[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]






HOW FRAUD AND ABUSE IN THE ASBESTOS COMPENSATION SYSTEM AFFECT VICTIMS, 
                JOBS, THE ECONOMY, AND THE LEGAL SYSTEM

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON THE CONSTITUTION

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 9, 2011

                               __________

                           Serial No. 112-51

                               __________

         Printed for the use of the Committee on the Judiciary





      Available via the World Wide Web: http://judiciary.house.gov






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                       COMMITTEE ON THE JUDICIARY

                      LAMAR SMITH, Texas, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        HOWARD L. BERMAN, California
HOWARD COBLE, North Carolina         JERROLD NADLER, New York
ELTON GALLEGLY, California           ROBERT C. ``BOBBY'' SCOTT, 
BOB GOODLATTE, Virginia                  Virginia
DANIEL E. LUNGREN, California        MELVIN L. WATT, North Carolina
STEVE CHABOT, Ohio                   ZOE LOFGREN, California
DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
MIKE PENCE, Indiana                  MAXINE WATERS, California
J. RANDY FORBES, Virginia            STEVE COHEN, Tennessee
STEVE KING, Iowa                     HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona                  Georgia
LOUIE GOHMERT, Texas                 PEDRO R. PIERLUISI, Puerto Rico
JIM JORDAN, Ohio                     MIKE QUIGLEY, Illinois
TED POE, Texas                       JUDY CHU, California
JASON CHAFFETZ, Utah                 TED DEUTCH, Florida
TIM GRIFFIN, Arkansas                LINDA T. SANCHEZ, California
TOM MARINO, Pennsylvania             DEBBIE WASSERMAN SCHULTZ, Florida
TREY GOWDY, South Carolina
DENNIS ROSS, Florida
SANDY ADAMS, Florida
BEN QUAYLE, Arizona
[Vacant]

      Sean McLaughlin, Majority Chief of Staff and General Counsel
       Perry Apelbaum, Minority Staff Director and Chief Counsel
                                 ------                                

                    Subcommittee on the Constitution

                    TRENT FRANKS, Arizona, Chairman

                   MIKE PENCE, Indiana, Vice-Chairman

STEVE CHABOT, Ohio                   JERROLD NADLER, New York
J. RANDY FORBES, Virginia            MIKE QUIGLEY, Illinois
STEVE KING, Iowa                     JOHN CONYERS, Jr., Michigan
JIM JORDAN, Ohio                     ROBERT C. ``BOBBY'' SCOTT, 
                                     Virginia

                     Paul B. Taylor, Chief Counsel

                David Lachmann, Minority Staff Director












                            C O N T E N T S

                              ----------                              

                           SEPTEMBER 9, 2011

                                                                   Page

                           OPENING STATEMENTS

The Honorable Trent Franks, a Representative in Congress from the 
  State of Arizona, and Chairman, Subcommittee on the 
  Constitution...................................................     1
The Honorable Jerrold Nadler, a Representative in Congress from 
  the State of New York, and Ranking Member, Subcommittee on the 
  Constitution...................................................     2

                               WITNESSES

Lester Brickman, Professor of Law, Benjamin N. Cardozo School of 
  Law
  Oral Testimony.................................................     4
  Prepared Statement.............................................     7
Michael Carter, Monroe Rubber & Gasket Company
  Oral Testimony.................................................    41
  Prepared Statement.............................................    44
Charles S. Siegel, Partner, Waters & Kraus LLP
  Oral Testimony.................................................    47
  Prepared Statement.............................................    49
James L. Stengel, Esq., Orrick, Herrington & Sutcliffe LLP
  Oral Testimony.................................................    84
  Prepared Statement.............................................    87

                                APPENDIX
               Material Submitted for the Hearing Record

Response to Post-Hearing Questions from Lester Brickman, 
  Professor of Law, Benjamin N. Cardozo School of Law............   122
Response to Post-Hearing Questions from Michael Carter, Monroe 
  Rubber & Gasket Company........................................   203
Response to Post-Hearing Questions from Charles S. Siegel, 
  Partner, Waters & Kraus LLP....................................   205
Response to Post-Hearing Questions from James L. Stengel, Esq., 
  Orrick, Herrington & Sutcliffe LLP.............................   223

 
HOW FRAUD AND ABUSE IN THE ASBESTOS COMPENSATION SYSTEM AFFECT VICTIMS, 
                JOBS, THE ECONOMY, AND THE LEGAL SYSTEM

