Specter-Leahy Introduce Bipartisan Asbestos Bill,
Creating $140 Billion Trust Fund,
To Fairly Compensate Victims
Compromise Plan Balances Interests of Victims and Businesses

[(WASHINGTON, Tuesday, April 19)  -- After more than three years of bipartisan negotiations, Sens. Arlen Specter, (R-Pa.) and Patrick Leahy (D-Vt.) on Tuesday evening introduced a comprehensive asbestos litigation bill that would create a national trust fund to fairly compensate victims suffering from asbestos-related disease.  The bill, co-sponsored by Sens. Dianne Feinstein (D-Ca.), Orrin Hatch (R-Utah), Mike DeWine (R-Ohio), Max Baucus (D-Mont.), and George Voinovich (R-Ohio), is the culmination of years of bipartisan discussion led by Specter, the chairman of the Senate Judiciary Committee, and Leahy, the ranking Democratic member of the panel.  The effort to stem the rising tide of asbestos litigation cases clogging the nation’s courts began more than three years ago. Below is Leahy’s statement on the introduction of the bill as well as a chart comparing provisions in the current Specter-Leahy bill to a previous asbestos-litigation bill considered last year.]

CONTACT:  Tracy Schmaler, 202-224-2154
                     David Carle, 202-224-3693

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Statement Of Senator Patrick Leahy
Ranking Member, Senate Judiciary Committee
Introduction Of Bipartisan Asbestos Legislation
April 19, 2005

This day has been a long time in coming, and I am pleased to join the Chairman of the Judiciary Committee, Senator Feinstein and others in sponsoring bipartisan legislation to address the serious problem of asbestos-related disease.  It is the product of years of difficult and conscientious craftsmanship and negotiation.  Building on the Committee’s work under Chairman Hatch, we have striven to bring a fair and efficient plan to the Congress, a plan that will ensure adequate compensation to the thousands of victims of asbestos exposure, but that also will give due consideration to the industries and the insurers that should, and will, provide that compensation.  Our bipartisan legislation does that.  Asbestos exposure has created a maze of arduous problems, and we have worked hard to produce a balanced bill that offers fair solutions.   

Senator Specter, with whom I have worked so hard on this legislation, rightly calls this one of the most complex issues we have ever tackled.  It is not the bill that I would have written, were I alone responsible for its drafting, nor is it the bill that Senator Specter might have produced.  Nor should anyone be surprised to hear that the interested groups – the labor organizations, the industrial participants in the trust fund, their insurers, the trial bar – are each less than pleased with some portion of the bill or another.  That is the essence of legislative compromise:  We have kept the ultimate goal of fair compensation to victims as the lodestar of our efforts, and we have all had to make sacrifices on a variety of subsidiary issues as we worked together to resolve this emergency.  What we have achieved is important and a significant step toward a better, more efficient method to compensate asbestos victims.  

Asbestos is among the most lethal substances ever to be widely used in the workplace.  Between 1940 and 1980, more than 27.5 million workers were exposed to asbestos on the job, and nearly 19 million of them had high levels of exposure over long periods of time.  We even know of family members who have suffered asbestos-related disease from washing the clothes of loved ones.  The ravages of disease caused by asbestos have affected tens of thousands of American families.  We need better health screening and swifter compensation for those affected.  In light of the devastating damage it has wreaked, it is hard to believe that asbestos is still being used today, yet it is.  This bill will change that as well, protect against yet another generation of victims.

The economic harm caused by asbestos is also real, and the bankruptcies that have resulted are a different kind of tragedy for everyone -- for workers and retirees, for shareholders, and for the families that built these companies.  In my home State of Vermont, the Rutland Fire and Clay Company is among the more than 70 companies to have declared bankruptcy. 

As Chief Justice Rehnquist noted several years ago, “the elephantine mass of asbestos cases cries out for a legislative solution.”  (Ortiz v. Fibreboard Corp., 527 U.S. 815, 865 (1999)).  In another Supreme Court opinion, Justice Ginsburg declared that “a nationwide administrative claims processing regime would provide the most secure, fair, and efficient means of compensating victims of asbestos exposure.” (Amchem Products v. Windsor, 521 U.S. 591, 628-29 (1997)).  I agree, the Chairman agrees, Senator Feinstein agrees, and we hope that many others in the Senate will agree.

We are encouraged by the favorable reception that this bill has already generated from a wide array of interested parties.  In the past week, I have received letters of support from the International Union, United Automobile, Aerospace & Agricultural Implement Workers of America (UAW), the Veterans of Foreign Wars of the United States (VFW), the Asbestos Study Group, and others.  The UAW notes in its April 13th letter, “[The Specter-Leahy Proposal] will provide more equitable, timely and certain compensation to the victims of asbestos-related disease.”  The VFW letter of April 14 declares:  “The national trust fund that you are proposing offers our members who are sick and dying the opportunity to secure timely and fair compensation for the injury they suffered in the course of serving their country.”  The National Association of Manufacturers also released a statement expressing their hope that this legislation will engender broad support. 

