[Congressional Record Volume 152, Number 16 (Friday, February 10, 2006)]
[Senate]
[Pages S1065-S1067]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              THE FAIR ACT

  Mr. SESSIONS. Mr. President, I want to share some thoughts on the 
asbestos litigation legislation that is before us. We have a point of 
order raised. I believe that point of order is a technical point of 
order. I believe it is not a point of order that has the potential to 
avoid a large amount of Federal expenditures. In fact, as we all know, 
the asbestos bill is funded by those companies and defendants who are 
being sued as an alternative to paying out money from aberrational, 
disjointed, inconsistent lawsuit verdicts, with 60 percent of that 
money going to lawyers both for the defendant companies and for the 
plaintiffs. They propose to pay

[[Page S1066]]

this money into a fund, allowing it to be distributed, with 5 percent 
or less attorney's fees cost, directly to those who are determined to 
be sick from asbestos.
  Surely, we can make this happen. Surely, we cannot allow the spasm 
that now exists, that is an embarrassment to the legal system, 
embarrassment to the profession of law, and an embarrassment to 
Congress for failing to fix it, when the Supreme Court and other judges 
have, on numerous occasions, called on us to fix it. That is what I 
would point out.
  I was hoping that this afternoon we would be able to discuss votes 
throughout the day, amendments. Senator Cornyn has offered an 
amendment, and we have had votes. There are others out there.
  I will point out amendments that I have offered and plan to offer 
which deal with the subrogation issue, particularly involving longshore 
shipping companies, where they are self-insured, and those companies 
are entitled to subrogate to some of this money that would come out, 
under normal circumstances, to money that is paid to the victims. And 
for a lot of reasons, I think they are in a specific special place that 
needs some relief. The silica claims, we need to consider that more 
carefully. I have proposed legislation that if this bill were to fail, 
the 5-percent cap on attorney's fees would apply, or the court would 
apply standards of comparable attorney's fees instead of allowing such 
a large chunk of money to be taken from the victims and their recovery 
to pay attorneys, as is the case today.
  We have some medical criteria in the bill; that is, if you are going 
to be sick, how do you know it was caused by asbestos; what do you have 
to show before you can make a claim so that we can pay those who are 
sick but not pay those who are not sick; or if those who are sick have 
a sickness unconnected to asbestos, they should not recover from the 
asbestos fund; otherwise, we would have a fund that can't survive. That 
needs to be tightened.
  Those are some of the amendments I would like to offer. We will get 
on that presumably next week after we vote on this point of order.
  I urge my colleagues not to allow this budget point of order to 
derail the opportunity we have today--it may be the last, best 
opportunity--to fix an asbestos system that is out of control. It is 
just not working right. Under the present system, we are going to 
have--and we have today--thousands of people who have been injured by 
asbestos. Many of them are veterans--thousands of people who are 
injured, some severely, some dying as a result of their exposure, who 
will not be able to recover any money because the company against which 
they have a lawsuit, the company which was responsible for exposing 
them to asbestos, no longer exists. They are bankrupt, and there is no 
one to sue.
  Secondly, we have a large number of companies--77--that have gone 
into bankruptcy, and many are in bankruptcy now. If we allow this 
uncontrolled rush to take every dime out of those companies as quickly 
as possible, as the lawyers for the individuals who are sick are trying 
to do, those companies, too, will go out of existence.
  There are other reasons certain people are not going to be able to 
recover who are sick from asbestos. This bill would give everybody a 
chance to have a fair recovery, so I believe it has a big humanitarian 
benefit.
  Also, if we leave these cases in the litigation system, a jury might 
become inflamed or become sympathetic for a victim and may render a 
$100 million verdict. Another jury may render a $100,000 verdict. 
Another jury may render nothing. So we have really aberrational 
allocations of scarce resources to people who are sick. We need to have 
a comprehensive system by which those who are sick are compensated 
fairly, promptly, and without attorney's fees.
  There is no doubt, as we know, that the attorney's fees, according to 
the Rand Corporation, total 58 percent of the amount of money paid out 
by the defendants. So defendant companies hire their own lawyers, and 
they are being sued for huge amounts of money, and they hire the best 
lawyers they can get. They defend those cases. One study shows they get 
a little more than plaintiffs' attorneys. Then the plaintiffs' 
attorneys sue, and they take their fee out of the recovery. If you look 
at it in an economic sense, all of the money paid out by the defendant 
companies should go to the victims, as much as possible. They should 
not have to pay a chunk to their own lawyers or a chunk of it to the 
plaintiffs' lawyers.
  We have 60 percent at stake. This bill caps the attorney's fees at 5 
percent. So we are talking about 53, 55 percent of the money being paid 
out by the defendant companies, and it is not getting to the victims. 
So we have a lot of ability here to do the right thing. We can get more 
money promptly to victims. We can get victims compensation who 
otherwise would not get it because the companies they might sue are no 
longer in existence or there are other legal impediments to it, and we 
can treat people fairly, and people similarly situated would get 
similar amounts.
  For example, mesothelioma, the deadly cancer that has been connected 
to asbestos exposure, would result in a prompt payment of $1.1 million 
to anybody who has contracted that disease due to asbestos exposure. If 
the doctor diagnoses that and it is not a diagnosis of any real 
dispute, you simply go in to the claim administration, make your claim, 
and 50 percent of that $1.1 million is to be paid within 30 days and 
the additional 50 percent paid in 6 months.
  That kind of process is quite different from what is happening today. 
There are 300,000 lawsuits pending in America. Some dockets have tens 
of thousands of lawsuits and only a handful of judges. These cases are 
not going to trial immediately. People are not getting paid promptly. 
It is an embarrassment to all of us. Some people are getting paid 
aberrationally and without consistency or fairness. Some are getting a 
lot, some are getting nothing. Some people are getting paid little 
checks over a period of 10 years, and there from different companies 
that settle up. That is not a way to handle a mass tort, where a lot of 
people are ill, in which the defendant companies are prepared to pay.
  All of that is not working right. We ought to take those companies' 
money--$140 billion of it--and set it aside in a fund and create a fund 
from which we can pay people whenever they are sick. That can be done, 
and that can make the system better.
  It was interesting to note that we don't often see a lot of agreement 
between the Washington Post and the Washington Times. But the 
Washington Post had an editorial today in which they say:

