[Congressional Record Volume 150, Number 26 (Wednesday, March 3, 2004)]
[Senate]
[Pages S2173-S2176]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             THE FAIRNESS IN ASBESTOS INJURY RESOLUTION ACT

  Mr. HATCH. Mr. President, I rise today to support the comments from 
the distinguished majority leader of last Friday with respect to the 
asbestos legislation. This is an absolutely vital issue for this 
country's civil justice system and, most importantly, to our economy.
  If you want to have jobs, then let us get this asbestos reform bill 
through and we will get hundreds of thousands, if not millions, of jobs 
back, and perhaps the 70 large companies which have gone into 
bankruptcy will be able to

[[Page S2174]]

resurrect themselves and be able to employ more people.
  We now have the opportunity with S. 1125, the Fairness In Asbestos 
Injury Resolution Act, to correct what has become a gross injustice 
against asbestos victims and the defendants who are relentlessly hauled 
into court despite having never manufactured or ever sold a shred of 
asbestos fiber.
  It has been a long road for this legislation so far. But I concur 
with Senator Frist, our distinguished majority leader, that we are 
finally in a position where we can enact this legislation.
  We went through a grueling markup of this bill last year, and since 
then have engaged in focused discussions over remaining differences 
under the stewardship of my friend from Pennsylvania, Senator Specter, 
and Judge Becker of the third circuit court of appeals. The 
stakeholders and Members involved in these discussions all agree that 
this process has proved to be quite successful, not only in clarifying 
areas of disagreement but in proposing workable solutions to these 
areas. As a result, there now remains a mere handful of issues left to 
consider. But given the timeframe set forth by the leader last Friday, 
I believe more needs to be done to help bridge the gap on the remaining 
issues. Therefore, I propose that we get the primary stakeholders and 
interested Members together for a 2-day-long negotiating session 
sometime in mid- to late-March with this type of focus on the last 
handful of these issues. I believe we can resolve the remaining 
differences in this bill. There is nothing we can't solve, if we will 
work together. This issue is too important, and we are too close not to 
give this one last effort through an extended 2-day-long meeting. I 
know Judge Becker and the stakeholders and the key Republican Members 
have all expressed their desire to participate in this 2-day meeting. I 
hope my Democratic colleagues who have been working on this issue will 
join us in the final push toward reaching consensus.

