October 14, 2013 by Barbara With
This is the second in a WCMC four-part series on asbestos.
Back in February when Sen. Glenn Grothman (R-West Bend) and Rep. Andre Jacque (R-De Pere) introduced AB19/SB13, otherwise known as the “Asbestos Claims Transparency Act,” many wondered who really wrote the bill. Both Jacque and Grothman are members of the American Legislative Exchange Council (ALEC), the bill mill that introduces corporate-friendly legislation through elected officials.
The Wisconsin Civil Justice Council, however, is an ALEC-like arm of a corporate lobby that extends into Wisconsin’s Republican-dominated state government. Trevor Will, partner at Foley & Lardner, testified for the bill at the public hearing on April 11, 2013, on behalf of WCJC, a coalition of powerful manufacturing, health care, insurance, construction and transportation groups that support policies making it more difficult to sue businesses.
The connection between Gov. Scott Walker and Foley & Lardner is Michael Grebe, Walker’s former campaign manager, a practicing partner and CEO of Foley & Lardner and chair of the ultra-conservative, Koch-funded Bradley Foundation.
History of the Asbestos Trust
Also testifying at the public hearing was retired Judge Dean Trafelet, chairman of the board of the Delaware Claims Processing Facility and the trustee of all future claimants in numerous settlement trusts. Trafelet manages investment strategies, portfolio performance, liquidity projections and beneficiary distributions of various trusts. According to Trafelet’s testimony, Johns-Manville Corporation was one of the largest manufacturers of asbestos products in the 20th century. Their directors purposely kept secret the deadly nature of their products from the workers who were being killed by them. As the story slowly emerged years later, Johns-Manville filed Chapter 11 in 1982 to prepare for the onslaught of lawsuits that would be filed against them.
To deal with future claims, part of the reorganization entailed the creation of a trust dedicated to resolving and paying all present and future asbestos claims. The Manville Trust was established which also rid the newly reorganized Manville Corporation of any and all liability, which made it a profitable company again. To ensure the money would be properly channeled from the corporation to the trust, in 1994 Congress enacted Bankruptcy Code Section 524(g), which statutorily validates the trust and channeling injunction mechanisms pioneered in the Manville case. This act of Congress now allows all asbestos companies to shed all present and future liability from the deadly effects of their products.
In 2011, there were 60 such trusts formed by large asbestos defendants, including Halliburton, Owens Corning, Armstrong World Industries and United State Gypsum. For an industry that was constantly killing its workforce, the trust was a way for asbestos manufacturers to stay in business while addressing some measure of compensation for their victims.
SB13 is a plaintiff’s nightmare. Grothman, Jacque and other ALEC-directed legislators claim the bill will prevent fraudulent claims and “double-dipping” into the trust. However, they have been unable to produce evidence of any such cases in Wisconsin. According to attorney Jeffrey Pitman, president of the Wisconsin Association for Justice, there were only nine asbestos cases filed in 2012. Instead of streamlining the process as the sponsors claim, it will immediately affect 6,350 personal injury cases already in court, increasing the costs, adding confusion and delaying resolution of those suits.
According to Nancy Rottier, legislative liaison from the Director of State Courts who testified for information only, the bill prevents trials from being scheduled until well beyond the time frame most circuit courts customarily set. The year delay can mean life or death for the plaintiff.
Jill Rakauski, an attorney who represents the victims of asbestos poisoning, addressed the transparency the bill requires of the plaintiff. “I find it ironic that the same corporations that for decades hid the dangers of asbestos exposure from their workers are now the same companies coming to the legislature and asking for so-called transparency in a one-sided bill that would only hurt the asbestos victims.” Attached to Rakauski’s testimony was a copy of a letter from UNR Asbestos Disease Claims Trust announcing an April 9, 2013 moratorium on claims processing that will last several months, delaying the process even further.
Also supplying written testimony against SB13 were Sheet Metal Air Rail Transportation Union (Smart), the American Legion, Military Order of the Purple Heart, VFW and the Wisconsin Association for Justice.
The Assembly version of the bill, AB19, passed on May 8 with a vote on party lines. Grothman pulled SB13 back into committee on Oct. 7, just one day after WCMC broke the news that abundant amounts of asbestos had been confirmed in Gogebic Taconite’s Bulk Sample Site 4 despite GTac’s continued claims on their application that the asbestos does not exist.
After adopting Grothman’s amendment, the Judiciary and Labor Committee passed SB13 as amended. It now awaits scheduling to be heard in the Senate.
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