[Congressional Record (Bound Edition), Volume 152 (2006), Part 1]
[Senate]
[Pages 950-953]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                ASBESTOS

  Mr. KENNEDY. Mr. President, the real crisis which confronts us is not 
an asbestos litigation crisis, it is an asbestos-induced disease 
crisis. Asbestos is the most lethal substance ever widely used in the 
workplace. Between 1940 and 1980, there were 27 million workers in this 
country who were exposed to asbestos on the job, and nearly 19 million 
of them had high levels of exposure over long periods of time. That 
exposure changed many of their lives. Each year, more than 10,000 of 
them died from lung cancer and other diseases caused by asbestos. Each 
year hundreds of thousands of them suffer from lung conditions which 
make breathing so difficult that they cannot function at all. Even more 
have become unemployable due to their medical condition, and because of 
the long latency period of these diseases, all of them live with fear 
of premature death due to asbestos-induced disease. These are the real 
victims. They deserve to be the first and foremost focus of our 
concern.
  As this chart indicates, asbestos mortality will likely peak around 
2015, reflecting the heavy exposures in the 1970s. We are going to see 
this is not an issue that is going to diminish, in terms of the impact 
on the workers, workers' lives, their families, and their communities, 
but is actually going to increase in terms of those who are going to be 
adversely impacted and affected.
  All too often the tragedy these workers and their families are 
enduring becomes lost in a complex debate about the economic impact of 
asbestos litigation. We cannot allow that to happen. The litigation did 
not create these costs; exposure to asbestos created them. They are the 
costs of medical care, the lost wages of incapacitated workers, and the 
cost of providing for the families of workers who died years before 
their time. Those costs are real. No legislative proposal can make them 
disappear. All legislation can do is shift those costs from one party 
to another. Any proposal which would shift more of the financial burden 
on to the backs of injured workers is unacceptable to me and should be 
unacceptable to every one of us.
  I have consistently said throughout the long debate on asbestos 
legislation that I would support a properly designed and adequately 
funded trust fund bill. That legislation would have to fairly 
compensate all the victims of asbestos-induced disease in a timely way. 
It would put more money into the pockets of these injured workers than 
the current system of reducing transaction costs. This is not such a 
bill.
  Senators Specter and Leahy have devoted an enormous amount of time 
and effort to this asbestos trust fund legislation. They deserve great 
credit for their work. But the bill before us contains fundamental 
flaws which make it both unfair and unworkable. It does not provide a 
reliable guarantee of just compensation to the enormous number of 
workers who are suffering from asbestos-induced disease.
  The argument that there are serious inadequacies in the way asbestos 
cases are adjudicated today does not mean any legislation is better 
than the current system. Our first obligation is to do no harm. We 
should not be supporting legislation that excludes many seriously ill 
victims from receiving compensation and that fails to provide a 
guarantee of adequate funding to make sure injured workers will 
actually receive what the bill promises them. This bill will do harm.
  The problem is that powerful corporate interests responsible for the 
asbestos epidemic have fought throughout this process to escape full 
accountability for the harm they have inflicted and, as a result, the 
focus has shifted from what these companies should pay victims to what 
they are willing to pay victims. That is preventing the Senate from 
enacting trust fund legislation that will truly help the workers who 
have been seriously injured by this industrial plague.
  The Senate should not be proceeding to this asbestos bill at this 
time. Despite all the work Senators Specter and Leahy and other 
supporters have done, S. 852 is simply not ready for floor 
consideration. There are too many unanswered questions, and the numbers 
do not add up.
  This legislation does not provide sufficient funding to keep the 
promises of compensation it makes to those asbestos victims it purports 
to cover. Even if the entire $140 billion the sponsors anticipate 
raising is paid to the fund, it will not be sufficient to fully 
compensate the projected number of eligible victims, and it is 
extremely unlikely the full amount will ever be paid.
  The formula in the bill is based on highly questionable estimates of 
the number of companies that would be required to contribute and how 
much each one would pay, contained in a secret list known only to the 
asbestos study group, the key lobbyists for the bill. None of the 
relevant information has ever been made public. There is reason to 
believe far fewer companies would be contributing than the ASG 
projects. There will also be serious court challenges brought against 
the new law that are certain to at least significantly delay 
statutorily mandated payments and could result in the loss of 
substantial anticipated revenue.
  Because of these problems, seriously ill victims are likely to wait 
for years in legal limbo, unable to proceed in court and unable to 
obtain compensation from the trust fund if this bill passes.
  The legislation also fails to permit victims to quickly return to the 
court system should the trust fund become insolvent. Victims are the 
losers at both ends.
  These problems are far too complex to be fixed on the Senate floor 
with a few last-minute amendments. If they could not be resolved in the 
3 years that the many Senators have worked on this bill, they cannot be 
corrected in a few days. S. 852 is the legislative version of the 
famous Spruce Goose--an ill-conceived plan too complex and cumbersome 
to ever get off the ground. As designed, it simply will not work. It is 
not a reliable vehicle for compensating the victims of asbestos 
disease. It should be sent back to the drawing board.
  The list of serious flaws of S. 852 is, unfortunately, a long one. I 
will focus my remarks on several of the most egregious.
  First, the financial inadequacy. Experts tell us that the asbestos 
trust fund created by this legislation is seriously underfunded. The 
funding plan in this bill relies on very substantial borrowing in the 
early years as the only way to pay the flood of claims. The result will 
be a huge debt service cost over the life of the trust that could 
reduce the $140 billion intended to pay claims by as much as $30 
billion or $40 billion. The amount remaining would be far too little to 
pay claims to cover all those who are entitled to compensation under 
the terms.
  In addition, there is a strong constitutional argument that the 
existing bankruptcy trusts cannot be forced to turnover all their 
assets, which will place $7.6 billion of the projected funding in 
jeopardy. Many companies are also likely to challenge their obligation 
to finance the asbestos trust. It is not at all clear how much will 
actually be available to pay eligible victims what the legislation 
promises they will receive.
  CBO's analysis of S. 852 raises serious concerns about the adequacy 
of funding. The report states:

       CBO expects that the value of valid claims likely to be 
     submitted to the fund over the next 50 years could be between 
     $120 and $150 billion, not including possible financing (debt 
     services) costs and administrative expenses. The maximum 
     actual revenues collected under the bill would be around $140 
     billion, but could be significantly less. Consequently, the 
     fund may have sufficient resources to pay all asbestos claims 
     over the

[[Page 951]]

     next 50 years, but depending on claim rates, borrowing, and 
     other factors, its resources may be insufficient to pay all 
     such claims.

  There is likely to be a serious shortfall in the early years, when 
nearly 300,000 pending cases will be transferred to trust for payment. 
Studies show the trust will not have the resources to pay those claims 
in a timely manner. Payments to critically ill people may be delayed 
for years.
  One way to reduce the enormous financial burden on the fund in the 
early years would be to leave many of those cases in the tort system, 
especially cases which were close to resolution. That would be fair to 
the parties in those cases and it would greatly improve the financial 
viability of the fund. Unfortunately, that proposal has been repeatedly 
rejected by the sponsors of the bill. As a result, there will be a 
serious mismatch between the number of claims the trust fund will face 
when its doors open and the payments begin coming into the fund. That 
will force major borrowing in the first 5 years. The debt service 
resulting from that borrowing will financially cripple the trust.
  In its report, CBO recognizes the seriousness of this debt-service 
problem, explaining:

       Because expenses would exceed revenues in many of the early 
     years of the fund's operations, the Administrator would need 
     to borrow funds to make up the shortfall. The interest cost 
     of this borrowing would add significantly to the long-term 
     costs faced by the fund and contributes to the possibility 
     that the fund might become insolvent.