  Let me give some background for those who have not been as steeped in 
this legislation over the past year or so. For more than 20 years, 
compensation to legitimate victims of asbestos exposure has been 
unacceptably diminished and delayed. It has become quite evident to the 
committee that tens of thousands of true asbestos victims are faced 
with agonizing pain and suffering with uncertain prospects of a 
meaningful recovery in our existing tort system. These victims are left 
with little to nothing because precious resources are being diverted to 
unimpaired plaintiffs and a handful of creative trial lawyers who are 
looking to make a quick buck.
  I am a member of the American Trial Lawyers Association, having been 
a trial lawyer in my former non-Senate life, since we Mormons believe 
in a premortal existence. I have to say that my fellow ATLA members are 
embarrassed by this small cadre of personal injury lawyers who are 
thinking only of themselves and the huge fees they make, with the 
approximately 50 to 60 percent of the moneys that go to attorneys. They 
are embarrassed by it. They won't say that because they don't want to 
cut up their fellow personal injury lawyers. But that is what is going 
on here.
  In up to 90 percent of the cases that have been filed, the person has 
never had a sick day in his life with regard to asbestos. In most of 
those cases, they have been sent to doctors who will find injury no 
matter what. It borders on fraud and in some cases it is fraudulent. It 
is wrecking the country. Seventy major companies are now in bankruptcy, 
and there are over 8,400 or more, going up to 15,000, that possibly 
will be thrown into bankruptcy that never had anything to do with 
asbestos or made anybody ill from asbestos.
  At the same time, scores of companies with almost no connection to 
the problem have had to file for bankruptcy, as I have said, and 
hundreds of others live under the constant threat of insolvency from 
this litigation. What this translates into is lost jobs, depleted 
pensions, and weaker financial markets.
  If my friends on the other side of the aisle want to do something 
about jobs, let us get serious about asbestos reform. Let us get 
serious about doing what is right for those who are truly ill and who 
won't get very much at all. Those who were employed by 70 companies are 
getting 5 cents on the dollar. We take care of them with this trust 
fund.
  We have heard the statistics but they bear repeating. The RAND 
Institute for Civil Justice tells us, to date, 70 companies have been 
forced into bankruptcy--at least 3 with operations in my home State of 
Utah.
  The number of claims continues to rise as does the number of 
companies pulled into the web of this abusive litigation, often with 
little, if any, culpability. More than 600,000 people have filed 
claims, and more than 8,400 companies have been named as defendants in 
asbestos litigation.
  This has become such a gravy train for some abusive personal injury 
lawyers that over 2,400 additional companies were named in the last 
year alone. RAND, this great research institution, also notes in its 
bipartisan research that about ``two-thirds of the claims are now filed 
by the unimpaired, while in the past they were filed only by the 
manifestly ill.''
  That is a low number. It is really up to 90 percent. But let us take 
their number. Two-thirds of them are filed by people who really are not 
impaired.
  Former Attorney General Griffin Bell, amongst many others, has 
denounced this type of ``jackpot justice.''
  To address this national problem, I introduced a bipartisan bill with 
my friends, Senators Ben Nelson, Mike DeWine, Zell Miller, George 
Voinovich, George Allen, Saxby Chambliss, and Chuck Hagel. This bill 
creates a trust fund which provides expedited no-fault compensation to 
victims while reducing the wasteful transaction costs. Attorney's fees 
and transactions costs have been as high as 60 percent of the amounts 
recovered.
  After weeks of marking up the bill, we passed this legislation 
favorably from the committee with bipartisan support last July. No one 
can accuse us of being unwilling to compromise. When I look at where 
our bill started--and it was a good start--and where it is now, our 
willingness to compromise is abundantly clear.
  Let me show you this chart. In total, we have made 53 changes to this 
bill to accommodate concerns raised by our friends on the other side, 
the Democrats.
  Let me review a brief history of these changes. In May, we circulated 
a bipartisan draft measure, and my staff met then with Democratic staff 
to listen to their concerns. As a result of these discussions, we 
incorporated many of their requests even before introduction.
  We then embarked on several weeks of markups that saw dozens of 
Democratic-initiated amendments adopted into this legislation. I didn't 
agree with all of these amendments, but it can't be said that there 
hasn't been strong participation with Democrats on this bill.
  By the way, I met for a couple of hours with the head of the AFL-CIO 
to explain this bill to him. I know deep in my soul that he knows I am 
doing everything in my power to do what is right. I know he knows that 
we have done what is right. I respect and appreciate the fact that he 
sat down with me and talked with me about it.
  This chart behind me summarizes some of the major changes we made at 
the behest of the Democrats.
  Raising the level of mandatory contributions to well over $100 
billion; 111 different changes to increase the value of awards to 
victims; 22 changes to make it easier for asbestos victims to be 
eligible for compensation; a historic, bipartisan agreement on 
eligibility criteria where the unions and everyone came together; 
reimbursement for medical monitoring--now they will pay for medical 
monitoring of people who are not sick and especially those who are; 
five additional provisions to guarantee payment of mandatory 
contributions; relief for asbestos victims in Libby, MT, where asbestos 
was mined; a Federal ban on asbestos and ``bad actor'' protections.

  Look at this chart. ``To build bipartisan support, more than 53 
changes to S. 1125 have already been made at the urging of the 
Democrats. These occurred prior to the bill's introduction, during 
negotiations between introduction and committee consideration, and 
throughout the four committee markups devoted to the legislation.''
  I ask unanimous consent all of these changes be printed in the 
Record.

[[Page S2175]]

  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    Building a Consensus on Asbestos