                              ----------                              


                       FRIDAY, SEPTEMBER 9, 2011

                  House of Representatives,
                  Subcommittee on the Constitution,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:06 a.m., in 
room 2141, Rayburn House Office Building, the Honorable Trent 
Franks (Chairman of the Subcommittee) presiding.
    Present: Representatives Franks, Chabot, Jordan, Nadler, 
and Scott.
    Staff Present: (Majority) Zach Somers, Counsel; Sarah 
Vance, Clerk; (Minority) Jason Everett, Counsel; and Veronica 
Eligan, Professional Staff Member.
    Mr. Franks. The subcommittee will come to order.
    Good morning, and welcome to this Constitution Subcommittee 
hearing on how fraud and abuse in the asbestos compensation 
system affects victims, jobs, the economy and the legal system. 
For many Americans, asbestos litigation, like asbestos itself, 
may seem like a relic of the past. However, asbestos 
litigation, which has long been rife with fraud and abuse, 
continues to negatively affect asbestos victims, jobs for 
American workers, the economy and the legal system.
    It has been about 5 years since Congress last conducted 
oversight into issues related to asbestos litigation. And 
although congressional hearings a half decade ago shed light on 
the asbestos bar's disturbing practices, I am concerned that 
the asbestos compensation system remains deeply troubled today.
    When Congress last examined asbestos litigation, it was on 
the heels of the uncovering of a massive asbestos litigation 
fraud that ranks among the worst frauds perpetrated in American 
history. This massive fraud turned the worst occupational 
health disaster in U.S. history into one of the country's 
greatest scandals. Yet, despite this fraud and abuse being 
detected over half a decade ago, legal observers report that 
the worst abuses of the tort system continue to be central 
features of asbestos litigation today.
    For instance, according to reports, a new generation of 
diagnosing doctors has emerged to provide questionable 
evaluations of asbestos claims, filling the void left as 
physicians subject to congressional scrutiny in the mid-2000's 
shuttered their asbestos practices. Moreover, plaintiffs' firms 
continue to abuse State laws in order to bring cases in 
favorable forums; they are also aggressively pursuing novel 
legal theories well outside the bounds of traditional tort law 
in order to bring indications against solvent firms only 
tenuously connected to their clients; and the longstanding 
abuse of enhanced or creative product identification in which 
plaintiffs are coached to identify the products of solvent 
companies as those they remember being exposed to, continues 
unabated.
    To make matters worse, it appears that fraudulent and 
abusive claims are now being filed against the ever-growing 
body of asbestos bankruptcy trusts. Indications are that 
claimants are attempting to double dip into both the tort and 
asbestos trust systems, often asserting contradictory claims 
against bankruptcy trusts and solvent companies. Falsified 
claims and duplicative recoveries unfairly reduce the amount of 
compensation available to deserving, present and future 
claimants.
    Fraudulent and abusive claims also affect solvent 
companies, most of which only have a limited link to asbestos 
liability. Over 8,500 U.S. companies and over 90 percent of 
American industries have been sued for asbestos-related claims. 
Companies, many of whom never manufactured asbestos nor 
marketed it, are being sued by people who are not sick and may 
never be sick, and who, therefore, may not need compensation.
    America's employers cannot create jobs and energize the 
economy when they are drained of tens of millions of dollars by 
abusive asbestos litigation in which their products were not 
even involved. Funds that could otherwise be used for research 
and development, facility construction and job creation are 
being lost to legal fees and the cost of fraudulent and abusive 
asbestos claims continues to drive otherwise viable employers 
into bankruptcy.
    I hope that by once again shining light on the fraud and 
abuse in the asbestos compensation system, Congress can 
discourage bad actors and direct judicial attention to 
troublesome practices. Fraudulent and abusive practices hurt 
deserving, present and future asbestos victims, American 
employees and employers and the U.S. legal system.
    With that, I would yield to the distinguished Ranking 
Member for his opening remarks.
    Mr. Nadler. Thank you, Mr. Chairman.
    Mr. Chairman, we are still living with the legacy of the 
careless use of asbestos and the widespread harm it caused to 
the health of still untold numbers of people. I hope that no 
one at today's hearing will seek to deny, as the industry did 
for too long, that asbestos causes serious, debilitating and 
fatal illnesses, that there is a widespread health crisis 
resulting from exposure to asbestos, or that those in industry 
whose actions caused people to become exposed and sick should 
bear the responsibility for their actions.
    Just as with the tobacco industry, the days when the facts 
could credibly be denied are long over. What remains for us is 
to ensure that those who have genuinely been harmed are 
compensated and receive the care they need and deserve, and 
that the cost of that harm are borne by those responsible and 
not by the U.S. taxpayer or by the victims. That we are, today 
in 2011, still trying to resolve this problem is unfortunate, 
to put it mildly.
    The 1994 amendments to the Bankruptcy Code provided 
companies facing massive future claims with the ability to get 
out from under the significant liability overhang and continue 
in business. Following the court in the Manville bankruptcy 
case, the Code allows companies to resolve all asbestos claims, 
present and future, and shifts liability to a trust. Although 
there is a representative of the future claimants in the case, 
the actual future claimants are never heard. Their claims will 
have been sent to the trust long before they ever know that 
they are sick. The trusts are often underfunded and inadequate 
to the full cost of the harm.
    While there has been much discussion and no shortage of 
suggestions as to how to improve the resolution of these 
claims, some of which merit careful consideration, I cannot 
help but express a certain amount of irritation at some 
companies who spent decades concealing the dangers, failing to 
protect their workers and fighting in the courts and Congress 
to avoid responsibility, who now complain about the trust 
system. It is a neat trick to be able to dispose of claims that 
have yet to arise involving people who never have the chance to 
be heard. I do not think anyone in the industry would suggest 
for a moment that we return to pre-Manville law and place these 
liabilities back on the companies' books where future claims 
could be paid out of future earnings.
    Asbestos cases will continue to plague us for many years 
because people, unfortunately, continue to get sick and to 
suffer. As we consider the economic impact of these 
liabilities, I hope no one would suggest that the cost to the 
companies for these injuries should be shifted to the victims 
in order to improve the company's financial outlook. Whatever 
the cost to the industry, the cost to the victims has been far 
more significant.
    There are some very serious issues, indeed, surrounding the 
administration of these trusts, the treatment of claims and the 
extent to which justice is being done. I hope we can remember 
to keep our eyes on the ball. Our chief mission must be to 
ensure that victims, those genuinely harmed by the asbestos 
industry, are aided, and that the wrongdoers, not the taxpayers 
foot the bill.
    Thank you, Mr. Chairman. I yield back.
    Mr. Franks. I thank the Ranking Member.
    I understand that the Ranking Member of the full Committee, 
Mr. Conyers, is not available for an opening statement. So then 
without objection, other Members' opening statements will be 
made part of the record.
    I want to welcome you all here to the Committee this 
morning. Our first witness, Lester Brickman, is a professor of 
law and former acting dean at the Benjamin N. Cardozo School of 
Law where he teaches contracts and legal ethics. He has written 
extensively and his writings have been widely cited in 
treatises, casebooks, scholarly journals and judicial opinions. 
Professor Brickman has been acknowledged by four Federal courts 
as an expert on the history of asbestos litigation, asbestos 
bankruptcy trusts, and the effect of tort reform on future 
asbestos claim generation.
    Our second witness, Michael Carter, is president of Monroe 
Rubber & Gasket, a small, family-owned business that is 
headquartered in Monroe, Louisiana. He served in the United 
States Navy from 1978 to 1981 and joined Monroe after leaving 
the Navy. Mr. Carter has been with Monroe for over 30 years.
    Our third witness, Charles Siegel, is the head of appellate 
practices at Waters & Kraus LLP. Mr. Siegel has argued appeals 
in eight Federal appellate courts, six State supreme courts and 
numerous intermediate appellate courts around the country. He 
has served as an adjunct professor at the University of Houston 
Law Center and as a guest lecturer at several other law 
schools. Mr. Siegel has been recognized on the Texas super 
lawyers list every year since its inception in 2003.
    Our fourth and final witness, James Stengel, is currently 
senior partner for litigation at Orrick, Herrington & Sutcliffe 
LLP and as such, manages the firm's global litigation practice. 
He primarily represents clients in large complex and multiparty 
class action litigation. He has handled significant actions 
involving the chemical, tobacco and medical device industries. 
Mr. Stengel has written and lectured on complex litigation and 
mass tort subjects at a variety of law schools and seminars.
    Each of the witnesses' written statements will be entered 
into the record in its entirety, so I would ask that each 
witness summarize his testimony in 5 minutes or less. To help 
you stay within that time, there is a timing light only your 
table. When the light switches from green to yellow, you will 
have 1 minute to conclude your testimony. When the light turn 
reds, it signals that the witness' 5 minutes have expired.
    Before I recognize the witnesses, it is the tradition of 
this subcommittee that they be sworn in. So if you please 
stand.
    [Witnesses sworn.]
    Mr. Nadler. Mr. Chairman, could I be recognized for a 
moment, please?
    Mr. Franks. Yes.
    Mr. Nadler. I just want to take this opportunity to extend 
a special welcome to Professor Brickman who is a distinguished 
professor at Cardozo Law School, which is in my district, where 
he is very highly regarded.
    Mr. Franks. Well, I am not going to ask him if he is a 
Republican here this morning.
    I would now recognize our first witness, Professor 
Brickman, for 5 minutes.