  This is only one of several major financing problems with S. 852 that 
experts have identified. There are also major questions about the 
projections of pending and future claims that further cloud the trust 
fund's financial viability.
  For example, there has been a significant increase in the number of 
mesothelioma cases in recent years. The only known cause of 
mesothelioma is asbestos exposure. This new information suggests that 
the CBO cost estimate may understate the cost of the mesothelioma 
claims that the trust fund will incur by more than $15 billion. This is 
by no means the only instance where there is strong evidence to suggest 
that the number of eligible claimants will substantially exceed CBO 
estimates.
  If S. 852 is enacted, the United States Government will be making a 
commitment to compensate hundreds of thousands of seriously ill 
asbestos victims but will not have ensured that adequate dollars are 
available to honor its commitment. That will precipitate a genuine 
asbestos crisis, and this Congress will bear the responsibility for it.
  The legislation before us would close the courthouse doors to 
asbestos victims on the day it passes, long before the trust fund will 
be able to pay their claims. Their cases will be stayed immediately. 
Seriously ill workers will be forced into a legal limbo for up to 2 
years. Their need for compensation to cover medical expenses and basic 
family necessities will remain, but they will have nowhere to turn for 
relief.
  Under the legislation, even exigent health claims currently pending 
in the courts will be automatically be stayed for 9 months as of the 
date of enactment. An exigent health claim is one in which the victim 
has been diagnosed ``as being terminally ill from an asbestos-related 
illness and having a life expectancy of less than one year.''
  By definition, these cases all involve people who have less than a 
year to live due to mesothelioma or some other disease caused by 
asbestos exposure. Their cases would all be stayed for 9 months. Nine 
months is an eternity for someone with less than a year to live. Many 
of them will die without receiving either their day in court or 
compensation from the trust fund.
  The stay language is written so broadly that it would even stop all 
forward movement of a case in the court system. A trial about to begin 
would be halted. An appellate ruling about to be issued would be 
barred. Even the deposition of a dying witness could not be taken to 
preserve his testimony. The stay would deprive victims of their last 
chance at justice. I cannot believe that the authors of this bill 
intended such a harsh result, but that is what the legislation does.
  The bill does contain language allowing an ``offer of judgment'' to 
be made during the period of the stay in the hope of producing a 
settlement. However, this provision is unlikely to resolve many cases 
because it requires the agreement of the defendants. There is no 
incentive for defendants to agree to a settlement when the case has 
been stayed. Those who have tried cases know that it is only the 
imminence of judicial action which produces a settlement in most cases. 
Delay is the defendant's best ally; and under this bill, the case is at 
least delayed for 9 months and may never be allowed to resume if the 
fund becomes operational. If, however, these exigent cases were not 
stayed, and judicial proceedings could continue, there would be far 
more likelihood of cases settling under the offer of judgment process.
  I strongly believe that, at a minimum, all exigent cases should be 
exempted from the automatic stay in the legislation. Victims with less 
than a year to live certainly should be allowed to continue their cases 
in court uninterrupted until the trust fund became operational. Their 
ability to recover compensation in the court should not be halted until 
the trust fund is operational and they are able to receive compensation 
from that Fund. It is grossly unfair to leave these dying victims in a 
legal limbo. For them, the old adage is especially true--justice 
delayed is justice denied.
  Under the legislation, defendants would receive a credit against what 
they must contribute to the trust fund for whatever payments they make 
to these dying victims; so they would not be ``paying twice,'' as some 
have claimed.
  Allowing the exigent cases to go forward in the courts without 
interruption is a matter of simple fairness. Staying the cases of 
victims who have less than a year to live is bureaucratic insensitivity 
at its worst. Most of these victims will not live to see the doors of 
the trust fund open.
  We should not deprive them of their last chance--their only chance--
to receive some measure of justice before asbestos-induced disease 
silences them. They should be allowed to receive compensation in their 
final months to ease their suffering. They should be allowed to die 
knowing that their families are financially provided for. S. 852 in its 
current form takes that last chance away from them.
  The way the legislation is written, victims will lose out at the back 
end of the process as well, should the trust fund run out of money 
after several years of operation.
  If the trust fund does become insolvent, a very real possibility, 
workers will not have an automatic right to immediately return to the 
court system. The process outlined in the current bill could take 
years. Workers could end up trapped in the trust with reduced benefits 
and long delays in receiving their payments. There needs to be a clear, 
objective trigger--inability of the trust to pay a certain percentage 
of claims within a set period of time--that will automatically allow 
victims to pursue their claims in court if the trust runs out of money. 
The Judiciary Committee's 2003 legislation contained such a provision, 
but this bill does not. We cannot allow seriously injured workers with 
valid claims who are not paid in a timely manner by the trust to be 
denied their day in court. That would be a shameful injustice.
  The asbestos trust is being presented as an alternative source of 
compensation for victims suffering from asbestos-induced disease. If 
that alternative runs out of money and can no longer compensate those 
victims in a full and timely manner, their right to seek compensation 
through the judicial system should be immediately restored with no 
strings attached. No principle is more basic. Yet, this bill violates 
that principle.
  I am particularly upset by the way lung cancer victims are treated in 
this bill. Under the medical criteria adopted by the Judiciary 
Committee overwhelmingly 2 years ago, all lung cancer victims who had 
at least 15 years of weighted exposure to asbestos were eligible to 
receive compensation from the fund. However, that was changed in S. 
852. Under this bill, lung cancer victims

