Re: The Tort of Asbestos Litigation

Sunday, August 14, 2005

Dear PV,

I must take issue with the promotion of HR 1957 over the FAIR Act (S 852), a bill that has been struggling through the trial lawyer thicket for years and was co-sponsored in the last Congress by both Zell Miller and Saxby Chamblis. When local activists sent out an e-mail a couple of months ago promoting 1957 over 852 and asking recipients to write their congressmen, offering a form letter and "talking points" for the purpose, I did write both Rep. Price and Rep Linder, but not as the e-mail encouraged. Below is the bulk of what I wrote to them almost two months ago, absent the niceties of the opening and closing:

"Asbestos litigation reform IS a very important issue and one in which I have great personal interest. You see, my cousin, Tom Martin, was recently a guest of the White House at the State of the Union address (seated in the First Lady's box) because the President felt this issue important enough for specific mention in the SOTU.

"Tom used to run our 120+ year old family business, Rutland Fire Clay Company, which is now controlled by an asbestos plaintiff's trust after firms like Baron & Budd forced it into bankruptcy by flooding it with claims from people who are not now and may never be sick. Last count I heard was over 18,000 lawsuits, including thousands from states where the company never sold a product, against this small, family business that did nothing more than use a legal ingredient in a few of its home repair products several decades ago.

"This company - or more precisely its employees and shareholders have been victimized by the asbestos lawsuit industry and NONE of the legislation currently before Congress does a thing to address this injustice simply because it, and others like it, had the dubious distinction of being among the early targets. Rutland Fire Clay and other early small business victims had neither the deep pockets to adequately battle this legalized extortion themselves nor the massive insurance coverage to motivate their insurers to fight for them - or at least drag it out while waiting for reform.

"I've taken a look at HR 1957 and while I agree that any legislation to address this issue should protect workers comp systems, ensure that those who are truly sick are treated fairly and ahead of those who are not, limit legal costs, etc., this bill seems to me to fall far short of the kind of comprehensive, final resolution that is needed. For example, unless I missed something in my admittedly quick review of this short bill, it does not provide defendant companies with the kind of certainty as to future obligations that S 852 provides. Furthermore, it does not appear to include any exemption from future liability for qualified small businesses as is included in 852.

"I hope someone will correct me if my interpretation of 1957 is incorrect on these issues, but based on my current understanding, I can not support it or encourage others to do so. I think it would be better for the backers of 1957 to address their concerns about 852 directly by offering appropriate amendments to it rather than by offering an inadequate substitute.

"And I would further encourage all in Congress concerned with this issue to do something for the small businesses that just happened to be the early victims of the asbestos bar. This can be accomplished simply by amending 852 to instruct the bankruptcy courts to reopen cases of qualified small businesses that are now owned by "524 trusts" and retry them in light of the reform (or if appropriate in the eyes of the court, unwind them completely), rather than just absorbing them into the larger trust. The bill already does this for recent bankruptcies, completely abrogating confirmed but unconsummated reorganizations (and apparently in some cases consummated ones if they were still pending in the last 12 months). In light of the Senate's apparent interest in protecting small businesses (based on the current version of 852 which exempts them from future liability) and given its willingness to look back and unwind recent asbestos-driven bankruptcies (not just for small businesses), it seems reasonable to ask Congress to extend these reform measures to early victims like the Rutland Fire Clay Company."


As you can see, I think there are many issues of ending the asbestos mess that 1957 completely fails to address. 852 has a few shortcomings as well, but they are relatively easy to fix. Let's not blindly promote an inadequate solution just because it has local sponsorship. Zell was right to co-sponsor the FAIR Act in the last congress and and Johnny Isackson is right to co-sponsor it this time around. As a Republican, I am very disappointed to see a segment of my party trying to stop the bill.

Best Regards,

Bob Buschman
Sandy Springs