[Congressional Record (Bound Edition), Volume 150 (2004), Part 7]
[Senate]
[Pages 9437-9438]
[From the U.S. Government Publishing Office, www.gpo.gov]




             THE FAIRNESS IN ASBESTOS INJURY RESOLUTION ACT

  Mr. SPECTER. I have also sought recognition to comment about the 
status of pending asbestos legislation under S. 2290, the Fairness in 
Asbestos Injury Resolution Act. The Judiciary Committee passed out of 
committee a bill in July of last year, largely along party lines, which 
I supported because I thought it important to move the legislation 
forward even though I had grave reservations about the quality of the 
bill.
  There was no doubt that there was an urgent need for Federal 
legislation on this subject because some 70 corporations have gone 
bankrupt, thousands of individuals who have been exposed to asbestos 
have deadly diseases, mesothelioma and other ailments, and were not 
being compensated because their employers, potential defendants, were 
bankrupt. I enlisted the aid--he is still a very young man, although a 
senior judge--of the former chief judge for the Court of Appeals for 
the Third Circuit, Edward Becker, who is now a senior judge, having 
taken that status in May of last year, and I asked him to assist in 
trying to resolve many of the problems in the asbestos issue. For 2 
days in August of last year he and I met in his chambers with 
representatives of the manufacturers, the insurers, the reinsurers, the 
AFL-CIO, and the trial lawyers, trying to work through many of the 
problems. On many intervening days since last August, he and I have met 
with those parties in my conference room, trying to work out many of 
the complex issues.
  These efforts were recognized by the majority leader, Senator Frist, 
and the leader of the Democrats, Senator Daschle, who asked Judge 
Becker to take on formal status as a mediator. He has spent many hours, 
many days working under the auspices of the leaders.
  Right now, the efforts to find a legislative solution have been held 
in abeyance because of the differences between the manufacturers, 
insurers, and reinsurers on one side, and the stakeholders, 
representing the injured parties, the AFL-CIO, and the trial lawyers, 
on the other, as to what the amount of the trust fund ought to be.
  The concept of a trust fund is an outstanding idea. Senator Hatch, 
the chairman of the Judiciary Committee, deserves great credit for 
moving the legislation in the direction of a trust fund with a schedule 
of payments analogous to workmen's compensation so the cases would not 
have to go through the litigation process. But a fund would be 
established to pay them once their damages were determined; credit also 
to Senator Leahy, the ranking member, and credit also to members of the 
Judiciary Committee and the leadership, Senator Frist and Senator 
Daschle, and many others.
  I asked Judge Becker to submit a memorandum summarizing where the 
issue stood, which at an appropriate time I will ask to have printed in 
the Record. Judge Becker's memorandum notes:

     . . . the achievements on an administrative structure for 
     processing claims, and on provisions for judicial review.

  And, further:

     . . . other significant matters such as the definition of 
     exigent claims, timing of payments, and . . . some consensus 
     on certain concepts such as the anatomy of the ``start up''. 
     . . .

  There was:

     . . . a much clearer understanding [as a result of these 
     mediation efforts] on the troublesome issue of projecting 
     disease incidence . . . and claim filings over the next 
     [many] years.

  Judge Becker noted that:

     . . . there are still some loose ends to be tied down, 
     especially on the issue of distribution of non-cancer 
     asbestos claimants with increasing degrees of lung impairment 
     claims . . .

  And noted further:

     . . . a significant breakthrough on the related issue of 
     partial ``sunset''. . . .

  And then itemized some of the issues which have yet to be resolved:

       Treatment of pending claims and bankruptcies; subrogation 
     of workers compensation payments; and the venue of any 
     revision to the tort system as a vehicle for ``sunset''. . . 
     .

  As noted, these mediation efforts have achieved a great deal. Much of 
the controversy has been resolved and many of the other issues, 
although not resolved, have seen very substantial progress.
  There is a considerable difference, as noted, as to what the fund 
ought to be with the insurers, reinsurers, and manufacturers on one 
side and the injured workers represented by the AFL-CIO and the trial 
lawyers on the other side. Judge Becker notes in his memorandum he is 
duty-bound not to make a disclosure as where the parties stand, but 
also noted there have already been disclosures by the parties. So it is 
not really a secret matter. But I will respect the confidentiality the 
leaders asked for, and not talk about that.
  I think maybe a certain hiatus in the negotiations would be 
appropriate. Judge Becker concluded his intensive 6 days of mediation 
last week. I have been talking to the parties on both sides and it is 
my hope to reconvene the mediation process.
  If the matter goes back to committee, it will not have the input from 
all of the stakeholders which is so important and so vital in 
understanding all the issues and trying to come to agreement. The 
parties may be motivated by reconstituting negotiations because of 
their desire to find a way to have agreement as opposed to having the 
Senate impose decisions that are not agreed to by the parties.
  I think it would be unfortunate if the Senate imposed the judgment as 
to where we stand on these complex issues because I think they require 
a lot more detail and a lot more study than the Judiciary Committee can 
give them. It is a much better forum to have the parties continue to 
work. As to the amount of money, it is my hope there will be 
flexibility on all sides.
  We ought not to consider this as a matter for extracting the last 
dollar one way or another because there are so many thousands of 
injured workers who have mesothelioma, which is deadly, who are not 
being compensated because their companies are bankrupt. There are some 
70 companies in bankruptcy. It would be an enormous help to the economy 
if there could be a resolution of this very troublesome problem.
  I ask unanimous consent the full text of Judge Becker's memorandum to 
me, dated May 11, be printed in the Record following my comments.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                               memorandum

