[Congressional Record Volume 144, Number 136 (Friday, October 2, 1998)]
[Senate]
[Pages S11343-S11345]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself, Mr. Dodd, Mr. Ashcroft, Mr. Lieberman, 
        Mr. Sessions, and Mr. Torricelli):
  S. 2546. A bill to establish legal standards and procedures for the 
fair, prompt, inexpensive, and efficient resolution of personal injury 
claims arising out of asbestos exposure, and for other purposes; to the 
Committee on the Judiciary.


           the fairness in asbestos compensation act of 1998

  Mr. HATCH. Mr. President, I am pleased to introduce today the 
``Fairness in Asbestos Compensation Act of 1998''. With me, sponsoring 
this important legislation are: Senator Dodd, Senator Ascroft, Senator 
Lieberman, Senator Sessions and Senator Torricelli.
  Asbestos litigation is a national crisis. Today, state and federal 
courts are overwhelmed by up to 150,000 asbestos lawsuits. Over 30,000 
new suits are added to the dockets annually. Unfortunately, those that 
are truly sick with asbestosis and various asbestos-related cancers and 
illnesses spend years in court before receiving any compensation, and 
then lose 60% of that compensation to attorneys' fees and other costs. 
The best available data show that on average asbestos suits take 31 
months to reach resolution, compared to 18 months for other product 
liability suits. One cause of this extraordinary delay in compensation 
is the large number of lawsuits filed by those who, without any 
symptoms or signs of asbestos-related illness, bring suits for future 
medical monitoring and fear of cancer.
  In a lottery-like system, juries award enormous compensation and 
outrageous punitive damages to non-impaired plaintiffs, while others in 
identical cases or with actual illness receive little or no 
compensation. Excessive Damage awards, along with the transaction costs 
associated with the lawsuits, deplete the financial resources of 
defendant companies and lead them to file for bankruptcy. As legal and 
financial resources are tied up and exhausted, it is increasingly 
unclear whether those who are truly inflicted with asbestos-caused 
diseases will be able to recover anything at all in the years ahead.
  Courts have tried unsuccessfully to cope with and alleviate the 
problems associated with the more than half a million asbestos cases. 
The major parties involved attempted to compromise on a fair and 
equitable solution that included prompt compensation. The Third Circuit 
Court of Appeals overturned one such compromise, known as the Amchem or 
Georgine agreement, on civil procedural rule grounds but found the 
settlement to be ``arguably a brilliant partial solution.'' Justice 
Ruth Bader Ginsburg, writing for the Supreme Court, upheld the 
Appellate decision and stated, ``[t]he argument is sensibly made that a 
nationwide administrative claims processing regime would provide the 
most secure, fair and efficient means of compensating victims of 
asbestos exposure. Congress, however, has not adopted such a 
solution.'' The Court accurately recognized that Congress is the most 
appropriate body to resolve the asbestos crisis. That is what we intend 
to do by introducing this important legislation.
  Mr. President, by virtue of the hundreds of thousands of cases that 
already have been litigated in the court system, the legal and 
scientific issues relating to asbestos litigation have been thoroughly 
explored and punishments have been exacted on defendant companies. 
Recognizing the potential dangers of asbestos exposure, we have seen 
asbestos consumption in the United States drop to historic lows since 
peak consumption in the early 1970's. These factors along with the 
recent court decisions demonstrate that the asbestos litigation issue 
is now ripe for a legislative solution.
  The bill that I introduce today will correct the asbestos litigation 
crisis problems. It is crafted to reflect as closely as possible the 
original settlement agreed to by the involved parties in the Amchem 
settlement. This bill will eliminate the asbestos litigation burden in 
the courts, get fair compensation for those who currently are sick, and 
enable the businesses to manage their liabilities in order to ensure 
that compensation will be available for future claimants. It is 
important to note that no tax-payer money will fund this bill. It will 
be entirely funded by asbestos defendants.
