Fairness in ASbestos Injury Resolution Act of 2005

FAIRNESS IN ASBESTOS INJURY RESOLUTION ACT OF 2005 -- (Senate - February 09, 2006)

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Mr. CORNYN. Mr. President, I rise to join my colleagues in a call for asbestos reform. No other issue more readily highlights the toll that excessive litigation has placed on our society and, even more poignantly, on the lives of those who are dying with asbestos-related disease who are left with inadequate legal recourse and compensation by virtue of the massive waive of litigation, primarily by those who are not sick and who suffer no impairment as a result of their exposure to asbestos. Make no mistake about it: Today we are not just talking about liability reform, we are talking about scandal reform.

The legislation before us represents a genuine effort--I dare say, a Herculean effort--by the chairman of the Judiciary Committee and the ranking member and others who have worked together with them to try to bring us to where we are today; that is, with a good-faith proposal to address this complex problem. No one has worked harder or driven the members of the Judiciary Committee harder than our chairman, Senator Specter. He has tried hard to reach consensus among so many disparate parties and on so many different complicated issues.

The question before us is whether a national trust fund of the magnitude contemplated is the appropriate method to ensure victims will be compensated fairly and efficiently and that the trust fund can reasonably expect to remain solvent and viable.

After countless hours of reviewing and studying the options and hours of working with my colleagues to achieve reform, I unfortunately conclude that in its current form and with its current significant weaknesses, it is not. Rather, I believe the likelihood is far greater that the trust fund will sooner, rather than later, prove unsustainable and return us to the same broken tort system, then leaving thousands of Americans in the wake of a failed Government program, wondering where to go and why they must now go back to court. This simply cannot be the outcome.

I offer an alternative solution, a simple solution that has been tested in States around the country and a solution that would target the key causes of the asbestos liability crisis. I am pleased to offer this amendment on behalf of 14 cosponsors: Senators Coburn, Graham, Thune, Ensign, Inhofe, Martinez, Crapo, Bennett, Smith, Craig, Sununu, DeMint, Thomas, and Bunning. We are working closely with our colleagues on the Democratic side who are looking for an alternative solution. I do believe, before the close of business today, we will have bipartisan cosponsorship of this amendment.

We are looking for a solution that provides a simple but effective approach and one that establishes a national floor with respect to the medical criteria required to bring a claim into court, one which tolls the statute of limitation to ensure that victims get their day in court and virtually eliminates the likelihood of fraud in the medical screening industry, which has proven to be a corrupt cottage industry.

In short, that is basically what this amendment would do. It is about 50 pages, not 400 pages. It requires no complicated administrative scheme, no complex funding formulas that require a Ph.D. in economics to understand. There are no complex constitutional questions, no litigation that will arise over the constitutionality of the proposal, and no real cost to the American taxpayer or, for that matter, to the businesses that would otherwise have to contribute to this $140 billion trust fund. There is no question about favoring one constituency differently than another constituency. Most importantly, I am confident that our solution is a system more likely to ensure that those individuals who are truly sick from exposure to asbestos will receive fair and efficient adjudication of their claims against those who were actually responsible for their injuries.

This proposal is embraced by such a diverse group as the American Bar Association that studied it. You can imagine getting lawyers to agree, with their divergent interests, on what solution to this problem would likely work best and be the least disruptive to our civil justice system. They believe this is it. Indeed, our legislation would target directly the well-documented causes of the asbestos liability scandal plaguing our civil justice system.

The oft-quoted RAND Corporation, in its research, has discovered:

Almost all the growth in the asbestos caseload can be attributed to the growth in the number of nonmalignant claims which includes claims from people with little or no functional impairment.

In other words, these are people who are not sick. Those are the main claimants today under the asbestos liability system. Their research reveals that up to 90 percent of the plaintiffs filing claims have no physical impairment, but they have clogged our courts and delayed justice for those who are sick with asbestos disease. These claims brought by unimpaired plaintiffs often are generated through mass screenings and supported by questionable medical evidence, backed by doctors who do not claim to have a doctor-patient relationship but who will screen thousands of x-rays and who, not surprisingly, more often than not, overwhelmingly find some evidence of asbestos-related disease. When those same x-rays are given a second opinion by someone without a vested interested in finding asbestos-related disease, only a minute fraction actually are confirmed. So this is a cottage industry of fraudulent claims which has further contributed to the broken system we have today.

