[Congressional Record Volume 145, Number 151 (Monday, November 1, 1999)]
[Senate]
[Pages S13603-S13604]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 MISLEADING ADVERTISEMENT FOR THE FAIRNESS IN ASBESTOS COMPENSATION ACT

  Mr. LEAHY. Mr. President, I come to the Senate floor today to stand 
up for a small business in my home state--the Rutland Fire Clay Company 
of Rutland, VT.
  For the past week, a coalition of 240 special interest organizations 
have run a series of the same paid advertisements in such Washington-
based publications as Roll Call and National Journal's Congress Daily 
AM . The targets of these interest groups in this expensive ad campaign 
are, of course, the members of this body and of the House of 
Representatives. The advertisement uses the recent bankruptcy 
reorganization filing of the Rutland Fire Clay Company to promote the 
Fairness in Asbestos Compensation Act, S. 758 and H.R. 1283.
  Mr. President, here is a copy of this ad. The headline is: ``How 
asbestos litigation ruined a family business.'' Then in the body of the 
advertisement is this pullout headline: ``Rutland Fire Clay Files For 
Chap. 11.'' Throughout the ad is the history of this 116-year-old 
Vermont firm as reported in the Rutland Herald on October 19, 1999.
  Finally, the ad concludes with this statement: ``we believe that the 
interests of the hundreds of large and small businesses affected by 
this national travesty, their employees, pensioners, communities who 
depend on them, and their millions of shareholders warrant your support 
of the Act as well.'' I ask unanimous consent that the text of this 
advertisement be printed in the Record at the end of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. LEAHY. Mr. President, I am offended by this slick advertisement. 
It is clear that the executives on Madison Avenue who crafted this ad 
want lawmakers--you, me, and all of our colleagues--to believe that the 
employees of the Rutland Fire Clay Company support the Fairness in 
Asbestos Compensation Act and that this bill would have helped the 
Vermont firm avoid reorganization in bankruptcy. Nothing is further 
from the truth.
  Thomas Martin, who is the President of the Rutland Fire Clay Company, 
and who is named in the advertisement, has written to me to set the 
record straight. Mr. Martin writes: ``I reviewed the bill and my 
opinion is it would not help Rutland Fire Clay Company reduce this 
[asbestos litigation] burden, nor would it help other small businesses 
with thousands of claims. . . . Under S. 758 costs would be apportioned 
to Rutland Fire Clay Company equally, and thus higher, than under the 
current system.''
  Mr. Martin continues: ``The advertisement's heading gave the 
impression that our family business would be `ruined' and that our 22 
employees would be out of work. The truth is that we have worked out a 
consensual bankruptcy plan which recognizes the value of Rutland Fire 
Clay Company and its employees. No jobs will be lost and we will 
continue to serve the fireplace and home repair markets as we have for 
116 years.''
  Finally, Mr. Martin notes: ``our firm in no way assisted in 
preparation of the CAR advertisement nor did we have any knowledge of 
it until your office sent me a copy.''
  I ask unanimous consent that the full text of Thomas Martin's letter 
to me be printed in the Record at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)
  Mr. LEAHY. I have met with Tom Martin of the Rutland Fire Clay 
Company and corresponded with him about asbestos litigation. Mr. Martin 
should be commended for reaching a settlement with his insurers and the 
trial bar concerning his firm's asbestos problems. Unlike some big 
businesses that are trying to avoid any accountability for their 
asbestos responsibilities through national legislation, Mr. Martin and 
the Rutland Fire Clay Company are trying to do the right thing within 
the legal system.
  Mr. Martin plans to lead the Rutland Fire Clay Company from 
bankruptcy next year as a stronger firm with a solid financial 
foundation for the 21st Century. I applaud Tom Martin and the employees 
of the Rutland Fire Clay Company for their efforts.
  Mr. President, I am willing to work with my colleagues on both sides 
of the aisle and with interested parties to craft fair legislation to 
help victims and businesses, large and small, affected by asbestos. But 
exploiting the bankruptcy filing of a small firm in Vermont and using 
misleading advertisements to promote a flawed bill are not the right 
ways to advance our consideration of this issue, and they are certainly 
not an admirable way to attempt to sway opinion in or outside of this 
body.
  I believe the 240 special interest organizations that sponsored this 
advertisement owe an apology to Tom Martin and the other Vermonters who 
work for the Rutland Fire Clay Company, and I will remind them of that 
obligation until they offer that apology.