These statements in many ways tell the story of what we have already accomplished:  We have drafted a bill that has garnered a favorable response from labor, manufacturers, and companies with considerable asbestos liabilities.  We have worked on this legislation for several years now, and I can assure you that garnering this level of consensus has been no small feat.  I ask unanimous consent that the text of these letters be printed in the Record.

The bipartisan efforts of the last two years have been productive.  With the help of Judge Edward Becker, the primary stakeholders have worked diligently and as a result we have reached a compromise agreement on a national trust fund that will fairly compensate victims of asbestos exposure.  With the Chairman’s leadership, the disparate interests have reached consensus on many issues such as overall funding of $140 billion and a streamlined administrative process within the Department of Labor.   Compensation will be awarded and paid outside of the court system through a simplified administrative claims process.  There is no need to prove liability or identify a particular defendant.  There is, instead, a claims process wherein all those who exhibit certain medical symptoms and evidence of disease are compensated.  

Last Congress I was disappointed by the bill reported by the Judiciary Committee and by the partisan bill, S.2290, that was subsequently introduced as a substitute for that legislation.  As compared to those efforts, our bipartisan bill includes significant and necessary improvements:  Our bill provides higher compensation awards for victims, with $1.1 million for victims of mesothelioma, $300,000 to $1.1 million for lung cancer victims, $200,000 for victims of other cancers caused by asbestos, $100,000 to $850,000 for asbestosis, and $25,000 for what we call “mixed disease cases.”  All likely asbestos victims are eligible for medical monitoring, and unlike last year’s bills, this bill provides for medical screening for high-risk workers, a relatively low-cost way to help make sure that those most likely to be harmed are diagnosed. 

Another essential improvement is the important provision ensuring that victims’ awards under the new trust fund will not be subject to subrogation by insurance companies.  This means that victims will not have to give up any of their much-deserved compensation just because they received workers’ compensation or other insurance benefits in the past.  The initial funding of this trust is both more realistic and more substantial than the partisan bill from the last Congress, providing for almost $43 billion of the total $140 billion in the first five years.  And unlike the earlier bill, this bill ensures that the contributors into the fund will be a matter of public record, as are their obligations to the fund.  Our bill also guarantees that court cases that are well under way, and certainly those that have reached judgment, will not be upset by the new trust fund.  Similarly, last year’s bill would also have overridden all civil settlements that had any remaining conduct outstanding.  Our bipartisan asbestos bill protects those settlements between named defendants and named victims, and also protects settlements that provide for health insurance or health care. 

There are other improvements to the trust fund plan over last year’s effort.  The previous legislation provided no incentive for the fund to start processing claims.  The Specter-Leahy-Feinstein bill creates an incentive for the fund to begin processing claims quickly: If it is not operational within nine months, the sickest victims will be able to return to the tort system.  If the fund is not operational within 24 months, all victims can return to the tort system. 

In improving the way the asbestos legislation handles exigent claims -- those victims who are sickest and may not have long to live -- Senator Feinstein was instrumental in developing a creative solution.  I thank the senior Senator from California for her tireless efforts on behalf of sick and dying asbestos victims.  These victims should not be forced to wait a year while this new trust fund gets organized and ready to process claims.    Under Senator Feinstein’s approach, which we adopted, exigent cases would receive an immediate lump-sum payment, and, as I noted earlier, if the fund is not operational in nine months, these sickest victims will be able to continue their cases in court.

As part of this compromise legislation, a particular class of lung cancer sufferers, those who have had significant asbestos exposure but no markings of asbestos-related disease, are not treated as compensable victims for purposes of the asbestos trust fund.  Because of the absence of markings, it is not possible to establish asbestos as the cause of their disease.  If they develop markings, however, they will become eligible for compensation from the asbestos trust fund.  As with many other administrative claims processes, this bill sets a limit on attorneys’ fee.  In connection with this asbestos fund, the limit is set at 5 percent on victims’ awards within the fund.  In addition, in order to prevent victims of asbestos exposure from retooling their complaints to circumvent the asbestos trust fund, the bill also imposes a higher burden of proof within the tort system for plaintiffs seeking damages resulting from exposure to silica.

The problems we are addressing are complex, this bill necessarily reflects these complexities, and its drafting was not easy.  The compromises we had to make were difficult but necessary to ensure that we created a trust fund that would provide adequate compensation to the thousands of workers who have suffered, and continue to suffer, the devastating health effect of asbestos.  The history of asbestos use in our country must come to an end.  Under a provision authored by Senator Murray that we have included, which was accepted during the last Congress by the Judiciary Committee, this bill will ban its use.  We must halt the harm asbestos creates, and ameliorate the harm it has already caused.  The industrial and insurer participants in the trust fund will gain the benefits of financial certainty and relief from the stresses of litigation in the tort system, and the victims will have a quicker and more efficient path to recovery.

I thank Chairman Specter, Senator Feinstein and others for working so hard with me on this bipartisan legislation.  I urge Senators to support this compromise legislation to, at long last, help solve the asbestos problem by providing fair compensation to victims of asbestos exposure.

(Click here for a chart comparing the Specter-Leahy bill with a previous proposal.)