Under the status quo, forum shopping is rampant. For example, between 1998 and 2000, five States captured 66 percent of the filings; 66 percent of the asbestos lawsuits were filed in just five States because of rampant forum shopping. They were the States of Texas--my State--Mississippi, New York, Ohio, and West Virginia. It is not surprising that each of these States has now enacted or is seriously considering enacting asbestos liability reform at the State level. The good news is, as the Senator from Utah, Mr. Bennett, pointed out, these State reforms appear to be working. They are working because they rightfully focus on the causes. So, too, should a national solution. Doctors and medical providers take the Hippocratic oath which says: First, do no harm. We in the Congress, particularly in the Senate, have a Hippocratic responsibility to, first, do no harm in the legislation we pass.

Notwithstanding the Herculean efforts undertaken by the chairman and the Judiciary Committee, I believe we cannot honestly take that oath and represent to the American people that we have done no harm in the proposal currently before us. We need an alternative which we have offered with this amendment.

The past several years have witnessed encouraging signs from States known to have been havens of the worst of the asbestos litigation abuses. As I mentioned, States such as Texas, Mississippi, Ohio, Florida, and Georgia are taking action. During the time that we have debated in the Nation's Capitol what to do, the States have acted.

Some States have created special dockets for unimpaired claimants, allowing only those who are sick to proceed to trial. It makes sense. The modest venue reforms and limits on consolidation have been adopted, and at least 4 States, including, last year, Texas, have enacted objective medical criteria.

The Texas bill, in the context of asbestos-related claims, allows claimants who are actually impaired to pursue their claims in the judicial system and merely defers the claims of those who are exposed but not impaired. It does this by establishing medical criteria that a claimant must meet to demonstrate some impairment before proceeding with the lawsuit. The good news for these individuals who are not impaired and have been exposed, and for the system generally, is the vast majority of them never will get sick.

Under the perverse limitations required by the statute of limitations that require you to file a lawsuit or risk being forever barred under the current system, they must file now, thus contributing to the huge clog of our court system and the bankruptcies that have racked up seemingly one after another. These State efforts are, in fact, working.

While it is difficult to assess the nationwide impact in the short time they have been implemented, anecdotal evidence indicates there has been a real impact. For example, one Texas tort reform observer, in 2006, said this:

We are still waiting on more definitive figures, but rough estimate at this point--filings of new claimants in Texas have dropped in excess of 50 percent since the State bill passed in July. Based on the terms of the act, the time has just run for claimants to file medicals to avoid the [multi district litigation in Federal Court]. The effect will be that at least 75 percent of pending claims will be dismissed or abated. Thousands of claims from unimpaired claimants have been rendered dormant and will not proceed.

Perhaps the most important point is the ones that justifiably should proceed because they have real manifestations of asbestos-related disease will have priority, will have their day in court, and will not be left with pennies on the dollar, which many are today because of the bankruptcies that have been created by this flood of litigation.

One example of the claims history of a company in Texas--we will call it ``company A'' because we don't want to necessarily point out or talk about a particular company, but company A, between 1980 and 1996, had 134,000 new claims. In 1987, they had 25,000. You can see the rest of the numbers. The height of their claims experience was in 2001, when they had 56,000 claims. In 2005, after this legislation passed in Texas imposing strict medical criteria, creating a dormant docket for those who were exposed but not impaired, while letting those who are sick go to court, only 13,272 claimants came forward. There has been a 77-percent decline in new filings over the last 5 years. This is due largely to the legislation and fair enforcement of the law in States such as Florida, Mississippi, Ohio, Texas, Georgia, and Illinois.

Company B, in Mississippi, has experienced a 90-percent decrease in claims since their legislation was enacted. The point is, some might say why don't we leave this up to the States? Unfortunately, we have seen claims migrate to States that don't have similar reform legislation, thus mandating, in my opinion, a national solution. That is what this amendment proposes.

Company C reports a significant decrease in new litigation filings since September 1, 2005. This is in Texas. The mix of the claims is important because there have been zero, none, malignancy cases, and 10 mesothelioma claims--the most pernicious cancers that are caused by asbestos exposure. In terms of the other types of claims, they have dropped precipitously. So 34 new filings in 5 months, all malignancy cases, which can be adjudicated in court based upon their respective merits.

We will go through a couple more here. Company D, in 2003, experienced 32,444 filings. In 2004, that number dropped to 5,000--from 32,000 to 5,000, roughly. In 2005, it dropped to 2,415, with 6,791 dismissals.