       Some amendments may be reasonable at the margin, but the 
     bill's central idea to replace litigation with a $140 billion 
     compensation fund, to be financed by defendant companies and 
     their insurers, must be preserved.

  They go on to say:

       The fact that the bill is being attacked from both 
     directions suggests that its authors, Senator Arlen Specter, 
     Republican of Pennsylvania, and Senator Patrick 
Leahy, Democrat of Vermont, have balanced competing interests in a 
reasonable manner.

  I am not sure that is totally correct, but there is some truth to 
that. It says:

       But the truth is that the bill's main opponents are the 
     trial lawyers who profit mightily from asbestos lawsuits and 
     who constitute a powerful lobby in their own right. Mr. 
     Specter and Mr. Leahy are, in fact, model resisters of 
     special interests who have spent more than two years crafting 
     legislation that serves the public interest. For Mr. Reid to 
     demean this effort in order to fire off campaign sound bites 
     is reprehensible.

  That is the Washington Post. I certainly agree with that. The special 
interests here are those who have lost sight of the victims, who have 
lost sight of trying to create a justice system that works; the special 
interest of those people engaged in the system who are enriching 
themselves in it every single day and do not desire to see it end.
  But I will note that Dicky Scruggs, one of America's most prominent, 
perhaps the most accomplished trial plaintiff lawyer in America, who 
lives in the Mississippi gulf coast area, where asbestos was such a bad 
problem at the shipyards, commenced this litigation many years ago--
maybe 30 years ago. He just appeared with Chairman Specter and said 
that enough is enough. We don't need this in the courts anymore. Not 
enough money is getting to the victims. The system is not working. We 
need change. He supports this bill. He believes there is sufficient 
money in it to take care of

[[Page S1067]]

those who are sick, and he supports this bill that has my amendment in 
it that limits lawyer's fees to 5 percent, unless it goes on appeal.
  If the lawyer comes in with a client with mesothelioma, gets a 
doctor's report, spends a few hours on that, talks with the client, 
files a claim with the board and they give him a date, and they walk 
down there and have the doctor's report and the physician says this 
person has mesothelioma, he is entitled to $1.1 million, and a 5-
percent fee is $55,000. That ought to be enough. Yet we have people 
saying that we cannot have these fees. We cannot cut these fees. This 
is too much.
  We are creating a trust fund. If you file a claim for a person under 
the Social Security Act, the Federal law limits your attorney's fees. 
If you make claims in workman's compensation cases in most States, 
attorney's fees are limited. It is perfectly proper to do so. I believe 
5 percent is adequate.
  The Washington Times said this. It is a conservative newspaper here:

       This bill should pass; Senator Arlen Specter, Pennsylvania 
     Republican, and Patrick Leahy, Vermont Democrat, are due 
     accolades for getting this far on a longstanding problem that 
     has befuddled everyone for decades. Many asbestos victims 
     have suffered or died of mesothelioma or other illnesses 
     while the courts and Washington struggle with a resolution. 
     The victims and their families deserve to be made whole.

