What's New and Old About Asbestos Litigation?

By Professor Georgene Vairo

On October 1-2, the ABA TIPS Asbestos Litigation Task Force held its second round of hearings at Loyola Law School, Los Angeles. The Task Force was created to study the current state of asbestos litigation and consider ways in which fairness for both claimants and defendants can be achieved. The L.A. hearing, as well as an earlier hearing in Washington, D.C., revealed deep divisions among plaintiffs' attorneys and defendant attorneys on what needs to be done to deal with current aspects of what the U.S. Supreme Court once described as an "elephantine mass." Ortiz v. Fibreboard Corp., 527 U.S. 815, 821 (1999).

A 1991 Report of The Judicial Conference Ad Hoc Committee on Asbestos Litigation 2-3 (Mar. 1991) sets forth the challenge: "[This] is a tale of danger known in the 1930s, exposure inflicted upon millions of Americans in the 1940s and 1950s, injuries that began to take their toll in the 1960s, and a flood of lawsuits beginning in the 1970s. On the basis of past and current filing data, and because of a latency period that may last as long as 40 years for some asbestos related diseases, a continuing stream of claims can be expected. The final toll of asbestos related injuries is unknown. Predictions have been made of 200,000 asbestos disease deaths before the year 2000 and as many as 265,000 by the year 2015."

We are only two years away from that date, and the asbestos litigation has morphed significantly and shows no sign of abating any time soon. Back in 1991, the Judicial Conference report identified numerous problems: growing dockets in state and federal courts; delays in getting to trial; long trials with complex issues being litigated over and over; transaction costs that dwarfed any recovery. Additionally, "the exhaustion of assets threatens and distorts the process; and future claimants may lose altogether." One piece of "good news" is that the federal MDL that was established in the same year is near completion of the resolution of most of the cases filed in the federal courts.

But, most of the rest of the asbestos litigation story is not good news. Since 1991, much has happened but problems remain. First, attempts to resolve the litigation through class actions failed. Amchem Prods. v. Windsor, 521 U.S. 591 (1997); Ortiz v. Fibreboard Corp., 527 U.S. 815, 821 (1999). Second, beginning with Johns-Manville in the late 1980's, asbestos defendants - mainly those that manufactured asbestos products - sought bankruptcy protection. Since then, perhaps as a result of the Supreme Court's decisions striking down asbestos settlement class actions, dozens and dozens more of these asbestos defendants have reorganized under § 524(g) of Chapter 11 of the bankruptcy code, which established Trusts to compensate injured parties. However, the Trusts are paying on average only 14-17% of settlement values.

At the same time, as serious latent injuries such as mesothelioma, asbestosis, and others cancers continue to appear, injured parties are filing new cases against solvent defendants who manufacture products containing asbestos. For a time, plaintiffs who claimed to have been exposed to asbestos who had not yet manifested an injury filed thousands of claims. Eventually, the federal MDL as well as state courts and the Trust dealt with this mass of cases by establishing pleural registries, raising the bar to the filing of such claims or by changing statutes of limitations that did not require exposure-only plaintiffs to file prophylactic claims.

The problem today is that claimants, who still number in the thousands, can, do or may file claims in the Trusts and in court. This system of plaintiffs filing claims in state courts, as well as before the Trusts, raises complicated issues. The problem is more acute in cases involving a dying plaintiff. To what extent will a dying plaintiff's case lead to precedence and a short time for discovery? To what extent is a defendant in a state court entitled to obtain information from the plaintiff about whether Trust claims were filed? What other information may be obtained about communications between the plaintiff's lawyer and the Trusts? Are existing state discovery rules or Case Management Orders (CMO's) sufficient to provide defendants with the information they need in a timely fashion, especially in cases involving a dying plaintiff who is given preference in the trial calendar? Should the FACT bill, currently pending before Congress, which mandates greater transparency on the part of plaintiffs by requiring asbestos trusts to provide detailed information about claims filed on a quarterly basis and allows anyone to obtain information about a particular claimant, be enacted? Should states enact legislation penalizing plaintiffs who refuse to turn over information about their communications with the Trusts? To what extent are complaints by defense interests that greater transparency about asbestos trust filings is needed empirically based? Are plaintiffs' attorneys gaming the Trust system by hiding the ball about their dealing with the Trusts, or are defendants overly suspicious of the plaintiffs' bar? What about plaintiff's complaints about defendants' transparency? Although we have yet to determine how to answer these questions and what solutions may exist to remedy them, our hearings showed us that the complaints flow both ways.

The ultimate question before the Task Force is therefore to assess how injured persons can be properly compensated while assuring that defendants are not assessed damages that are not warranted. The fractured nature of the testimony in both hearings, and differences in state substantive and procedural rules, suggests that the Task Force's charge is a difficult one to fulfill. At the same time, we were able to see certain trends and avenues of consensus. The judges and academics who testified laid out the empirical landscape and ground view look at how the litigation plays out. As the Reporter to the Task Force, I will work with our Chair, Robert Peck, the President of the Center for Constitutional Litigation, as well as the other Task Force members, to sift through the testimony, literature, court cases and orders to determine where common ground exists. Those interested in our work may find our Task Force website of interest.

We would welcome the submissions of anyone interested in helping us develop our Report and Recommendations.