Proposals Aim to Limit Rising Asbestos Claims

** Please note the quotation from MARF Executive Director Chris Hahn at the end of this very good article. It is MARF's hope that in future stories MARF's message that we need to focus on ending the source of the misery by finding a cure will dominate the lead paragraphs.

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05/28/03
Stephen Hudak
Clevland Plain Dealer Reporter

It's D.V. Polly's fault.

Lawmakers and business leaders don't mention the retired steelworker by name, but their plans to stop runaway asbestos litigation take aim at the hundreds of thousands of people like him.

Polly, 75, a millwright at USX in Lorain for 34 years, is one of an estimated 200,000 people - 37,000 in Cuyahoga County - demanding money for lung injuries they blame on asbestos.

Company lawyers say he, like most who sue because of asbestos, can't prove it.

Backed by both Ohio senators last week, Utah Sen. Orrin Hatch proposed an industry-financed $108 billion trust fund for asbestos victims that would boot claims like Polly's out of the courthouse.

The idea of a trust fund is supported by traditional foes like business and labor, although the AFL-CIO opposes Hatch's draft law, saying it needs to be much richer and less restrictive.

Both sides say claims filed by people who fear they might someday get sick because they inhaled asbestos stand in the way of the sickest victims, some of whom die without a dollar.

Asbestos lawsuits also are blamed for pushing nearly 70 companies into bankruptcy, sinking stock prices, shrinking pension plans and threatening thousands of manufacturing jobs.

But the trust fund is just the latest strategy designed to slay an asbestos monster, which has inflicted so much economic and human pain that the American Bar Association has called for reform.

Oklahoma Sen. Don Nickles, the Senate budget chairman, introduced an asbestos reform bill in February after conducting a hearing about the effect of rising claims on the economy.

Under his plan, a person wanting to sue for an asbestos injury would first have to meet rigid medical criteria, a provision that would eliminate hundreds of thousands of existing claims.

The bill is fiercely opposed by trial lawyers and the nation's largest union.

"It's a pure corporate bailout," said Jon Hiatt, general counsel for the AFL-CIO.

This month in Columbus, Ohio Republicans proposed sweeping changes to the state's civil-justice system that would make it harder to file an asbestos lawsuit in Ohio courts.

"The asbestos problem is a job killer," said David Hansen, a lobbyist for the Ohio Manufacturing Association, which backs the bill. "Just the potential of litigation has a very chilling effect."

In January, the stock price for Medina-based RPM Inc. plunged 25 percent after it announced it had 1,490 claims, most stemming from sales of an auto-body patch containing asbestos.

RPM officials said the market "misinterpreted and overreacted" to its liability.

Lawyer Thomas Bevan, who represents about 5,000 clients in Northeast Ohio pressing claims against auto, rubber and steel manufacturers, said the bill would hurt asbestos victims and the state's economy.

"If you look over the last few years, probably somewhere in the neighborhood of $50 [million] to $75 million a year has been going to Ohio's asbestos victims. That's money being pumped into our economy," he said. "If they pass this, what they're doing is voting to take that money out of Ohio and stick it into the economies of other states. I don't see the sense of it."

Asbestos, a generic name for strong, durable, heat-resistant mineral fibers, was widely used to insulate, fireproof and strengthen thousands of home and industrial products until the early 1970s.

The eyelash-thin fibers are deadly.

Even in small doses, they can cause cancer and other lung ailments when inhaled, although the diseases usually take decades to develop, which could help explain the flood of claims.

About 700,000 claims have been filed, 200,000 in the last two years.

But there is another explanation for rising claims.

When he introduced his plan, Hatch described asbestos litigation as a "gravy train for abusive trial lawyers" who recruit clients with paid ads on TV and in newspapers, including The Plain Dealer.

Lawyer Steven Kazan, who represents asbestos cancer victims, has criticized colleagues who file claims on behalf of people whose lungs were scarred by asbestos but who are not sick.

At worst, about 8,000 cases of asbestos-related cancer are diagnosed each year.

The rest of the claims, by some estimates as many as 90 percent, are filed on behalf of people like Polly, people who were exposed to asbestos but who do not have cancer or a serious lung injury.

The non-disabling conditions satisfy legal criteria for injury but also fuel a debate.

Those demanding reform say the "not sick" - who may never get sick - are getting paid by companies and trusts that could run out of money before the "truly sick" are rightfully compensated.

Many trial lawyers say a scarred lung is injury enough to sue.

"Value judgments are clearly at the heart of this debate," said Stephen Carroll, an economist who studies asbestos litigation. "But the meaning of the word 'impaired' is also at issue."

Polly said he didn't even know he was injured by asbestos until 1999 when he took part in a free medical screening offered to him and a hundred other steelworkers at the union hall.

He got a chest X-ray, spoke to a doctor and then a lawyer called him, he said.

Polly's X-ray was dotted with extra shadows and lines the screening doctor interpreted as evidence of asbestosis, while a company expert said Polly's X-ray was "as good or better" than most.

"I ain't got no wind to do nothing no more," Polly said. "I can't do like I did."

Although Polly has never been treated for a breathing-related problem, his lawyer filed an asbestos lawsuit and a workers' compensation claim, arguing the retired steelworker had asbestosis, a debilitating scarring of the lungs caused by inhaling the tiny indestructible fibers.

A jury took less than an hour last week to deny his workers' comp claim.

The verdict might weaken Polly's asbestos lawsuit, one of 37,000 cases on a special asbestos docket in Cuyahoga County Common Pleas Court. His lawsuit names 168 defendants and 100 "John Doe" corporations who may have supplied the mill with asbestos products.

Polly said he didn't even realize an asbestos lawsuit had been filed on his behalf.

Companies are buckling under the weight of claims like his, hurting workers, retirees and communities that depend on them, said Michael Baroody of the National Association of Manufacturers.

"What we've seen so far is ugly but we ain't seen nothing if we don't fix it," he said.

The most culpable companies, those that mined and milled asbestos - and hid its dangers - declared bankruptcy long ago because of lawsuits from workers and others exposed to their products. Plaintiff lawyers have found thousands of new defendants, 8,400 at last count.

"Companies that may have used asbestos products in the normal course of business for a gasket, pump, brakes, what-have-you now are getting dragged into litigation," said Joel Johnson of the Asbestos Study Group, a coalition of Fortune 500 firms with asbestos liability.

The group includes the Big Three automakers.

The RAND Institute for Civil Justice, which has studied asbestos lawsuits for two decades, said future costs to fight and settle claims could cost businesses and insurers more than $250 billion.

RAND also estimates 65 cents of every asbestos dollar goes to lawyers on both sides.

"If you were able to wring those costs out of the system, you could leave a lot of money to pay sick people, pay them promptly and pay them fairly," Johnson said. A trust would do that.

The trust proposed by Hatch would be the second-largest legal settlement ever, topped only by the tobacco companies' agreement to pay $246 billion to states for smokers' health care.

Under the plan, asbestos victims couldn't opt out and sue.

All new and existing claims would be settled by the trust, which would be financed entirely by businesses and their insurers, who would pay damages for injuries according to a fixed scale.