  TESTIMONY OF LESTER BRICKMAN, PROFESSOR OF LAW, BENJAMIN N. 
                     CARDOZO SCHOOL OF LAW

    Mr. Brickman. Mr. Chairman, Members of the Subcommittee, 
thank you for the opportunity to appear before you.
    As you have stated, the tragedy of asbestos continues to--
--
    Mr. Franks. Sir, could we get your microphone a little 
closer here. Is it turned on?
    Mr. Brickman. Asbestos has long been regarded as the 
``magic mineral'' because of its unique qualities, but it has 
also caused the deaths of at least 200,000 occupationally 
exposed workers. Another 50,000 deaths from mesothelioma, a 
rare cancer caused by asbestos, are projected over the next 40 
years.
    The tragedy of asbestos, however, is compounded by its 
litigation history. This carcinogenic mineral has given rise to 
a malignant enterprise. In nine published articles on asbestos 
litigation, I have documented the existence of a massively 
fraudulent enterprise involving the creation of literally 
hundreds of thousands of bogus medical reports. These reports 
have been used to extract billions of dollars in settlements 
from defendants in the tort system, and more recently, from 
personal injury trusts which have been created to pay the 
claims against the companies that were bankrupted by asbestos 
litigation.
    There has been a complete and total failure by State and 
Federal law enforcement agencies to prosecute the doctors who 
have received tens of millions of dollars for preparing these 
reports, let alone the lawyers who hired them.
    The U.S. Attorney's Office for the Southern District of New 
York began an investigation in the summer of 2004. Though grand 
juries were convened and voluminous credible evidence of fraud 
has been amassed, this investigation, once again, languishes 
for want of someone to head it. The effect of this systemic 
neglect is to grant lawyers and the medical doctors they hire a 
special dispensation to commit fraud.
    This failure, I suggest, should not be allowed to stand 
unchallenged. I, therefore, urge this subcommittee to request 
the Government Accounting Office to investigate this law 
enforcement failure and then exercise oversight over a 
Department of Justice that effectively condones manufacturing 
medical diagnoses for money on a massive scale.
    The effects of this corrupt scheme have been devastating. 
Over 90 companies have gone bankrupt. Ten years ago, the Rand 
Institute for Civil Justice estimated that over 600,000 jobs 
were lost due to asbestos litigation. Undoubtedly, that total 
would be much higher today.
    Though nonmalignant claim filings have declined 
precipitously starting in 2004, primarily because of State tort 
reforms, there has been a recent upsurge of such filings with 
the trusts. The impetus for this is the recent emergence of 
trusts with substantial assets that have significantly 
increased the value of nonmalignant claims in the trust system 
to as much as $40,000. Given the huge volume of filings, 
attorney fees can easily amount to over $100 million on an 
annual basis for filing these nonmalignant claims with the 
trusts.
    Over $6.5 billion have been or will be set aside by the 
pending and confirmed trusts for unimpaired and moderately 
impaired nonmalignant asbestosis and pleural claims. Expedited 
filing procedures now allow lawyers to upload thousands of 
claims with a key stroke. This combination of efficiency, a 
nearly $7 billion fund waiting to be tapped and the magnitude 
of the attorney fees potentially available presents a 
compelling incentive for asbestos lawyers to resume the mass 
recruitment of claimants.
    Trust claiming procedures are hidden from public view by 
the stealth sheathing that lawyers have constructed around the 
trusts. This system affords law enforcement and the public no 
transparency regarding the validity of claims filed with the 
trusts. Already, as the Chairman noted, there is evidence that 
a new generation of litigation doctors is emerging to replace 
the doctors that have been unmasked. Unless law enforcement 
withdraws the free pass it has extended to lawyers, and to the 
litigation doctors that they hire to manufacture diagnoses for 
money, in the words of U.S. district court judge Janis Jack, 
and to maladminister pulmonary function tests, mass recruitment 
of those occupationally exposed to asbestos can be expected to 
resume, and that will be a sad day indeed, sir.
    Thank you for this opportunity.
    Mr. Franks. Well, thank you, Professor Brickman.
    [The prepared statement of Mr. Brickman follows:]
    
    
    
                               __________

    Mr. Franks. I now recognize Mr. Carter for 5 minutes.

