Who Needs an Asbestos-Containing Product for an Asbestos Claim?

Plaintiff's trial lawyers love to paint all the defendants in asbestos litigation as "asbestos manufacturers" even though most of the defendants nowadays used only very minute amounts of asbestos in small component parts. Most of the real "asbestos manufacturers" are simply bankrupt and trial lawyers need someone to pay their sick clients and (more realistically) for their mansions, luxury cars and mistresses.

So, in California at least, they may now be able to sue companies that never used asbestos in their products. A court held last week that if someone uses your product with another product that has a toxic substance, you may be on the hook for failing to include a warning (i.e. do not use with a toxic material). In asbestos litigation, this could dramatically expand the number of folks that can get sued. Pity the poor plastic bucket maker that made the bucket that was used to mix insulation mud. Or, the sandpaper manufacturer whose sandpaper was used to smooth out joint compound.

Hopefully, other courts will limit this holding or, if we're really lucky, the California Supreme Court may reverse it and restore some sanity to product liability law.

TELLEZ-CORDOVA v. CAMPBELL-HAUSFELD No B172127, California Court of Appeals, 2d App. Dist. May 18, 2005

Senator Unclear on the Concept

Where oh where is John Edwards when you need him? While I did not vote for the VP candidate, he made a much better advocate for the trial lawyers on asbestos reform than his replacement, Illinois senator Dick Durbin.

Even with the judge fight distracting from the markup of Specter's bill, Senator Durbin still manages to make a goof out of himself. Seems he's not too pleased that the fund caps attorneys' fees at 5%. He looked at the RAND study that showed more than half the money spent on asbestos litigation went to attorneys and figured that 5% was too low.

Now, as a lawyer, I'm not against lawyers getting paid but the whole point of the trust fund is to take the lawyers out of the equation so that insurers and manufacturers don't pay out as much as they do now but the people truly injured get paid more and sooner than they do now. Of course, it may be impossible to freeze out the lawyers but that is another issue. Though, if you cap fees at 5%, it would be a pretty power disincentive to get involved.

Bottom line, lawyers stand at the end of the sympathy line in asbestos litigation reform in DC and rightly so regardless of the fact that so many of us are stand up folks. We aren't dying. We aren't going bankrupt. We can find another line of work even if we don't really want to.

The Asbestos Numbers According to RAND

RAND released another phonebook of a report on asbestos litigation last week. If you can slog through the 200+ pages in the pre-publication version, here you go. Some highlights from RAND:

• only 42% of all the litigation costs go to plaintiffs
• about 730,000 cases have been filed up to 2002
• about 90% of new cases involve "non-cancerous injuries" which implies that a large percentage of cases are not valid.

Arlen Specter, Fire Your Editorial Writers

It's not a big surprise that Arlen Specter would push for his bill in the New York Times editorial pages but this effort is kind of lame. First, why spend all your effort attacking Dick Armey when the main opposition is from the trial lawyers and the labor unions? Could it be that Mr. Armey has influence with the waivering conservative senators?

Second, if many of the major contributors to the fund are against the fund to start with, forcing them to pay into the fund would be a tax or, even worse, an unconstitutional taking. Specter implies that all the insurers and manufacturers have agreed to pay into the fund which is disproven by his own point that Mr. Armey is getting funding from an insurer opposed to the fund.

Finally, he makes very little hay on the (in)ability of the current tort system to handles asbestos claims. Where is the harping that only 10% of cases are legitimate or that less than half the money currently spent on litigation goes to the plaintiffs themselves?

There are valid reasons for asbestos litigation reform. There are good arguments for Specter's bill but, unfortunately, they're not laid out in Specter's editorial.

Paying for Asbestos

Who to Believe on the Trust Fund Bill?

This week the Senate Judiciary Committee started plowing through the numerous amendments to the FAIR Act. The Boston Globe reports that the bill has stalled. On the other hand, CBS reports that the pro-fund forces have the momentum.

From reading the stories, I would guess CBS has is closer to the truth right now. They point to the votes today and the statement of the Republican most likely to oppose the bill, Senator Coburn, that he does not oppose the concept of the trust fund, just some of the current details of it.

On the other hand, the Globe quotes anonymous sources and focuses solely on the Democratic side, which ignores the fact that the bill can make it out of committee with none of the Democrats - other than two already supporting the bill. True, the Democrats could (and probably will) filibuster if the bill makes it out of committee but if two Democrats already support the bill, how many more outside of the committee will go along with them? After losing four seats last year, the margin of error is much smaller than it was last year.

For the labor unions and the plaintiff's bar, the great irony may lie in the possibility that the House will not follow the lead of the Senate but may simply adopt a medical criteria bill at the urging of "ultra conservative" former Congressman Dick Armey. Then, as with much legislation in the past five years, any hope of reform will die in conference.

Be Nice to the Wives

Wives (spouses to be P.C.) have won favorable decisions recently in asbestos litigation. In New Jersey, an appellate court has held that a wife's paraoccupational exposure to asbestos fibers on her husband's clothing is reasonably foreseeable in a negligence (specifically premises liability) cause of action. Additionally, a Maryland court has held that the statutory damage cap does not apply to loss of consortium claims where the exposed spouse's last exposure to asbestos occurred before the effective date of the statute even if they got married after that date.

It's probably easier to look a blue collar tradesman in the eye and wonder if he knew of he health hazards of asbestos or quibble if he smoked to boot. However, doing the same to a spouse who washed clothes or hugged and kissed the tradesman is a whole other story.

Libby Vermiculite vs. California Serpentine

It would be ironic if little things like compensating residents of Libby, Montana or residents of the El Dorado Hills in California finally kills the asbestos trust fund. Though why the folks in Libby can't get in line with everybody else is beyond me. I mean, it should be fairly easy to establish exposure for them (anything with a Libby mailing address would do) and they have someone to point the finger at, W.R. Grace.

On the other hand, folks in the El Dorado Hills really can't sue God for putting asbestos in the ground and going after building contractors is a bit harder than suing manufacturers. And, if I was an insurer or manufacturer putting money into the fund, I would be a bit miffed that some of that money would go to folks who had no claim against anybody let alone if those folks end up busting the fund.

Both groups have problems but including one and excluding the other may come down to old fashioned politics. Whose vote do you need and whose vote isn't going anywhere? Or, they can just include both and risk busting the fund...not that it was a problem in the first place.

The Other Asbestos Bill

While Senator Specter's FAIR Act was getting plenty of ink last week, Congressman Chris Cannon quietly introduced the Asbestos Compensation Fairness Act of 2005. Whereas Specter's bill is a trust fund, Cannon's bill is a medical criteria bill. Most folks figured the real action is in the Senate since a legilative filibuster could stop anything the House would try. However, what the conventional wisdom has not taken into account is how the plaintiff's bar would react to a medical criteria bill.

After all, plaintiff's lawyers initially proposed medical criteria three years ago. Whether the Cannon bill addressed their concerns or goes too far or not far enough may determine whether the reform forces can split the trial lawyers and the labor unions.

Medical criteria at least targets the main problem with asbestos litigation. Whether a medical system can efficiently weed out the bad cases while allowing the meritorious cases is another issue altogether, let alone whether they can pass a bill if the trust fund bill sucks all the oxygen out of any reform.

I suspect the Cannon medical criteria bill will ride along quietly in the House while Specter's bill gets much more attention. Then, after Specter's bill dies a painful death, Cannon's bill may take all the reform watchers by surprise.