UPDATE: Attorneys: Asbestos trust claims bill good for W.Va.

By Chris Dickerson | Mar 31, 2015

CHARLESTON – The asbestos trust claims act recently signed into law is good for business in West Virginia, according to several attorneys who played key roles in crafting the legislation.

“The asbestos legislation and other legal reforms enacted this year by the Legislature and signed by the governor will help attract jobs into West Virginia and make West Virginia businesses more competitive,” said Mark Behrens, a national asbestos trust expert and attorney with Shook Hardy & Bacon in Washington. “The asbestos trust transparency bill will help ensure that West Virginia businesses and other businesses that are sued in asbestos lawsuits in West Virginia are held liable for their fair share of the plaintiffs harm and will help those companies avoid having to pay for the fault of others.”

A plaintiff's attorney, however, credited legislative leadership for making sure needed compromises were included.

Senate Bill 411, also known as Asbestos Bankruptcy Trust Claims Transparency Act and the Asbestos and Silica Claims Priorities Act, was signed March 18 by Gov. Earl Ray Tomblin. It becomes law June 9.

It will coordinate asbestos claims that are filed both in litigation and trusts established in asbestos-related bankruptcy proceedings, and it requires disclosure of existing and potential asbestos bankruptcy trust claims and also establishes medical criteria procedures and statute of limitations standards.

Kelley Goes, an attorney with Jackson Kelly in Charleston, called the asbestos trust claims system “a large and cumbersome process that, in some cases, is corrupt.”

“This brings fairness to the system,” said Goes, who also helped craft the bill. “It brings efficiency. It is designed to give everyone a fair shot of compensation if you are ill and worked where asbestos was used. It is designed to make sure the process works smoothly and fairly.”

According to the legislation, more than 100 businesses have went bankrupt because of asbestos-related liability. That has resulted in solvent companies – more than 8,500 – being named as asbestos defendants. The bankrupt businesses have formed trusts to pay damage claims, and it has created a multibillion-dollar compensation system outside of the court system.

How the system typically works is that asbestos claimants often seek compensation for asbestos-related conditions from solvent defendants in civil lawsuits. But they also can seek money from these trusts formed from bankruptcies.

There is “limited coordination and transparency between these two paths to recovery,” the legislation states, resulting in “the suppression of evidence in asbestos actions and potential fraud.”

The goal of the bill is to provide transparency for claims made and prevent fraud and evidence suppression. Among other provisions, the legislation requires plaintiffs who file asbestos actions in the state to file sworn statements identifying all asbestos trust claims they have filed.

Danielle Swann, another Jackson Kelly attorney involved in the crafting of the bill, said her father worked at Weirton Steel for more than 30 years. She talked to him about the bill and how it would affect people he had worked with there.

“What happened is that some of these claims that were fraudulent or frivolous bankrupted the more culpable parties,” Swann said. “Now, there isn’t money for those who truly are sick to recover. This will help ensure that money is available for people who actually were exposed.”

Behrens said that at least 120 days before trial a plaintiff will have to identify all asbestos trust claims that have been made or that potentially could be filed by the plaintiff.  If the plaintiff identifies a claim that could be filed, the court may stay the action until that claim is filed.

Then, at least 90 days before trial, if the defense side believes there are additional trust claims the plaintiff can make, the defendant ask the court to compel the plaintiff to file those asbestos trust claims.  At least 30 days before trial, the court will enter into the record a list of all asbestos trust claims the plaintiff has made.

“The jury will be allowed to hear about all of the plaintiff’s asbestos exposures and reach a more fully informed decision as to the cause of the person’s injuries,” Behrens said. “The legislation also will promote honesty in litigation by providing a mechanism to catch unscrupulous trial lawyers who may otherwise try to tell one story about the plaintiff’s exposures to asbestos to a jury and a different story to asbestos trusts.

“Now, there is a Case Management Order that requires plaintiff to identify any claims made or claims anticipated to be made. But we heard that not all West Virginia plaintiff lawyers were following that Case Management Order. The legislation provides a mechanism to fill that gap.”

He said that 30 days before trial, the court will enter a record identifying all claims made against the asbestos trusts.

“Now, that plaintiffs know this information can be read to the jury,” Behrens said. “The hope is that it will encourage plaintiffs to be honest in their claim process because this information will be made available to the jury.

“And, the jury likely wouldn’t look well upon someone who is saying something that contradicts what they’ve said on trust claims. The goal is to promote honest claiming. It saves everyone time and money.”