                 TESTIMONY OF MICHAEL CARTER, 
                 MONROE RUBBER & GASKET COMPANY

    Mr. Carter. Thank you.
    Mr. Franks. Mr. Carter, can you pull your microphone to 
you. We should probably turn those on in the Committee ahead of 
time because it happens constantly.
    Mr. Carter. Chairman Franks, Ranking Member Nadler and 
Members of the Subcommittee, thank you for inviting me to 
testify today. My name is Mike Carter and I am with Monroe 
Rubber & Gasket.
    Mr. Nadler. I can't hear you.
    Mr. Carter. My name is Mike Carter and I am with Monroe 
Rubber & Gasket Company in Monroe, Louisiana, the president of 
the company.
    Just to give you a little history, we were incorporated in 
1975, and over the course of about 35 years, we have managed to 
employ about 25 people. We started with a handful, we worked 
hard, and we have got to where we are today by hard work. 
Unfortunately, I need probably four to six more people, maybe 
more than that, but I am not in a position to hire these people 
because I am inundated with lawsuits.
    Unfortunately, I was pulled into this back starting around 
March of 2002 and I received my first lawsuit which would 
become 104 separate lawsuits with about 2,200 plaintiffs, and 
my office has got a designated corner now where it is just 
stacked full with asbestos lawsuits.
    Let me say, first of all, I am very sympathetic to those 
individuals that are sick. I think it was a horrible crime that 
was committed by the people that kept this quiet for so long. 
But I say let's go after the people that we need to go after 
and not just anybody in the tier.
    But with these lawsuits, I have spent many, many hours and 
a lot of time on a grassroots effort in Louisiana, been here in 
Washington several times pleading my case, but to this point, 
to no avail.
    I have got a situation here where it just seems that we 
have got a very broken system. I can't hire people that I need 
to hire in an economy that unemployment is high, and I can't 
grow a business not knowing what tomorrow might bring for me. I 
feel like that at this point we are in a broken system caught 
up in a feeding frenzy of trial attorneys out for their own 
agenda, and it threatens to destroy small business across our 
country. And I just feel like it is time for our elected 
officials to step up to the plate and help small businesses 
like myself.
    I have been able to get out of some of these cases summary 
judgment, but unfortunately, my attorney is telling me now that 
some of these cases are probably going to trial. I am a small 
company in a small town that worked hard to get where I am at 
today in a country that we can call our America based on our 
dreams and hard work to become and be what we want to be here. 
Unfortunately, that can be taken away from me with nothing to 
do with it.
    Again, I need more people. I can't hire them. I won't hire 
them. I am not going to grow this company, this second company 
any farther, based on the fact that I don't know what tomorrow 
is going to bring.
    I can't tell you the number of times I have been here and 
pleaded my case in front of so many people. But I just can't 
tell you enough how much I need help. And I am just a small 
voice for a lot of people across America, small business. We 
are the backbone of America. But it is just an unfair thing 
that is happening right now, and I surely need somebody to step 
up and help us.
    I don't know how long it is going to be that I can come 
here and do this. This could be my last trip here. If I go to 
trial and I am hit with a verdict and I have to pay a certain 
percentage of that, I am probably going to be locking my doors 
and sending my people home, and I just hope there is somebody 
that is going to be able to tell me how to tell my people why 
they are going home.
    It is unfortunate that we live in this kind of economy that 
this kind of stuff can happen to people like myself.
    But in wrapping this up, I only hope that--I am just a 
small fish in a lot of big water here, but I hope that somebody 
will hear me and they will come to bat and help me with this. I 
just don't know how much time I have left. Like I say, if I get 
hit with any kind of verdict, I can't afford $3 million or $4 
million. I will close my doors and go home. But I would love to 
hire some more people, but at this point that is just not able 
to happen.
    Thank you for your time.
    Mr. Franks. Thank you, Mr. Carter.
    [The prepared statement of Mr. Carter follows:]
                  Prepared Statement of Michael Carter



                               __________

    Mr. Franks. As some of you saw, we have been called to the 
floor for votes, and that has actually happened before, and we 
are going to go ahead and let Mr. Siegel testify. And then, Mr. 
Stengel, we will have to come back after the votes and 
reconvene. I apologize to you, sir.
    Mr. Siegel, you are recognized for 5 minutes.

           TESTIMONY OF CHARLES S. SIEGEL, PARTNER, 
                       WATERS & KRAUS LLP

    Mr. Siegel. Thank you. I would like to thank the 
subcommittee for the opportunity to testify on the State of 
asbestos litigation today. My name is Charles Siegel and I am a 
partner in the firm of Waters & Kraus, and for 25 years, I have 
had the privilege of representing people seriously injured by 
exposure to asbestos or their survivors.
    I am proud to represent people such as Mark Smith from San 
Antonio who was a constituent of Chairman Smith of this 
Committee. He was exposed to asbestos through his father who 
worked as a contractor installing siding and roofing materials 
that contained asbestos.
    Mr. Smith's father would come home with asbestos on his 
clothes that young Mark would breathe. Mark Smith died at the 
age of 50, leaving a wife and a 12-year-old son.
    But the Smith case is only one example out of hundreds of 
thousands. Asbestos is widely agreed to be the greatest public 
health disaster of the 20th century, and it continues unabated 
in this century. Even today, seven or eight persons die of 
mesothelioma alone every day in this country, and thousands 
more get sick with lung cancer and asbestosis. Asbestosis is a 
chronic progressive inflammation of the lungs. Mesothelioma is 
a rare cancer of the lining of the lungs known only to be 
caused by asbestos.
    We are here today because these deaths have a cause. 
Litigation was necessary because there was fault. Juries and 
judges hearing these cases in State courts around the country 
for the last 40 years have consistently heard evidence of 
corporate concealment of the dangers of asbestos exposure.
    A corporate official for Bendix Company, for example, wrote 
to Johns Manville in 1966 saying, ``If you have enjoyed the 
good life while working with asbestos, why not die from it?'' 
Another example is provided by the conduct of Union Carbide 
Corporation, which actually mined and marketed raw asbestos. It 
touted its own asbestos as being safe somehow, while 
questioning the safety of other forms of the mineral.
    This corporate conduct and the vast legacy of death and 
disease that resulted have led to litigation. The overwhelming 
majority of this litigation has occurred in State courts and 
continues to occur there. State law provides that a claimant 
may recover from each party found by the jury to have been 
responsible for the exposure and to have behaved negligently or 
to have supplied an unreasonably dangerous product. In nearly 
all the jurisdictions with any significant number of cases, 
there is no joint and several liability, so the jury simply 
assigns a percentage of responsibility to each company it finds 
to be liable.
    When an asbestos defendant files for bankruptcy protection, 
there is a popular perception that company offices are closed 
and employees lose their jobs and the factories are padlocked. 
This is emphatically not true in the asbestos context. Section 
524(g) of the bankruptcy code exists precisely so that 
companies facing substantial asbestos claims can compensate 
victims while continuing normal operations. Almost every 
company to have sought bankruptcy protection under this 
provision due to asbestos liabilities has been able to continue 
its economic health while also compensating victims of asbestos 
disease.
    In recent years, defendants have argued that lawsuits 
constitute double-dipping since claimants may potentially 
recover both from defendants in the State court system and from 
bankruptcy trusts. The claim is false and reflects a basic 
fundamental misunderstanding of the way the bankruptcy system 
and State court lawsuits work.
    First, trust payments are minimal. There a scheduled value 
of a particular disease claim, but then there is also a payment 
percentage for all claims. So, for example, while a certain 
trust may officially value a mesothelioma claim at perhaps 
$100,000, the payment percentage may be 15 percent, resulting 
in an actual payment of $15,000. The median payment percentage 
across the trust is roughly 25 percent, but some trusts pay as 
low as 0.8 percent of the value of a claim.
    Second, there is no ``fair share'' for a defendant in 
asbestos litigation, there is only what percentage of causal 
responsibility is assigned by a jury in a particular case and 
each case, of course, turns on its facts. In all 50 States, the 
fact that other parties may share responsibility for causing an 
injury is not a ground for any one defendant to avoid 
liability. Defendants routinely and vigorously assert their 
rights to discover materials submitted by plaintiffs to 
bankruptcy trusts, and defendants are, of course, free to 
conduct and do conduct their own unilateral investigation into 
the plaintiff's claims as well.
    Even in States with joint and several liability, plaintiffs 
do not obtain a double recovery. Under the one satisfaction 
rule, a plaintiff is entitled to one recovery, and so after a 
verdict is entered, the defendant's share will be offset 
against all settlements, including any settlements with trusts. 
State law provides a remedy to these families and asbestos 
victims should not have to apologize for seeking compensation 
for their injuries.
    Thank you.
    Mr. Franks. Thank you, Mr. Siegel.
    [The prepared statement of Mr. Siegel follows:]
    
