successfully argued to continue the case beyond the date of signing this bill, you're finished?

Your day in court is over. No matter how much you've been through, no matter how much you've worked to prepare your case, for companies that are liable for the illness which is slowly taking away your life, your days are over, simply because one judge and one court has said I'll grant the defense motion for a continuance. That's true, isn't it, Judge?


SENATOR RICHARD DURBIN WITH SENATOR ARLEN SPECTER

SENATOR RICHARD DURBIN

I just want to say I understand the time that you've put in this bill, Senator Leahy as well. And I'm not being critical of that. I think you will concede the fact that many of the meetings which you have had have not been open to the members of this committee.

SENATOR ARLEN SPECTER:

No, that's not true at all.

DURBIN:

Well, I will just tell you that your negotiations that led up to the presentation of this was not an open invitation to members of this committee to come attend those meetings.

SPECTER:

Well, that simply is not true.

DURBIN:

Well, Mr. Chairman, I'm sorry, but it is true. And three weeks ago, we were handed this bill and saw it for the first time.

SPECTER:

Excuse me. Excuse me, Senator Durbin. I'm still the chairman here.

DURBIN:

I understand that.

SPECTER:

The 39 sessions presided over by Judge Becker and attended by me were open. Let's move on.


PEG SEMINARIO, AFL-CIO SAFETY AND HEALTH DIRECTOR:

I would just point out that when the bill was reported out of this committee two years ago as S.1125, it included an amendment that Senator Feinstein had offered and it was unanimously adopted by the committee.

It allowed that all victims could continue to go in court with their case until the fund was up and running and that there would be an offset by the defendants or the insurers against the money paid out. So the committee considered it. In the interest of justice, it was unanimously adopted in the reported bill.

The provisions in S.2290 were ones that were put in by the business people and insurers who didn't like that provision. So dealing with the issue of the transition is really, really important.

As you said, Senator Feingold, the idea that we don't know -- and we don't know exactly how many claimants will come to the fund, what will happen 10 years out, 20 years out. We do know right away that there are thousands and thousands of people who are sick, who have pending claims.

And when this fund is up and running, many of them will have nowhere to go as it is currently crafted. We think that is unfair. We think it does make more sense to allow people to go forward.

They can make the choice as to whether it is in their interest to wait and go to the fund or to continue with the litigation. And so, again, as a matter of fairness here for victims -- and think about it from their perspective. What will they do? How will they pay their medical bills?

You're even extinguishing the existing bankruptcy trusts where people now have a right to go, you know, for no reason at all. And so you're leaving many of these victims with nowhere to go.

We know there's going to be litigation from the bankruptcy trusts. We know there's going to be litigation from the insurers over their formula of contribution. And so the idea that this will all get up and going very quickly -- while we would all like that to happen, there is no certainty that that is the case.


PROFESSOR ERIC GREEN, BOSTON UNIVERSITY LAW SCHOOL:

I am a professional mediator as well as a law professor, and I've been mediating all kinds of commercial and personal injury disputes for 25 years, and I've been mediating every aspect of the asbestos litigation, every aspect of it, from single cases to class actions to insurance disputes to reinsurance disputes. I've served as a special master for courts.

I recognize the necessity for consensus and compromise in trying to achieve anything. And I also recognize as a mediator the desire of the mediator, of the consensus builders, to get something done. But one of the criteria for any good result is workability.

And I am very concerned that this bill as presently constructed will turn out not to be workable and we will be back here in a few years with a bigger problem, and we will be sorry that we didn't address the things that need to be addressed if this is going to be workable.

I know you want it to work out. I know your motives and intentions are the highest and honorable. But there is a significant risk in this bill that the funding will turn out to be illusory or highly contested in court, that the actual funding will not be in place on time.

Whether claims can be processed in 90 days, Senator Feinstein, or nine months is not the issue. I think the issue is when the claims will be processed and paid. And the funding has to be there to pay the claims once they're processed.

I predict that the litigation that I've been struggling with at one level for all these years will simply be shifted to another level once this bill passes, because the funding is not specified and made clear, and the commitments aren't there.

I have friends in the industry. I have friends in the insurance industry. I have friends on the plaintiff's side. I'm in the middle. I'm a mediator. But I think this bill presents illusory protection for all of them because the ultimate responsibilities and amounts are not made clear and transparent ahead of time.

I think the litigation that could ensue could result in delays in funding of the trust, delays in payment, incurring of huge debts, and ultimately a downward spiral for the trust that will then trigger the sunset provisions.

Unfortunately, I think the sunset provisions are subjective, not automatically triggered as in Senator Biden's amendment which was in a previous version of this bill, and will create a limbo which will then only ultimately be resolved by throwing the victims back into a tort system and a trust system that has been essentially annihilated for the asbestos victims.

So I think these problems must be addressed and fixed. They're tough problems. The insurance industry deserves to know what they're going to pay and who's going to pay it. The manufacturers, all of them, the 1,500 small players as well as the 20 or 40 big players, deserve to know exactly how much they're going to be assessed.

They deserve to know whether they're going to have to pay supplemental assessments if this trust falls short. The taxpayers of America deserve to know whether there is truly a government backstop here, whether the federal financing will be backstopped by the taxpayers of the United States.

All of these issues, I believe, are swept under the rug, and the risks ultimately are thrown onto the least able to protect themselves, the individual victims, the people who stood up behind me, to whom I would gladly yield my time at this podium.

Otherwise, my remarks, Senator Specter, with a great deal of respect for the work you've been doing on this, I would submit.


SENATOR ARLEN SPECTER:

It's a little hard for me to understand that when we have a figure of $140 billion, which wasn't my idea. That's a figure which was voluntarily suggested by the manufacturers and the insurers. The AFL-CIO wanted more.

And last fall Senator Daschle, who was leader of the Democrats, and Senator Frist, the majority leader, got together and agreed to that $140 billion figure, which met the amount which had been voluntarily agreed to.

*** POSTED ON MAY 9, 2005 ***