     Date: May 11, 2004.
     To: Senator Arlen Specter.
     From: Judge Edward R. Becker.
     Re: Pending Asbestos Legislation S. 2290 (Fairness in 
         Asbestos Injury Resolution Act; Status Report on 
         Mediation).

       You have asked that I update my previous evaluation of the 
     status of the efforts to achieve a consensus among the 
     manufacturers and other defendant companies, the insurers, 
     the reinsurers, organized labor, and the trial lawyers, i.e., 
     the stakeholders concerned with S. 2290, so as to facilitate 
     consideration of the legislation by the Senate and make 
     possible its ultimate passage in a form satisfactory to the 
     stakeholders and the Senate. I am pleased to do so.
       You and I began the mediation process in the summer of 
     2003, and intensified it in the early months of 2004, leading 
     to significant agreement among the stakeholders on a number 
     of major issues, most notably on an administrative structure 
     for processing claims, and on provisions for judicial review. 
     We also achieved agreement on a number of other significant 
     matters such as the definition of exigent claims, the timing 
     of payments, and we reached some consensus on certain 
     concepts such as the anatomy of the ``start up'', though 
     details remained to be worked out.
       As you know, I have just concluded six days of intensive 
     mediation under the auspices of Majority Leader Frist, and 
     Minority Leader Daschle, focused on the critical issues of 
     claims values, projections, and the overall funding necessary 
     to sustain a viable National Trust. These sessions were 
     attended by the top representatives of all the stakeholders, 
     including a large cadre of CEO's and

[[Page 9438]]

     corporate general counsels. This process served a number of 
     highly useful purposes. At the threshold, as the result of a 
     session attended by four leading experts, we came to a much 
     clearer understanding of the troublesome issue of projecting 
     disease incidence and, more importantly, claim filings over 
     the next forty to fifty years. There are still some loose 
     ends to be tied down, especially on the issue of distribution 
     of non-cancer asbestosis claimants with increasing degrees of 
     lung impairment claims (S. 2290 levels III, IV and V), but in 
     other respects we have a good handle on the issues. While the 
     confidentiality attendant to the mediation process cautions 
     me against memorializing the details of the parties' 
     positions on claim values, projections, and the size of the 
     fund, I can fairly state that major progress was made in all 
     these areas. There was also a significant breakthrough on the 
     related issue of partial ``sunset'' of claims by lung cancer 
     victims with significant asbestos exposure, but without x-ray 
     evidence of pleural thickening or asbestosis, if and when 
     these claims exceed an agreed upon number. . . . In short, 
     the parties are significantly closer than they had been 
     before. Additionally, on the vital issue of the size of the 
     up-front funding (during the first 5 years of the fund), 
     major strides have also been made.
       While there is still a good deal of distance between the 
     positions of the stakeholders on these matters, I am 
     optimistic that, with further discussions with the right 
     intermediary, the gap might be closed. Such a ``gap closure'' 
     would not, I must add, seal a consensus in the absence of 
     agreement on a number of other issues of great importance to 
     the parties, most of which are inextricably intertwined with 
     the financial issues just described. The most important items 
     on this list are: (1) treatment of pending claims and 
     bankruptcies; (2) subrogation of workers' compensation 
     payments; and (3) the venue of any revision to the tort 
     system as a vehicle for ``sunset'' in the event that the fund 
     becomes insufficient to make the required payments to 
     victims. But if the claims values, projections and funding 
     issues can be resolved, I believe that these latter issues 
     would fall into place.
       I am encouraged by the joint statement made today by 
     Senator Frist and Senator Daschle that they ``are committed 
     to working together to determine whether a compromise can be 
     reached that would provide sufficient payments to asbestos 
     victims and certainty to companies.''

  Mr. SPECTER. In the absence of any Senator on the floor seeking 
recognition, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. ALEXANDER. Madam President, I ask unanimous consent that the 
order for the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ALEXANDER. Madam President, I ask unanimous consent to speak for 
up to 15 minutes as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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