    
    
                               __________

    Mr. Franks. Mr. Stengel, if it is all right, we are going 
to go ahead and try to get your testimony in and then return 
for questions at the end of the vote series, which I will try 
to get a timing on that as soon as we finish here.
    Could we get you to turn your microphone on. You are 
recognized for 5 minutes.

             TESTIMONY OF JAMES L. STENGEL, ESQ., 
               ORRICK, HERRINGTON & SUTCLIFFE LLP

    Mr. Stengel. Chairman Franks, Ranking Member Nadler, my 
name is Jim Stengel. I appreciate the opportunity to come here 
and talk to the subcommittee about these issues, particularly 
the question posed by the Committee, which is the impact of 
fraud and abuse in the compensation system for asbestos on 
victims and defendants.
    Thank you for the recital of my background. There is one 
additional fact which may be relevant for this subcommittee. My 
first experience in asbestos litigation was spending 10 years 
as outside litigation counsel for the Manville trust, so I am 
reasonably familiar with what trusts do and how they operate. 
Since then, I have represented a number of defendants in the 
civil litigation system and distressed defendants in the 
asbestos litigation system, so I am familiar with both sides of 
the street, so-to-speak, in this context.
    What I would like to address here this morning is the 
somewhat narrower but very important issue of how the operation 
of the trusts impacts the tort litigation system. Now, this is 
of critical importance, because the independent research group 
RAND has determined that the trusts have north of $30 billion 
available for the compensation of asbestos victims going 
forward. The most recent statistics we have on annual 
compensation was that the asbestos trusts disbursed some $3.3 
billion in 2008, so we are talking about very substantial 
amounts of compensation from the trusts.
    Now, to allay a misperception perhaps, I don't think anyone 
here today takes issue with the fact that the asbestos health 
crisis is real, there are injured people, and those people 
deserve to be compensated. What I think you are hearing from 
most of us is we want a level playing field.
    We want a system that awards compensation based on actual 
fact and actual evidence. And what has happened in the trust 
environment is, particularly with the most recent wave of 
bankruptcy trust filings starting in 2000, a wave of 
bankruptcies which was, in part, occasioned by the fraud that 
Professor Brickman talked about, the unimpaired claims 
overwhelming corporate defendants in a way that gave them no 
option but to declare bankruptcy, we saw the disappearance of 
first- and second-line defendants in the asbestos scheme and a 
vast number of new defendants were introduced to litigation, 
and I think there was an expectation that those companies would 
necessarily bear the burden of the missing bankrupt entities, 
at least during the reorganization process.
    That is not what happened. The process has been sticky. It 
has ratcheted in one direction and the new defendants, like 
Monroe Rubber, are continuing to bear the burden of the 
departed bankrupt entities. And now that these very substantial 
amounts of assets are available from the trusts to provide 
compensation, there is no reason why the trust system and the 
tort system on the other side should be split the way they are 
now. The trusts operate in a way that is siloed, separate and 
opaque from the litigation system.
    What we want is transparency in terms of a limited but 
critically important piece of information or evidence. That is, 
what assertions of exposure are being made by claimants who are 
also plaintiffs in the tort system about who is responsible for 
their injury. It is unfair and distorts the system for a 
claimant to do, as they can, under the current rules, litigate 
their case against 20 or 30 solvent defendants in the tort 
system, resolve that case, and we resolve mesothelioma cases in 
12 to 18 months, and before even the very rare statute of 
limitations in a trust of 3 years comes into play, have the 
opportunity then to go back and reassert those claims.
    The one thing that the 50 years of experience that we have 
had in asbestos litigation has proven to us is, one, the system 
is very, very sensitive to economic incentives, and by putting 
billions of dollars available in a secondary compensation 
system that doesn't have to be reflected in the tort system, we 
can expect that bad things will happen.
    The second as we have seen is the system is remarkably bad 
at self-policing. It simply will not fix these problems.
    All we ask at this point, frankly, is transparency, and we 
believe full disclosure and airing of what is happening on the 
trust side of the ledger as well as the tort side of the ledger 
will improve the system for claimants, certainly and admittedly 
for solvent defendants, and for all others.
    My written testimony is more extensive and provides some 
concrete examples of misconduct we have discovered, concrete 
situations where plaintiffs have taken different positions in 
court and with the trusts. We have knowledge as to what I 
suspect is the mere tip of the iceberg. But even those stark 
examples I think provide this Committee with the evidence they 
need to look at this issue and look at it seriously.
    Thank you very much.
    Mr. Franks. Thank you, Mr. Stengel.
    [The prepared statement of Mr. Stengel follows:]
    
    
    


