01 May 2004 Time to Clean Up the Asbestos Mess, by Dana Joel Gattuso

As James Russell Lowell said, “Compromise makes a good umbrella but a poor roof.” An umbrella may be all we’re getting in the latest watered-down version of the asbestos litigation reform bill.

Asbestos was most widely used in this country during World War II by the ship-building industry. To a lesser extent, it was used in the 1950s and 1960s as well. Since the 1970s, after its link to lung cancer became more widely understood, asbestos usage and exposure fell dramatically.1 As might be expected, asbestos-related illnesses also declined. Medical data show that asbestos-inflicted cancer rates, which typically are not detected until ten to 40 years after exposure occurs,2 peaked in the early 1990s and have been falling ever since.3 Asbestosis – a nonmalignant lung disorder linked to asbestos – is considered a “disappearing disease,” according to various medical texts and journals.4

Asbestos litigation, however, is an epidemic. According to RAND Corporation, the number of claims has ballooned from 21,000 in 1982 to 730,000 by 2002.5 Yet, shockingly, most of the cases filed today are by individuals without any real impairment. As RAND reports, asbestos claims “in recent years were submitted by individuals who have not incurred an injury that affects their ability to perform activities of daily living.”6 Lester Brickman, a law professor at Yeshiva University and a leading asbestos litigation scholar, calls asbestos litigation “a massive client recruitment effort” and estimates that 90 percent of all asbestos claims are “supported by baseless medical evidence.”7

The litigation explosion is the work of a handful of personal injury attorneys who have built a $70 billion dynasty recruiting hundreds of thousands of former industrial workers,8 typically by soliciting free X-rays and promises of revenge to anyone whose employer at one time used an asbestos product. Through the development of what some legal experts call “special asbestos law,” standards of proof for causation and culpability have become so relaxed that plaintiffs can win millions of dollars just by showing that at one time asbestos was present and that injury could occur.9

Tragically, the victims of this litigation abuse are the small percent of legitimate claimants who have real grievances or even life-threatening conditions. But too many are squeezed out by the sheer number of meritless cases that have overwhelmed the courts and depleted available funds.

Thirteen years ago, U.S. Supreme Court Chief Justice William Rehnquist appointed a special judicial committee to look into what then was considered an emerging crisis. The report referred to asbestos litigation as “a disaster of major proportions” and urged Congress to fix it. At that time, trial attorneys had litigated 150,000 asbestos cases10 at a price tag of $7 billion, with future claims estimated at the time at $100 billion.11 Today, more than 730,000 cases have been filed, costing business a whopping $70 billion12 – with future claims pegged at $250 billion.13 And still no federal bill to stop the hemorrhaging.

Last spring, Senator Orin Hatch (R-UT) introduced reform legislation to create a $108 billion trust fund for resolving legitimate claims, financed by payments from asbestos manufacturers, insurers and defendant businesses. The bill established specific medical criteria to ensure plaintiffs compensated have real “bodily injury.”14 But organized labor and trial attorneys – backed by the powerful Association of Trial Lawyers of America – weighed in against the bill,15 claiming the trust fund was too small and pressuring Democrats to vote against it.

After a year of cave-ins in a failed attempt to gain support from labor and trial attorneys, the revised bill would create a fund of $114 billion – plus another $10 billion if the money dries up. Criteria ensuring victims have legitimate grievances is now so relaxed, one has to wonder if it would improve the current system at all. The new legislation also relaxes restrictions that in the previous bill ensured the medical diagnosis was accurate, extends the statute of limitations regulating when a claimant can file and replaces the fund’s administer from an independent special federal-appointed court to the U.S. Department of Labor.16

All told, Republicans have conceded to 53 demands for changes by opponents.17 Yet organized labor still opposes the bill and says they won’t support it till the trust fund is at least $153 billion.

Some legal scholars questioned last spring how effectively the legislation would end fallacious claims and grossly unethical behavior in the courtroom.18 Others argued it was the best one could hope for, considering the trial attorneys’ powerful grip on the lucrative status quo. Sadly, the asbestos mess will never be cleaned up until Congress puts the interests of real asbestos victims before the interests of the powerful trial attorneys who currently run the show – not only in the courtroom but also on the Senate floor.

Dana Joel Gattuso is a senior fellow at the National Center for Public Policy Research. 

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Footnotes:

1 “Asbestos Litigation: Malignancy in the Courts?” Civil Justice Forum, Number 40, Manhattan Institute for Policy Research, New York, New York, August 2002; Work-Related Lung Disease Surveillance Report, 2002, U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, Division of Respiratory Disease Studies, National Institute for Occupational Safety and Health, May 2003, pp. xxiii, 16-24 and “Asbestos,” American Cancer Society, Atlanta, Georgia, available at http://www.cancer.org/docroot/PED/content/PED_1_3X_Asbestos.asp?sitearea=PED as of May 11, 2004.

2 “Asbestos Litigation: Malignancy in the Courts?”

3 Barry I. Castleman, Asbestos: Medical and Legal Aspects 784 (4th ed.), 1996, as excerpted in Michelle J. White, “Why the Asbestos Genie Won’t Stay in the Bankruptcy Bottle,” University of Cincinnati Law Review, Vol. 70, 2002, p. 1336 and “SEER Incidence Age-Adjusted Rates, 9 Registries, 1973-2000,” National Cancer Institute, Bethesda, Maryland, available at http://www.seer.cancer.gov/faststats/html/inc_mesoth.html as of May 11, 2004.

4 W. Raymond Parkes, Occupational Lung Disorders 464-78 (3d ed.), 1994 and David M. Rosenber, MD, MPH, FCCP, “Asbestos-Related Disorders: A Realistic Perspective,” CHEST: The Cardiopulmonary and Critical Care Journal, 111:1424, 1997.

5 Stephen J. Carroll, et. al., “Asbestos Litigation Costs and Compensation,” Documented Briefing, RAND Institute for Civil Justice, RAND Corporation, Santa Monica, California, 2002, p. 75 and Susan Cornwell, “Asbestos Costs US Companies $70 Billion So Far,” Reuters, February 6, 2004.

6 Carroll, p. 21.

7 Lester Brickman, “On the Theory Class’s Theories of Asbestos Litigation: The Disconnect Between Scholarship and Reality,” Pepperdine Law Review, Vol. 31, No. 1, December 2003, p. 33.

8 According to RAND Corporation, businesses have paid out $70 billion on asbestos-related personal injury claims (Cornwell).

9 “Asbestos Litigation: Malignancy in the Courts?”

10 Andrew Blum, “Untangling Asbestos Litigation,” The National Law Journal, Vol. 13, No. 28, March 18, 1991.

11 Suzanne L. Oliver and Leslie Spencer, “Who Will the Monster Devour Next?” Forbes, February 18, 1991.

12 Cornwell.

13 Lester Brickman, “Asbestos Litigation,” Center for Legal Policy, Manhattan Institute for Policy Research, New York, New York, March 10, 2004, available at http://www.manhattan-institute.org/html/clp03-10-04.htm as of May 11,2004.

14 “Fairness in Asbestos Injury Resolution Act” (S.1125 IS), U.S. Senate, Washington, D.C., May 22, 2003.

15 The American Bar Association supports asbestos reform legislation.

16 Remarks by Senator Orin Hatch (R-UT) on the “Fairness in Asbestos Injury Resolution Act,” Congressional Record, March 3, 2004, p. S2173.

17 Ibid.

18 Michelle J. White, “Resolving the ‘Elephantine Mass,'” Regulation, Summer 2003, pp. 53-54 and “Asbestos Dreams,” The Wall Street Journal, October 17, 2003.