                             Exhibit No. 1

                [From the Rutland Herald, Oct. 19, 1999]

                  Rutland Fire Clay Files for Chap. 11


  how asbestos litigation ruined a family business: 22 employees and 
                            50,000 lawsuits

       Asbestos lawyers would have you believe that only billion 
     dollar companies are affected by the asbestos nightmare. But 
     in reality, more than 300 small businesses, as well as large 
     ones, find themselves today enmeshed in the asbestos 
     litigation mess. This spiraling litigation--filed largely by 
     non-sick claimants who may have been exposed to asbestos, as 
     have a majority of all Americans, but have no physical 
     symptoms or impairment--continues to drive firms to 
     bankruptcy or its brink.
       Just last week, Rutland Fire Clay, a small family-owned 
     Vermont manufacturer of furnace and wood stove repair 
     cements, was

[[Page S13604]]

     forced into bankruptcy as a result of what it termed ``the 
     crushing burden of asbestos related lawsuits.''
       You should know these facts about the Rutland Fire Clay 
     case:
       Rutland Fire Clay, with its 22 employees, is a small, 116 
     year-old family business, in Rutland, Vermont.
       The business was started in 1883 by Rufus Perkins and his 
     two sons and has manufactured, for more than 100 years, a 
     cement material for use in the repair of furnaces and 
     residential wood stoves sold through hardware stores. The 
     product originally contained a very small amount of 
     encapsulated asbestos, although Rutland discontinued the use 
     of asbestos in its products almost 30 years ago.
       Since 1984, there have been 50,000 asbestos cases filed 
     against the company, and 37,000 remain pending today--most of 
     these cases involving non-sick claimants.
       The company has estimated its liability for current and 
     future asbestos claims at $67 million, with assets of only $3 
     million.
       Thomas Martin, the firm's president, said in a Rutland 
     press interview last week, that if it weren't for asbestos 
     claims, the 116 year-old company would never have wound up in 
     bankruptcy. He described business as ``excellent,'' with the 
     company expecting a record sales year.
       The Rutland Fire Clay case is a stark example of what 
     happens in the asbestos litigation world today. Asbestos 
     lawyers continue to draw from an almost limitless pool of 
     potential defendants by targeting, with the touch of a word 
     processing button, small and large companies--many with only 
     a tangential association to asbestos. These ``asbestos'' 
     defendants include local building products distributors, home 
     remodeling centers, ``mom and pop'' hardware stores, and 
     other unsuspecting companies who manufactured, or only 
     distributed, products that may have contained nominal amounts 
     of asbestos in a component part of end products, such as 
     forklifts, cranes, gaskets, grinding wheels, lawnmower 
     engines, etc.
       While the principal focus of the bipartisan Fairness in 
     Asbestos Compensation Act is, as it should be, on the rights 
     of deserving asbestos victims, we believe that the interests 
     of the hundreds of large and small businesses affected by 
     this national travesty, their employees, pensioners, 
     communities who depend upon them, and their millions of 
     shareholders warrant your support of the Act as well.
                                  ____


                             Exhibit No. 2


                                    Rutland Fire Clay Company,

                                    Rutland, VT, October 29, 1999.
     Hon. Patrick J. Leahy,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Leahy: Thank you for sending me the recent 
     advertisement produced by the Coalition for Asbestos 
     Resolution (CAR) that is using our recent bankruptcy filing 
     in its campaign in support of S. 758 and its companion, H.R. 
     1283.
       We presently have over 37,000 lawsuits pending against us 
     and we have approximately $4 million of insurance and $2 
     million in assets. For small firms such as ours with limited 
     remaining insurance and minimal assets, the burden of claims 
     is indeed crushing as quoted in the CAR advertisement. 
     However, I reviewed this bill and my opinion is it would not 
     help Rutland Fire Clay Company reduce this burden, nor would 
     it help any other small business with thousands of claims. As 
     an example under section 601 apportionment of costs for the 
     ARC are addressed. Potential disputes could easily arise 
     between defendants as to their respective share of costs. Our 
     company cannot afford the expense of litigation if 
     disagreement with the large defendants is the result. In 
     addition, our historical costs per claim processed for 
     defense and indemnity have been very low relative to that of 
     other defendant companies. Under S. 758 costs would be 
     apportioned to Rutland Fire Clay Company equally, and thus 
     higher, than under the current system.
       The advertisement's headline gave the impression that our 
     family business would be ``ruined'' and that our 22 employees 
     would be out of work. The truth is that we have worked out a 
     consensual bankruptcy plan which recognizes the value of 
     Rutland Fire Clay Company and its employees. No jobs will be 
     lost and we will continue to serve the fireplace and home 
     repair markets as we have for 116 years.
       Lastly, our firm in no way assisted in preparation of the 
     CAR advertisement nor did we have any knowledge of it until 
     our office sent me a copy.
       Thank you,
           Sincerely,
                                                 Thomas P. Martin,
     President.

                          ____________________