                               __________
    Mr. Franks. With that, our meeting will be adjourned until 
the sound of the gavel, which will be as close to 11:30 as 
possible. Immediately following votes, approximately 11:30. 
Thank you.
    [Recess.]
    Mr. Franks. The meeting will resume. I apologize to you 
profoundly for it taking longer on the floor than we thought it 
would. It seems like that is a proverb, but I do apologize to 
all of you.
    Mr. Nadler, the Ranking Member, would have been back, but, 
unfortunately, because of the delay on the floor, he was called 
to a special briefing on terrorist threats. His district 
encompasses the World Trade Center, and he is there on behalf 
of his constituents. So we will have to plod on. Again, I 
appreciate you all being here. I also am grateful for Mr. Scott 
being here to allow us to continue.
    If I may, I will recognize myself for 5 minutes to begin 
the questioning here. Mr. Carter, I would like, if I could, to 
start with you, sir.
    From what I can tell, your business had essentially very 
little involvement with asbestos in general, maybe you can 
enlighten me, and I certainly hope that you survive the 
lawsuits that you are facing at this time.
    Can you give us just sort of a recap of your story related 
to what the involvement of your company was or was not with 
asbestos and what the lawsuits mean to you and how they affect 
your company going forward? You did quite well in your 
testimony, but I am wondering if you would just recap that for 
us.
    Mr. Carter. Yes, thank you. Well, in the 104 separate 
lawsuits with 2,200 plaintiffs, first and foremost, I have 
never manufactured any asbestos. All I ever did was buy a 
product from a manufacturer and resell it to the end user who 
asked for it by name. I didn't make anybody sick. I mean, in 
all of the 36 years I have been in business, not one person 
that has ever been affiliated with my company has ever 
contracted any type of asbestos-related disease. Nobody.
    I am just one of the next people in the next tier of 
companies that the trial attorneys are going after, and it is 
going to break us. We are a small business. We are trying to--
we are supposed to be the backbone of America, and, 
unfortunately, we have been caught up in this vacuum and I 
don't see an end to it. We have never manufactured it. We have 
never made anybody sick. I do have the utmost compassion for 
those individuals that are sick, but let's go after the ones 
that did all of this.
    So, to make a long story short, we never manufactured 
asbestos. We just bought a product, like I say, sold it to the 
end user who asked for it by name, and for some reason or 
another, we are brought into this as somebody that is 
responsible. And if this trend continues, you will see a lot of 
small business across America do the same thing we are going to 
do if we get brought into any type of trial, and that is to 
close our doors.
    Mr. Franks. Well, thank you, sir, very much.
    Professor Brickman, if I could ask you briefly, in your 
written testimony you stated that law enforcement officials 
have essentially given a free pass to lawyers and doctors 
involved in asbestos litigation fraud. How you do you think the 
failure to hold those individuals accountable affects the 
asbestos compensation system as well as those who might 
rightfully have a claim that might be affected by overlooking 
the fraud that seems evident, at least according to your 
testimony?
    Mr. Brickman. Mr. Franks, I think that the enormous amounts 
of money that have been paid out to bogus claims, easily $25, 
$30 billion and perhaps more, has deprived claimants who have 
actually been injured by exposure to asbestos from the level of 
compensation that could have been accorded them had these 
billions and billions of dollars not been paid out in verdicts 
and settlements to persons, to hundreds of thousands of persons 
who could not legitimately show any injury from exposure to 
asbestos.
    Going forward, what I foresee is the distinct possibility 
that litigation screenings that generated this entire 
fraudulent scheme will resume because of the enormous amounts 
of money. As I have put forth in my oral and written 
statements, there is upwards of $6.5 billion set aside for 
nonmalignant claims, and the only way that lawyers will be able 
to tap into this is to resume screenings, and I fear that is 
what will happen. And the fact that law enforcement is just 
sitting back and doing nothing despite the enormous volume of 
credible evidence of fraud is only encouraging this 
potentiality.
    Mr. Franks. Thank you, sir.
    Mr. Stengel, if you had seen Mr. Siegel's written 
testimony, he seems to indicate a picture in which only truly 
sick and deserving plaintiffs sue responsible companies for 
their injuries, and those companies are forced to pay only 
their fair share of the damages, and claimants do not file 
fraudulent claims or double-dip the asbestos bankruptcy trust.
    I just want to give you the opportunity to respond. Do you 
think that that fits with your understanding of the facts?
    Mr. Stengel. It does not fit with my understanding of the 
facts, Chairman Frank. We have uncovered specific instances 
where claimants as plaintiffs in the tort system have taken one 
position as to when they were exposed and what products they 
were can exposed to, in some cases, insisting the only asbestos 
they have been exposed to was that of a client of mine, where 
at the same time, through discovery, we have learned they made 
16 or more bankruptcy trust claim filings. I can't tell you as 
I sit here today which of those is not correct, but clearly 
somebody is not being told the truth somewhere in the system.
    The history that Professor Brickman has recited I think 
makes it very clear that there is always room for misconduct in 
this system given the amount of money at stake and the flux of 
the system, and at present, bad things will happen, and we have 
evidence of that.
    Mr. Franks. Well, thank you, sir.
    I now yield to Mr. Scott for 5 minutes.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Chairman, I think we need to put a little bit of this 
in perspective to begin with, because we are here because of 
decisions made that exposed plaintiffs to asbestos, and in the 
Johns-Manville case, Fisher versus Johns-Manville Corporation, 
the judge found that the jury was justified in concluding that 
both defendants, fully appreciating the nature, extent and 
gravity of the risk, nevertheless made a conscious and cold-
blooded business decision in utter and flagrant disregard of 
the rights of others to take no protective or remedial action 
and pointed out that that is exactly the kind of behavior that 
ought to subject people to punitive damages.
    Now, Mr. Brickman, you talk about bogus claims. Are you 
talking about claims where people have indications of exposure 
to asbestos but no symptoms?
    Mr. Brickman. Congressman, the bogus claims I am referring 
to are the claims generated by litigation screenings, by the 
screening companies hired by law firms that brought mobile X-
ray vans and then hired litigation doctors who read the x-rays 
as positive for exposure to asbestos, although their error 
rates when subjected to testing by doctors who had no 
participation in the litigation were in the high 90 percent 
range. Those are the bogus claims that I am referring to.
    Mr. Scott. Well, if you do something about those, what 
about the people who have valid claims. Do you have a problem 
with the valid claims?
    Mr. Brickman. Of course not.
