Asbestos transparency advances in Senate

Monday, March 05, 2018

There's an unseemly underside to some of those mesothelioma commercials that dominate late-night television. It hasn't come to Colorado yet, and if the Colorado General Assembly passes Senate Bill 123 (sponsored by Sen. Jerry Sonnenberg), it never will. 

Mesothelioma is a cancer that develops from asbestos fibers that become lodged in the lungs. Because it usually goes undiscovered until it has become advanced, it is almost always fatal.

While it is just to feel sympathy for those suffering from mesothelioma and to want them to receive timely compensation, the way some asbestos plaintiffs lawyers abuse the asbestos claims process is not only unjust - it also endangers the ability of future victims to receive adequate compensation.

Those suffering from mesothelioma can seek relief in two ways: a lawsuit against manufacturers of asbestos products that are still in business or a claim against one or more "asbestos trusts" established during bankruptcy proceedings to pay claims against insolvent companies.

Many injured parties may have legitimate claims against both. However, as more primary companies declared bankruptcy, plaintiffs attorneys began focusing lawsuits against secondary users of asbestos, including those whose products were less dangerous.

One such company, Garlock Sealing Technologies, regularly settled for very small amounts while the primary companies were still solvent. But when the trusts were established, Garlock and other secondary companies suddenly saw claimants argue that they had been exposed only to these secondary products and not to those manufactured by the likes of Owens Corning or Johns Manville.

Garlock's lawyers smelled a rat and, thanks to an inquisitive judge, uncovered a scam in which plaintiffs lawyers first sued solvent companies, claiming exposure only to one or two products, then after reaching a settlement, they applied to the asbestos trusts, now claiming exposure to many other products which were manufactured by now-bankrupt companies.

Bankruptcy Judge George R. Hodges examined 15 such cases and found that in "each and every one" evidence of exposure to other products was withheld by the plaintiffs' attorneys.

"It was a regular practice by many plaintiffs' firms to delay filing Trust claims," Hodges wrote. He found that, on average, plaintiffs against solvent companies disclosed only about two exposures to bankrupt companies' products, but after settling with Garlock, those same plaintiffs subsequently made claims against 19 of the trusts.

Because exposure happened decades ago, "there's no way for defendants to get information on exposure (to asbestos) except from claimants," said Phil Goldberg, who testified for the U.S. Chamber of Commerce in favor of SB 123.

SB 123 requires claimants to first file trust claims before litigating against existing companies in state courts and to provide the same information to each.

"The fastest way to pay plaintiffs is to file trust claims first," Goldberg testified. "The only reason to file civil claims first is to game the system."

While no such abuses are yet known to have occurred in Colorado, we should institute safeguards before these deceptive practices undermine the integrity of our judicial system.



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