Copyright 1999 Federal News Service, Inc.
Federal News Service
JULY 1, 1999, THURSDAY
SECTION: IN THE NEWS
LENGTH:
2043 words
HEADLINE: PREPARED TESTIMONY OF
JONATHAN
HIATT
GENERAL COUNSEL
AMERICAN FEDERATION OF LABOR AND
CONGRESS OF
INDUSTRIAL ORGANIZATIONS
BEFORE THE HOUSE COMMITTEE ON THE
JUDICIARY
BODY:
Good morning, Chairman Hyde. My
name is Jonathan Hiatt, I am the General Counsel of the American Federation of
Labor and Congress of Industrial Organizations. I would like to thank the
Committee for the opportunity to testify on the issue of federal legislation
addressing the rights of workers suffering from exposure to asbestos.
The
Committee has before it H.R. 1283, the Fairness in Asbestos Compensation Act of
1999. The AFL-CIO is opposed to H.R. 1283, as is the Building and Construction
Trades Department of the AFL-CIO, which has been actively involved over the
years in representing workers exposed to asbestos. I have attached to my written
testimony a copy of a letter from Robert Georgine, the President of the Building
and Construction Trades Department of the AFLCIO, to Congressman Conyers of this
Committee, expressing his opposition to last year's version of this bill, and a
copy of a letter from William G. Bernard, President of the International
Association of Heat & Frost Insulators and Asbestos Workers, to Chairman
Hyde expressing that union's opposition to H.R. 1283.
The AFL-CIO's member
unions represent, we believe, over 1 million active and retired workers who have
been exposed to asbestos. Hundreds of thousands of America's workingfamilies are
living with the deadly consequences of this exposure, acquired often while
working in defense industries. Compounding this tragedy, the legal system has
offered lengthy delays followed by limited compensation, compensation that often
comes too late.
The AFL-CIO, its member unions, and its affiliated state
federations of labor have been actively involved in efforts over the last ten
years to craft solutions to the tragedy of asbestos. We have sought to work with
responsible elements among the asbestos manufacturers, and we continue to be
ready to engage in dialogue with the industry. There is, we believe, a broad
recognition that the plight of asbestos victims might be eased by developing
alternative methods of resolving their claims. Currently efforts are underway
among the parties to asbestos litigation to craft innovative voluntary
alternative claims procedures at the state level. One such agreement has been
entered into in Louisiana. These efforts should be allowed to develop and be
tested.
The exposure of millions of working Americans to asbestos is one of
the largest torts in the nation's history. It has led to hundreds of thousands
of claims, and will lead to more. The judiciary has asked several times for
Congress to consider how this case load might be managed, most recently in last
week's Fibreboard decision.1 However, the need for innovative approaches to
obtaining justice for asbestos victims must not be the basis for denying those
same people effective access to our courts. The AFL-CIO is eager to work with
the Committee to craft such an innovative approach, but we must begin by
outlining why the bill before the Committee today takes us in the wrong
direction.
Any asbestos legislation should meet certain basic fairness
tests. Among these are:
-- The legislation should preserve asbestos victims'
access to the courts-- alternative dispute mechanisms should be just that--
voluntary alternatives to the courts.
-- The legislation should preserve
asbestos victims' access to counsel.
-- Any alternative claims procedure
should be structured to lessen the delay and uncertainty facing all parties.
-- Any alternative claims procedure should be minimally adversarial and
minimally legalistic.
-- Any provisions that seek to alter the financing of
asbestos liabilities should be comprehensive, transparent and should add to
victims' recoveries.
I would like to briefly discuss why H.R. 1283 is at
odds with each of these principles.
H.R. 1283 dramatically restricts both
asbestos victims' access to the courts and their substantive rights under state
law. It requires asbestos victims to file a claim with a new quasigovernmental
agency, the Asbestos Resolution Corporation ("ARC"), and only allows victims to
proceed once they have obtained a "certificate of medical eligibility." Without
this certificate, a victim cannot seek justice in the courts. But having
obtained a certificate would not be enough. H.R. 1283 would then impose
mandatory mediation and would require the asbestos victim obtain a "release from
mediation" certificate. Once a victim or, more likely in view of the delays
theseprocedures would create, the victims' estate reached a court, they would be
barred from bringing class actions, joining parties, consolidating actions, or
aggregating claims-- all standard procedures for lessening the costs and time
involved in tort litigation-- unless they obtained the defendants' consent.
These procedural barriers significantly diminish asbestos victims current
rights under state law. But the bill goes further. It would bar recovery unless
victims could prove they had the specific medical criteria listed in the bill.
And finally, victims would be barred from seeking punitive damages or relief for
emotional distress, medical monitoring or surveillance, increased risk of cancer
or other diseases.
Ironically, as the bill shuts the courthouse doors to
asbestos victims, it creates a new federal cause of action for asbestos
manufacturers to bring to allocate disputed administrative costs.
As to the
right to counsel, we are not supportive of excessive attorneys fees, but we are
all too well aware that unless assured of adequate risk-adjusted compensation,
attorneys will not represent clients who are unable to pay hourly rates. H.R.
1283 limits attorneys' fees to levels below those customarily awarded by courts
in contingent litigation and the bars on consolidating cases effectively act as
a barrier to economical representation of low-paid workers in asbestos cases.