    Mr. Scott. Are you counting nonsymptomatic as a valid or a 
bogus claim?
    Mr. Brickman. Nonsymptomatic, in and of itself, is not 
indicative in either way.
    Mr. Scott. If you have pleural thickening of the lungs, is 
that a valid claim or not?
    Mr. Brickman. It depends on the nature of the thickening, 
but in many States, it is a valid claim. In some States, it is 
not. That is an area of law I am not going to comment on 
because of the technicalities.
    Mr. Scott. So if lawyers are trying to find people that 
have been victims of this conscious and cold-blooded business 
decision, is that anything inherently bad about that?
    Mr. Brickman. Well, let me just respond by talking about 
the cold-blooded business decision. You need to make a 
distinction or a distinction should be made between mining 
asbestos and companies that used raw asbestos like Johns-
Manville to incorporate into products. The companies that sold 
asbestos-containing products did not know, had no reason to 
know at the time they were manufacturing these products that 
when the production were used in the workplace, they would 
result in injury to workers.
    That knowledge did not come out until Dr. Selikoff did his 
studies in the early mid-1960's. It was then and only then that 
knowledge became available to the industry that products 
containing asbestos could also injure workers.
    Mr. Scott. So the information in the 1930's and 1940's that 
subjected people to the kinds of injuries that they are 
suffering today, that doesn't count?
    Mr. Brickman. That counts with regard to mining companies 
and it counts with regard to companies that used raw asbestos 
in their plants to manufacture the materials. What it doesn't 
count for is the sale of products and the use of these products 
in the workplace. That is a separate area in terms of knowledge 
of the potential harm. As I said----
    Mr. Scott. So should the victim, depending on who the 
defendant ought to be, is the defendant not entitled to full 
recovery, including punitive damages for being subjected to 
this kind of conscious and cold-blooded business decision. 
Isn't the plaintiff entitled to recover?
    Mr. Brickman. Plaintiffs are entitled total recovery for 
injuries sustained----
    Mr. Scott. And punitive damages?
    Mr. Brickman. Punitive damages are very complex, because if 
you have multiple punitive damage awards, arguably that 
violates the 14th Amendment to the Constitution with regard to 
due process of law. I have written about the subject. I don't 
think you can give a simple yes-no answer. It is a complex 
issue, and one that I think the courts have basically 
mishandled, although by and large today, courts do not permit 
punitive damages in many of these cases.
    Mr. Scott. Mr. Siegel, did you want to comment?
    Mr. Siegel. Thank you, Congressman Scott. Yes. What 
Professor Brickman says is exactly wrong, and I think is due to 
the fact that perhaps he is an academic and has not spent time 
trying these cases.
    Juries have consistently found that companies that took the 
raw asbestos that was mined and put it in their products and 
sold those products in the marketplace, in other words, 
companies that didn't mine it and take it out of the ground but 
that bought it from the mining companies, put it in their 
products, sold those products, juries have consistently found 
for 30 or 40 years that those companies were negligent and 
grossly negligent.
    And I used the example in my statement of Bendix, which was 
a company that sold breaks that had asbestos in them. There is 
that infamous Bendix document in which the corporate officials 
said, ``Well, if you made a nice living working with asbestos, 
you might as well die from it.'' Or to take another example, 
National Gypsum, whose official in 1958, 1958, said, ``There is 
no question that if you work with asbestos and you inhale it, 
you are going to get asbestosis.''
    Now, did that compel them to stop selling their product? 
No. Did that compel them to put a warning on their product? No. 
So that is simply a conclusion and a statement that is divorced 
entirely from the results of trials. And I would be happy to 
supply the subcommittee with a very, very long list of punitive 
damages verdicts upheld by appellate courts against companies 
that sold asbestos-containing products.
    Mr. Scott. Thank you.
    Mr. Franks. Thank you, Mr. Scott. You folks have been so 
patient and you were so kind to come back, if it is all right 
with you, we are going to go ahead and do a second round, give 
you a little better opportunity to develop any other thoughts 
that you have.
    Mr. Stengel, I might begin with you, sir. About 8,500 
companies representing about 90 percent of all of the U.S. 
industries have been sued in cases related to asbestos. What 
percentage of those companies would you estimate were involved 
in the actual production of asbestos or the hiding of the 
harmful effects of asbestos?
    Mr. Stengel. Well, Chairman Franks, the best way to answer 
that is probably to go back to where the litigation was when 
Manville was still a viable defendant in the early eighties. 
There were probably at that time, and Professor Brickman can 
correct me, I think a roster of around 20-25 defendants that 
were routinely viewed as the first rank, both miners, millers 
and producers most importantly of asbestos insulating material, 
because those were viewed and that was the subject matter of 
the Selikoff study. So you ended up with a fairly small 
population.
    When Manville went into bankruptcy, that circle expanded 
somewhat to get secondary players, but it was still fairly well 
constricted to people who had some material role in the 
production of either raw asbestos or asbestos-containing 
materials or had premises that had asbestos present.
    What has happened in the period really from the late 1990's 
forward has been this explosion in the number of entities and 
individuals named as defendants where you get from secondary to 
tertiary to peripheral defendants, and it is really a search 
for a solvent bystander, and companies like Monroe Gasket and 
other small companies are being brought into this, or even 
large companies with very little participation in the asbestos 
production process. So you get increasingly tangential 
connection with the production of the material.
    Now, as to the evidence of a conspiracy among the major 
asbestos producers includes Johns-Manville, that was a very 
small group of companies and that emerged in the 1930's, 1940's 
and 1950's, conduct which no one here is going to defend. But 
that is again a smaller concentric circle of involved people.
    And if I could, and I don't want to take your time, 
Chairman Franks, but to respond in part to Mr. Scott's 
question, I don't think anyone here is suggesting that an 
individual plaintiff shouldn't be allowed to bring suit against 
defendants and seek punitive damages if they can prove their 
case, both as to the conduct or responsibility of the 
defendants they name, and they can show, and this is where the 
transparency with the trust becomes critically important, if 
they can show an actual connection between the products, 
premises or actions of a given defendant and their illness.
    If you look at a roster, and I believe now the number is 
north of $10,000, or 10,000 claimants, I think that is what 
Towers-Perrin's most recent estimate is, when you get to those 
peripheral levels of players, is there really a material 
substantive legally sufficient causal link between whatever 
those defendants were alleged to do and the illness of those 
people?