  Specifically, the bill reforms asbestos litigation in the judicial 
system by establishing a national claims facility to provide fair and 
prompt compensation for persons suffering from asbestos-associated 
illnesses. Eligibility for compensation will be determined by objective 
predetermined criteria. The legislation provides for alternative 
dispute resolution and allows plaintiffs who go through the system 
without resolving their claims through the claims facility to use the 
tort system. Again no taxpayer dollars will fund this facility or any 
part of this program.
  I have carefully crafted this legislation so that it is at least as 
favorable--and, in many cases, more favorable--to claimants as the 
original Amchem settlement. As this bill makes its way through the 
legislative process, I look forward to working with my colleagues to 
further refine the language in order to achieve the maximum public 
benefit from this legislation.
  Mr. DODD: Mr. President, I am pleased to join with my colleague, 
Senator Hatch, to introduce the ``Fairness in Asbestos Compensation Act 
of 1998.'' This legislation would expedite the provision of financial 
compensation to the victims of asbestos exposure by establishing a 
nationwide administrative system to hear and adjudicate their claims.
  Mr. President, millions of American workers have been exposed to 
asbestos on the job. Tragically, many have contracted asbestos-related 
illness, which can be devastating and deadly. Others will surely become 
similarly afflicted. These individuals--who have or will become 
terribly ill due to no fault to their own--deserve swift and fair 
compensation to help meet the costs of health care, lost income, and 
other economic and non-economic losses.
  Unfortunately, many victims of asbestos exposure are not receiving 
the efficient and just treatment they deserve from our legal system. 
Indeed, it can be said that the current asbestos litigation system is 
in a state of crisis. Today, more than 150,000 lawsuits clog the state 
and federal courts. In 1996 alone, more than 36,000 new suits were 
filed. Those who have been injured by asbestos exposure must often wait 
years for compensation. And when that compensation finally arrives, it 
is often eaten up by attorneys' fees and other transaction costs.
  In the early 1990's, an effort was made to improve the management of 
federal asbestos litigation. Cases were consolidated, and a settlement 
to resolve them administratively was agreed to between defendant 
companies and plaintiffs' attorneys. This settlement also obtained the 
backing of the Building and Construction Trades Union of the AFL-CIO. 
Regrettably, the settlement was overturned by the Third Circuit Court 
of Appeals in 1996. Though the Court termed the settlement ``arguably a 
brilliant partial solution,'' it found that the class of people created 
by the settlement--namely, those exposed to asbestos--was too large and 
varied to be certified pursuant to Rule 23 of the Federal Rules of 
Civil Procedure. The Supreme Court affirmed that decision. In its 
decision, the Court effectively invited the Congress to provide for the 
existence of such a settlement as a fair and efficient way to resolve 
asbestos litigation claims.
  Hence this bill. In simple terms, it codifies the settlement reached 
between companies and the representatives of workers who were exposed 
to asbestos on the job. It would establish a body to review claims by 
those who believe that they have become ill due to exposure to 
asbestos. It would provide workers with mediation and binding 
arbitration to promote the fair and swift settlement of their claims. 
It would allow plaintiffs to seek additional compensation if their non-
malignant disease later developed into cancer. And it would limit 
attorneys' fees so as to ensure that a claimant receives a just portion 
of any settlement amount.

[[Page S11344]]

  All in all, Mr. President, this is a good bill. I commend Senator 
Hatch for his leadership in crafting it. However, it is not a perfect 
bill. My office has received comments on the bill from representatives 
of a number of parties affected by asbestos litigation. I hope and 
expect that those comments will be given the consideration that they 
deserve by the Judiciary Committee and the full Senate as this 
legislation moves forward, as I hope it will early in the 106th 
Congress.
  Mr. ASHCROFT. Mr. President, I rise today as a co-sponsor of the 
Fairness in Asbestos Compensation Act of 1998 to speak in favor of this 
important, bipartisan measure. I support this bill for a simple 
reason--it makes sense. The problems caused by the manufacture and use 
of asbestos are well-documented. Although some companies initially 
denied responsibility and fought suits to recover for asbestos-related 
injuries in court, the injuries associated with asbestos and the fact 
that manufacturers are liable for those injuries are now well-
established.
