State Senate unanimously passes asbestos trust claims act

CHARLESTON – The state Senate on Friday unanimously passed Senate Bill 411, creating the Asbestos Bankruptcy Trust Claims Transparency Act and the Asbestos and Silica Claims Priorities Act.

The bill, which was sponsored by Kanawha County Republican Senator Tom Takubo, establishes legal standards and procedures for the handling of certain asbestos and silica claims. Additionally, the bill establishes medical criteria procedures, statute of limitations standards, and requires disclosure of existing and potential asbestos bankruptcy trust claims.

“As a pulmonary doctor, I’m pleased that the Senate voted today with full bipartisan support to protect funds for West Virginians who are affected by asbestos-related injuries,” Takubo said. “We must ensure funds are healthy five to 10 years from now to help pay for medical bills and family expenses, and this legislation will allow us to do that.”

Majority Leader Mitch Carmichael (R-Jackson), Senator Ryan Ferns (R-Ohio), Senator Ed Gaunch (R-Kanawha) and Senator Jeff Mullins (R-Raleigh) also were sponsors of the bill.

“This bill would promote honesty in litigation and help juries reach fully informed decisions as to the cause of a person’s asbestos-related disease,” Carmichael said. “Other states have laws similar to this one, including our neighboring state, Ohio.

"Ohio has given priority to asbestos cancer victims for more than a decade and adopted trust claim honesty three years ago. Asbestos litigation is still active in Ohio, and deserving people continue to be paid.”

The bill now goes to the House of Delegates.

Last week, a statewide group for trial lawyers called the bill unnecessary and said it only will hurt affected residents.

A legal reform group, however, applauds the measure, saying it would bring needed transparency to the process and create medical criteria for asbestos claimants.

West Virginia Association for Justice President Anthony Majestro says West Virginia’s current case management order for asbestos cases is working well.

The current CMO “has a system to prioritize cases so that cancer patients have their cases heard first,” he said. “The case management order has been used for all cases filed after September 6, 2001, and should serve as a national model for how these cases are processed.”

Majestro, a Chareston attorney, said SB 411 simply isn’t needed.

“For more than a decade, West Virginia’s asbestos cases have been handled very effectively by our case management order,” he said. “It was developed by lawyers for both the injured workers and the manufacturers. They worked together to establish a system that would handle these cases fairly, efficiently and protected the interests of all parties involved.

“More importantly, it ensures that very sick people are compensated for their exposure to a deadly product that was kept on the market for decades after its dangers were well known.

“West Virginia’s case management order is working, and it should be a model for any state that has asbestos claims.  If SB 411 is passed, dying West Virginians will not be compensated and billion-dollar manufacturers that kept a dangerous product on the market will not be held accountable and get to keep their profits.”

Majestro said defendants involved in the creation of the CMO have acknowledged that “the existing CMO was an exhaustive joint effort by the vast majority of plaintiffs and defendants to develop a comprehensive system to address the large number of asbestos claims in West Virginia.” He also said that since its implementation, additional changes have been made to improve disclosure requirements regarding bankruptcy payments to clients and that the CMO never has been appealed.

Majestro also noted that the proposed bill would eliminate possible claims for secondary exposures for spouses and children who were exposed to asbestos from a worker’s body and clothing even in cases of mesothelioma which is caused by inhaling asbestos fibers.

West Virginia Citizens Against Lawsuit Abuse says the reform is needed “to stop abuse of the asbestos trust system.”

“Future legitimate asbestos claimants would benefit greatly from legal reforms to bring transparency to the asbestos claims process and establish medical criteria for asbestos claimants,” WV CALA Executive Director Roman Stauffer said. “These reforms are needed to reduce fraud and help ensure the longevity of asbestos trusts.

“Abuse of the asbestos trust claims process is widespread, and this legislation will shed much-needed daylight on how trusts are being run and cut down on widespread fraud in trust claims and litigation. Greed and misrepresentation of facts are rampant in the system, and future legitimate victims of asbestos exposure are losing out to those factors in our present system.”

Stauffer said West Virginia and national personal injury attorneys have abused the asbestos trust filing process for personal gain, citing bogus claims filed by late radiologist Ray Harron and two Pittsburgh asbestos attorneys. They were found guilty of fraud and racketeering. He also mentioned recent events in North Carolina regarding Garlock Sealing Technologies.

U.S. Bankruptcy Judge George Hodges ruled in January 2014 that Garlock would put $125 million into a trust that would pay asbestos claimants. The figure was roughly $1 billion less than plaintiffs attorneys had argued for.

Hodges wrote in his ruling that Garlock's history of verdicts and settlements was an unreliable future indicator of the company's liability because that past had been tainted by plaintiffs attorneys who withheld their clients' evidence of exposure to other companies' products in order to maximize recovery against Garlock.

Garlock has filed four racketeering lawsuits against the firms Shein Law Center of Philadelphia, Belluck & Fox of New York City, Waters & Kraus of Dallas and Simon Greenstone Panatier Bartlett, also of Dallas.

Garlock has since settled with a representative who represents future claimants for more than $360 million.

“The Asbestos Bankruptcy Trust Claims Transparency Act would require personal injury lawyers to disclose, in litigation, when they have filed claims with asbestos trusts or plan to do so, which is currently not practiced,” Stauffer said. “Additionally, the legislation establishes medical criteria for asbestos claims, which will help eliminate fraudulent trust claims and preserve asbestos trust resources for those with legitimate claims.

“Some millionaire personal injury lawyers are not speaking the truth when they say this legislation will ‘eliminate asbestos monetary recovery.’ This reform legislation will ensure that our lawsuit system is used for justice, not greed. It will ensure that asbestos trusts remain accessible to those with legitimate asbestos claims and will be a giant step toward ending asbestos fraud with trusts and in the courtroom.”

On its website, the Asbestos Disease Awareness Organization said it also is opposed to SB 411.

“West Virginians suffer some of the worst asbestos exposure with the fourth-highest age-adjusted mesothelioma death rate,” an ADAO post states. “Mesothelioma, a name few know until they are diagnosed, is a fatal lung cancer directly caused by asbestos exposure.”

ADAO says that, if SB 411 passes, “asbestos victims will likely be unable to receive the compensation they rightly deserve from the asbestos companies who unlawfully exposed workers, community members, and families to the carcinogen.”

“If passed, the bill will take away victims legal right to privacy and rightful compensation needed to pay the unending tide of mesothelioma medical bills and basic costs of day-to-day living,” the group states. “In addition, the bill would undercut our right as American citizens to hold asbestos companies responsible for their unlawful and morally reprehensible actions.”