Anthony Majestro, president of the West Virginia Association for Justice, said Senate Judiciary Chairman Charles Trump and Senate Majority Leader Mitch Carmichael made sure the bill had a clear focus.

“The original version of SB 411 was authored by the U. S. Chamber of Commerce and the American Tort Reform Association, and it was pushed by Behrens, Goes and Swan, their lobbyists," Majestro said. "The original bill would have provided immunity for manufacturers and wrongdoers while delaying or eliminating the majority of serious asbestos and silica cases.

"(Trump and Carmichael) recognized the significant problems with the bill and encouraged key stakeholders to meet and put together a compromise that allows seriously ill West Virginians to have their day in court. We thank them for that opportunity."

The West Virginia Record is owned by the U.S. Chamber's Institute for Legal Reform.

"While it’s all well and good for Behrens, Goes and Swann to trumpet the fact that the bill that passed is similar to bills in other states and still allows asbestos victims to recover, the widespread opposition to the original bill was based on the fact that it assuredly would have barred a large number of claims in their entirety and caused unconscionable delays for all mesothelioma and asbestos cancer victims,” Majestro said. "The compromise removed the immunities in the original bill as well as extensive new burdens for mesothelioma and asbestos cancer patients, including new requirements for medical experts.  It also restored claims for spouses and children who were exposed from workers’ clothing and acquired asbestosis.”

Majestro said many provisions in the original bill weren't needed because of the existing Case Management Order.

“It was also the result of an extensive compromise with lawyers for both injured workers and manufacturers," he said. "The CMO has handled these cases effectively for more than a decade, ensuring that these cases are handled fairly and efficiently for all parties.

"Its enforcement by Judge Ronald Wilson and Judge Arthur Recht made much of SB 411 superfluous and unnecessary — and Senator Trump recognized that.  The only major change the compromise bill made to the existing CMO was full disclosure when claims are filed with the bankruptcy trusts.”

Swann said the West Virginia legislation is similar to that in Ohio.

“This has been in place in Ohio for some time, and the asbestos litigation industry still is alive and well there,” she said.

Behrens said Ohio, Wisconsin and Oklahoma have similar laws in the books. And Arizona is headed in that direction. He said he spent a few weeks in Charleston during the session working on the bill, and he praised all of those who worked on it, including Majestro, Senate Judiciary Committee Chairman Charles Trump (R-Morgan), Senate Majority Leader Mitch Carmichael (R-Jackson), Goes, Swann and others who came in from around the country, including attorneys from Motley Rice and Goldberg Persky.

Goes said all of those involved spent “a lot of hours” fine-tuning the bill.

“The bill was drafted based on legislation that had passed in other states,” Swann said. “Our (Swann and Goes) involvement in the negotiations were to tailor it to the West Virginia legal system.

“We were very directly involved, especially in the Senate Judiciary. Chairman Trump took great care and put forth a great amount of time and effort to get all of the stakeholders together. Everyone went over the bill, literally line by line. There were compromises, the language was improved. It included people who are on the ground on both sides of this litigation. We wanted to make sure it worked and that the process was fair to the trusts, the companies doing business now and the people who have been affected.”

Behrens praised Trump’s dedication to the bill.

“He brought all of the stakeholders together and he personally sat through meetings,” he said. “He wanted to ensure it was fair for everybody involved and good for the people of West Virginia. Carmichael also also sat in on some of those stakeholder meetings as well. It’s great when legislative leaders are involved and engaged in the issue and knowledgeable about it.

“Chairman Trump said these negotiations raised things to a new level of professionalism. He was pleased with how both sides worked together on how to do this.”

Goes said the importance of the bill can’t be underestimated.

“Now, there are insurers who have paid millions over the years because of these claims,” she said. “This bill will help eliminate that. It also will lower the cost of doing business in West Virginia.

“As for existing employers who have asbestos claims on going, this will help resolve those claims so they can move on with business. The bottom line is that you encourage people to do business when you manage the legal questions. With law, the ultimate goal is to provide clear rules of the road.

“This process was a true compromise with both sides gave up things they’d like to have seen. But, it’s very workable. It provides certainty and assurances against fraud while continuing to allow plaintiffs lawyers to practice like they have been.”

Goes said it also is important for West Virginians to know some allegations that started when the bill was introduced were false. If someone has been exposed to asbestos, she said they still can recover damages.

“I think it’s important to counteract some of the negative campaigning that happened early on in the process,” she said. “It does not prevent anyone from recovering from asbestos, and that includes first or second exposures for family members as well as widow benefits.

“It is a fair application of the benefits available, and no one is cut out. If you were eligible before, you’re still eligible.”

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