       To build bipartisan support, more than 53 changes to S. 
     1125 have already been made at the urging of the Democrats. 
     These occurred prior to the bill's introduction, during 
     negotiations between introduction and Committee 
     consideration, and throughout the four Committee mark-ups 
     devoted to the legislation. The changes include:
       Raising the Level of Mandatory Contributions to well over 
     $100 Billion;
       11 Different Changes to Increase the Value of Awards to 
     Victims;
       22 Changes to Make It Easier for Asbestos Victims to be 
     Eligible for Compensation;
       An Historic, Bipartisan Agreement on Eligibility Criteria;
       Reimbursement for Medical Monitoring;
       5 Additional Provisions to Guarantee Payment of Mandatory 
     Contributions;
       Relief for Asbestos Victims in Libby, Montana;
       A Federal Ban on Asbestos and ``Bad Actor'' Protections;
       Raising the compensation value for eligible mesothelioma 
     claims to $1,000,000;
       Limiting the offset of collateral sources to judgments and 
     settlements, thus increasing the value of awards to 
     claimants;
       Indexing the scheduled award values for future inflation;
       Specifying that awards should be paid over 3 years, but in 
     no event over more than 4 years;
       Moving the Asbestos Court established under S. 1125 to the 
     United States Court of Federal Claims;
       Changing the two-year statute of limitations to four years;
       Eliminating the rule of construction on the statute of 
     limitations in favor of the Fund;
       Striking language requiring a claimant to submit evidence 
     of product identification as a factor in proving asbestos 
     exposure;
       Reducing the latency period to 10 years for all disease 
     categories;
       Eliminating the requirement that the diagnosing physician 
     be the ``treating'' physician;
       Increasing the compensation level for the most severe 
     asbestosis claims to $750,000;
       Providing alternatives to the physical examination 
     diagnostic requirement for claimants who are decreased;
       Eliminating language requiring that the diagnosing 
     physician independently verify the claimant's exposure;
       Dropping language that would have stipulated that an 
     attorney retention agreement not be required as a 
     prerequisite to a medical examination or medical screening 
     for purposes of obtaining a medical diagnosis or other 
     medical information;
       Raising the compensation level available for eligible lung 
     cancer claims with underlying pleural disease (Level VIII) to 
     a maximum of $1,000,000 (depending on smoking history);
       Expending eligibility to include U.S. citizens exposed 
     while serving on U.S. flagships and U.S. citizens exposed 
     while employed overseas by a U.S. company;
       Allowing take-home exposures to meet the exposure 
     requirements under the Act;
       Eliminating a requirement of at least 6 months of 
     occupational exposure to asbestos prior to December 31, 1982;
       Creating an entirely new eligibility category to compensate 
     claimants who fail the test for restrictive disease;
       Raising the compensation value for eligible asbestos claims 
     (Level III) to $75,000;
       Adding bilateral pleural calcification to the definition of 
     bilateral asbestos-related nonmalignant disease;
       Removing the requirement of a grade B2 or greater for 
     pleural conditions, including thickening and plagues, to show 
     underlying bilateral asbestos-related non-malignant disease;
       Replacing the definition of ``significant occupational 
     exposure'' with a definition of ``substantial occupational 
     exposure,'' including the clarification that ``on a regular 
     basis'' means ``on a frequent or recurring basis'';
       Providing an exception to the year and industry weighting 
     of the occupational exposure requirements for claimants whose 
     exposures were above applicable OSHA standards;
       Establishing a scheduled value of compensation for Level II 
     claims (mixed disease with impairment) at $20,000;
       Expanding the class of claimants eligible for compensation 
     under Level III to include anyone showing a 20% reduction in 
     pulmonary function, even if their overall pulmonary function 
     is still within normal limits;
       Creating an additional category of non-malignant disease to 
     reflect an intermiate level of impairment (Level IV);
       Reducing the ILO requirement from 2/1 to 1/1 for severe 
     asbestosis;
       Creating standards for moderate and severe asbestosis 
     categories based on the AMA Guide to the Evaluation of 
     Permanent Impairment;
       Allowing alternative tests to show impairment based on DLCO 
     and PO2 for Level V;
       Increasing the compensation level for intermediate (Level 
     IV) asbestosis claims to $300,000;
       Providing eligibility for compensation for colorectal 
     cancer claims;
       Providing three scheduled value ranges for smokers, former 
     smokers and non-smokers for each of the lung cancer 
     categories;
       Creating a separate category of eligible lung cancer claims 
     for current smokers with no evidence of underlying asbestos-
     related non-malignant disease;
       Establishing a compensation range for eligible lung cancer 
     claims without underlying asbestos-related non-malignant 
     disease to a maximum of $600,000 (depending on smoking 
     history);
       Creating an exceptional medical claims panel to address 
     those claims that might not meet the medical criteria in the 
     bill (e.g. no pulmonary function test);
       Providing that CT scans may be submitted (with an x-ray) to 
     review exceptional medical claims;
       Strengthening the enforcement authority of the 
     Administrator with respect to payment of mandatory 
     contributions;
       Amending Title 18 of the United States Code to prohibit 
     fraud on the Asbestos Insurers Commission and Office of 
     Asbestos Injury Claims Resolution;
       Limiting the time period in which an inequity adjustment 
     will be in effect;
       Providing that the adjustments may be reinstated in the 
     event there is a material change in the defendant 
     participant's conditions;
       Doubling the amount of the hardship and inequity 
     adjustments available under the Act;
       Providing for inequity adjustments when the defendant's 
     prior asbestos expenditures primarily consist of defense 
     costs where settlements were entered into or where no adverse 
     judgments were found;
       Providing for inequity adjustments where the amount of 
     contribution is exceptionally inequitable when compared with 
     the defendant's likely future liability and with the 
     liability of the other defendant participants in the same 
     tier;
       Establishing that a successor in-interest of any 
     participant would be liable under the Act;
       Revising federal sentencing guidelines for environment 
     crimes to prevent ``bad actors'' from recklessly exposing 
     individuals to asbestos health risks;
       Requiring an annual report by the Administrator as to the 
     status of the Fund;
       Making the Freedom of Information Act applicable to the 
     Asbestos Insurers Commission; and
       Increasing the compensation levels available for eligible 
     lung cancer claims with underlying asbestosis a maximum of 
     $1,000,000 (depending on smoking history).