[[Page 952]]

who have had very substantial exposure to asbestos over long periods of 
time are denied any compensation unless they can show asbestos scarring 
on their lungs. The committee heard expert medical testimony that 
prolonged asbestos exposure dramatically increases the probability that 
a person will get lung cancer even if they do not have scarring on 
their lungs. Deleting this category will deny compensation to more than 
forty thousand victims suffering with asbestos-related lung cancers. 
Under the legislation as now drafted, these victims are losing their 
right to go to court, but are receiving nothing from the fund. How can 
any of us support such an unconscionable provision?
  Since we began considering asbestos legislation, no aspect has 
concerned me more than the treatment of lung cancer victims. My top 
priority has been to make sure that these severely ill workers receive 
just and fair compensation, and I have not been alone. A number of 
other members have spoken out about the importance of adequately 
providing for lung cancer victims who have been exposed to substantial 
amounts of asbestos over long periods of time.
  Now we find that these victims, many of whom will have their lives 
cut short because of asbestos-induced disease, will not receive one 
penny in compensation from the trust fund. They are losing their right 
to go to court, but are also being denied any right to compensation 
under the fund. They are, in essence, being told to suffer in a legally 
imposed silence with no recourse whatsoever.
  One of the arguments we hear most frequently in favor of creating an 
asbestos trust fund is that in the current system, too much money goes 
to people who are not really sick and too little goes to those who are 
seriously ill. Well, lung cancer victims who have years of exposure to 
asbestos are the ones who are seriously ill. They are the ones this 
legislation is supposed to be helping. Yet, they are being completely 
excluded.
  The committee heard extensive testimony from distinguished medical 
experts--Dr. Laura Welsh and Dr. Philip Landrigan--that prolonged 
exposure to asbestos can cause lung cancer even if the victim does not 
also have markers of nonmalignant asbestos disease. They cited numerous 
medical authorities supporting their position. They even described 
treating lung cancer victims whose disease was clearly caused by 
asbestos but who had neither pleural thickening or asbestosis.
  In a situation where people are undeniably severely ill and 
undeniably had 15 or more years of weighted exposure to asbestos, it is 
wrong to completely exclude them from compensation under the trust 
fund. Some of the proponents of S. 852 have attempted to justify 
excluding them by claiming that smoking probably caused their lung 
cancers. But, the evidence refutes this contention.
  First, even those lung cancer victims with 15 or more weighted years 
of exposure to asbestos who had never smoked were removed from 
eligibility for compensation under the trust fund. So, this is about 
more than just the relationship between asbestos and smoking.
  Second, regarding the smoking issue, Dr. Landrigan testified that 
smokers who have substantial exposure to asbestos have 55 times the 
background risk of developing lung cancer, while smokers who were not 
exposed to asbestos have 10 times the background risk of developing 
lung cancer. Clearly, the asbestos exposure makes a huge difference.
  There is a powerful synergistic effect between asbestos and tobacco 
in the causation of lung cancer. Both are substantial contributing 
factors to the disease. The smoker with substantial asbestos exposure 
should receive less compensation from the trust fund than the nonsmoker 
with lung cancer. That principle appears throughout the bill. But 
smoking is not a reason to exclude the smoker from all compensation.
  Asbestos and tobacco are analogous to joint tortfeasors. Each is 
partly responsible and each should pay a proportionate share of the 
compensation. Without prolonged exposure to asbestos, the smoker would 
have been far less likely to contract lung cancer. It is a gross 
injustice to completely exclude these severely ill workers.
  This bill also tampers with the agreed-upon medical criteria 
carefully negotiated between representatives of business and labor by 