This would be appropriate if the bill envisioned a voluntary, non-adversarial
process that allowed asbestos victims to obtain justice with limited assistance
from counsel and limited factfinding.
But H.R. 1283 does just the opposite.
The certification procedure is substantively rigid and technically demanding,
and the mediation and arbitration procedures are highly adversarial and
procedurally dense, with financial penalties for taking certain procedural and
substantive positions in the process. No one would be well advised to enter into
such proceedings without counsel. To take one example, to get through mandatory
mediation, the asbestos victim would have to provide a detailed,
company-specific exposure history, which would be subject to challenge by
industry counterparties. This procedure, rather than eliminating a major cause
of litigation expense, adds to it, by requiring asbestos victims to prove their
exposure histories twice-- once in mediation, then again in court if mediation
fails. Ironically, this procedure appears to make no sense if the Act's
intention is to address the enormous transaction costs of attempting to
precisely prove all the sources of each individual victim's asbestos exposure.
Finally, as to financing, to the extent H.R. 1283 acts to limit the
liability of asbestos manufacturers, it may merely succeed in transferring that
liability to employers under the workers' compensation system, and to workers'
health funds. Where the federal government is the employer, as is the case in
federal shipyards, this will result in a direct transfer of financial
responsibility from the asbestos manufacturers to the federal government. Where
the employer is a federal contractor, such as in the private shipbuilding
industry, the transfer will be indirect, butjust as real. While there may be a
role for the federal government in assisting asbestos victims, it should not be
to use federal dollars to substitute for asbestos manufacturer dollars. In
addition, H.R. 1283 does not meet the comprehensiveness test to the extent that
it fails to address issues such as the failure of the insurance industry to
honor its contractual commitments to the asbestos manufacturers.
There has
been much discussion of the relationship of H.R. 1283 and its predecessors to
the Amchem settlement. The crucial difference between the two is that the Amchem
settlement was voluntary, this legislation is not. The AFL-CIO affiliates who
were involved in the Amchem settlement negotiations oppose H.R. 1283.
The
AFL-CIO's opposition to H.R. 1283 should not be interpreted to mean that we
believe the current state of affairs in asbestos litigation is optimal. We are
deeply concerned about the collusion of certain attorneys and asbestos
manufacturers in "screening programs" that settle cases for workers exposed to
asbestos before they know whether they will suffer serious health consequences.
But rather than proceed in the direction laid out in H.R. 1283, the AFL-CIO
believes the Committee would be better served by examining the approach now
being worked out between the industry and plaintiffs' representatives in
Louisiana. In that state, representatives of some of the major asbestos
manufacturers like Owens-Illinois and Owens- Corning and the attorneys
representing a majority of Louisiana claimants have worked out a voluntary case
resolutionsystem. This system defines three levels of claims, and sets payment
levels for each type of claim, together with provisions allowing for higher
level claims if the applicants' condition worsens. It creates certainty for all
parties that is absent from the procedures in H.R. 1283. Though entirely
voluntary, it allows for victims to receive certain and immediate payments, and
for defendant companies to accurately estimate their exposure to claims.
We
believe a program like this would be the appropriate context for limiting
attorneys fees, since participants in this program would not need extensive
adversarial representation or need to engage in time- consuming discovery.
Similarly, the Louisiana program should do much to address the screening abuses,
as it provides rights to additional compensation to those who have been exposed
to asbestos but have not yet become ill.
A copy of the Louisiana agreement
is attached to my written testimony.
Any voluntary national program along
these lines would have to address certain issues that do not arise in a single
state- such as the variation in award levels from state to state. It would also
need to be constructed on the understanding that for a voluntary ADR program to
succeed, it must offer value to both sides in potential litigation-- value in
the form of mutually reduced costs and reduced uncertainty. Such a program
cannot merely be a vehicle for irresponsible elements in the industry to
continue to fight core liability issues that have really long been settled in
the hope of winning incremental victories through delay.Before I close, I would
like to make two larger systemic points. This Committee in considering whether
to create exceptions to state tort law, should be mindful of the incentives it
creates for industrial decision makers. I am sure the Committee would not want
to suggest to business executives making decisions in the future that if the
scale of the risk their product poses is truly awe inspiring, Congress will step
in to save them from the consequences of their actions under state tort law.
In addition, the AFL-CIO has always opposed efforts to deny working families
access to state courts. The most recent such effort was defeated last year in
the Senate.-' H.R. 1283's mandatory provisions are in effect an effort at
tort reform one class of plaintiffs at a time. We oppose
so-called tort reform both in aggregate and in bite sized
pieces.
In conclusion, the AFL-CIO and its affiliates are ready to work with
all concerned parties, and especially with this Committee, to seek creative
solutions in this area that are respectful of the rights of asbestos victims. We
thank you for the opportunity to testify here today.
NOTES:
1 Esteban
Ortiz et. al v. Fibreboard Corporation et. al., No. 97-1704 (1999). See The
Report of the Judicial Conference Ad Hoc Committee on Asbestos Litigation (March
1991); Amchem Products, Inc. v. Windsor, 138 L. Ed. 2d 689, at 716 (1997).
2
The Products Liability Reform Act of 1997, S. 648.. END
LOAD-DATE: July 2, 1999 