  The courts--both state and federal--have done an admirable job of 
establishing the facts and legal rules concerning asbestos. That is a 
job the courts do well. However, now that the basic facts and liability 
rules have been established, the courts are being asked simply to 
process claims. That is not a job the courts do particularly well. The 
rules governing court actions give parties rights to dispute facts that 
have been conclusively established in other proceedings. All the while 
the meter is running for the lawyers on both sides. Dollars that could 
go to compensate deserving victims, instead go to lawyers and court 
costs.
  In the asbestos context, these problems are exacerbated by the finite 
amount of resources available to compensate victims and the fact that 
legal rules concerning both punitive damages and what constitutes a 
sufficient injury to bring suit make for jury awards that do not 
correspond to the seriousness of the injury. Someone filing suit 
because of a preliminary manifestation of a minor injury, i.e., pleural 
thickening, which may never lead to more severe symptoms, may receive 
more compensation than another person with more serious asbestos-
related injuries. None of this is to suggest that it is somehow wrong 
for plaintiffs with a minor injury to file suit. To the contrary, some 
state rules concerning when injury occurs obligate plaintiffs to file 
suit or risk having their suit dismissed as time-barred. What is more, 
in light of the finite number of remaining solvent asbestos defendants, 
potential plaintiffs have every incentive to file suit as soon as 
legally permissible.
  The Fairness in Asbestos Compensation Act of 1998 attempts to address 
these problems by establishing an administrative claims systems that 
aims to compensate victims of asbestos rationally and efficiently. The 
Act accomplishes this goal by ensuring that more serious injuries 
receive greater awards, by securing a compensation fund so that victims 
whose conditions are not yet manifest can recover in the future, and by 
eliminating the statute of limitations and injury rules that force 
plaintiffs into court prematurely. Although I wish I could claim some 
pride of authorship in these mechanisms, these basic features were all 
part of a proposed settlement worked out by representatives of both 
plaintiffs and defendants.
  At the end of last term, the Supreme Court rejected the proposed 
global asbestos settlement in Amchem Products versus Windsor. The 
District Court had certified a settlement class under Rule 23 that 
included extensive medical and compensation criteria that both 
plaintiffs and defendants had accepted. The Supreme Court ruled that 
this type of global, nationwide settlement of tort claims brought under 
fifty different state laws could not be sustained under Rule 23. The 
Court recognized that such a global settlement would conserve judicial 
resources and likely would promote the public interest. Nonetheless, 
the Court concluded that Rule 23 was too thin a reed to support this 
massive settlement, and that if the parties desired a nationwide 
settlement they needed to direct their attention to the Congress, 
rather than the Courts.
  I believe the Supreme Court was right on both counts--the proposed 
settlement criteria were in the public interest, but the proposed class 
simply could not be sustained under Rule 23. The Rules Enabling Act and 
the inherent limits on the power of federal courts preclude an 
interpretation of Rule 23 that would result in a federal court 
overriding or homogenizing varying state laws. However, as the Supreme 
Court pointed out, Congress has the power to do directly what the 
courts lack the power to do through a strained interpretation of Rule 
23.
  This bill takes up the challenge of the Supreme Court and addresses 
the tragic problem of asbestos. The bill incorporates the medical and 
compensation criteria agreed to by the parties in the Amchem settlement 
and employs them as the basis for a legislative settlement. In the 
simplest terms, the legislation proposes an administrative claims 
process to compensate individuals injured by asbestos as a substitute 
for the tort system (although individuals retain an ability to opt-in 
to the tort system at the back end). The net effect of this legislation 
should be to funnel a greater percentage of the pool of limited 
resources to injured plaintiffs, rather than to lawyers for plaintiffs 
and defendants.