  Mr. HATCH. That chart is amazing. I don't agree with all those 
changes, but we made them to accommodate our friends on the other side. 
Just look at all these changes. No one can tell us we are not doing 
everything we can to make this bill a consensus bill and to be fair to 
everybody.
  We know there are a lot of people who will be compensated under this 
bill who have never suffered a bit from asbestos, but we have given the 
benefit of the doubt. Many of them are union workers who have smoked 
all their lives and got cancer from smoking but have had something to 
do with asbestos at one time or another in their career but probably 
have shown no feasible asbestos.
  Literally thousands and thousands, hundreds of thousands, will be 
compensated. There comes a point where you have to say, Let's do what 
is right here. Let's not just keep loading this bill up so you can beat 
your breast and claim you get more money, more blood out of these 
companies.
  Moreover, even though our original claim values would have on average 
provided more money to legitimate claimants, we increased the values 
even more and we removed most collateral source offsets to ensure more 
of the award goes directly to the claimant. That means even though they 
received moneys, we removed those as offsets.
  These changes listed on the chart behind me do not even include other 
changes we have offered since the bill was reported out of committee. 
Through the leadership of the majority leader, we got contributors to 
add an additional $6 billion in overall funding along with significant 
increases in claims values in many categories. We started at $94 
billion in mandatory funding because this amount would give more money 
to claimants on average than they received in the current tort system. 
Nonetheless, through the markup in the Frist financing agreement, we 
increased the fund to have the capacity to pay out $114 billion to 
claimants. It is not just money, either. The Frist financing deal adds 
more flexible borrowing authority as yet another safeguard for 
solvency. Senator

[[Page S2176]]

Frist has my cooperation and support in doing this.
  Our willingness to resolve the Democratic concerns speaks for itself 
by virtue of where this bill stands today. I again thank Senators Frist 
and Specter for their willingness to help resolve some of the difficult 
issues on this legislation and, of course, the cosponsors as well.
  Let me talk about the final issues. Even though we made all of these 
changes that show up here, I understand some want to make further 
changes, including streamlining the claims process even more. I have 
said I am willing to look at such proposals, but the time has come and 
the time is past to wrap up this process. It passed out of the 
committee last summer and we need to stop talking and do something. 
With all of this whining about jobs that all of us want to get in this 
country, this bill would do more to create jobs and solidify our 
economy than any other bill we can pass this year. This bill makes 
sense except for how costly it is, but even then we are willing to do 
that. This is why we need to continue working for the next several 
weeks on the issues and sit down in a 2-day meeting sometime in the 
last half of March to see if we can finally get agreement on all of the 
issues.
  I thank Senator Specter and Judge Becker for their valuable 
assistance. I was not really happy because we had gone through so much 
and I had commitments from so many people if we got to $108 billion, 
this bill would go and they would support it. I got it to $108 
billion--and I think they thought we could not do it--and they said we 
have to have more and more and more. We are giving them more, even.

  I also appreciate the willingness of Senator Specter and Judge Becker 
to help finally resolve these issues in a 2-day session. My friends, 
Senators Leahy, Dodd, and Daschle, have been graciously willing to sit 
down with us at a staff level to narrow the differences and I am 
confident they will be willing to join in this 2-day meeting as well. 
We are willing to accommodate schedules to get full participation in 
this meeting within a reasonable fashion.
  We simply cannot delay any longer. We need to ensure the truly sick 
get paid and paid in a timely manner. We need to provide stability to 
our economy by stemming the rampant litigation that resulted in a tidal 
wave of bankruptcies and stop endangering jobs and pensions through the 
current broken system. This crisis reaches far and wide and it hurts 
everyone.
  What is happening with these bad acting personal injury lawyers who 
have been handling some of these cases, they forum-shop the cases into 
jurisdictions where juries go wild and judges support them and judges 
are in the pocket of the plaintiffs' lawyers. In one case, if I recall 
it correctly, five people, not one of whom experienced a sick day up to 
that time, got $125 million, while thousands and thousands of very sick 
people get nothing. That is wrong.
  For anybody to keep supporting that process the way some have done is 
wrong. That is why I am here on the floor to challenge all of our 
colleagues to work together in good faith, put our differences aside 
and let's get this bill done in the best interests of our country and 
the best interests of jobs. If that is not done, I would not listen to 
one ``mouthing'' word from people on jobs because they are playing 
politics rather than doing the art of the doable, doing what needs to 
be done, what must be done in the interests of the sick people, the 
truly sick people and, I might add, many others who did not get their 
sickness from asbestos, but we give them the benefit of the doubt.
  This bill really will work even though I have to admit it is very 
tough on the companies that have to come up with this $114 billion.
  I yield the floor.

                          ____________________