raising the standard of proof for each disease category. The language 
in S. 852 requires the workers to prove that asbestos was ``a 
substantial contributing factor'' to their disease, instead of just ``a 
contributing factor.''
  This is a major increase in the burden workers must overcome to 
receive compensation. It is significantly higher than most states 
currently require in a court of law. Rather than having to show that 
asbestos exposure contributed to their illness, they will now have to 
address the relative impact of asbestos and other potential factors. 
This change is a serious step in the wrong direction, raising the bar 
even higher on injured workers.
  Another major shortcoming of this legislation is its failure to 
compensate the residents of areas that have experienced large-scale 
asbestos contamination. S. 852 simply pretends that this problem does 
not exist. It fails to compensate the victims of all asbestos-induced 
diseases, other than mesothelioma, whose exposure was not directly tied 
to their work. There is very substantial scientific evidence showing 
that the men, women and children who lived in the vicinity of asbestos-
contaminated sites, such as mining operations and processing plants, 
can and do contract asbestos-induced disease.
  The reason that this legislation needs a special provision to 
compensate the residents of Libby, MT, is because it does not 
compensate victims of community contamination generally. The residents 
of Libby are certainly entitled to compensation, but so are the 
residents who lived near the many processing plants from Massachusetts 
to California that received the lethal ore from the Libby mine. The 
deadly dust from Libby, MT was spread across America. W.R. Grace 
shipped almost 10 billion pounds of Libby ore to its processing 
facilities between the 1960s and the mid 1990s. One of the places it 
was shipped was to the Town of Easthampton, MA, where the operations of 
an expanding plant spread the asbestos to the surrounding environment, 
into the air and onto the soil. I intend to discuss this problem in 
great detail as the debate moves forward.
  I raise it now as a dramatic example of one of the major injustices 
caused by the arbitrary exclusion of a large number of asbestos victims 
from compensation under the trust fund.
  The red spots on this chart show where these other communities were 
contaminated. The larger the spot, the more shipments. We can see these 
spots all over the country. Yet these communities are not compensated 
for it, although one community is; other communities are not.
  The problem of (community contamination is not limited to the sites 
receiving ore from Libby. Community asbestos contamination can result 
from many different sources. For example, medical experts believe it 
may result from exposure to asbestos after the collapse of the WorId 
Trade Center. Because of the long latency period, we often do not learn 
about community asbestos contamination until long after it occurs. 
Certainly these victims of asbestos are entitled to fair treatment as 
well. They should not be arbitrarily excluded from compensation as if 
their suffering is somehow less worthy of recognition than the 
suffering of other asbestos victims. Yet, that is what S.852 does.
  This is a bill that shifts more of the financial burden of asbestos-
induced disease to injured workers by unfairly and arbitrarily limiting 
the liability of defendants. It does not establish a fair and reliable 
system that will compensate all those who are seriously ill due to 
asbestos. It lacks a dependable funding stream which can ensure that 
all who are entitled to compensation actually receive full and timely 
payment. These are very basic shortcomings.
  We cannot allow what justice requires to be limited by what the 
wrongdoers are willing to pay. I intend to

[[Page 953]]

vote ``no'' and I urge my colleagues to do the same.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee is recognized.
  Mr. ALEXANDER. Mr. President, I ask unanimous consent to address the 
Senate until 3 p.m.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. ALEXANDER. Thank you, Mr. President. The Presiding Officer will 
be relieved because I am to preside at 3 p.m.

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