  I believe those were strong and appropriate words.
  Then they comment on Senator Reid, the Democratic leader. They say:

       Mr. Reid said the bill benefited ``a few large companies'' 
     while supposedly leaving the little guy in the lurch. Really? 
     Why, then, do insurance giants AllState and AIG oppose the 
     bill? Why are many plaintiffs anxious to see it pass? In 
     reality, the big guys speak through Mr. Reid--in this case, 
     unscrupulous lawyers who stand to profit greatly from keeping 
     asbestos cases in the courts.

  That is who the big guys are who are making the big money. They say:

       . . . the FAIR Act offers what nothing else previously has: 
     A light at the end of the tunnel for claimants.

  I think one estimate I have seen has been that $70 billion has been 
paid out to date to victims of asbestos. Somebody said the figure is 
more than that. Think about this: think about the fees. Let's say 25 
percent of that is a legal fee. Some make more than that. Some of the 
numbers show 25 percent as an average total when all is said and done. 
But most fees are normally one-third. What is 25 percent of $70 
billion? What, $18 billion? That is going to lawyers. These are not 
thousands and thousands of lawyers. Really, I would say there are 
probably no more than a few hundred plaintiff lawyers who are handling 
well over 50 percent of the cases. So it is an incredible amount of 
money. We could create a system where you can walk in with a medical 
report, basically, and have your compensation delivered to you 
promptly, without all these fees being taken from it.
  Why can we not do this? That is why independent groups such as the 
liberal Washington Post and the conservative Washington Times have both 
endorsed the bill. I am hopeful that we will, over the weekend, take a 
good look at the budget point of order that has been raised here. When 
my colleagues look at it, I hope they will conclude that this is not 
the kind of budget point of order which was contemplated when this rule 
was passed. This budget point of order arose from Chairman Gregg's 
brilliant understanding that many of our entitlement programs are 
drafted in such a way that when they score that bill, they score it 
over a maximum of 10 years. People write the bill so it will cost more 
the next 10 years than it does the first 10 years.
  If the Government is starting an entitlement program, you can object 
if you can show it goes up too much in the outyears, which I think is a 
good reform. But this bill is not Federal taxpayers' money. This bill 
represents money that will be paid into the fund by the people who are 
paying out money now to victims in a willy-nilly, random fashion that 
is unprincipled and unjustified. They will put the money in voluntarily 
in exchange for not having to hire a bunch of lawyers to defend 
themselves in courts in every jurisdiction, virtually, in this country. 
That is what they are trying to do.
  The legislation does not impose any cost on the American taxpayers, 
and if the fund was to collapse and not have enough money in it, then 
the taxpayers do not pick up the tab. They do not pick up the tab. The 
cases go back in the courts, and any companies that still exist would 
have to pay, just like they would before this reform passed.
  I think this budget point of order, for reasons I am not clear about, 
lies apparently in a technicality. It does not lie in the classical 
understanding of its purpose to protect the Federal taxpayers because 
this is not taxpayers' money; it is the defendant companies' money.
  When we vote on this budget point of order early next week--I am a 
member of the Budget Committee. I know Senator Cornyn is and others are 
who care about the budget. We meet every day and we take heat every day 
for trying to constrain the growth of spending and entitlements in this 
country in a rational way to meet the needs of our people. But to stop 
the abusive growth in these programs, we support a balanced budget. We 
support containing spending.
  Many of the people who are supporting this objection, however, have 
not demonstrated, in my view, any important interest over the years in 
containing spending. A lot of them are big spenders.
  That objection, while technically is legitimate, does not in any 
substantive way have an impact on the debt of the United States in the 
next 30 years as this act would be enforced.
  I urge my colleagues to look into this point. Do not allow this 
supermajority vote. To keep the bill on track, 60 Senators will have to 
vote to waive this point of order. It would be a tragedy, indeed. When 
we see Senator Leahy, Senator Specter, and Senator Sessions supporting 
a piece of legislation, when we see the Washington Times and the 
Washington Post supporting a piece of legislation, when we see the 
veterans groups incredibly anxious to see this legislation passed, and 
when we see overwhelmingly the businesses that are involved in this 
process and are paying out this money that want to see it passed, why 
can't we get it passed?
  Let's not allow it to fall on a supermajority vote of 60 instead of 
the normal 50 required to pass legislation. I hope everyone will study 
it, and when they do, I think they will feel comfortable in voting to 
waive the budget point of order.

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