  I want to be clear, however, that I am not here to suggest that this 
is a perfect bill. This bill represents a complex solution to a complex 
problem. A number of groups will be affected by this legislation, and 
it may be necessary to make changes to make sure that no one is 
unfairly disadvantaged by this legislation. But that said, I am 
confident that we can make any needed changes. We have a bipartisan 
group of Senators who have agreed to cosponsor this legislation, and 
the bill represents a sufficient improvement in efficiency over the 
existing litigation quagmire that there should be ample room to work 
out any differences.
  Finally, let me also note that this bill also plays a minor, but 
important role in preserving a proper balance in the separation of 
powers. I have been a strong and consistent critic of judicial 
activism. Judges who make legal rules out of whole cloth in the absence 
of constitutional or statutory text damage the standing of the 
judiciary and our constitutional structure. On the other hand, when 
judges issue opinions in which they recognize that the outcome sought 
by the parties might well be in the public interest, but nonetheless is 
not supported by the existing law, they reinforce the proper, limited 
role of the judiciary. Too often, federal judges are tempted to reach 
the result they favor as a policy matter without regard to the law. 
When judges succumb to that temptation, they are justly criticized. But 
when they resist that temptation, their self-restraint should be 
recognized and applauded. The Court in Amchem rightly recognized a 
problem that the judiciary acting alone could not solve. By offering a 
legislative solution to that problem the bill provides the proper 
incentives for courts to be restrained and reinforces the proper roles 
of Congress and the judiciary.
  In short, this bill provides a proper legislative solution to the 
asbestos litigation problem. It ensures that in an area in which 
extensive litigation has already established facts and assigned 
responsibility, scarce dollars compensate victims, not lawyers. I want 
to thank Chairman Hatch for his leadership on this issue and to thank 
my co-sponsors for their work on the bill. I look forward to working 
with them to ensure final passage of this legislation. The courts have 
completed their proper role in ascertaining facts and liability. It is 
time for Congress to step in to provide a better mechanism to direct 
scarce resources to deserving victims.
  Mr. LIEBERMAN. Mr. President, I want to thank Senator Hatch for 
introducing this important legislation, which I am pleased to co-
sponsor with him and Senators Dodd, Ashcroft, Sessions, and Torricelli. 
As Senator Hatch already has explained, this bill addresses an issue--
asbestos litigation--that has clogged the federal and state courts for 
some time now. Due to the huge number of these cases and the massive 
verdicts they often yield, it is unclear whether those who have been 
exposed to asbestos, but have not yet become sick, will be able to gain 
full compensation for their injuries should they become sick in the 
future.

[[Page S11345]]

  To address these concerns, and respond to calls from the courts and 
others for creating an alternative mechanism for resolving these 
disputes outside of the court system, a settlement was reached several 
years ago that, among other things, would have created an alternative 
claims resolution system for dealing with certain asbestos claims. 
Unfortunately, despite the desire of representatives of the interested 
parties--both victims and defendants--to enter into this settlement, 
and despite the trial court's belief that the settlement was fair, the 
Supreme Court voided it. The Supreme Court acted, however, not because 
it believed that the settlement was in any respect unfair, but instead 
because it concluded that only Congress has the authority to sanction 
such a settlement.
  That is the goal of this goal--for Congress to step up to the plate 
and authorize a solution to the asbestos litigation problem that will 
ensure that all those who become sick from asbestos are fairly and 
efficiently compensated, as contemplated by the parties' earlier 
settlement. Because I believe this is a problem crying out for 
Congressional action, and because I believe the settlement reached by 
the parties was a fair one, I am supporting the bill.
  With that said, I understand that representatives of some of those 
exposed to asbestos who supported the settlement are not currently 
supporting this proposed legislation. Because I firmly believe that 
this should go forward as a consensus bill, I remain open to supporting 
any reasonable changes that would be required to gain the support of 
all parties with an interest in asbestos litigation. I am hopeful that 
we can gain their support and move forward with and pass this 
legislation.
                                 ______