Rubbing a Lot of People the Wrong Way : Congress must now step into the long-running asbestos compensation mess
A recent federal appellate decision is only the most recent evidence, should more be needed, that after nearly two decades of litigation, the legal system is not capable of solving the asbestos litigation mess. In the wake of this manifest failure, the only answer, if indeed there is one, may be a national compensation scheme funded by the defendants.
The U.S. Court of Appeals for the 2nd Circuit struck down an agreement between asbestos claimants and the Manville Personal Injury Trust that would have restarted the flow of payments to the most seriously injured of the more than 150,000 claimants. These individuals became ill after working with asbestos products manufactured by the Manville Corp.
The trust was created as part of a mid-1980s bankruptcy reorganization agreement between Manville--the leading defendant in asbestos litigation--and claimants. But the trust was paying out claims faster than it earned funds. More claimants than expected and enormous legal costs quickly drained it; the trust compensated only a portion of those entitled to the money.
Under court order, the parties went back to the drawing board and in 1990 produced a new agreement that many believed restored some measure of equity and efficiency. It set a range of payments for different categories of injuries and gave priority to the most severely injured. It also put limits on attorneys’ fees.
Yet the appeals court found those very features of the new plan troublesome, and it set aside the agreement. The court’s ruling may reflect the letter of the law but not its spirit and the tragic reality of asbestos litigation. The reality is that many Manville claimants have waited for more than a decade for compensation; others have long since died of cancer or old age without receiving a penny.
Sadly, Manville claimants are not alone. One year after all pending federal cases against other asbestos defendants were consolidated in a Philadelphia federal court for the specific purpose of speeding their disposition, little progress has occurred. The disposition of state court claims in Los Angeles and elsewhere has, similarly, slowed amid battles over the relative value of cases and legal fees. Defendants contend they are simply running out of money; their critics contend they have squandered far too much on lawyers stalling valid claims, sometimes by re-litigating such long-settled issues as whether asbestos causes disease.
Congress must stop this spectacle. At a minimum, it should resolve the lingering doubts of judges, such as those on the 2nd Circuit, about the permissibility of procedural innovation. Better still would be a federal plan, funded by defendants, to compensate victims quickly outside the courts.
