The LABI Report: Asbestos litigation needs reform

Published 12:00 am Monday, June 10, 2002


Asbestos-related bankruptcies are increasing, destroying jobs and pension plans across the United States, even though the original manufacturers of asbestos are already bankrupt.

People who are not sick and may have only worked in a facility where asbestos was present are filing a second wave of asbestos claims. In many of these instances, there is no evidence that the worker was ever exposed to asbestos, only that asbestos was present in the workplace.

The ease with which an asbestos claim may be made has resulted in an enormous number of asbestos lawsuits being filed. More than 50 companies have been forced into bankruptcy.

At least 1,000 and perhaps as many as 2,400 companies face asbestos litigation, including many small businesses with 20 or fewer employees.

A number of well-known companies currently facing asbestos litigation here in Louisiana never manufactured asbestos or products containing asbestos.

On June 9, 2001, the Times-Picayune reported that one Louisiana construction and fabrication company, employing more than 3,500 workers statewide, faces $1.3 billion in costs related to asbestos litigation following the February 2002 bankruptcy of one of its subsidiaries.

Another company in Louisiana facing asbestos claims employs more than 3,000 workers at its Louisiana facilities. If the system is not reformed, many jobs could be lost if these Louisiana companies are forced to close plants and cut payrolls.

A major concern for employers, organized labor and many elected officials is that the proliferation of asbestos litigation (especially class action lawsuits) will force more companies into bankruptcy and wreak havoc in the workplace.

Good-paying jobs are being lost, employee 401(k) plans are being devalued, retiree health insurance canceled and other employer-sponsored benefits are in jeopardy, as well. Unfortunately, these major class action lawsuits are paying claimants who are not sick or have no symptoms of asbestosis.

That often leaves workers who are truly sick or have been actually exposed with only a bankrupt company that has few resources to compensate them for their injuries.

In a January 27, 2002 article, the Los Angeles Times estimated that the number of people expected to file injury claims could eventually reach 2.5 million, and “the economic toll of asbestos could run as high as $200 billion, higher than estimates for all Superfund sites combined, Hurricane Andrew or the Sept. 11 terrorist attacks.”

The situation is so bad that the United States Supreme Court has asked Congress to provide a legislative solution to address the asbestos litigation crisis.

The Asbestos Alliance is seeking a fair asbestos solution.

This coalition consists of manufacturers, insurers, trade associations and yes, some trial lawyers.

According to the Wall Street Journal, Steve Kazan, a San Diego trial lawyer who has represented plaintiffs in asbestos litigation, spent much of last week working the halls of Congress with insurance lobbyists as part of the Asbestos Alliance.

The Alliance is asking Congress for a law that would give priority to claims made by the most seriously ill. Unless some sanity can be brought to this mess, the truly sick may never be compensated because healthy members of large class actions will have already bankrupted the system.

The legislation now pending in Congress may be the best hope many asbestos victims have to be treated fairly in the legal system.

Our civil justice system is designed to fairly compensate those who, through no fault of their own, have suffered loss or injury. It was not intended to be a lottery where the “lucky,” not the injured, occasionally hit a jackpot.

The legislation pending in Congress will help return our legal system to its original purpose when it comes to the tragedy of asbestosis.

DAN JUNEAU is the president of the Louisiana Association of Business and Industry.