As we can see, there have been significant declines in the number of claims, making way for people who truly are sick to have their day in court, while those who have been exposed but are unimpaired and not sick can preserve their claims for a later date, if and when they happen to get sick.

The national solution we have crafted is designed to ensure that those who truly are sick get their day in court, as I said. It establishes specific medical criteria to be used to distinguish claims between people who are physically impaired due to exposure to asbestos and the claims of people who are not experiencing any physical problems. This legislation will prioritize the claims of the truly sick through the use of reasonable, objective medical criteria. It requires physical impairment. It requires supporting documentation to verify that the claimant can demonstrate impairment based on reasonable and objective medical criteria. It requires that the diagnosing physician actually have a doctor-patient relationship with the claimant, avoiding the millions in this cottage industry doing fraudulent screenings, which has generated problems for the current system. It allows the claimant who acquires a nonmalignant condition to pursue a separate recovery if the person later develops an asbestos-related cancer.

I could go on, but I think it is clear from not only the simplicity of this approach, and due to the fact that it has broadly been embraced among organizations such as the ABA, which has both defense lawyers and plaintiff's lawyers and represents the legal profession generally, it is their considered judgment that this represents a reasonable and, in fact, a better solution to our current problem. It observes the ``Hippocratic oath'' that I submit should apply to legislation as much as it should to the practice of medicine, that it does no harm to the

current system. In fact, it is narrowly focused on the causes of the problems that confront our system today.

The Federal trust fund may well be a fine solution to the current problem but only if structured appropriately and only if we can reasonably expect that it will proceed.

I am sorry to say that S. 852, as drafted, cannot, in my opinion, succeed. It would create an unsustainable Federal entitlement, with costs that would likely far exceed the $140 billion price tag presently contemplated. Enacting this legislation without significant modification would undermine recent State reforms and would create at least as many problems as it would solve.

I sincerely believe this alternative amendment my colleagues and I have offered today is the best hope we have of accomplishing the goal that I believe all of us operating in good faith share, and that is ensuring prompt payment for victims and allowing those exposed but not sick to have their day in court if and when they do become sick.

I invite all of my colleagues to join the 14 of us who are cosponsors to this amendment. I predict by the close of business today we will have a bipartisan amendment. We are continuing to reach out to our colleagues in the Senate, and I know this is a complex issue and many on the Judiciary Committee have spent years trying to get us to where we are today. Frankly, I applaud their efforts, as I have the leadership of our chairman. I believe, and the cosponsors of this amendment believe, this is the best approach; that is, to pass this amendment and send it to the House of Representatives so we can provide a simple and effective solution to the current asbestos scandal.

Mr. President, before I conclude, I send a second-degree amendment to the desk.

Mr. DURBIN. Will the Senator yield for a question?

Mr. CORNYN. Yes.

Mr. DURBIN. Mr. President, I thank the Senator for bringing this important amendment to debate. I will ask him a question or two about his amendment.

I think the Senator is on the right track in noting that several States have made significant progress in dealing with the asbestos litigation. In some States, there has been an agreement between what are usually warring and opposing parties as to how the system can be improved. I wish to ask the Senator from Texas whether the approach he has suggested to the Senate today would preempt existing State laws and standards in this area?

Mr. CORNYN. I thank the Senator for his question. It is an important one. Our intention would not be to preempt local State laws but, rather, to create a national forum, in a way that would provide uniformity and would avoid the migration of claims from those States that have reform to those that do not, thus continuing the status quo.

Mr. DURBIN. One of the more controversial parts of the amendment relates to joint and several liability, which those of us who have practiced law know a little more about than those who have not. If a State already has joint and several liability in these cases, would your amendment preempt that State's joint and several liability standard?

Mr. CORNYN. Mr. President, I appreciate the question. This amendment calls for several liability, not joint liability. The Senator raises a good question and, frankly, one I want to make sure I do a little research on and confer with him, perhaps, so I can give him a more definitive answer.

Mr. DURBIN. Mr. President, I thank the Senator for allowing me to ask a question. I thank him also for offering the amendment. It is a valuable part of the debate. Parenthetically, I concur completely with the Senator from Texas in the fact that many States are doing very positive things to deal with this issue, and I think it would be wise for us to look to their leadership in some of these areas. Secondly, I think he feels as I do, that the underlying trust fund has some fundamental flaws.

I yield the floor.

Mr. CORNYN. Mr. President, I yield the floor.

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