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Published: July, 2005; Vol 2, Num 2

The Devil is in the Details:

Asbestos Compensation Bill Struggles for Support

The battle for a $140 billion asbestos victims' compensation trust fund is now deep in the trenches of Capital Hill lobbying and politics.

At its hearing on April 26, Senate bill S-852 attracted opposition from every side. Yet, its co-sponsors, Senator Judiciary Committee Co-Chairmen Arlen Specter (R—PA) and Patrick Leahy (D—VT), insisted that only a compromise among the parties can resolve this national crisis.

It is a crisis because hundreds of thousands of American workers and their family members have contracted deadly asbestosis and mesothelioma from working with asbestos after the manufacturers and their insurers were aware of the risk but did nothing to prevent exposure.

On the basis of that proven fact, over the last 30 years and for the next 30 to come, victims have and will file righteous and mostly successful claims against the manufacturers and their insurers. However, because every defendant has a right to a day in court, this avalanche of claims has brought the judicial system to a standstill. Thus, today, most asbestos manufacturers are in bankruptcy, insurers do not know the extent of their liability, claims remain unprocessed and victims are dying without compensation.

For the past three sessions, the U.S. Senate has attempted to find a solution through a national compensation trust fund. The idea is that the manufacturers and insurers would pay into the fund, and, in return for fixed and assured compensation, victims would relinquish their right to sue in court.

Though all parties – the manufacturers, the insurers, the victims, the AFL-CIO and the trial lawyers – find some aspects of the fund appealing, none find the proposed and evolving details of its operation acceptable. The manufacturers are the most behind the bill, but the insurers, after initial interest, have been backing away. The trial lawyers have been most consistently against the bill, in part because it will diminish their compensation but, also, because it will reduce the potential payouts to many victims. The victims like the idea of the trust, but not the idea of giving up their right to sue, if the trust proves unworthy for any reason (including setting claim limits too low).

In this case, the AFL-CIO may be the least self-interested party of all. Though tens of thousands of its members were victimized by asbestos manufacturers, the labor federation is willing to accept the compulsory nature of the trust, provided that the fund will really be fair and solvent. Thus, it is withholding endorsement while carefully scrutinizing the emerging details of the plan and making proposals to ensure justice for all victims.

One point of contention is a proposal by the AFL-CIO to allow CAT scan tests to determine if certain victims show evidence of asbestos-related disease. Known as “Category 7’s” (from an earlier draft of the legislation), these are victims with lung cancer who had extended exposure to asbestos at work, yet show no visible lung scarring on x-rays. It is likely that many Laborers are in this category. Because scarring is the surest evidence of asbestos-related disease, the manufacturers and insurers suggest that the lack of scarring indicates that the cause of cancer in these victims may have been smoking or hazardous exposures other than asbestos. AFL-CIO sources believe CAT scans would reveal the scarring, but the bill’s opponents are blocking efforts to allow CAT scan documentation.

Thus, Dr. Jim Melius – NYLHSTF Executive Director and LHSFNA Research Director, who serves as LIUNA's point person with the AFL-CIO on asbestos compensation issues – says, "The failure of the manufacturers and insurers to allow CAT scan documentation is clear proof that they seek only to limit their loss, not to ensure fair compensation for all victims. As it stands, the current bill could deny thousands of Laborers just compensation for their asbestos-related illness. We need to be very careful about supporting a compromise that does not provide adequate and fair compensation for our members with asbestos-related diseases."

Apparently, many conservative Republicans are simply going to oppose any federal effort to resolve the problem. As an alternative, some are now promoting the notion of returning all cases to state courts with the understanding that states will impose “medical criteria” to determine which and to what extent victims will be compensated. It is unclear if that plan could resolve the present judicial impasse, but it certainly would define justice in 50 different ways, few of which are likely to fairly compensate all victims.

However, because many Republicans will not support any kind of national trust, Specter knows he needs Democratic votes to pass the bill. He also knows that many Democrats will oppose the bill if it is not endorsed by Labor. Thus, he remains open to proposals from the AFL-CIO, but he must be careful not to alienate too many Republicans. At this point, no one knows if or when an acceptable compromise may be found and brought to the Congress for a vote.

[Steve Clark]