    Again, we are not saying that asbestos plaintiffs shouldn't 
have their day in court. We think a day in court is a wonderful 
thing, if we have a single day in court where all the evidence 
is available and we can allocate fault and have the jury make 
the decisions that are appropriate.
    Mr. Franks. All right. Professor Brickman, I might ask you 
another question. Not to pick on Mr. Siegel, but in his written 
testimony, he asserts that the large number of nonmalignant 
claims are a thing of the past essentially. And in your 
opinion, do nonmalignant claims still exist, either in the 
court system or as claimants to the asbestos bankruptcy trust?
    That is a sincere question. I assume your asbestos will 
probably be yes, but enlighten me if you can.
    Mr. Brickman. Yes, sir. There has been a huge increase in 
nonmalignant claims put to trusts beginning around 2007, almost 
a doubling every year. The trusts don't publish this 
information. They don't make it available. The trusts are 
opaque. They are the model of non-transparency. They are run by 
plaintiffs' lawyers. All decisions of the trusts are made by 
people that are appointed by plaintiff lawyers. So this 
information is very hard to come by.
    But my research shows it has been a huge increase in trust 
filings, and that most of these trust filings are re-filings of 
claims that were made in States like Ohio, Georgia, 
Mississippi, States which have enacted tort reforms, which 
basically preclude these screening-generated claims. So what 
the lawyers are doing is refiling them with the trusts, and now 
the significant difference is they can get serious money from 
the trusts, I said up to $40,000 for a nonmalignant claim. And 
my concern is that because law enforcement has given a free 
pass to lawyers and doctors to perpetrate this fraud, that 
lawyers will not be content, given almost $7 billion available 
for nonmalignant claims, lawyers will not be content with 
simply refiling claims they have already brought in the tort 
system, but will again reinstitute screenings because that 
money, it is a pot of gold sitting there waiting for them to 
harvest it.
    Mr. Franks. Thank you, Professor. I will now recognize Mr. 
Scott for 5 more minutes.
    Mr. Scott. Thank you.
    Mr. Siegel, questions of double-dipping have been brought 
up. You referred to this in your testimony. Is it possible to 
get compensated twice for the same injury?
    Mr. Siegel. No.
    Mr. Scott. Why not?
    Mr. Siegel. Because when a person has a claim against the 
various companies that caused his injury, in other words, the 
various companies that made the products to which he was 
exposed, he will pursue those claims either in the court system 
or in the trust system. And the notion that the one is hidden 
from the other or that the one should pay and the other 
shouldn't pay and therefore the other paying is a double-dip is 
just--it is completely wrong.
    Mr. Scott. Can the defendant figure out that through 
discovery?
    Mr. Siegel. Absolutely. And the way we know this again is 
through the results of actual trials. In my written statement, 
I provided several recent examples of California trials, and I 
know Mr. Stengel is familiar with these cases because his 
client was in some of them, not in the trials, but was in some 
of the cases earlier in which the jury hears all the evidence, 
the defendant puts on evidence of other products to which the 
plaintiff was exposed, and the jury allocated significant 
shares of responsibility, usually much more than was allocated 
to the solvent defendants, significant shares of responsibility 
to the bankrupt defendants. That way we know that the 
defendants in the tort system are not handcuffed, are not being 
shielded from the truth, because they have the evidence that is 
necessary to convince the jury of alternate exposures.
    There is sort of pervading all of this is a very elitist 
notion that the jury will never get it right and the jury can't 
understand anything between, for the smoke screen that is being 
erected in front of it, but we know that that's not true. And 
we know that the results of actual trials show they are 
perfectly capable of seeing the exposure to bankrupt companies, 
perfectly capable of deciding who is liable and who isn't 
because we certainly lose our share of trials as well.
    Mr. Scott. Now speaking of transparency, when you settle a 
case, is there any pressure put upon you to keep the settlement 
confidential?
    Mr. Siegel. Yes, there is. I guarantee you Mr. Stengel 
would not pay us a cent in any case without an ironclad 
confidentiality agreement. That is an absolute condition of 
defense agreements in the tort system all the time. And what 
there--it is sort of a violation of the first rule in law 
school in the case of Goose v. Gander. They want complete 
confidentiality in the tort system, and they want complete so-
called transparency, i.e., no confidentiality at all otherwise.
    Mr. Scott. Now, a lot has been made about the idea, and you 
have kind of referred to it, about the connection of present 
defendants to the asbestos liability. Some of them are saying 
they didn't have anything to do with it. What is your response 
to that?
    Mr. Siegel. Again, we trust juries in State courts to 
decide these things. And for any--just like I think my clients 
are always right, it has been my experience that most lawyers 
for defendants think their clients are always right and never 
committed any negligence whatsoever. And that's why we have 
juries. Juries hear the evidence, they decide if a company was 
negligent, they decide if a company knew or should have known 
the hazards of its products. And what we are facing and what 
these defendants frankly are facing are the verdict of juries. 
That is how we operate these things in the United States, we 
trust them to State court juries.
    Mr. Scott. Now victims of this conscious and cold-blooded 
business decision activity that creates nonmalignant 
situations, what is the--is there any damage--what kind of 
damages would occur if someone has nonmalignant----
    Mr. Siegel. Right, we have to remember exactly what 
nonmalignant means, people who are being castigated for having 
the temerity to seek compensation for a non malignant 
condition. That includes severe disabling, fatal asbestosis. 
That includes pleural thickening. That includes an entire 
spectrum of lung function or lack of decrease in pulmonary 
function, all of which comes under the heading of 
nonmalignancy. As we know, the first massive wave of asbestos 
deaths in this country was the massive wave of asbestosis 
deaths, and there are continuing cases of asbestosis even 
today. And to suggest that $40,000 for asbestosis is some kind 
of windfall to these people is frankly offensive. I know it 
would be offensive to my clients.
    Mr. Franks. Well, I am glad we settled the issue today. And 
I think thank you all for being here and without objection, all 
Members will have 5 legislative days to submit to the chair 
additional written questions for the witnesses which we will 
forward and ask the witnesses to respond as promptly as they 
can so that the answers may be made a part of the record.
    Without objection all Members will have 5 legislative days 
with which to submit any additional materials for inclusion in 
the record. And with that, I sincerely thank all of the 
witnesses again, I thank the Members and observers and this 
meeting is now adjourned.
    [Whereupon, at 12:16 p.m., the subcommittee was adjourned.]
                         



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