UPDATE: Tomblin signs asbestos trust claims bill

By Chris Dickerson | Mar 19, 2015

CHARLESTON – Gov. Earl Ray Tomblin has signed Senate Bill 411, also known as the Asbestos Bankruptcy Trust Claims Transparency Act and the Asbestos and Silica Claims Priorities Act.

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

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.

Takubo, who is a pulmonologist, had strong feelings about the bill.

"I am so very pleased that the Legislature and governor have followed my lead to rightly protect and preserve the trusts for those suffering from asbestos disease so that the patients and their families will be finally protected for generations to come," he said.

A nationally known asbestos defense attorney heralded the move.

"The West Virginia asbestos bankruptcy trust transparency and medical criteria law will improve West Virginia's legal climate," said Mark Behrens, an attorney with the Washington, D.C., office of Shook, Hardy & Bacon. "Trust transparency will promote honesty in trust claiming activity and in civil asbestos litigation.

"The law's medical criteria for nonmalignant asbestos and silica claims will give priority to deserving claimants by requiring plaintiffs to be sick to sue. The bill had broad bipartisan support, and the Governor deserves credit for signing it into law."

A statewide legal reform group also praised the signing of the measure.

"We applaud Governor Tomblin for signing into law Senate Bill 411, the Asbestos Bankruptcy Trust Claims Transparency Act," said Roman Stauffer, executive director of West Virginia Citizens Against Lawsuit Abuse. "This legislation passed the State Senate and House of Delegates with strong bi-partisan support because legislators realized the need to bring transparency into the asbestos claims process.

"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.

"This legislation was very much needed. We applaud Governor Tomblin, Senate President Bill Cole, and Speaker Tim Armstead for making it a priority.

When the bill was being debated by the Legislature last month, a statewide group for trial lawyers called the bill unnecessary and said it only will hurt affected residents.

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

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

“For more than a decade, West Virginia’s asbestos cases have been handled very effectively by our case management order,” Majestro, a Charleston attorney, 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.

"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 newly signed law will 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.

“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.”

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